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Filed by: JFAX.COM, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: EFAX.COM, Inc.
Commission File No. 000-22561
On April 6, 2000, JFAX.COM, Inc. and EFAX.COM, Inc. announced their
proposed merger. The following is a transcript of the joint press release
issued on April 6, 2000:
JFAX.COM SIGNS LETTER OF INTENT TO ACQUIRE EFAX.COM,
CREATING STRONG POSITION IN INTERNET COMMUNICATIONS
Combined Installed Base of Over 125,000 Paying Subscribers and Over 2.8 Million
Free Users Establishes Platform for Increased Revenue Generation
Consideration to Consist of Approximately 18.5 Million JFAX.COM Common Shares
HOLLYWOOD AND MENLO PARK, Calif. (April 6, 2000) - JFAX.COM (NASDAQ: JFAX) and
EFAX.COM (NASDAQ: EFAX), two of world's largest unified messaging services
providers, today announced that they have signed a letter of intent to merge.
The proposed merger transaction will establish the combined company as the clear
industry leader in Internet-based unified messaging services worldwide.
JFAX.COM, the combined company, will have over 125,000 paid subscribers
generating monthly subscription and usage revenue and over 2.8 million free
users who represent an attractive advertising audience and are prime candidates
for a range of revenue-generating products and services that the combined
company will offer.
"Combining the resources of EFAX.COM with JFAX.COM will allow us to achieve
critical mass in the Internet communications marketplace," said Steven J.
Hamerslag, CEO and president of JFAX.COM. "We will have a substantial installed
base of business users on the Internet with an extensive range of communication
service offerings. EFAX.COM has done a great job of establishing a strong brand
and growing a large base of customers. Their paid subscriber base has
accelerated, growing 45% quarter-to-quarter to 66,000. We now have the
additional opportunity to enhance revenue generation by leveraging the EFAX
subscriber base with our previously
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announced plans for call management services that build off our global Internet
Protocol (IP) network."
"JFAX has a proven management team, a strong cash position and a global
network with innovative telecom solutions," said Ronald Brown, president of
EFAX.COM. "EFAX.COM has concentrated on Internet document delivery, brand-name
partnerships, and a new wireless initiative for mobile users. JFAX.COM has the
technology platform to tie it all together and expand services even further. We
welcome this opportunity to consolidate a powerful position," he added.
JFAX.COM has committed to loan EFAX.COM, subject to satisfactory
documentation, up to $5 million on a senior secured basis. This loan will
enable EFAX.COM to fund its working capital needs and continuing growth until
the consummation of the merger. The loan commitment also includes a warrant for
JFAX.COM to purchase 250,000 shares of EFAX.COM common stock at yesterday's
close-of-market price. If the merger does not occur, the warrant exercise price
will be reset to $1.00 a share. The proposed merger is subject to negotiation of
definitive agreements, completion of due diligence, and other customary
conditions.
The letter of intent provides that, as total consideration for EFAX.COM,
JFAX.COM will issue approximately 18.5 million shares of its common stock to the
holders of EFAX.COM common and preferred stock, subject to an adjustment of this
number in certain circumstances. EFAX.COM's preferred stockholders have agreed
to exchange their current shares of Series A convertible preferred stock into a
new series of convertible preferred stock. The new series will have a right to
convert into common stock of EFAX.COM at a per-share price based upon the
average trading price for EFAX.COM common stock during the 20-trading-day period
beginning Friday. As a result, the number of shares of JFAX.COM common stock to
be ultimately received by existing holders of EFAX.COM common stock will be
determined following completion of such 20-trading-day period.
For example, as of today, the average closing price of the EFAX.COM common
stock for the last 10 trading days has been $5.46. Assuming this average
continues for the next 20 trading days, and further assuming that no other
adjustment becomes applicable, EFAX.COM common shareholders will receive 1.10
shares of JFAX.COM common stock for each share of EFAX.COM common stock. The
actual number of shares that EFAX.COM shareholders receive will likely differ
from the example and such difference may be material.
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In consideration for the letter of intent, JFAX.COM will be granted
warrants to purchase either 750,000 or 1.75 million shares, depending on certain
circumstances, of EFAX.COM common stock at an exercise price of $1.00 per share,
in the event the merger does not occur.
This release will be followed promptly by the filing of reports on Form 8-K
which will describe the terms of the transactions in greater detail.
JFAX.COM management has previously encouraged investors to gauge its
progress by its revenues, gross margins and profits, and subscriber base (both
free and paid). For the quarter ended March 31, JFAX.COM said it expects its
gross profits and margins to be at the high end of analysts' expectations.
JFAX.COM also estimated that its subscriber growth exceeded expectations, with
free subscribers growing by 475,000 in the quarter to a total of 820,000. Paid
subscriber levels, however, are estimated to be below estimates for the quarter
following a previously announced decision to defer marketing efforts in the wake
of JFAX.COM's management transition. As a result, quarterly revenues will be
approximately $2.9 million.
"With the combined capabilities of both companies, we will expand our
services beyond message management to a full suite of unified communications
solutions," continued Hamerslag. "This will enable customers to access and
initiate business communications easily and seamlessly through a single
communications provider."
About JFAX.COM
JFAX.COM (NASDAQ: JFAX) is an award-winning Internet-based messaging and
communications service provider to individuals and businesses throughout the
world. JFAX's services enable the user's email box to function as a single
repository for all email, fax and voicemail and permit convenient advanced
message management through email or by phone. JFAX is a registered trademark of
JFAX. The company is headquartered in Hollywood, California. For more
information on JFAX and its services, see http://www.JFAX.com or call 1-888-GET-
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JFAX.
About EFAX.COM
EFAX.COM (NASDAQ: EFAX) is a provider of Internet communication services, and
has provisioned unique telephone numbers to about 2 million members. The Company
continues to expand its range of solutions beyond its initial offering of the
world's first free fax-to-email service. The Company markets its Internet
services via its own EFAX.COM web site and through affiliates
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and co-brand partners, including Phone.com, Microsoft, Network Solutions,
WebTV, fortunecity.com, FindLaw, Phoenix Technologies and AllBusiness.com.
EFAX.COM is headquartered in Menlo Park, Calif. For more information, call
1-877-EFAXCOM; fax (650) 326-6003; or visit: http://www.EFAX.com.
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Safe Harbor for Forward-Looking Statements: Certain statements in this news
release constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from projected results. Forward-looking statements include
statements about efforts to attract or prospects for additional subscribers for
our services and other statements of a non-historical nature. Actual results may
differ from projected results due to various risk factors including our limited
operating history, our use of third parties to market our services, competition
including competition from companies offering free services, risks associated
with technological change, uncertainties regarding the protection of proprietary
technology and other factors set forth in the companies' respective filings with
the Securities and Exchange Commission.
Notice of Registration Statement: JFAX.COM expects to file a registration
statement, which will contain a joint proxy statement/prospectus of JFAX.COM and
EFAX.COM, and other documents with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to receive the joint proxy
statement/prospectus and other documents free of charge at the SEC's web site,
www.sec.gov and from JFAX.COM Investor Relations at 6922 Hollywood Boulevard,
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Hollywood, California 90028.
(C) 2000 JFAX.COM. All rights reserved.
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JFAX contacts, media only:
John Davis Krys Card Bryan Maxwell
JFAX.COM Rogers & Cowan Rogers & Cowan
(323) 860-9469 (310) 201-8838 (310) 201-8892
[email protected] [email protected] [email protected]
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JFAX contacts, investor relations only:
Scott Turrichi Betsy MacKinnon, Jim Lucas Winnie Lerner
JFAX.COM Abernathy MacGregor Group- West Abernathy MacGregor- New York
(323) 860-9408 (213) 630-6550 (212) 371-5999
[email protected] [email protected] [email protected]
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EFAX contacts, media and investor releations:
Todd Kenck Peter Delauzon/Christina Newman Jonathan Schaffer, Jill Fatzinger (IR)
EFAX.com (Media) Morgen-Walke Associates, Inc.
650-688-6810 Morgen-Walke Associates, Inc. (415) 296-7383
[email protected] (415) 296-7383 [email protected]
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