<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______)*
AVERY COMMUNICATIONS, INC.
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(NAME OF ISSUER)
COMMON STOCK, $.01 PAR VALUE
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(TITLE OF CLASS OF SECURITIES)
053605 10 1
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(CUSIP NUMBER)
JOSEPH R. SIMRELL
PRIMAL SOLUTIONS, INC.
18881 VON KARMAN, SUITE 400
IRVINE, CALIFORNIA 92612
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS)
- with copies to -
Randolf W. Katz, Esq.
Bryan Cave LLP
2020 Main Street, Suite 600
Irvine, California 92614
(949) 223-7000
NOVEMBER 3, 2000
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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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box / /
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. Seess.ss.240.13d-7 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).
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 2 of 8 Pages
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<TABLE>
<S><C>
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Joseph R. Simrell
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(See Instructions) (a) / /
(b) /X/
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3 SEC USE ONLY
---------------- ------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
00
---------------- ------------------------------------------------------------------------------------------------------
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
------------------------- ----------- ---------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 1,539,403
BENEFICIALLY ----------- ---------------------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 0
PERSON ----------- ---------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,539,403
----------- ---------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
---------------- ------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,539,403
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
---------------- ------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.8%
---------------- ------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
---------------- ------------------------------------------------------------------------------------------------------
</TABLE>
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 3 of 8 Pages
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<TABLE>
<S><C>
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
John Faltys
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(See Instructions) (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
00
---------------- ------------------------------------------------------------------------------------------------------
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
------------------------- ----------- ---------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 2,172,713
SHARES ----------- ---------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING ----------- ---------------------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
2,172,713
----------- ---------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
---------------- ------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,172,713
---------------- ------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
---------------- ------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.9%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
---------------- ------------------------------------------------------------------------------------------------------
</TABLE>
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 4 of 8 Pages
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<TABLE>
<S><C>
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
David Haynes
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(See Instructions) (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
00
---------------- ------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------- ------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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7 SOLE VOTING POWER
NUMBER OF 1,539,403
SHARES ----------- ---------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING ----------- ---------------------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
1,539,403
----------- ---------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
---------------- ------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,539,403
---------------- ------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
---------------- ------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.8%
---------------- ------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
---------------- ------------------------------------------------------------------------------------------------------
</TABLE>
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 5 of 8 Pages
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Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is
the common stock, $.01 par value (the "Common Stock"), of Avery Communications,
Inc., a Delaware corporation (the "Issuer"). The principal executive offices of
the Issuer are located at 190 South LaSalle Street, Suite 1710, Chicago,
Illinois 60603.
Item 2. Identity and Background.
The business address of John Faltys ("Faltys"), David Haynes
("Haynes"), and Joseph R. Simrell ("Simrell") is 18881 Von Karman, Suite 400,
Irvine, California 92612. Faltys' principal occupation is chief technology
officer of Primal Solutions, Inc. Haynes' principal occupation is vice president
of marketing and business development of Primal Solutions, Inc. Simrell's
principal occupation is chief financial officer of Primal Solutions, Inc. The
principal business of Primal Solutions, Inc. is software development and sales.
The address of the principal office of Primal Solutions, Inc. is 18881 Von
Karman, Suite 400, Irvine, California 92612. Faltys and Simrell are citizens of
the United States. Haynes is a citizen of Canada. None of these individuals has
been convicted, during the last five years, in a criminal proceeding nor has any
of them 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, Federal or State securities laws
or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The acquisition of the shares of Series G Preferred Stock of the
Issuer, which is the subject matter of this Schedule 13D, is part of a larger
transaction contemplated in the Primal Solutions, Inc. Preliminary Distribution
Agreement, dated as of July 31, 2000 (the "Distribution Agreement"), entered
into by and among the Issuer, Primal Solutions, Inc., a Delaware corporation,
Faltys, Haynes, Simrell, Mark J. Nielsen ("Nielsen"), Arun Anand ("Anand"),
Murari Choplappadi ("Choplappadi"), Sanjay Gupta ("Gupta"; collectively, with
Faltys, Haynes, Simrell, Nielsen, Anand and Choplappadi, the "Old Primal
Stockholders"), Thurston Group, Inc., a Delaware corporation ("Thurston Group"),
Patrick J. Haynes, III ("Haynes III") and Scot M. McCormick ("McCormick").
On September 30, 1999, Primal Systems, Inc., a California corporation
("Old Primal"), was merged with and into a wholly owned subsidiary of the Issuer
and the name of the subsidiary was changed to Primal Solutions, Inc., a Delaware
corporation ("Primal") (the "1999 Merger"). As part of the Primal merger
agreement, Faltys acquired 593,008 shares of Series F Preferred Stock of the
Issuer, Haynes acquired 420,156 shares of Series F Preferred Stock of the
Issuer, and Simrell acquired 420,156 shares of Series F Preferred Stock of the
Issuer. Pursuant to the Primal merger agreement, an additional 1,945,188 shares
of the Series F Preferred Stock of the Issuer were issued at the closing and
delivered into escrow to satisfy contingent liabilities. The release of these
escrowed shares was also subject to Primal meeting certain agreed revenue tests
during the 12-month period ended July 31, 2000. In addition, the former Primal
stockholders could also receive up to an additional 4 million shares of Series F
Preferred Stock of the Issuer as additional merger consideration if Primal met
additional agreed revenue tests during the same 12-month period. (See Issuer's
Current Report on Form 8-K filed with the Securities and Exchange Commission
(the "Commission") on October 5, 1999, as well as subsequent reports of the
Issuer filed with the Commission.)
On August 1, 2000, pursuant to the terms of the Distribution Agreement:
(i) Faltys acquired a total of 1,579,705 shares of Series F
Preferred Stock of the Issuer, of which 593,013 shares of Series F Preferred
Stock were acquired through the release of shares from the escrow, and
986,692 shares of Series F Preferred Stock were issued as additional merger
consideration. All of these shares of Series F Preferred Stock of the Issuer
were immediately exchanged for 1,579,705 shares of Series G Preferred Stock of
the Issuer.
(ii) Haynes acquired a total of 1,119,247 shares of Series F
Preferred Stock of the Issuer, of which 420,159 shares of Series F Preferred
Stock were acquired through the release of shares from the escrow, and
699,088 shares of Series F Preferred Stock were issued as additional merger
consideration. All of these shares of Series F Preferred Stock of the Issuer
were immediately exchanged for 1,119,247 shares of Series G Preferred Stock of
the Issuer.
(iii) Simrell acquired a total of 1,119,247 shares of Series F
Preferred Stock of the Issuer, of which 420,159 shares of Series F Preferred
Stock were acquired through the release of shares from the escrow, and
699,088 shares of Series F Preferred Stock were issued as additional merger
consideration. All of these shares of Series F Preferred Stock of the Issuer
were
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 6 of 8 Pages
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immediately exchanged for 1,119,247 shares of Series G Preferred Stock of
the Issuer. (See Issuer's Current Report on Form 8-K filed with the Commission
on August 15, 2000.)
The shares of the Series G Preferred Stock are convertible into the
Common Stock of the Issuer on a one-to-one basis upon the earlier of the date of
(i) the distribution or (ii) a "distribution failure event," as that term is
defined in the Distribution Agreement.
Item 4. Purpose of Transaction.
The acquisition of the Series G Preferred Stock is part of a larger
transaction contemplated in the Distribution Agreement. (See Item 3 above.)
Pursuant to the Distribution Agreement, the equity securities of the Issuer's
subsidiary, Primal, will be spun-off to the Issuer's stockholders. The
Distribution Agreement calls for certain former stockholders of the Issuer,
including Faltys, Haynes, and Simrell, to give irrevocable proxies to the
Thurston Group to vote all of their shares of the Series G Preferred Stock and
for the Thurston Group to give to such stockholders irrevocable proxies to vote
all of the shares of Primal common stock that the Thurston Group will receive
and/or control after the spin-off. This exchange of proxies is meant to separate
the control of the Issuer and Primal and return, as closely as possible, to the
situation that existed before the 1999 Merger.
On July 31, 2000, Faltys, Haynes, and Simrell each executed and
delivered to the Thurston Group irrevocable proxies to vote all shares of the
Series G Preferred Stock respectively owned or held by such individual or
thereafter acquired, and all shares of the Issuer's Common Stock respectively
owned or held by such individual or thereafter that could be acquired upon
conversion of the Series F Preferred Stock and the Series G Preferred Stock.
During the effective period of the proxy, Faltys, Haynes, and Simrell do not
have the power to vote and, due to certain dispositive restriction under the
Pledge Agreements (see Item 6 below), do not have the power to dispose of their
respective shares of the Series G Preferred Stock. (See Issuer's Current Report
on Form 8-K filed with the Commission on August 15, 2000.)
Under the terms of the proxies, the proxies will automatically
terminate in the event a distribution failure event occurs and the distribution
is not completed as set forth in the Distribution Agreement. Under the
Distribution Agreement, the earliest date on which a "distribution failure
event" can occur is December 31, 2000. In accordance with Rule 13d-3(d), each of
Faltys, Haynes, and Simrell is deemed to beneficially own the Series G Preferred
Stock because each has the right to acquire beneficial ownership thereof and the
Common Stock into which the Series G Preferred Stock is convertible within 60
days of November 3, 2000. It is on this basis that the Schedule 13D is now being
filed.
Item 5. Interest in Securities of the Issuer.
The filing of this Schedule 13D shall not be construed as an
acknowledgment or admission that any of Faltys, Haynes, or Simrell is, for the
purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of any
securities covered by this Schedule 13D. The filing of this Schedule 13D shall
not be construed as an acknowledgment or admission that any of Faltys, Haynes,
or Simrell, for the purposes of Section 13(d) or 13(g) of the Act, affirms the
existence of a group.
Under certain circumstances set forth in the Distribution Agreement, if
a "distribution failure event" occurs and the distribution is not completed as
set forth in the Distribution Agreement, the proxies granted by Faltys, Haynes,
and Simrell, respectively, to the Thurston Group will automatically terminate
and (i) Faltys shall beneficially own a total of 2,172,713 shares of the
Issuer's Series G Preferred Stock, which ownership would constitute
approximately 15.9% percent of the Issuer's Common Stock; (ii) Haynes shall
beneficially own a total of 1,539,403 shares of the Issuer's Series G Preferred
Stock, which ownership would constitute approximately 11.8% of the Issuer's
Common Stock; and (iii) Simrell shall beneficially own a total of 1,539,403
shares of the Issuer's Series G Preferred Stock, which ownership would
constitute approximately 11.8 % of the Issuer's Common Stock.
In the event Faltys, Haynes, and Simrell were viewed as a group, the
group would beneficially own a total of 5,251,519 shares of the Issuer's Series
G Preferred Stock, which beneficial ownership would constitute approximately
31.3% of the Issuer's Common Stock.
Although the Distribution Agreement provides for other circumstances under
which the proxies granted by Faltys, Haynes, and Simrell, respectively, to the
Thurston Group may terminate upon a "distribution failure event", the aggregate
numbers and percentages stated above in this Item 5 reflect the greatest number
and percentage of beneficial ownership of Issuer's Series G Preferred Stock that
Faltys, Haynes, and Simrell each may acquire pursuant to the terms and
conditions of the Distribution Agreement. Furthermore, if the distribution
occurs, the beneficial ownership of Issuer's Series G Preferred Stock by each
Faltys, Haynes, and
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SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 7 of 8 Pages
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Simrell would be less than as set forth above. (See Issuer's Current
Report on Form 8-K filed with the Commission on August 15, 2000.)
See Item 4 above regarding each Faltys', Haynes', and Simrell's power
to vote his shares of Series G Preferred Stock and Item 6 below regarding the
power to dispose his shares of Series G Preferred Stock and the right to receive
dividends and sale proceeds.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On July 31, 2000, Faltys, Haynes and Simrell each executed and
delivered Non-Recourse Promissory Notes ("Promissory Notes") to the Issuer. On
July 31, 2000, Faltys, Haynes, and Simrell each executed and delivered pledge
agreements ("Pledge Agreements") which pledged their respective shares of
Issuer's Series F Preferred Stock, Series G Preferred Stock, and Common Stock
receivable upon the conversion of the Series F Preferred Stock or Series G
Preferred Stock, then owned or thereafter acquired ("Collateral Stock"), to the
Issuer, as collateral for the Promissory Notes. Under the Pledge Agreements,
each of Faltys, Haynes, and Simrell is prohibited from selling, assigning or
otherwise disposing of his Collateral Stock without the prior written consent of
the Issuer, and each is obligated to deliver any distribution with respect to
his respective Collateral Stock to the Issuer to be held as additional
collateral. (See Issuer's current report on Form 8-K filed with the Commission
on August 15, 2000)
On July 31, 2000, Faltys, Haynes, and Simrell each executed and
delivered to the Thurston Group irrevocable proxies to vote all shares of the
Series G Preferred Stock respectively owned or held by such individual or
thereafter acquired, and all shares of the Issuer's Common Stock respectively
owned or held by such individual or thereafter acquired. The proxies will
automatically terminate upon the occurrence of a distribution failure event.
(See Item 4 above)
On July 31, 2000, the Issuer, Primal, Faltys, Haynes, Simrell, and
others entered into the Distribution Agreement. (See Item 3 above)
On March 19, 1999, Primal, Old Primal, Faltys, Haynes, Simrell and
others entered into the Primal merger agreement (entitled Agreement and Plan of
Merger), including the amendments thereto (the "Primal Merger Agreement"). (See
Item 3 above, and see Issuer's Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "Commission") on October 5, 1999, as
well as subsequent reports of the Issuer filed with the Commission.)
Item 7. Material to be filed as Exhibits.
The Distribution Agreement and the exhibits thereto were filed with the
Form 8-K by the Issuer on August 15, 2000. The Distribution Agreement and the
exhibits thereto are incorporated by reference herein.
The Primal Merger Agreement was filed as Exhibit 2.5 to Issuer's
Registration Statement on Form SB-2(Registration No.333-65133). Amendment No.1
to the Primal Merger Agreement was filed as Exhibit 2.6 to Issuer's
Registration Statement on Form SB-2 (Registration No.333-65133) and Amendment
No.2 to the Primal Merger Agreement was filed as Exhibit 2.1 to Issuer's Current
Report on Form 8-K, dated September 27, 1999. The Primal Merger Agreement,
including its amendments, are incorporated by reference herein.
<PAGE>
SCHEDULE 13D
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CUSIP No. 053605 10 1 Page 8 of 8 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 13, 2000
By: /s/ Joseph R. Simrell
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Joseph R. Simrell
