UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
VANGUARD AIRLINES, INC.
(Name of Issuer)
Common Stock, $0.001 par value
(Title of Class of Securities)
922018-10-9
(CUSIP Number)
Donald S. Scherer
Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation
Three Embarcadero Center, Suite 700
San Francisco, CA 94111
(415) 434-1600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 20, 1998
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(c), 13d-1(f) or 13d-1(g), check the following box [].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Exhibit Index on Page 29
Total Pages 30<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 2 of 30
1 Name of Reporting Person H&Q LONDON VENTURES
IRS Identification No. of Above Person 94-2966540
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization England
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person PN
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 3 of 30
1 Name of Reporting Person H&Q TSP INVESTORS, L.P.
IRS Identification No. of Above Person 94-3203715
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7*
14 Type of Reporting Person PN
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 4 of 30
1 Name of Reporting Person H&Q TSP II INVESTORS, L.P.
IRS Identification No. of Above Person 94-3268515
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person PN
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 5 of 30
1 Name of Reporting Person RVR SECURITIES CORP.
IRS Identification No. of Above Person 94-3181298
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person CO
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 6 of 30
1 Name of Reporting Person HAMBRECHT & QUIST VENTURE PARTNERS
IRS Identification No. of Above Person 94-2949080
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person PN
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 7 of 30
1 Name of Reporting Person HAMBRECHT & QUIST MANAGEMENT CORPORATION
IRS Identification No. of Above Person 94-2917770
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person CO
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 8 of 30
1 Name of Reporting Person H&Q TSP INVESTMENT MANAGEMENT CO., LLC
IRS Identification No. of Above Person 94-3203714
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person OO
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 9 of 30
1 Name of Reporting Person H&Q TSP II INVESTMENT MANAGEMENT, LLC
IRS Identification No. of Above Person 94-3268512
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person OO
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 10 of 30
1 Name of Reporting Person HAMBRECHT & QUIST CALIFORNIA
S.S. No. of Above Person 94-2856927
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person CO
* See response to Item 5. <PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 11 of 30
1 Name of Reporting Person HAMBRECHT & QUIST GROUP
S.S. No. of Above Person 94-3246636
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization Delaware
7 Sole Voting Power -0-
NUMBER OF
SHARES 8 Shared Voting Power 46,087,343*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power -0-
PERSON WITH
10 Shared Dispositive Power 46,087,343*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 46,087,343*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 68.7%*
14 Type of Reporting Person CO
* See response to Item 5. <PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 12 of 30
1 Name of Reporting Person WILLIAM R. HAMBRECHT
IRS Identification No. of Above Person ###-##-####
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 Source of Funds Not applicable
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization United States
7 Sole Voting Power 13,902,651*
NUMBER OF
SHARES 8 Shared Voting Power 24,205,418*
BENEFICIALLY
OWNED BY EACH
REPORTING 9 Sole Dispositive Power 13,902,651*
PERSON WITH
10 Shared Dispositive Power 24,205,418*
11 Aggregate Amount Beneficially Owned by Each
Reporting Person 38,108,069*
12 Check Box if the Aggregate Amount in Row 11 Excludes
Certain Shares [ ]
13 Percent of Class Represented by Amount in Row 11 63.1%*
14 Type of Reporting Person IN
* See response to Item 5.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 13 of 30
Item 1. Security and Issuer.
This Schedule 13D relates to the Common Stock, par value
$0.001 (the "Common Stock"), of Vanguard Airlines, Inc., a
Delaware corporation (the "Issuer"). The principal executive
office of the Company is located at 7000 Squibb Road, Third
Floor, Mission, Kansas 66202. The reporting persons previously
filed a Schedule 13G pursuant to Rule 13d-1(d) to report the
beneficial ownership of securities of the Issuer. The reporting
persons are filing this Schedule 13D to report subsequent
acquisitions of securities of the Issuer.
Item 2. Identity and Background.
(a), (b) & (c) The following information is given with
respect to the persons filing this statement:
H&Q London Ventures is an English partnership formed in
1985 to make venture capital investments, with its principal
office at 10 Park Place, London, England SW1A1LP. The general
partners of H&Q London Ventures are H&Q Venture Partners
(described below) and Second London American Trust P.L.C. H&Q
Venture Partners has complete investment authority over the
partnership.
Second London American Trust P.L.C. is an English
investment trust formed in 1889 to engage in the investment
business, with its principal office at 10 Park Place, London,
England SW1A1LP. The directors of Second London American Trust
P.L.C. are:
Principal
Name Occupation
(Citizenship) Position Address (Business)
Peter Dicks Director, 10 Park Place Chairman,
(United Kingdom) Chairman London, England Second London
SW1A1LP American
Trust
(investments)
William Director One Bush Street Advisory
Easterbrook San Francisco, CA Director,
(United States) 94104 Hambrecht &
Quist
(investment
bank)<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 14 of 30
Principal
Name Occupation
(Citizenship) Position Address (Business)
Andrew Gifford Director 10 Park Place Chief
(United Kingdom) London, England Executive,
SW1A1LP GJW
Government
Relations
Limited
(consulting)
Oliver Grace Director 10 Park Place Co-chairman,
(United States) London, England Associated
SW1A1LP Asset
Management,
Inc.
(investments)
Christopher Mills Director 10 Park Place Investment
(United Kingdom) London, England Manager, JO
SW1A1LP Hambo &
Partners
(investments)
Barbara Thomas Director 10 Park Place Attorney
(United Kingdom) London, England
SW1A1LP
H&Q TSP Investors, L.P. is a Delaware limited partnership
formed to invest in the Issuer. Its principal office is at One
Bush Street, San Francisco, California 94104. Its Investment
General Partner is H&Q TSP Investment Management Co., LLC, and
its Administrative General Partner is H&Q Management Corporation,
each of which is described below.
H&Q TSP II Investors, L.P. is a California limited
partnership formed to invest in the Issuer. Its principal office
is at One Bush Street, San Francisco, CA 94104. Its Investment
General Partner is H&Q TSP II Investment Management, LLC, and its
Administrative General Partner is H&Q Management Corporation,
each of which is described below.
RVR Securities Corp. is a California corporation that is
a wholly-owned subsidiary of H&Q California (described below).
Its principal office is at One Bush Street, San Francisco,
California 94104. The directors and executive officers of RVR
Securities Corp. are the following:<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 15 of 30
Principal
Occupation
Name Position Address (Business)
Daniel H. Case Director One Bush President,
III Street CEO, H&Q Group
San Francisco,
CA 94104
William R. Director, One Bush Vice Chairman,
Timken President Street H&Q Group
San Francisco,
CA 94104
Steven N. Secretary One Bush General
Machtinger Street Counsel,
San Francisco, Secretary, H&Q
CA 94104 Group
Patrick J. Treasurer One Bush CFO, H&Q Group
Allen Street
San Francisco,
CA 94104
Hambrecht & Quist Venture Partners ("H&Q Venture
Partners") is a California limited partnership formed in 1984 to
manage venture capital funds, with its principal office at One
Bush Street, San Francisco, California 94104. The general
partners of H&Q Venture Partners are H&Q California and
William R. Hambrecht, each of whom is described below.
Hambrecht & Quist Management Corporation ("H&Q Management
Corporation") is a California corporation that is a wholly-owned
subsidiary of H&Q California (described below). Its principal
office is at One Bush Street, San Francisco, California 94104.
The directors and executive officers of H&Q Management
Corporation are the following:<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 16 of 30
Principal
Occupation
Name Position Address (Business)
Standish Director, One Bush Managing
O'Grady President Street Director, H&Q
San Francisco, Group
CA 94104
Patrick J. Director, VP, One Bush CFO, H&Q Group
Allen CFO Street
San Francisco,
CA 94104
Steven N. Director, VP, One Bush V.P., Sec'y,
Machtinger Sec'y Street H&Q Group
San Francisco,
CA 94104
Jackie A. VP One Bush CFO, H&Q
Berterretche Street Venture
San Francisco, Department
CA 94104
Samuel D. VP One Bush VP, H&Q
Kingsland Street Venture
San Francisco, Department
CA 94104
Frederick C. VP One Bush Associate, H&Q
Wasch Street Venture
San Francisco, Department
CA 94104
H&Q TSP Investment Management Co., LLC, is a Delaware
limited liability company formed to serve as the Investment
General Partner of H&Q TSP Investors, L.P. (described above).
Its four member-managers are as follows:
Principal Occupation
Name Address (Business)
William R. Hambrecht 550 Fifteenth Street President, W.R.
San Francisco, CA Hambrecht & Co., LLC
94103
David Golden One Bush Street Managing Director,
San Francisco, CA Investment Banking,
94104 H&Q Group<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 17 of 30
Principal Occupation
Name Address (Business)
Christopher One Bush Street Investment Manager,
Hollenbeck San Francisco, CA H&Q Venture
94104 Department
Russell Winter 7000 Squibb Rd. VP of Market and
3rd Flr. Planning, Vanguard
Mission, KS 66202 Airlines
H&Q TSP II Investment Management, LLC is a California
limited liability company formed to serve as the Investment
General Partner of H&Q TSP II Investors, L.P. (described above).
Its four member-managers are as follows:
Principal Occupation
Name Address (Business)
William R. Hambrecht 550 Fifteenth Street President of W.R.
San Francisco, CA Hambrecht & Co., LLC
94103
David Golden One Bush Street Managing Director,
San Francisco, CA Investment Banking,
94104 H&Q Group
Russell Winter 7000 Squibb Rd. VP of Market and
3rd Flr. Planning, Vanguard
Mission, KS 66202 Airlines
Robert Hambrecht 550 Fifteenth Street Director of
San Francisco, CA Distribution, W.R.
94103 Hambrecht & Co., LLC
Hambrecht & Quist California ("H&Q California") is a
California corporation wholly owned by H&Q Group (described
below), with its principal office at One Bush Street, San
Francisco, California 94104. The directors and executive
officers of H&Q California are the following:
Principal
Occupation
Name Position Address (Business)
Daniel H. Director, One Bush President,
Case III President CEO Street CEO, H&Q Group
San Francisco,
CA 94104<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 18 of 30
Principal
Occupation
Name Position Address (Business)
William R. Director, Vice One Bush Vice Chairman,
Timken Chairman Street H&Q Group
San Francisco,
CA 94104
Howard B. Director c/o President,
Hillman Hambrecht & Auto-Trol
Quist Technology
One Bush Corp.
Street
San Francisco,
CA 94104
William E. Director c/o Founder,
Mayer Hambrecht & Development
Quist Capital LLC
One Bush
Street
San Francisco,
CA 94104
William J. Director c/o Professor,
Perry Hambrecht & Stanford
Quist University
One Bush
Street
San Francisco,
CA 94104
Edmund H. Director c/o Vice
Shea, Jr. Hambrecht & President,
Quist J.F. Shea
One Bush Co., Inc.
Street (construction
San Francisco, and venture
CA 94104 capital)
Patrick J. CFO One Bush CFO, H&Q Group
Allen Street
San Francisco,
CA 94104
Steven N. General One Bush General
Machtinger Counsel, Street Counsel,
Secretary San Francisco, Secretary, H&Q
CA 94104 Group<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 19 of 30
Hambrecht & Quist Group ("H&Q Group") is a publicly-held
Delaware corporation with its principal office at One Bush
Street, San Francisco, California 94104. In addition to being
engaged, through its indirect subsidiary, Hambrecht & Quist LLC,
in the investment banking and broker-dealer businesses, H&Q
Group, directly and through associated entities, is engaged in
the venture capital and money management businesses. The
directors and executive officers of H&Q Group are the following:
Principal
Occupation
Name Position Address (Business)
Daniel H. Director, One Bush Same as
Case III President, CEO Street Position
San Francisco,
CA 94104
William R. Director, Vice One Bush Same as
Timken Chairman Street Position
San Francisco,
CA 94104
Howard B. Director c/o Hambrecht President,
Hillman & Quist Auto-Trol
One Bush Technology
Street Corp.
San Francisco,
CA 94104
William E. Director c/o Founder,
Mayer Hambrecht & Development
Quist Capital LLC
One Bush
Street
San Francisco,
CA 94104<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 20 of 30
Principal
Occupation
Name Position Address (Business)
William J. Director c/o Professor,
Perry Hambrecht & Stanford
Quist University
One Bush
Street
San Francisco,
CA 94104
Edmund H. Director c/o Vice
Shea, Jr. Hambrecht & President,
Quist J.F. Shea Co.,
One Bush Inc.
Street (construction
San Francisco, and venture
CA 94104 capital)
Patrick J. CFO One Bush Same as
Allen Street Position
San Francisco,
CA 94104
Steven N. General One Bush Same as
Machtinger Counsel, Street Position
Secretary San Francisco,
CA 94104
William R. Hambrecht is a United States citizen, whose
business address is 550 Fifteenth Street, San Francisco, CA
94103. His principal occupation is President of W.R. Hambrecht &
Co., LLC. Mr. Hambrecht resigned as the Chairman of the Board of
H&Q Group effective as of January 1, 1998. Mr. Hambrecht is the
trustee and the trustor of The Hambrecht 1980 Revocable Trust
("The Hambrecht Trust"), which purchased certain securities of
the Issuer.
(d) & (e) To the best knowledge of the reporting
persons, during the last five years none of the reporting persons
or their officers, directors or controlling persons has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 21 of 30
(f) All individuals referred to above are United States
citizens unless otherwise indicated.
Item 3. Source and Amount of Funds or Other Consideration.
On January 17, 1997, H&Q California agreed to establish a
two-year $4.0 million letter of credit in favor of the Issuer's
credit card processor on behalf of the Issuer. In consideration
for the establishment of the letter of credit, the Issuer issued
to H&Q California warrants to purchase up to 4,000,000 shares of
Common Stock. Upon execution of the letter of credit, warrants
to purchase 1,600,000 shares of Common Stock immediately vested.
The remaining warrants to purchase 2,400,000 shares of Common
Stock vest quarterly according to the amount of exposure under
such letter of credit. As of the date of this filing, warrants
to purchase up to 2,618,820 shares of Common Stock have vested.
Each warrant expires ten years from the date of issuance with an
exercise price of $1.00 per share.
On April 28, 1997, the Issuer completed a $10.3 million
private sale of 5,150,000 units of securities, for a purchase
price of $2.00 per unit. Each unit consisted of one share of
Common Stock and two redeemable common stock purchase warrants.
Each redeemable common stock purchase warrant entitles the
registered holder to purchase one share of Common Stock, at any
time over a five year period, at an exercise price of $2.50. In
this private placement transaction, the Issuer sold 1,687,500
units to H&Q TSP Investors, L.P., 475,000 units to H&Q TSP II
Investors, L.P., 1,135,000 units to H&Q California, and 851,250
units to The Hambrecht Trust. The purchase price was paid by the
discharge of various notes issued by the Issuer in favor of the
purchasers. The exercise price of these warrants is subject to
adjustment in the event the Company issues equity securities
raising net proceeds in an aggregate amount of $1,000,000 at a
price below $2.00 per share of Common Stock. In such event, the
exercise price of the warrants is reduced to the offering price
of the equity offering.
On May 7, 1997, H&Q California agreed to establish a two
year $2.0 million guarantee in favor of the Company's credit card
processor on behalf of the Company. This guarantee did not
require the use of any funds by H&Q California. As consideration
for the establishment of this guarantee, the Company issued to
H&Q California warrants to purchase up to 1,030,928 shares of
Common Stock at an exercise price of $1.94 per share. Upon
execution of the guarantee, 412,371 warrants vested immediately.
The remaining 618,557 warrants vest according to the amount of
exposure under such guarantee. As of the date of this filing,
warrants to purchase up to 721,650 shares of Common Stock have
vested. Each warrant expires ten years from the date of
issuance.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 22 of 30
On October 10, 1997, the Issuer distributed, at no cost,
to holders of its Common Stock, nontransferable rights to
purchase shares of Common Stock (the "Rights"). Each stockholder
received two Rights for each share of Common Stock held by such
stockholder (the "Rights Offering"). Each stockholder purchasing
all of the shares available to him or her could also subscribe to
purchase any shares not purchased pursuant to the Rights
Offering, subject to proration (the "Oversubscription
Privilege"). Each Right entitled the holder to subscribe for and
purchase one share of Common Stock for a price of $0.50 per
share. On December 10, 1997, the following reporting persons
exercised their Rights which resulted in the following shares of
Common Stock being issued on January 9, 1998:
Shares of
Purchaser Common Stock Purchase Price
H&Q TSP Investors, L.P. 10,029,316 $5,014,658.00
H&Q TSP II Investors, L.P. 950,000 475,000.00
H&Q California 5,689,127 2,844,563.50
The Hambrecht Trust 4,596,845 2,298,422.50
The purchasers paid such purchase price in cash from their
working capital (if an entity) or from personal funds (in the
case of Mr. Hambrecht).
On March 20, 1998, the Issuer exchanged outstanding
demand notes previously issued to the following persons for new
notes convertible into the following number of shares of Common
Stock, with such notes expected to be convertible within the next
60 days:
Principal Amount Convertible Into
Reporting Person of New Note Common Shares
H&Q TSP Investors, L.P. $ 65,250.00 130,500
H&Q TSP II Investors, L.P. 151,749.82 303,499
H&Q California 4,603,664.31 9,207,328
The Hambrecht Trust 3,328,528.00 6,657,056
Also on March 20, 1998, the Issuer completed a $3,023,620
private sale of 302,362 units of securities at a purchase price
of $10 per unit. Each unit consisted of 20 shares of preferred
stock (convertible into Common Stock on a 1:1 basis) and warrants
to purchase 40 shares of Common Stock. The preferred stock is
not convertible, and the warrants are not exercisable, until
July 15, 1998; therefore the shares of Common Stock underlying
such preferred stock and warrants are not considered beneficially<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 23 of 30
owned pursuant to Rule 13d-3(1)(i) under the Securities Exchange
Act of 1934 (the "Exchange Act"). In this transaction, The
Hambrecht Trust acquired 151,162 units, resulting in 3,023,240
shares of Common Stock and warrants to purchase 6,046,480 shares
of Common Stock.
Item 4. Purpose of Transaction.
The reporting persons purchased the securities to obtain
or to increase their respective equity interests in the Issuer.
Depending on market conditions and other factors, the reporting
persons may, at any time or from time to time, sell all or some
of their securities of the Issuer, or may purchase additional
securities of the Issuer in the open market or in private
transactions.
Except as set forth above, the reporting persons have no
plans or proposals which relate to or would result in the
following types of transactions or events:
(a) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or
any of its subsidiaries;
(b) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries;
(c) any change in the present board of directors or
management of the Company, including any plans or proposals to
change the number or term of directors or fill any existing
vacancies on the board;
(d) any material change in the present capitalization or
dividend policy of the Company;
(e) any other material change in the Company's business
or corporate structure;
(f) changes in the Company's charter, by-laws or
instruments corresponding thereto or other actions which may
impede the acquisition of control of the Company by any person;
(g) causing a class of securities of the Company to be
delisted from a national securities exchange or cease to be
quoted in an inter-dealer quotation system of a registered
national securities association;
(h) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act; or
(i) any action similar to those enumerated above.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 24 of 30
Item 5. Interest in Securities of the Issuer.
(a) & (b) Reference is made to Items 7-11 and 13 of
each of the cover pages to this Schedule, which Items are
incorporated by reference herein. According to information
furnished to the reporting persons by the Issuer, there were
45,697,316 shares of Common Stock issued and outstanding as of a
recent date. The following persons directly own the following
(i) shares of Common Stock and (ii) derivative securities to
acquire shares of Common Stock that are immediately exercisable
or convertible (or exercisable or convertible within 60 days of
this date):<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 25 of 30
<TABLE>
<CAPTION>
Common Stock
From
Common Stock Derivative
Person Directly Owned Securities Total
<S> <C> <C> <C>
H&Q London Ventures 1,409,091 95,307<F1> 1,504,398
H&Q TSP Investors, 15,043,974 4,978,547<F2> 20,022,521
L.P.
H&Q TSP II Investors, 1,425,000 1,253,499<F3> 2,678,499
L.P.
RVR Securities Corp. -0- 240,000<F4> 240,000
H&Q California 6,824,127 14,817,798<F5> 21,641,925
__________ __________ __________
Subtotal 24,702,192 21,385,151 46,087,343
The Hambrecht Trust 5,543,095 8,359,556<F6> 13,902,651
__________ __________ __________
TOTAL 30,245,287 29,744,707 59,989,994
========== ========== ==========
<FN>
<F1> H&Q London Ventures has warrants to acquire 95,307 shares
of Common Stock.
<F2> H&Q TSP Investors, L.P. has (i) warrants to acquire
4,848,047 shares of Common Stock, and (ii) a note convertible
into 130,500 shares of Common Stock.
<F3> H&Q TSP Investors II, L.P. has (i) warrants to acquire
950,000 shares of Common Stock, and (ii) a note convertible into
303,499 shares of Common Stock.
<F4> RVR Securities Corp. has a warrant to acquire 240,000
shares of Common Stock.
<F5> H&Q California has (i) warrants to acquire a total of
5,610,470 shares of Common Stock, consisting of warrants acquired
on January 17, 1997, April 28, 1997, and May 7, 1997 (as further
described in Item 3 above) that are currently exercisable into up
to 2,618,820, 2,270,000, and 721,650 shares of Common Stock,
respectively, and (ii) a note convertible into 9,207,328 shares
of Common Stock.
<F6> The Hambrecht Trust beneficially owns (i) warrants to
acquire 1,702,500 shares of Common Stock, and (ii) a note
convertible into 6,657,056 shares of Common Stock. The Hambrecht
Trust is not deemed to beneficially own (x) preferred stock,
which is convertible into 3,023,240 shares of Common Stock on
July 15, 1998, or (y) warrants to acquire 6,046,480 shares of
Common Stock, which are exercisable on July 15, 1998.
</FN>
/TABLE
<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 26 of 30
Voting and investment decisions concerning the above
securities owned by H&Q London Ventures, H&Q TSP Investors, L.P.,
H&Q TSP II Investors, L.P., RVR Securities Corp. and H&Q
California may be made by or in conjunction with H&Q Venture
Partners, H&Q Management Corporation, H&Q TSP Investment
Management Co., LLC, H&Q TSP II Investment Management, LLC and
H&Q Group. Accordingly, each of the reporting persons may be
deemed a member of a group that shares voting and dispositive
power over all of the above securities, in which case each
Reporting Person would be deemed to have beneficial ownership of
an aggregate of 46,087,343 shares of Common Stock (24,702,192
shares of Common Stock owned directly and an additional
21,385,151 shares from derivative securities), which is 68.7% of
the outstanding Common Stock (calculated in accordance with Rule
13d-3(d)(1)(i) of the Exchange Act). Although the reporting
persons are reporting such securities as if they were members of
a group, the filing of this Schedule shall not be construed as an
admission by any reporting person that it is a beneficial owner
of any securities other than those directly held by such
reporting person.
Under the definition of "beneficial ownership" in Rule
13d-3 under the Exchange Act, it is also possible that the
individual general partners, directors, executive officers,
members, and/or managers of the foregoing entities might be
deemed the "beneficial owners" of some or all of the securities
to which this Schedule relates in that they might be deemed to
share the power to direct the voting or disposition of such
securities. Neither the filing of this Schedule nor any of its
contents shall be deemed to constitute an admission that any of
such individuals is, for any purpose, the beneficial owner of any
of the securities to which this Schedule relates, and such
beneficial ownership is expressly disclaimed.
William R. Hambrecht may be deemed to share voting and
dispositive power over the securities owned by H&Q London
Ventures (because he is one of the two general partners of the
Investment General Partner of H&Q London Ventures), as well as
H&Q TSP Investors, L.P. and H&Q TSP II Investors, L.P. (because
he is a managing member of the limited liability companies which
are the Investment General Partners of each of those two
partnerships). Accordingly, in addition to the securities owned
by The Hambrecht Trust (of which he has sole voting and
dispositive power), he may be deemed to have shared voting and
dispositive power over an additional 24,205,418 shares of Common
Stock.
The reporting persons are not aware of any other persons
named in Item 2 above who beneficially own any shares of Common
Stock of the Issuer, except that Edmund H. Shea, Jr., a director
of H&Q California and H&Q Group, beneficially owns securities of<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 27 of 30
the Issuer, which are being reported in a separate Schedule 13D
Amendment being filed by Mr. Shea.
(c) During the past 60 days, the reporting persons did
not effect any transactions in the Issuer's securities other than
those set forth in Item 3 above.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
None of the reporting persons is a party to any contract,
arrangement, understanding or relationship with respect to any
securities of the Issuer, including but not limited to the
transfer or voting of any securities of the Issuer, finder's
fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Item 7. Material to Be Filed as Exhibits.
(a) Joint Filing Undertaking.<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 28 of 30
Signatures
After reasonable inquiry and to the best of their
knowledge and belief, the undersigned certify that the
information set forth in this statement is true, complete and
correct.
DATED: April 3, 1998
H&Q LONDON VENTURES H&Q TSP INVESTMENT MANAGEMENT
CO., LLC
By: /s/ Jackie A. Berterretche
__________________________ By: /s/ Jackie A. Berterretche
Jackie A. Berterretche __________________________
Attorney-in-Fact Jackie A. Berterretche
Attorney-in-Fact
H&Q TSP INVESTORS, L.P.
H&Q TSP II INVESTMENT
By: /s/ Jackie A. Berterretche MANAGEMENT, LLC
__________________________
Jackie A. Berterretche By: /s/ Jackie A. Berterretche
Attorney-in-Fact __________________________
Jackie A. Berterretche
H&Q TSP II INVESTORS, L.P. Attorney-in-Fact
By: /s/ Jackie A. Berterretche HAMBRECHT & QUIST CALIFORNIA
__________________________
Jackie A. Berterretche By: /s/ Patrick J. Allen
Attorney-in-Fact __________________________
Patrick J. Allen
RVR SECURITIES CORP. Chief Financial Officer
By: /s/ Steven N. Machtinger HAMBRECHT & QUIST GROUP
__________________________
Steven N. Machtinger By: /s/ Patrick J. Allen
Secretary __________________________
Patrick J. Allen
HAMBRECHT & QUIST VENTURE Chief Financial Officer
PARTNERS
WILLIAM R. HAMBRECHT
By: /s/ Jackie A. Berterretche
__________________________ By: /s/ Jackie A. Berterretche
Jackie A. Berterretche __________________________
Attorney-in-Fact Jackie A. Berterretche
Attorney-in-Fact
HAMBRECHT & QUIST MANAGEMENT
CORPORATION
By: /s/ Jackie A. Berterretche
__________________________
Jackie A. Berterretche
Attorney-in-Fact<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 29 of 30
EXHIBIT INDEX
Exhibit 1 Joint Filing Undertaking Page 30<PAGE>
CUSIP No. 922018-10-9 SCHEDULE 13D Page 30 of 30
JOINT FILING UNDERTAKING
The undersigned, being duly authorized thereunto, hereby
execute this agreement as an exhibit to this Schedule 13D to
evidence the agreement of the below-named parties, in accordance
with rules promulgated pursuant to the Securities Exchange Act of
1934, to file this Schedule 13D and any subsequent amendment
jointly on behalf of each of such parties.
DATED: April 3, 1998.
H&Q LONDON VENTURES H&Q TSP INVESTMENT MANAGEMENT
CO., LLC
By: /s/ Jackie A. Berterretche
__________________________ By: /s/ Jackie A. Berterretche
Jackie A. Berterretche __________________________
Attorney-in-Fact Jackie A. Berterretche
Attorney-in-Fact
H&Q TSP INVESTORS, L.P.
H&Q TSP II INVESTMENT
By: /s/ Jackie A. Berterretche MANAGEMENT, LLC
__________________________
Jackie A. Berterretche By: /s/ Jackie A. Berterretche
Attorney-in-Fact __________________________
Jackie A. Berterretche
H&Q TSP II INVESTORS, L.P. Attorney-in-Fact
By: /s/ Jackie A. Berterretche HAMBRECHT & QUIST CALIFORNIA
__________________________
Jackie A. Berterretche By: /s/ Patrick J. Allen
Attorney-in-Fact __________________________
Patrick J. Allen
RVR SECURITIES CORP. Chief Financial Officer
By: /s/ Steven N. Machtinger HAMBRECHT & QUIST GROUP
__________________________
Steven N. Machtinger By: /s/ Patrick J. Allen
Secretary __________________________
Patrick J. Allen
HAMBRECHT & QUIST VENTURE Chief Financial Officer
PARTNERS
WILLIAM R. HAMBRECHT
By: /s/ Jackie A. Berterretche
__________________________ By: /s/ Jackie A. Berterretche
Jackie A. Berterretche __________________________
Attorney-in-Fact Jackie A. Berterretche
Attorney-in-Fact
HAMBRECHT & QUIST MANAGEMENT
CORPORATION
By: /s/ Jackie A. Berterretche
__________________________
Jackie A. Berterretche
Attorney-in-Fact<PAGE>
