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CUSIP NO 64121L-10-3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NETWORK SYSTEMS INTERNATIONAL, INC.
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(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE
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(Title of Class of Securities)
64121L-10-3
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(CUSIP Number)
HERBERT TABIN
6413 CONGRESS AVENUE
SUITE 230
BOCA RATON, FL 33487
561-988-2334
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 25, 2000
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(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. [ __ ]
Check the following box if a fee is being paid with this statement. [ ]
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CUSIP NO 64121L-10-3
SCHEDULE 13D
CUSIP No. 64121L-10-3
1. Name of Reporting Persons - IRS Identifications No. of Above Person
(Entities Only)
Herbert Tabin
2. Check the Appropriate Box if a Member of a Group
(a) [ __ ]
(b) [ __ ]
3. SEC Use Only
4. Source of Funds
Personal funds. (PF)
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
2,700,000
8. Shared Voting Power
0
9. Sole Dispositive Power
2,700,000
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CUSIP No 64121L-10-3
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
2,700,000
12. Check if the Aggregate Amount in Row 11 Excludes
Certain Shares
[ ]
--
13. Percent of Class Represented by Amount in Row 11
28.5 % (1)
14. Type of Reporting Person
IN
(1) Calculated based upon the total of 9,489,171 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 6413 Congress
Avenue, Suite 230, Boca Raton, Florida 33487.
Item 2. Identity and Background
(a) Name:
Herbert Tabin
(b) Address:
6413 Congress Avenue, Suite 230
Boca Raton, Florida 33487
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CUSIP NO 64121L-10-3
(c) Present Principal Occupation:
Mr. Tabin is vice-president of Millennium Holdings Group, Inc.
("Millennium") and vice-president and chief operating officer for
International Internet, Inc. ("IINN").
(d) During the last five years, Mr. Tabin has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Tabin 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. Tabin is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
Mr. Tabin paid $1,500,000 from personal funds to acquire 2,700,000
shares.
Item 4. Purpose of Transaction
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,
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CUSIP No 64121L-10-3
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.
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 obligation 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
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CUSIP No 64121L-10-3
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. Tabin 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
Mr. Efird beneficially owns, and has the sole power to vote and
dispose of 811,491 shares, or 8.6%, 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.
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CUSIP No 64121L-10-3
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Stock Purchase Agreement dated July 10, 2000 between Robbie M. Efird and Herbert
Tabin (attached hereto as Exhibit 99.1).
Stock Purchase Agreement dated July 10, 2000 between E.W. Miller, Jr. and
Herbert Tabin (attached hereto as Exhibit 99.2).
Stock Purchase Agreement dated July 10, 2000 between David F. Christian and
Herbert Tabin (attached hereto as Exhibit 99.3).
Stock Purchase Agreement dated July 10, 2000 between James W. Moseley and
Herbert Tabin (attached hereto as Exhibit 99.4).
Item 7. Materials to Be Filed as Exhibits
Exhibit 99.1 - Stock Purchase Agreement dated July 10, 2000 between
Robbie M. Efird and Herbert Tabin
Exhibit 99.2 - Stock Purchase Agreement dated July 10, 2000 between
E.W. Miller, Jr. and Herbert Tabin
Exhibit 99.3 - Stock Purchase Agreement dated July 10, 2000 between
David F. Christian and Herbert Tabin
Exhibit 99.4 - Stock Purchase Agreement dated July 10, 2000 between
James W. Moseley and Herbert Tabin
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: November 15, 2000
/s/ Herbert Tabin
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Herbert Tabin
