UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 4
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
( ) Check this box if no longer subject to Section 16.
Form 4 or Form 5 obligations may continue. See Instructions 1(b).
1. Name and Address of Reporting Person
Saugatuck Capital Company, Limited Partnership III
One Canterbury Green
Stamford, CT 06901
USA
2. Issuer Name and Ticker or Trading Symbol
Preferred Networks, Inc.
PFNT
3. IRS or Social Security Number of Reporting Person (Voluntary)
4. Statement for Month/Year
March 1998
5. If Amendment, Date of Original (Month/Year)
6. Relationship of Reporting Person(s) to Issuer (Check all applicable)
( ) Director (X) 10% Owner ( ) Officer (give title below) ( ) Other
(specify below)
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 Acquired, Disposed of, or Beneficially Owned |
___________________________________________________________________________________________________________________________________|
1. Title of Security |2. |3. |4.Securities Acquired (A) |5.Amount of |6.Dir |7.Nature of Indirect |
| Transaction | or Disposed of (D) | Securities |ect | Beneficial Ownership |
| | | | Beneficially |(D)or | |
| | | | | A/| | Owned at |Indir | |
| Date |Code|V| Amount | D | Price | End of Month |ect(I)| |
___________________________________________________________________________________________________________________________________|
<S> <C> <C> <C><C> <C> <C> <C> <C> <C>
___________________________________________________________________________________________________________________________________|
<CAPTION>
___________________________________________________________________________________________________________________________________
Table II -- Derivative Securitites Acquired, Disposed of, or Beneficially Owned |
___________________________________________________________________________________________________________________________________|
1.Title of Derivative |2.Con- |3. |4. |5.Number of De |6.Date Exer|7.Title and Amount |8.Price|9.Number |10.|11.Nature of|
Security |version |Transaction | rivative Secu |cisable and| of Underlying |of Deri|of Deriva |Dir|Indirect |
|or Exer | | | rities Acqui |Expiration | Securities |vative |tive |ect|Beneficial |
|cise | | | red(A) or Dis |Date(Month/| |Secu |Securities |(D)|Ownership |
|Price of| | | posed of(D) |Day/Year) | |rity |Benefi |or | |
|Deriva- | | | |Date |Expir| | |ficially |Ind| |
|tive | | | | A/|Exer-|ation| Title and Number | |Owned at |ire| |
|Secu- | | | | | D |cisa-|Date | of Shares | |End of |ct | |
|rity |Date |Code|V| Amount | |ble | | | |Month |(I)| |
___________________________________________________________________________________________________________________________________|
<S> <C> <C> <C> <C><C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Warrants to purchase c|$1.50 |03/17|P | |391,032 |A |03/17|03/17|Common Stock|391,032|(2) |1,771,032 |D(1| |
ommon stock | |/98 | | | | |/98 |/03 | | | | |) | |
- -----------------------------------------------------------------------------------------------------------------------------------|
| | | | | | | | | | | | | | |
___________________________________________________________________________________________________________________________________|
</TABLE>
Explanation of Responses:
(1) Greyrock Partners Limited Partnership, a Delaware limited
partnership ("Greyrock"), is
the sole general partner of the Reporting Person. By virtue of the
relationship described above,
Greyrock 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. Frank
J. Hawley, Jr., Christy S. Sadler, Owen S. Crihfield, Richard P. Campbell, Jr.,
and Barbara E.
Parker (collectively, the "Saugatuck Partners") are each general partners of
Greyrock. However,
none of the Saugatuck Partners, acting alone, has voting or investment power
with respect to the
securities of the Issuer directly beneficially held by Saugatuck III, and, as a
result, each Saugatuck
Partner disclaims beneficial ownership of the Issuer securities directly
beneficially owned by
Saugatuck III. Each of the Saugatuck Partners disclaims any pecuniary interest
in any Issuer
securities, other than to the extent of such Saugatuck Partner's indirect
proportionate interest in
the Reporting
Person.
(2) On March 17, 1998, the Reporting Person and certain other
stockholders of the Issuer (the
"Stockholders") invested an aggregate of $8 million in newly issued Class B
Senior Redeemable Preferred
Stock and warrants of the Issuer. The Reporting Person invested a total of
$579,307.50 of such amount.
Joint Filer Name: Greyrock Partners Limited
Partnership
Address: One Canterbury
Green,
Stamford, Connecticut
06901
Signature: /s/ Richard P. Campbell,
Jr.
Richard P. Campbell, Jr., General
Partner
SIGNATURE OF REPORTING PERSON
/s/ Richard P. Campbell, Jr., G.P., Greyrock Partners, G.P.
DATE
April 10, 1998
