AS SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION
FOR FILING ON JUNE 9, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMERICAN DIGITAL COMMUNICATIONS, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.0001 PER SHARE
(Title of Class of Securities)
025369-10-9
(CUSIP Number)
John G. Simmonds
Simmons Capital Limited
580 Granite Court
Pickering, Ontario CANADA
L1W 3Z4
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JANUARY 28, 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 Statement because of Rule
13d-1(b)(3) or (4), check the following: |_|
<PAGE>
CUSIP NO. 025369-10-9
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Simmons Capital Limited
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_| (b)|_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS* WC/OO (see Item 3 below)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e)
|_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
8,686,263 (see Item 5)
NUMBER OF --------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY N/A
OWNED BY --------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 8,686,263
PERSON --------------------------------
WITH 10 SHARED DISPOSITIVE POWER
N/A
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,686,263 (see Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
|_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 33.9% (see item 5)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
The Schedule 13D filed on November 8, 1996 (the "Schedule 13D") by Simmonds
Capital Limited ("SCL") is hereby amended as follows:
I. Item 2 of the Schedule 13D ("Identity and Background") is amended by deleting
"Robert Donaldson", "Charles Gawlicki", "Mark Longden" and "Michael Smith" (and
all corresponding information) in the table set forth in the second paragraph of
such item and inserting in lieu thereof the following:
<TABLE>
<CAPTION>
PRINCIPAL
[NAME TITLE BUSINESS ADDRESS OCCUPATION]
- ----- ----- ---------------- -----------
<S> <C> <C> <C>
Gary Hokkanen Chief Financial 5255 Yonge Street Vice President,
Officer Suite 1050 Finance, SCL
Willowdale Ontario
Canada M2N 6P4
</TABLE>
In addition, Item 2(f) is amended and restated as follows:
All of the executive officers and directors of SCL are citizens of Canada.
<PAGE>
II. Item 3 of the Schedule 13D ("Source and Amount of Funds or Other
Consideration") is amended and restated as follows:
On December 29, 1995, Midland International Corp., a wholly owned subsidiary of
SCL, acquired 4,230,906 common shares of ADC paid as consideration for the grant
to ADC of certain exclusive license rights and the sale of assets.
On November 8, 1996, SCL acquired 3,000,000 common shares of ADC as
consideration for an exclusive distribution license granted to ADC.
During the period December 23, 1996 through February 12, 1997 inclusive, SCL
purchased with funds from working capital 165,000 common shares of ADC in the
market for a total purchase price of $38,790.00.
On August 25, 1997, Midland International Corp. transferred 200,000 common
shares of ADC in a private transaction to a former employee as settlement of an
employment severance dispute.
On August 31, 1997, SCL granted to Mr. Brian Faughnan, a former employee, an
option until August 31, 1999 to purchase 100,000 common shares of ADC for $0.25
per share.
On January 12, 1998, SCL granted, as a management incentive to certain employees
(see Item 5(a) above), options to purchase 1,350,000 common shares of ADC for
$0.01 per share and 1,350,000 common shares of ADC for $0.25 per share (the
"Employee Options"). The options to purchase common shares of ADC at the price
of $ 0.01 per share become vested at any time after the common shares of ADC
have traded at or above a minimum bid price of $0.25 per share for a period of
45 consecutive trading days. The options to purchase common shares of ADC at the
price of $ 0.24 per share become vested at any time after the common shares of
ADC have traded at or above a minimum bid price of $0.75 per share for a period
of 45 consecutive trading days. These Employee Options expire on December 31,
2000.
On January 28, 1998, SCL completed the sale to ADC of certain intellectual
property and other assets (the "SCL Sale"). As consideration for these assets,
SCL received 1,000,000 shares of convertible preferred stock of ADC, which are
convertible at the option of the holder into 1,000,000 shares of common stock of
ADC, and a warrant exercisable until January 31, 2001 to purchase 500,000 common
shares of ADC at a purchase price of $2.00 per share.
On February 9, 1998, SCL sold 40,000 common shares of ADC at a price of $0.23
per share in the market for cash.
On February 11, 1998, SCL sold 125,000 common shares of ADC at a price of $0.217
per
<PAGE>
share in the market for cash.
On March 16, 1998, SCL subscribed for 164,262 common shares of ADC issued from
treasury and purchased for cash from the company at a price of $0.21 per share.
On April 17, 1998, (i) Mr. John Simmonds, a director and executive officer of
SCL, (ii) Ms. Deborah Simmonds, Mr. Simmonds' wife, and (iii) Mr. Harry Dunstan,
a director an executive officer of SCL, purchased 1.5, 1.5 and 3.5 units,
respectively, in ADC. Each unit consists of 5,000 shares of common stock in ADC,
one warrant to purchase 5,000 shares of common stock in ADC and debt securities
in the principal amount of $5,000. The three individuals paid cash for such
investment.
On May 1, 1998, SCL transferred 73,905 shares of common stock of ADC to an
independent consultant as partial settlement for amounts due for services
rendered.
III. Item 4 of the Schedule 13D ("Purpose of the Transaction") is amended and
restated as follows:
SCL has acquired shares in ADC, both directly and through Midland International
Corp., for investment purposes. Pursuant to the SCL Sale, ADC agreed, upon the
satisfaction of certain conditions, to pay SCL the lower of 10% of the earnings
before interest, taxes, depreciation and amortization or $1,500,000.
IV. Item 5 of the Schedule 13D ("Interest in Securities of the Issuer") is
amended and restated as follows:
<PAGE>
(a) SCL owns an aggregate of 7,153,763 shares of common stock of ADC,
representing 29.6% of the aggregate shares of common stock of ADC
outstanding./1/ In addition, (1) SCL owns (i) 1,000,000 shares of preferred
stock of ADC, which are convertible into an aggregate of 1,000,000 shares of
common stock of ADC, and (ii) warrants to purchase 500,000 shares of common
stock of ADC at an exercise price of $2.00 per share, and (2) certain directors
and executive officers (and a member of their immediate family) own in the
aggregate warrants to acquire 32,500 shares of common stock of ADC; assuming the
conversion of such preferred stock and the exercise of such warrants, SCL owns
33.9% of the outstanding common stock of ADC./2/ SCL has the sole power to vote
or to direct the vote, and sole power to dispose or to direct the disposition
of, all of such securities, subject to the next paragraph.
Certain executive officers and directors of SCL have the right to acquire
certain of the shares owned by SCL, as follows:
<TABLE>
<CAPTION>
Sole/Shared Voting
POWER/POWER TO
PERSON NUMBER OF SHARES DISPOSE
- ------ ---------------- -------
<S> <C> <C>
John Simmonds option to acquire 300,000 shares for $0.01 per share sole
option to acquire 300,000 shares for $0.25 per share
Harry Dunstan option to acquire 200,000 shares for $0.01 per share sole
option to acquire 200,000 shares for $0.25 per share
David O'Kell option to acquire 150,000 shares for $0.01 per share sole
option to acquire 150,000 shares for $0.25 per share
Gary Hokkanen option to acquire 100,000 shares for $0.01 per share sole
option to acquire 100,000 shares for $0.25 per share
</TABLE>
- --------
/1/ Includes an aggregate of 32,500 shares of common stock owned by certain
executive officers and directors of SCL (and a member of their immediate
family). Percentages are based upon an aggregate of 24,112,669 shares
outstanding, representing: (1) 23,448,407 shares of Common Stock reported
outstanding as of November 30, 1997 in ADC's Quarterly Report on Form 10-QSB for
the quarter ended November 30, 1997; (2) an additional 164,262 shares of Common
Stock issued to SCL on March 16, 1998; and (3) an additional 500,000 shares of
Common Stock, issued on April 17, 1998, as reported in ADC's Report on Form 8-K
dated May 7, 1998.
/2/ Percentages are based upon an aggregate of 25,612,669 shares outstanding,
representing: (1) 23,448,407 shares of Common Stock reported outstanding as of
November 30, 1997 in ADC's Quarterly Report on Form 10-QSB for the quarter ended
November 30, 1997; (2) an additional 164,262 shares of Common Stock issued to
SCL on March 16, 1998; (3) the assumed exercise of 1,000,000 shares of
Convertible Preferred Stock, convertible into 1,000,000 shares of Common Stock,
and warrants to purchase an aggregate of 500,000 shares of Common Stock, each
issued on January 28, 1998, and (4) an additional 500,000 shares of Common
Stock, issued on April 17, 1998, as reported in ADC's Report on Form 8-K dated
May 7, 1998.
<PAGE>
(b) On December 29, 1995, Midland International Corp., a wholly owned subsidiary
of SCL, acquired 4,230,906 common shares of ADC paid as consideration for the
grant to ADC of certain exclusive license rights and the sale of assets.
On November 8, 1996, SCL acquired 3,000,000 common shares of ADC as
consideration for an exclusive distribution license granted to ADC.
During the period December 23, 1996 through February 12, 1997 inclusive, SCL
purchased with funds from working capital 165,000 common shares of ADC in the
market for a total purchase price of $38,790.00.
On August 25, 1997, Midland International Corp. transferred 200,000 common
shares of ADC in a private transaction to a former employee as settlement of an
employment severance dispute.
On August 31, 1997, SCL granted to Mr. Brian Faughnan, a former employee, an
option until August 31, 1999 to purchase 100,000 common shares of ADC for $0.25
per share.
On January 12, 1998, SCL granted, as a management incentive to certain employees
(see Item 5(a) above), options to purchase 1,350,000 common shares of ADC for
$0.01 per share and 1,350,000 common shares of ADC for $0.25 per share (the
"Employee Options"). The options to purchase common shares of ADC at the price
of $ 0.01 per share become vested at any time after the common shares of ADC
have traded at or above a minimum bid price of $0.25 per share for a period of
45 consecutive trading days. The options to purchase common shares of ADC at the
price of $ 0.24 per share become vested at any time after the common shares of
ADC have traded at or above a minimum bid price of $0.75 per share for a period
of 45 consecutive trading days. These Employee Options expire on December 31,
2000.
On January 28, 1998, SCL consummated the SCL Sale and received securities as
described in Item 3 above.
On February 9, 1998, SCL sold 40,000 common shares of ADC at a price of $0.23
per share in the market for cash.
On February 11, 1998, SCL sold 125,000 common shares of ADC at a price of $0.217
per share in the market for cash.
On March 16, 1998, SCL subscribed for 164,262 common shares of ADC issued from
treasury and purchased for cash from the company at a price of $0.21 per share.
<PAGE>
On April 17, 1998, (i) Mr. John Simmonds, a director and executive officer of
SCL, (ii) Ms. Deborah Simmonds, Mr. Simmonds' wife, and (iii) Mr. Harry Dunstan,
a director an executive officer of SCL, purchased 1.5, 1.5 and 3.5 units,
respectively, in ADC. Each unit consists of 5,000 shares of common stock in ADC,
one warrant to purchase 5,000 shares of common stock in ADC and debt securities
in the principal amount of $5,000. The three individuals paid cash for such
investment.
On May 1, 1998, SCL transferred 73,905 shares of common stock of ADC to an
independent consultant as partial settlement for amounts due for services
rendered.
V. Item 6 ("Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer") is amended by added the following at the
end of the first paragraph:
Options to acquire securities of the Issuer have been granted by SCL, as
described in Items 5(a) and 5(c) above.
VI. Item 7 ("Material to be Filed as Exhibits") is amended by adding the
following exhibits:
(a) Agreement between SCL and ADC, dated January 15, 1998. Incorporated by
reference to Exhibit 2 through 2.6 to ADC's Report on Form 8-K, dated May 7,
1998.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth herein is true, complete and correct.
June 8, 1998
SIMMONDS CAPITAL LIMITED
By: /s/ David C. O'Kell
-------------------
David C. O'Kell, Executive Vice President and Secretary
