1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
AMENDMENT NO. 1
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Internet Pictures Corporation
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
46059S101
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(CUSIP Number)
Warner B. Rodda, Esq.
Paradigm Capital Equity Partners, LLC
6410 Poplar Ave., Ste 395
Memphis, TN 38119
(901) 682-6060
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 29, 2001
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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 that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 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. See Section 240.13d-7(b) 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).
(Continued on following page(s))
Page 1 of 8 pages
2
CUSIP No. 46059S101 13D Page 2 of 8 pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Image Investor Portfolio, a separate series of Memphis Angels, LLC
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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) Source Of Funds*
WC
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(5) Check Box 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 Of Shares (7) Sole Voting Power 140,000,000 (1)
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 0
(9) Sole Dispositive Power 140,000,000 (1)
(10) Shared Dispositive Power 0
(11) Aggregate Amount Beneficially Owned By Each Reporting Person 140,000,000 (1)
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ]
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(13) Percent Of Class Represented By Amount In Row (11) 68.7%
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(14) Type Of Reporting Person OO
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(1) Consists of shares of Common Stock issuable upon conversion of (i) 500,000
shares of Series B Preferred Stock underlying a convertible promissory note
issued in connection with the First Closing and Second Closing (each as
defined herein); (ii) 250,000 shares of Series B Preferred Stock underlying
warrants (the "Tranche A Warrants") issued in the First Closing and Second
Closing; and (iii) 1,000,000 shares of Series B Preferred Stock underlying
a warrant (the "Tranche B Warrant") that Image Investor Portfolio acquired
in the Second Closing. Each share of Series B Preferred Stock is
convertible into 80 shares of Common Stock.
SEE INSTRUCTION BEFORE FILLING OUT!
3
CUSIP No. 46059S101 13D Page 3 of 8 pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Memphis Angels, LLC
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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) Source Of Funds*
WC
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(5) Check Box 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 Of Shares (7) Sole Voting Power 140,000,000 (1)
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 0
(9) Sole Dispositive Power 140,000,000 (1)
(10) Shared Dispositive Power 0
(11) Aggregate Amount Beneficially Owned By Each Reporting Person 140,000,000 (1)
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ]
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(13) Percent Of Class Represented By Amount In Row (11) 68.7%
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(14) Type Of Reporting Person OO
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(1) Consists of shares of Common Stock issuable upon conversion of (i) 500,000
shares of Series B Preferred Stock underlying a convertible promissory note
issued in connection with the First Closing and Second Closing (each as
defined herein); (ii) 250,000 shares of Series B Preferred Stock underlying
warrants (the "Tranche A Warrants") issued in the First Closing and Second
Closing; and (iii) 1,000,000 shares of Series B Preferred Stock underlying
a warrant (the "Tranche B Warrant") that Image Investor Portfolio acquired
in the Second Closing. Each share of Series B Preferred Stock is
convertible into 80 shares of Common Stock. All of such shares are held or
may be acquired by Image Investor Portfolio, a separate series of Memphis
Angels LLC, a Delaware limited liability company.
SEE INSTRUCTION BEFORE FILLING OUT!
4
CUSIP No. 46059S101 13D Page 4 of 8 pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Paradigm Capital Equity Partners, LLC
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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) Source Of Funds*
AF
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(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
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Number Of Shares (7) Sole Voting Power 140,000,000 (1)
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 0
(9) Sole Dispositive Power 140,000,000 (1)
(10) Shared Dispositive Power 0
(11) Aggregate Amount Beneficially Owned By Each Reporting Person 140,000,000 (1)
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ]
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(13) Percent Of Class Represented By Amount In Row (11) 68.7%
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(14) Type Of Reporting Person OO
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(1) Consists of shares of Common Stock issuable upon conversion of (i) 500,000
shares of Series B Preferred Stock underlying a convertible promissory note
issued in connection with the First Closing and Second Closing (each as
defined herein); (ii) 250,000 shares of Series B Preferred Stock underlying
warrants (the "Tranche A Warrants") issued in the First Closing and Second
Closing; and (iii) 1,000,000 shares of Series B Preferred Stock underlying
a warrant (the "Tranche B Warrant") that Image Investor Portfolio acquired
in the Second Closing. Each share of Series B Preferred Stock is
convertible into 80 shares of Common Stock. All of such shares are held or
may be acquired by Image Investor Portfolio, a separate series of Memphis
Angels LLC, a Delaware limited liability company, of which Paradigm Capital
Equity Partners, LLC, a Delaware limited liability company, is the Manager.
SEE INSTRUCTION BEFORE FILLING OUT!
5
CUSIP No. 46059S101 13D Page 5 of 8 pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Paradigm Holdings
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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
---------------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
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(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
---------------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 140,000,000 (1)
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 0
(9) Sole Dispositive Power 140,000,000 (1)
(10) Shared Dispositive Power 0
(11) Aggregate Amount Beneficially Owned By Each Reporting Person 140,000,000 (1)
---------------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ]
---------------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11) 68.7%
---------------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person PN
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(1) Consists of shares of Common Stock issuable upon conversion of (i) 500,000
shares of Series B Preferred Stock underlying a convertible promissory note
issued in connection with the First Closing and Second Closing (each as
defined herein); (ii) 250,000 shares of Series B Preferred Stock underlying
warrants (the "Tranche A Warrants") issued in the First Closing and Second
Closing; and (iii) 1,000,000 shares of Series B Preferred Stock underlying
a warrant (the "Tranche B Warrant") that Image Investor Portfolio acquired
in the Second Closing. Each share of Series B Preferred Stock is
convertible into 80 shares of Common Stock. All of such shares are held or
may be acquired by Image Investor Portfolio, a separate series of Memphis
Angels LLC, a Delaware limited liability company, of which Paradigm Capital
Equity Partners, LLC, a Delaware limited liability company, is the Manager,
of which Paradigm Holdings, a Delaware general partnership, is the Managing
Member.
SEE INSTRUCTION BEFORE FILLING OUT!
6
CUSIP No. 46059S101 13D Page 6 of 8 pages
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(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Frank A. McGrew IV
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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) Source Of Funds*
AF
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(5) Check Box 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
Tennessee
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Number Of Shares (7) Sole Voting Power
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 140,000,000(1)
(9) Sole Dispositive Power
(10) Shared Dispositive Power 140,000,000(1)
(11) Aggregate Amount Beneficially Owned By Each Reporting Person 140,000,000 (1)
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(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ]
---------------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11) 68.7%
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(14) Type Of Reporting Person IN
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(1) Consists of shares of Common Stock issuable upon conversion of (i) 500,000
shares of Series B Preferred Stock underlying a convertible promissory note
issued in connection with the First Closing and Second Closing (each as
defined herein); (ii) 250,000 shares of Series B Preferred Stock underlying
warrants (the "Tranche A Warrants") issued in the First Closing and Second
Closing; and (iii) 1,000,000 shares of Series B Preferred Stock underlying
a warrant (the "Tranche B Warrant") that Image Investor Portfolio acquired
in the Second Closing. Each share of Series B Preferred Stock is
convertible into 80 shares of Common Stock. All of such shares are held or
may be acquired by Image Investor Portfolio, a separate series of Memphis
Angels LLC, a Delaware limited liability company, of which Paradigm Capital
Equity Partners, LLC, a Delaware limited liability company, is the Manager,
of which Paradigm Holdings, a Delaware general partnership, is the Managing
Member, of which Mr. McGrew is the Managing Partner.
SEE INSTRUCTION BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to Schedule 13D relates to the Common Stock, $.001
par value per share (the "Shares"), of Internet Pictures Corporation, a Delaware
corporation (the "Company"), and is being filed on behalf of the undersigned to
amend the Schedule 13D originally filed on May 24, 2001 (the "Schedule 13D").
The principal executive offices of the Company are located at 1009 Commerce Park
Dr, Oak Ridge State: TN, 37830, (865) 482-3000. Unless otherwise indicated, all
capitalized terms used herein but not defined shall have the same meaning as set
forth in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 to the Schedule 13D is amended, in pertinent part, to add the
following paragraph:
On May 29, 2001, pursuant to the Second Closing to the Purchase
Agreement, in exchange for an investment of $7,000,000 in the Company (i) the
principal amount of the Promissory Note increased from $3,000,000 to
$10,000,000, (ii) the Tranche A Warrants increased to become exercisable for an
aggregate of 250,000 shares of Series B Preferred Stock of the Company, and
(iii) Image received the Tranche B Warrant to purchase 1,000,000 shares of
Series B Preferred Stock of the Company. The source of funds used by Image in
the Second Closing was working capital and other funds.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 to the Schedule 13D is amended, in pertinent part, to add the
following sentences at the end of the third paragraph:
The Second Closing occurred on May 29, 2001. In connection with the
Second Closing Mr. McGrew and three other nominees of Image were appointed to
four of the Company's seven positions on the Board of Directors.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 to the Schedule 13D is amended, in pertinent part, to replace
the second paragraph in its entirety with the following:
The 140,000,000 shares of Common Stock beneficially owned by the Filing
Persons include 40,000,000 shares of Common Stock underlying the $10 million
Promissory Note and an aggregate of 20,000,000 shares of Common Stock currently
underlying the related Tranche A Warrants. It also includes an additional
80,000,000 shares of Common Stock that Image has the right to acquire upon
exercise of the Tranche B Warrant issued in the Second Closing.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned each certifies that the information set forth in this statement
is true, complete and correct.
Dated May 30, 2001
IMAGE INVESTOR PORTFOLIO,
a separate series of
MEMPHIS ANGELS, LLC,
a Delaware limited liability company
By: PARADIGM CAPITAL EQUITY
PARTNERS, LLC,
its Manager
By: PARADIGM HOLDINGS,
its Managing Member
By: /s/ Frank A. McGrew IV
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Name: Frank A. McGrew IV
Title: Managing Partner
PARADIGM CAPITAL EQUITY
PARTNERS, LLC,
a Delaware limited liability company
By: PARADIGM HOLDINGS,
its Managing Member
By: /s/ Frank A. McGrew IV
---------------------------
Name: Frank A. McGrew IV
Title: Managing Partner
PARADIGM HOLDINGS,
a Delaware general partnership
By: /s/ Frank A. McGrew IV
--------------------------
Name: Frank A. McGrew IV
Title: Managing Partner
FRANK A. MCGREW IV
/s/ Frank A. McGrew IV
--------------------------