<PAGE> 1
SCHEDULE 13D
(RULE 13d-101)
Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Vsource, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value
--------------------------------------------------------------------------------
(Title of Class of Securities)
92908B 10 5
--------------------------------------------------------------------------------
(CUSIP Number)
Mercantile Equity Partners III, L.P.
Attention: I. Steven Edelson
1372 Shermer Road
Northbrook, Illinois 60062
(847) 509-3711
with a copy to:
Michael H. Altman, Esq.
Altheimer & Gray
10 South Wacker Drive
Chicago, Illinois 60606
(312) 715-4961
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 12, 2000
--------------------------------------------------------------------------------
(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(e), 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 disclosures provided in a prior cover page.
The information required on 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).
<PAGE> 2
CUSIP No. 92908B 10 5 13D Page 2 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile VS, LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0- (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
N/A
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
00
--------------------------------------------------------------------------------
(1) Mercantile VS, LLC ("Mercantile VS") was dissolved on December 12, 2000 and
its shares of Series 1-A Convertible Preferred Stock were distributed to
its members.
<PAGE> 3
CUSIP No. 92908B 10 5 13D Page 3 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile Equity Partners III, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
91,161 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
91,161 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
91,161 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
--------------------------------------------------------------------------------
(1) Mercantile Equity Partners III, L.P. ("MEP, LP") directly holds 91,161
shares of Series 1-A Convertible Preferred Stock which are convertible into
91,161 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 4
CUSIP No. 92908B 10 5 13D Page 4 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile Equity Partners III, L.L.C.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
91,161 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
91,161 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
91,161 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
00
--------------------------------------------------------------------------------
(1) Solely in its capacity as general partner of MEP, LP. MEP, LP directly
holds 91,161 shares of Series 1-A Convertible Preferred Stock which are
convertible into 91,161 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 5
CUSIP No. 92908B 10 5 13D Page 5 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile Capital Partners I, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
678,337 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
678,337 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
678,337 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.1% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
--------------------------------------------------------------------------------
(1) Mercantile Capital Partners I, L.P. ("MCP") directly holds 624,025 shares
of Series 2-A Convertible Preferred Stock which are convertible into
624,025 shares of Common Stock and has a Warrant to purchase 54,312 shares
of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 6
CUSIP No. 92908B 10 5 13D Page 6 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile Capital Group, LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
678,337 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
678,337 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
678,337 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.1% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
00
--------------------------------------------------------------------------------
(1) Solely in its capacity as the general partner of MCP. MCP directly holds
624,025 shares of Series 2-A Convertible Preferred Stock which are
convertible into 624,025 shares of Common Stock and has a Warrant to
purchase 54,312 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 7
CUSIP No. 92908B 10 5 13D Page 7 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mercantile Capital Management Corp.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
678,337 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
678,337 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
678,337 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.1% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
--------------------------------------------------------------------------------
(1) Solely in its capacity as the manager of Mercantile Capital Group, LLC
("MCG") which is the general partner of MCP. MCP directly holds 624,025
shares of Series 2-A Convertible Preferred Stock which are convertible into
624,025 shares of Common Stock and has a Warrant to purchase 54,312 shares
of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 8
CUSIP No. 92908B 10 5 13D Page 8 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Michael A. Reinsdorf
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,838 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
769,498 (1)
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
3,838 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
769,498 (1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
773,336 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.6% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
(1) Solely in his capacity as (a) a managing member of, Mercantile Equity
Partners III, L.L.C. ("MEP, LLC"), (b) a member of MCG, and (c) a member of
the Investment Committee of Mercantile Capital Management Corp. ("MCM").
MEP, LLC is the general partner of MEP, LP. MEP, LP directly holds 91,161
shares of Series 1-A Convertible Preferred Stock which are convertible into
91,161 shares of Common Stock. MCG is the general partner of MCP. MCP
directly holds 624,025 shares of Series 2-A Convertible Preferred Stock
which are convertible into 624,025 shares of Common Stock and has a Warrant
to purchase 54,312 shares of Common Stock. In addition, Mr. Reinsdorf
directly owns 3,838 shares of Series 1-A Convertible Preferred Stock which
are convertible into 3,838 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 9
CUSIP No. 92908B 10 5 13D Page 9 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
I. Steven Edelson
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,838 (1)
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
769,498 (1)
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
3,838 (1)
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
769,498 (1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
773,336 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.6% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
(1) Solely in his capacity as (a) a managing member of MEP, LLC, and trustee
of the Edelson Family Trust dated September 17, 1997 (the "Trust") which is
also a managing member of MEP, LLC, (b) a member of MCG, and (c) a member
of the Investment Committee of MCM. MCG is the general partner of MCP. MEP,
LLC is the general partner of MEP, LP. MEP, LP directly holds 91,161 shares
of Series 1-A Convertible Preferred Stock which are convertible into
91,161 shares of Common Stock. MCP directly holds 624,025 shares of Series
2-A Convertible Preferred Stock which are convertible into 624,025 shares
of Common Stock and has a Warrant to purchase 54,312 shares of Common
Stock. In addition, Mr. Edelson is the trustee of the Mercantile Companies
Inc. Money Purchase Plan which holds 3,838 shares of Series 1-A Convertible
Preferred Stock which are convertible into 3,838 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 10
CUSIP No. 92908B 10 5 13D Page 10 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
The Edelson Family Trust dated September 17, 1997
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
91,161 (1)
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
91,161 (1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
91,161 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
00
--------------------------------------------------------------------------------
(1) Solely in its capacity as a managing member of MEP, LLC which is the
general partner of MEP, LP. MEP, LP directly holds 91,161 shares of Series
1-A Convertible Preferred Stock which are convertible into 91,161 shares of
Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 11
CUSIP No. 92908B 10 5 13D Page 11 of 18 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Nathaniel C. A. Kramer
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
--------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
678,337 (1)
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
678,337 (1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
678,337 (1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.1% (2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
--------------------------------------------------------------------------------
(1) Solely in his capacity as (a) a member of MCG, and (b) a member of the
Investment Committee of MCM. MCG is the general partner of MCP. MCP
directly holds 624,025 shares of Series 2-A Convertible Preferred Stock
which are convertible into 624,025 shares of Common Stock and has a Warrant
to purchase 54,312 shares of Common Stock.
(2) Based on 15,914,189 shares of Common Stock outstanding as of August 29,
2000, as reported in the Issuer's Form 10QSB/A.
<PAGE> 12
Item 1. Security and Issuer, is hereby amended in its entirety as follows:
This Amendment No. 1 to statement on Schedule 13D relates to the
shares of common stock, $0.01 par value (the "Common Stock") of Vsource, Inc., a
Delaware corporation ("Issuer").
The principal executive offices of Issuer are located at 5740 Ralston
Street, Suite 110, Ventura, California 93003.
Item 4. Purpose of Transaction, is hereby amended by adding thereto the
following paragraph:
On December 12, 2000, Mercantile VS was dissolved and its shares of
Series 1-A Convertible Preferred Stock were distributed to its members.
Item 5. Interest in Securities of the Issuer, is hereby amended in its
entirety as follows:
Each of the calculations in this Item 5 are based on 15,914,189 shares
of Common Stock outstanding as of August 29, 2000, as reported in the Issuer's
most recent Form 10QSB/A and assumes the exercise of the Warrant held by MCP
(which Warrant is currently exercisable). Statements regarding the power to vote
and dispose of the shares of Common Stock assume that the Warrant has been
exercised.
(a)
Mercantile VS
On December 12, 2000, Mercantile VS was dissolved and, therefore,
ceased to be the beneficial owner of any shares of Common Stock.
MEP, LP
From and after December 12, 2000, when Mercantile VS was dissolved,
MEP, LP may be deemed to beneficially own, pursuant to Rule 13d-3 of the Act,
91,161 shares of Common Stock (upon conversion of 91,161 shares of Series 1-A
Convertible Preferred Stock) which constitutes approximately 0.6% of the issued
and outstanding shares of Common Stock.
MEP, LLC
As the sole general partner MEP, LP, MEP, LLC may, pursuant to Rule
13d-3 of the Act, be deemed to be the beneficial owner of 91,161 shares of
Common Stock which constitutes approximately 0.6% of the issued and outstanding
shares of Common Stock.
MCP
The aggregate number of shares of Common Stock that MCP may be deemed
to beneficially own, pursuant to Rule 13d-3 of the Act, is 678,337 (upon (a)
conversion of 624,025 shares of Series 2-A
- 12 -
<PAGE> 13
Convertible Preferred Stock, and (b) exercise of the Warrant for 54,312 shares
of Common Stock) which constitutes approximately 4.1% of the issued and
outstanding shares of Common Stock.
MCG
As the sole general partner of MCP, MCG may, pursuant to Rule 13d-3 of
the Act, be deemed to be the beneficial owner of 678,337 shares of Common Stock
(upon (a) conversion of 624,025 shares of Series 2-A Convertible Preferred
Stock, and (b) exercise of the Warrant for 54,312 shares of Common Stock) which
constitutes approximately 4.1% of the issued and outstanding shares of Common
Stock.
MCM
As the non-member manager of MCG, MCM may, pursuant to Rule 13d-3 of
the Act, be deemed to be the beneficial owner of 678,337 shares of Common Stock
(upon (a) conversion of 624,025 shares of Series 2-A Convertible Preferred
Stock, and (b) exercise of the Warrant for 54,312 shares of Common Stock) which
constitutes approximately 4.1% of the issued and outstanding shares of Common
Stock.
Mr. Reinsdorf
Directly, and as a managing member of MEP, LLC, a member of MCG and a
stockholder of MCM, Mr. Reinsdorf may, pursuant to Rule 13d-3 of the Act, be
deemed to be the beneficial owner of 773,336 shares of Common Stock (upon (a)
conversion of 94,999 shares of Series 1-A Convertible Preferred Stock, (b)
conversion of 624,025 shares of Series 2-A Convertible Preferred Stock, and (c)
exercise of the Warrant for 54,312 shares of Common Stock) which constitutes
approximately 4.6% of the issued and outstanding shares of Common Stock.
Edelson
As a managing member of MEP, LLC, and trustee of the Trust which is
also a managing member of MEP, LLC, the trustee of the Mercantile Companies,
Inc. Money Purchase Plan, a member of MCG and a stockholder of MCM, Edelson may,
pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of
773,336 shares of Common Stock (upon (a) conversion of 94,999 shares of Series
1-A Convertible Preferred Stock, (b) conversion of 624,025 shares of Series 2-A
Convertible Preferred Stock, and (c) exercise of the Warrant for 54,312 shares
of Common Stock) which constitutes approximately 4.6% of the issued and
outstanding shares of Common Stock.
The Trust
As a managing member of MEP, LLC, the Trust may, pursuant to Rule
13d-3 of the Act, be deemed to be the beneficial owner of 91,161 shares of
Common which constitutes approximately 0.6% of the issued and outstanding shares
of Common Stock
Mr. Kramer
As a member of MCG and a stockholder of MCM, Mr. Kramer may, pursuant
to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 678,337 shares
of Common Stock (upon (a) conversion of 624,025 shares of Series 2-A Convertible
Preferred Stock and (b) exercise of the Warrant for 54,312 shares of Common
Stock) which constitutes approximately 4.1% of the issued and outstanding shares
of Common Stock.
- 13 -
<PAGE> 14
(b)
Mercantile VS
On December 12, 2000, Mercantile VS was dissolved. Therefore,
Mercantile VS may be deemed to have sole voting power and sole dispositive power
with respect to 0 shares of Common Stock which constitutes approximately 0% of
the outstanding shares of Common Stock.
MEP, LP
From and after December 12, 2000, MEP, LP has sole voting power and
sole dispositive power with respect to 91,161 shares of Common Stock which
constitutes approximately 0.6% of the outstanding shares of Common Stock.
MEP, LLC
As the sole general partner MEP, LP, MEP, LLC may be deemed to have
sole voting power and sole dispositive power with respect to 91,161 shares of
Common Stock which constitutes approximately 0.6% of the outstanding shares of
Common Stock.
MCP
MCP may be deemed to have sole voting power and sole dispositive power
with respect to 678,337 shares of Common Stock (upon conversion of 624,025
shares of Series 2-A Convertible Preferred Stock and exercise of the Warrant for
54,312 shares of Common Stock) which constitutes approximately 4.1% of the
outstanding shares of Common Stock.
MCG
As the sole general partner of MCP, MCG may be deemed to have sole
voting power and sole dispositive power with respect 678,337 shares of Common
Stock (upon conversion of 624,025 shares of Series 2-A Convertible Preferred
Stock and exercise of the Warrant for 54,312 shares of Common Stock) which
constitutes approximately 4.1% of the outstanding shares of Common Stock.
MCM
As the non-member manager of MCG, MCM may be deemed to have sole
voting power and sole dispositive power with respect 678,337 shares of Common
Stock (upon conversion of 624,025 shares of Series 2-A Convertible Preferred
Stock and exercise of the Warrant for 54,312 shares of Common Stock) which
constitutes approximately 4.1% of the outstanding shares of Common Stock.
Mr. Reinsdorf
Directly, and as a managing member of MEP, LLC, a member of MCG and a
stockholder of MCM, Mr. Reinsdorf may be deemed to have shared voting power and
shared dispositive power with respect to 773,336 shares of Common Stock (upon
(a) conversion of 94,999 shares of Series 1-A Convertible Preferred Stock, (b)
conversion of 624,025 shares of Series 2-A Convertible Preferred Stock, and (c)
exercise of the Warrant for 54,312 shares of Common Stock) which constitutes
approximately 4.6% of the outstanding shares of Common Stock.
Edelson
As a managing member of MEP, LLC, and trustee of the Trust which is
also a managing member of MEP, LLC, the trustee of the Mercantile Companies Inc.
Money Purchase Plan, a member of MCG and a stockholder of MCM, Edelson may be
deemed to have shared voting power and shared dispositive power with respect to
773,336 shares of Common Stock (upon (a) conversion of 94,999 shares of Series
1-A Convertible Preferred Stock, (b) conversion of 624,025 shares of Series 2-A
Convertible Preferred Stock, and (c) exercise of the Warrant
- 14 -
<PAGE> 15
for 54,312 shares of Common Stock) which constitutes approximately 4.6% of the
outstanding shares of Common Stock.
The Trust
As a managing member of MEP, LLC, the Trust may be deemed to have
shared voting power and shared dispositive power with respect to 91,161 shares
of Common Stock which constitutes approximately 0.6% of the outstanding shares
of Common Stock.
Mr. Kramer
As a member of MCG and a stockholder of MCM, Mr. Kramer may be deemed
to have shared voting power and shared dispositive power with respect to 678,337
shares of Common Stock (upon (a) conversion of 624,025 shares of Series 2-A
Convertible Preferred Stock and (b) exercise of the Warrant for 54,312 shares of
Common Stock) which constitutes approximately 4.1% of the outstanding shares of
Common Stock.
(c) Except as set forth in Item 4 above, none of the Reporting Persons
have effected any other transactions in Common Stock during the past sixty (60)
days.
(d) None of the Reporting Persons have the right to receive, or the
power to direct the receipt of, dividends from, or the proceeds from the sale
of, any of the securities of the Issuer acquired by the Reporting Persons as
described in Item 5.
(e) The Reporting Persons ceased to be the beneficial owners of more
than five percent (5%) of the shares of Common Stock as of December 12, 2000.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer, is hereby amended in its entirety as follows:
Except as set forth in this Amendment No. 1 to Schedule 13D or in the
Exhibits filed herewith and incorporated herein by reference, and except for the
Joint Filing Agreement dated December 13, 2000 among the Reporting Persons
attached as Exhibit 1 to this Amendment No. 1 to Schedule 13D, the Reporting
Persons do not have any contracts, arrangements, understandings or relationships
(legal or otherwise) with any person with respect to any securities of the
Issuer, including but not limited to transfer or voting of any of the shares of
Common Stock 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, or a pledge or power over the shares of
Common Stock of the Issuer.
Item 7. Materials to be Filed as Exhibits.
Exhibit 1 Statement made pursuant to Rule 13d-1(k)(1)(iii) of
Regulation 13D-G of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
Exhibit 2 Amended Certificate of Designation of Series 1-A
Convertible Preferred Stock is incorporated by
reference to the Schedule 13D filed by the Reporting
Persons on November 24, 2000.
Exhibit 3 Certificate of Designation of Series 1-A Convertible
Preferred Stock is incorporated by reference to the
Schedule 13D filed by the Reporting Persons on November
24, 2000.
- 15 -
<PAGE> 16
Exhibit 4 Certificate of Designation of Series 2-A Convertible
Preferred Stock is incorporated by reference to the
Schedule 13D filed by the Reporting Persons on November
24, 2000.
Exhibit 5 Form of Common Stock Warrant is incorporated by
reference to the Schedule 13D filed by the Reporting
Persons on November 24, 2000.
Exhibit 6 Form of Registration Rights Agreement is incorporated
by reference to the Schedule 13D filed by the Reporting
Persons on November 24, 2000.
- 16 -
<PAGE> 17
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 13, 2000 MERCANTILE VS, LLC, a Delaware limited
liability company
By: Mercantile Equity Partners III, L.P.,
an Illinois limited partnership, its
Managing Member
By: Mercantile Equity Partners III,
L.L.C., an Illinois limited
liability company, its General
Partner
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: Managing Member
MERCANTILE EQUITY PARTNERS III, L.P.,
an Illinois limited partnership, its
Managing Member
By: Mercantile Equity Partners III,
L.L.C., an Illinois limited liability
company, its General Partner
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: Managing Member
MERCANTILE EQUITY PARTNERS III, L.L.C.,
an Illinois limited liability company,
its General Partner
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: Managing Member
MERCANTILE CAPITAL PARTNERS I, LP, an
Illinois limited partnership
By: Mercantile Capital Group, LLC, a
Delaware limited liability company,
its general partner
By: Mercantile Capital Management
Corp., an Illinois corporation,
its manager
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: President
<PAGE> 18
MERCANTILE CAPITAL GROUP, LLC, a Delaware
limited liability company
By: Mercantile Capital Management Corp.,
an Illinois corporation, its manager
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: President
MERCANTILE CAPITAL MANAGEMENT CORP., an
Illinois corporation, its manager
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: President
THE EDELSON FAMILY TRUST DATED
SEPTEMBER 17, 1997
By: /s/ I. Steven Edelson
------------------------
Name: I. Steven Edelson
Title: Trustee
/s/ Michael A. Reinsdorf
-------------------------------------
MICHAEL A. REINSDORF, an Individual
/s/ I. Steven Edelson
-------------------------------------
I. STEVEN EDELSON, an Individual
/s/ Nathaniel C. A. Kramer
-------------------------------------
NATHANIEL C. A. KRAMER, an Individual
