UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 3
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
1. Name and Address of Reporting Person
Primus Capital Fund III, Limited Partnership
1375 E. Ninth Street, Suite 2700
Cleveland, OH 44114
USA
2. Date of Event Requiring Statement (Month/Day/Year)
04/09/97
3. IRS or Social Security Number of Reporting Person (Voluntary)
4. Issuer Name and Ticker or Trading Symbol
Preferred Networks, Inc.
PFNT
5. Relationship of Reporting Person(s) to Issuer (Check all applicable)
( ) Director (X) 10% Owner ( ) Officer (give title below) ( ) Other
(specify below)
6. If Amendment, Date of Original (Month/Day/Year)
7. Individual or Joint/Group Filing (Check Applicable Line)
( ) Form filed by One Reporting Person
(X) Form filed by More than One Reporting Person
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________________________
Table I -- Non-Derivative Securities Beneficially Owned |
___________________________________________________________________________________________________________________________________|
1. Title of Security |2. Amount of |3. Ownership |4. Nature of Indirect |
| Securities | Form: | Beneficial Ownership |
| Beneficially | Direct(D) or | |
| Owned | Indirect(I) | |
___________________________________________________________________________________________________________________________________|
<S> <C> <C> <C>
Common Stock |521,250(1) |D(1) | |
- -----------------------------------------------------------------------------------------------------------------------------------|
___________________________________________________________________________________________________________________________________|
<CAPTION>
___________________________________________________________________________________________________________________________________
Table II -- Derivative Securitites Beneficially Owned |
___________________________________________________________________________________________________________________________________|
1.Title of Derivative |2.Date Exer- |3.Title and Amount | |4. Conver-|5. Owner- |6. Nature of Indirect |
Security | cisable and | of Underlying | |sion or |ship | Beneficial Ownership |
| Expiration | Securities | |exercise |Form of | |
| Date(Month/ |-----------------------|---------|price of |Deriv- | |
| Day/Year) | |Amount |deri- |ative | |
| Date | Expira- | |or |vative |Security: | |
| Exer- | tion | Title |Number of|Security |Direct(D) or | |
| cisable | Date | |Shares | |Indirect(I) | |
___________________________________________________________________________________________________________________________________|
<S> <C> <C> <C> <C> <C> <C> <C>
___________________________________________________________________________________________________________________________________|
</TABLE>
Explanation of Responses:
Explanation of
Responses:
(1) Primus Venture Partners III Limited Partnership, an Ohio limited
partnership ("Primus Venture III"), is the sole general partner of the
Reporting Person, and Primus Venture Partners, Inc.,
an Ohio corporation, is the sole general partner of Primus Venture III. By
virtue of the relationships described above, Primus and Primus Venture III may
be deemed to control the Reporting Person
and possess indirect beneficial ownership of the securities of the Issuer
directly beneficially held by the Reporting Person. Each of Primus and Primus
Venture III disclaims any pecuniary interest
in any Issuer securities, other than to the extent of such person's indirect
proportionate interest in the Reporting Person.
On April 9, 1997, the Reporting Person and certain other stockholders of the
Issuer (the "Stockholders") committed to invest an aggregate of $15 million in
newly issued Class A
Preferred Stock and warrants of the Issuer (the "Investment"). The Investment
is subject to a number of conditions, including without limitation the
negotiation of definitive documents to evidence
the Investment and approval by the Issuer's shareholders of certain
transactions contemplated by the Investment, and no assurances can be given
that the Investment will be closed or that the
terms and conditions of the Investment will not
change.
As result of the foregoing, each of the Reporting Person, Primus and Primus
Venture III may be deemed to be a member of a group holding in excess of 10% of
the Issuer's Common
Stock. However, the Reporting Person, Primus and Primus Venture III each
disclaim beneficial ownership of, and any pecuniary interest in, any Issuer
securities held by the Stockholders.
Joint Filer Name: Primus Venture Partners III Limited
Partnership
Address: 1375 E. Ninth Street, Suite
2700,
Cleveland, Ohio
44114
Signature:
__________________________________
Managing Director of Primus Venture Partners, Inc., General
Partner
Joint Filer Name: Primus Venture Partners,
Inc.
Address: 1375 E. Ninth Street, Suite
2700,
Cleveland, Ohio
44114
Signature:
__________________________________
Managing
Director
SIGNATURE OF REPORTING PERSON
Steve Rothman, Primus Venture Partners, Inc., G.P. of G.P.
DATE
04/18/97
