<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): October 5, 2000
(August 1, 2000)
Applied Voice Recognition, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-23607 76-0513154
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
1770 St. James Place, Suite 116
Houston, Texas 77056
(Address of Registrant's principal executive offices)
(713) 621-3131
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
Private Placements
During September 2000, Applied Voice Recognition, Inc., d/b/a
eDOCS.net (the "Company"), completed several private placements with
accredited investors. The Company relied upon the exemptions from
registration afforded by Section 4(2) and Rule 506 of the Securities Act of
1933, as amended (the "Securities Act"). The net proceeds, received by the
Company from these private placements were approximately $1.44 million. In
connection with these private placements the Company also entered into
registration rights agreements with the investors. The material terms of
these transactions are discussed below.
Convertible Promissory Notes
On September 1, 2000, the Company issued five convertible promissory
notes in the aggregate principal amount of $450,000 (the "Promissory
Notes"). One Promissory Note, in the principal amount of $100,000, was
issued to Daniel Dornier, a member of the Company's board of directors. The
Promissory Notes will be automatically converted into shares of the
Company's common stock, par value $0.001 per share (the "Common Stock"),
when the Company's Certificate of Incorporation is amended to increase the
authorized capital to permit the issuance of the Common Stock upon
conversion of the Promissory Note. Each Promissory Note is convertible into
the number of shares of Common Stock equal to the principal amount of the
Promissory Note plus any accrued and unpaid interest divided by the lessor
of $0.15 or the lowest per share price that the Company has sold shares of
Common Stock between September 1, 2000 and the conversion date of the
Promissory Note. The Promissory Notes bear interest at twelve percent (12%)
per annum and, unless converted, mature on the earlier of the following:
. February 28, 2001, or
. change in control of the Company in connection with a merger,
acquisition or sale of all or substantially all of the assets of the
Company.
Common Stock and Warrant to Purchase Common Stock
Additionally, in September 2000, the Company issued (i) 6,666,666
shares of Common Stock at a purchase price of $0.15 per share and (ii) a
warrant to the placement agent to acquire 1,000,000 shares of Common Stock
at an exercise price of $0.15 per share (the "Warrant"). The Warrant is
exercisable immediately and expires on August 31, 2003. The Warrant also
contains customary antidilution provisions to address a future merger or
acquisition of the Company, sale of all or substantially all of the
Company's assets, and stock dividends or splits, if any.
<PAGE>
Registration Rights Agreements
Pursuant to the registration rights agreements between the Company and the
investors in the private placements (the "Registration Rights Agreements"), the
Company will (i) file a registration statement (the "Registration Statement")
registering the resale of the Common Stock sold in the private placements or
issued upon conversion of a Promissory Note or exercise of the Warrant, and (ii)
use commercially reasonable efforts to cause the Registration Statement to be
declared effective by the U.S. Securities & Exchange Commission by December 31,
2000.
If the Registration Statement is not declared effective by December 31,
2000, the Company is obligated to make monthly payments to each investor until
the Registration Statement is declared effective or such investors Common Stock
can be resold in reliance on Rule 144(k) of the Securities Act. An investor's
rights to receive these payments will be its exclusive remedy.
The descriptions of the Promissory Notes, the Warrant and the Registration
Rights Agreements do not purport to be complete and are qualified in their
entirety by reference to such documents, which are filed as exhibits to this
Form 8-K and incorporated by reference.
Changes in Management
On October 1, 2000, James G. Springfield joined the Company as President,
Chief Executive Officer and Vice-Chairman of the Board of Directors. Mr.
Springfield has over a decade of senior executive and financial management
experience, most recently as chief operating officer of Hermann Hospital, the
flagship of the 13 hospital Memorial Healthcare System.
In September, 2000, Tim Connolly, the Company's founder, resigned his
positions as President and Chairman of the Board of Directors of the Company.
Mr. Connolly will continue to advise the Company and focus his efforts on
capital formation, investor relations and business development. J. William Boyar
was named Chairman of the Board of Directors. Mr. Boyar, chairman of the Houston
based law firm Boyar & Miller, has been a director of the Company since 1997 and
has 24 years of experience in representing domestic and international
businesses.
Effective September 1, 2000, Russ M. Douglas resigned as Chief Technology
Officer to pursue another business opportunity. Michael H. Leggett was named
Director of Technology and will direct the technical development efforts for the
EPN. Mr. Leggett has worked closely with Mr. Douglas on Company projects since
1997.
On August 1, 2000, Anna M. Goss joined the Company as Controller. Most
recently, Ms. Goss was an audit manager with Arthur Andersen LLP.
On September 28, 2000, the Company issued a press release announcing Mr.
Connolly's resignation, Mr. Boyar's appointment as Chairman of the Board of
Directors and Mr. Springfield's election as President, Chief Executive Officer
and Vice Chairman, a copy of which is filed as an exhibit to this Form 8-K.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) None
(b) None
(c) Exhibits
4.1 Warrant to Purchase Common Stock of Applied Voice Recognition,
Inc. d/b/a e-DOCS.net
4.2 Form of Convertible Promissory Note
4.3 Registration Rights Agreement - Placement Agent
4.4 Form of Registration Rights Agreement - (Common Stock)
4.5 Form of Registration Rights Agreement - (Convertible Promissory
Note)
99.1 Press Release--September 28, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Applied Voice Recognition, Inc.
October 3, 2000
/s/ James G. Springfield
--------------------------------------
James G. Springfield
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Warrant to Purchase Common Stock of Applied Voice Recognition,
Inc., d/b/a e.DOCS.net
4.2 Form of Convertible Promissory Note
4.3 Registration Rights Agreement - Placement Agent
4.4 Form of Registration Rights Agreement - (Common Stock)
4.5 Form of Registration Rights Agreement - (Convertible Promissory
Note)
99.1 Press Release - September 28, 2000
