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Filed Pursuant to Rule 424(b)(3)
SEC File No. 333-65133
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 27, 1999)
AVERY COMMUNICATIONS, INC.
Effective September 27, 1999, the earn-out provisions of the Primal merger
agreement were amended to provide that the earn-out would be based on the
consolidated revenues and operating losses of Primal and Primal Billing
Solutions, rather than the unconsolidated revenues and operating losses of
Primal. Accordingly, the second, third and fourth paragraphs under the caption
"Business - Recent Transactions - The Primal Acquisition" on pages 21 and 22 of
Avery's prospectus dated August 27, 1999, are amended to read in their entirety
as follows:
At the time of the merger, Avery will issue up to 4,000,000 shares of
Avery's convertible preferred stock in exchange for all of the issued and
outstanding shares of Primal. Of this amount, 2,000,000 shares will be held in
escrow to satisfy the indemnification obligations of the principal shareholders
of Primal under the merger agreement. Any shares not returned to Avery under
these indemnification provisions will be released to Primal's shareholders based
upon the consolidated operating performance of Primal and Primal Billing
Solutions from August 1, 1999, through July 31, 2000. The Primal shareholders
may also receive up to a maximum 4,000,000 additional shares of Avery
convertible preferred stock as additional consideration for the merger based on
the consolidated operating performance of Primal and Primal Billing Solutions
from August 1, 1999, through July 31, 2000. The shares of convertible preferred
stock issued by Avery will be convertible into Avery common stock on a one-for-
one basis.
The consolidated operating performance of Primal and Primal Billing
Solutions will be based upon the consolidated revenues and actual operating
losses of Primal and Primal Billing Solutions during the period from August 1,
1999, through July 31, 2000. To receive the minimum additional shares under the
merger agreement, Primal and Primal Billing Solutions must have consolidated
revenues during this period of at least $6,660,000. To receive the maximum
number of shares under the merger agreement, Primal and Primal Billing Solutions
must have consolidated revenues during this period of at least $15,540,000.
There are eight revenue and operating loss thresholds between the minimum and
maximum thresholds that provide for the release of a pro rata number of shares
between the minimum and maximum amounts. The number of shares are subject to
reduction in each case if the actual consolidated operating loss of Primal and
Primal Billing Solutions for such period exceeds the consolidated operating loss
specified in the merger agreement for the applicable consolidated revenue
amount.
In addition, the principal shareholders of Primal will have the right
during September and October 2000 to require Avery to repurchase up to 1,550,000
shares of Avery common stock issued upon the conversion of the Avery preferred
stock received in the merger for the purchase price of $2.50 per share if Primal
and Primal Billing Solutions have consolidated gross revenues of at least
$8,325,000 and their consolidated operating loss does not exceed $1,082,000
during the period beginning August 1, 1999, and ending July 31, 2000. Assuming
that Mark J. Nielsen is still employed by Avery on August 15, 2000, the number
of shares required to be repurchased will be reduced by the total number of
shares received by Mr. Nielsen in the Primal merger. The minimum number of
shares Mr. Nielsen could receive at such consolidated gross revenues and
operating loss thresholds is 456,340 shares, which would reduce the repurchase
obligation to 1,093,660 shares. The maximum number of shares Mr. Nielsen could
receive is 1,215,600, which would reduce the repurchase obligation to 334,400
shares.
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The date of this supplement is September 28, 1999.
