SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
NETTAXI.COM
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(Name of Registrant as Specified In Its Charter)
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[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[_] Check box if any part of the fee is offset as provided by Exchange Act
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(1) Amount Previously Paid: N/A
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Dear Shareholder:
We are pleased to inform you that we have executed a definitive merger
agreement with RAE Systems Inc. The company was established in 1991 and is
recognized as one of the world's leading manufacturers of technologically
advanced single and multiple sensor atmospheric monitors, photo-ionization
detectors, gas detection tubes, sampling pumps, and wirelessly connected gas
detection and security monitoring systems. RAE System's proprietary and patented
technology is also uniquely positioned for use in the detection and response to
contaminants and vapors associated with weapons of mass destruction.
RAE Systems commercial customers include: American Airlines, United
Airlines, US Airways, General Motors, Honda, Exxon, IBM, Mobile, DOW, Texaco,
DuPont, Chevron, Hewlett-Packard, British Petroleum, Amoco, Motorola, Boeing,
and Intel. Based in the heart of "Silicon Valley", RAE Systems is a progressive,
high-tech company with manufacturing and distribution networks spanning the
entire globe.
The merger will allow RAE Systems to expand its operations, exploit its
market opportunities and continue to develop and enhance its product line. We
believe that the merger will enhance the value of our company by combining our
financial resources with a solid business model in a viable field.
Under the terms of the merger agreement, unanimously approved by both
Boards of Directors, RAE Systems shareholders will receive a majority of the
outstanding shares of the combined entity. The transaction, which is expected to
be tax-free to shareholders of both companies for U.S. Federal income tax
purposes, will be accounted for as a purchase. The transaction is subject to the
approval of each party's shareholders and we anticipate presenting the
transaction for approval in the first quarter of 2002. Further information
regarding the merger will be provided in a proxy statement filed with the
Securities and Exchange Commission.
As you know, this has been an extremely turbulent year for companies in the
Internet space. There have been many high and low profile casualties in the
industry. Early in 2001, we saw the changing of the tides in the Internet
industry. The bankruptcy and liquidation of many of our Internet based customers
and suppliers had a very real and adverse affect on our business. Yet, the costs
to operate our Internet community and portal were increasing.
These difficulties caused us to re-evaluate our business model and forge ahead
in a new direction. To survive this sudden downturn in the economy, we cut costs
drastically, downsized our operations, and adopted a new business strategy that
we believed would increase the value of our business for our shareholders. In
2001, we took several actions to conserve the company's capital. We terminated
several costly contracts. We virtually eliminated our research and development
and marketing expenses. We also reduced the number of employees dramatically.
Currently, our management team consists only of the 2 founders, one financial,
and one administrative employee, who are in place to maintain our limited
operations and assist with the completion of the merger with RAE Systems. Each
of these remaining employees has reduced his or her salary substantially. We
have taken every opportunity available to conserve our capital and the company
is still alive and able to enter into this transaction today because of these
actions.
We would like to thank all of our stockholders who have stuck with us
during this difficult year. We believe the merger with RAE systems is the fruit
of our acquisition strategy, which we adopted in May 2001. The merger will
provide us with a new direction that avoids the pitfalls that have crippled so
many Internet businesses.
Since May 2001, we have committed ourselves to the goal of identifying a
suitable business with which to merge our operations. Since then, we have been
on an aggressive hunt for a business which has a proven business model and the
potential to enhance the value of our company for our shareholders. We engaged
Baytree Capital Associates to find merger candidates. Baytree has reviewed over
100 potential opportunities. Management has evaluated potential transactions
with more than 50 of those companies. Of all of these companies, we believe RAE
Systems presents the best fit for our shareholders.
Despite the announcement of our significant cost cutting measures and our
acquisition strategy, Seedling Technologies ("Seedling"), which now appears to
be operating under the name Worldmodal Network Services, Inc., has repeatedly
attempted to take over the company. Although Doug Spink of Seedling has touted
his track record, our research into his record seems to demonstrate a record of
failed transactions and one lawsuit after another. When asked repeatedly to
provide verifiable references and provide documentation regarding its ability to
perform as claimed, Seedling has refused.
Nevertheless, through postings on Internet chat rooms, Web sites, press
releases, and in communications with our shareholders, Seedling has attempted to
undermine shareholder confidence in our business by publishing misleading
information that does not accurately reflect our business. You will not find any
of the facts presented to you in this letter in a release by Seedling. We urge
you to review Seedling's track record. Seedling's trading symbol is WMDL
and you can find its SEC reports at www.sec.gov.
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In closing, we respectfully request your patience and support while RAE
Systems review statements are currently being audited which will allow the
formal process of a proxy delivery for your review and approval. Any questions,
please contact us at 408-879-9880.
Sincerely,
/s/ Robert A. Rositano, Jr. /s/ Dean Rositano
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Robert A. Rositano, Jr. Dean Rositano
Chief Executive Officer President
IMPORTANT INFORMATION
This letter does not constitute a request for a proxy. Nettaxi plans to file a
proxy statement with the Securities and Exchange Commission relating to
Nettaxi's solicitation of proxies from the stockholders of Nettaxi with respect
to the Nettaxi 2002 annual meeting of stockholders. NETTAXI ADVISES SECURITY
HOLDERS TO READ ITS PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Nettaxi's proxy statement and other relevant
documents will be available for free at www.sec.gov. You may also obtain a free
copy of Nettaxi proxy statement, when it becomes available, by writing to
Nettaxi at1875 South Bascom Ave., No. 116, Campbell, CA 95008. Detailed
information regarding the names, affiliation and interests of individuals who
may be deemed participants in the solicitation of proxies of Nettaxi's
shareholders will be available in the soliciting materials on Schedule 14A filed
by Nettaxi with the SEC.
SAFE HARBOR STATEMENT
The matters discussed in this communication include forward-looking statements
such as statements relating to our ability to successfully complete the
transactions contemplated by the merger agreement and statements relative to the
merger regarding whether the merger will add value to our business. These
forward looking statements are subject to various risks, uncertainties, and
other factors that could cause actual results to vary materially from the
results anticipated in such forward-looking statements. Such risks and
uncertainties include, but are not limited to the possibility that we will be
unable to obtain shareholder approval of the transaction or that we will be
unable to close the transaction contemplated. The inability to accurately
predict our success of our combined companies and other risks are detailed from
time to time in our filings with the Securities and Exchange Commission, and
represents our judgment as of the date of this release. We disclaim any intent
or obligation to update these forward-looking statements.
FOR IMMEDIATE RELEASE
NETTAXI.COM AND RAE SYSTEMS INC. AGREE TO MERGE
Campbell, California, January 10, 2002- Nettaxi.com (OTC BB: NTXY), a community
and portal Web site that has been pursuing strategic opportunities for the
acquisition or merger of an appropriate business, today announced that it has
entered into a definitive merger agreement with RAE Systems Inc. RAE Systems
was established in 1991 and is recognized as a leading manufacturer of
technologically advanced single and multiple sensor atmospheric monitors,
photo-ionization detectors, gas detection tubes, sampling pumps, and wirelessly
connected gas detection and security monitoring systems. RAE System's
proprietary and patented technology can also be used in the detection and
response to certain contaminants and vapors associated with weapons of mass
destruction.
Under the terms of the merger agreement, unanimously approved by both Boards of
Directors, RAE Systems shareholders will receive a majority of the outstanding
shares of the combined entity. Subject to the approval of shareholders, Nettaxi
shares will be reverse split at the ratio of 5.67 to 1 prior to the closing of
the merger. The management and Board of Directors of Nettaxi will resign at the
closing of the merger and be replaced with the Board of Directors and management
team of RAE Systems. The transaction, which is expected to be tax-free to
shareholders of both companies for U.S. Federal income tax purposes is subject
to the approval of each party's shareholders. Upon completion of the merger,
the new company will be known as RAE Systems Inc. The merger would make RAE
Systems a public company. Further information regarding the merger will be
provided in a proxy statement filed with the Securities and Exchange Commission.
"The merger with Nettaxi will allow us to expand our operations, exploit our
market opportunities and continue to develop and enhance our product line" said
Robert Chen, Chairman of RAE Systems Inc. "We believe our combined resources
will be a significant benefit to all of the shareholders involved."
"We believe the merger with RAE Systems is the fruit of our acquisition strategy
which we announced in May 2001." said Robert A. Rositano, Jr. CEO of Nettaxi.
"All year, we have worked aggressively to cut costs and downsize our operations
while seeking to identify an appropriate merger candidate. In the course of this
effort, we have analyzed numerous potential candidates of varying qualities. RAE
Systems stands out amongst all of these candidates because of its strong track
record and quality business."
ABOUT NETTAXI.COM
Nettaxi.com is an Internet portal with a range of services and content. Nettaxi
offers members access to broadband content featuring sports, movie clips, movie
trailers and other forms of entertainment. Nettaxi has been seeking a strategic
acquisition of a new and profitable business model that could potentially
increase shareholder value. Nettaxi is found on the Web at
<http://www.nettaxi.com/> www.nettaxi.com.
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ABOUT RAE SYSTEMS
RAE Systems Inc. was established in 1991. RAE Systems is recognized as a leading
manufacturer of technologically advanced single and multiple sensor atmospheric
monitors, photo-ionization detectors, gas detection tubes, sampling pumps, and
wirelessly connected gas detection and security monitoring systems. RAE Systems
commercial customers include: American Airlines, United Airlines, US Airways,
General Motors, Honda, Exxon, IBM, Mobile, DOW, Texaco, DuPont, Chevron,
Hewlett-Packard, British Petroleum, Amoco, Motorola, Boeing, and Intel. Based
in the heart of "Silicon Valley", RAE Systems is a progressive, high-tech
company with manufacturing and distribution networks spanning the entire globe.
IMPORTANT INFORMATION
This press release does not constitute a request for a proxy. Nettaxi plans to
file a proxy statement with the Securities and Exchange Commission relating to
Nettaxi's solicitation of proxies from the stockholders of Nettaxi with respect
to the Nettaxi 2002 annual meeting of stockholders. NETTAXI ADVISES SECURITY
HOLDERS TO READ ITS PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Nettaxi's proxy statement and other relevant
documents will be available for free at www.sec.gov. You may also obtain a free
copy of Nettaxi proxy statement, when it becomes available, by writing to
Nettaxi at 1875 South Bascom Ave., No. 116, Campbell, CA 95008. Detailed
information regarding the names, affiliation and interests of individuals who
may be deemed participants in the solicitation of proxies of Nettaxi's
shareholders will be available in the soliciting materials on Schedule 14A filed
by Nettaxi with the SEC.
SAFE HARBOR STATEMENT
The matters discussed in this communication include forward-looking statements
such as statements relating to our ability to successfully complete the
transactions contemplated by the merger agreement and statements relative to the
merger regarding whether the merger will add value to our business. These
forward looking statements are subject to various risks, uncertainties, and
other factors that could cause actual results to vary materially from the
results anticipated in such forward-looking statements. Such risks and
uncertainties include, but are not limited to the possibility that we will be
unable to obtain shareholder approval of the transaction or that we will be
unable to close the transaction contemplated. The inability to accurately
predict the success of our combined companies and other risks are detailed from
time to time in our filings with the Securities and Exchange Commission
represents our judgment as of the date of this release. We disclaim any intent
or obligation to update these forward-looking statements.
Contact: Robert Rositano, CEO Nettaxi, (408) 879-9880 ext. 101