UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Equalnet Communications Corp.
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(Name of the Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
294408109
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(CUSIP Number)
Brian W. Pusch, Esq.
Law Offices of Brian W Pusch
Penthouse Suite
29 West 57th Street
New York, New York 10019
212-980-0408
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 25, 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 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
box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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).
<PAGE>
CUSIP No. 294408109
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1 NAMES OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS:
Advantage Fund Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions):
N/A
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5 CHECK 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:
British Virgin Islands
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NUMBER 7 SOLE VOTING POWER: 0
OF
SHARES -----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 22,500
OWNED
BY -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON -----------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER: 22,500
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 22,500
(See Item 5)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instruction): [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
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14 TYPE OF REPORTING PERSON (See Instructions): CO
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<PAGE>
CUSIP No. 294408109
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1 NAMES OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS:
Genesee International, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions):
N/A
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5 CHECK 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:
Delaware
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NUMBER 7 SOLE VOTING POWER: 0
OF
SHARES -----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 22,500
OWNED
BY -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON -----------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER: 22,500
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 22,500
(See Item 5)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instruction): [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
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14 TYPE OF REPORTING PERSON (See Instructions): CO
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<PAGE>
CUSIP No. 294408109
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1 NAMES OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS:
Donald R. Morken
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions): N/A
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5 CHECK 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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NUMBER 7 SOLE VOTING POWER: 0
OF
SHARES -----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 22,500
OWNED
BY -----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON -----------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER: 22,500
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 22,500
(See Item 5)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instruction): [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
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14 TYPE OF REPORTING PERSON (See Instructions): IN
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<PAGE>
CUSIP No. 294408109
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1 NAMES OF REPORTING PERSONS:
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS:
MCM Partners, a Washington Limited Partnership
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions): N/A
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5 CHECK 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:
Washington
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NUMBER 7 SOLE VOTING POWER: 0
OF
SHARES -----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED
BY EACH -----------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER: 0
PERSON
WITH -----------------------------------------------
10 SHARED DISPOSITIVE POWER: 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 0
(See Item 5)
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instruction): [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
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14 TYPE OF REPORTING PERSON (See Instructions): PN
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 on Schedule 13D amends Item 1 and Item 5
of the initial statement on Schedule 13D dated March 5, 1998 filed by the
Reporting Persons (as defined herein) as amended by Amendment No. 1 thereto
dated September 16, 1998 (such initial statement on Schedule 13D as amended by
such Amendment No. 1 is referred to herein as the "Schedule 13D"). This
Amendment No. 2 relates to the Common Stock, $.01 par value ("Common Stock")
of Equalnet Communications Corp., a Texas corporation, formerly known as
EqualNet Holding Corp. (the "Issuer"). The Issuer's principal executive
offices are located at 1250 Wood Branch Park Drive, Houston, Texas 77079.
This Amendment No. 2 is being filed on behalf of Advantage
Fund Ltd., a British Virgin Islands corporation (the "Fund"), Genesee
International, Inc., a Delaware corporation ("Genesee"), Donald R. Morken
("Mr. Morken"), and MCM Partners, a Washington Limited Partnership ("MCM").
The foregoing persons are hereinafter sometimes collectively referred to as
"Reporting Persons." Information as to each Reporting Person set forth in this
Amendment No. 2 has been provided by such Reporting Person.
Capitalized terms used in this Amendment No. 2 without
definition have the respective meanings given such terms in the Schedule 13D.
References in this Amendment No. 2 to the "Series D Preferred Shares" means
the 1,875 initial shares of Series D Preferred Stock and the 50 additional
shares of Series D Preferred Stock received as dividends thereon to date.
References in this Amendment No. 2 to the "GFL Note" include additional notes
of like tenor received in payment of accrued interest thereon which to date
aggregate $40,516 in principal amount.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Conversion Restrictions.
The terms of the Series D Preferred Stock, the GFL Note and
the GFL Warrants provide that a holder thereof may not convert or exercise any
portion of such securities if such conversion or exercise would cause such
holder's beneficial ownership of the Common Stock, including shares held by
all persons whose beneficial ownership would be aggregated with such holder,
(other than shares so owned through ownership of such unconverted securities
or other convertible securities containing similar restrictions) to exceed
4.9% of the outstanding Common Stock (collectively, the "Conversion
Restrictions"). On March 25, 1999, the Issuer amended the terms of the Series
A Preferred Stock to add Conversion Restrictions so that conversions of the
Series A Preferred Stock became subject to the same 4.9% beneficial ownership
limitation applicable to the Series D Preferred Stock, the GFL Note and the
GFL Warrants. Accordingly, by reason of such Conversion Restrictions, none of
the Reporting Persons or GFL may beneficially own in excess of 4.9% of the
outstanding shares of Common Stock. For purposes of the numerical and
percentage disclosures required by this Item 5, no beneficial ownership of
Common Stock has been attributed to the Reporting Persons with respect to the
Series A Preferred Shares, the Series D Preferred Shares, the GFL Note and the
GFL Warrants, all of which are unconverted or unexercised.
(b) Securities Owned by the Fund.
(1) As of the date of this Amendment No. 2, the Fund is the
direct beneficial owner of 22,500 shares of Common Stock (the "Common
Shares"). The Common Shares represent approximately 0.1% of the outstanding
shares* of Common Stock. In addition, the Fund is the direct beneficial owner
of all Series D Preferred Shares.
(2) Genesee, in its capacity as investment manager for the
Fund, shares with the Fund the power to direct the disposition and direct the
vote of the Common Shares and the Series D Preferred Shares owned directly by
the Fund. Genesee, in its capacity as investment manager for GFL, also shares
with GFL the power to direct the disposition and direct the vote of the shares
of Common Stock issuable upon conversion of the GFL Note and upon exercise of
the GFL Warrants. Mr. Morken, by reason of his position as the President and
Treasurer, a director and the controlling stockholder of Genesee, may be
deemed to indirectly share the power to direct the disposition and direct the
vote of the Common Shares as well as the Series D Preferred Shares and the
shares of Common Stock issuable upon conversion of the Series D Preferred
Shares and the GFL Note and upon exercise of the GFL Warrants. Except as
described in Item 5(b)(1) and in this Item 5(b)(2) no other person identified
in Item 2(a) has or shares the power to dispose or the power to vote the
Common Shares, the Series D Preferred Shares, or the shares of Common Stock
issuable upon conversion of the Series D Preferred Shares and the GFL Note and
upon exercise of the GFL Warrants.
(3) No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Common Shares and the Series D Preferred Shares beneficially
owned by the Fund.
(c) Series A Preferred Stock Owned by MCM.
(1) As of the date of this Amendment No. 2, MCM is the direct
beneficial owner of all 2,000 Series A Preferred Shares.
(2) Mr. Morken, individually, by reason of his position as
sole general partner of MCM, may be deemed to indirectly share the power to
direct the disposition and direct the vote of the shares of Common Stock into
which the Series A Preferred Shares can be converted. Except as described in
Item 5(c)(1) and in this Item 5(c)(2), no other person identified in Item 2(a)
has or shares the power to dispose or the power to vote the Series A Preferred
Shares and shares of the Common Stock into which they can be converted.
(3) No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Series A Preferred Shares beneficially owned by MCM.
(d) Date Reporting Persons Ceased To Be Five Percent Beneficial
Owners.
On March 25, 1999, each of MCM and Mr. Morken ceased to be the
beneficial owner of more than five percent of the Common Stock. Each of the
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* 18,385,832 shares of Common Stock were reported as outstanding as of
February 16, 1999 in the Issuer's Quarterly Report on Form 10-Q for the period
ended December 31, 1998.
Fund and Genesee continue to beneficially own less than five percent of the
Common Stock.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: April 6, 1999
ADVANTAGE FUND LTD.
By: INTER CARIBBEAN SERVICES LTD.,
Secretary and Director of
ADVANTAGE FUND LTD.
By: /s/ W.R. Weber
-------------------------------
W.R. Weber
Attorney-in-Fact
By: /s/ Kieran Conroy
-------------------------------
Kieran Conroy
Attorney-in-Fact
GENESEE INTERNATIONAL, INC.
By: /s/ Donald R. Morken
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Donald R. Morken
President
/s/ Donald R. Morken
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Donald R. Morken
MCM PARTNERS, A WASHINGTON LIMITED
PARTNERSHIP
By: /s/ Donald R. Morken
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Donald R. Morken
General Partner
