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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
DATA RACE, INC.
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
237842109
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(CUSIP Number)
John M. Liviakis, 2420 "K" St., #220
Sacramento, CA 95816, (916) 448-6084
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 15, 1999
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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 Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-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 Section 240.13d-7 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).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER.
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CUSIP No. 237842109 PAGE 2 OF 10
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Liviakis Financial Communications, Inc. 68-0311399
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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7 SOLE VOTING POWER
2,776,887
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY --
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,776,887
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
--
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,776,887
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.5%
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14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS)
CO
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CUSIP No. 237842109 PAGE 3 OF 10
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John M. Liviakis
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
71,400
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,776,887
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 71,400
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
2,776,887
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,848,287
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.9%
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14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS)
IN
- --------------------------------------------------------------------------------
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CUSIP No. 237842109 PAGE 4 OF 10
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Renee A. Liviakis
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
--
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,776,887
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING --
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
2,776,887
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,776,887
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS)
IN
- --------------------------------------------------------------------------------
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Page 5 of 10
1. SECURITY AND ISSUER.
The title of the class of equity securities to which this Amended
Statement relates is common stock, no par value (the "Common Stock"), issued by
Data Race, Inc., a Texas corporation (the "Corporation"). The principal offices
of the Corporation are located at 12400 Network Boulevard, San Antonio, Texas
78249.
2. IDENTIFY AND BACKGROUND.
This amended statement is filed by Liviakis Financial Communications,
Inc., a California corporation ("LFC"), John M. Liviakis ("JML") and Renee A.
Liviakis ("RAL").
LFC's principal business is as a consultant in the areas of financial
and investor public relations and communications. LFC's principal business and
principal office address is 2420 "K" Street, Suite 220, Sacramento, California
95816.
LFC's President is JML, and its Treasurer, Chief Financial Officer and
Secretary is RAL. JML and RAL are the only executive officers of LFC. The
activities associated with these positions constitute the principal occupation
and employment of JML and RAL. JML and RAL are LFC's only directors, and JML and
RAL are its sole stockholders. JML and RAL are citizens of the United States,
and their business address is LFC's principal business address listed above.
Prior to his resignation on March 15, 1999, Robert B. Prag ("RBP") was
an executive officer and director of LFC. As such, RBP had filed jointly with
LFC, JML and RAL a statement on Schedule 13D with respect to the Corporation's
Common Stock. With his resignation, RBP disaffirms any joint actions with LFC,
JML and RAL with respect to the Corporation or its Common Stock, and LFC, JML
and RAL disaffirm any joint actions with RBP with respect to the Corporation or
its Common Stock. Any group status that may have existed with respect to LFC,
JML and RAL, on the one hand, and RBP, on the other, in regard to the
Corporation's Common Stock terminated upon the resignation of RBP as an
executive officer and director of LFC. All further filings by RBP with respect
to transactions in the Corporation's Common Stock will be filed, if required, by
RBP in his individual capacity.
During the last five years, none of LFC, JML and RAL has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors),
and during such period none of them has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, the result of which
was to subject such person 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.
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Page 6 of 10
3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This Amendment No. 4 to Schedule 13D is being filed to report (i)
2,276,331 shares of Common Stock held by LFC on March 31, 1999, (ii) 500,556
shares of Common Stock which LFC has the right to acquire within sixty days of
March 31, 1999 through the exercise of stock purchase warrants, and (iii) 71,400
shares of Common Stock held by JML on March 31, 1999.
1,406,475 shares of Common Stock were issued to LFC by the Corporation
pursuant to a Consulting Agreement dated effective as of July 13, 1998 by and
between the Corporation and LFC (the "Consulting Agreement"). Under the
Consulting Agreement, LFC undertakes to perform certain investor communications,
financial and investor public relations, and related services for the
Corporation through March 15, 1999. A copy of the Consulting Agreement is filed
as Exhibit "A" to the Schedule 13D. 200,000 shares of Common Stock were
delivered by the Corporation to LFC on February 24, 1999 pursuant to an
Amendment No. 1 to Consulting Agreement dated as of November 19, 1998
("Amendment No. 1") but which was executed and delivered contemporaneously with
the delivery of the shares. Amendment No. 1 extends the term of the Consulting
Agreement through January 1, 2000. A copy of Amendment No. 1 is filed with this
Amended Schedule 13D as Exhibit "E" hereto.
On December 9, 1998, the Corporation delivered to LFC 11,667 shares of
Common Stock and stock purchase warrants expiring December 9, 1999 (the "1999
Warrants") entitling LFC to purchase up to 11,667 shares of Common Stock at an
exercise price of $2.25 per share. The securities were delivered to LFC as
finders fee compensation in connection with a financing consummated by the
Issuer.
From August 28, 1998 through September 1, 1998, LFC purchased 40,000
shares of Common Stock in the open market at an aggregate cost of $57,458. On
December 30 and 31, 1998, LFC purchased an aggregate of 36,200 shares of Common
Stock in the open market at an aggregate cost of $113,294.55. On January 4 and
5, 1999, LFC purchased an aggregate of 91,000 shares of Common Stock in the open
market at an aggregate cost of $317,096.95. On March 10, 1999, LFC purchased
2,100 shares of Common Stock in th open market at an aggregate cost of
$7,718.70. The source of funds for those purchases was LFC's working capital.
On November 15, 1998, LFC entered into a Subscription Agreement (the
"Subscription Agreement") with the Corporation under which LFC agreed to
purchase a minimum of 488,889 units ("Units"), each consisting of one share of
Common Stock and a warrant (a "Unit Warrant") expiring two years after issuance
to purchase a share of Common Stock at an exercise price of $2.25 per share, at
a price of $2.25 per Unit. On or about November 18, 1998, LFC purchased 488,889
Units from the Corporation. A copy of the Subscription Agreement is filed as
Exhibit "D" to this Schedule 13D, as amended.
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Page 7 of 10
On August 28, 1998, JML purchased 61,400 shares of Common Stock in the
open market at an aggregate cost of $100,357. On March 10, 1999, JML purchased
10,000 shares of Common Stock in the open market at an aggregate cost of
$36,554.00. The source of funds for those purchases was JML's personal funds.
4. PURPOSE OF TRANSACTION.
An aggregate of 1,618,142 shares of Common Stock and 11,667 1999
Warrants were issued to LFC for services rendered and to be rendered. 1,606,475
of those shares of Common Stock were issued pursuant to the Consulting
Agreement, as amended, in consideration for consulting services performed and to
be performed by LFC for the Corporation. An aggregate of 658,189 shares of
Common Stock and 488,889 Unit Warrants were purchased by LFC for investment
purposes. An aggregate of 71,400 shares of Common Stock were purchased by JML
for investment purposes.
LFC and JML have acquired and intend to hold the shares of Common Stock
so acquired for investment purposes. LFC, JML and RAL may acquire additional
shares of Common Stock and other securities issued by the Corporation for
investment purposes from time to time, although they do not have any present
plans to do so.
LFC, JML and RAL have no plans or proposals which relate to or would
result in: any extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Corporation or any subsidiary of the
Corporation; the sale or transfer of a material amount of assets of the
Corporation or any of its subsidiaries; any change in the Corporation's present
Board of Directors or management; any material change in the present
capitalization or dividend policy of the Corporation; any material change in the
Corporation's business or corporate structure; any changes in the Corporation's
charter, bylaws, or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Corporation by any person; a class of
securities of the Corporation being delisted from a national securities exchange
or ceasing to be authorized to be quoted in an inter-dealer quotation system of
a registered national securities association; a class of equity securities of
the Corporation becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or any
similar action.
5. INTEREST IN SECURITIES OF THE ISSUER.
LFC has the sole power to direct the vote or disposition of the
2,276,331 shares of Common Stock owned by LFC and would expect to have the sole
power to direct the vote or disposition of any of the 500,556 shares of Common
Stock it might acquire through the exercise of the Unit Warrants and 1999
Warrants. LFC would exercise its power to direct the vote or disposition of such
securities through its officers and directors, JML and RAL.
<PAGE> 8
Page 8 of 10
JML has the sole power to direct the vote or disposition of the 71,400
shares of Common Stock owned by JML. RAL has a community property interest in
such shares. LFC disclaims any beneficial interest in any shares of Common Stock
owned by JML.
The 2,276,331 shares of Common Stock that LFC owns, and as to which LFC
has the sole power to direct the vote or disposition, represent approximately
12.7% of that class of securities. The 500,556 shares of Common Stock that LFC
could acquire through the exercise of the Unit Warrants and the 1999 Warrants,
and as to which LFC would expect to have the sole power to direct the vote or
disposition, represent approximately 2.8% of that class of securities. The
aggregate of 2,776,887 shares of Common Stock that LFC owns or has the right to
acquire through exercise of the Unit Warrants and 1999 Warrants represents
approximately 15.5% of that class of securities. The 71,400 shares of Common
Stock that JML owns, and as to which JML has the sole power to direct the vote
or disposition, represent approximately 0.4% of that class of securities. The
2,848,287 shares of Common Stock that LFC and JML in the aggregate own or have
the right to acquire through exercise of Unit Warrants and 1999 Warrants, and as
to which either LFC or JML has or would expect to have the sole power to direct
the vote or disposition, represent approximately 15.9% of that class of
securities. In each case, the calculation of the percentage of the class of
Common Stock is based on 17,368,314 shares of Common Stock which the Corporation
advised LFC was outstanding on March 25, 1999.
During the past sixty days, LFC, JML and RAL have not engaged in any
transactions in Common Stock, other than LFC's receipt of 200,000 shares of
Common Stock pursuant to Amendment No. 1, LFC's March 10, 1999 purchase of 2,100
shares on the Nasdaq National Market System for an aggregate price of $7,718,80,
and JML's March 10, 1999 purchase of 10,000 shares on the Nasdaq National Market
System for an aggregate price of $36,554.00.
6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The Corporation entered into the Consulting Agreement and Amendment No.
1 with LFC in consideration for consulting services to be performed by LFC
pursuant to the Consulting Agreement, as amended, from July 13, 1998 through
January 1, 2000. In the Consulting Agreement and Amendment No. 1, the
Corporation grants to LFC and RBP certain rights to have shares of Common Stock
registered under the Securities Act of 1933, as amended. In the Consulting
Agreement, as amended by Amendment No. 1, LFC agrees not to sell or transfer
during the term of the Consulting Agreement, as amended, any shares of Common
Stock that it received pursuant to the Consulting Agreement and Amendment No. 1.
The Subscription Agreement also grants LFC certain rights to have shares of
Common Stock registered under the Securities Act of 1933, as amended. In the
Subscription Agreement, LFC agrees to enter into an agreement under which it
will be prohibited from selling prior to January 1, 2000 any
<PAGE> 9
Page 9 of 10
shares of Common Stock acquired pursuant to the Consulting Agreement, the
Subscription Agreement or the Unit Warrants.
Except for the Consulting Agreement, Amendment No. 1 and Subscription
Agreement, there are no contracts, arrangements, understandings or relationships
between the persons named in Item 2 above and any person with respect to any
securities of the Corporation.
7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Consulting Agreement, dated effective July 13, 1998, by and
between the Corporation and LFC.
Exhibit B - Agreement of LFC and RBP pursuant to Rule 13d-1(f).
Exhibit C - Agreement among LFC, JML, RAL and RBP pursuant to Rule 13d-
1(f).
Exhibit D - Subscription Agreement between LFC and the Corporation
executed November 15, 1998.
Exhibit E - Amendment No. 1 to Consulting Agreement, dated as of
November 19, 1998, by and between the Corporation and LFC.
Exhibit F - Agreement among LFC, JML and RAL pursuant to Rule
13d-1(k)(1).
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: April 9, 1999 Liviakis Financial Communications, Inc.
By /s/ John M. Liviakis
-------------------------------------
John M. Liviakis, President
/s/ John M. Liviakis
----------------------------------------
John M. Liviakis
/s/ Renee A. Liviakis
----------------------------------------
Renee A. Liviakis
/s/ Robert B. Prag
----------------------------------------
Robert B. Prag
<PAGE> 10
Page 10 of 10
EXHIBIT F
JOINT FILING AGREEMENT
Liviakis Financial Communications, Inc., John M. Liviakis and Renee A.
Liviakis (collectively the "Parties" and individually a "Party") hereby agree
that they shall file a single statement on Schedule 13D (as amended from time to
time, the "Statement") with respect to their beneficial ownership of shares of
Common Stock (the "Securities") of Data Race, Inc., a Texas corporation, on
behalf of and in satisfaction of the obligations of all of the Parties and that
they shall amend the Statement from time to time as required by rules
promulgated under the Securities Exchange Act of 1934, as amended.
Each of the Parties represents and warrants that such Party is eligible
to use Schedule 13D with respect to information regarding the Securities and
agrees to assume responsibility for the timely filing of the Statement and any
amendments thereto. Each of the Parties hereby assumes responsibility for the
completeness and accuracy of the information concerning such Party contained in
the Statement. No Party shall be responsible for the completeness and accuracy
of the information contained in the Statement concerning the other Parties,
unless such Party knows or has reason to believe that such information is
incomplete or inaccurate. The execution of the Statement, including any
amendment thereto, by one of the Parties shall constitute a representation by
such Party that the information concerning such Party contained therein is
complete and accurate and that such Party neither knows nor has any reason to
believe that the information concerning the other Parties contained therein is
either incomplete or inaccurate. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
In Witness Whereof, the Parties have executed this Joint Filing
Agreement this ninth day of April, 1999.
Liviakis Financial Communications, Inc.
By /s/ John M. Liviakis
-------------------------------------
John M. Liviakis, President
/s/ John M. Liviakis
----------------------------------------
John M. Liviakis
/s/ Renee A. Liviakis
----------------------------------------
Renee A. Liviakis
