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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
OMB APPROVAL
OMB NUMBER 3235-0145
Expires: December 31, 1997
Estimated average burden
hours per response.... 14.90
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
EUPHONIX, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
298416 10 8
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(CUSIP Number)
Mark Lanier, Pegasus Capital II, L.P.
181 Elm Street, New Canaan, CT 06840 (203) 966-2760
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 23, 1998
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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).
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SCHEDULE 13D
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CUSIP No. 298416 10 8 Page 2 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON
Pegasus Capital II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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5 SOLE VOTING POWER
527,925
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NUMBER OF 6 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------------------
OWNED BY 7 SOLE DISPOSITIVE POWER
EACH 527,925
REPORTING ---------------------------------------------------------------
PERSON 8 SHARED DISPOSITIVE POWER
WITH -0-
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9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
527,925
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10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* / /
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11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
7.96%
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12 TYPE OF REPORTING PERSON*
PN
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Page 2 of 8 pages
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SCHEDULE 13D
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CUSIP No. 298416 10 8 Page 3 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON
Grumman Hill Advisors, L.L.C.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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5 SOLE VOTING POWER
527,925
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NUMBER OF 6 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------------------
OWNED BY 7 SOLE DISPOSITIVE POWER
EACH 527,925
REPORTING ---------------------------------------------------------------
PERSON 8 SHARED DISPOSITIVE POWER
WITH -0-
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9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
527,925
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10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* / /
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11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
7.96%
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12 TYPE OF REPORTING PERSON*
OO
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Page 3 of 8 pages
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SCHEDULE 13D
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CUSIP No. 298416 10 8 Page 4 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR IRS. IDENTIFICATION NO. OF ABOVE PERSON
Mark Lanier
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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5 SOLE VOTING POWER
527,925
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NUMBER OF 6 SHARED VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------------------
OWNED BY 7 SOLE DISPOSITIVE POWER
EACH 527,925
REPORTING ---------------------------------------------------------------
PERSON 8 SHARED DISPOSITIVE POWER
WITH -0-
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9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
527,925
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10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* / /
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11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
7.96%
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12 TYPE OF REPORTING PERSON*
IN
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Page 4 of 8 pages
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Item 1. SECURITY AND ISSUER
This Statement on Schedule 13D (the "Schedule 13D") relates to the
Common Stock, CUSIP Number 298416 10 8 (the "Common Stock"), of Euphonix,
Inc., a California corporation (the "Issuer"), which has its principal
executive offices at 220 Portage Avenue, Palo Alto, California 94306.
Item 2. IDENTITY AND BACKGROUND
The persons filing this Schedule 13D are Pegasus Capital II, L.P., a
Delaware limited partnership ("Pegasus"), Grumman Hill Advisors, L.L.C., a
Delaware limited liability company ("GHA"), and Mark Lanier (collectively,
the "Filing Persons"). Mr. Lanier is the General Manager of GHA, which is
the General Partner of Pegasus. The business address of each of the Filing
Persons is 181 Elm Street, New Canaan, CT 06840.
The Filing Persons are in the business of investing in publicly-traded
securities.
During the last five years, none of the Filing Persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the last five years, none of the Filing Persons was 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 funds used by Pegasus to acquire shares of the Issuer's Common Stock
were derived from capital contributions made by the limited partners of
Pegasus.
Item 4. PURPOSE OF TRANSACTION
Pegasus acquired the shares of the Issuer's Common Stock for investment
purposes only and does not presently have any plans or proposals which relate
to or would result in the realization of any of items (a) through (j) of Item
4 of the Instructions to Schedule 13D.
Item 5. INTEREST IN THE SECURITIES OF THE ISSUER
A. The Filing Persons beneficially own 527,925 shares of Common Stock
(the "Shares"), for an aggregate of 7.96% of the 6,630,491 shares of Common
Stock outstanding as of March 31, 1998.
B. Pegasus, GHA and Mr. Lanier have sole voting power with respect to
the shares of the Common Stock of the Issuer held by Pegasus.
C. The Filing Persons acquired the Shares as follows:
Page 5 of 8 pages
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<TABLE>
<CAPTION>
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Date of Shares Acquired Price Per Share Transaction
Acquisition
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<S> <C> <C> <C>
12/23/97 2,500 1.07 open market purchase
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12/26/97 2,500 1.20 open market purchase
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12/29/97 5,000 1.19 open market purchase
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12/30/97 35,000 1.06 open market purchase
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12/31/97 10,000 1.06 open market purchase
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8/24/98 5,000 1.01 open market purchase
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9/14/98 5,000 1.01 open market purchase
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12/18/98 100 1.50 open market purchase
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12/23/98 150 1.31 open market purchase
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12/23/98 462,675 0.875 privately negotiated
purchase
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Total 527,925
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</TABLE>
On December 15, 1998, Pegasus entered into a Letter Agreement (the "Letter
Agreement") with Alta IV Limited Partnership and C.V. Sofinnova Partners Five
(collectively, "Sellers") to acquire an aggregate of 462,675 shares of
Issuer's Common Stock held by Sellers for an aggregate purchase price of
$404,842.62. The purchase of such shares was consumated on December 23, 1998.
D. Not applicable.
E. Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Reference is hereby made to the Letter Agreement, which is described above
and attached hereto as Exhibit 1.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
The Filing Persons file as exhibits the following:
EXHIBIT 1 Letter Agreement
Page 6 of 8 pages
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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: January 3, 1999 PEGASUS CAPITAL II, L.P.,
a Delaware limited partnership
By: Grumman Hill Advisors, L.L.C.,
a Delaware limited liability company
Its: General Partner
By: /s/ Mark Lanier
--------------------------------
Mark Lanier
General Manager
GRUMMAN HILL ADVISORS, L.L.C.,
a Delaware limited liability company
By: /s/ Mark Lanier
------------------------------------
Mark Lanier, General Manager
/s/ Mark Lanier
-----------------------------------------
Mark Lanier
Page 7 of 8 pages
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EXHIBIT INDEX
EXHIBIT PAGE NO.
EXHIBIT 1 Letter Agreement
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PEGASUS CAPITAL II, L.P.
181 ELM STREET
NEW CANAAN, CT 06840
December 15, 1998
Ms. Eileen McCarthy
Chief Financial Officer
Burr, Egan, Deleage & Company
One Post Office Square
Suite 3800
Boston, MA 02102
Re:EUPHONIX, INC,
Dear Eileen:
We have agreed that Pegasus Capital II, L.P. ("Buyer") will buy an
aggregate of 462,675 shares of the Common Stock of Euphonix, Inc. (the
"Euphonix Shares"), of which 391,285 shares are held by Alta IV Limited
Partnership ("Alta") and 71,390 shares are held by C.V. Sofinnova Partners Five
("Sofinnova" and with Alta, the "BED Funds"). The aggregate purchase price for
the Euphonix Shares will be $404,842.62, which will be paid by wire transfer of
immediately available funds to an account designated by the BED Funds. In
consideration for the purchase of the Euphonix Shares, the BED Funds have
represented to Buyer the following:
- The BED Funds have held the Euphonix Shares continually since November
1991, and such shares are free and clear of any and all liens, security
interests, restrictions or encumbrances of any kind, including without
limitation, any restrictions that may be imposed under the Securities Act
of 1933, as amended;
- The sale of the Euphonix Shares by the BED Funds to Buyer will not
violate or conflict with any of the charter documents of either of the BED
Funds or with any contract, agreement or other instrument applicable
thereto;
- Following Buyer's purchase of the Euphonix Shares, such shares will be
freely tradeable by Buyer on the Nasdaq Stock Market without any further
action on the part of Buyer; and
- the BED Funds will take all steps that are reasonably necessary and
appropriate to assist Buyer in removing any and all legends that may
presently appear on any certificate representing any of the Euphonix
Shares.
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If you are in agreement with the terms of this letter, please sign and fax
a copy of your signed letter to me. Upon your receipt of certificates
representing the Euphonix Shares we can mutually agree on a closing of this
purchase.
Sincerely,
/s/ Mark Lanier
Mark Lanier, General Manager
AGREED AND ACCEPTED
ON BEHALF OF THE BED
FUNDS:
ALTA IV LIMITED PARTNERSHIP
By: Alta IV Management Partners, L.P.
By: /s/ William P. Egan
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General Partner
C.V. SOFINNOVA PARTNERS FIVE
By: Sofinnova (International) Five, N.V.,
General Partner
By: /s/ Eileen McCarthy
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Under Power of Attorney
SECLTR.WPD
