As filed with the Securities and Exchange Commission on July 12, 2001
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRIMELINK SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
Delaware 72-1186845
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10135 Hereford Road
Folsom, LA 70437
(Address of principal executive offices) (Zip Code)
PROFESSIONAL SERVICES CONSULTING
AGREEMENT WITH RANDALL A. DREW
AND C. CHRISTOPHER KESSEN
(Full title of the plan)
John R. Wade, President
PRIMELINK SYSTEMS, INC.
10135 Hereford Road
Folsom, LA 70437
(Name and address of agent for service)
COPY TO:
James M. Schneider, Esq.
Atlas Pearlman, P.A.
350 East Las Olas Boulevard, Suite 1700
Fort Lauderdale, FL 33301
(954) 763-1200
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered share price fee
====================================================================================================================================
COMPENSATORY STOCK ISSUED TO SELLING SECURITYHOLDERS
Common Stock, $0.001
par value per share 300,000 $2.00 $600,000 $150.00*
- -----------------
* Calculated in accordance with Rule 457 based upon not lower than the
average of the closing bid and asked prices on July 11, 2001.
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PROSPECTUS
PRIMELINK SYSTEMS, INC.
300,000 SHARES OF COMMON STOCK
This prospectus forms a part of a registration statement which
registers an aggregate of 300,000 shares of common stock, that are collectively
referred to as the "Shares," of Primelink Systems, Inc. ("Primelink", "Company",
"we", "us" or "our"). The Shares have been issued to Messrs. Randall A. Drew and
C. Christopher Kessen, pursuant to an Agreement dated July 2, 2001. Messrs. Drew
and Kessen are sometimes referred to collectively as the "selling
securityholders." The selling securityholders may sell all or a portion of the
Shares from time to time in the over-the-counter market, in negotiated
transactions, directly or through brokers or otherwise, and at market prices
prevailing at the time of such sales or at negotiated prices. We will not
receive any proceeds from sales by the selling securityholders.
No person has been authorized by us to give any information or to make
any representation other than as contained in this prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by us. Neither the delivery of this prospectus nor any distribution
of the Shares shall, under any circumstances, create any implication that there
has been no change in our affairs since the date hereof.
----------
These securities have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed on the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
----------
This prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
The date of this prospectus is July 12, 2001
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AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, we file reports,
proxy statements and other information with the Securities and Exchange
Commission. Reports, proxy statements and other information filed with the
Commission can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of this
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a website on the internet
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-8
under the Securities Act of 1933, as amended, covering the Shares. This
prospectus, which comprises Part I of the registration statement, omits certain
information contained in the registration statement. For further information
with respect to us and the Shares offered by this prospectus, reference is made
to the entire registration statement, including the exhibits thereto. Statements
in this prospectus as to any document are not necessarily complete, and where
any such document is an exhibit to the registration statement or is incorporated
by reference herein, each such statement is qualified in all respects by the
provisions of the exhibit or other document to which reference is hereby made,
for a full statement of the provisions thereof. A copy of the registration
statement, with exhibits, may be obtained from the Commission's office in
Washington, D.C. (at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge or
at the Commission's website at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are
incorporated herein by reference and made a part hereof:
o Annual Report on Form 10-KSB for the year ended December 31,
2000, filed on April 13, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended March
31, 2001, filed on May 15, 2001;
All reports and documents filed by us pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this prospectus.
We hereby undertake to provide without charge to each person, including
any beneficial owner, to whom a copy of the prospectus has been delivered, on
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the written request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written requests for such
copies should be directed to Corporate Secretary, Primelink Systems, Inc., 10135
Hereford Road, Folsom, Louisiana 70437.
THE COMPANY
THIS PROSPECTUS CONTAINS, IN ADDITION TO HISTORICAL INFORMATION,
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING
STATEMENTS. FACTORS THAT MIGHT CAUSE OR CONTRIBUTE TO THESE DIFFERENCES INCLUDE
THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS PROSPECTUS.
ADDITIONAL FACTORS THAT MAY AFFECT OPERATING RESULTS
In evaluating us, the following risk factors should be considered:
THE INDUSTRIES WE SERVE ARE SUBJECT TO RAPID TECHNOLOGICAL AND REGULATORY CHANGE
We derive and anticipate that we will continue to derive a substantial
portion of our revenue from customers in the telecommunications industry. The
telecommunications industry is subject to rapid changes in technology and
governmental regulation. Changes in technology may reduce the demand for the
services we provide. New or developing technologies could displace the wireline
systems used for the transmission of voice, video and data, and improvements in
existing technology may allow telecommunications providers to significantly
improve their networks without physically upgrading them. Additionally, the
telecommunications industry has been characterized by a high level of
consolidation that may result in the loss of one or more customers. Loss of
customers will have a material adverse affect on our operations.
THE VOLUME OF WORK WE RECEIVE FROM OUR CUSTOMERS IS DEPENDENT ON THEIR FINANCIAL
RESOURCES AND ABILITY TO OBTAIN CAPITAL
The volume of work awarded under contracts with certain of our
telecommunications customers is subject to periodic appropriations or rate
increase approvals during each contract's term. If a customer of ours fails to
receive sufficient appropriations or rate increase approvals, that customer
could reduce the volume of work that it awards to us or delay its payments to
us. These outcomes could affect us negatively. In addition, a number of other
factors, including financing conditions for the industry, could adversely affect
our customers and their ability or willingness to fund capital expenditures in
the future. These factors could also have a material adverse effect on our
results of operations.
WE FACE NUMEROUS COMPETITORS, AND POTENTIAL COMPETITORS FACE FEW BARRIERS TO
ENTRY
The industries in which we operate are highly competitive and we
compete with other companies in most of the markets in which we operate. We may
also face competition from existing or prospective customers who employ in-house
personnel to perform some of the same types of services as we provide. There are
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relatively few significant barriers to entry into the markets in which we
operate, and as a result, any organization that has adequate financial resources
and access to technical expertise may become one of our competitors. Competition
will affect the operating results we are able to achieve.
MANY OF OUR CONTRACTS MAY BE CANCELED ON SHORT NOTICE, AND WE MAY BE
UNSUCCESSFUL IN REPLACING OUR CONTRACTS AS THEY ARE COMPLETED OR EXPIRE
We provide a significant portion of our services on a non-recurring,
project by project basis. We could experience a material adverse effect on our
results of operations and financial condition if:
o our customers cancel a significant number of contracts;
o we fail to win a significant number of our existing contracts
upon re-bid; or
o we complete the required work under a significant number of
our non-recurring projects and cannot replace them with
similar projects.
WE EXPERIENCE VARIATIONS IN REVENUE AND NET INCOME AS WE COMMENCE OR COMPLETE
WORK
Our contracts typically require significant start-up costs in one
quarterly period, but we typically do not realize the benefit of the contractual
revenue until subsequent periods. The completion of major contracts may affect
our quarterly results for similar reasons. In addition, the amount and type of
work that we perform at any given time and the general mix of customers for
which we perform work can vary significantly from quarter to quarter, affecting
our quarterly results.
IF WE ARE UNABLE TO EXPAND OUR INFRASTRUCTURE, WE WILL NOT BE SUCCESSFUL IN
MANAGING OUR RAPID GROWTH
Our anticipated growth could significantly strain our operational
infrastructure and financial resources. To manage our growth effectively, we
will need to continuously enhance our information systems and our operational
and financial systems and controls. Our business and results of operations may
be adversely affected if we are unable to expand and continuously improve our
operational infrastructure.
WE MAY HAVE DIFFICULTY IDENTIFYING AND FINANCING ACQUISITIONS
We have grown rapidly through internal growth and may consider
acquisitions of other companies in the future to enhance our growth. We may face
increased competition for acquisition candidates which generally raises prices
for these targets and lengthens the time required to recoup our investment. Our
acquisition strategy presents the risks inherent in:
o assessing the value, strengths and weaknesses of growth
opportunities; and
o evaluating the costs and uncertain returns of expanding our
operations.
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We cannot assure you that:
o we will be able to identify and acquire appropriate businesses
on favorable terms or at all;
o we will be able to obtain financing for acquisitions on
favorable terms if at all; or
o the companies that we acquire will perform as we expect.
Our future acquisitions could also result in:
o issuing additional shares of our capital stock, which could
dilute our existing shareholders,
o incurring additional debt to finance the acquisitions, which
could require us to agree to restrictive covenants and which
might limit our operational and financial flexibility; or
o using our cash, which would reduce the funds we have available
for other corporate purposes.
WE MAY HAVE DIFFICULTY INTEGRATING THE BUSINESSES THAT WE ACQUIRE
Once we have acquired a business, the integration process may require
us to change its operating methods and strategies. The integration of an
acquired business may divert the attention of its management of the acquired
business from its day-to-day responsibilities. We may also become responsible
for liabilities of an acquired business that we may not have discovered prior to
an acquisition. Any difficulties we encounter in the integration process could
reduce the earnings we generate from an acquired business, which may have a
material adverse effect on the results of our operations.
WE ARE EFFECTIVELY SELF-INSURED AGAINST MANY POTENTIAL LIABILITIES
Although we maintain insurance policies with respect to automobile,
general liability, workers' compensation and employee group health claims, those
policies are generally subject to certain deductibles and policy limits we
believe to be appropriate based on our evaluation of risk within our recurring
business operations. However, if we were to experience insurance claims or costs
above our estimates and were unable to offset such increases with earnings, our
business could be materially and adversely affected.
WE ARE CONTROLLED BY A SMALL NUMBER OF OUR EXISTING STOCKHOLDERS
Our management and members of their families beneficially own more than
35% of the outstanding shares of our common stock. Accordingly, they will remain
in a position to effectively:
o control the vote of most matters submitted to our
shareholders, including any merger, consolidation or sale of
all or substantially all of our assets;
o elect all of the members of our Board of Directors;
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o prevent or cause a change in our control; and
o decide whether we will issue additional common stock or other
securities or declare dividends.
These stockholders' ability to exercise significant control over us may
discourage, delay or prevent a takeover attempt that you might consider in your
best interest and that might result in you receiving a premium for your common
stock.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY
We have experienced and expect to continue to experience quarterly
variations in revenues and net income as a result of many factors, including:
o the timing and volume of customers' construction and
maintenance projects;
o budgetary spending patterns of customers;
o the commencement or termination of significant agreements with
our customers,
o costs incurred to support growth internally or through
acquisitions;
o fluctuations in results of operations caused by acquisitions;
o changes in our mix of customers, contracts and business
activities; and
o fluctuations in insurance expense accruals due to changes in
claims experience.
Revenues and net income in any calendar quarters have in the past been,
and may in the future be, adversely affected by weather conditions and year-end
budgetary spending patterns of our customers.
WE DEPEND ON A SMALL GROUP OF KEY CUSTOMERS
Our customer base is highly concentrated. Our top five customers in
fiscal 2000 accounted in the aggregate for almost all of our total contract
revenues. We believe that a substantial portion of our contract revenues and
operating income will continue to be derived from a concentrated group of key
customers. The loss of any key customer, if not replaced, could have a material
adverse effect on our business.
SUCCESSFUL COMPLETION AND UTILIZATION OF OUR FIBER NETWORK DEPENDS ON MANY
FACTORS
8
Meeting our business objectives will largely depend on our ability to
complete and efficiently market our fiber network. We must also achieve
sufficient sales volume with our networks in order to fully realize the expected
cash flows, operating efficiencies and cost benefits. The successful completion
of our fiber network depends upon many factors, some of which are beyond our
control, including:
o gaining access to sufficient capital;
o obtaining access to rights-of-way;
o the timely granting of franchise agreements;
o the availability of construction contractors;
o timing conflicts with other fiber projects which could
increase contractor costs;
o the pricing and availability of advanced fiber optic cable;
o construction delays; and
o cost overruns.
Although we believe that our cost estimates and build out schedule are
reasonable, we cannot assure you that the actual construction costs or time
required to complete the construction of our fiber network will match our
estimates.
INCREASING SUPPLY COULD EXCEED DEMAND AND REDUCE PRICES
We expect that prices for fiber, bandwidth and data services will
decline over the next several years as the deployment of new fiber networks add
substantially more supply than in the past. Additionally, technological advances
such as dense wave division multiplexing, high speed optical transmission
electronics and packet switching will substantially increase the transmission
capacity of fiber at much lower costs. We cannot assure you that we will be able
to achieve increased sales volumes at acceptable prices and volumes to support
our networks. Our financial condition could be adversely affected if we are
unable to successfully market the capacity of our network or adequately utilize
our network capacity for internal traffic.
WE WILL NEED ADDITIONAL CAPITAL AFTER 2000 TO FINANCE FURTHER EXPANSION OF OUR
FIBER NETWORK
We estimate that our total capital requirements for the next several
years will be substantial. We cannot assure you that the anticipated sources of
working capital will continue to be available, that we have anticipated all
future costs, or that our expected financial resources will be sufficient to
cover future expenditures. Our revenues and costs are dependent upon factors
that are not within our control, such as regulatory changes, changes in
technology, and increased competition. Due to the uncertainty of these factors,
actual revenues and costs may vary from expected amounts, and such variations
are likely to affect our future capital requirements.
Working capital is expected to be used, among other purposes, for:
o expansion of our fiber network;
o installation of additional voice and data switches;
o co-locating in the central offices of local telephone
companies;
o opening new sales offices; 9
o recruiting and training new personnel; and
o additional and increased marketing expenses.
We will need additional capital after 2000 to finance further expansion
of our fiber networks. The actual amount and timing of future capital
requirements may differ from our estimates, depending on the demand for
services, regulatory, technological and competitive developments, new market
developments and new opportunities. We may also require additional capital in
the future, or sooner than currently anticipated, for new business activities
related to our current and planned businesses or in the event we decide to make
additional acquisitions or enter into joint ventures and strategic alliances.
Sources of additional capital may include cash flow from operations, public and
private equity, debt financings, vendor financings and sales of dark fiber or
infrastructure. If we fail to generate or raise enough capital, some or all of
our future expansion plans may be delayed or abandoned, which could have a
material adverse effect on our Company.
OUR COMMON STOCK PRICE MAY BE VOLATILE
The market price for our Common Stock has been, and may continue to be,
highly volatile. Numerous factors could have a significant effect on the market
price of our Common Stock. Such factors include the announcements of
fluctuations in operating results, new contracts or customers and acquisitions
by either us or one of our competitors. The market price of our Common Stock is
also influenced by market conditions for telecommunications or
telecommunications services company stocks and their service companies in
general and by changes in recommendations or earnings estimates by securities
analysts. In addition, the stock market has experienced significant price and
volume fluctuations in recent years that have been unrelated or disproportionate
to the operating performance of companies. These broad fluctuations may
adversely affect the market price of our Common Stock.
FUTURE SALES OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR STOCK PRICE
Future sales of substantial amounts of our Common Stock in the public
market, or the perception that such sales could occur, could adversely affect
the market price of our Common Stock. As of June 30, 2001, we had outstanding
6,066,223[?] shares of Common Stock, plus 1,400,000 shares of Common Stock
reserved for issuance upon exercise of outstanding options, including 1,400,000
options which are currently exercisable. A substantial amount of the outstanding
shares of our Common Stock are either freely salable or salable subject to
certain volume and manner of sale restrictions pursuant to Rule 144 of the
Securities Act of 1933.
DEPENDENCE ON KEY PERSONNEL
The success of the Company will be largely dependent on the efforts of
the members of the management of the Company. While the Company has entered into
employment agreements with various members of the management of the Company,
there can be no assurance that such persons will continue their employment with
the Company. The loss of the services of one or more of such key personnel would
have a material adverse effect on the Company. The success of the Company also
is dependent upon its ability to hire and retain additional qualified executive,
engineering and marketing personnel. There can be no assurance that the Company
will be able to hire or retain such necessary personnel. The Company does not
presently have "key man" life insurance with respect to members of its
management.
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NO DIVIDENDS ANTICIPATED TO BE PAID
The Company does not anticipate paying cash dividends in the
foreseeable future. The future payment of dividends is directly dependent upon
future earnings of the Company, its financial requirements and other factors to
be determined by the Company's Board of Directors. For the foreseeable future,
it is anticipated that any earnings which may be generated from the Company's
operations will be used to finance the growth of the Company and that cash
dividends will not be paid to stockholders.
LIMITED MARKET FOR THE COMPANY'S SECURITIES
There is currently only a limited trading market for the Common Stock
of the Company. The Common Stock of the Company trades on the OTC Bulletin Board
under the symbol "PMLK," which is a limited market and subject to substantial
restrictions and limitations in comparison to the NASDAQ System or the American
Stock Exchange (AMEX). While the Company expects to apply for inclusion of its
Common Stock either on NASDAQ (Small Cap) or AMEX at such time as its securities
comply with applicable criteria for inclusion, there can be no assurances that
the Company's Common Stock will ever qualify for inclusion within the NASDAQ or
AMEX System or that more than a limited market will ever develop for its Common
Stock.
BROKER-DEALER SALES OF SHARES
The NASDAQ Stock Market, Inc., has entry and maintenance criteria for
listing eligibility on The NASDAQ SmallCap Market. The entry standards require
at least $5,000,000 in equity or $750,000 in net income in two of the last three
years. The entry standards also require a public float of at least 1,000,000
shares, a $5,000,000 market value of public float, a minimum bid price of $4.00
per share, at least 3 market markers, and at least 300 shareholders. The
maintenance standards (as opposed to entry standards) require at least
$2,500,000 in equity or $500,000 in income in two of the last three years, a
public float of at least 500,000 shares, a $1,000,000 market value of public
float, a minimum bid price of $1.00 per share, at least two market makers, and
at least 300 shareholders.
As a result the Company's Common Stock may be covered by a Securities
and Exchange Commission rule that opposes additional sales practice requirements
on broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell the Company's securities and may
also affect the ability of stockholders to sell their shares in the secondary
market.
IT IS NOT POSSIBLE TO FORESEE ALL RISKS WHICH MAY AFFECT US. MOREOVER, WE CANNOT
PREDICT WHETHER WE WILL SUCCESSFULLY EFFECTUATE OUR CURRENT BUSINESS PLAN. EACH
PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE RISKS AND MERITS OF
AN INVESTMENT IN THE UNITS, INCLUDING THE RISK FACTORS DISCUSSED ABOVE.
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PROFESSIONAL SERVICES CONSULTING
--------------------------------
AGREEMENTS WITH RANDALL A. DREW
-------------------------------
AND C. CHRISTOPHER KESSEN
-------------------------
GENERAL
On July 5, 2001, Primelink entered into a Professional Services
Consulting Agreement with Randall A. Drew and C. Christopher Kessen pursuant to
which the selling securityholders agree to provide professional consulting
services between July 5, 2001 and December 31, 2001 involving not less than 60%
of their business time. These services included the following:
o Advice regarding the introduction, marketing, negotiation and
sales of the twelve (12) innner duct system on the Interstate
I-49 project;
o Assisting Primelink with respect to the negotiations with
material suppliers and subcontractors related to the "south
side" portion of the I-49 project;
o Advising Primelink regarding the management of contractual
negotiations for the construction of the "north side" portion
of the I-49 project.
As compensation for these services, Primelink agreed to issue to the
selling securityholders a total of 300,000 shares of Primelink's common stock
divided evenly between the selling securityholders.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the issuance of the Shares and is
based on federal income tax laws and regulations in effect on December 31, 2000.
It does not purport to be a complete description of the federal income tax
consequences of the issuance, nor does it describe the consequences of state,
local or foreign tax laws which may be applicable.
In connection with the issuance of Shares as compensation, the
recipient must include in gross income the excess of the fair market value of
the property received over the amount, if any, paid for the property in the
first taxable year in which beneficial interest in the property either is
"transferable" or is not subject to a "substantial risk of forfeiture." A
substantial risk of forfeiture exists where rights and property that have been
transferred are conditioned, directly or indirectly, upon the future performance
(or refraining from performance) of substantial services by any person, or the
occurrence of a condition related to the purpose of the transfer, and the
possibility of forfeiture is substantial if such condition is not satisfied.
Shares received by a person who is subject to the short swing profit recovery
rule of Section 16(b) of the Securities Exchange Act of 1934 is considered
subject to a substantial risk of forfeiture so long as the sale of such property
at a profit could subject the stockholder to suit under that section. The rights
of the recipient are treated as transferable if and when the recipient can sell,
assign, pledge or otherwise transfer any
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interest in the Shares to any person. Inasmuch as the recipient would not be
subject to the short swing profit recovery rule of Section 16(b) of the
Securities Exchange Act of 1934 and the Shares, upon receipt following
satisfaction of condition prerequisites to receipt, will be presently
transferable and not subject to a substantial risk of forfeiture, the recipient
would be obligated to include in gross income the fair market value of the
Shares received once the conditions to receipt of the Shares are satisfied.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of the Shares must be made in compliance with federal and
state securities laws. Our officers, directors and 10% or greater shareholders,
as well as certain other persons or parties who may be deemed to be "affiliates"
of ours under federal securities laws, should be aware that resales by
affiliates can only be made pursuant to an effective registration statement,
Rule 144 or other applicable exemption. Our officers, directors and 10% and
greater stockholders may also be subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934.
SALES BY SELLING SECURITYHOLDERS
The following table sets forth
o the name of the selling securityholders,
o the amount of shares of common stock held directly or
indirectly,
o the maximum amount of shares of common stock to be offered by
the selling securityholders,
o the amount of common stock to be owned by the selling
securityholders following sale of the shares of common stock,
and
o the percentage of shares of common stock to be owned by the
selling Securityholders following completion of such offering.
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Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Securityholders Shares Owned be Offered Offering Offering
- --------------- ------------ ---------- ------------ -----------
Randall A. Drew 150,000 150,000 -0- -
C. Christopher Kessen 150,000 150,000 -0- -
The shares reflected above are the shares of common stock to be received under
the Professional Services Consulting Agreement.
PLAN OF DISTRIBUTION
The Shares covered by this prospectus may be distributed from time to
time by the selling securityholders in one or more transactions that may take
place on the over-the-counter market. These include ordinary broker's
transactions, privately-negotiated transactions or through sales to one or more
broker-dealers for resale of these shares as principals, at market prices
existing at the time of sale, at prices related to existing market prices,
through Rule 144 transactions or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the selling
Securityholders in connection with sales of securities.
The selling securityholders may sell the securities in one or more of
the following methods, which may include crosses or block transactions:
o through the "pink sheets", on the over-the-counter Bulletin
Board, or on such exchanges or over-the-counter markets on
which our shares may be listed from time-to-time, in
transactions which may include special offerings, exchange
distributions and/or secondary distributions, pursuant to and
in accordance with the rules of such exchanges, including
sales to underwriters who acquire the shares for their own
account and resell them in one or more transactions or through
brokers, acting as principal or agent;
o in transactions other than on such exchanges or in the
over-the-counter market, or a combination of such
transactions, including sales through brokers, acting as
principal or agent, sales in privately negotiated
transactions, or dispositions for value by any selling
Securityholders to its partners or members, subject to rules
relating to sales by affiliates;
o through the issuance of securities by issuers other than us,
convertible into, exchangeable for, or payable in our shares;
or
o through the writing of options on our shares, whether or not
such options are listed on an exchange, or other transactions
requiring delivery of our shares, or the delivery of our
shares to close out a short position.
Any such transactions may be effected at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
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In making sales, brokers or dealers used by the selling securityholders
may arrange for other brokers or dealers to participate. The selling
securityholders and others through whom such securities are sold may be
"underwriters" within the meaning of the Securities Act for the securities
offered, and any profits realized or commission received may be considered
underwriting compensation.
At the time a particular offer of the securities is made by or on
behalf of the selling securityholders, to the extent required, a prospectus is
to delivered. The prospectus will include the number of shares of common stock
being offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter for
the shares of common stock purchased from the selling securityholders, and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
and the proposed selling price to the public.
We have told the selling securityholders that the anti-manipulative
rules under the Securities Exchange Act of 1934, including Regulation M, may
apply to their sales in the market. We have provided each of the selling
securityholders with a copy of these rules. We have also told the selling
securityholders of the need for delivery of copies of this prospectus in
connection with any sale of securities that are registered by this prospectus.
Sales of securities by us and the selling securityholders or even the
potential of these sales may have a negative effect on the market price for
shares of our common stock.
DESCRIPTION OF SECURITIES
COMMON STOCK
We are authorized to issue 10,000,000 shares of common stock, $.001 par
value per share. As of July 1, 2001, there were issued and outstanding,
6,066,223 shares of common stock and no shares of preferred stock.
Common stockholders share dividends on a proportionate basis, as may be
declared by the board of directors. Upon our liquidation, dissolution or winding
up, after payment to creditors, our assets will be divided proportionately on a
per share basis among the holders of our common stock.
Each share of our common stock has one vote. Holders of our common
stock do not have cumulative voting rights. This means that the holders of a
plurality of the shares voting for the election of directors can elect all of
the directors. In that event, the holders of the remaining shares will not be
able to elect any directors. Our By-Laws provide that a majority of the
outstanding shares of our common stock are a quorum to transact business at a
stockholders' meeting. Our common stock has no preemptive, subscription or
conversion rights. Also, our common stock is not redeemable.
TRANSFER AGENT
The transfer agent and registrar for our common stock is North American
Transfer Company, 147 West Merrick Road, Freeport, NY 11520. Telephone number
(516) 379-8501.
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EXPERTS
Our consolidated financial statements appearing in our Annual Report on
Form 10-KSB, for the fiscal years ended December 31, 2000 and December 31, 1999,
have been audited by LaPorte, Sehrt, Romig and Hand, Independent Certified
Public Accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports of LaPorte, Sehrt, Romig and
Hand, pertaining to such financial statements (to the extent covered by consents
filed with the Commission) given upon the authority of such firm as experts in
accounting and auditing.
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction Primelink is incorporated, empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. The corporation may indemnify
against expenses (including attorneys' fees) and, other than in respect of an
action by or in the right of the corporation, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted in good faith
and in the manner he or she reasonably believed to be in or non-opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or in the right of the corporation, no
indemnification of expenses may be made in respect to any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
the action was brought shall determine that, despite the adjudication of
liability, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 of the General
Corporation Law of Delaware further provides that to the extent a director,
officer, employee or agent of the corporation has been successful in the defense
of any action, suit or proceeding referred to above or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith.
Article SEVENTH of Primelink's Certificate of Incorporation provides as
follows:
"SEVENTH: The corporation shall indemnify to the fullest
extent permitted by Delaware Statute 145, as may be amended
from time to time, any director or officer of the corporation
who is a party or who is threatened to be made a party to any
proceeding which is a threatened, pending or completed action
or suit brought against said officer or director in his
official capacity. This action or suit, threatened, pending or
completed, brought by him against the corporation, in the
event the officer or director is not the prevailing party.
Indemnification of any other persons, such as employees or
agents of the corporation, or serving at the request of the
corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, or
other enterprise, shall be determined in the sole and absolute
discretion of the Board of Directors of the corporation."
16
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission, this
indemnification is against public policy as expressed in the securities laws,
and is, therefore unenforceable.
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PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The documents listed below are incorporated by reference in the
Registration Statement. All documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in the Registration Statement and to be part thereof
from the date of filing of such documents.
o Annual Report on Form 10-KSB for the year ended December 31,
2000, filed on April 13, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended March
31, 2001, filed on May 15, 2001;
All reports and documents filed by us pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this prospectus.
We hereby undertake to provide without charge to each person, including
any beneficial owner, to whom a copy of the prospectus has been delivered, on
the written request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written requests for such
copies should be directed to Corporate Secretary, Primelink Systems, Inc., 10135
Hereford Road, Folsom, Louisiana 70437.
ITEM 4. Description of Securities
- ------- -------------------------
A description of the Registrant's securities is set forth in the
Prospectus incorporated as a part of this Registration Statement.
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ITEM 5. Interests of Named Experts and Counsel
- ------- --------------------------------------
Not Applicable.
ITEM 6. Indemnification of Directors and Officers
- ------- -----------------------------------------
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction Primelink is incorporated, empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. The corporation may indemnify
against expenses (including attorneys' fees) and, other than in respect of an
action by or in the right of the corporation, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted in good faith
and in the manner he or she reasonably believed to be in or non-opposed to the
best interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of an action by or in the right of the corporation, no
indemnification of expenses may be made in respect to any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
the action was brought shall determine that, despite the adjudication of
liability, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 of the General
Corporation Law of Delaware further provides that to the extent a director,
officer, employee or agent of the corporation has been successful in the defense
of any action, suit or proceeding referred to above or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith.
Article SEVENTH of Primelink's Certificate of Incorporation provides as
follows:
"SEVENTH: The corporation shall indemnify to the fullest
extent permitted by Delaware Statute 145, as may be amended
from time to time, any director or officer of the corporation
who is a party or who is threatened to be made a party to any
proceeding which is a threatened, pending or completed action
or suit brought against said officer or director in his
official capacity. This action or suit, threatened, pending or
completed, brought by him against the corporation, in the
event the officer or director is not the prevailing party.
Indemnification of any other persons, such as employees or
agents of the corporation, or serving at the request of the
corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, or
other enterprise, shall be determined in the sole and absolute
discretion of the Board of Directors of the corporation."
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission, this
indemnification is against public policy as expressed in the securities laws,
and is, therefore unenforceable.
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ITEM 7. Exemption From Registration Claimed
- ------- -----------------------------------
Inasmuch as the recipient of the Shares was knowledgeable and
sophisticated, had access to relevant information pertaining to Primelink and
had the ability to fend for himself, the issuance was exempt from registration
under the Securities Act of 1933 by reason of Section 4(2) of that act.
ITEM 8. Exhibits
- ------- --------
10.1 Professional Services Consulting Agreement with Randall A.
Drew and C. Christopher Kessen.
23.1 Consent of Independent Certified Public Accountants.
- --------------------
* Filed herewith.
ITEM 9. Undertakings
- ------- ------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
a. To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
c. To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post- effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
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2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
against such liabilities (other than the payment by the registrant in the
successful defense of an action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
The Registrant pursuant to the requirements of the Securities Act of
1933, as amended, certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, in the
City of Folsom, State of Louisiana, on the 12th day of July, 2001.
PRIMELINK SYSTEMS, INC.
By:/s/John R. Wade
------------------------
John R. Wade
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chief Executive Officer
Chairman of the Board,
/s/John R. Wade President, Director and Principal
- ------------------------- Executive Officer July 12, 2001
John R. Wade
/s/Bob Clemons Executive Vice President,
- ------------------------- Secretary and Director
Bob Clemons July 12, 2001
Treasurer, Director and
/s/Reid Green Principal Financial and
- ------------------------- Accounting Officer
Reid Green July 12, 2001
/s/Danny Majors Vice President and
- ------------------------- Director
Danny Majors July 12, 2001
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