Filed by: Paradyne Networks, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Elastic Networks Inc.
Form S-4 Registration Statement
Commission File No.: 333-76814
Date: January 16, 2002
In connection with the filing of a Registration Statement on
Form S-4 (the "Registration Statement") by Paradyne Networks, Inc. ("Paradyne")
relating to the proposed acquisition (the "Acquisition") of Elastic Networks
Inc. ("Elastic") by Paradyne, Paradyne today filed a Current Report on Form 8-K
setting forth "Risks Related to the Business of Paradyne Networks, Inc." This
Current Report on Form 8-K is incorporated by reference into the Registration
Statement.
The material referred to in this filing contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as
applicable, particularly those statements regarding the effects of the Elastic
acquisition, and those preceded by, followed by or that otherwise include the
words "believes," "expects," "anticipates," "intends," "estimates," or similar
expressions. For those statements, Paradyne and Elastic claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements relating to
expectations about future results or events are based upon information
available to Paradyne and Elastic as of today's date, and Paradyne and Elastic
do not assume any obligation to update any of these statements. The
forward-looking statements are not guarantees of the future performance of
Paradyne or Elastic or the combined company and actual results may vary
materially from the results and expectations discussed. For instance, while
Paradyne and Elastic have entered into a definitive agreement, there is no
assurance that the parties will complete the transaction. In the event the
companies do not receive necessary stockholder or other approvals or fail to
satisfy conditions to closing, the transaction will terminate. Additional risks
and uncertainties related to the Acquisition include, but are not limited to,
conditions in the financial markets relevant to the proposed Acquisition, the
successful integration of Elastic into Paradyne's business, and each company's
ability to compete in the highly competitive data communications equipment
industry. The revenues and earnings of Paradyne and the combined company and
their ability to achieve their planned business objectives will be subject to a
number of factors that make estimates of future operating results uncertain.
These factors include: the timing and amount of expense reduction; the
uncertainty of litigation, including putative stockholder class actions; a
reliance on international sales; rapid technological change
that could render Paradyne's or the combined company's products obsolete; the
uncertain acceptance of new telecommunications services based on DSL;
substantial dependence on network service providers who may reduce or
discontinue their purchase of products or services at any time; the timing and
amount of, or cancellation or rescheduling of, orders of Paradyne's or the
combined company's products to existing and new customers; possible inability to
sustain revenue growth or profitability; dependence on only a few customers for
a substantial portion of Paradyne's or the combined company's revenue; highly
competitive markets; reliance on sales of access products to BB Technologies
Corporation (a newly formed subsidiary of SOFTBANK CORP.), Lucent Technologies
and Avaya Inc.; dependence on sole and single-source suppliers and the
reliability of the raw materials supplied by them to manufacture products under
customer contracts; a long and unpredictable sales cycle; the number of DSL
lines actually deployed by BB Technologies Corporation and other DSL customers
as compared to forecasts; Paradyne's or the combined company's ability to
manufacture adequate quantities of products at forecasted costs under customer
contracts; Paradyne's or the combined company's ability to manufacture products
in accordance with its published specifications; and other risks identified from
time to time in Paradyne's and Elastic's SEC reports and public announcements.
The proposed transaction will be submitted to Paradyne's and Elastic's
stockholders for their consideration. On January 16, 2002, Paradyne filed with
the SEC a registration statement containing a preliminary joint proxy
statement-prospectus regarding the proposed transaction. STOCKHOLDERS OF
PARADYNE AND ELASTIC ARE URGED TO READ THE PRELIMINARY JOINT PROXY
STATEMENT-PROSPECTUS, THE DEFINITIVE JOINT PROXY STATEMENT-PROSPECTUS WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL
AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. THE DEFINITIVE JOINT PROXY STATEMENT-PROSPECTUS WILL BE
SENT TO PARADYNE'S AND ELASTIC'S STOCKHOLDERS SEEKING THEIR APPROVAL OF THE
PROPOSED TRANSACTION. YOU WILL BE ABLE TO OBTAIN FREE COPIES OF THESE DOCUMENTS
AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES OF THE DEFINITIVE JOINT
PROXY STATEMENT-PROSPECTUS (WHEN IT BECOMES AVAILABLE) AND THE SEC FILINGS THAT
WILL BE INCORPORATED BY REFERENCE IN THE DEFINITIVE JOINT PROXY
STATEMENT-PROSPECTUS CAN ALSO BE OBTAINED, WITHOUT CHARGE, BY DIRECTING A
REQUEST TO PARADYNE, INVESTOR RELATIONS 727-530-8082.
Paradyne and Elastic and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Paradyne and Elastic in connection with the merger.
Information regarding those participants is included in the proxy statements for
the Paradyne and Elastic annual stockholders' meetings for 2001, which are
available at the SEC's website. Additional information regarding the interests
of those participants may be obtained by reading the joint proxy
statement-prospectus regarding the proposed transaction when it becomes
available.
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