ROCKY MOUNTAIN INTERNET INC files prospectus for common stock.
IFN Smart Edgar News - November 24, 1998 19:14
Excerpted from 424B2 filed on 11/24 by ROCKY MOUNTAIN INTERNET INC:
ROCKY MOUNTAIN INTERNET INC files prospectus for common stock.
[LOGO] ROCKY MOUNTAIN INTERNET, INC.
RMI
PROSPECTUS 4,596,500 COMMON STOCK PURCHASE WARRANTS
13,880,233 SHARES OF COMMON STOCK
This Prospectus relates to up to 4,000,000 shares (the "Acquisition Shares") of
common stock, $0.001 par value (the "Common Stock"), that may be offered and
issued by Rocky Mountain Internet, Inc., a Delaware corporation (the "Company"
or "RMI"), from time to time in connection with the merger with or acquisition
by the Company of other businesses or assets. With the consent of the Company,
this Prospectus may also be used by persons or entities who have received or
will receive from the Company shares of Common Stock, including the Acquisition
Shares, in connection with such mergers or acquisitions and who may wish to sell
such shares of Common Stock under circumstances requiring or making desirable
the use of this Prospectus and by certain transferees of such persons. The
Company's consent to such use may be conditioned upon such persons or entities
agreeing not to offer more than a specified number of shares following
amendments to this Prospectus, which the Company may agree to use its best
efforts to prepare and file at certain intervals. The Company may require that
any such offering be effected in an organized manner through securities dealers.
The Company anticipates that the terms of mergers, acquisitions, or business
combinations, if any, involving the issuance of securities covered by this
Prospectus will be determined by direct negotiations with the owners or
controlling persons of the businesses or assets to be merged with or acquired by
the Company, and that the shares of Common Stock issued will be valued at prices
reasonably related to market prices current either at the time that a merger or
acquisition are agreed upon or at or about the time of delivery of shares. No
underwriting discounts or commissions will be paid, although finder's fees may
be paid from time to time with respect to specific mergers or acquisitions. Any
person receiving any such fees may be deemed to be an underwriter within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"). There
can be no assurance that the Company will, in fact, consummate a business
combination or asset acquisition on terms that are favorable to the Company.
This Prospectus also relates to 535,000 Common Stock Purchase Warrants (the
"DataXchange Warrants") that may be offered and issued by the Company in
connection with the proposed acquisition by the Company of all of the issued and
outstanding common stock of DataXchange Network, Inc. ("DataXchange"), a
Florida-based national Internet backbone provider. See "RECENT DEVELOPMENTS -
ACQUISITIONS AND PROPOSED ACQUISITIONS." This Prospectus also relates to the
offer and sale of up to 535,000 shares of Common Stock that can be issued upon
the exercise of the DataXchange Warrants. This Prospectus may also be used by
persons or entities who are anticipated to receive the DataXchange Warrants and
the shares of Common Stock underlying the DataXchange Warrants and who may wish
to
sell such warrants and/or shares of Common Stock under circumstances requiring
or making desirable the use of this Prospectus and by certain transferees of
such persons.
This Prospectus may also be used by donees, pledgees, and other
transferees of up to 3,950,000 shares of Common Stock who receive such shares
as gifts, as security for loans, and similar transactions and who may wish to
sell such shares under circumstances requiring or making desirable the use of
this Prospectus and by certain transferees of such persons or entities.
This Prospectus also relates to 9,880,233 shares of Common Stock (the
"Selling Securityholder Shares"), of which approximately 3,135,538 shares are
currently issued and outstanding and of which approximately 6,744,695 shares
may be issued upon the exercise of currently outstanding warrants to purchase
shares of Common Stock. This Prospectus also relates to such additional
shares of Common Stock that may be issued pursuant to the anti-dilution
provisions of such outstanding warrants. See "DESCRIPTION OF CAPITAL STOCK."
The Selling Securityholder Shares will be offered and sold from time to time
by certain persons identified below under the caption "SELLING
SECURITYHOLDERS" (the "Selling Securityholders"), and the Company will
receive none of the proceeds of any such sales.
This Prospectus also relates to 4,596,500 outstanding warrants to
purchase shares of Common Stock (the "Warrants," which includes the
DataXchange Warrants) of which 4,061,500 Warrants may be offered and sold
from time to time by certain of the Selling Securityholders, and the Company
will receive none of the proceeds of any such sales. However, the Company
will receive proceeds from the exercise of Warrants if any Warrants are
exercised. The remaining 535,000 Warrants are anticipated to be offered and
sold by the Company in connection with the proposed acquisition of
DataXchange. The shares of Common Stock that may be issued upon the exercise
of 4,061,500 of the Warrants are included in the 9,880,233 shares identified
above as being offered by the Selling Securityholders. This Prospectus also
relates to the sale and issuance by the Company of shares of Common Stock to
holders of the Warrants (other than the Selling Securityholders) upon the
exercise of those Warrants.
The Company will pay substantially all of the expenses with respect to
the offering and the sale of the Acquisition Shares, the Selling
Securityholder Shares, and the Warrants (sometimes referred to herein
collectively as the "Securities") to the public, including the costs
associated with registering the Securities under the Securities Act and
preparing and printing this Prospectus. Normal underwriting commissions and
broker fees, however, as well as any applicable transfer taxes, are payable
individually by the Selling Securityholders. See "USE OF PROCEEDS," "RECENT
DEVELOPMENTS--CHANGE IN CONTROL," "SELLING SECURITYHOLDERS," and "DESCRIPTION
OF CAPITAL STOCK."
On October 15, 1998 the closing sale price of the Common Stock on the
NASDAQ SmallCap-TM- Market ("Nasdaq") was $7.50 per share.
SEE "RISK FACTORS," BEGINNING ON PAGE 16, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 19, 1998.
(End of Item Excerpt)
THE OFFERING
Common Stock offered by:
The Company 4,000,000 shares (1)
Selling Securityholders 9,880,233 shares (2)
Common Stock Purchase Warrants
("Warrants") offered by: The Company 535,000 Warrants (3)
Selling Securityholders 4,061,500 Warrants (4)
Common Stock Outstanding Prior to this Offering 8,106,252 shares
Common Stock Outstanding After this Offering 18,850,947 shares (5)
Nasdaq Trading Symbols Common Stock: RMII
Common Stock Purchase Warrants: RMIIW
(1) Such shares may be offered and issued from time to time in connection
with future acquisitions by the Company, including the Proposed Acquisitions.
With the consent of the Company, this Prospectus may also be used by persons or
entities who have received or will receive from the Company Common Stock covered
by this Prospectus in connection with acquisitions of businesses, properties or
securities and who may wish to sell such stock under circumstances requiring or
making desirable use of this Prospectus and by certain transferees of such
persons or entities.
(2) Approximately 3,135,538 of such shares are currently issued and
outstanding and may be offered and sold from time to time by the Selling
Securityholders. The remaining approximately 6,744,695 shares may be purchased
upon the exercise of the Warrants and thereafter offered and sold by the holders
thereof pursuant to this Prospectus. Does not include shares of Common Stock
that may be issued pursuant to anti-dilution provisions of various outstanding
warrants, including the Warrants to be offered and sold by certain Selling
Securityholders. This Prospectus may also be used for the resales, from time to
time, of up to 3,950,000 shares that may be acquired by donees, pledgees, and
other transferees who receive shares covered by this Prospectus as gifts, as
security for loans, and in other similar transactions and who may wish to sell
such shares under circumstances requiring or making desirable the use of this
Prospectus. See "SELLING SECURITYHOLDERS" and "DESCRIPTION OF CAPITAL STOCK."
(3) Anticipated to be issued in connection with the proposed acquisition
of DataXchange.
(4) Includes 111,500 Warrants issued to the representative of the
underwriters of the Company's IPO in 1996 and 3,950,000 Warrants owned by
Douglas H. Hanson, President, Chairman, and Chief Executive Officer of the
Company (the "Hanson Warrants"). The Warrants owned by Mr. Hanson may be
exercised until September 22, 1999 for a purchase price of $1.90 per share of
Common Stock purchased. The shares of Common Stock issuable upon exercise of
these Warrants are included in the 9,880,233 shares of Common Stock offered by
the Selling Securityholders. See "CERTAIN TRANSACTIONS--CHANGE IN CONTROL" and
"DESCRIPTION OF CAPITAL STOCK."
(5) Assumes: (i) the issuance of all 4,000,000 of the Acquisition Shares in
one or more mergers by the Company with other businesses or acquisitions by the
Company of other businesses or assets; and (ii) the exercise of all of the
Warrants, including all of the Hanson Warrants. Does not give effect to the
exercise of outstanding options granted to employees or non-employee directors
of the Company pursuant to various stock option plans or shares of Common Stock
that can be issued pursuant to anti-dilution provisions of the Warrants
(End of Item Excerpt)
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information concerning the
ownership of Common Stock as of October 15, 1998 by (i) each stockholder of
the Company known by the Company to be the beneficial owner of more than 5%
of its outstanding shares of Common Stock, (ii) each current member of the
board of directors of the Company, (iii) each executive officer of the
Company named in the Summary Compensation Table appearing under the caption
"Executive Compensation," and (iv) all current directors and executive
officers of the Company as a group.
SHARES BENEFICIALLY OWNED(1)(2)
NUMBER OF PERCENTAGE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OUTSTANDING
Current Directors
Douglas H. Hanson..................... 6,727,040(3) 52.3%
1099 Eighteenth Street
30th Floor
Denver, CO 80202
D. D. Hock............................ 1,500(4) *
1099 Eighteenth Street
30th Floor
Denver, CO 80202
Robert W. Grabowski................... 6,300(5) *
1099 Eighteenth Street
30th Floor
Denver, CO 80202
Lewis H. Silverberg................... 6,500(6) *
1099 Eighteenth Street
30th Floor
Denver, CO 80202
Mary Beth Vitale...................... 1,500(7) *
1099 Eighteenth Street
30th Floor
Denver, CO 80202
Named Executive Officers Who Are Not
Directors
Kevin R. Loud(8)...................... 378,800 4.7%
1099 Eighteenth Street
30th Floor
Denver, CO 80202
All Directors and Named Executive 6,750,940 53.9%
Officers as a Group (6 persons)........
Over 5% Stockholders and Members of a
"group" Who Are Not Directors or
Executive Officers(1)(2)
Christoper K. Phillips(1)(9).......... 170,000 2.1%
4580 Star Ridge Drive
Colorado Springs, CO 80916
Jim D. Welch(1)(10)................... 86,340 1.1%
1326 Sorrento Road
Colorado Springs, CO 80910
Kennedy Capital Management, Inc.(11).. 375,000 4.6%
10829 Olive Boulevard
St. Louis, MO 63141
(End of item excerpt.)
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