SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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|_| Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
AUTO DATA NETWORK, INC.
(Name of Registrant as Specified in Its Charter)
(NA)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
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AUTO DATA NETWORK, INC.
NOTICE AND PROXY STATEMENT FOR ACTION TO BE TAKEN
BY WRITTEN CONSENT IN LIEU OF A MEETING OF STOCKHOLDERS
To the stockholders of Auto Data Network, Inc.:
Attached hereto is a Proxy Statement which solicits the written consent of the
stockholders of Auto Data Network, Inc., a Delaware corporation (the "Company"),
to authorize and approve an amendment to the Company's Certificate of
Incorporation which increases the number of authorized shares of common stock,
par value $.001 (the "Common Stock"), of the Company from 50,000,000 shares to
75,000,000 shares. This proposal (the "Proposal") is described in detail in the
Proxy Statement attached to this notice which Proxy Statement is incorporated
herein by this reference. The Board of Directors has determined that it is
necessary to authorize additional shares of Common Stock so that such will be
available (a) for issuance upon conversion to common stock of the Series D-1
Preferred Stock Issued, and Series D-2 Preferred Stock issuable to CarParts
Technologies, Inc. (the "CarParts Transaction") in connection with the Company's
August 2, 2004 acquisition of CarParts; and (b) for issuance in a private
placement to investors, the proceed of which are to be used to acquire of DCS
Automotive Holdings Limited (the "DCS Automotive Transaction"). The Board of
Directors has also determined that it is in the best interests of the Company to
authorize additional shares of Common Stock so that such will be available to
permit future stock dividends, if any, to raise additional capital through the
sale of equity securities, to acquire another company or its assets, to
establish strategic relationships with corporate partners, to provide equity
incentives to employees and officers or for other corporate purposes. The
increase in authorized Common Stock will not have any immediate effect on the
rights of existing stockholders. However, the Board will have the authority to
issue authorized Common Stock without requiring future stockholder approval of
such issuances, except as may be required by the Company's Certificate of
Incorporation, Certificates of Designation or applicable law. To the extent that
additional authorized shares are issued in the future, they may decrease the
existing stockholders' percentage equity ownership and, depending on the price
at which they are issued, could be dilutive to the existing stockholders.
The Board of Directors believes that it is in the best interests of the Company
and its stockholders to solicit such approval as of the earliest possible date.
In order to accomplish this objective, the Board of Directors is hereby
soliciting the approval of the Proposal by stockholders by written consent, in
lieu of a meeting of stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Christopher R. Glover
----------------------------------------------
CHRISTOPHER R. GLOVER, CHIEF EXECUTIVE OFFICER
New York, New York
September 3, 2004
AUTO DATA NETWORK, INC.
19TH FLOOR
712 FIFTH AVENUE,
NEW YORK, NEW YORK 10019-4108
PROXY STATEMENT
FOR
STOCKHOLDER ACTION BY WRITTEN CONSENT
To our stockholders:
The Board of Directors of Auto Data Network, Inc. (the "Company") is furnishing
this Proxy Statement to you to solicit your approval, by written consent, of an
amendment to the Company's Certificate of Incorporation which increases the
number of authorized shares of common stock, par value $.001 (the "Common
Stock"), of the Company from 50,000,000 shares to 75,000,000 shares.
We are mailing this Proxy Statement to you on or about September 7, 2004,
together with the accompanying Consent Card.
The procedure for indicating approval of the amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 50,000,000 shares to 75,000,000 shares ("Proposal No. 1") is
described in detail in this Proxy Statement.
GENERAL INFORMATION
PRIOR REVIEW
Although copies of these proxy materials have been filed with and examined by
the Securities and Exchange Commission (the "Commission"), such filing and
examination by the Commission does not represent and shall not be deemed to be a
finding that the materials are accurate or complete or not false or misleading
or that the Commission has passed upon the merits of or approved any statement
contained in the materials or any matter to be acted upon by the security
holders. No representation to the contrary has been made or should be implied.
Any representation to the contrary is a criminal offense.
NO FALSE OR MISLEADING STATEMENTS
To the best of the Company's knowledge, all statements made and contained herein
are true at the time made and in the light of the circumstances under which they
are being made and are not false or misleading with respect to any material fact
or do not otherwise omit any material fact necessary to make the statements
herein not false or misleading or to correct any prior statements.
VOTING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on August 16, 2004 (the "Record
Date") are entitled to approve the Proposal. On the Record Date, there were
Twenty Nine Million Two Hundred Seventy Three Thousand Nine Hundred Four
(29,273,904) shares of Common Stock of the Company issued and outstanding, and
Nine Million Two Hundred Forty Six Thousand Five Hundred and Fifty Three
(9,246,553) shares of Preferred Stock of the Company issued and outstanding.
Each share of Common Stock is entitled to one vote, and each share of Preferred
Stock is entitled to that number of votes equal to the number of shares of
Common Stock into which it is convertible. The Proposal must be approved by the
holders of a majority of the outstanding shares of the Common Stock and the
Preferred Stock voting together as a single class.
The beneficial ownership of the Company's Common Stock (after giving effect to
the conversion of the Preferred Stock into Common Stock) by certain beneficial
owners and by each of the Company's directors and executive officers and all
directors and executive officers as a group is set forth below under "Security
Ownership of Certain Beneficial Owners and Management."
Under the Company's Bylaws and pursuant to applicable Delaware law, any action
which may be taken at any annual or special meeting of the stockholders of the
Company may be taken without a meeting and without a vote, if a consent in
writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. The matter being considered by
the stockholders is being submitted for action by written consent, rather than
by votes cast at a meeting. The text of the proposed amendment to the Company's
Certificate of Incorporation effecting the increase in authorized Common Stock
is set forth in full under "Proposal No. 1 - Increase in Authorized Common
Stock." The Proposal will be deemed to have been approved upon receipt by the
Company on or prior to September 30, 2004 (the "Termination Date") of Consent
Cards approving the Proposal from stockholders holding a majority of the shares
of Common Stock and Preferred Stock issued and outstanding on the Record Date.
If, however, sufficient written consents have not been received by the
Termination Date, the Company reserves the right to extend the solicitation of
written consents made hereby except that, under Delaware law, such solicitation
may not be extended beyond the date that is sixty (60) days after the earliest
dated consent received by the Company.
Any election to extend this consent solicitation will be made by the Company by
news release or other similar public announcement. The date on which the
Proposal is deemed approved hereunder is referred to as the "Effective Date."
Stockholders are requested to indicate approval of the Proposal by signing the
enclosed Consent Card and returning it to the Company.
Execution of the Consent Card will constitute your approval, as a stockholder of
the Company, of the Proposal, and if sufficient written consents are received
prior to the Termination Date, the Proposal will be deemed to have been approved
by the stockholders of the Company. No appraisal or dissenters rights apply to
stockholders who do not approve the Proposal. The Company will pay the entire
cost of the preparation and mailing of this Proxy Statement and all other costs
of this solicitation. After the mailing of this Proxy Statement, the Company's
officers, directors and regular employees may solicit the return of Consent
Cards in person and by mail, telephone and facsimile. Officers, directors and
employees who assist in such activities will not receive additional compensation
for doing so.
DELIVERY OF WRITTEN CONSENTS
The Board of Directors requests that each stockholder execute, date and mail the
Consent Card in the return envelope provided. THE CONSENT CARD SHOULD BE
RETURNED AS SOON AS POSSIBLE AND, IN ANY EVENT, FOR RECEIPT NOT LATER THAN
September 30, 2004.
REVOCATION OF WRITTEN CONSENTS
Any Consent Card executed and delivered by a stockholder may be revoked by
delivering written notice of such revocation prior to the Effective Date to the
Company at the following address: Auto Data Network, Inc., 19th Floor, 712 Fifth
Avenue, New York, New York 10019-4108. Consent Cards may not be revoked after
the Effective Date.
NOTICE OF EFFECTIVENESS OF PROPOSAL
If the Proposal is approved by stockholders, the Company will promptly give
written notice thereof to all stockholders who have not consented to the extent
required by Section 228(d) of the Delaware General Corporation Law.
STOCKHOLDER LIST
A complete list of the stockholders entitled to vote on the Proposal will be
available for examination by any stockholder, for any proper purpose, during
ordinary business hours for a period of ten (10) days prior to the Termination
Date at the corporate offices of the Company at 19th Floor, 712 Fifth Avenue,
New York, New York 10019-4108.
PROPOSAL NO. 1
THE PROPOSED INCREASE IN AUTHORIZED COMMON STOCK AND PREFERRED STOCK
PURPOSE AND EFFECT
The Company currently has 29,273,904 shares of Common Stock and 9,246,553 shares
of Preferred Stock which are issued and outstanding. The principal purpose of
the proposed amendment to the Company's Certificate of Incorporation, attached
hereto as Annex A, is to authorize additional shares of Common Stock which will
be available in connection with the CarParts Transaction and the DCS Automotive
Transaction and in the event the Board of Directors determines that it is
necessary or appropriate to permit future stock dividends, to raise additional
capital through the sale of equity securities, to acquire another company or its
assets, to establish strategic relationships with corporate partners, to provide
equity incentives to employees and officers or for other corporate purposes. The
availability of additional shares of stock is particularly important in the
event that the Board of Directors needs to undertake any of the foregoing
actions on an expedited basis and thus to avoid the time and expense of seeking
stockholder approval in connection with the contemplated issuance of stock. If
the amendment is approved by the stockholders, the Board does not intend to
solicit further stockholder approval prior to the issuance of any additional
shares of Common Stock, except as may be required by the Company's Certificate
of Incorporation, Certificates of Designations or applicable law.
The additional shares of authorized Common Stock shall have the same rights as
all other shares of Common Stock of the Company.
The increase in authorized Common Stock will not have any immediate effect on
the rights of existing stockholders. However, the Board will have the authority
to issue authorized Common Stock without requiring future stockholder approval
of such issuances, except as may be required by the Company's Certificate of
Incorporation, Certificates of Designations or applicable law. To the extent
that additional authorized shares are issued in the future, they may decrease
the existing stockholders' percentage equity ownership and, depending on the
price at which they are issued, could be dilutive to the existing stockholders.
The increase in the authorized number of shares of Common Stock and the
subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Company without further action by the
stockholders. Shares of authorized and unissued Common Stock could, within the
limits imposed by applicable law, be issued in one or more transactions which
would make a change in control of the Company more difficult, and therefore less
likely. Any such issuance of additional stock could have the effect of diluting
the earnings per share and book value per share of outstanding shares of Common
Stock, and such additional shares could be used to dilute the stock ownership or
voting rights of a person seeking to obtain control of the Company.
The Board of Directors is not currently aware of any attempt to take over or
acquire the Company. While it may be deemed to have potential anti-takeover
effects, the proposed amendment to increase the authorized Common Stock is not
prompted by any specific effort or takeover threat currently perceived by
management.
Except for the Company's obligations in connection with the CarParts Transaction
and the DCS Automotive Transaction and any equity financings which may be
necessary in order to support such transactions, we do not have any current
intentions, plans, arrangements, commitments or understandings to issue any
additional shares of our capital stock.
THE AMENDMENT
FOURTH. The total number of shares of all classes of capital stock which the
corporation shall have the authority to issue is 100,000,000 shares consisting
of: (1) 75,000,000 shares of Common Stock, par value $0.001 per share and (2)
25,000,000 shares of Preferred Stock, par value $0.001 per share. The Preferred
Stock shall be issuable in one or more series with such powers, designations,
preferences, rights, qualifications, limitations or restrictions as may be
determined in the board's sole discretion, with no further authorization by
stockholders required for the creation and issuance thereof. When required by
law and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the board shall have the express
authority to execute, acknowledge and file a certificate of designations,
preferences, rights, qualifications, limitations or restrictions of the
Preferred Stock.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and Preferred Stock of the Company, voting together as a single
class, is required to approve the Proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors approved the Amendment on August 16, 2004 and unanimously
recommends that the stockholders vote to approve the Amendment. The Board of
Directors believes that the Amendment is in the best interests of the Company
and its stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of August 16, 2004, by (i) each person whom we know
to beneficially own 5% or more of the Common Stock, (ii) each of our directors
and executive officers and (iv) all of our directors and executive officers as a
group. The number of shares of Common Stock beneficially owned by each
stockholder is determined in accordance with the rules of the Commission and
does not necessarily indicate beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes those shares of Common Stock over
which the stockholder exercises sole or shared voting or investment power. The
percentage ownership of the Common Stock, however, is based on the assumption,
expressly required by the rules of the Commission, that only the person or
entity whose ownership is being reported has converted or exercised Common Stock
equivalents into shares of Common Stock; that is, shares underlying Common Stock
equivalents are not included in calculations in the table below for any other
purpose, including for the purpose of calculating the number of shares
outstanding generally.
BENEFICIAL CURRENT
OWNERSHIP PERCENTAGE OF
NAME OF STOCK CLASS (1)
- ----------------------------------------------- ---------- -------------
Christopher Glover (2) .................... 1,517,973 5.19%
Lee Cole (3) .............................. -0- -0-
Lt. Gen. J. W. Morris (4) ................. 2,000 *
Linden Boyne (3) .......................... -0- -0-
Ci4, Inc. (5) ............................. 5,060,956 17.29%
Rho Management Trust I (6) ................ 1,510,208 5.16%
Triage Management LLC (7) ................. 1,583,158 5.41%
All officers and
Directors as a group
(3 persons) ............................... 1,519,973 5.19%
* Less than 1% and statistically insignificant
(1) Based on a total of 29,273,904 shares of Common Stock outstanding as of
August 16, 2004.
(2) Brooklands, St. Marks Road, Tunbridge Wells, Kent, TN2 5LU, UK.
(3) 32 Haymarket, Piccadilly, London, SW1Y 4TP, UK.
(4) Fairfax Drive, Suite Number 5, Arlington, Virginia, USA.
(5) Care of P.W.C. LLP, Benson House, 33 Wellington Street, Leeds LS14JP, UK.
(6) Assumes all preferred shares held are converted to common stock. Rho
Management Trust I of Carnegie Hall Tower, 152 W 57th Street, 23rd Floor,
New York, NY, 10019
(7) 401 City Avenue, Suite 526, Bala Cynwyd, PA, 19004
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THE
ACCOMPANYING CONSENT CARD IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Christopher R. Glover
----------------------------------------------
CHRISTOPHER R. GLOVER, CHIEF EXECUTIVE OFFICER
New York, New York
September 3, 2004
AUTO DATA NETWORK, INC.
CONSENT CARD
THIS CONSENT IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of Auto Data Network, Inc. (the "Company") hereby
acknowledges receipt of the proxy statement and hereby consents to the amendment
to the Company's Certificate of Incorporation to increase the authorized shares
of Common Stock from 50,000,000 shares to 75,000,000 shares.
PLEASE SIGN, DATE AND RETURN THIS CONSENT CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Dated: September ___, 2004 ----------------------------------------
(month) (day)
----------------------------------------
Sign exactly as your name appears on
your certificate. When signing as an
attorney, executor, administrator,
trustee or guardian, please give full
title. If more than one trustee, all
should sign. All joint owners should
sign.
ANNEX A
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
AUTO DATA NETWORK, INC.
(A Delaware Corporation)
AUTO DATA NETWORK, INC., a corporation duly organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
1. The present name of this corporation is AUTO DATA NETWORK, INC.
(hereinafter the "Corporation").
2. The Certificate of Incorporation of this Corporation is hereby amended by
deleting Article FOURTH in its entirety and replacing it with the
following:
"FOURTH. The total number of shares of all classes of capital stock which the
corporation shall have the authority to issue is 100,000,000 shares consisting
of: (1) 75,000,000 shares of Common Stock, par value $0.001 per share and (2)
25,000,000 shares of Preferred Stock, par value $0.001 per share. The Preferred
Stock shall be issuable in one or more series with such powers, designations,
preferences, rights, qualifications, limitations or restrictions as may be
determined in the board's sole discretion, with no further authorization by
stockholders required for the creation and issuance thereof. When required by
law and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the board shall have the express
authority to execute, acknowledge and file a certificate of designations,
preferences, rights, qualifications, limitations or restrictions of the
Preferred Stock."
The foregoing amendment was duly adopted by the Corporation in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed by
Christopher R. Glover, Chief Executive Officer, on this __ day of September,
2004.
CHRISTOPHER R. GLOVER, CHIEF EXECUTIVE OFFICER