SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
To 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13D-
2(a)
NETWORK SYSTEMS INTERNATIONAL, INC.
(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE
(Title of Class of Securities)
64121L-10-3
(CUSIP Number)
EDGAR W. MILLER, JR.
200 N. ELM STREET
GREENSBORO, N.C. 27401
336-271-8400
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 25, 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 that is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-1(e), Rule 13d-1(f) of Rule 13d-1(g), check the
following box. [ __ ]
SCHEDULE 13D
CUSIP No. 64121L-10-3
1. Name of Reporting Persons - IRS Identifications No. of
Above Person (Entities Only)
Edgar W. Miller, Jr.
2. Check the Appropriate Box if a Member of a Group
(a) [ __ ]
(b) [ __ ]
3. SEC Use Only
4. Source of Funds
N/A
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
To Items 2(d) or 2(e) [ __ ]
6. Citizenship or Place of Organization
United States
Number of Shares Beneficially Owned by Each Reporting Person
With:
7. Sole Voting Power
861,183 (1)
8. Shared Voting Power
0
9. Sole Dispositive Power
861,183 (1)
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
861,183 (1)
12. Check if the Aggregate Amount in Row 11 Excludes
Certain Shares
[ __ ]
13. Percent of Class Represented by Amount in Row 11
9.1 % (1) (2)
14. Type of Reporting Person
IN
(1) Mr. Miller indirectly holds 1,562 shares by his wife.
These shares are included in the amounts stated above.
(2) Calculated based upon the total of 9,479,821 shares of
Common Stock outstanding as of July 31, 2000 per the
Company's stock transfer agent.
Item 1. Security and Issuer
This Schedule 13D relates to the shares of common stock, par
value $.001 per share (the "Common Stock"), of Network
Systems International, Inc., a Nevada corporation (the
"Company").
The principal executive offices of the Company are located
at 200 North Elm Street, Greensboro, North Carolina, 27401.
Item 2. Identity and Background
(a) Name:
Edgar W. Miller, Jr.
(b) Address:
200 North Elm Street
Greensboro, North Carolina, 27401
(c) Present Principal Occupation:
Mr. Miller is Senior Vice President of Sales and
Marketing of Network Systems International of
North Carolina, Inc. The principal executive
offices of Network Systems International of North
Carolina, Inc. are located at 200 North Elm
Street, Greensboro, North Carolina, 27401.
(d) During the last five years, Mr. Miller has not been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, Mr. Miller was not 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.
(f) Citizenship:
Mr. Miller is a United States citizen.
Item 3. Source and Amount of Funds or Other
Consideration
N/A
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended and
restated as follows:
As described in the Company's Current Report on Form 8-
K which was filed with the Securities and Exchange
Commission on July 10, 2000, a copy of which is attached
hereto as Exhibit A and incorporated herein by reference,
the Company entered into a Stock Purchase Agreement dated
July 10, 2000 (the "Stock Purchase Agreement") with Richard
T. Clark, Joel C. Holt, D. Mark White, George D. Gordon,
Bryan John, John Signorello and Steven Elias (the "Initial
Investors"). Subject to the terms and conditions of the
Stock Purchase Agreement, the Company issued 1,666,667 new,
restricted shares of the Company's common stock at $0.60 per
share to the Initial Investors in a private placement
organized by Millennium Holdings Group, Inc. ("Millennium").
The sale under the Stock Purchase Agreement was subject to
the satisfaction of the following conditions, which are
discussed in more detail below: (i) certain of the
Company's current management shareholders must agree to sell
2,700,000 shares of the Company's common stock to accredited
investors arranged by Millennium, (ii) these current
management shareholders must grant the Company a put option
giving the Company the right to require such management
shareholders to purchase substantially all of the assets
associated with the Company's business as currently
conducted for $3,000,000, (iii) all of the Company's current
directors must resign and a designated representative of the
Initial Investors must be appointed to replace the former
directors effective as of the closing date of the stock
sale, and (iv) the Company must receive the consent of its
current revolving credit lender, Wachovia Bank, N.A.
("Wachovia"). The sale under the Stock Purchase Agreement
closed on July 25, 2000.
As a condition to the Initial Investors' obligations
pursuant to the terms of the Stock Purchase Agreement, four
of the Company's current management shareholders, Robbie M.
Efird, E. W. "Sonny" Miller, Jr., David F. Christian and
James W. Moseley (collectively, the "Selling Shareholders")
entered into Stock Purchase Agreements dated July 10, 2000
(the "Investment Agreements") to collectively sell 2,700,000
shares to Herbert Tabin, a managing partner with Millennium,
for $1,500,000 (approximately $0.56 per share) in a second
private placement arranged by Millennium. Mr. Miller agreed
to sell 600,000 shares to Mr. Tabin pursuant to the terms of
his Stock Purchase Agreement, which transaction is reflected
in this Schedule 13D.
As a further condition to the Initial Investors'
obligations under the Stock Purchase Agreement, the Selling
Shareholders granted the Company a put option, expiring
forty-five (45) days after the closing date, giving the
Company the right to require the Selling Shareholders to
purchase substantially all of the Company's operating assets
and liabilities (the "Company Assets") and substantially all
of the operating assets and liabilities of Vercom Software,
Inc., a wholly-owned subsidiary corporation of the Company
("Vercom") (the "Vercom Assets"; the Company Assets and the
Vercom Assets shall collectively be referred to as the
"Assets") for $3,000,000. The Assets include all of the
operating assets related to the Company's business as
currently conducted. During this 45-day period, the
Company will determine the value of the Assets and evaluate
whether it is in the best interests of the Company and its
shareholders for the Company to sell the Assets to the
Selling Shareholders at the put price, to sell the Assets to
a third party, to retain the Assets or to take other
appropriate action.
In order to facilitate the Company's potential exercise
of the put option, the Company contributed the Company
Assets to a recently formed wholly-owned subsidiary
corporation, Network Systems International of North
Carolina, Inc. on July 20, 2000. As part of this process,
the Company assigned its rights and obligations under
substantially all of its current agreements (including its
software license agreements, service agreements and
employment agreements) to Network Systems International of
North Carolina, Inc.
In order to satisfy a condition to the Initial
Investors' obligations under the Stock Purchase Agreement,
all of the Company's current directors resigned effective as
of the closing date, except for Mr. Efird. The current
officers of the Company also resigned as of the closing
date. Herbert Tabin has been appointed to the Company's
Board of Directors as of the closing date.
If the Company elects to exercise the put option and
require the Selling Shareholders to purchase the Assets for
$3,000,000, the Selling Shareholders will make an initial
cash payment of $1,500,000 to the Company. The Selling
Shareholders will deliver a non-recourse promissory note in
the principal amount of $1,500,000, payable in one hundred
twenty (120) days, for the remaining purchase price. The
Selling Shareholders will pledge all of their remaining
2,925,856 shares of the Company's common stock (the "Pledged
Shares") as security for the payment of the promissory note.
The Company's right to exercise the put option will be
conditioned upon the Company using $2,000,000 of the sales
price received for the Assets to reduce the obligation under
the revolving credit arrangement with Wachovia. The Company
plans to use $1,250,000 from the Selling Shareholders'
initial cash payment and $750,000 from the sale, if any, of
the Pledged Shares to reduce the outstanding indebtedness.
The sale of the Pledged Shares is discussed below. As a
further condition to the Company's right to exercise the put
option, the Company will also agree to change its name on
its corporate charter, to discontinue the use of the name
"Network Systems International" and to transfer all rights
to the name "Network Systems International" to the Selling
Shareholders.
The Company understands that Millennium will use its
best efforts to place the Pledged Shares with accredited
investors on behalf of the Selling Shareholders for at least
$1,500,000, or approximately $0.513 per share. Millennium
will remit the proceeds generated by the sale of the Pledged
Shares, up to $1,500,000, to the Company to satisfy the
remaining balance of the purchase price for the Assets.
If all of the Pledged Shares are sold for an amount
greater than $1,500,000, Millennium will retain the excess.
If Millennium cannot sell all of the Pledged Shares for at
least $1,500,000, Millennium will use its best efforts to
place as many of the Pledged Shares as possible with
accredited investors on behalf of the Selling Shareholders
for approximately $0.513 per share. Pursuant to the terms
of the put option, the Company will use the first $750,000
from the sale of the Pledged Shares to reduce the obligation
under the revolving credit arrangement with Wachovia. If
Millennium is unable to sell all of the Pledged Shares, the
Company will extinguish the promissory note at maturity and
retain any remaining shares in satisfaction of the
outstanding purchase price for the sale of the Subsidiaries
to the Selling Shareholders.
Mr. Miller may from time to time acquire
additional securities of the Company or at any time dispose
of securities of the Company he now beneficially owns or
hereafter may acquire.
Item 5. Interest in Securities of the Issuer
Item 5 of the Schedule 13D is hereby amended and restated as
follows:
Mr. Miller beneficially owns, and has the sole power to vote
and dispose of 861,183 shares, or 9.1%, of the outstanding
shares of the Company's Common Stock. The calculation of
ownership set forth herein is based upon 9,479,821 shares of
Common Stock outstanding as of July 31, 2000, as indicated
on the records of the Company's transfer agent.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the
Issuer.
Stock Purchase Agreement dated July 10, 2000 between Edgar
W. Miller, Jr. and Herbert Tabin (attached hereto as Exhibit
B).
Subsidiary Stock Purchase Agreement dated July 21, 2000
between Robbie M. Efird, E. W. Miller, Jr., David F.
Christian, James W. Moseley and the Company (attached hereto as Exhibit C).
Item 7. Materials to Be Filed as Exhibits
Exhibit A - Network Systems International, Inc. Current
Report on Form 8-K which was filed with the Securities and
Exchange Commission on July 10, 2000.
Exhibit B - Stock Purchase Agreement dated July 10, 2000
between Edgar W. Miller, Jr. and Herbert Tabin.
Exhibit C - Subsidiary Stock Purchase Agreement dated July
21, 2000 between Robbie M. Efird, E. W. Miller, Jr., David
F. Christian, James W. Moseley and the Company.
Signature
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.
Date: August 8, 2000
/s/ E.W. Miller, Jr.
E.W. MILLER, JR.
