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
Subject Company: Elastic Networks Inc.
Commission File No.: 333-76814
Date: January 30, 2002
Paradyne Networks, Inc. ("Paradyne") today filed a Current Report on
Form 8-K containing Paradyne's press release announcing Paradyne's 2001 fourth
quarter and year-end results, certain forward-looking information regarding
Paradyne for the first quarter of 2002 and Paradyne's press release announcing
Paradyne's license agreement with Alcatel's Semiconductor Unit. This Current
Report on Form 8-K is incorporated by reference into this filing.
The material incorporated by reference into 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 pending acquisition of Elastic Networks Inc. ("Elastic") by Paradyne, and
those preceded by, followed by or that otherwise include the words "believes,"
"expects," "anticipates," "intends," "estimates," or similar expressions. For
those statements, Paradyne claims 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 as of today's
date, and Paradyne does not assume any obligation to update any of these
statements. The forward-looking statements are not guarantees of the future
performance of Paradyne 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. Paradyne has filed with the SEC
a registration statement containing a preliminary joint proxy
statement-prospectus regarding the proposed transaction, as well as other
relevant documents concerning 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 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 acquisition.
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 preliminary joint proxy
statement-prospectus regarding the proposed transaction and the definitive joint
proxy statement-prospectus when it becomes available.