-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JRUKNkCEp+jHjXZoJj1KlshtSyh9/JRY0Xuy6yoMHmJ4VDQYAH0OX3AeFiEg7RrE teQdShuqHFROPOOp9BG9Yg== 0000948830-99-000400.txt : 19990827 0000948830-99-000400.hdr.sgml : 19990827 ACCESSION NUMBER: 0000948830-99-000400 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990826 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DATALINK NET INC CENTRAL INDEX KEY: 0000832370 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 353574355 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-49551 FILM NUMBER: 99700165 BUSINESS ADDRESS: STREET 1: 1735 TECHNOLOGY WAY STREET 2: STE 790 CITY: SAN JOSE STATE: CA ZIP: 95110 BUSINESS PHONE: 4083671700 MAIL ADDRESS: STREET 1: 1705 TECHNOLOGY WAY STREET 2: SUITE 790 CITY: SAN JOSE STATE: CA ZIP: 95110 FORMER COMPANY: FORMER CONFORMED NAME: DATALINK SYSTEMS CORP /CA/ DATE OF NAME CHANGE: 19960723 FORMER COMPANY: FORMER CONFORMED NAME: PLATINUM PRODUCTIONS INC /CO DATE OF NAME CHANGE: 19930803 FORMER COMPANY: FORMER CONFORMED NAME: LORD ABBOTT INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DATALINK NET INC CENTRAL INDEX KEY: 0000832370 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 353574355 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 1735 TECHNOLOGY WAY STREET 2: STE 790 CITY: SAN JOSE STATE: CA ZIP: 95110 BUSINESS PHONE: 4083671700 MAIL ADDRESS: STREET 1: 1705 TECHNOLOGY WAY STREET 2: SUITE 790 CITY: SAN JOSE STATE: CA ZIP: 95110 FORMER COMPANY: FORMER CONFORMED NAME: DATALINK SYSTEMS CORP /CA/ DATE OF NAME CHANGE: 19960723 FORMER COMPANY: FORMER CONFORMED NAME: PLATINUM PRODUCTIONS INC /CO DATE OF NAME CHANGE: 19930803 FORMER COMPANY: FORMER CONFORMED NAME: LORD ABBOTT INC DATE OF NAME CHANGE: 19920703 SC 13E4 1 SECURITIES AND EXCHANGE COMMISSION Washington DC 20549 ------------------- SCHEDULE 13E-4 Issuer Tender Offer Statement (Pursuant to Section 13(e) (1) of the Securities Exchange Act of 1934) Datalink.net, Inc. ------------------ (Name of Issuer) Datalink.net, Inc. ------------------------------------ (Name of Person(s) filing Statement) Agent's Warrants ------------------------------ (Title of Class of Securities) None ------------------------------------ (CUSIP Number of Class of Securities) Anthony N. LaPine, President Datalink.net, Inc. 1735 Technology Drive, Suite 790, San Jose, California 95110 (408) 367-1700 --------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on behalf of the Person(s) Filing Statement) With copies to: James P. Beck, Esq. Krys Boyle Freedman & Sawyer, P.C. 600 17th Street, Suite 2700 South Tower Denver, Colorado 80202 (303) 893-2300 August 26, 1999 ---------------------------------------------------------------------- (Date Tender Offer First Published, Sent or Given to Security Holders) CALCULATION OF FILING FEE _____________________________________________________________________________ Transaction Valuation Amount of Filing Fee $533,375.75 (1) $106.67 _____________________ _____________________ ___ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount previously paid: __________ Filing party:_____________ Form or registration no.:__________ Date filed: _____________ _____________________________________________________________________________ (1) Pursuant to Rule 0-11(a)(4), since no market exists for the Agent's Warrants, the transaction is valued based on the 145,880 shares of Common Stock that may be exchanged for the Agent's Warrants multiplied by the average of the closing bid and ask prices of the Issuer's Common Stock on August 24, 1999, as reported on the OTC Bulletin Board. 2 This statement relates to an offer by Datalink.net, Inc., a Nevada corporation (the "Company"),to exchange one (1) share of Common Stock for each six (6) Common Stock Purchase Warrants ("Agent's Warrants") tendered effective upon the filing of this statement until September 23, 1999, unless extended by the Board of Directors. Each Agent's Warrant entitles the registered holder thereof upon exercise to purchase one share of Common Stock, par value $.01, at $3.75 per share. There are currently 875,280 Agent's Warrants outstanding. ITEM 1. SECURITY AND ISSUER. (a) The name of the Company is Datalink.net, Inc. The address of its principal executive office is 1735 Technology Way, Suite 790, San Jose, California 95110. (b) The securities being sought are any and all of the Company's Agent's Warrants. There are 875,280 Warrants presently outstand- ing. No Officers, Directors or Affiliates of the Company own no Agent's Warrants, except for Commonwealth Associates, an affiliate, which owns 418,553 Agent's Warrants, Michael S. Falk, the chairman and controlling equity owner of Commonwealth Associates, who owns 180,767 Agent's Warrants, and Peter Allard, an affiliate, who owns 100,000 Agent's Warrants. (c) There is currently no established trading market for the Agent's Warrants. (d) Not applicable; the Company is filing this statement. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER COMPENSATION. No funds or other consideration are being offered by the Company in exchange for the Agent's Warrants. Only shares of Common Stock are being offered in exchange offer. ITEM 3. PURPOSE OF TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. The exchange offer is being made in order to reduce the number of Agent's Warrants outstanding and to provide the holders of such warrants the opportunity to receive Common Stock without having to exercise such warrants and pay cash or use the "cashless exercise" features of such warrants. The large number of warrants outstanding may have a negative impact on potential investors and on the market for the Company's Common Stock due to the potential dilution of shareholders' interests. All Agent's Warrants received will be cancelled. There are no present plans of proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Company or any of its subsidiaries; 3 (d) Any change in the present board of directors or management of the issuer including, but not limited to, any plans or proposals to change the number of the terms of directors, to fill any existing vacancy on the board or to change any material term of the employment contract of any executive officer; (e) Any material change in the present dividend rate or policy, or indebtedness or capitalization of the issuer; (f) Any other material change in the issuer's corporate structure or business, including, if the issuer is a registered closed-end investment company, any plans or proposals to make, any changes in its investment policy for which a vote would be required by Section 13 of the Investment Company Act of 1940; (g) Changes in the Company's charter, bylaws or instruments correspond- ing thereto or other actions which may impede the acquisition of control of the Company by any person; (h) Causing a class of equity security of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity security of the Company becoming eligible for termination of registration pursuant to Section 12(g) (4) of the Act; or (j) The suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Act. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. Neither the Company nor, to the best knowledge of the Company, any of the Executive Officers or Directors of the Company or any associate or subsidiary of any of the foregoing, has engaged in any transactions involving the Agent's Warrants during the 40 business days prior to the date hereof. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. None. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. None. ITEM 7. FINANCIAL INFORMATION. (a) Incorporated by reference are the financial statements which are included in and are part of the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 1999, and Quarterly Report on Form 10-QSB for the quarter ended June 30, 1999. (b) The effect of the issuer tender offer is not expected to have a material effect on the Company's financial statements. 4 ITEM 8. ADDITIONAL INFORMATION. None. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. EXHIBIT NUMBER EXHIBIT NAME (a)(1) Offering Circular dated August 26, 1999 (a)(2) Form of Letter of Transmittal (a)(3) Form of Letter to Warrantholders SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct DATALINK.NET, INC. Date: August 26, 1999 By:/s/ Anthony N. LaPine Anthony N. LaPine, President 5 EX-99 2 EXHIBIT (A)(1) OFFERING CIRCULAR DATALINK.NET, INC. OFFER TO EXCHANGE ONE SHARE OF ITS COMMON STOCK, $.01 PAR VALUE FOR EACH SIX AGENT'S COMMON STOCK PURCHASE WARRANTS _____________________________________________________________________________ THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., MOUNTAIN TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE EXCHANGE OFFER IS EXTENDED. _____________________________________________________________________________ Datalink.net, Inc., a Nevada corporation ("Datalink.net"), hereby offers to exchange one share of its Common Stock, $.01 par value (the "Common Stock"), for each six Warrants to Purchase Common Stock issued in connection with Datalink.net's Private Offering in November 1997 (the "Agent's Warrants"), upon the terms and subject to the conditions set forth in this Offering Circular and in the related Letter of Transmittal (which, together, constitute the "Exchange Offer"). There is no active trading market for the Agent's Warrants. Any stockholder desiring to tender all or any portion of his Agent's Warrants should complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal and mail or deliver it to American Securities Transfer & Trust, Inc. (the "Exchange Agent"), together with all other required documents, including the Warrant Certificates. Questions and requests for assistance may be directed to the Exchange Agent at its addresses and telephone numbers set forth herein. ______________________ The date of this Offering Circular is August 26, 1999 ______________________ This Offering Circular does not constitute an offer for exchange or a solicitation of an offer for exchange of any securities other than the securities covered by this Offering Circular, by Datalink.net or any other person. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Agent's Warrants in any jurisdiction in which the making of the Exchange Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. However, Datalink.net may, in its discretion, take such action as it may deem necessary to make the Exchange Offer in any such jurisdiction and extend the Exchange Offer to holders of Agent's Warrants in such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY DATALINK.NET. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THIS INFORMATION CONTAINED IN THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. The Exchange Offer is being made by Datalink.net in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Sections 3(a)(9) and/or 4(2) thereof and Regulation D thereunder. Datalink.net will not pay any commission or other remuneration to any broker, dealer, salesman or other person for soliciting tenders of Agent's Warrants. Regular employees of Datalink.net may solicit exchanges from the holders of the Agent's Warrants, but they will not receive additional compensation therefor. AVAILABLE INFORMATION Datalink.net is subject to certain informational reporting requirements of the Exchange Act and in accordance therewith files reports and other information with the Securities and Exchange Commission. These reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024 of the SEC's office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549, and at its regional offices located at 7 World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such reports, proxy statements and other information can be obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549 at prescribed rates. The SEC maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically. Additional updating information with respect to the securities covered herein may be provided in the future to purchasers by means of appendices to this prospectus. Datalink.net has filed with the Commission a Transaction Statement on Schedule 13E-4, together with exhibits, pursuant to Rule 13e-4 of the General Rules and Regulations under the Act, furnishing certain additional information with respect to the Exchange Offer. The Schedule 13E-4 and any amendments thereto, including exhibits, may be examined and copies may be obtained from the offices of the Commission in the manner set forth above. 2 TABLE OF CONTENTS PAGE SUMMARY .......................................................... 4 The Company ................................................. 4 Purpose of the Exchange Offer ............................... 4 The Exchange Offer .......................................... 5 RISK FACTORS ..................................................... 6 THE EXCHANGE OFFER ............................................... 10 Terms of the Exchange Offer ................................. 10 Purpose of the Exchange Offer ............................... 10 Procedure for Tendering Agent's Warrants Stock .............. 10 Withdrawal Rights ........................................... 11 Acceptance for Exchange and Exchange ........................ 12 Extension of Exchange Offer Period; Termination; Amendments ................................................. 13 Certain Conditions of the Exchange Offer .................... 14 Fractional Shares ........................................... 15 Solicitations of Tenders; Fees .............................. 15 Interests of Certain Persons; Transactions .................. 15 CERTAIN TAX CONSEQUENCES ......................................... 16 PRICE RANGE OF COMMON STOCK ...................................... 16 DESCRIPTION OF CAPITAL STOCK AND AGENT'S WARRANTS ................ 17 Common Stock ................................................ 17 Preferred Stock ............................................. 18 Agent's Warrants ............................................ 18 EXHIBIT A - Form 10-KSB for the fiscal year ended March 31, 1999 EXHIBIT B - Form 10-QSB for the quarter ended June 30, 1999 3 SUMMARY The following is a summary of certain information contained in this Offering Circular, including a summary of the terms of the Exchange Offer. It is not intended to be complete and is qualified in its entirety by the more detailed information contained in this Offering Circular. THE COMPANY Datalink.net is an internet-based company that provides personalized financial and lifestyle information to customers' wireless communication devices. We also offer wireless business solutions to companies. We have developed technology that combines real-time data, the world wide web, customized information from corporations and wireless communications to provide individually tailored information services to customers' pagers and digital cellular phones. Our web site and customer support team provide account maintenance services that allow subscribers to customize the types of information alerts they receive. All consumer services are marketed from our web site as well as through direct and re-seller distribution channels. Our re-sellers currently include broker-dealers, information service providers, wireless network carriers, and other internet companies. In addition, our business solutions use our wireless technology to give businesses a way to provide personalized information to their customers. The first of our financial information services is QuoteXpress, an investment monitoring tool that alerts subscribers with stock quote information they pre-specify, such as price changes and volume. Other financial services include SplitXpress, a service that notifies subscribers of stock splits, buy-backs, takeovers, mergers and surprise earnings announcements. CommmodityXpress tracks futures contract prices for commodities trading on all the major US commodities markets. CompanyNews provides the latest news stories and press releases for specific companies selected by the subscriber. The headlines are delivered to the wireless device and the complete story may be delivered to their email address, and is also available on our web site. During 1998, we introduced two new lifestyle services. Sports2Go provides personalized real-time sports coverage with up-to-the-minute scores and breaking game events. InfoXtra allows subscribers to receive personalized information from a wide range of categories that include: local weather forecasts, horoscopes, winning lottery numbers, ski conditions, beach forecasts, top ten video rentals, and news headlines. We currently market two message services that link the internet with wireless communications. MailXpress alerts subscribers when important email arrives in their mailbox. MessageX allows anyone with internet access to send a message to the subscriber's pager or cell phone using the subscriber's email address. Our corporate offices are located at 1735 Technology Drive, Suite 790, San Jose California 95110. Our telephone number is (408) 367-1700 and our world wide web site is www.datalink.net. PURPOSE OF THE EXCHANGE OFFER The Exchange Offer is being made to provide the holders of Agent's Warrants with the opportunity to obtain shares of the Company's Common Stock for their Warrants without having to pay cash or use the "cashless exercise" 4 provisions of such warrants. The Agent's Warrants are exercisable at $3.75 per share of Common Stock. Since August 1, 1999, the Company's Common Stock has traded in the range of $2.81 to $4.38 per share. The Exchange Offer also provides Datalink.net the opportunity to reduce the number of Agent's Warrants outstanding. There are currently outstanding 875,280 Agent's Warrants exercisable to purchase an equal number of shares of Common Stock. Some potential investors have expressed concerns over the large number of warrants outstanding because of the potential dilution to holders of Common Stock and possible effects on the market for the Common Stock. As a result, management believes that the Exchange Offer may make the Company more attractive to potential investors. THE EXCHANGE OFFER Exchange Ratio One share of Common Stock for each six Agent's Warrants. Expiration Date 5:00 p.m. (Mountain time), on Friday, September 24, 1999, unless extended. Withdrawal Rights Tenders may be withdrawn by providing proper written notification to the Exchange Agent at any time before the Expiration Date. See "The Exchange Offer -- Withdrawal Rights". How to Tender Warrantholders desiring to tender all or any portion of their Agent's Warrants should properly complete, sign and mail or deliver the Letter of Transmittal to the Exchange Agent, together with any other required documents, such as the certificate for such Warrants. See "The Exchange Offer -- Procedure for Tendering Agent's Warrants." Acceptance of Tenders Subject to the terms and conditions of the Exchange Offer, Agent's Warrants validly tendered and not withdrawn will be accepted on the Expira- tion Date and certificates for shares of Common Stock will be issued in exchange for such properly tendered Warrants and mailed by the Exchange Agent as soon as practicable after the Expiration Date. See "The Exchange Offer -- Acceptance for Exchange and Exchange". Federal Income Tax Generally, no gain or loss will be recognized for Consequences federal income tax purposes by the holders of Agent's Warrants upon the exchange of such shares for Common Stock pursuant to the Exchange Offer. See ""Certain Tax Consequences". Trading There is no trading market for the Agent's Warrants. Accordingly, Datalink.net is unable to determine the current market value for these Warrants. The Common Stock that will be issued upon consummation of the Exchange Offer is cur- rently traded in the over-the-counter market, and quotations are included on the OTC Bulletin Board under the symbol "NETD". 5 Exchange Agent American Securities Transfer & Trust, Inc. THIS OFFERING CIRCULAR AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE EXCHANGE OFFER. RISK FACTORS An investment in the Common Stock is very risky. You should be able to bear a complete loss of your investment. In deciding whether to exchange your Agent's Warrants for shares of Common Stock, you should carefully consider the following risk factors, among others, as well as information contained in this Offering Circular, our most recent annual reports on Form 10-KSB and Form 10- QSB, which are attached hereto. Common Stock issued in The shares of Common Stock to be issued in Exchange Offer will be exchange for Agent's Warrants will be restricted "restricted securities" as that term is defined under SEC Rule 144. However, under interpretations of the holding period requirements of Rule 144, persons who exchange their Agent's Warrants for Common Stock in the Exchange Offer may "tack" their holding period for the Common Stock with the period they have held their warrants. Since the Agent's Warrants were issued in November 1997, persons who have held such warrants since that time could immediately resell their Common Stock. In addition, we have filed a registration statement on Form S-3 with the SEC which is not yet effective which would register the resale of the Common Stock. However, we can give no such assurance as to when such registration statement will become effective. It is possible that the registration statement will never become effective. We have a history of losses We have recorded a net loss for each year since and we may not be able to our current business started in 1996 through achieve profitability. our fiscal year ended March 31, 1999. As of June 30, 1999, we had an accumulated deficit of $26,717,306. Our ability to operate profitably depends on increasing our sales through increased market acceptance of our products and services and successfully competing with other companies. We are also subject to other risks associated with new business enterprises. Therefore, we cannot assure you that Datalink.net will achieve profitability. Our revenue may not grow We plan to use any cash flow we generate to enough to pay for our research and develop improvements and upgrades research and development to our current products and services and adapt costs. them to new technologies. Our industry is subject to rapid technological changes. We cannot assure you that our revenues will grow enough to pay for the research and development 6 needed to improve our products and services so that they compete in this rapidly changing marketplace. If we are unable to adequately research and develop our products and services, they could become obsolete and we will not achieve profitability. We have several competi- Our market is very competitive. There are a tors, some of them are number of competitors who are larger and have larger and have greater much greater resources than we do. Our resources than we do. competitors have more experienced people and larger facilities and budgets than we do. These competitors could use their resources to conduct greater amounts of research and development and to offer services at lower prices than we can. These factors may adversely affect our ability to compete by decreasing the demand for our products and services. We may need to raise We have met capital needs with private sales of additional funds. These securities. However, we cannot assure you that funds may not be avail- we will not need additional funds, that any able to us. Alternative- needed funds will be available to us at all, or ly, raising additional that any available funds will be given on ac- funds may dilute your ceptable terms. If we need additional funds, share ownership. and are unable to raise them, we will not be able to continue our business operations. If we raise funds by selling equity securities, those sales may dilute your share ownership. If we raise funds by forming joint ventures with other companies, we may have to give up some of our rights to certain technologies, products or marketing territories. We depend on quality Our business is largely dependent on our managers. However, we ability to hire and retain quality managers. only have a written Currently, we have a written employment agree- employment agreement ment and key-man life insurance in the face with and insurance on amount of $3 million with Anthony N. LaPine, one key officer. the Company's chairman, CEO and president. We do not have employment agreements or key-man life insurance with any other officer. The loss of Mr. LaPine or any other officer may have an adverse effect on our business and prospects by depriving us of the management services necessary to operate Datalink.net and achieve profitability. Our patents may not pro- We currently own a number of patents related to tect us from competitors. our products, and have applied for additional Costs of prosecuting and patents. We are not certain whether any new defending patent infringe- patents will be granted in the future. Even if ment claims can be signifi- we receive additional patents, they may not cant. provide us with protection from competitors. Our failure to obtain patent protection, or illegal use by others of any patents we have 7 or may obtain could adversely effect our business, financial condition and operating results. In addition, the laws of certain foreign countries do not protect proprietary rights to the same extent as the laws of the United States. Claims for damages resulting from any such infringement may be asserted or prosecuted against us. The validity of any patents we have or obtain could also be challenged. Any such claims could be time consuming and costly to defend, diverting management's attention and our resources. The limited market may Our shares are not listed on Nasdaq or any make it difficult to exchange. Trading is conducted in the over- resell our shares. the-counter market on the OTC Bulletin Board, which was established for securities that do not meet the Nasdaq or exchange listing requirements. Consequently, selling Datalink. net shares is more difficult because smaller quantities of shares are bought and sold and security analysts' and news media's coverage of Datalink.net is limited. These factors could result in lower prices and larger spreads in the bid and ask prices for our shares. Because our shares are not currently listed on Nasdaq or an exchange, they are subject to Rule 15g-9 under the Exchange Act. That rule imposes additional sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker- dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. Consequently, the rule affects the ability of broker-dealers to sell our shares and may affect the ability of holders to sell Datalink.net shares in the market. We do not plan to pay We intend to retain any future earnings to fund any dividends. the operation and expansion of our business. We do not anticipate paying cash dividends on our shares in the future. Resales of outstanding Of the 3,316,716 shares issued and outstanding restricted shares could as of July 31, 1999, 619,459 shares were have a depressive effect "restricted securities," as defined under on the market price of Rule 144, all of which are currently eligible our shares. for sale under Rule 144. In addition, 4,497,070 shares which may be issued on the conversion of the preferred stock and exercise of warrants 8 are being registered for resale. We are unable to predict the effect that sales of these shares may have on the then prevailing market price of our shares. It is likely that market sales of large amounts of Datalink.net shares (or the potential for those sales even if they do not actually occur) will have the effect of depressing the market price of our shares. Securities held by our As part of our private offering which was CEO and Chairman for which completed in November 1997, Anthony N. LaPine, he gave a promissory note our CEO and chairman, bought 280,000 shares of are being registered for preferred stock and 140,000 Private Placement resale. Warrants which he paid for with a collateralized non-recourse promissory note for $1,050,000 due on November 5, 2003. The common stock underlying these securities and the warrants are being registered for resale by Mr. LaPine. Since Mr. LaPine paid for these securities with a collateralized non-recourse promissory note these securities would not be eligible for resale under Rule 144 until one year after the promissory note was paid. As a result, this registration will allow Mr. LaPine the opportunity to resell his securities prior to paying off the related promissory note, and realize a profit prior to the time he would if these securities were not registered for resale. It also could potentially make it more difficult for Datalink.net to obtain payment of the promissory note. Year 2000 issues could Although we anticipate that there will be little have an impact on our or no Year 2000 issues and therefore little or business. no cost will be incurred therefrom, our business may still be impacted. Our internal systems meet Year 2000 compliance standards. However, although compliance confirmation has been provided by seventy-five percent of our vendors, and the remaining twenty-five percent have indicated that they are currently Year 2000 compliant, there can be no assurance that these vendors will not experience some level of Year 2000 issues that may have an adverse effect on our systems. We have assessed our risk related to this occurrence as very low. Our contingency plan in the event that an unforeseen Year 2000 issue should occur will be to change to another vendor that is Year 2000 compliant. For this reason, we are developing an inventory of back- up vendors that may be called upon to provide services in accordance with Year 2000 compliance standards. 9 THE EXCHANGE OFFER TERMS OF THE EXCHANGE OFFER Datalink.net hereby offers, upon the terms and subject to the conditions set forth in this Offering Circular and in the related Letter of Transmittal, to exchange one share of Common Stock for each eight Agent's Warrants outstanding of its Common Stock validly tendered by the Expiration Date and not withdrawn as provided in this Offering Circular. The term "Expiration Date" means 5:00 p.m., Mountain time, on Thursday, September 23, 1999, unless Datalink.net shall have extended the period of time for which the Exchange Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Exchange Offer, as so extended by Datalink.net, shall expire. Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by notification thereof. As of August 20, 1999, there were 875,280 Agent's Warrants outstanding held of record by 35 Warrantholders. If Datalink.net makes a material change in the terms of the Exchange Offer, or if it waives a material condition to the Exchange Offer, Datalink.net will extend the Exchange Offer and disseminate additional exchange offer materials to the extent required by applicable law. The minimum period during which an offer must remain open following material changes in the terms of the offer, other than a change in the consideration offered, will depend upon the facts and circumstances, including the materiality, of the changes. With respect to a change in the consideration offered, a minimum period of 10 business days from the date of such change is generally required to allow for adequate dissemination to Warrantholders. For purposes of the Exchange Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Mountain time. This Offering Circular and the related Letter of Transmittal will be mailed to record holders of the Agent's Warrants. PURPOSE OF THE EXCHANGE OFFER The Exchange Offer is being made to provide the holders of Agent's Warrants with the opportunity to obtain shares of the Company's Common Stock for their Warrants without having to pay cash. The Agent's Warrants are exercisable at $3.75 per share of Common Stock. Since August 1, 1999, the Company's Common Stock has traded in the range of $2.81 to $4.38 per share. The Exchange Offer also provides Datalink.net the opportunity to reduce the number of Agent's Warrants outstanding. There are currently outstanding 872,280 Agent's Warrants exercisable to purchase an equal number of shares of Common Stock. Some potential investors have expressed concerns over the large number of warrants outstanding because of the potential dilution to holders of Common Stock and possible effects on the market for the Common Stock. As a result, management believes that the Exchange Offer may make the Company more attractive to potential investors. 10 PROCEDURE FOR TENDERING AGENT'S WARRANTS To tender Agent's Warrants pursuant to the Exchange Offer a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal, including, the Warrant certificates, must be received by the Exchange Agent on or prior to the Expiration Date. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a bank, broker, dealer, credit union, savings association or other entity which is a member of a recognized Medallion Program approved by the Securities Transfer Association, Inc. (an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed if the Letter of Transmittal is signed by the registered holder of the Agent's Warrants tendered therewith and such holder has not completed the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal. If any warrant certificates are forwarded separately to the Exchange Agent, a properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery. THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING WARRANTHOLDER. IF THE LETTER OF TRANSMITTAL, WARRANT CERTIFICATES OR ANY OTHER DOCUMENTS ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Notwithstanding any other provision hereof, exchange of Agent's Warrants accepted for exchange pursuant to the Exchange Offer will in all cases be made only after timely receipt by the Exchange Agent of a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees, and any other documents required by the Letter of Transmittal. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Agent's Warrants will be determined by Datalink.net, in its sole discretion, whose determination shall be final and binding on all parties. Datalink.net reserves the absolute right to reject any or all tenders of Agent's Warrants determined by it not to be in proper form or the acceptance for exchange of or exchange for which may, in the opinion of Datalink.net's counsel, be unlawful. Datalink.net also reserves the absolute right to waive any defect or irregularity in any tender of Agent's Warrants. None of Datalink.net or any of its affiliates or assigns, the Exchange Agent or any other person will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The tender of Agent's Warrants pursuant to any one of the procedures described above will constitute an agreement between the tendering Stockholder and Datalink.net upon the terms and subject to the conditions of the Offer. WITHDRAWAL RIGHTS Tenders of Agent's Warrants made pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after October 22, 1999, 11 unless theretofore accepted for exchange as provided in this Offering Circular. If Datalink.net is delayed in accepting for exchange or in exchanging Agent's Warrants or is unable to accept for exchange or exchange Agent's Warrants pursuant to the Exchange Offer for any reason, then, without prejudice to Datalink.net's rights under the Exchange Offer, the Exchange Agent may, on behalf of Datalink.net, retain all Agent's Warrants tendered, and such Agent's Warrants may not be withdrawn except as otherwise provided. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at its address set forth herein and must specify the name of the person who tendered the Agent's Warrants to be withdrawn and the number of Agent's Warrants to be withdrawn. If the Agent's Warrants to be withdrawn have been delivered to the Exchange Agent, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution must be submitted prior to the release of such Agent's Warrants. In addition, such notice must specify, in the case of any Agent's Warrants tendered by the delivery of certificates, the name of the registered holder (if different from that of the tendering Warrantholder) and the serial numbers shown on the particular certificates evidencing such Warrants to be withdrawn. Withdrawals may not be rescinded, and Agent's Warrants withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer. However, properly withdrawn Agent's Warrants may be retendered by again following one of the procedures described under "The Exchange Offer -- Procedure for Tendering Agent's Warrants" at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Datalink.net, in its sole discretion, which determination shall be final and binding. None of Datalink.net, the Exchange Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification. ACCEPTANCE FOR EXCHANGE AND EXCHANGE Upon the terms and subject to the conditions of the Exchange Offer (including if the Exchange Offer is extended or amended, the terms and conditions of the Exchange Offer as so extended or amended), Datalink.net will accept for exchange and exchange all Agent's Warrants validly tendered by the Expiration Date and not withdrawn as soon as practicable after the later of (i) the Expiration Date and (ii) the satisfaction or waiver of the conditions set forth under "The Exchange Offer -- Conditions to Exchange Offer". In addition, Datalink.net reserves the right, in its sole discretion and subject to applicable law, to delay the acceptance for exchange or exchange of Agent's Warrants in order to comply in whole or in part with any applicable law or regulatory or government approval as discussed under "The Exchange Offer -- Conditions to Exchange Offer". For a description of Datalink.net's right to terminate the Exchange Offer and not accept for exchange or exchange Agent's Warrants or to delay acceptance for exchange or delay exchange of Agent's Warrants, see "The Exchange Offer -- Extension of the Exchange Offer Period; Termination; Amendments". For purposes of the Exchange Offer, Datalink.net shall be deemed to have accepted for exchange Agent's Warrants validly tendered and not withdrawn if, as and when Datalink.net gives oral or written notice to the Exchange Agent of its acceptance of the tenders of such Agent's Warrants. In all cases, upon the 12 terms and subject to the conditions of the Exchange Offer, the exchange of Agent's Warrants accepted for exchange pursuant to the Exchange Offer will be made by Datalink.net's submission of certificates for Common Stock with the Exchange Agent, which will act as agent for the tendering Warrantholders for the purpose of receiving certificates for Common Stock from Datalink.net and transmitting such consideration to tendering Warrantholders. In all cases, delivery of certificates of shares of Common Stock to be issued in exchange for properly tendered Agent's Warrants pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (i) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, (ii) the certificates for such Warrants and (iii) any other documents required by the Letter of Transmittal. If Datalink.net increases the consideration to be given for Agent's Warrants pursuant to the Exchange Offer, Datalink.net will provide such increased consideration for all Agent's Warrants acquired pursuant to the Exchange Offer whether or not such Agent's Warrants was tendered prior to or after such increase in consideration. If any tendered Agent's Warrants are not exchanged pursuant to the Exchange Offer for any reason, certificates for such unexchanged or untendered warrants will be returned without expense to the tendering Warrantholder, as promptly as practicable following the expiration or termination or withdrawal of the Exchange Offer. EXTENSION OF EXCHANGE OFFER PERIOD; TERMINATION; AMENDMENTS Datalink.net expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Exchange Offer is open by giving written notice of such extension to the Exchange Agent and to the holders of the Agent's Warrants. There can be no assurance that Datalink.net will exercise its right to extend the Exchange Offer. Datalink.net also expressly reserves the right, at any time or from time to time, in its sole discretion and regardless of whether or not any of the conditions specified in "The Exchange Offer -- Conditions of Exchange Offer" shall have been satisfied, to amend the Exchange Offer in any respect by making a written notice of such amendment. If Datalink.net shall decide to decrease or increase the consideration offered pursuant to the Exchange Offer, and the Exchange Offer is scheduled to expire at any time before the expiration of a period of 10 business days from and including the date that notice of such increase or decrease is first sent or given to Warrantholders, the Exchange Offer will be extended at least until the expiration of such period of 10 business days. In addition, if Datalink.net makes a material change in the terms of the Exchange Offer or in the information concerning the Exchange Offer, or waives a material condition of the Exchange Offer, Datalink.net will extend the Exchange Offer if and to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Act or other applicable law. These rules provide that a period sufficient to allow Warrantholders to consider the amended terms of the Exchange Offer must be provided following material changes in the terms of the offer or information concerning the offer. In a published release, the Commission has stated that in its view an offer must remain open for a minimum period of time following a material change in the terms of such offer and that the waiver of a condition is a material change in 13 the terms of an offer. The release states that an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to security holders, and that if material changes are made with respect to the information contained herein, a minimum of 10 business days may be required to allow adequate dissemination and investor response. Datalink.net also expressly reserves the right, in the event any of the conditions specified under "The Exchange Offer -- Conditions of Exchange Offer" shall not have been satisfied and so long as Agent's Warrants have not theretofore been exchanged, to delay (except as otherwise required by applicable law) acceptance for exchange or delay exchange of Agent's Warrants or to terminate the Exchange Offer and not accept for exchange or not exchange Agent's Warrants. If Datalink.net extends the period of time during which the Exchange Offer is open, is delayed in accepting for exchange or exchanging Agent's Warrants or is unable to accept for exchange or exchange Agent's Warrants pursuant to the Exchange Offer for any reason, then, without prejudice to Datalink.net's rights under the Exchange Offer, the Exchange Agent may, on behalf of Datalink.net, retain all Agent's Warrants tendered, and such Agent's Warrants may not be withdrawn except as otherwise provided in "The Exchange Offer -- Withdrawal Rights". The reservation by Datalink.net of the right to delay acceptance for exchange or exchange Agent's Warrants is limited by Rule 13e- 4(f)(5) promulgated under the Act, which requires that Datalink.net pay the consideration offered or return the Agent's Warrants deposited by or on behalf of Stockholders promptly after the termination or withdrawal of the Exchange Offer. Any extension, termination or amendment of the Exchange Offer will be followed as promptly as practicable by a written notice mailed no later than the next business day after the previously scheduled Expiration Date. CERTAIN CONDITIONS OF THE EXCHANGE OFFER Notwithstanding any other provisions of the Exchange Offer, Datalink.net shall not be required to accept for exchange or to exchange any Agent's Warrants tendered and may terminate or amend the Exchange Offer or may postpone (subject to the requirements of the Act for prompt exchange or return of Agent's Warrants) the acceptance for exchange of, and exchange of, Agent's Warrants tendered if any material change occurs which is likely to affect the Exchange Offer or the value or market price of the Agent's Warrants or the Common Stock, including, but not limited to, the following: (a) there shall have been threatened, instituted or pending any action or proceeding before any court, authority, agency or tribunal which challenges the making of the Exchange Offer, the acquisition of some or all of the Agent's Warrants pursuant to the Exchange Offer or otherwise relates in any manner to the Exchange Offer; (b) there shall have been any action threatened, pending or taken, or any approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, enforced or deemed to be applicable to the Exchange Offer or which, in Datalink.net's sole judgment, would or might directly or indirectly (1) make the acceptance for exchange or exchange of some or all of the Agent's Warrants 14 illegal or otherwise restrict, prohibit or delay materially the consummation of the Exchange Offer, (2) materially impair the contemplated benefits of the Exchange Offer to Datalink.net, or (3) materially affect the business, condition (financial or other), income, operations or prospects of Datalink.net, or otherwise materially impair in any way the contemplated future conduct of the business of Datalink.net; or (c) there shall have occurred any general suspension of, or limitation on prices for, trading in securities on any national securities exchange or in the over-the-counter market or any other change in the general political, market, economic or financial conditions in the United States or abroad that could, in the sole judgment of Datalink.net, have a material adverse effect on the business, condition (financial or other), income, operations or prospects of Datalink.net or the trading in the Common Stock. The conditions referred to above are for the sole benefit of Datalink.net and may be asserted by Datalink.net in its sole discretion regardless of the circumstances (including any action or omission by Datalink.net) giving rise to any such conditions or may be waived by Datalink.net in its sole discretion in whole at any time or in part from time to time. The failure by Datalink.net or any other affiliate of Datalink.net at any time to exercise its rights under any of the foregoing conditions shall not be deemed a waiver of any such right. The waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and each such right shall be deemed an ongoing right which may be asserted at any time or from time to time. FRACTIONAL SHARES No fractional shares of Common Stock will be issued in the Exchange Offer. A Warrantholder who would be entitled to receive a fraction of a share of Common Stock as part of the consideration to be received for the Agent's Warrants held by him shall, if he tenders all of the Agent's Warrants held by him, in lieu of such fraction, receive one full share of Common Stock. In the event that a holder of Agent's Warrants makes only a partial tender of his Warrants, no fractional share shall be issued, and any Agent's Warrants which would be exchanged for such fraction of a share shall be returned to the Warrantholder. SOLICITATIONS OF TENDERS; FEES Datalink.net has not retained any dealer-manager or similar agent in connection with the Exchange Offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the Exchange Offer. Datalink.net has retained American Securities Transfer & Trust, Inc. as Exchange Agent in connection with the Exchange Offer. The Exchange Agent will receive reasonable and customary compensation for its services in connection with the Exchange Offer, will be reimbursed for its reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith. 15 Datalink.net may contact holders of Agent's Warrants by mail, telephone, telecopy, telegraph and personal interview and may request brokers, dealers and other nominee shareholders to forward materials relating to the Exchange Offer to beneficial owners. Datalink.net also will reimburse brokers, dealers, commercial banks and trust companies for customary handling and mailing expenses incurred in forwarding the Exchange Offer to their customers. INTERESTS OF CERTAIN PERSONS; TRANSACTIONS Commonwealth Associates, an affiliate of the Company, currently holds 418,553 Agent's Warrants, and Michael S. Falk, the Chairman and controlling equity owner of Commonwealth Associates, owns 180,767 Agent's Warrants. In addition, Peter Allard, an affiliate of the Company, owns 100,000 Agent's Warrants. Datalink.net has no information as to whether these persons will accept the Exchange Offer. During the 40 days preceding the date of this Offering Circular, neither Datalink.net nor, to its knowledge, any of its subsidiaries, executive officers or directors or any associate of any such officer or director has engaged in any transactions involving the Agent's Warrants. CERTAIN TAX CONSEQUENCES This summary sets forth the principal anticipated federal income tax consequences to Warrantholders of their exchange of Agent's Warrants for Common Stock pursuant to the Exchange Offer. The summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect as of the date hereof, and, in particular, is based on the assumption that the Agent's Warrants have been held as "capital assets" within the meaning of Section 1221 of the Code. Such laws or interpretations may differ on the date of the consummation of the Exchange Offer, and relevant facts may also differ. This summary does not address any foreign or local tax consequences, does not address state tax consequences and does not address estate or gift tax considerations. The consummation of the Exchange Offer is not conditioned upon the receipt of any ruling from the Internal Revenue Service (the "IRS") or any opinion of counsel as to tax matters. This summary is for general information only. The tax treatment of each Warrantholder will depend in part upon his particular situation. Special tax consequences not described below may be applicable to particular classes of taxpayers, including financial institutions, pension funds, mutual funds, broker-dealers, persons who are not citizens or residents of the United States or who are foreign corporations, foreign partnerships or foreign estates or trusts, Warrantholders who own actually or constructively (under certain attribution rules contained in the Code) 5% or more of the Agent's Warrants, Stockholders who acquired their Agent's Warrants and persons who received Agent's Warrants as compensation. ALL WARRANTHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE EXCHANGE OFFER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS. 16 No gain or loss will be recognized by a holder (an "Exchanging Holder") of Agent's Warrants as a result of the exchange of Agent's Warrants for shares of Common Stock. The tax basis of an Exchanging Holder in its shares of Common Stock will be determined by allocating the holder's tax basis in the Agent's Warrants exchanged therefor pro rata among the shares of Common Stock. For tax purposes, the holding period of an Exchanging Holder in shares of Common Stock received pursuant to the Exchange Offer will include the period during which such holder held the Agent's Warrants exchanged therefor. PRICE RANGE OF COMMON STOCK The Company's Common Stock trades in the over-the-counter market, under the symbol "NETD". The following table sets forth the high and low bid quotations for the Company's Common Stock for the periods indicated as reported by the OTC Bulletin Board since April 1, 1997. These prices are believed to be inter-dealer quotations and do not include retail mark-ups, mark-downs, or other fees or commissions, and may not necessarily represent actual transactions. QUARTER ENDED HIGH BID LOW BID ------------------ -------- ------- June 30, 1997 $25.62 $ 3.12 September 30, 1997 $ 5.80 $ 2.60 December 31, 1997 $ 9.40 $ 3.45 March 31, 1998 $ 6.13 $ 2.50 June 30, 1998 $ 7.94 $ 4.00 September 30, 1998 $ 4.94 $ 1.00 December 31, 1998 $ 1.31 $ 0.63 March 31, 1999 $ 4.00 $ 1.06 June 30, 1999 $ 5.12 $ 2.41 July 1, 1999 through August 24, 1999 $ 4.97 $ 2.81 A 1 for 10 reverse stock split became effective February 9, 1998. Share bid prices have been adjusted to reflect this split. DESCRIPTION OF CAPITAL STOCK AND AGENT'S WARRANTS Datalink.net has 55,000,000 authorized shares of stock, consisting of 50,000,000 shares of common stock, having a par value of $.01 per share, and 5,000,000 shares of preferred stock, having a par value of $.001 per share. COMMON STOCK As of July 31, 1999, there were 3,316,716 shares of common stock outstanding. All such outstanding shares of common stock are fully paid and nonassessable. Each share of common stock has an equal and ratable right to receive dividends when declared by the Board of Directors of Datalink.net out of assets legally available for that purpose and subject to the dividend obligations of Datalink.net to holders of any preferred stock then outstanding. In the event of a liquidation, dissolution or winding up of Datalink.net, the holders of common stock are entitled to share equally and ratably in the assets available for distribution after payment of all liabilities, and 17 subject to any prior rights of any holders of preferred stock outstanding at that time. The holders of common stock have no preemptive, subscription, conversion or redemption rights, and are not subject to further calls or assessments of Datalink.net. Each share of common stock is entitled to one vote in the election of directors and on all other matters, submitted to a vote of stockholders. Datalink.net's Articles of Incorporation provide that a holder of any class or series of stock entitled to vote in the election of directors shall be entitled to cumulate his votes, and may cast votes equal to the number of votes which (except for cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected. Such shareholders may cast all such votes for a single director or allocate such votes to two or more directors as such shareholder sees fit. Under Nevada law, to exercise the right to cumulative voting, a shareholder must give Datalink.net written notice of his intent to do so at least 48 hours before the time fixed for the annual meeting. Such written notice must be given to the president or secretary of Datalink.net. PREFERRED STOCK Preferred stock may be issued from time to time in one or more series, and the board of directors, without further approval of the stockholders, is authorized to fix the dividend rates and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences and any other rights, preferences, privileges and restrictions applicable to each series of preferred stock. The purpose of authorizing the board of directors to determine such rights, preferences, privileges and restrictions is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of common stock and, under some circumstances, make it more difficult for a third party to gain control of Datalink.net. As of June 21, 1999, Datalink.net had 2,022,465 shares of preferred stock outstanding, which shares have been designated series A convertible preferred stock. The preferred stock is convertible into common stock on a 1 for 1 basis. Holders of preferred stock are entitled to receive dividends equal to any dividends paid on the common stock. In the event of a liquidation of Datalink.net, holders of preferred stock are entitled to receive $3.75 per share prior to any distributions to be made to holders of common stock. The preferred stock is not redeemable. Holders of preferred stock are entitled to vote together with the holders of common stock on an "as-converted" basis. The preferred stock will be automatically converted into an equal number of shares of common stock in the event that the closing market price of the common stock equals or exceeds $10.00 per share for 30 consecutive trading days and a registration statement covering the resale of the common stock is then effective. No other series of preferred stock has been designated by Datalink.net. 18 AGENT'S WARRANTS In connection with a private placement that was completed in November 1997, Datalink.net issued to Commonwealth Associates, the placement agent, and its designees warrants to purchase 824,383 shares of common stock. At that time, Datalink.net also issued warrants to purchase 100,000 shares of common stock to Peter Allard, an investor who had provided Datalink.net with $2 million in debt financing. These warrants are exercisable at $3.75 per share and are exercisable at any time until November 5, 2002. At the election of a holder of these warrants, the holder may exchange all or a portion of the warrants held for shares of common stock in a "cashless exercise" transaction. The number of shares issued in exchange for the warrants is determined by determining the value of the warrants by subtracting the $3.75 exercise price from the current market price and multiplying this by the number of shares that the holder could purchase with the surrendered warrants. This total value is then divided by the current market price to determine the number of shares to be received. For example, if a holder surrenders warrants to purchase 1,000 shares and the current market price is $5.00 per share, the holder would receive 250 shares of common stock in exchange for the warrants. These warrants are not redeemable. 19 EX-99 3 EXHIBIT (A)(2) THE EXCHANGE OFFER IS BEING MADE PURSUANT TO THE EXEMPTIONS FROM REGISTRATION AFFORDED BY SECTIONS 3(A) AND/OR 4(2) OF THE SECURITIES ACT OF 1933 AND REGULATION D THEREUNDER. NO COMMISSION OR OTHER REMUNERATION WILL BE PAID OR GIVEN DIRECTLY OR INDIRECTLY FOR SOLICITING THE EXCHANGE OF AGENT'S WARRANTS PURSUANT TO THE EXCHANGE OFFER. LETTER OF TRANSMITTAL TO EXCHANGE AGENT'S WARRANTS OF DATALINK.NET, INC. FOR SHARES OF ITS COMMON STOCK, $.01 PAR VALUE THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., MOUNTAIN TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE EXCHANGE OFFER IS EXTENDED. The Exchange Agent for the Offer is: AMERICAN SECURITIES TRANSFER & TRUST, INC. Attn: Trust Department, (303) 986-5400 Mail to: P.O. Box 1596 Denver, Colorado 80201 Overnight or Hand Deliveries: 12039 W. Alameda Parkway, Suite Z-2 Lakewood, Colorado 80228 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be used in connection with the delivery of any and all Agent's Warrants. Questions or requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth above. Warrantholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Exchange Offer. DESCRIPTION OF AGENT'S WARRANTS TENDERED NAME(S) AND ADDRESS OF REGISTERED HOLDER(S) (PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE): Name(s) ................................................................. (Please Print) Address ................................................................. .......................................................................... (Include Zip Code) NUMBER OF WARRANTS TENDERED* (PLEASE FILL IN): .......................................................................... *Unless otherwise indicated, it will be assumed that all Agent's Warrants delivered to the Exchange Agent are being tendered. See Instruction 3. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Datalink.net, Inc., a Nevada corporation ("Datalink.net"), the above described Agent's Warrants (collectively, except where the context otherwise requires, the "Warrants"), of Datalink.net pursuant to Datalink.net's offer to exchange one (1) share of its Common Stock, $.01 par value (the "Common Stock"), for each six (6) Warrants, upon the terms and subject to the conditions set forth in the Offering Circular, dated August 25, 1999 (the "Offering Circular"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Exchange Offer"). Upon the terms and subject to the conditions of the Exchange Offer and effective upon acceptance for exchange of the Warrants tendered herewith, the undersigned hereby tenders, exchanges, sells, assigns and transfers to or upon the order of Datalink.net, and instructs Datalink.net to register such tender, exchange, sale, assignment and transfer of, all right, title and interest in and to all the Warrants that are being tendered hereby and irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned with respect to such Warrants, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) present the Warrants for transfer on the books of Datalink.net, including by delivery of certificates for such Warrants, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Datalink.net and (b) receive all benefits and otherwise exercise all rights of beneficial ownership of the Warrants, all in accordance with the terms of the Exchange Offer. 2 The undersigned hereby represents and warrants that the undersigned and has been given an opportunity to review complete information concerning the Company and ask questions of the Company's management in making a decision as to whether to accept the Exchange Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Warrants tendered hereby and to give the instruction set forth herein and that when such Warrants are accepted for exchange by Datalink.net, Datalink.net will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned will, upon request, execute and deliver, or cause to be executed and delivered, any additional documents deemed by the Exchange Agent of Datalink.net to be necessary or desirable to complete the tender, exchange, sale, assignment and transfer of the Warrants tendered hereby. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Exchange Offer, this tender is irrevocable. The undersigned understands that tenders of the Warrants pursuant to any one of the procedures described in the Offering Circular and in the instructions hereto will constitute a binding agreement between the undersigned and Datalink.net upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated under "Special Issuance Instructions," please issue the certificate for the shares of Common Stock issuable upon exchange of the Warrants being exchanged in the name(s) of the registered holder(s) appearing under "Description of Agent's Warrants Tendered" and return any Warrants not tendered or not exchanged to such registered holder(s). Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the certificate for the shares of Common Stock issuable upon exchange of the Warrants being exchanged, and return any Warrants not tendered or not exchanged (and accompanying documents, as appropriate), to the address(es) of the registered holder(s) appearing under "Description of Agent's Warrants Tendered" shown below the undersigned's signature(s). In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificate and return any Warrants not tendered or not exchanged (and accompanying documents, as appropriate) in the name(s) of, and mail said certificate (and accompanying documents, as appropriate) to, the person(s) so indicated. The undersigned recognizes that Datalink.net has no obligation, pursuant to the "Special Issuance Instructions," to transfer any Shares from the name of the registered holder(s) thereof if Datalink.net does not accept for exchange any of the Warrants so tendered. 3 SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 1, 4 and 5) To be completed ONLY if the certificates for the Common Stock are to be issued in the name of someone other than the undersigned. Issue certificates to: Name .................................................................... (Please Print) Address ................................................................. .......................................................................... (Include Zip Code) .......................................................................... (Taxpayer Identification or Social Security No.) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4 and 5) To be completed ONLY if the certificates for the Common Stock are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail certificates to: Name .................................................................... (Please Print) Address ................................................................. .......................................................................... (Include Zip Code) 4 SIGN HERE ........................................................................... ........................................................................... Signature(s) of Owner(s) Dated: ............................................................., 1999 (Must be signed by registered holder(s) exactly as name(s) appear(s) on the certificate or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 4.) Name(s): ........................................................ (Please Print) ................................................................. Capacity (full title) (See Instruction 5): ...................... Address: ........................................................ ................................................................. (Include Zip Code) Area Code and Telephone Number: ............................................... Tax Identification or Social Security No.: ............................................ GUARANTEE OF SIGNATURE(S) (If Required -- See Instructions 1 and 4) Authorized Signature: ........................................... Name(s): ........................................................ (Please Print) Name of Firm: ................................................... Address: ........................................................ ................................................................. (Include Zip Code) Area Code and Telephone Number: ............................................... Dated: ..................................................., 1999 5 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a bank, broker, dealer, credit union, savings association or other entity that is a member of a recognized Medallion Program approved by The Securities Transfer Association, Inc.(an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed if this Letter of Transmittal is signed by the registered holder(s) of the Warrants tendered herewith and such holder(s) have not completed the instruction entitled "Special Issuance Instructions" on this Letter of Transmittal. 2. Delivery of Letter of Transmittal and Warrants. This Letter of Transmittal is to be used for the tender of all Agent's Warrants. A properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth on the front page of this Letter of Transmittal by the Expiration Date. In addition, the Warrant certificate is to be delivered by physical delivery of such certificate, together with any other documents required by this Letter of Transmittal, and must be received by the Exchange Agent by the Expiration Date. THE METHOD OF DELIVERY OF WARRANTS, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING WARRANTHOLDER. IF CERTIFICATES FOR WARRANTS ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BY THE EXPIRATION DATE. No alternative, conditional or contingent tenders will be accepted, and no fractional shares of Common Stock will be issued. By executing this Letter of Transmittal (or facsimile thereof), the tendering warrantholder waives any right to receive any notice of the acceptance for exchange of the Warrants. 3. Partial Tenders. If fewer than all the Agent's Warrants delivered to the Exchange Agent are to be tendered, fill in the number of Warrants which are to be tendered in the box entitled "Number of Warrants Tendered". In such case, a new certificate, for the remainder of the Warrants not tendered will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Exchange Offer. All Agent's Warrants delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 4. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Warrants tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates, without alteration, enlargement or any change whatsoever. If any of the Agent's Warrants tendered hereby are held of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the Agent's Warrants tendered hereby are registered in different names, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations. 6 If this Letter of Transmittal is signed by the registered holder(s) of the Agent's Warrants tendered hereby, no endorsement of the certificate or separate stock power is required unless issuance of the certificate representing the Common Stock is to be made in the name of any person other than the registered holder(s). Signatures on any such certificate or stock power must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Agent's Warrants tendered hereby, this Letter of Transmittal must be accompanied by an appropriate stock power, or such certificate must be endorsed, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Agent's Warrants. Signature(s) on any such stock power or certificate must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any stock power or certificate is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Datalink.net and/or the Exchange Agent of the authority of such person so to act must be submitted. 5. Special Issuance and Delivery Instructions. If the certificate for the Common Stock issuable upon exchange of the Agent's Warrants tendered hereby is to be issued in the name of a person other than the person(s) signing this Letter of Transmittal or if the certificate for the Common Stock or certificate for Agent's Warrants not tendered or not exchanged are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. 6. Waiver of Conditions. Subject to the terms of the Exchange Offer, Datalink.net reserves the absolute right in its sole discretion to waive any of the specified conditions of the Exchange Offer, in whole or in part, in the case of any Warrants tendered. 7. Requests for Assistance or Additional Copies. Requests for assistance or additional copies of the Offering Circular and this Letter of Transmittal may be obtained from the Exchange Agent at its address or telephone number set forth above. Questions or requests for assistance may be directed to the Exchange Agent. 8. Lost, Destroyed or Stolen Certificates. In the case of Agent's Warrants for which the certificate has been lost, destroyed or stolen, the Warrantholder should promptly notify the Exchange Agent. The Warrantholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. 9. Acceptance of Tendered Warrants. Upon the terms and subject to the conditions of the Exchange Offer, Datalink.net will have accepted for exchange (and thereby exchanged) Agent's Warrants validly tendered and not withdrawn as, if and when Datalink.net gives oral or written notice to the Exchange Agent of its acceptance of the tenders of such Agent's Warrants pursuant to the Exchange Offer. 7 10. Withdrawal Rights. Tendered Agent's Warrants may be withdrawn only pursuant to the procedures set forth under the heading "The Exchange Offer -- Withdrawal Rights" in the Offering Circular. 8 EX-99 4 EXHIBIT (A)(3) Datalink.net, Inc. 1735 Technology Way, Suite 790 San Jose, California 95110 August 26, 1999 To the Holders of Agent's Warrants of Datalink.net, Inc. As you know, in connection with the private offering of Datalink.net's Series A Preferred Stock which was completed in November 1997, you received warrants to purchase shares of Common Stock at $3.75 per share. These warrants are referred to as "Agent's Warrants" because most of them were issued to Commonwealth Associates, the Placement Agent for the offering. The Board of Directors has now decided to give the holders of those warrants the opportunity to exchange those warrants for common stock. This offer will also help to reduce the number of warrants that are outstanding. Datalink.net is offering the holders of the Agent's Warrants one share of Common Stock for each six Warrants exchanged. The terms of this Exchange Offer are explained in the enclosed Offering Circular. Also enclosed is a Letter of Transmittal for your use in submitting your warrant certificates for exchange, and a copy of our Schedule 13E-4 as filed with the SEC. The shares of Common Stock that will be issued in the Exchange Offer will be "restricted." However, because of the SEC's tacking rules, if you have held your warrants for at least one year, the shares will be immediately eligible for resale under Rule 144. As you also may be aware, on February 9, 1998, Datalink.net effected a 1 for 10 reverse split of our outstanding Common Stock. At the same time, the Warrants were also reverse split on a 1 for 10 basis. As a result, if your certificate was issued before February 9, 1998, the number of Warrants shown is ten times greater than the number you actually own. You may still exchange your old certificate in the Exchange Offer, but keep in mind that you will only receive shares of Common Stock based on the number of Warrants you hold after the reverse split. The Exchange Offer materials are fairly lengthy and have been written to satisfy a number of legal requirements. We suspect that many of you may have questions about the materials or the exchange offer. If you have questions, we ask that you call Tali Durant at Datalink.net at (408) 367-1714. Questions of a technical nature should be directed to representatives of American Securities Transfer & Trust, Inc., which is acting as the exchange agent. The telephone number for American Securities Transfer & Trust, Inc. is (303) 986- 5400. Ask for the Trust Department. Please take the time to review the enclosed materials and consider accepting the Exchange Offer. We believe that this will benefit both you and the Company. We look forward to your response. This Exchange Offer will be held open until September 24, 1999, unless extended. Sincerely, Anthony N. LaPine, President -----END PRIVACY-ENHANCED MESSAGE-----