UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
NESTOR, INC.
____________________________________________________________
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
____________________________________________________________
(Title of Class and Securities)
64107410
____________________________________________________________
(CUSIP Number of Class of Securities)
Bruce W. Schnitzer, Wand Partners Inc., 630 Fifth Avenue,
Suite 2435, New York, New York 10111
_____________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 3, 1994
____________________________________________________________
(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 which is the
subject of this Schedule 13D, and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check the following ( ):
Check the following box if a fee is being paid with this
Statement (X):
SCHEDULE 13D
CUSIP NO. 64107410
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WAND/NESTOR INVESTMENTS L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
2,000,000
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 2,000,000
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP NO. 64107410
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WAND (NESTOR) INC.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
2,000,000
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 2,000,000
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
14 TYPE OF REPORTING PERSON*
CO
SCHEDULE 13D
CUSIP NO. 64107410
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MR. BRUCE W. SCHNITZER
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
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 OF AMERICA
7 SOLE VOTING POWER
2,000,000
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 2,000,000
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES* ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.5%
14 TYPE OF REPORTING PERSON*
IN
Item 1. Security and Issuer.
The class of equity securities to which this
Statement relates is shares of common stock, par value
$.01 per share (the "Common Stock") of Nestor, Inc., a
Delaware corporation (the "Company"). The principal
executive offices of the Company are located at One
Richmond Square, Providence, Rhode Island 02906.
Item 2. Identity and Background.
This Statement is being filed by Wand/Nestor
Investments L.P., a Delaware limited partnership (the
"Wand/Nestor Partnership"), Wand (Nestor) Inc., a
Delaware corporation (the "General Partner"), and Mr.
Bruce W. Schnitzer, a citizen of the United States. The
Wand/Nestor Partnership, the General Partner and Mr.
Schnitzer are hereinafter sometimes referred to
collectively as the "Filing Persons".
The Wand/Nestor Partnership was formed on
August 1, 1994 specifically for the purpose of acquiring
the shares of Common Stock reported in this Statement and
has not engaged in any business other than as disclosed
herein. The General Partner was incorporated on July 19,
1994 specifically for the purpose of acting as the
general partner of the Wand/Nestor Partnership and has
not engaged in any business other than as disclosed
herein.
The General Partner is owned by Mr. Schnitzer,
who owns 66% of its outstanding common stock, and David
J. Callard, a citizen of the United States, who owns 34%
of its outstanding common stock. The executive officers
of the General Partner are Mr. Schnitzer (Chairman and
Treasurer) and Mr. Callard (President and Secretary).
Mr. Schnitzer and Mr. Callard are the sole directors of
the General Partner. Mr. Schnitzer's present principal
occupation or employment is as Chairman of Wand Partners
Inc., a Delaware corporation ("WPI"). Mr. Callard's
present principal occupation or employment is as
President of WPI. The principal business address of the
Wand/Nestor Partnership, the General Partner, WPI, Mr.
Schnitzer and Mr. Callard is 30 Rockefeller Plaza, Suite
3226, New York, New York 10112.
None of the Filing Persons, and to the best
knowledge of the Filing Persons, neither WPI nor Mr.
Callard, has, during the last five years (i) been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a 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, United States federal
or state securities laws or finding any violations with
respect to such laws.
Item 3. Source and Amount of Funds or Other
Consideration.
Pursuant to a Securities Purchase Agreement
dated as of August 1, 1994 (the "Securities Purchase
Agreement"), between the Company and the Wand/Nestor
Partnership, the Wand/Nestor Partnership, acquired (i)
1,500 shares of a new class of preferred stock of the
Company, par value $1.00 per share (the "Series C
Convertible Preferred Stock"), convertible into 1,000,000
shares of the Company's Common Stock and (ii) warrants to
purchase 1,000,000 shares of the Company's Common Stock
at an exercise price of $1.50 per share (the "Warrant")
for an aggregate cash purchase price of $1,500,000,
$1,125,000 of which was allocable to the Series C
Convertible Preferred Stock and $375,000 of which was
allocable to the Warrant. The Warrant is presently
exercisable. Copies of the Securities Purchase
Agreement, the Certificate of Powers, Designations,
Preferences and Special Rights of the Series C
Convertible Preferred Stock (the "Preferred Stock Terms")
and the Warrant are attached hereto as Exhibits 1, 2 and
3, respectively. The 2,000,000 shares of Common Stock of
the Company into which the Series C Convertible Preferred
Stock may be converted and for which the Warrant may be
exercised at the date hereof are referred to herein as
the "Shares".
The purchase of the Series C Convertible
Preferred Stock and Warrant was consummated on August 3,
1994. All of the consideration for the purchase was
provided by the partners of the Wand/Nestor Partnership
in exchange for the acquisition of their respective
partnership interests in the Wand/Nestor Partnership.
Item 4. Purpose of the Transaction.
The Wand/Nestor Partnership acquired the Series
C Convertible Preferred Stock and the Warrant for
investment.
Concurrently with the purchase of the Series C
Convertible Preferred Stock and Warrant on August 3, 1994
by the Wand/Nestor Partnership, (i) Wand Partners L.P., a
Delaware limited partnership ("WPLP") that is an
affiliate of the Wand/Nestor Partnership, was issued a
warrant to acquire 250,000 shares of Company Common Stock
at an exercise price of $2.00 per share (the "WPLP Fee
Warrant"), and (ii) Hill & Partners was issued a warrant
to acquire 150,000 shares of Company Common Stock at an
exercise price of $2.00 per share (the "Hill Fee
Warrant"). The Company issued the WPLP Fee Warrant and
the Hill Fee Warrant as compensation for certain
financial, management and marketing consulting services
provided by WPLP and Hill & Partners pursuant to the
terms of a certain Letter of Engagement, dated April 26,
1994, among the Company, WPI (as the general partner of
WPLP) and Hill & Partners (the "Letter of Engagement").
The Letter of Engagement is attached hereto as Exhibit 4.
Neither the WPLP Fee Warrant nor the Hill Fee Warrant is
exercisable until after August 1, 1996. Accordingly, for
purposes of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, WPLP and Hill &
Partners are not deemed to be the beneficial owners of
the Company Common Stock underlying their respective Fee
Warrants at this date and such ownership is not reflected
in this report on Schedule 13D. On August 11, 1994, WPLP
transferred warrants to acquire an aggregate of 40,000
shares of Company Common Stock and Hill & Partners
transferred warrants to acquire an aggregate of 20,000
shares of Company Common Stock to five individuals, all
of whom are employees of WPI or other companies directly
or indirectly controlled by WPI.
Upon consummation of the purchase of the Series
C Convertible Preferred Stock, the Company, the
Wand/Nestor Partnership and certain other securityholders
of the Company entered into a Registration Rights
Agreement, a copy of which is attached hereto as Exhibit
5. Subject to the provisions of the Registration Rights
Agreement, the Filing Persons may dispose of all or any
of the shares of Common Stock underlying the Series C
Convertible Preferred Stock and the Warrant.
None of the Filing Persons, or, to the best
knowledge of the Filing Persons, Mr. Callard, has any
plans or proposals which relate to, or could result in
any of the matters referred to in paragraphs (b) through
(j) of Item 4 of Schedule 13D, except, as discussed more
fully in Item 6 below, the terms of the Securities
Purchase Agreement and the Series C Convertible Preferred
Stock provide for representation of the Wand/Nestor
Partnership on the Company's Board of Directors.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, as a result of the
relationships and stock ownership discussed above, the
Wand/Nestor Partnership, the General Partner and Mr.
Schnitzer may each be deemed, pursuant to the Exchange
Act and the rules and regulations promulgated thereunder,
to beneficially own approximately 21.5% of the
outstanding shares of Common Stock of the Company.
Except as set forth in this Item 5(a), none of the Filing
Persons or, to the best knowledge of the Filing Persons,
Mr. Callard, beneficially owns any shares of Company
Common Stock.
(b) The Wand/Nestor Partnership has sole power
to vote or direct the vote and sole power to dispose or
direct the disposition of the 2,000,000 shares of Company
Common Stock beneficially owned by it as a consequence of
its ownership, of record and beneficially, of the Series
C Convertible Preferred Stock and the Warrant. By virtue
of their relationship to the Wand/Nestor Partnership, the
General Partner and Mr. Schnitzer may each be deemed to
have concurrent indirect power to vote or to direct the
vote and to dispose or to direct the disposition of such
Shares. Holders of Series C Convertible Preferred Stock
are entitled to vote on all matters as to which
shareholders of the Company are entitled to vote, with
each holder entitled to cast a number of votes equal to
the greatest number of whole shares of Common Stock into
which such holder's shares of Series C Convertible
Preferred Stock could be converted.
(c) On August 3, 1994, the Company sold the
Series C Convertible Preferred Stock and the Warrant to
the Wand/Nestor Partnership pursuant to the Securities
Purchase Agreement in a private placement transaction.
As set forth in Item 6 below, on August 3, 1994, Wand
Partners L.P. acquired the WPLP Fee Warrant and Hill &
Partners acquired the Hill Warrant. As set forth in Item
6 below, portions of each of the WPLP Fee Warrant and the
Hill Fee Warrant were subsequently transferred to five
individuals, all of whom are employees of WPI or other
companies directly or indirectly controlled by WPI.
Except for the transactions described in this Item 5(c),
none of the Filing Persons, nor, to the best knowledge of
the Filing Persons, Mr. Callard has effected any
transactions in Common Stock of the Company during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Understandings or Relationships with
respect to Securities of the Issuer.
Pursuant to Section 6(e) of the Securities
Purchase Agreement, for so long as the Wand/Nestor
Partnership owns Common Stock (or Series C Convertible
Preferred Stock convertible into shares of Common Stock)
equal to or exceeding five percent of the then
outstanding Common Stock of the Company, it shall be
entitled to propose two candidates (the "Purchaser
Designees") for election to the Board of Directors of the
Company. Subject to its fiduciary duty to shareholders,
the Company will recommend to its shareholders that the
Purchaser Designees be elected to the Company's Board of
Directors. Section 1.4.2 of the Preferred Stock Terms
provides that holders of the Series C Convertible
Preferred Stock have the right, voting separately as a
class, to elect two directors to the Board of Directors
of the Company which, except under certain
circumstances, shall be composed of no more than ten
directors. As noted in Item 5(b), the Series C
Convertible Preferred Stock votes with the Common Stock
on all matters as to which shareholders of the Company
are entitled to vote.
Pursuant to the Registration Rights Agreement,
the Wand/Nestor Partnership has the right, commencing on
August 1, 1997, to require the Company to register all or
a portion of the Shares.
Other than as set forth in this Statement on
Schedule 13D, none of the Filing Persons nor, to the best
knowledge of the Filing Persons, Mr. Callard, has any
contracts, arrangements, understanding or relationships
(legal or otherwise) with each other or with any other
person with respect to any securities of the Company,
including but not limited to the transfer or voting of
any such securities, finder's fees, joint ventures, loan
or option agreements, put or calls, guarantees of
profits, division of profits or loss or the giving or
withholding of proxies.
Item 7. Material to Be Filed as Exhibits.
Exhibit 1 - Securities Purchase Agreement,
dated as of August 1, 1994,
between the Company and the
Wand/Nestor Partnership.
Exhibit 2 - Certificate of Powers,
Designations, Preferences and
Special Rights of Series C
Convertible Preferred Stock of
the Company.
Exhibit 3 - Warrant to acquire 1,000,000
Shares of Company Common Stock,
issued to the Wand/Nestor
Partnership.
Exhibit 4 - Letter of Engagement, dated as
of April 26, 1994, among the
Company, WPI, and Hill &
Partners.
Exhibit 5 - Registration Rights Agreement,
dated as of August 1, 1994,
among the Company and certain
holders of its securities,
including the Wand/Nestor
Partnership.
Exhibit 6 - Joint Filing Agreement
SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete
and correct.
Dated: August 12, 1994
WAND/NESTOR INVESTMENTS L.P.
BY: WAND (NESTOR) INC.,
as general partner
By: /s/ Bruce W. Schnitzer
Name: Bruce W. Schnitzer
Title: Chairman
SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete and
correct.
Dated: August 12, 1994
WAND (NESTOR) INC.
By: /s/ Bruce W. Schnitzer
Name: Bruce W. Schnitzer
Title: Chairman
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.
Dated: August 12, 1994
By: /s/ Bruce W. Schnitzer
Name: Bruce W. Schnitzer
EXHIBIT INDEX
Exhibit No. Exhibit Name Page No.
1 Securities Purchase Agreements,
dated as of August 1, 1994,
between the Company and the
Wand/Nestor Partnership . . . . . . . . . . 15
2 Certificate of Powers, Designa-
tions, Preferences and Special
Rights of Series C Convertible
Preferred Stock of the Company. . . . . . . 238
3 Warrant to acquire 1,000,000
Shares of Company Common Stock,
issued to the Wand/Nestor Part-
nership . . . . . . . . . . . . . . . . . . 275
4 Letter of Engagement, dated as of
April 26, 1994, among the Company,
WPI, and Hill & Partners . . . . . . . . . . 306
5 Registration Rights Agreement, dated
as of August 1, 1994, among the Company
and certain holders of its securities,
including the Wand/Nestor Partnership . . . 313
6 Joint Filing Agreement . . . . . . . . . . . 341
JOINT FILING AGREEMENT
The undersigned, and each of them, do hereby agree
and consent to the filing of a single statement on behalf of
all of them on Schedule 13D and amendments thereto, in
accordance with the provisions of Rule 13d-1(f)(1) of the
Securities Exchange Act of 1934.
Dated: August 12, 1994
By: /s/ Bruce W. Schnitzer
Name: Bruce W. Schnitzer
WAND (NESTOR) INC.
By: /s/ Bruce W. Schnitzer
Title: Chairman
WAND/NESTOR INVESTMENTS L.P.
By: Wand (Nestor) Inc.
General Partner
By: /s/ Bruce W. Schnitzer
Name: Bruce W. Schnitzer
Title: Chairman
