APOLLO INTERNATIONAL OF DELAWARE INC, SB-2/A, 1997-06-19

APOLLO INTERNATIONAL OF DELAWARE INC
SB-2/A, 1997-06-19
INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 19, 1997
REGISTRATION NO. 333-18071
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 5
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

APOLLO INTERNATIONAL OF DELAWARE, INC.
(Name of Small Business Issuer in Its Charter)

------------------------------

<TABLE>
<S> <C> <C>
DELAWARE 3625 59-3285046
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

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6542 U.S. HIGHWAY 41
SUITE 215
APOLLO BEACH, FLORIDA 33572
(813) 645-7677
(Address and Telephone Number of Principal Executive Offices and Principal Place
of Business)

------------------------------

DAVID W. CLARKE
PRESIDENT
APOLLO INTERNATIONAL OF DELAWARE, INC.
6542 U.S. HIGHWAY 41
APOLLO BEACH, FLORIDA 33572
(813) 645-7677
(Name, Address and Telephone Number of Agent for Service)

------------------------------

COPIES TO:

<TABLE>
<S> <C>
RANDOLPH H. FIELDS, ESQ. JAY M. KAPLOWITZ, ESQ.
Greenberg Traurig Hoffman Gertsten, Savage,
Lipoff Rosen & Quentel, P.A. Kaplowitz, Fredericks & Curtin, LLP
111 North Orange Avenue, Suite 2050 101 E. 52nd Street, 9th Floor
Orlando, Florida 32801 New York, New York 10022
Telephone: (407) 420-1000 Telephone: (212) 752-9700
Telecopier: (407) 420-5909 Telecopier: (212) 980-5192
</TABLE>

------------------------

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/

------------------------

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Exhibit Index required by Item 601 of Regulation S-B is located at page
of the sequential numbering system appearing in the manually signed copy of
this Registration Statement, totaling pages, filed with the Securities and
Exchange Commission.
<PAGE>
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER UNIT AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) (2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par value.......... 920,000(3) $ 5.00 $ 4,600,000 $ 1,394
Redeemable Common Stock Purchase
Warrants............................ 920,000(4) $ .25 $ 230,000 $ 70
Common Stock, $.01 par value(5)....... 920,000(6) $ 5.50 $ 5,060,000 $ 1,534
Underwriters' Warrant(7).............. 1 $ .0001 $ 10 $ 1
Common Stock, $.01 par value(8)....... 80,000 $ 8.25 $ 660,000 $ 200
Redeemable Common Stock Purchase
Warrants(9)......................... 80,000 $ .4125 $ 33,000 $ 10
Common Stock, $.01 par value(10)...... 80,000 $ 5.50 $ 440,000 $ 134
Common Stock, $.01 par value(11)...... 250,000 $ 5.50 $ 1,375,000 $ 417
Total............................. $ 12,398,010 $ 3,760
</TABLE>

<TABLE>
<S> <C>
Previously Paid........ $ 5,002
Amount Due............. $ 0
</TABLE>

(1) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such indeterminable additional shares of Common Stock
as may become issuable as a result of any future anti-dilution adjustment in
accordance with the terms of the Warrants.

(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457 under the Securities Act of
1933.

(3) Includes 120,000 shares of Common Stock which the Underwriters have the
option to purchase to cover over-allotments, if any.

(4) Includes 120,000 Warrants which the Underwriters have the option to purchase
to cover over-allotments, if any.

(5) Issuable upon exercise of Warrants.

(6) Includes 120,000 shares of Common Stock issuable upon exercise of Warrants
subject to the Underwriters' over-allotment option.

(7) Issuable to Underwriters.

(8) Issuable upon exercise of Underwriters' Common Stock Purchase Warrant.

(9) Issuable upon exercise of Underwriters' Warrant.

(10) Issuable upon exercise of Underwriters' redeemable common stock purchase
warrants ("Underwriters' Warrants").

(11) Represents 250,000 shares of Common Stock issuable upon exercise of
Warrants held by private placement investors.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION. DATED JUNE 19, 1997

PROSPECTUS

APOLLO INTERNATIONAL OF DELAWARE, INC.

800,000 SHARES OF COMMON STOCK AND
800,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

Apollo International of Delaware, Inc., a Delaware corporation (the
"Company"), hereby offers (the "Offering") 800,000 shares of common stock, $.01
par value (the "Common Stock"), of the Company and 800,000 Redeemable Common
Stock Purchase Warrants (the "Public Warrants"). The Common Stock and the Public
Warrants offered hereby (sometimes hereinafter collectively referred to as the
"Securities") will be separately tradeable immediately upon issuance and may be
purchased separately. Investors will not be required to purchase shares of
Common Stock and Public Warrants together or in any particular ratio. Each
Public Warrant entitles the holder to purchase one share of Common Stock at an
exercise price of $5.50 (the "Exercise Price"), subject to adjustment,
commencing two years after the date of this Prospectus (the "Effective Date")
until the close of business on the sixth year after the Effective Date. The
Public Warrants are each redeemable by the Company for $.25 per Public Warrant
at any time after one year from the Effective Date, upon thirty days' prior
written notice to the Public Warrant holders, provided (i) the closing bid price
of the Common Stock exceeds $7.50 per share for a period of 20 consecutive
trading days ending on the fifteenth day prior to the date of the Company's
redemption notice, and (ii) if such redemption occurs during the first two years
following the Effective Date, the representative of the Underwriters (the
"Representative") has consented in writing to the redemption. Upon the giving of
a notice of redemption, the Public Warrants will become exercisable if they were
not otherwise exercisable. See "Description of Securities".

Prior to this Offering, there has been no public market for the Company's
Common Stock or Public Warrants, and there can be no assurance that such a
public market will develop or be sustained after the completion of the Offering.
The Company has applied for the listing of the Common Stock and Public Warrants
on the NASDAQ SmallCap Market ("NASDAQ") under the symbols AIOD and AIODW,
respectively. For discussion of the factors considered in determining the
offering prices of the Common Stock and Public Warrants, see "Underwriting."

------------------------------

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE SUBSTANTIAL DILUTION FROM THE PUBLIC OFFERING PRICE AND
SHOULD NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED
UNDER THE CAPTION "RISK FACTORS" WHICH APPEAR BEGINNING ON PAGE 7 OF THIS
PROSPECTUS. SEE ALSO "DILUTION."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING DISCOUNTS
PRICE TO PUBLIC AND COMMISSIONS(1)
<S> <C> <C>
Per Share of Common Stock.............................. $5.00 $.50
Per Warrant............................................ $.25 $.025
Total(3)............................................... $4,200,000 $420,000

PROCEEDS TO COMPANY(2)
<S> <C>
Per Share of Common Stock.............................. $4.50
Per Warrant............................................ $.225
Total(3)............................................... $3,780,000
</TABLE>

(1) In addition, the Company has agreed to pay the Representative in the form
of: (i) a non-accountable expense allowance equal to 3% of the gross
proceeds of this Offering, of which $25,000 has been prepaid by the Company
and the balance of which shall be paid upon closing of the Offering and (ii)
an underwriters' warrant ("Underwriters' Warrant") for 80,000 shares of
Common Stock and/or 80,000 Public Warrants, which Underwriters' Warrant is
exercisable for a period of five years, commencing one year after the
Effective Date at an exercise price of $8.25 per share or $.4125 per
warrant, subject to adjustment. The Company and the Underwriters have agreed
to indemnify each other against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses, estimated at $574,260, payable by the Company,
including the Underwriters' non-accountable expense allowance

(3) The Company has granted the Underwriters an option, exercisable within 45
days form the date of this Prospectus, to purchase up to 120,000 additional
shares of Common Stock and/or 120,000 Public Warrants on the same terms and
conditions as set forth above, solely for the purpose of covering
over-allotments. If such option is exercised in full, the Price to Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be a
total of $4,830,000, $483,000, and $4,347,000, respectively.
The Securities offered by this Prospectus are being offered by the
Underwriters on a "firm commitment" basis subject to prior sale, when, as
and if accepted by the Underwriters, approval of certain legal matters by
counsel for the Underwriters and certain other conditions. The Underwriters
reserve the right to withdraw, cancel or modify such offer without notice
and reject any order in whole or in part. It is expected that delivery of
the certificates representing the Securities will be made in New York, New
York on or about , 1997.
(CONTINUED ON NEXT PAGE)

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MAY DAVIS GROUP, INC.
----------------------

THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>
(CONTINUED FROM COVER PAGE)

In addition to the 800,000 shares of Common Stock and 800,000 Public
Warrants to be sold under this Prospectus, the Company has concurrently
registered 800,000 shares of Common Stock issuable upon exercise of the Public
Warrants; 80,000 shares of Common Stock and 80,000 Public Warrants issuable upon
exercise of the Underwriters' Warrant; 80,000 shares of Common Stock issuable
upon exercise of the Underwriters' Public Warrants; and 250,000 shares of Common
Stock issuable upon exercise of currently outstanding warrants that, upon the
Effective Date, will have the same exercise price and terms as the Public
Warrants (the "Additional Registered Securities").

FOR CALIFORNIA RESIDENTS ONLY: The following suitability standards have been
imposed for all sales of Securities of the Company to residents of the State of
California: $65,000 of income and $250,000 of net worth, excluding principal
residence, home furnishings, and automobiles, or in the alternative, a minimum
net worth of at least $500,000, excluding principal residence, home furnishings,
and automobiles. California residents wishing to invest must show their
eligibility by completing a confidential purchaser questionnaire.

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK AND
PUBLIC WARRANTS OFFERED HEREBY, INCLUDING PURCHASES OF THE COMMON STOCK OR
PUBLIC WARRANTS TO STABILIZE ITS MARKET PRICE, PURCHASES OF THE COMMON STOCK OR
PUBLIC WARRANTS TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK OR
PUBLIC WARRANTS MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION (INCLUDING FINANCIAL
STATEMENTS AND NOTES THERETO) CONTAINED IN THIS PROSPECTUS AND IS QUALIFIED IN
ITS ENTIRETY BY THE MORE DETAILED INFORMATION APPEARING ELSEWHERE HEREIN. UNLESS
OTHERWISE SPECIFIED, ALL REFERENCES HEREIN REFLECT THE 10.6828 FOR 1 SPLIT OF
THE COMPANY'S COMMON STOCK EFFECTED FOR SHAREHOLDERS OF RECORD ON MAY 10, 1996.
ALTHOUGH FRACTIONAL SHARES RESULTED FROM THE STOCK SPLIT, THERE ARE NO
REFERENCES TO FRACTIONAL SHARES HEREIN. FURTHER, UNLESS OTHERWISE INDICATED, THE
INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT
OPTION IS NOT EXERCISED. EACH PROSPECTIVE INVESTOR IS URGED TO READ THIS
PROSPECTUS IN ITS ENTIRETY.

THE COMPANY

Apollo International of Delaware, Inc. (the "Company") was formed in
Delaware in November, 1994. The Company designs and sells to industry and
electric utilities electric power protection and control products utilizing new
computer and fiber optics technologies. The Company is developing concurrently
two product lines, the first of which (designated as "CMPR" products) is
designed to monitor motors used by industrial users, and the second of which
(designated as "SOLARIS" or "NOVA" products), is designed to monitor electric
power transmission for industrial users and electric utilities. The target
market for the motor protection and control product line is industrial end users
such as steel mills, mining operations, pulp and paper mills, and petrochemical
companies. The NOVA product line is designed for the utility substation
marketplace which includes public and investor owned utilities, cogeneration
facilities, and large industrial users who operate their own electric power
substations.

The Company maintains its principal executive offices at 6542 Highway 41,
Suite 215, Apollo Beach, Florida 33572; telephone (813) 645-7677.

3
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Securities Offered........................... 800,000 shares of Common Stock, $.01 par
value.

800,000 Public Warrants. Each Public Warrant
entitles the holder, for $5.50, to purchase
one share of Common Stock for a period of
four years commencing two years after the
date of this Prospectus (the "Effective
Date"). The Public Warrants are each
redeemable by the Company for $.25 per Public
Warrant at any time after one year from the
Effective Date, upon thirty days' prior
written notice to the Public Warrant holders,
provided (i) the closing bid price of the
Common Stock exceeds $7.50 per share for a
period of 20 consecutive trading days ending
on the fifteenth day prior to the date of the
Company's redemption notice, and (ii) if such
redemption occurs during the first two years
following the Effective Date, the
Representative has consented in writing to
the redemption. Upon the giving of a notice
of redemption, the Public Warrants will
become exercisable if they were not otherwise
exercisable. See "Description of
Securities--Warrants."

Securities Outstanding Prior to the
Offering................................... 2,504,794 shares of Common Stock(1)

Securities Outstanding Subsequent to the
Offering(2)................................ 3,304,794 shares of Common Stock(1)
1,050,000 Public Warrants(3)

Estimated Net Proceeds(4).................... $3,205,740

Use of Proceeds by Company................... The Company intends to use the net proceeds
of this Offering for product development and
engineering in the continuing design and
testing of its products; equipment
expenditures; marketing and selling costs
associated with expansion of its domestic and
international sales network; the design and
development of marketing materials, the
hiring of additional personnel; payment of
consulting fees to a director and principal
shareholder of the Company in the approximate
aggregate amount of $23,000; and working
capital and general corporate purposes. See
"Use of Proceeds."

Risk Factors................................. Investment in the securities offered hereby
are speculative and involve a high degree of
risk and immediate substantial dilution. See
"Risk Factors" and "Dilution."

Proposed NASDAQ Small Cap Market
Symbols(5)................................. Common Stock--AIOD
Public Warrants--AIODW
</TABLE>

4
<PAGE>
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(1) Does not include (i) 148,500 shares of Common Stock reserved for future
issuance under the Company's 1996 Stock Option Plan; (ii) 351,500 shares of
Common Stock reserved for issuance upon exercise of stock options granted
under the 1996 Stock Option Plan; (iii) 1,350,000 shares of Common Stock
reserved for issuance upon exercise of outstanding warrants to purchase
Common Stock; (iv) 80,000 shares of Common Stock reserved for issuance upon
exercise of the Underwriters' Warrant; (v) 80,000 shares of Common Stock
reserved for issuance upon exercise of Public Warrants issuable upon
exercise of the Underwriters' Warrant; (vi) 800,000 shares of Common Stock
reserved for issuance upon exercise of the Public Warrants; and (vii) up to
41,666 shares of Common Stock issuable under a license agreement.

(2) Does not include 120,000 additional shares of Common Stock or 120,000 Public
Warrants issuable upon exercise of the Underwriters' over-allotment option.
See "Underwriting."

(3) Includes 250,000 common stock purchase warrants issued pursuant to a private
placement of the Company's securities, all of which warrants shall have the
same exercise price and other terms and provisions of the Public Warrants
upon the closing of the Offering. Does not include (i) 950,000 common stock
purchase warrants issued to consultants; or (ii) 150,000 common stock
purchase warrants issued to employees.

(4) After deducting expenses of this Offering payable by the Company estimated
at $994,260 (inclusive of commissions and underwriting discounts and
assuming no exercise of the Underwriters' over-allotment option).

(5) Although the Company has applied for listing the Securities for quotation on
the NASDAQ SmallCap Market, there can be no assurance that the Company's
securities will be accepted for listing or that if listed it will be able to
continue to meet the requirements for continued quotation, or that a public
trading market will develop or that if such market develops, it will be
sustained. See "Risk Factors-- Lack of Prior Market for Securities,
"--Possible Delisting of Securities from Nasdaq System; Risks Related to
Low-Priced Stocks."

SUMMARY FINANCIAL INFORMATION

The following table presents summary historical data of the Company for the
years ended December 31, 1995 and 1996, which have been derived from the
Company's audited financial statements and unaudited financial data for the
three months ended March 31, 1997, included elsewhere in this Prospectus. The
Company was formed in November 1994 and did not begin to generate revenues until
October

5
<PAGE>
1996. The information should be read in conjunction with "Management's Plan of
Operation" and the Financial Statements and the related notes thereto.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1996
---------- ------------ MARCH 31, 1997
-------------------------------------------
PRO PRO FORMA,
ACTUAL FORMA(1) AS ADJUSTED(2)
------------- ------------ --------------
<S> <C> <C> <C> <C> <C>

SUMMARY BALANCE SHEET DATA

Working capital (deficit)..................... $ (33,590) $ (541,359) $ (957,460) $ (957,460) $ 2,358,021

Total assets.................................. $ 356,738 $ 1,214,001 $ 1,643,974 $ 1,643,974 $ 4,849,714

Total liabilities............................. $ 363,949 $ 1,035,342 $ 1,809,986 $ 1,809,986 $ 1,809,986
Shareholders' equity (deficit)................ $ (7,211) $ 178,659 $ (166,012) $ (166,012) $ 3,039,728
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------- ----------------------------
1995 1996 1996 1997
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>

SUMMARY INCOME STATEMENT DATA

Sales............................................ $ 294,734 $ 126,835 $ 437,799

Cost of sales.................................... (197,803) (24,722) (234,525)
------------- ------------- -------------

Gross profit..................................... 96,931 102,113 203,274

Research and development......................... $ (233,073) (334,750) (108,723) (106,366)

General and administrative ...................... (294,089) (1,253,031) (139,142) (394,460)
------------ ------------- ------------- -------------

Loss from operations ............................ (527,162) (1,490,850) (145,752) (297,552)

Interest expenses................................ (189,882) (8,362) (48,786)

Deferred income taxes............................ (40,000) 40,000 40,000

Extraordinary income from forgiveness of 75,028
indebtedness....................................
------------ ------------- ------------- -------------

Net loss......................................... $ (567,162) $ (1,565,704) $ (114,114) $ (346,338)
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------

Average number of common shares outstanding ..... 1,385,243 2,622,393 1,455,919 2,811,434

Net loss per common share ....................... $ (.41) $ (.60) $ (.08) $ (.12)
</TABLE>

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(1) Pro forma to reflect (a) repurchase and retirement of 299,000 shares of
common stock in exchange for the reduction of the exercise price of warrants
to purchase 400,000 shares of Common Stock from $5.50 to $3.00 per share,
(b) contribution of 25,000 shares of Common Stock without consideration, and
(c) issuance of 17,360 shares of Common Stock under anti-dilution
provisions.

(2) Pro forma, as adjusted to reflect the pro forma adjustments referred to in
footnote (1) and gives effect to the sale of 800,000 shares of Common Stock
and 800,000 Public Warrants of the Company in the Offering at $5 per share
and $.25 per warrant, and anticipated expenses of $994,260. Does not include
(a) up to 120,000 shares and 120,000 Public Warrants subject to issuance
under the over-allotment option; (b) 80,000 shares and 80,000 Public
Warrants subject to the Underwriters' Warrant; (c) up to 41,666 shares
issuable under a license agreement; or (d) other outstanding options or
warrants.

6
<PAGE>
RISK FACTORS

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SUBSTANTIAL DILUTION AND SHOULD ONLY BE PURCHASED BY INVESTORS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS, PRIOR TO MAKING
AN INVESTMENT, SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE
FACTORS, AS WELL AS OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS,
ASSOCIATED WITH THIS OFFERING, INCLUDING THE INFORMATION CONTAINED IN THE
FINANCIAL STATEMENTS HEREIN.

LIMITED REVENUES; DEFICIT; POSSIBLE INABILITY TO CONTINUE AS A GOING CONCERN
EMPHASIZED IN AUDITOR'S REPORT. The Company was formed in November 1994 and had
a deficit of $2,153,025 as of December 31, 1996 and a deficit of $2,499,363 as
of March 31, 1997. Potential investors should be aware that unanticipated
problems, many of which may be beyond the Company's control, are commonly
encountered by companies seeking to commercialize new products. These include,
but are not limited to, unexpected product development, marketing and customer
support problems, increased competition, lack of credibility with customers and
suppliers, and technical obsolescence. Further, the Company had no significant
revenues prior to October 1996, had limited revenues of $294,734 for the fiscal
year ended December 31, 1996, and for the fiscal years ended December 31, 1995
and 1996, had net losses of $567,162 and $1,565,704, respectively. For the three
months ended March 31, 1997, the Company had revenues of $437,799 with a net
loss of $346,338. There is no assurance that the Company will ever generate
sufficient revenues to meet expenses or be profitable. The Company's independent
auditors have emphasized the possible inability of the Company to continue as a
going concern in their audit report. See "Management's Discussion of Plan of
Operations", "Business" and the Financial Statements hereto.

SIGNIFICANT CAPITAL REQUIREMENTS; DEPENDENCE ON OFFERING PROCEEDS; POSSIBLE
NEED FOR ADDITIONAL FINANCING. The Company has had significant working capital
deficits of $33,590, $541,359, and $957,460 at December 31, 1995, December 31,
1996 and March 31, 1997, respectively. The Company's capital requirements in
connection with the design, development and commercialization of its products
have been and will continue to be significant. To date, the Company has been
substantially dependent upon loans from its principal stockholders, as well as
private placements of its debt and equity securities, to finance its working
capital requirements. The Company is dependent on the proceeds of this Offering
to commence full-scale marketing activities in connection with its products, to
complete the development of additional product and software applications, and to
fund the Company's working capital requirements. The Company anticipates, based
on currently proposed plans and assumptions relating to its operations, that the
proceeds of this Offering will be sufficient to satisfy its contemplated cash
requirements for at least twelve months following the consummation of this
Offering. In the event that the Company's plans change or prove to be inaccurate
or if the proceeds of this Offering prove to be insufficient to fund operations,
the Company could be required to seek additional financing sooner than currently
anticipated or could be required to curtail its activities. The Company has no
current arrangements with respect to, or sources of, additional financing, and
there can be no assurance that existing stockholders will provide any portion of
the Company's future financing requirements. There can be no assurance that any
additional financing will be available to the Company on acceptable terms, or at
all. Additional equity financing may involve substantial dilution to the
interests of the Company's then existing stockholders. See "Use of Proceeds" and
"Certain Transactions."

BROAD DISCRETION IN APPLICATION OF PROCEEDS. Approximately $1,090,110 (34%)
of the Offering proceeds have been allocated to working capital. In addition,
management of the Company may adjust the application and allocation of the net
proceeds of this Offering, including funds received upon exercise of the
Underwriters' over-allotment option or the exercise of any Public Warrants, if
such adjustment is determined to be in the best interests of the Company in
order to address changed circumstances and opportunities. Furthermore, to the
extent that the Company's expenditures are less than projected, the resulting
balance will be retained and used for general working capital purposes. As a
result of the foregoing, the success of the Company will be substantially
dependent upon the judgment of the management of the Company with respect to the
application and allocation of the net proceeds hereof.

7
<PAGE>
Pending use of such proceeds, the net proceeds of this Offering may be invested
by the Company in interest-bearing accounts, or invested in government
obligations, certificates of deposit or similar short-term, low-risk
investments. See "Use of Proceeds."

BENEFITS TO RELATED PARTIES. Frank J. Mancini, a director and a
shareholder, will be paid approximately $23,000 for consulting services from the
Offering proceeds. In addition, the Company may use a portion of the proceeds of
this Offering to pay salaries of its executive officers (estimated at $44,200
per month) and fees to Mr. Mancini for consulting services ($4,000 per month),
to the extent that cash flow from operations is insufficient for such purposes.
See "Management--Employment Agreements," "--Consulting Agreements," "Use of
Proceeds," and "Certain Transactions."

TECHNOLOGICAL FACTORS; UNCERTAINTY OF PRODUCT DEVELOPMENT AND
COMMERCIALIZATION. Although the Company has completed the development of the
technological aspects of certain of its products, which it believes perform the
principal functions for which they have been designed, the Company has only
commenced limited commercialization of its products for a limited number of
users. Accordingly, there can be no assurance that, upon widespread commercial
use, if any, these products or other products currently being developed by the
Company will satisfactorily perform the functions for which they have been
designed or that they will operate satisfactorily. The Company intends to use a
portion of the proceeds of this Offering in connection with product refinement
and enhancement of existing products and the development of additional products.
Product development, commercialization, and continued system refinement and
enhancement efforts remain subject to all of the risks inherent in development
of new products based on innovative technologies, including unanticipated
delays, expenses, technical problems, or difficulties, as well as the possible
insufficiency of funds to implement development efforts, which could result in
abandonment or substantial change in product commercialization. The Company's
success will be largely dependent upon its products meeting targeted cost and
performance objectives of full production and the timely introduction of its
products into the marketplace, among other things. There can be no assurance
that the Company's products will satisfy current price or performance
objectives, that unanticipated technical or other problems which would result in
increased costs or material delays in introduction and commercialization will
not occur, or that the Company's products will prove to be sufficiently reliable
or durable under actual operating conditions or otherwise be commercially
viable. Software and other technologies as complex as those incorporated into
the Company's systems may contain errors which become apparent subsequent to
widespread commercial use. Remedying such errors may delay the Company's plans
and cause it to incur additional costs, or otherwise have a material adverse
impact on the Company. See "Business--Products", "--Sales and Marketing" and
"--Patents and Copyrights."

CHANGES IN TECHNOLOGICAL CLIMATE. The high technology business in which the
Company participates is characterized by rapidly changing technology and
frequent new product introductions. The Company's success is dependent upon its
ability to develop and market its products on a timely basis. There can be no
assurance that the Company will be successful in developing or marketing such
products to take advantage of the perceived demand for such products within the
motor protection and electric utility industry. In addition, there can be no
assurance that products or technologies developed by others will not render the
Company's products or technologies non-competitive or obsolete. See
"Business--Competition" and "--Sales and Marketing."

UNCERTAINTY OF MARKET ACCEPTANCE. As is typical in the case of emerging and
evolving markets, demand and market acceptance for newly introduced products and
services is subject to a high level of uncertainty. The Company has not yet
commenced significant marketing activities relating to product commercialization
and currently has limited marketing experience and limited financial, personnel
and other resources to undertake extensive marketing activities. Acceptance of
the Company's products that
are geared to the electric utility industry will involve retrofitting electric
utility substations, which potential customers may be reluctant to do.
Consequently, potential customers may elect to utilize other products with which
they are familiar or which they believe to have more advantages over the
Company's products, or may otherwise be reluctant to purchase the Company's
products. Achieving market acceptance for the Company's products will require
substantial marketing efforts and expenditure of significant funds to

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create awareness and demand by potential customers as to the perceived benefits
and distinctive characteristics of the Company's products. There can be no
assurance that the Company will have available funds or other resources
necessary to achieve such acceptance. See "Business--Sales and Marketing" and
"--Competition."

LIMITED MARKETING CAPABILITIES AND EXPERIENCE; DEPENDENCE UPON THIRD-PARTY
RESELLERS. The Company has limited marketing experience and has conducted only
limited marketing activities. The Company expects to continue to market directly
to certain accounts and to market through a network of independent
manufacturers' representatives and distributors. The Company's present
manufacturers' representatives and distributors are not subject to minimum
purchase requirements and can discontinue marketing the Company's products with
minimum notice. There can be no assurance that the Company will be able to
retain any of its present manufacturers' representatives or distributors, or
expand its existing distribution network. Loss of any such persons or the
inability to expand the existing distribution network could have a detrimental
effect on the Company's ability to carry out its intended plan of operations.

The Company, directly and through its independent sales network, also
intends to establish a network of resellers, consisting primarily of value-added
resellers ("VARS") and original equipment manufacturers ("OEMS") with
established distribution channels to market the Company's products and to
educate potential resellers to install and service its systems. The Company's
prospects will be significantly affected by its ability to successfully develop
relationships with VARS and OEMS and the marketing efforts of such resellers.
While the Company believes that independent resellers with which it enters into
such arrangements will have an economic motivation to market the Company's
products, the time and resources devoted to these activities generally will be
controlled by such entities and not by the Company. The Company will also be
dependent upon such resellers to provide installation and support services. A
decline in the financial prospects of particular resellers or of any of their
customers, or inadequate installation and support services by resellers, could
have an adverse effect on the Company. In addition, such resellers will likely
market various product lines, including, in some cases, products directly
competitive with the Company's products. There can be no assurance that the
Company will be able, for financial or other reasons, to finalize any
third-party distribution or marketing arrangements or that such arrangements, if
finalized will result in commercialization of any of the Company's products. See
"Business--Sales and Marketing."

DEPENDENCE UPON THIRD-PARTY MANUFACTURERS. The Company engages small
contract manufacturers to supply its products, pursuant to purchase orders. As
order volume increases, the Company has the flexibility of engaging larger
manufacturers with greater production capabilities. There can be no assurance
that its products can be manufactured reliably on a large-scale basis on
commercially reasonable terms, or at all. The Company is substantially dependent
on the ability of its third-party manufacturers to, among other things, meet the
Company's design, performance and quality specifications.

Failure by the Company's third-party manufacturers to comply with these and
other requirements could have a material adverse effect on the Company. There
can be no assurance that the Company's third-party manufacturers will dedicate
sufficient production capacity to meet the Company's scheduled delivery
requirements or that the Company's manufacturers will have sufficient production
capacity to satisfy the Company's requirements during any period of sustained
demand. Moreover, the electronics industry from time to time experiences short
supplies of certain high demand components, which may adversely affect the
Company's ability to meet its production schedules. Failure of manufacturers to
meet production demands of the Company, or allocations in the supply of certain
high demand components could adversely affect the Company's operations and
ability to meet its own delivery schedules on a timely and competitive basis.
There can be no assurance that if such problems develop at a time when the
Company is just beginning to deliver its products to the commercial marketplace,
the Company will be able to rectify such problems to avoid a material adverse
effect on its intended plan of operations or financial results. See
"Business--Manufacturing and Materials."

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<PAGE>
NO PATENTS OR INTELLECTUAL PROPERTY REGISTRATION; POSSIBLE NON-EXCLUSIVITY
OF TECHNOLOGY; POTENTIAL LEGAL ACTION. The Company has not yet applied for
patents or copyrights on its products, nor has it applied for trademark
registration for any of its products' names. Although the Company intends to
initiate patent and intellectual property applications for registration, there
can be no assurance as to the breadth or degree of protection which patents or
copyrights, if any, may afford the Company; that any patent and intellectual
property applications will result in issued patents or registered copyrights or
trademarks; that the Company's patents, copyrights or trademarks will be upheld
if challenged; or that competitors will not develop similar or superior methods
or products outside the protection of any patent or copyright issued to the
Company. Although the Company is not aware of the infringement of its
technologies by third-parties, and does not believe (nor has any party asserted)
that the Company's products infringe on the proprietary rights of others, it is
possible that any future patent or intellectual property rights of the Company's
may not be valid, or if valid, that infringement of such proprietary rights may
occur. In the event the Company's products infringe patents, intellectual
property rights or proprietary rights of others, the Company may be required to
modify the design of its products, change the name of its products or obtain a
license for certain technology. There can be no assurance that the Company will
be able to do so in a timely manner, upon acceptable terms and conditions, or at
all. Failure to do any of the foregoing could have a material adverse effect
upon the Company. In addition, there can be no assurance that the Company will
have the financial or other resources necessary to enforce or defend a patent
infringement or proprietary rights violation action. Moreover, if the Company's
products infringe patents, trademarks or proprietary rights of others, the
Company could, under certain circumstances, become liable for damages, which
also could have a material adverse effect on the Company.

The Company also relies on confidentiality agreements with its directors,
employees, consultants, and manufacturers and employs various methods to protect
the source codes, concepts, ideas, proprietary know-how, and documentation of
its proprietary technology. However, such methods may not afford complete
protection, and there can be no assurance that others will not independently
develop similar know-how or obtain access to the Company's know-how or software
codes, concepts, ideas and documentation. See "Business--Patents and
Copyrights."

COMPETITION. The Company is introducing new high technology products into
markets that are dominated by competitors which have a significant share of the
market for microprocessor control relay products in electrical substations in
the United States. Current competitors such as General Electric, Siemens A.G.,
GEC Alsthom, Inc. and ABB Industrie A.G. have substantially greater financial,
marketing and technical resources, more established manufacturing capability and
distribution channels, stronger customer support organizations and greater name
recognition than the Company. Such current or future competitors may develop
competing technologies similar or more advanced than the Company's. There can be
no assurance that the Company will be able to compete successfully in current or
future markets. See "Business--Competition."

DEPENDENCE ON KEY EXECUTIVES; RELATIONSHIP OF KEY EXECUTIVES. The success
of the Company is dependent on the services and efforts of its existing key
management personnel. Ms. Clewes and Messrs. Clarke, Smith, Swatland and Louw
each have an employment agreement with the Company; however, the loss of the
services of one or more of its existing management personnel would have a
material adverse effect on the Company's business. Mr. Clarke and Ms. Clewes are
husband and wife. The Company currently maintains key-man life insurance
policies on the lives of David W. Clarke, Christine Clewes and Steven D. Smith,
officers of the Company, and W. Haines Knox, an employee, but does not maintain
life insurance policies covering any other officer or employee. The Company's
success and plans for future growth will also depend on its ability to attract
and retain additional qualified personnel. There is no assurance that the
Company will be able to hire or retain such personnel in the future. See
"Management."

EXECUTIVE OFFICERS' LIMITED TIME WITH COMPANY. The Company's Executive Vice
President of Operations, Vice President of International Sales and Vice
President of Sales have recently joined the Company.

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<PAGE>
Therefore there can be no assurance that they will be able to function
effectively as a group. The failure of the management team to work together
effectively could have a material adverse effect on the Company's operations.

NO INDEPENDENT DIRECTORS. While following this Offering the Company intends
to elect two independent directors (including one designated by the
Representative), presently all of the directors of the Company are employed by,
or consultants to, the Company and receive compensation from the Company.

IMMEDIATE AND SUBSTANTIAL DILUTION. Upon completion of this Offering, the
pro forma net tangible book value per share of the Common Stock, would be $.90,
representing an immediate dilution of $4.10 of pro forma net tangible book value
per share, or 82.0%, to the public investors and an increase of $.99 per share
to existing shareholders. The exercise of the Public Warrants included in the
Securities offered hereby will result in further dilution to the public
investors. See "Dilution."

CONTROL BY MANAGEMENT. Upon consummation of this Offering, David W. Clarke,
President, Chief Executive Officer and Chairman of the Board, and his wife,
Christine Clewes, Vice President, Marketing and a director, will beneficially
own 22.98% of the shares of Common Stock outstanding. Together, they may be in a
position generally to control the affairs of the Company. For example, these two
stockholders, individually and as a group, or together with others, including
directors and executive officers of the Company and other principal
stockholders, may be able to control the outcome of stockholder votes, including
votes concerning the election of directors, the adoption of amendments to the
Company's certificate of incorporation or by-laws and the approval of certain
mergers and other significant corporate transactions, including a sale of
substantially all of the Company's assets. Such control by existing stockholders
could also have the effect of delaying, deferring or preventing a change in
control of the Company. See "Beneficial Ownership of Principal Stockholders and
Management" and "Description of Securities."

POTENTIAL LIABILITY AND INSURANCE. The Company's products are designed for
electric power protection and control purposes. Should any of its products fail
in operation, the Company could have potential liability to its customers in
amounts which cannot be estimated. The Company maintains product liability
insurance with a $1,000,000 limit of coverage which it believes is adequate for
its potential liability. There can be no assurance that any insurance maintained
by the Company will cover, as to scope or amount, any claims made against the
Company or that appropriate insurance will be available in the future at
acceptable cost or at all.

NO DIVIDENDS ANTICIPATED. The Company does not intend to pay dividends in
the foreseeable future. Any earnings which the Company may realize in the
foreseeable future will be retained to finance the growth of the Company. See
"Dividend Policy."

NO PRIOR PUBLIC MARKET; ARBITRARY DETERMINATION OF OFFERING PRICES; POSSIBLE
VOLATILITY OF SECURITIES. Prior to this Offering, there has been no public
market for the Company's Securities. Accordingly, there can be no assurance that
an active trading market will develop or, if developed, that it will be
sustained upon the completion of this Offering or that the market prices of the
Securities will not decline below the initial public offering prices. The
initial public offering prices of the Securities and the terms of the Public
Warrants have been arbitrarily determined by negotiations between the Company
and the Underwriters and do not necessarily bear any relationship to the
Company's assets, book value, net earnings, net sales or other established
criteria of value, and should not be considered indicative of the actual value
of the Securities. See "Underwriting." The stock market has, from time to time,
experienced extreme price and volume fluctuations, which often have been
unrelated to the operating performance of particular companies. Regulatory
developments and economic and other external factors, as well as
period-to-period fluctuations in financial results of the Company, may have a
significant impact on market prices of the Securities.

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<PAGE>
LIMITED EXPERIENCE OF THE REPRESENTATIVE. The Company has entered into an
Underwriting Agreement with May Davis Group, Inc. under which that company is
the managing underwriter or representative (the "Representative"). The
Representative was organized in August 1993, was registered as a broker in June
1995, and became a member firm of the National Association of Securities
Dealers, Inc. (the "NASD") in June 1995. The Representative is principally
engaged in retail brokerage and market making activities and various corporate
finance projects. The Representative has acted as a placement agent in private
offerings and has participated as a member of the underwriting syndicate or as a
selected dealer in one public offering and it has acted solely one time as the
lead manager in only one public offering of securities. While certain of the
officers of the Representative have significant experience in corporate finance
and the underwriting of securities, no assurance can be given that the
Representative's lack of experience as a lead managing underwriter of public
offerings will not adversely affect this Offering and the subsequent development
of a liquid public market in the Company's securities. See "Underwriting."

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF PUBLIC WARRANTS. The Public
Warrants are subject to redemption by the Company. Redemption of the Public
Warrants could force the holders to exercise the Public Warrants and pay the
exercise price at a time when it may be disadvantageous for the holders to do
so, to sell the Public Warrants at the current market price when they might
otherwise wish to hold the Public Warrants, or to accept the redemption price,
which may be substantially less than the market value of the Public Warrants at
the time of redemption. The holders of the Public Warrants will automatically
forfeit their rights to purchase the shares of Common Stock issuable upon
exercise of such Public Warrants unless the Public Warrants are exercised before
they are redeemed. The holders of Public Warrants will not possess any rights as
stockholders of the Company unless and until the Public Warrants are exercised.
See "Description of Securities--Warrants."

CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION IN CONNECTION WITH
EXERCISE OF PUBLIC WARRANTS. The Company will be able to issue shares of its
Common Stock upon exercise of the Public Warrants only if there is a then
current prospectus relating to the Common Stock issuable upon the exercise of
the Public Warrants under an effective registration statement filed with the
Commission and only if such Common Stock is then qualified for sale or exempt
from qualification under applicable state securities laws of the jurisdictions
in which the various holders of Public Warrants reside. Although the Company
will use its best efforts to meet such requirements, there can be no assurance
that the Company will be able to do so. The failure of the Company to meet such
requirements may deprive the Public Warrants of any value and cause the resale
or other disposition of Common Stock issued upon the exercise of the Public
Warrants to become unlawful. See "Description of Securities--Warrants."

POSSIBLE ADVERSE IMPACT ON MARKET OF WARRANT EXERCISE. In the event of the
exercise of a substantial number of Public Warrants within a reasonably short
period of time after the right to exercise commences, the resulting increase in
the amount of Common Stock of the Company in the trading market could
substantially affect the market price of the Common Stock. See "Description of
Securities--Warrants."

POSSIBLE ADVERSE IMPACT OF UNDERWRITERS' WARRANT. In connection with the
Offering, the Company will sell to the Underwriters, for nominal consideration
of $10, an Underwriters' Warrant exercisable for 80,000 shares of Common Stock
at $8.25 per share and/or 80,000 Public Warrants at $.4125 per warrant. The
Underwriters' Warrant will be exercisable for a period of five years, commencing
one year after the date of this Prospectus. The Underwriters' Warrant will not
be redeemable by the Company. The holders of the Underwriters' Warrant will have
the opportunity to profit from a rise in the market price of the Securities, if
any, without assuming the risk of ownership. The Company may find it more
difficult to raise additional equity capital if it should be needed for the
business of the Company while the Underwriters' Warrant is outstanding. At any
time when the holders thereof might be expected to exercise them, the Company
would probably be able to obtain additional capital on terms more favorable than
those provided by the Underwriters' Warrant.

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<PAGE>
The Underwriters have "piggy back" and demand registration rights with
respect to the Common Stock issuable upon exercise of the Underwriters' Warrant
(and the Public Warrants issuable thereunder). Any future exercise of these
registration rights may cause the Company to incur substantial expense and could
impair the Company's ability to raise capital through the public sale of its
securities. See "Dilution," "Shares Eligible for Future Sale" and
"Underwriting."

UNDERWRITERS' SIGNIFICANT INFLUENCE ON THE COMPANY. The Company has entered
into an Underwriting Agreement with May Davis Group, Inc., the Representative
and managing underwriter, pursuant to which, among other things, the Company has
granted the Underwriters a three-year preferential right with respect to future
financing relating to the offering of the Company's securities. The Underwriting
Agreement also gives the Underwriters the right, for a period of three years
from the Effective Date, to appoint a designee of the Underwriters as an advisor
to the Company's Board of Directors or, in the alternative, to designate one
person for election as a director of the Company. The Representative has
indicated to the Company that it intends to appoint a director, although such
person has not been identified. In addition, the Company has agreed to enter
into a management and financial consulting agreement to retain the
Representative as a financial consultant for a period of three years at a
monthly fee of approximately $2,187.50, payable in full, in advance, at the
closing of this Offering; the consulting agreement will not require the
consultant to devote a specific amount of time to the performance of its duties
thereunder.

LIMITATION ON DIRECTOR LIABILITY UNDER DELAWARE LAW. Pursuant to the
Company's Certificate of Incorporation and under Delaware law, directors of the
Company are not liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty, except for liability in connection with a breach
of the duty of loyalty, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for dividend payments or
stock repurchases illegal under Delaware law or for any transaction in which a
director has derived an improper personal benefit. However, insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), may be permitted to directors, officers, or
persons controlling the Company pursuant to the foregoing, the Company has been
informed that in the opinion of the Securities and Exchange Commission ("SEC"),
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable.

DEPENDENCE ON MAJOR CUSTOMERS. Substantially all of the Company's sales for
the fiscal year ended 1996 and the three months ended March 31, 1997 were
derived from Jeanelac, US Steel and Phasetronics. The Company anticipates that
these companies will continue as major customers in the foreseeable future.
Therefore, the loss of any of these customers could have a material adverse
effect on the business of the Company. See "Business--Sales and Marketing."

POSSIBLE DILUTIVE EFFECT OF OPTIONS AND WARRANTS AND ADVERSE EFFECT ON
MARKET PRICE. No assurance can be given as to the effect, if any, that future
sales of Common Stock, or the availability of shares of Common Stock for future
sales, will have on the market price of the Common Stock from time to time.
Sales of substantial amounts of Common Stock (including shares issued upon the
exercise of warrants or stock options), or the possibility that such sales could
occur, could adversely affect the market price of the Common Stock and could
also impair the Company's ability to raise capital through an offering of its
equity securities in the future. As of the date of this Prospectus, the Company
granted options for 351,500 shares of Common Stock to various employees of the
Company, 130,750 of which options are first exercisable commencing one year from
their respective dates of grant (approximately July 1, 1997 to November 21,
1997), 45,000 of which are first exercisable one year from the date of this
Prospectus, and the balance of which (175,750) are exercisable incrementally
over six months after their respective initial exercise dates, all at an
exercise price of $4.00 per share. Further, the Company issued a total of
150,000 common stock purchase warrants to three employees, which are exercisable
at $5.50 per share commencing one year from the date of this Prospectus until
September 26, 2001 as to two warrants and November 1, 2001 as to the third
warrant. The Company also issued common stock purchase warrants to consultants
for an aggregate of 950,000 shares, 400,000 of which are exercisable at $3.00
per share commencing one year

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<PAGE>
from the date of this Prospectus until May 10, 2001; 250,000 of which are
exercisable at $4.00 per share commencing June 1, 2000 (unless the Company
agrees to an earlier exercise) until June 1, 2002; 250,000 of which are
exercisable at $5.50 per share commencing June 1, 2000 (unless the Company
agrees to an earlier exercise) until June 1, 2002, and 50,000 of which are
exercisable at $5.50 per share commencing June 30, 2000 (unless the Company
agrees to an earlier exercise) until June 30, 2002. In addition, the Company
issued 250,000 common stock purchase warrants to private placement investors
which shall have the same exercise price and terms as the Public Warrants
offered hereby. Further, in connection with this Offering, the Company will
issue to the Underwriters an Underwriters' Warrant entitling the Underwriters,
for four years commencing one year from the date of this Prospectus to purchase,
for $8.25 per share, 80,000 shares of the Company's Common Stock and/or 80,000
Public Warrants at a purchase price of $.4125 per warrant. The issuance of any
additional shares by the Company in the future may result in a reduction of the
book value or market price of the then outstanding Common Stock. For the life of
the Underwriters' Warrants, the Public Warrants, non-public warrants and
options, the holders thereof are given the opportunity to profit from a rise in
the market price of the Common Stock. Any rise in the market price of the Common
Stock may encourage the holders to exercise such warrants or options, which may
result in a dilution of the interests of other stockholders. As a result, the
Company may find it more difficult to raise additional equity capital if it
should be needed for the business of the Company while such warrants and options
are outstanding. See "Description of Securities."

SHARES ELIGIBLE FOR FUTURE SALE. Upon the closing of this Offering, there
will be issued and outstanding 3,304,794 shares of Common Stock, of which
800,000 shares will be freely tradable. The remaining 2,504,794 shares of Common
Stock are "restricted securities", as that term is defined under Rule 144
promulgated under the Securities Act. Under recent amendments to Rule 144 by the
SEC, which are effective April 29, 1997, a person who has satisfied a one-year
holding period may, under certain circumstances, sell within any three month
period a number of shares of Common Stock that does not exceed the greater of 1%
of the then outstanding shares of Common Stock or the average weekly trading
volume in such shares during the four calendar weeks prior to such sale. Rule
144 also permits, under certain circumstances, the sale of shares without any
quantity or other limitaiton by a person who is not an affiliate of the Company
and who has satisfied a two-year holding period. Certain shareholders (excluding
officers and directors) holding 1,433,529 shares of restricted Common Stock,
will be eligible to sell such shares under Rule 144 as of the date of this
Prospectus as to 902,996 shares; July 1997 as to 25,333 shares; and, August
through December 1997 as to 528,500 shares. However, shareholders holding
1,133,989 of such shares have agreed not to sell those shares for periods
ranging from 13 months to 24 months from the Effective Date, without the prior
consent of the Representative. Future sales of substantial amounts of Common
Stock, or the potential for such sales, could adversely affect prevailing market
prices of the Company's securities.

Each of the Company's directors and officers, holding a total of 1,071,265
shares of Common Stock and warrants, options and rights to acquire another
641,666 shares of Common Stock, have agreed not to publicly offer, sell or
otherwise dispose of any Common Stock for a period of 24 months after the date
of this Prospectus without the prior written consent of the Underwriters, with
the exception of 21,365 shares which are held by one of the Company's directors
as custodian for his children. All of such shares would, but for the lock-up, be
available for sale as of the date of this Prospectus, subject to certain volume
limitations and other requirements of Rule 144. Future sales of substantial
amounts of Common Stock, or the potential for such sales, could adversely affect
prevailing market prices. See "Shares Eligible For Future Sale."

POSSIBLE RESTRICTIONS ON MARKET MAKING ACTIVITIES IN THE
SECURITIES. Although they have no legal obligation to do so, the Underwriters
from time to time may act as market makers and otherwise effect transactions in
the Securities. Unless granted an exemption by the Commission from Regulation M
under the Securities Exchange Act of 1934 (the "Exchange Act"), the Underwriters
will be prohibited from engaging in any market making activities or solicited
brokerage activities with respect to the Securities for

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the period from five business days prior to any solicitation by the Underwriters
of the exercise of any Public Warrant until the completion of such solicitation
activity. However, the foregoing 5-day restriction period is reduced to one day
where the security has an average daily trading volume of $100,000 and the
public float for the issuer's equity securities is at least $25 million; and,
there is no restrictive period where the average daily trading volume of the
security is $1 million and the public float for the issuer's equity securities
is at least $150 million. As a result, the Underwriters may be unable to
continue to provide a market for the Securities during certain periods while the
Public Warrants are exercisable. The prices and liquidity of the Securities may
be adversely affected by the cessation of the Underwriters' market making
activities.

POSSIBLE DELISTING OF SECURITIES; NASDAQ SMALL CAP MARKET. Prior to this
Offering, there has been no established trading market for the Company's
Securities and there is no assurance that a trading market for such Securities
will develop after the completion of this Offering. If a trading market does in
fact develop for the Securities offered hereby, there can be no assurance that
it will be sustained. Trading in such Securities is subject to official notice
of issuance that the Common Stock and the Public Warrants have been approved for
trading on the NASDAQ SmallCap Market. If the listing is approved, the continued
trading of the Common Stock and the Public Warrants on the NASDAQ SmallCap
Market is conditioned upon the Company meeting certain criteria. The NASD, which
administers NASDAQ, currently requires that, in order for a company's securities
to be listed on the NASDAQ SmallCap Market, the Company must have $4,000,000 in
total assets, a $1,000,000 market value of the public float and $2,000,000 in
total capital and surplus. Further, initial listing requires two market makers
and a minimum bid price of $3.00 per share. Continued inclusion on the NASDAQ
SmallCap Market currently requires two market makers and a minimum bid price of
$1.00 per share; provided, however, if the Company falls below the minimum bid
price, it will remain eligible for continued inclusion if the market value of
the public float is at least $1,000,000 and the Company has $2,000,000 in
capital and surplus. However, NASDAQ has recently proposed revisions to its
listing and maintenance criteria which if adopted would make it more difficult
for a company to become listed and thereafter maintain its listing. The proposed
new listing criteria, in so far as they would be applicable to the Company,
require a company to have net tangible assets of $4,000,000, a public float of
1,000,000 shares, a market value of the public float of not less than $5,000,000
and a minimum bid price of $4.00. The proposed new maintenance criteria require,
among other alternatives, net tangible assets of $2,000,000, a public float of
500,000 shares, a market value of the public float of not less than $1,000,000
and a minimum bid price of $1.00. NASDAQ has indicated that for companies, like
the Company, who are first listed after June 2, 1997 but before the proposed
rules are adopted and become effective, such companies will be listed under the
existing listing criteria but will have to satisfy the new listing criteria
within a period of 90 days after the new listing criteria become effective.
There has been no indication of when the new listing criteria will be approved.

The Company cannot now satisfy the new listing criteria since its public
float after the completion of the Offering will be 800,000 shares and its does
not have $4,000,000 in net tangible assets. The Company is considering possible
alternatives for meeting the public float and asset requirements; however, there
is no assurance that the Company will be successful in meeting the new
requirements, or if successful, that it will be able to maintain its listing
under the new listing maintenance criteria. Should the Company not satisfy the
new listing criteria when required to do so, or should it be unable to satisfy
the NASDAQ maintenance criteria for listing, its Securities may be delisted from
NASDAQ, which delisting could materially adversely affect the trading market for
the Common Stock and/or the Public Warrants. In such event, trading in the
Securities would be conducted in the over-the-counter market known as the NASD
OTC Electronic Bulletin Board, or more commonly referred to as "pink sheets."
The Representative is not presently permitted to make a market in securities
traded on the OTC Electronic Bulletin Board. As a result, an investor may find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's Securities. There can be no assurance that the
Securities will not be delisted. See "Underwriting."

15
<PAGE>
PENNY STOCK REGULATION. In the event the Common Stock is delisted from
trading on NASDAQ SmallCap Market and the trading price of the Common Stock is
less than $5.00 per share, trading in the Common Stock would also be subject to
the requirements of Rule 15g-9 promulgated under the Exchange Act. Under such
rule, broker/dealers who recommend such low-priced securities to persons other
than established customers and accredited investors must satisfy special sales
practice requirements, including a requirement that they make an individualized
written suitability determination for the purchaser and receive the purchaser's
written consent prior to the transaction. The Securities Enforcement Remedies
and Penny Stock Reform Act of 1990 also require additional disclosure in
connection with any trades involving a stock defined as a "penny stock"
(generally, according to recent regulations adopted by the Securities and
Exchange Commission (the "Commission"), any non-NASDAQ equity security that has
a market price of less than $5.00 per share, subject to certain exceptions),
including the delivery, prior to any penny stock transaction, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.
Such requirements could severely limit the market liquidity of the Common Stock
and the ability of purchasers in this Offering to sell their securities in the
secondary market. There can be no assurance that the Common Stock will not be
treated as a penny stock.

ANTI-TAKEOVER CONSIDERATIONS INCLUDING POSSIBILITY OF FUTURE ISSUANCE OF
PREFERRED STOCK. The Company's certificate of incorporation authorizes the
Board of Directors to issue up to 5,000,000 shares of preferred stock in one or
more series, having terms fixed by the Board of Directors without shareholder
vote, including voting, dividend or liquidation rights that could be greater
than or senior to the rights of holders of Common Stock. The rights of holders
of Common Stock will be subject to, and may be materially adversely affected by
the rights of the holders of any preferred stock that may be issued in the
future. The issuance of preferred stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. The Company's certificate of incorporation also
specifically adopts the governance of Section 203 of the Delaware Corporation
Law. Generally, Section 203 prohibits a publicly held Delaware corporation from
engaging, under certain circumstances, in a "business combination" ("Business
Transaction") with an "interested stockholder" for a period of three years after
the date of the transaction in which the person becomes an interested
stockholder (i.e., a person who, together with affiliates and associates, owns
15% or more of the corporation's voting stock). The Board's authority to issue
preferred stock and the provisions of Section 203 could impede any merger,
consolidation, takeover or other business combination involving the Company or
discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of the Company, and any such impediment could serve
to entrench management and may not be in the best interests of the Company's
shareholders. The Company has no current intentions or plans to issue any such
preferred stock. See "Description of Securities--Anti-Takeover Provisions of
Delaware Law; Certain Provisions in Certificate of Incorporation."

16
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 800,000 shares of
Common Stock and 800,000 Public Warrants offered hereby (after deducting
underwriting discounts and commissions and other expenses of the Offering
approximating $994,260) are estimated to be $3,205,740 ($3,434,115 if the
Underwriters' over-allotment option is exercised in full). See "Underwriting."
The Company expects such funds to be utilized over the next twelve months
approximately as follows:

<TABLE>
<CAPTION>
APPROXIMATE
PERCENTAGE
APPROXIMATE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
- ------------------------------------------------------------------------------------ -------------- ------------
<S> <C> <C>
Product Development and Engineering(1).............................................. $ 810,000 25.3%
Advertising, Marketing and Promotion(2)............................................. 807,630 25.2%
Capital Expenditures(3)............................................................. 475,000 14.8%
Payment of Consulting Fee(4)........................................................ 23,000 .7%
Working Capital (5)................................................................. 1,090,110 34.0%
-------------- ------------
TOTAL......................................................................... $ 3,205,740 100.0%
-------------- ------------
-------------- ------------
</TABLE>

- ------------------------------

(1) Includes anticipated costs for software in the amount of $325,000 for new
product lines currently in development (i.e., the CMPR1 (motor protection
relay), and FPR2 and FPR3 (feeder protection relays); engineering costs
associated with product tooling in the approximate amount of $160,000; and
engineering salaries in the approximate amount of $325,000.

(2) Represents anticipated costs associated with advertising and promotion,
including trade shows and trade publications.

(3) Represents anticipated costs associated with purchasing equipment, including
computer hardware, engineering and testing equipment.

(4) Represents payment of consulting fees of approximately $23,000 to Frank J.
Mancini, a director and shareholder of the Company. See "Certain
Transactions."

(5) The Company may use a portion of the proceeds to pay salaries of its
executive officers (estimated at $44,200 per month) and fees to Frank
Mancini, a director, for consulting services ($4,000 per month until
September 1, 1997) to the extent that cash flow from operations is
insufficient for such purposes. See "Management--Employment Agreements," and
"--Consulting Agreements."

The foregoing represents the Company's current estimate of the allocation of
the net proceeds of the Offering based upon certain assumptions relating to the
costs associated with the implementation of the Company's proposed business
operations. Future events, including problems, delays, expenses and
complications frequently encountered by companies which seek to develop new
technologies or establish new services or introduce services to a new market, as
well as changes in economic conditions, regulatory or competitive conditions,
and the success of the Company's marketing activities, may make shifts in the
allocation of funds necessary or desirable. There can be no assurance that the
Company's estimates will prove to be accurate or that unforeseen expenses will
not be incurred.

The Company believes that the net proceeds of this Offering will satisfy the
Company's capital requirements for at least twelve months. During those twelve
months, the Company's efforts will be directed at developing and implementing
its proposed business operations.

Prior to expenditures, the net proceeds of this Offering will be invested
principally in high grade short-term interest-bearing investments. Any proceeds
received upon exercise of the over-allotment option or any of the Company's
Warrants will be used for working capital.

17
<PAGE>
DILUTION

The pro forma negative net tangible book value of the Company at March 31,
1997 was $227,718 or $.09, per share of Common Stock. Net tangible book value
per share is determined by dividing the net tangible book value of the Company
(total tangible assets less total liabilities) by the number of shares of Common
Stock outstanding. After giving effect to the receipt of net proceeds from the
sale of the shares offered hereby, the pro forma, as adjusted net tangible book
value of the Company at March 31, 1997, would have been $2,978,022 or $.90 per
share of Common Stock, representing an immediate dilution of $4.10 (or
approximately 82.0%) per share to the public investors. The following table
illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share....................................... $ 5.00
Pro forma net tangible book value per share before Offering(1)................ $ (.09)
Increase in pro forma net tangible book value per share attributable to public
investors................................................................... .99
Pro forma as adjusted net tangible book value per share after
Offering(2)(3).............................................................. .90
---------
Dilution per share to public investors........................................ $ 4.10
---------
---------
</TABLE>

The following table sets forth, as of the date of this Prospectus, the
number of shares of Common Stock purchased, the percentage of total shares
purchased, the total consideration paid, the percentage of total consideration
paid and the average price per share paid by the existing stockholders of the
Company and the investors in this Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------------- ------------------------- AVERAGE PRICE
NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE
---------- ----------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
Existing Stockholders(1).................... 2,504,794 75.8% $ 2,646,653 39.8% $ 1.06
Public Investors(2)(3)(4)................... 800,000 24.2% 4,000,000 60.2% $ 5.00
---------- ----------- ------------ -----------
Total....................................... 3,304,794 100.0% $ 6,646,653 100.0%
---------- ----------- ------------ -----------
---------- ----------- ------------ -----------
</TABLE>

- ------------------------

(1) Pro forma to reflect (a) repurchase and retirement of 299,000 shares of
Common Stock in exchange for the reduction of the exercise price of warrants
to purchase 400,000 shares of Common Stock from $5.50 to $3.00 per share,
(b) contribution of 25,000 shares of Common Stock without consideration, and
(c) issuance of 17,360 shares of Common Stock under anti-dilution
provisions.

(2) Does not include: (a) up to 120,000 shares and 120,000 Public Warrants
subject to issuance under the over-allotment option; (b) 80,000 shares and
80,000 Public Warrants subject to the Underwriters' Warrant; (c) up to
41,666 shares issuable under license agreement; or (d) other outstanding
options or warrants. To the extent that any warrants or options are
exercised, there may be further dilution to the public investors.

(3) In the event that the Underwriters exercise their over-allotment option in
full, the net tangible book value after this Offering would be $1.03 per
share which would result in an immediate dilution of $3.97 to the public
investors.

(4) Allocates no value to the Public Warrants offered hereby.

18
<PAGE>
CAPITALIZATION

The following table sets forth the debt and capitalization of the Company at
March 31, 1997, and as adjusted to give effect to the sale of 800,000 shares of
Common Stock and 800,000 Public Warrants by the Company in the Offering at $5
per share and $.25 per Public Warrant and the application of the net proceeds
therefrom. This information should be read in conjunction with the financial
statements and the notes thereto, as well as "Summary Financial Information,"
appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1997
----------------------------------------------
PRO FORMA
AS
ACTUAL PRO FORMA(1) ADJUSTED(2)(3)
------------- ------------- ----------------
<S> <C> <C> <C>
Loans payable--stockholders...................................... $ 598,075 $ 598,075 $ 598,075
------------- -------------
Stockholders' Equity
Preferred Stock, $.01 par value; authorized: 5,000,000 shares;
issued and outstanding: none
Common Stock, $.01 par value; authorized: 15,000,000 shares;
issued and outstanding: 2,811,434 actual,2,504,794 pro forma,
and 3,304,794 pro forma, as adjusted......................... 21,280 18,214 26,214
Additional paid-in capital..................................... 2,325,404 2,328,470 5,526,210
Deficit........................................................ (2,499,363) (2,499,363) (2,499,363)
Less prepaid rent.............................................. (13,333) (13,333) (13,333)
------------- ------------- ----------------
Total Stockholders' Equity................................. (166,012) 166,012 3,039,728
------------- ------------- ----------------
Total Capitalization....................................... $ 432,063 $ 432,063 $ 3,637,803
------------- ------------- ----------------
------------- ------------- ----------------
</TABLE>

- ------------------------

(2) Pro forma, as adjusted to reflect the pro forma adjustments referred to in
footnote (1) and gives effect to the sale of 800,000 shares of Common Stock
and 800,000 shares of Public Warrants of the Company in the Offering at $5
per share and $.25 per warrant, net of anticipated expenses of $994,260.

(3) Does not include: (a) up to 120,000 shares and 120,000 Public Warrants
subject to issuance under the overallotment option; (b) 80,000 shares and
80,000 Public Warrants subject to the Underwriters' Warrant; (c) up to
41,666 shares issuable under license agreement; or (d) other outstanding
options or warrants.

19
<PAGE>
DIVIDEND POLICY

The Company does not anticipate paying any dividends on its Common Stock in
the foreseeable future. Any earnings which the Company may realize in the
foreseeable future will be retained to finance the growth of the Company. Future
dividend policy will depend upon the Company's earnings, capital requirements,
financial condition and other factors considered relevant by the Company's Board
of Directors. See "Description of Securities."

MANAGEMENT'S DISCUSSION OF PLAN OF OPERATIONS

THE FOLLOWING DISCUSSION OF THE COMPANY'S PLAN OF OPERATIONS SHOULD BE READ
IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND NOTES THERETO
INCLUDED ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION CONTAINS FORWARD LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD LOOKING
STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE BUT ARE NOT
LIMITED TO THOSE DISCUSSED IN "RISK FACTORS."

OVERVIEW

The Company was incorporated in 1994 for the purpose of engaging in the
development, production and marketing of protection relays for heavy industry
and electric utilities worldwide. The Company's initial products are a motor
protection relay developed to protect medium to large motors, and a feeder
protection relay designed to protect industrial equipment and utility
substations.

From inception to September 1996, the Company's operating activities were
related primarily to recruiting personnel, raising capital, purchasing operating
assets and performing research and development.

The Company's strategy is to develop products for heavy industry that are
price competitive and have performance and other features not found in
competitors' products. As part of product development, the Company first tests a
product at its facility and then "beta" tests the product. Beta testing is the
testing of the unit on a customer's site under the customer's normal operating
conditions with the understanding that there could be undetected "bugs" or
additional features which have not yet been implemented. Feedback from the
customer at the beta testing stage regarding the operation and features of the
unit are analyzed by the Company for possible modification of the unit prior to
final commercial release.The Company plans on beta testing two new motor
protection relay products in May and June 1997. Currently in development and
scheduled for beta testing in August 1997 is a new feeder protection relay. The
Company expects to have an overvoltage/undervoltage relay ready for beta testing
in September 1997. With these additional products, the Company will have a
complete range of relay products for heavy industry and power utilities. Each
new relay is more unique and has a wider potential customer base than its
predecessor. The final product in the Solaris protection relay family, NOVA, is
expected to outperform existing products and provide a range of substation
protection features that have never previously been available in the electric
power utility industry. The Company is in the process of having patent
applications prepared for a patent on NOVA; however, there is no assurance that
a patent will be awarded, or if awarded, there can be no assurance as to the
breadth or degree of protection which a patent, if any, may afford the Company;
that any patent will be upheld if challenged; or that competitors will not
develop similar or superior methods or products outside the protection of any
patent issued to the Company.

RESULTS OF OPERATIONS

REVENUES. Prior to the year ending December 31, 1996, the Company had no
sales. For the year ended December 31, 1996 the Company had sales of $294,734
which generated a gross profit of $96,931. For the three months ended March 31,
1997, the Company had sales of $437,799 which generated a gross profit of
$203,274.

20
<PAGE>
OPERATING EXPENSES: The Company's operating expenses have been about
$130,000 per month during the three months ended March 31, 1997. However, as the
Company expands operations, which the Company believes is essential to achieving
and maintaining market leadership, the Company anticipates that operating
expenses will increase.

In order to meet its cash requirements until the consummation of this
Offering, the Company arranged for factoring and financing of its accounts
receivable. Under a factoring agreement between the Company and Queensbury,
Inc., a Florida corporation, some of whose shareholders are also shareholders of
the Company (none of whom is an officer, director or principal shareholder of
the Company), the Company sold accounts receivable at a 6% discount, plus pays a
fee on the outstanding balance at the rate of 1% per month. The Company is
obligated to repurchase accounts which are delinquent for six consecutive
months. This agreement was terminated effective December 31, 1996, at which time
accounts receivable sold under the agreement were $160,350. At March 31, 1997,
$156,010 of such amount remained uncollected.

The factoring agreement was converted to a revolving line of credit
agreement between the Company and the same lender, effective January 1, 1997.
Under that agreement, the Company may borrow 94.5% of the face amount of
accounts receivable which are collateral for the loans. Interest accrues at 1%
per month and is payable monthly on the outstanding principal balance of each
such loan. The loans are repaid at 100% of the face amount of the collateralized
accounts as the Company receives payments from the customers. The maturity date
for amounts owed under the loan agreement is December 31, 1998. The maximum
amount available under the agreement is $500,000 and at March 31, 1997, there
was an outstanding obligation of $257,241 under this agreement.

Additionally, the Company entered into a cash advance and security agreement
with Framan Company, a business entity owned by Frank J. Mancini, a shareholder
and a director of the Company. Under the agreement, Framan Company advances
funds to the Company for the purchase of parts inventory and equipment and
receives a security interest in the parts and equipment. The advances accrue
interest at 2% above the prime rate and are payable interest only commencing on
the first business day of the month following the closing of the Offering and
continuing on the first business day of each month thereafter until the
outstanding principal and all accrued interest is repaid. Principal is due and
payable one-half on the earlier of June 1, 1999, or the last day of the first
fiscal quarter that the Company's gross revenue exceeds $500,000, subject to
cash flow; and one-half, or more, of the then outstanding principal balance is
due and payable on the last day of each subsequent fiscal quarter that the
Company's gross revenue exceeds $500,000, subject to cash flow. Outstanding
principal and interest is to be paid in full on or before December 31, 1999. As
of March 31, 1997, the Company had been advanced $449,151 under this agreement.

The Company believes that the foregoing arrangements will allow the Company
to have cash available to meet its operating expenses, including inventory
requirements, until the closing of this Offering.

RESEARCH AND DEVELOPMENT: Research and development expenses consist
primarily of salaries and consulting fees to support technological product
development. Costs of software to be sold, incurred after technological
feasibility has been established and until it is available for general release,
are capitalized. Salaries and other material costs are expensed. The Company
believes that continuous development will occur for new products and has added
four new engineers to replace consultants which the Company believes will be
more cost efficient.

During the fiscal year ended December 31, 1996, and the three months ended
March 31, 1997, the Company spent approximately $334,750 and $106,366,
respectively, on research and development. Expected research and development
costs for the fiscal year ended December 31, 1997 are estimated to be $300,000
in salaries for software engineers (4 persons); $300,000 in salaries for
hardware engineers (8 persons); $150,000 for engineering equipment; and $150,000
for product tooling.

21
<PAGE>
SALES AND MARKETING: Sales and marketing expenses, which currently
represent less than 10% of expenses, will grow as more products are developed.
The Company currently develops its own marketing materials in-house to save
costs; however, since the Company is planning to penetrate a global market
place, the Company expects these costs to increase at a faster rate than other
costs.

EXECUTIVE OFFICER SALARIES. Salaries for the Company's five executive
officers for fiscal year ended December 31, 1997 are expected to aggregate
$530,000. See "Management--Employment Agreements."

INCOME TAXES

As of March 31, 1997, the Company had federal net operating loss carry
forwards of approximately $2,460,000. This net operating loss can be carried
forward for fifteen years to offset future taxable income.

FACTORS AFFECTING OPERATING RESULTS

As a result of the Company's limited operating history, the Company does not
have historical financial data for a significant number of periods on which to
base planned operating expenses. Additionally, the Company has not yet generated
enough revenue to become profitable on a month-to-month basis. Accordingly, the
Company's expense levels are based entirely on its expectations as to future
revenues and to a large extent are variable. The Company in the past used
outside independent contractors to support its limited number of development
personnel. However, the Company found that development schedules were difficult
to control and the Company experienced unanticipated development cost overruns.
The Company plans to hire additional personnel and to fund internal research and
development at a level sufficient to meet the Company's planned introduction of
new products. Additionally, the Company plans to increase its sales and
marketing expenses to increase potential customer awareness of its products. The
Company currently has 23 employees and anticipates hiring approximately another
14 employees within twelve months from the date of this Prospectus.

The Company distributes its products to customers directly and through
independent manufactures' representatives and distributors. The Company
anticipates that its largest customer base will be OEMS; however, the Company is
just beginning to exploit the OEM market and it is uncertain whether the Company
can timely supply products in the quantities that OEMS may require.

The Company is dependent on and intends to use the proceeds of this Offering
to implement its proposed expansion. The Company anticipates, based on currently
proposed plans and assumptions relating to its operations (including the costs
associated with, and the timetable for, its proposed expansion), that the
proceeds of this Offering, together with projected cash flow from operations,
will be sufficient to satisfy its contemplated cash requirements for at least
twelve months following the successful consummation of this Offering.

The Company expects to experience significant fluctuations to future
quarterly operating results that may be caused by many factors, including demand
for the Company's products, introduction of new technological developments, the
introduction, enhancement and market acceptance of new and existing products,
the introductions of competing products, and general economic conditions.
Further, the Company's products have long sales cycles. Occasionally, a product
may be evaluated by customers for a period of time, after which the Company may
be required to modify the product to meet the customer's needs, after which the
product is evaluated again prior to a purchase order being issued. Payment for
foreign sales is normally net 60 days and net 30 days for domestic sales. The
Company anticipates that a significant portion of its business will come from
foreign sales. As a result, the Company believes that period-to-period
comparisons of its results of operations will not necessarily be meaningful and
should not be relied upon as any indication of future performance.

22
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has primarily financed its operations through private
sales of equity and debt securities as well as loans and capital contributions
by stockholders including the factoring and accounts receivable financing and
cash advance agreements.

From December 1994 to December 1995, the Company raised in the aggregate
$580,000 through the sale of Common Stock. On June 3, 1995 certain stockholders
advanced $122,154 to the Company which has been partially repaid leaving a
balance at October 31, 1996 of $85,121. During January to April of 1996 a
stockholder advanced the Company $60,840 which was subsequently converted to
64,994 shares of Common Stock. During January to April of 1996, the Company
borrowed an aggregate of $178,087, which principal amount plus interest totaling
$190,703 was converted to 203,726 shares of Common Stock. During March to May
the Company sold convertible debentures for net proceeds of $54,980. These were
converted to 25,333 shares of Common Stock effective July 1, 1996. On May 15,
1996 the Company completed a bridge financing of $250,000 which was repaid from
proceeds of a subsequent private placement. Starting in June 1996 through
November 15, 1996, the Company conducted a private placement in which the
Company sold 50 units resulting in net proceeds of $1,305,000 after payments to
the placement agent. See "Certain Transactions."

The Company began generating sales in October 1996 and for the year ended
December 31, 1996 and the three months ended March 31, 1997 had sales of
$294,734 and $437,799, respectively. During the three months ended March 31,
1997, the Company shipped approximately 373 FPRI units and 58 CMPR2 units.
During the six months ended September 30, 1997, the Company expects to ship
approximately 1200 FPR1 units and approximately 180 CMPR2 units to customers in
North America, Taiwan, Brazil and South Africa. Additionally, the Company has
orders subject to satisfactory completion of development and beta testing for
certain of its other products. The Company believes that the revenue to be
generated from these sales together with the proceeds from this Offering will be
sufficient to meet its anticipated needs for working capital, capital
expenditures, new research and development, and increased engineering staff for
at least the next 12 months. Thereafter, sales from products that have been
developed in 1996 are expected to provide sufficient cash or provide the basis
for conventional bank financing for growth of accounts receivable and inventory.
Prior to the closing of this Offering, the Company expects to utilize its line
of credit under the revolving line of credit and cash advance agreements in
order to generate cash.

PROPOSED ACCOUNTING STANDARDS

On June 14, 1996, the American Institute of Certified Public Accountants
issued an exposure draft of a Statement of Position on Software Revenue
Recognition which may require the Company to change their method of recognizing
revenue effective for the year ending December 31, 1997. The Company has not
analyzed or determined the effect, if any, which may result, but management of
the Company does not believe there will be a material effect of such change and
any change would be charged to operations.

23
<PAGE>
BUSINESS

GENERAL

Apollo International of Delaware, Inc. (the "Company") was formed in
Delaware in November, 1994 with its principal place of business located in
Apollo Beach, Florida. The Company designs and sells to industry and electric
utilities electric power protection and control products utilizing new computer
and fiber optics technologies. The Company is developing concurrently two
product lines, the first of which (designated as "CMPR" products) is designed to
monitor motors used by industrial users, and the second of which (designated as
"SOLARIS" or "NOVA" products), is designed to monitor electric power
transmission for industrial users and electric utilities. The target market for
the motor protection and control product line is industrial end users such as
steel mills, mining operations, pulp and paper mills, and petrochemical
companies. The NOVA product line is designed for the utility substation
marketplace which includes, public and investor owned utilities, cogeneration
facilities, and large industrial users who operate their own electric power
substations. The following discussion contains forward looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward looking statements. Factors
that might cause such a difference include, but are not limited to, those
discussed in "Risk Factors."

PRODUCTS

THE CONTROL AND MOTOR PROTECTION RELAYS (CMPR).

The CMPR products are motor protection relays designed for the medium to
heavy industrial electric motor market. The CMPR is a hardware and software
package designed to provide a high level of protection to expensive electric
motors used throughout heavy industries such as mining operations, chemical and
petrochemical, steel mills, and paper manufacturing facilities. The CMPR, which
is attached to a motor directly or indirectly through a circuit breaker, is a
digital protection device (relay) similar to a circuit breaker that monitors the
motor and either shuts down the motor or sets off an alarm upon detection of
irregularities such as shorts to ground, loss of a phase of power, overheating,
failing gears, or an unbalanced rotor. The CMPR offers an advantage over other
types of motor protection devices because it contains its own "intelligence" and
as such is not required to communicate with any other "off-site" device for
instructions before making the decision to shut down a motor, sound an alarm, or
do nothing.

The Company is currently marketing the CMPR2 relay which is designed to
protect motors with a minimum of 5000 horsepower. The motor protection and
control products share a common technology and the Company anticipates
developing and marketing variations of the CMPR2 offering varying degrees of
motor protection (i.e., monitoring voltage, ground current, motor temperature)
and/or control (i.e., starting up and shutting down the motors), depending on
the types of motors and needs of potential customers. Under current development
and scheduled for beta testing in May 1997 is the CMPR1 relay product which is
designed for small to medium motors with horsepower ranging from 100 HP to 5,000
HP. The CMPR1 products are versions of the CMPR2 in a streamlined package with
fewer features selling at a lower price. Management believes that the market is
substantially larger for the CMPR1 than for the CMPR2 due to the larger number
of lower horsepower motors used in industry. The Company expects to release the
first of such products in the second quarter of 1997. The Company also has in
development another variation of the CMPR2 which is designed for motors which
require more control features than motor protection features (the MCR1-motor
control relay). The Company anticipates that this product will be ready for beta
testing by the third quarter of 1997. Also in development is the SMPR1
(synchronious motor protection relay) which the Company expects to have ready
for beta testing approximately in the third quarter of 1997. The price range for
a CMPR2 motor protection relay is $2,195 to $3,734 per unit, depending on the
number of added features the customer requests. The CMPR1 price range is
expected to be $1,095 to $1,570 per unit. The Company expects to price the SMPR1
synchronious motor protection relay at $1,595 per unit.

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<PAGE>
THE NOVA PRODUCT FAMILY

The NOVA product line is a family of feeder breaker relays that are designed
to provide protection and control for both electric power utility substations
and heavy industrial facilities operating their own substations. The Company
believes NOVA's unique design will perform more rapidly than existing products
and provide a range of substation protection features that previously have not
been available in the Company's target markets. Ultimately, the NOVA products
will be self-contained, stand alone devices (i.e., act independently with their
own intelligence without having to communicate with a remote or off-site device
for instruction) that monitor and send communications regarding irregularities
in power transmission (i.e., loss of electric power from a transformer, an
imbalance in power, shorts to ground, etc.). The NOVA feeder breaker relays will
be installed in electric power substations (which contain transformers and
breakers). A transformer is a device that transforms variations of electric
current into variations of voltage and current and sends power to different
locations over several feeder lines, which, in turn, pass through other, smaller
down-stream substations, where power is eventually disseminated to final
destinations such as hospitals, office buildings, industrial plants and
residential areas. On each such feeder line is a feeder breaker to which relays
are attached. The relays tell the breaker to open or shut in response to
irregularities in power transmission. The relays currently used by electric
power utilities (and industries that have their own electric power substations)
do not have their own "intelligence" and therefore must first communicate with a
remote terminal unit ("RTU") or a programmable logic controller ("PLC") before
reacting. The RTU/PLC contains the information necessary to analyze the problem,
make a decision and transmit that decision to the relay, which then reacts by
either shutting off or opening up the breaker. On the other hand, NOVA relays
are designed to contain their own intelligence and therefore can respond more
quickly to a problem.

The Company is initially developing three models of its NOVA line. The first
model "Solaris" (FPR1), is designed primarily for use by heavy industry. Solaris
is a solid state digital tripping device for large industrial breakers. It can
be programmed to trip the breaker under certain conditions or to send an alarm
under other circumstances. The Company anticipates that the Solaris will benefit
major industrial operations where there is a multitude of motor-operated
equipment (i.e., conveyor belts, paint stations, robotics, machinery), which may
be synchronized and where precise monitoring of motor functions is critical. The
price for the Solaris FPR1 is $1,095 per unit.

In development is a more sophisticated version of Solaris (FPR3) which is
expected to be beta tested during May 1997 and, subject to successful testing,
commercially marketed by the third quarter of 1997. The FPR3 model is designed
for the electric power utility industry and has automatic reclosure capability
when tripped. It will contain more information than current feeder breaker
relays, but will still communicate with the RTU or PLC. However, it will provide
more information to the RTU/PLC, thereby shortening processing and response time
by the RTU/PLC. The projected price for the FPR3 unit is $1,695. An FPR2 model
will be a scaled-down version of the FPR3 for which the Company has not yet
determined a price. It is anticipated that the FPR2 model will be ready for beta
testing during June 1997.

The Company also has in development a feeder protection relay with automatic
closure capability and under/over voltage protection and a feeder protection
relay with automatic closure and direction determination capability. The Company
has not established beta test dates or prices for these products.

The Company's flagship product will be the most sophisticated version of
feeder breaker relays in the NOVA family and its development is scheduled to
commence during the third quarter of 1997. This NOVA design is expected to
perform more rapidly than existing products and provide a range of substation
control features that have never previously been available in the electric power
utility industry. Each feeder breaker relay will be self contained, having its
own intelligence and ability to react independently of an RTU/PLC, thus
rendering the RTU/PLC obsolete. Each NOVA unit is designed to communicate with
other NOVA units and the customer via a high speed data network. By combining
self contained intelligence and communications via fiber optics and
sophisticated software, the response time to an

25
<PAGE>
electrical irregularity is expected to be reduced to milliseconds from several
seconds. In addition to a faster response time, the Company anticipates that
electric utilities will save the cost of an expensive RTU/PLC plus the cost of
wiring. The Company estimates that wiring requirements will be reduced by
two-thirds with the NOVA flagship system. The commercial availability of the
product will depend on beta testing results and any refinements that may be
required. At this time the Company expects to commence beta testing the product
in the third quarter of 1997. As with the CMPR product line, the NOVA product
line will share a common technology with variations for emphasizing different
purposes.

MANUFACTURING AND MATERIALS

The Company develops and designs its products, the associated test
procedures and produces assembly and operations manuals for customers' use. The
Company contracts with third party manufacturers for the manufacture of product
components which the Company assembles at its facilities. The Company believes
that such relationships will afford the most competitive pricing and the Company
will not be dependent on one source for production. However, the Company has
limited control over the manufacturing process from the perspective of quality
control and production of a sufficient number of products to meet demand.

The Company purchases raw materials for its products from approximately
eight suppliers. Since industry standard components are typically used to
produce the Company's products, there are many sources for raw materials and the
Company is not dependent on any one supplier of materials. Suppliers for custom
components, such as printed circuit boards, can be quickly tooled in the event
of an interruption in supply by the Company's current vendors.

RESEARCH AND DEVELOPMENT

During the fiscal year ended December 31, 1996 and the three months ended
March 31, 1997, the Company spent approximately $334,750 and $106,366,
respectively, on research and development. The Company plans to further expand
its engineering department to focus on research and development of additional
products, including the completion of the NOVA line of products utilizing the
proceeds of this Offering. These "design teams" will work closely with the
Company's field engineers, sales and marketing staff to evaluate additional
customer needs and to further advance the state of its substation control and
motor protection product development.

PATENTS AND COPYRIGHTS

The Company is in the process of having patent applications prepared for
certain individual modules of its products. The Company has not previously
applied for patent or copyright protection for its products nor has it conducted
a patent search (other than through university library resources and the
Internet) due to a lack of sufficient working capital. Although the Company has
not determined whether various products are patentable as a whole, or even
whether it can obtain patents and copyrights on certain components, the Company
plans to obtain copyrights and patents on the various modules of the overall
system, which the Company anticipates will provide an effective barrier to
infringement by third parties. Although the Company anticipates obtaining
patents for the NOVA system and/or its various modules, the patent process is
long and complex, and there is no assurance that the Company will be successful
in obtaining patents on any or all of its products. There may be other, similar
products currently being developed or subject to superior patents or copyrights,
thereby subjecting the Company to potential liability claims based on patent or
copyright infringement. See "Risk Factors--No Patents or Intellectual Property
Registration; Possible Non-Exclusivity of Technology; Potential Legal Action."

26
<PAGE>
SALES AND MARKETING

The Company has been establishing relationships with a network of
independent manufacturer's representative organizations strategically located
throughout the United States and selected international markets for the
marketing of its Solaris and NOVA products. As of the date of this Prospectus,
the Company has entered into agreements with 13 domestic and 6 international
representatives. The Company also expects to enter into agreements with domestic
and international OEMS, VARS and systems integrators. The Company also plans to
sell directly to certain customers. The Company's marketing strategy utilizes
public relations, trade media advertising, product sales materials and other
direct distributor and customer relations support.

The Company plans to first concentrate its internal marketing efforts on
forging contractual relationships with OEMS and permit the OEM to put its own
label on certain CMPR products. In January, 1996 the Company entered into its
first OEM agreement with Phasetronics, Inc., a manufacturer and distributor of
solid state power and motor control products, some of which are distributed
under the "Motortronics" label. Under the agreement, the Company supplies its
CMPR motor protection relays to the Phasetronics, on a non-exclusive basis, who
in turn distributes the relays worldwide under its own Motortronics label. The
agreement has a term of two years and to date, the Company has sold 24 relays
under this agreement and has received a purchase order for another 100 relays,
deliverinig 30 units during the three months ended March 31, 1997. Delivery of
the remaining 70 units is yet to be scheduled.

The Company expects to enter into similar arrangements with other OEMS. The
Company believes that this marketing effort will give the Company exposure to
some of the largest users of electric motor power in the United States.

The Company entered into a second agreement with Phasetronics pursuant to
which the Company agreed to design, develop, manufacture and supply that company
with a solid state digital starter module (inclusive of communications control
software) according to specifications supplied by the OEM. The OEM expects to
use the module in the development and marketing of a digital soft start device
for motors. The module has been completed and delivered to the customer.
Although the Company does not have any current plans to enter into similar
product development arrangements with other companies, preferring instead to
sell completed products to the OEM market, in the future the Company may enter
into agreements with third parties to develop specific products for them.

As the Company diversifies its customer base, it will have less dependence
on any one customer. The majority of the Company's 1996 sales were allocated
between Jeanelac (37%), US Steel (30%), and Phasetronics (28%). During the three
months ended March 31, 1997, the majority of the Company's sales were allocated
between Jeanelac (67%), US Steel (20%), and Phasetronics (7%). Both Jeanelac, a
distributor, and Phasetronics, an OEM, resell the Company's products to numerous
end users. The loss of any one of these customers during the Company's initial
growth could have a material adverse effect on the Company. However, the Company
has begun selling products to Hawker Siddeley and Iscor Steel and contracts have
been signed with distributors in Brazil, Columbia, Ecuador, Peru, Taiwan and
Namibia who have placed initial inventory orders. The Company is currently
conducting negotiations with distributors and/or end users in China and the
United Kingdom which the Company believes will be completed during the second
quarter, 1997. See "Risk Factors -- Dependence on Major Customers."

COMPETITION

The Company faces competition from manufacturers of the existing technology
products currently used by the electric power protection and control market.
Companies such as General Electric, Siemens A.G., GEC Alsthom, Inc., and ABB
Industrie A.G., are established companies which control a substantial share of
the domestic and international market for motor control and relay products and
have greater name recognition and financial resources than the Company. Although
the Company believes it has no current competitor manufacturing high technology
products similar to the CMPR or NOVA, there is no

27
<PAGE>
assurance that such competitors will not emerge and further they may have more
resources than the Company for development, manufacturing and marketing their
products.

EMPLOYEES

As of December 31, 1996, the Company had 23 employees, comprised of 13
engineers, 6 marketing and sales personnel and 4 administrative personnel, all
of which are full-time employees. The employees are not represented by a union
and no work stoppages have occurred since the Company's inception.

GOVERNMENT REGULATION

To the Company's knowledge, the Company's products are not subject to
governmental regulation in the United States. To the Company's knowledge, there
are no specific foreign governmental regulations covering its products in the
countries in which it presently contemplates selling its products. However, in
such foreign jurisdictions, the products are regulated by generally applicable
import and currency control regulations.

INSURANCE

The Company maintains $1 million in product liability insurance coverage in
addition to $1 million general liability insurance coverage. The Company does
not have errors and omissions insurance at this time.

PROPERTY

The Company's facilities are located at 6542 North U.S. Highway 41, Apollo
Beach, Florida 33572 where it leases its office and plant space comprising
approximately 7,230 square feet. The lease expires as to 5,630 square feet on
March 31, 1999 and expires as to approximately 1,600 square feet on October 31,
1998. The lease provides for a monthly rental of $6,873.26. However, in April
1996, the landlord gave the Company a $20,000 credit toward the rent in exchange
for 21,366 shares of the Company's Common Stock, which credit is being off-set
against the rent at $555.56 per month. The landlord is not affiliated with the
Company or any of its directors or officers. The Company believes that the
facilities are adequate for its purposes for the foreseeable future.

LEGAL PROCEEDINGS

There are no legal proceedings pending to which the Company or any of its
property is subject, and to the knowledge of the Company, there are no such
proceedings threatened. There can be no assurance that any future legal
proceedings will not have a material adverse effect on the Company's business,
reputation or financial condition.

28
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follow:

<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE
- --------------------------------------- --- --------------------------------------------------
<S> <C> <C>
David W. Clarke........................ 48 President, Chief Executive Officer; Chairman
Christine Clewes....................... 46 Vice President, Marketing; Director
Steven D. Smith........................ 43 Vice President, Operations; Director
Gregory C. Hamilton.................... 47 Director
Mathias E. Lukens, Jr.................. 46 Director (Vice Chairman)
Frank J. Mancini....................... 75 Director
Robert K. Swatland..................... 56 Vice President, Sales
Donald P. Louw......................... 40 Vice President, International Sales
</TABLE>

David W. Clarke, one of the Company's founders, has served as its President
and Chief Executive Officer since its inception in November 1994 and was elected
Chairman in September 1996. Prior to founding the Company, Mr. Clarke was a
sales representative for GF Electro, a power utility industry representative,
from April 1994 to November 1994. From April 1992 to April 1994, Mr. Clarke
co-founded and was employed by WHR Corporation, a high technology firm
specializing in data communications for multimedia firms. Mr. Clarke served as
Vice President until WHR was dissolved in April 1994. In April 1991, Mr. Clarke
co-founded and was director and Executive Vice President of Sales and Marketing
for Watch Hill Research, a high technology manufacturing firm specializing in
high speed data links and located in Providence, Rhode Island. That company's
domestic operations were sold in 1992. In November 1984, Mr. Clarke co-founded
Sequel Data Communications, a high tech data switching manufacturer based in
Raleigh, North Carolina. He served as Executive Vice President and Director
until the company was sold in August 1990. Mr. Clarke is married to Christine
Clewes, a founder, director and officer of the Company.

Christine Clewes, one of the Company's founders, has been its Vice President
of Marketing and a Director since the Company's inception in November 1994.
Prior to founding the Company, Ms. Clewes was the director of Sales and
Marketing for WHR Corporation since 1992, where she had responsibility for large
direct commercial accounts and all US Government accounts. From 1991 through
1992, Ms. Clewes managed her own firm, C2 Communications, a sole proprietorship,
located in Reston, Virginia which focused on government contracts and large
national accounts. Ms. Clewes is married to David W. Clarke, a founder, director
and officer of the Company.

Steven D. Smith joined the Company in February, 1996 as Vice President of
Operations and was elected as a Director in September 1996. Prior to joining the
Company, from 1994 to 1996, he was employed as President and CEO by Innovative
Concepts & Manufacturing Company, Boca Raton, Florida, a provider of
manufacturing and operational consulting services to various industries. Prior
to founding Innovative Concepts, from 1993 to 1994, he was employed as a
consultant to Reynolds International, Inc., a provider of environmental
consulting services. In 1978 Mr. Smith founded Manutek, Inc., an electronics
manufacturing firm where he functioned as it's President and CEO through 1993.

Gregory C. Hamilton, has been a director since September 1996. Mr. Hamilton
is an independent public accountant who has conducted a public accounting
practice in Bradenton, Florida since 1983. He has been the Company's business
accountant since November 1994. Mr. Hamilton has an accounting degree from the
University of South Florida in Tampa, Florida and is a Certified Public
Accountant. While operating his practice, Mr. Hamilton also served as an adjunct
professor in accounting and tax at the University of Tampa.

Frank J. Mancini has been a director of the Company since September, 1996.
He is a shareholder, director and since March 1995 the President and Chief
Executive Officer of The Mancini Packing

29
<PAGE>
Company, Zolfo Springs, Florida, prior to which he had been Vice President of
that company since 1946. Mr. Mancini receives consulting fees from the Company
and has advanced the Company funding for acquisition of parts pursuant to a cash
advance agreement. Mr. Mancini will receive $23,000 in consulting fees from
Offering proceeds. See "Management--Consulting Agreements" and "Certain
Transactions."

Mathias E. Lukens, Jr., has been a director of the Company and its Vice
Chairman since September, 1996. Mr. Lukens has been a Vice President, director
and shareholder of Access Solutions International, Inc., North Kingston, Rhode
Island, a computer software developer since January 1996. From April 1994 to
January 1996 he was President and CEO of that company. Mr. Lukens was President
of WHR Corporation from May 1992 to April 1994. From June 1990 to March 1992 he
was President of Watch Hill Research, Providence, Rhode Island. Mr. Lukens
receives certain consulting fees and was issued 250,000 common stock purchase
warrants pursuant to a consulting agreement. Mr. Lukens has licensed certain
software to the Company pursuant to an agreement and under the terms of the
agreement will receive up to $125,000 in cash and 41,666 shares of Common Stock
of the Company. See "Management--Consulting Agreements" and "Certain
Transactions."

Robert K. Swatland has been Vice President of Sales since October, 1996.
From March 1995 to October, 1996, Mr. Swatland was national sales manager for HT
Communications, Inc., Simi Valley, California, a manufacturer of wide area
communication devices. From April 1994 to March 1995, Mr. Swatland sold wide
area communications equipment as a sales representative for his own company, RKS
Enterprises, Wheaton, Illinois. Mr. Swatland served as Vice President of Sales
for Watch Hill Research from March 1992 to March 1994, Providence, Rhode Island,
a high technology manufacturing firm that specialized in high speed data links.
From April 1987 to March 1992, Mr. Swatland was employed as a regional manager
by Sequel Data Communications, Raleigh, North Carolina, a high technology data
switching manufacturer.

Donald P. Louw has been Vice President of International Sales since March
1996 and is currently working for the Company in South Africa. Prior to joining
the Company, Mr. Louw was employed by Siemens LTD South Africa in its motor
protection department from 1990 to March 1996, where he was Senior Project
Engineer. Prior to Siemens, he was employed by G E C Alstrom South Africa in its
motor protection department, where he also held the position of Senior Project
Engineer.

EXECUTIVE COMPENSATION

The following table sets forth cash compensation paid by the Company to, as
well as any other compensation paid to or earned by, the President and Chief
Executive Officer of the Company and those executive officers compensated at or
greater than $100,000 for services rendered to the Company in all capacities
during the fiscal year ended December 31, 1996. For information regarding
current compensation paid to the Company's executive officers, see "Employment
Agreements."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
- ----------------------------------------------------------------------------------------------
FISCAL YEAR OTHER ANNUAL
NAME AND POSITION ENDED 12/31 SALARY(1) BONUS COMPENSATION
- ----------------------------------------- ------------- ---------- --------- -------------
<S> <C> <C> <C> <C>
David W. Clarke.......................... 1996 $ 113,423 -- --
President, CEO 1995 $ 57,692(2) -- --
</TABLE>

- ------------------------

(1) Reflects annual compensation earned for the fiscal years ended December 31,
1996 and 1995 in the form of salary, bonus or other annual compensation. No
executive officer received any long-term compensation (e.g., restricted
stock awards, securities underlying options/stock appreciation rights,
long-term incentive plan payouts or other long-term compensation).

(2) Reflects $60,000 salary, of which $57,692.25 was paid and $2,307.69 accrued
in fiscal 1995.

30
<PAGE>
DIRECTOR COMPENSATION

Directors who are employees of the Company do not receive compensation for
serving as directors. The Company anticipates compensating its independent
directors for their services in the form of fees and/ or stock options, yet to
be determined. All directors will be reimbursed for their reasonable
out-of-pocket expenses incurred in connection with attending meetings of the
Board of Directors and for other expenses incurred in their capacity as
directors of the Company.

EMPLOYMENT AGREEMENTS

The Company entered into a five year employment agreement with David W.
Clarke as the Company's President and Chief Executive Officer, commencing June
1, 1996. The term of the agreement may be automatically extended for successive
one (1) year terms, unless notice of termination is given ninety (90) days prior
to the expiration of the term or any extension period thereafter. The agreement
provides for an initial annual base salary of $150,000, subject to increases, in
addition to annual cost of living increases, based on the Company's annual gross
sales, as follows: For each $1,000,000 in annual gross sales, as calculated in
accordance with Generally Accepted Accounting Principles, in excess of
$10,000,000 but less than $30,000,001, Mr. Clarke shall receive an additional
$5,000 in annual base salary, commencing in the next fiscal year; PROVIDED,
HOWEVER, that during the applicable fiscal year, the Company's earnings before
interest and taxes are at least 10% of the annual gross sales. The agreement
also provides that an independent committee of Board members may award Mr.
Clarke discretionary bonuses.

Mr. Clarke's employment agreement provides for certain severance payments to
be made to him or his estate as follows: (i) in the event of death, any accrued
and unpaid salary, vacation and bonus, and one year's annual base salary then in
effect, payable in 12 equal monthly installments; (ii) in the event of permanent
disability, three years of annual base salary then in effect, and any unpaid
bonus, payable in 36 equal monthly installments (inclusive of any disability
payments paid to him from any Company-sponsored disability plan or disability
insurance), plus continued coverage, at the Company's expense, under the
Company's major medical, dental and disability plans, or the monetary
equivalent, for a period of 36 months; (iii) in the event of termination without
cause, the full compensation to which he would otherwise be entitled under the
employment agreement, payable in one lump sum upon termination, plus continued
coverage under the Company's major medical, dental and disability plans, or the
monetary equivalent, for a period of 24 months; and, (iv) in the event of
non-renewal of the employment agreement by the Company, one year's annual base
salary then in effect, payable in 12 equal monthly installments. In the event
that the Company terminates Mr. Clarke within nine months of a change in control
of the Company, Mr. Clarke will be entitled to receive in one lump sum payment,
three times his annual base salary for the remainder of the term of his
employment agreement, provided that such payment shall be based upon a minimum
period of three years.

Under the terms of his employment agreement, Mr. Clarke is subject to a
covenant not to compete with the business of the Company anywhere in the world
during the term of his employment with the Company and for a term of five years
following the expiration or termination of his employment agreement.

The Company also entered into employment agreements with Christine Clewes
(Vice President of Marketing), Steven D. Smith (Vice President of Operations),
Robert K.. Swatland (Vice President of Sales) and Donald P. Louw (Vice President
of International Sales). These employment agreements are substantially similar
and were entered into on July 1, 1996 as to Ms. Clewes and Mr. Smith, and March
22, 1996 and November 1, 1996 as to Messrs. Louw and Swatland, respectively. Mr.
Swatland's agreement is for a term of two years. The other agreements have an
initial period of four (4) years and all the agreements and are automatically
renewable for successive two (2) year terms, unless notice of termination is
given prior to the renewal period. The agreements provide for the following
annual base salaries, subject to increases for annual cost of living
adjustments: Ms. Clewes ($100,000); Mr. Smith ($120,000); Mr. Swatland
($80,000); and Mr. Louw ($80,000). Except for Ms. Clewes' employment agreement,
the

31
<PAGE>
agreements provide that the executives will be entitled to stock options under
the Company's stock option plan, as determined by the Board of Directors. The
number and exercise prices of the options shall be determined in accordance with
such plan. See "--Employee Stock Option Plan."

Ms. Clewes is entitled to receive additional compensation pursuant to the
terms of her employment agreement in the amount of one and one-half percent of
the net sales of the Company's products within the United States. For purposes
of the agreement, net sales is defined as the gross sales price of the Company's
products, less (a) any commissions paid to the third parties by the Company with
respect to such products, (b) sales tax, if any, and shipping and handling
charges.

Mr. Louw is entitled to receive, under his employment agreement, additional
compensation equal to three percent of the net sales of the Company's products
outside of North America.

The agreements provide for severance payments in the event that the Company
terminates the executives without cause, or for permanent disability or death in
an amount equal to six (6) months of the executive's annual base salary. They
also be entitled to any major medical, dental and disability plans available to
employees generally for the six month period, or the monetary equivalent in the
event of termination without cause or permanent disability. The employment
agreements contain covenants not to compete with the business of the Company
during the term of employment and for a period of two years following the
expiration or termination of the employment agreements.

Although all of the employment agreements discussed above contain
non-compete restrictions during and after termination of employment (five years
in the case of Mr. Clarke, and two years in the case of other executive
officers), a state court reviewing the enforceability of any such covenant not
to compete may decline to enforce, or may enforce in part, such a covenant based
on various factors. There is no assurance that if a former employee challenges
the covenant not to compete, that a court would declare any portion or all of
the covenant enforceable.

The Company may enter into other employment agreements with current and
future employees on terms as deemed appropriate by the Company's Board of
Directors. The Company anticipates hiring a Chief Financial Officer after the
closing of the Offering.

CONSULTING AGREEMENTS

The Company entered into consulting arrangements with four separate
consultants for business advice on non-operational aspects of the Company's
business. Under one such agreement, the Company issued 299,000 shares of the
Company's Common Stock and 400,000 Common Stock purchase warrants to Perryman
Corp. N.V. ("Perryman") for consulting services rendered through May 10, 1996,
the agreement's termination date. Perryman is an international business
consulting firm which assisted the Company in connection with assessing the
market potential of various foreign countries and in identifying and contacting
potential customers in certain of those countries. Pursuant to a repurchase
option provision in the consulting agreement, the Company recently repurchased
and retired the 299,000 shares in exchange for the reduction of exercise price,
for nominal consideration and the reduction of the exercise price of the 400,000
warrants from $5.50 per share to $3.00 per share. Further, the warrants, which
originally contained registration rights and were to be automatically modified
to conform to the same terms and conditions as the Public Warrant, were amended
to delete any such registration rights and modification provisions. See
"Description of Securities--Warrants."

The Company is also party to a five year consulting agreement with Imagine
Holdings for business advice services, commencing June 1, 1996. The consultant's
services include strategic planning and advice in respect of foreign market
negotiations. In respect of such services, the Company agreed to pay the
consultant 250,000 Common Stock purchase warrants, exercisable at $4.00 per
share commencing June 1, 2000 (unless the Company agrees to an earlier exercise)
until June 1, 2002 and reimbursement of the consultant's reasonable expenses
incurred in connection with the agreement. The consulting agreement provides for
certain piggy-back registration rights for the shares underlying the warrants.
The consultant

32
<PAGE>
has given David W. Clarke, President of the Company, a voting proxy for the
shares issued in respect of the exercise of the warrants, until the earlier of:
(i) June 1, 2002, and (ii) the date that the shares issuable upon exercise of
the warrants are included in a registration statement for a secondary public
offering of the Company's Common Stock. Any unexercised warrants may be
terminated by the Company upon the occurrence of certain events including a
breach of the agreement by the consultant. The agreement requires the consultant
to not disclose the Company's confidential information and also contains a
restriction on competition with the Company during the term of the agreement and
for three years after termination of the agreement. In consideration of making a
short term loan in the amount of $50,000 to the Company, which loan has been
repaid, the consultant was also issued a warrant for 50,000 shares of Common
Stock on the same terms and conditions as the other warrant, except it is
exercisable at $5.50 per share. See "Description of Securities--Warrants," and
"--Registration Rights."

In addition, in November 1996, the Company entered into a five year
consulting agreement with Mathias E. Lukens, Jr., a director (and Vice Chairman)
of the Company, for consulting services in connection with administrative,
business development and product development matters. Specific services include
engineering and re-engineering of software and advice on market identification
and expansion. Pursuant to the agreement, Mr. Lukens was issued 250,000 common
stock purchase warrants, exercisable at $5.50 per share commencing June 1, 2000
(unless the Company agrees to an earlier exercise) until June 1, 2002. The
warrant contains "piggy-back" registration provisions for the shares issuable
upon exercise of the warrants. Mr. Lukens gave David W. Clarke, President of the
Company, a voting proxy for the shares issued in respect of the exercise of the
warrants, until the earlier of (i) June 1, 2002, and (ii) the date that the
shares are included in a registration statement for a secondary offering of the
Company's Common Stock. Mr. Lukens is also reimbursed for expenses reasonably
incurred in performance of his duties under the agreement. The consulting
agreement may be terminated under certain circumstances, including breach of the
agreement and upon such termination, the consultant would be entitled to
exercise only a PRO RATA portion of the unexercised warrants based on the number
of months service provided under the consulting agreement. The agreement
requires the consultant to not disclose the Company's confidential information
and also contains a restriction on competition with the Company during the term
of the agreement and for three years after termination of the agreement.

In December 1996, the Company formalized a consulting relationship with
Frank J. Mancini, a principal shareholder and director of the Company, pursuant
to which Mr. Mancini provides the Company with business and day-to-day
operations advice. Pursuant to the agreement, Mr. Mancini will be paid $4,000
per month commencing the first day of the calendar month following the closing
of the Company's initial public offering, and to and including September 1,
1997. The agreement expires September 30, 1997. The agreement also contains
non-disclosure and non-compete restrictions applicable during and after
termination of the consulting relationship. The Company plans to pay Mr. Mancini
$23,000 from Offering proceeds for consulting advice in connection with various
operational matters, which fees are independent from the fees to be paid under
the consulting agreement.

Although the consulting agreements discussed above contain non-compete
restrictions during and after termination of the consulting relationship, a
state court reviewing the enforceability of any such covenant not to compete may
decline to enforce, or may enforce in part, such a covenant based on various
factors. There is no assurance that if a former consultant challenges the
covenant not to compete, that a court would declare any portion or all of the
covenant enforceable, except as would otherwise be enforceable based on
fiduciary obligations imposed on officers and directors.

EMPLOYEE STOCK OPTION PLAN

In June 1996, the Company's Board of Directors adopted and its shareholders
approved the Company's 1996 Employee Stock Option Plan (the "Plan") under which
500,000 shares of Common Stock are currently reserved for issuance to employees
upon exercise of stock options. The purpose of the Plan is to attract and retain
key personnel, to encourage stock ownership by officers, directors and key
management

33
<PAGE>
of the Company, and to provide an incentive for such persons to expand and
improve the performance of the Company. The Plan provides for the grant of both
incentive stock options ("ISOs") intended to qualify as such under Section 422
of the Internal Revenue Code (the "Code") and nonqualified stock options to key
employees (including directors and officers who are employees), as determined in
the discretion of a committee designated by the Board.

The Plan is administered by a committee, comprised of David W. Clarke,
Christine Clewes, Mathias E. Lukens and Frank Mancini. The selection of
participants, allotment of shares, and whether a grant will consist of incentive
stock options or nonqualified stock options or a combination thereof is
discretionary with the committee. ISO's granted under the Plan may not be
granted at a price less than the fair market value of the Common Stock on the
date of grant (or 100)% of fair market value in the case of persons holding 10%
or more of the voting stock of the Company). The aggregate fair market value of
shares for which ISO's granted to any employee are exercisable for the first
time by such employee during any calendar year (under all stock option plans of
the Company) may not exceed $100,000. The exercise price of non-qualified stock
options shall be determined by the option committee, in its discretion. Options
granted under the Plan will expire not more than ten years from the date of
grant (five years in the case of ISO's granted to persons holding 10% or more of
the voting stock of the Company). All options granted under the Plan are not
transferable during an optionee's lifetime but may be transferred by will or by
the laws of descent and distribution.

The Plan contains anti-dilution provisions authorizing appropriate
adjustments in certain circumstances. Shares of Common Stock subject to options
which expire without being exercised or which are canceled as a result of
cessation of employment are available for further grants.

As of March 1, 1997, there were 351,500 ISO's granted under the Plan, all
exercisable at $4.00 per share. The options, which have five or ten year terms
and were granted between July 1996 and February 1997, are first exercisable one
year from their respective dates of grant as to one-half of the option shares,
and quarterly thereafter as to each remaining 25%. However, the optionees have
agreed not to sell the shares issuable upon exercise of their options for a
period of 24 months after the date of this Prospectus, unless released earlier
by the Underwriters.

The Company plans to grant independent directors of the Company
non-qualified stock options outside of the Plan, although at a later date the
Company may implement a stock option plan specifically for non-employee
directors.

INDEMNIFICATION, DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation and Bylaws provide that the
Company shall indemnify all directors and officers of the Company to the full
extent permitted by the Delaware General Corporation Law. Under such provisions,
any director or officer, who in his capacity as such, is made or threatened to
be made, a party to any suit or proceeding, may be indemnified if the Board of
Directors determines such director or officer acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interest of the Company. The Certificate of Incorporation, Bylaws and the
Delaware General Corporation Law further provide that such indemnification is
not exclusive of any other rights to which such individual may be entitled under
the Certificate of Incorporation, the Bylaws, any agreement, vote of
shareholders or disinterested directors or otherwise.

The Company's Board of Directors and executive officers entered into
indemnification agreements with the Company. The agreements follow the
indemnification and expense advancement provisions of Delaware's General
Corporation Law. In addition, the indemnitee under the agreements is entitled to
indemnification against all expenses actually and reasonably incurred by him or
on his behalf in connection with serving as a witness in any proceeding (as
defined in the agreement) by virtue of his or her status with the Company. The
agreements also provide a procedural mechanism under which the indemnitee can
claim and obtain indemnification, including a procedure for the Board or
independent counsel to determine entitlement to indemnification under specific
situations. In the event the indemnitee does not

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<PAGE>
receive the indemnification to which he would otherwise be entitled under the
terms of the agreement, the indemnitee is entitled to seek a judicial
determination. In the event the indemnitee seeks a judicial adjudication to
enforce his or her rights under, or to recover damages for breach of, the
agreement, the indemnitee is entitled to recover from the Company his or her
reasonable legal fees and other expenses in connection with the legal
proceeding, subject to proration in the event the amount of the aware is less
than the amount of indemnification sought.

The Company and the Underwriters have agreed to indemnify each other
(including officers and directors) against certain liabilities arising under the
Securities Act. See "Underwriting."

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted for directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

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<PAGE>
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information concerning stock
ownership of all persons known by the Company to own beneficially five percent
or more of the outstanding shares of Common Stock, each Director and all
officers and Directors as a group as of the date of this Propectus, and as
adjusted to reflect the sale of the 800,000 shares of Common Stock included in
the Securities offered hereby.

<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING STOCK(1)
AMOUNT AND NATURE OF ------------------------
NAME AND ADDRESS OF BENEFICIAL BENEFICIAL BEFORE AFTER
OWNER OR IDENTITY OF GROUP(2) OWNERSHIP(1) OFFERING OFFERING
- ------------------------------------------------------------- ---------------------- ----------- -----------
<S> <C> <C> <C>
David W. Clarke.............................................. 959,513(3) 38.31% 29.03%
Christine Clewes............................................. 705,962(4) 28.18% 21.36%
Steven D. Smith.............................................. -0-(5) -0- -0-
Gregory C. Hamilton.......................................... -0- -0- -0-
Mathias E. Lukens, Jr........................................ 21,365(6) * *
Frank J. Mancini............................................. 343,937(7) 13.73% 10.41%
c/o The Mancini Packing Company
700 Magnolia Street
Zolfo Springs, FL 32890
Robert C. Swatland........................................... -0-(8) -0- -0-
Donald P. Louw............................................... -0-(9) -0- -0-
James Kendall................................................ 347,191 13.86% 10.51%
676 Reef Road
Vero Beach, FL 32963
All Directors and officers as a group
(eight persons)............................................ 1,324,815(3)-(9) 52.89% 40.09%
</TABLE>

- ------------------------

* Less than 1% of the issued and outstanding Common Stock.

(1) As used herein, the term beneficial ownership with respect to a security is
defined by Rule 13d-3 under the Securities Exchange Act of 1934 as
consisting of sole or shared voting power (including the power to vote or
direct the vote) and/or sole or shared investment power (including the power
to dispose or direct the disposition of) with respect to the security
through any contract, arrangement, understanding, relationship or otherwise,
including a right to acquire such power(s) during the next 60 days. Unless
otherwise noted, beneficial ownership consists of sole ownership, voting and
investment rights.

(2) Unless otherwise noted, addresses are c/o Apollo International of Delaware,
Inc., 6542 North U.S. Highway 41, Suite 215, Apollo Beach, Florida 33572

(3) Includes 705,962 shares owned jointly by Mr. Clarke and Ms. Clewes and
253,551 shares for which David W. Clarke has sole voting power pursuant to
irrevocable proxies granted to him by various shareholders; but excludes
900,000 shares issuable upon exercise of warrants for which Mr. Clarke also
holds a proxy, but which warrants are not exercisable within the next 60
days. Of the 253,551 shares of outstanding Common Stock for which Mr. Clarke
holds a proxy, the proxies as to 200,000 of these shares terminates as of
the date of this Prospectus, whereupon he will beneficially own 22.98% of
the outstanding Common Stock.

(4) Represents 705,962 shares owned jointly by Ms. Clewes and Mr. Clarke.

(5) Excludes 50,000 shares issuable upon exercise of a common stock purchase
warrant and 100,000 shares issuable upon exercise of a stock option, neither
of which is exercisable within the next 60 days.

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<PAGE>
(6) Represents 21,365 shares held by Mr. Lukens as custodian for his children.
Excludes (a) 250,000 shares issuable upon exercise of a warrant that is not
exercisable within the next 60 days and (b) up to 41,666 shares issuable in
connection with a software license agreement. See "Certain Transactions."

(7) Represents 155,394 shares held individually and 188,543 shares owned
beneficially by an entity of which Mr. Mancini is sole owner.

(8) Excludes 50,000 shares issuable upon exercise of a common stock purchase
warrant and 50,000 shares issuable upon exercise of a stock option, neither
of which is exercisable within the next 60 days.

(9) Excludes 50,000 shares of Common Stock issuable upon exercise of a common
stock purchase warrant and 50,000 shares issuable upon exercise of a stock
option, neither of which is within the next 60 days.

CERTAIN TRANSACTIONS

In December 1994, a total of 694,382 shares of Common Stock were issued to
David W. Clarke, Christine Clewes, Mathias E. Lukens, Jr. and W. Haines Knox,
the Company's founders, for a total consideration of $110. Mr. David W. Clarke
and Ms. Christine Clewes, officers and directors of the Company, own 640,968 of
such shares.

The Company is indebted to its President and Chief Executive Officer and its
Vice President, Marketing in the total amount of approximately $85,000
represented by a promissory note dated December 15, 1995. The note bears
interest at 10.5% per annum and provides for payments of principal and interest
equal to $1,600 per month from January 15, 1996 through June 15, 1998, at which
time the entire remaining unpaid principal balance becomes due and payable along
with any accrued and unpaid interest.

In early 1996, Mr. Clarke and Ms. Clewes advanced the Company an additional
$60,840, which obligation was converted into approximately 64,994 shares of
Common Stock in June, 1996.

Mr. Clarke and Ms. Clewes have loaned the Company an additional $40,800
which is payable on demand, without interest.

Pursuant to a consulting agreement with Mathias E. Lukens, Jr., a director
(Vice Chairman) of the Company, he was issued 250,000 Common Stock purchase
warrants exercisable at $5.50 per share commencing June 1, 2000 (unless the
Company agrees to an earlier exercise) and expiring June 1, 2002. See
"Management--Consulting Agreements." In December 1996, the Company and Mr.
Lukens also entered into a non-exclusive license agreement, pursuant to which
Mr. Lukens licensed to the Company certain software and its source code for the
Company's use in its products. Under the agreement, Mr. Lukens is to be paid a
one-time license fee of $250,000, payable: (a) $125,000 in the following cash
installments: $62,500 on the earlier of September 1, 1998 or the last day of the
first fiscal quarter that the Company's gross revenue exceeds $500,000, subject
to cash flow, and $62,500, or more, of the then outstanding balance on the last
day of each subsequent fiscal quarter that the Company's gross revenues exceed
$500,000, subject to cash flow, until paid. The balance of the $125,000 license
fee is to be paid in 41,666 shares of the Company's Common Stock (valued at
$3.00 per share in December 1996), one-half of which shall be paid on the date
the licensed software is successfully run on any of the Company's products, and
one-half of which shall be paid when the first successful beta testing is
concluded prior to the first full commercial shipment incorporating the
software.

During 1995 and 1996, Frank J. Mancini, a director, and an affiliate, loaned
the Company an aggregate of $178,087.25. In June, 1996, pursuant to an agreement
between him and the Company, he converted the entire principal balance, plus
accrued interest of $12,617.39 into a total of 203,726 shares of the Company's
Common Stock. Mr. Mancini will be paid approximately $23,000 from the proceeds
of this Offering for consulting services previously rendered to the Company.

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<PAGE>
The Company entered into a cash advance and security agreement with Framan
Company, a business entity owned by Frank J. Mancini, pursuant to which Framan
advances funds to the Company for the purchase of parts inventory and equipment
and takes a security interest in the parts and equipment. The advances accrue
interest at 2% above the prime rate and are payable monthly interest only
commencing after the close of the Offering. Principal is due and payable
one-half on the earlier of June 1, 1999, or the last day of the first fiscal
quarter that the Company's gross revenues exceed $500,000, subject to cash flow;
and one-half, or more, of the remaining principal balance on the last day of
each subsequent fiscal quarter that revenues exceed $500,000, subject to cash
flow. The maturity date for any outstanding principal balance and accrued and
unpaid interest is December 31, 1999. As of March 31, 1997, the Company had been
advanced $449,151 under this agreement.

In October 1996, The Company entered into a factoring agreement with
Queensbury, Inc., some of whose shareholders are also shareholders of the
Company (none of whom is an officer, director or principal shareholder of the
Company) in order to obtain additional working capital. Under the agreement, the
Company sold receivables at a 6% discount, plus pays interest at the rate of 1%
per month on the outstanding balance. The Company is obligated to repurchase
accounts which are delinquent for six consecutive months. This agreement was
terminated effective December 31, 1996, at which time accounts receivable sold
under the agreement were $160,350. At March 31, 1997, $156,010 of such amount
remained uncollected.

As of January 1, 1997, the Company converted the above-referenced factoring
agreement to a revolving line of credit agreement with the same lender. Under
that agreement, the Company may borrow 94.5% of the face amount of accounts
receivable which are collateral for the loans. Interest accrues at 1% per month
and is payable monthly on the outstanding principal balance of each such loan.
The loans are repaid at 100% of the face amount of the collateralized accounts
as the Company receives payments from customers. Outstanding principal and
interest on all such loans is due and payable on December 31, 1998. The maximum
outstanding principal balance under the loan agreement at any time is limited to
$500,000 and at March 31, 1997, the outstanding principal balance under this
loan agreement was $257,241.

From August 5, 1996 through November 14, 1996, the Company issued an
aggregate of 500,000 shares of Common Stock and 250,000 Common Stock purchase
warrants for gross proceeds of $1,500,000 pursuant to a private placement to
accredited investors that commenced June 25, 1996. Upon the Effective Date, the
warrants will be automatically modified to the same terms as the Public
Warrants. The private placement was conducted by the Representative, as
placement agent, which was paid a commission of 10% and a non-accountable
expense allowance of 3% of the gross proceeds.

Gregory C. Hamilton, a director, receives compensation from the Company for
providing accounting services to the Company. During the fiscal year ended
December 31, 1996, Mr. Hamilton was paid $34,015 for accounting and tax
reporting services.

The Company believes that all transactions with officers, directors and/or
5% shareholders were made on terms no less favorable to the Company than those
available from unaffiliated parties. All future transactions between the Company
and its officers, directors and 5% shareholders will be on terms no less
favorable than could be obtained by independent third parties and will be
approved by a majority of the disinterested directors of the Company.

38
<PAGE>
DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is currently authorized to issue 15,000,000 shares of Common
Stock, $.01 par value per share, 2,504,794 of which are issued and outstanding
to a total of 52 shareholders as of the date of this Prospectus. Holders of
Common Stock have one vote for each share held of record on all matters to be
voted upon by stockholders, including the election of directors. Holders of
Common Stock are entitled to receive dividends when, as and if declared by the
Board of Directors out of funds legally available therefor and, upon liquidation
of the Company, and to share ratably in the net assets available for
distribution. Shares of Common Stock are not redeemable and have no preemptive,
conversion or similar rights.

PREFERRED STOCK

The Company's Amended and Restated Certificate of Incorporation authorizes
the issuance of 5,000,000 shares of "blank check" preferred stock, $.01 par
value, with such designation, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the board of directors is
empowered, without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights superior to those of the holders
of Common Stock. Shares of preferred stock, if and when issued, could have
voting or other rights that adversely affect the voting power of the holders of
Common Stock. Further, the issuance of preferred stock could have the effect of
delaying or preventing a change of control of the Company, which could limit
stockholders' ability to dispose of their Common Stock in such transactions. The
Company currently has not issued any shares of preferred stock.

WARRANTS

REDEEMABLE COMMON STOCK PURCHASE WARRANTS. Each redeemable common stock
purchase warrant offered hereby (the "Public Warrants") entitles the holder
thereof to purchase one share of Common Stock at a price of $5.50 per share (the
"Exercise Price"), subject to adjustment, commencing two years after the date of
this Prospectus (the "Effective Date") until the close of business on the sixth
year after the Effective Date. Each Public Warrant is redeemable, in whole or in
part, by the Company at a price of $.25 per Public Warrant, commencing one year
after the Effective Date and prior to their expiration, provided that (a) prior
written notice of not less than thirty days is given to the Public Warrant
holders, (b) the closing bid price (as defined) of the Company's Common Stock
for the twenty consecutive trading days ending on the fifteenth day prior to the
date on which the notice of redemption is given, shall have exceeded $7.50 per
share, (c) Public Warrant holders shall have exercise rights until the close of
business the day preceding the date fixed for redemption, and (d) if such
redemption occurs during the first two years following the Effective Date, the
Company has received the prior written consent of the Underwriters for such
redemption. Upon the giving of a notice of redemption, the Public Warrants will
become exercisable if they were not otherwise exercisable. In the Warrant
Agreement, the "closing bid price" is defined as (i) the last bid price regular
way as reported on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or (ii) if the Common Stock is
not listed or admitted to trading on any national securities exchange, the last
bid price regular way for the Common stock as reported by the NASDAQ National
Market System or SmallCap Market of the NASDAQ Stock Market, Inc. ("NASDAQ"), or
(iii) if the Common Stock is not listed or admitted for trading on any national
securities exchange, and is not reported by NASDAQ, the last bid price in the
over-the-counter market as furnished by the National Quotation Bureau, Inc. or
if no such quotation is available, the fair market value of the Common Stock as
determined in good faith by the Board of Directors of the Company. Pursuant to
applicable federal and state securities laws, in the event a current prospectus
is not available, the Public Warrants may not be exercised by the holders
thereof and the Company will be precluded from redeeming the Public Warrants.
There can be no assurance that the Company will not be prevented by financial or
other considerations from maintaining a current prospectus. Any Public Warrant

39
<PAGE>
holder who does not exercise prior to the redemption date, as set forth in the
Company's notice of redemption, will forfeit the right to purchase the Common
Stock underlying the Public Warrants, and after the redemption date or upon
conclusion of the exercise period any outstanding Public Warrants will become
void and be of no further force or effect, unless extended by the Board of
Directors of the Company.

The number of shares of Common Stock that may be purchased is subject to
adjustment upon the occurrence of certain events including a dividend
distribution to the Company's shareholders, or a subdivision, combination or
reclassification of the outstanding Common Stock. Further, the Public Warrant
exercise price is subject to adjustment in the event the Company issues
additional stock or rights to acquire stock at a price per share that is less
than the current market price per share of Common Stock on the record date
established for the issuance of additional stock or rights to acquire stock. The
term "current market price" is defined as the average of the daily closing
prices for the five consecutive trading days ending three days prior to the
record date. However, the Warrant exercise price will not be adjusted in the
case of the issuance or exercise of options pursuant to the Company's stock
option plans, the issuance of the Underwriters' Warrant or any other options or
warrants outstanding as of the date of this Offering. The Public Warrant
exercise price is also subject to adjustment in the event of a consolidation or
merger where a distribution by the Company is made to its stockholders of the
Company's assets or evidences of indebtedness (other than cash or stock
dividends) or pursuant to certain subscription rights or other rights to acquire
Common Stock. The Warrants are also subject to price adjustment upon the
occurrence of certain events including subdivisions or combinations of the
Common Stock.

The Company may at any time, and from time to time, extend the exercise
period of the Public Warrants, provided that written notice of such extension is
given to the Public Warrant holders prior to the expiration date then in effect.
Also, the Company may reduce the exercise price of the Public Warrants for
limited periods or through the end of the exercise period if deemed appropriate
by the Board of Directors of the Company, in addition to the adjustments to the
exercise price arising from certain events as discussed above. Any extension of
the terms and/or reduction of the exercise price of the Public Warrants will be
subject to compliance with Rule 13e-4 under the Exchange Act including the
filing of a Schedule 13E-4. Notice of any extension of the exercise period
and/or reduction of the exercise price will be given to the Public Warrant
holders. The Company does not presently contemplate any extension of the
exercise period not does it contemplate any reduction in the exercise price of
the Public Warrants.

The Public Warrants are to be issued pursuant to the terms and conditions of
a Public Warrant Agreement between the Company and American Stock Transfer &
Trust Company.

In addition, the Company has outstanding warrants exercisable for a total of
250,000 shares of Common Stock, which warrants have the same terms and
conditions as the Public Warrants, but which are not registered under the
Securities Act.

NONREDEEMABLE COMMON STOCK PURCHASE WARRANTS. The Company issued to a
consultant a non-redeemable warrant to purchase 250,000 shares of Common Stock.
It has a six year term commencing June 1, 1996. The warrants may be exercised
for two years commencing June 1, 2000 at an exercise price of $4.00 per share,
unless the Company agrees to an earlier exercise. The warrant is subject to
termination by the Company under certain circumstances. The warrant contains
certain anti-dilution provisions with respect to stock dividends or
distributions to shareholders; and combinations, subdivisions and
reclassification of shares. The warrant contains certain piggy-back registration
rights (for shares issuable upon exercise of such warrants) with respect to a
secondary public offering of the Company's securities. In consideration of
making a short term loan to the Company, the consultant was also issued a
warrant for 50,000 shares of Common Stock on the same terms and conditions as
its other warrant, except it is exercisable at $5.50 per share. See
"Management--Consulting Agreements," and "Description of
Securities--Registration Rights."

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<PAGE>
The Company also issued to a consultant 400,000 common stock purchase
warrants, exercisable at $5.50 per share, which warrants, upon the Effective
Date of this Offering, were to be modified to the same terms and conditions as
the Public Warrants. However, recently those warrants were amended to remove
such modification (as well as registration) provisions. Further, the exercise
price was reduced from $5.50 per share to $3.00 per share. The warrants are
first exercisable one year from the Effective Date and terminate on May 10,
2001. See also "Management--Consulting Agreements."

Mathias E. Lukens, Jr., a director of the Company as well as a consultant,
was issued, pursuant to a consulting agreement, a non-redeemable warrant to
purchase 250,000 shares of Common Stock exercisable at $5.50 per share from June
1, 2000 until June 1, 2002 until unless the Company agrees to an earlier
exercise. Unexercised warrants are subject to termination by the Company under
certain circumstances. The warrants contain certain anti-dilution provisions
respecting stock dividends or distributions to shareholders; and combinations,
subdivisions and reclassification of shares. The warrants also contain "piggy-
back" registration rights (for shares issuable upon exercise of the warrants)
with respect to a secondary public offering of the Company's securities. See
"Management--Consulting Agreements," "Descriptions of Securities--Registration
Rights," and "Certain Transactions."

The Company issued to three of its officers, Steven D. Smith, Donald Louw
and Robert J. Swatland, non-redeemable common stock purchase warrants, each
exercisable for 50,000 shares of Common Stock at an exercise price of $5.50 per
share. Mr. Smith's and Mr. Louw's warrants are first exercisable one year from
the date of this Prospectus until September 26, 2001 and Mr. Swatland's warrant
is exercisable one year from the date of this Prospectus until November 1, 2001.
However, Messrs. Smith, Louw and Swatland have agreed with the Company that the
shares underlying the warrants will not be sold for a period of 24 months from
the date of this Prospectus, unless released earlier by the Underwriters. The
warrants contain certain anti-dilution provisions with respect to stock
dividends or distributions to shareholders, and combinations, subdivisions and
reclassification of shares. The warrants do not provide registration rights.

REGISTRATION RIGHTS

The Underwriters have demand and piggy-back registration rights with respect
to the 80,000 shares of Common Stock underlying the Underwriters' Warrant, the
80,000 Public Warrants issuable upon exercise thereof and the 75,000 shares of
Common Stock underlying the warrants. The Underwriters' demand and piggy-back
registration rights will expire no later than five years and seven years,
respectively, from the Effective Date. In addition, certain securityholders
holding 1,133,989 shares of Common Stock and warrants to purchase an aggregate
of 250,000 shares of the Company's Common Stock have piggy-back registration
rights for such shares and Common Stock underlying the warrants with respect to
a secondary offering of the Company's securities. However, the holders of such
shares and warrants are subject to lock-up agreements for periods of 13 to 24
months from the date of this Prospectus and such shares may not be sold or
otherwise disposed of until expiration of the applicable lock-up period, which
may be shortened at the discretion of the Underwriters. Additionally,
consultants holding warrants to purchase a total of 550,000 shares of Common
Stock have "piggy-back" registration rights commencing June 1, 1998 in
connection with a secondary offering of the Company's securities. Any exercise
of such registration rights may result in dilution of the interest of the
Company's stockholders, hinder efforts by the Company to arrange future
financings and/or have an adverse effect on the market prices of the Securities.
In the event such registration rights are exercised, the Company will be
obligated to pay all expenses in connection with such registration, including
but not limited to legal and accounting fees, printing and certain other costs;
however, any selling securityholder will be responsible for payment of any
transfer taxes and broker/dealer commissions.

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<PAGE>
ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW; CERTAIN PROVISIONS IN THE CERTIFICATE
OF INCORPORATION

Unless otherwise provided in a corporation's certificate of incorporation,
Delaware law generally requires the affirmative vote of holders of a majority of
the outstanding voting stock for approval of mergers, consolidations, and
certain other transactions. The Company's Certificate of Incorporation expressly
adopts the provisions of Section 203 of the Delaware General Corporation Law
("DGCL"). In general, this statute prohibits a publicly held Delaware
corporation from engaging, under certain circumstances, in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person becomes an interested
stockholder, unless (i) prior to the date at which the stockholder became an
interested stockholder, the board of directors approved either the business
combination or the transaction in which the person becomes an interested
stockholder; (ii) the stockholder acquires more than 85% of the outstanding
voting stock of the corporation (excluding shares held by directors who are
officers or held in certain employee stock plans) upon consummation of the
transaction in which the stockholder becomes an interested stockholder; or (iii)
the business combination is approved by the board of directors and at least
66 2/3% of the outstanding voting stock of the corporation (excluding shares
held by the interested stockholder) at a meeting of stockholders, (and not
written consent) held on or subsequent to the date such stockholder became an
interested stockholder. However, the Company's Certificate of Incorporation
provides for the affirmative vote of 60% of the outstanding voting stock
(excluding shares held by the interested stockholder) rather than the 66 2/3%
provided in the statute. An "interested stockholder" is a person who, together
with affiliates and associates, owns (or at any time within the prior three
years did own) 15% or more of the corporation's voting stock. Section 203
defines a "business combination" to include, without limitation, mergers,
consolidations, stock sales and asset based transactions and other transactions
resulting in a financial benefit to the interested stockholder.

The overall effect of such anti-takeover provisions is to render more
difficult the accomplishment of mergers or the assumption of control by a
principal shareholder, and thus to make difficult the removal of management.
However, the Company believes that the advantages to the Company and its
shareholders of anti-takeover provisions would outweigh any disadvantages and
afford the Board of Directors greater flexibility in the management of the
Company.

The Certificate imposes a super-majority voting requirement (75% of the
outstanding voting shares) for certain amendments to the Company's Bylaws. The
Certificate also provides for indemnification of the Company's directors,
officers and, in the discretion of the Board of Directors, any and all other
persons whom it shall have power to indemnify under Delaware law from and
against certain liabilities. For a summary of such provisions, see
"Management--Indemnification, Directors and Officers." The Certificate does not
provide shareholders with any preemptive rights or cumulative voting rights.

TRANSFER AND WARRANT AGENT AND REGISTRAR

The transfer agent and registrar for the Securities and the warrant agent
for the Public Warrants is American Stock Transfer & Trust Company, 40 Wall
Street, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of this Offering, the Company will have 3,304,794 shares
of Common Stock outstanding (3,424,794 shares, if the Underwriters'
over-allotment option is exercised in full), of which 800,000 shares offered
hereby (920,000 shares, if the Underwriters' over-allotment option is exercised
in full) will be freely tradable without restriction or further registration
under the Securities Act. The remaining 2,504,794 shares are deemed to be
"restricted securities," as that term is defined under Rule 144, in that such
shares were issued and sold by the Company in private transactions not involving
a public offering and, as such, may only be sold pursuant to an effective
registration under the Securities Act,

42
<PAGE>
in compliance with the exemption provisions of Rule 144 or pursuant to another
exemption under the Securities Act. Certain shareholders (excluding officers and
directors) holding 1,433,529 shares of restricted Common Stock, will be eligible
to sell such shares under Rule 144 as of the date of this Prospectus as to
902,996 shares; July 1997 as to 25,333 shares; and, August through December 1997
as to 528,500 shares. However, shareholders holding 1,133,989 of such shares
have agreed not to sell those shares for periods ranging from 13 months to 24
months from the Effective Date, without the prior consent of the Representative.
Of the remaining 1,071,265 restricted securities, all shares are eligible for
sale under Rule 144 as the date of this Prospectus (subject to certain recurring
three-month volume limitations prescribed by Rule 144 and the lock-up
arrangements with the Underwriters described below). Sales of such shares in the
public market, or the availability of such shares for sale, could adversely
affect the market price for the Common Stock.

The officers and directors of the Company (holding an aggregate of 1,071,265
shares of Common Stock, and warrants, options and rights to purchase an
aggregate of 641,666 shares of Common Stock), have agreed not to publicly offer,
sell or otherwise dispose of any of those shares of Common Stock for 24 months
after the date of this Prospectus without the written consent of the
Underwriters, with the exception of 21,365 shares which are held by one of the
Company's directors as custodian for his children. The Underwriters may, in
their sole discretion and at any time without notice, release all or any portion
of the securities subject to the lock-up agreements.

In general, under Rule 144, (as recently amended by the SEC effective April
29, 1997), subject to the satisfaction of certain other conditions, a person,
including an affiliate of the Company (or person whose shares are aggregated
with an affiliate), who has owned restricted shares of Common Stock beneficially
for at least one year is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of 1% of the then outstanding
shares of Common Stock (approximately 35,000 shares based on the number of
shares expected to be outstanding after this Offering) or, if the Common Stock
is quoted on NASDAQ, the average weekly trading volume during the four calendar
weeks preceding the sale. Sales under Rule 144 are also subject to certain
requirements as to the manner and notice of sale and the availability of public
information concerning the Company. A person who has not been an affiliate of
the Company for at least three months immediately preceding the sale and who has
beneficially owned shares of Common Stock for at least two years is entitled to
sell such shares under Rule 144 without regard to any of the limitations
described above.

No prediction can be made as to the effect, if any, that public sales of
shares of Common Stock or the availability of such securities for sale will have
on the market prices of such securities prevailing from time to time.
Nevertheless, the possibility that substantial amounts of Common Stock may be
sold in the public market may adversely affect prevailing market prices for the
these securities and could impair the Company's ability in the future to raise
additional capital through the sale of its equity securities.

43
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, the Company has agreed to sell to the Underwriters,
severally and not jointly, and the Underwriters have severally and not jointly
agreed to purchase from the Company, on a "firm commitment" basis, if any are
purchased, the number of Securities (exclusive of Securities issuable upon
exercise of the Underwriters' over-allotment option) set forth opposite their
respective names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SECURITIES
- ---------------------------------------------------------------------------------- -----------
<S> <C>
May Davis Group, Inc..............................................................

Total.........................................................................
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Securities offered hereby are
subject to approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are obligated to take and pay for all shares
of Securities offered hereby (other than those covered by the over-allotment
option described below) if any such shares are purchased.

The Underwriters, for whom May Davis Group, Inc. is acting as Representative
(the "Representative"), propose to offer the Securities directly to the public
at the public offering price set forth on the cover page of this Prospectus and
may allow certain dealers who are National Association of Securities Dealers,
Inc. ("NASD") members to offer a part of the Securities at a price which
represents a concession not in excess of $ per share and $ per
Public Warrant. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share and $ per Public Warrant
to certain other dealers. Commencement of the initial public offering, the
offering price and other selling terms may be changed by the Representative.

The Representative has informed the Company that the Underwriters do not
intend to confirm sales to accounts over which they exercise discretionary
authority.

The Company has granted to the Underwriters an option, exercisable for 45
days from the date of this Prospectus, to purchase up to an aggregate of 120,000
additional shares of Common Stock and/or up to 120,000 additional Public
Warrants at the public offering price set forth on the cover page of this
Prospectus, less the underwriting discounts and commissions. The Representative
may exercise such option solely for the purpose of covering over-allotments, if
any, in connection with the sale of the Securities offered hereby. To the extent
such option is exercised, each Underwriter will be obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares as the number of shares set forth opposite such Underwriter's name in the
preceding table bearing the total number of shares in such table.

The Company has agreed to sell to the Representative or its designees, for
$10, a common stock purchase warrant (the "Underwriters' Warrant") exercisable
for 80,000 shares of Common Stock at $8.25 per share and/or 80,000 Public
Warrants at $.4125 per warrant. The Underwriters' Warrant may not be sold,
transferred, assigned or hypothecated, except to officers and directors of the
Underwriters, and is exercisable for four years commencing one year from the
Effective Date (or until the close of business five years after the Effective
Date) (the "Exercise Term"). During the Exercise Term, the holders of the
Underwriters' Warrant are given, at nominal cost, the opportunity to profit from
a rise in the market price of the Company's Common Stock. To the extent that the
Underwriters' Warrant is exercised, dilution of the interests of the Company's
stockholders will occur. Further, the terms on which the Company will be able to
obtain additional equity capital may be adversely affected since the holders of
the Underwriters'

44
<PAGE>
Warrants can be expected to exercise it any time when the Company would, in all
likelihood, be able to obtain any needed capital on terms more favorable to the
Company than those provided in the Underwriters' Warrant. Any profit realized by
the Underwriters on the sale of the shares of Common Stock underlying the
Underwriters' Warrant may be deemed additional underwriting compensation. The
Company has also agreed to pay the Representative a non-accountable expense
allowance equal to 3% of the gross proceeds from the sale of the Securities
offered hereby of which $25,000 has been paid.

In connection with this Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock and
Public Warrants. Such transactions may include stabilization transactions
effected in accordance with Rule 104 of Regulation M, pursuant to which such
persons may bid for or purchase Common Stock or Public Warrants for the purpose
of stabilizing their respective market prices. The Underwriters also may create
a short position for the account of the Underwriters by selling more shares of
Common Stock or Public Warrants in connection with the Offering than they are
committed to purchase from the Company, and in such case may purchase shares of
Common Stock or Public Warrants in the open market following completion of the
Offering to cover all or a portion of such short position. The Underwriters may
also cover all or a portion of such short position by exercising the
Over-Allotment Option. In addition, the Representative, on behalf of the
Underwriters, may impose "penalty bids" under contractual arrangements with the
Underwriters whereby it may reclaim from an Underwriter (or dealer participating
in the Offering) for the account of other Underwriters, the selling concession
with respect to shares of Common Stock and Public Warrants that are distributed
in the Offering but subsequently purchased for the account of the Underwriters
in the open market. Any of the transactions described in this paragraph may
result in the maintenance of the price of the Common Stock and Public Warrants
at a level above that which might otherwise prevail in the open market. None of
the transactions described in this paragraph is required, and, if they are
undertaken they may be discontinued at any time.

Certain shareholders who beneficially hold an aggregate of 2,183,889 shares
of Common Stock, have agreed that, for periods ranging from 13 to 24 months
following the date of this Prospectus, they will not, without the prior written
consent of the Representative offer, sell, contract to sell, or otherwise
dispose of any shares of Common Stock of the Company or any securities
convertible into, or exercisable or exchangeable for Common Stock of the
Company. The Representative has advised the Company that it has no present
intention to waive or shorten the lock-ups.

The Underwriting Agreement provides for reciprocal indemnification between
the Company and the Underwriters against certain liabilities in connection with
the Registration Statement, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be provided to officers, directors or persons controlling the Company, the
Company has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy and is therefore
unenforceable.

The Company has agreed with the Representative that the Company will pay to
the Underwriters a warrant solicitation fee (the "Warrant Solicitation Fee")
equal to 5% of the exercise price of the Public Warrants which are exercised
pursuant to a solicitation of exercise of the warrants or in connection with a
redemption and to the extent not inconsistent with the guidelines of the NASD
and the rules and regulations of the Commission (including NASD Notice to
Members 81-38). Such Warrant Solicitation Fee will be paid to the Underwriters
if (a) the market price of the Common Stock on the date that any Public Warrant
is exercised is greater than the exercise price of the Public Warrant; (b) the
exercise of such Public Warrant was solicited by the Underwriters; (c) prior
specific written approval for exercise is received from the customer if the
Public Warrant is held in a discretionary account; (d) disclosure of this
compensation agreement is made prior to or upon the exercise of such Public
Warrant; (e) solicitation of the exercise is not in violation of Regulation M of
the Exchange Act; (f) the Underwriters provided bona fide services in exchange
for the Public Warrant Solicitation Fee; and (g) the Underwriters have been
specifically designated in writing by the holders of the Public Warrants as the
broker. Unless granted an exemption by

45
<PAGE>
the Commission from Regulation M under the Exchange Act, the Underwriters will
be prohibited from engaging in any market making activities or solicited
brokerage activities with respect to the Securities for the period from five
business days prior to any solicitation by the Underwriters of the exercise of
any Public Warrant until the termination of such solicitation activity by the
Underwriters. The foregoing 5-day restriction period is reduced to one day where
the security has an average daily trading volume of $100,000 and the public
float for the issuer's equity securities is at least $25 million; and, there is
no restrictive period where the average daily trading volume of the security is
$1 million and the public float for the issuer's equity securities is at least
$150 million. As a result, the Underwriters may be unable to continue to provide
a market for the Securities during certain periods while the Public Warrants are
exercisable.

The Underwriters have been given certain "piggyback" and demand registration
rights with respect to the Common Stock underlying the Underwriters' Warrants
for a period of four years commencing one year from the date of this Prospectus
(or until the close of business five years after the Effective Date). The
exercise of any of such registration rights by the Underwriters may result in
dilution to the interest of the Company's shareholders, hinder efforts by the
Company to arrange future financing of the Company and/ or have an adverse
effect on the market price of the Securities.

The Company has agreed that for a period of 24 months commencing on the
Effective Date, it will not issue any shares of its Common Stock or any
warrants, options or other rights to purchase Common Stock and Public Warrants,
without the consent of the Underwriters, which consent shall not be unreasonably
withheld, except for issuances pursuant to (i) the public offering of the
Company's securities as described herein, (ii) the exercise of the Underwriters'
Warrant and the shares issuable thereunder, (iii) outstanding options, warrants,
convertible securities or contractual obligations disclosed in this Prospectus
and (iv) the grant of options and the issuance of shares issued upon exercise of
options granted or in the future granted under the Company's Stock Option Plan.
The Company has granted the Underwriters a three-year preferential right with
respect to future financing relating to the offering of the Company's
securities.

The Underwriting Agreement gives the Underwriters the right, for a period of
three years from the Effective Date, to appoint a designee of the Underwriters
as an advisor to the Company's Board of Directors who shall be reimbursed
expenses incurred in connection with attendance at Board meetings and who shall
receive the same compensation as paid to non-employee directors. Alternatively,
the Underwriters may designate one person for election as a director of the
Company. The Representative has indicated to the Company that it intends to
appoint a director, although such person has not been identified.

In addition, the Company has agreed to enter into a management and financial
consulting agreement to retain the Representative as a financial consultant for
a period of three years at a monthly fee of $2,333.33, payable in full, in
advance, at the closing of this Offering. Further, the Representative will be
entitled to receive certain payments in the event of a merger, sale of
substantially all of the Company's assets or similar transaction that is
originated by the Representative. The Representative will provide investment
banking services under the agreement. The consulting agreement will not require
the consultant to devote a specific amount of time to the performance of its
duties thereunder.

Further, the Underwriting Agreement provides the Underwriters with a right
of first refusal for a period of three years from the date of this Prospectus
for any public or private offering of securities to raise capital and sale of
securities to be made by the Company, its affiliates or any of its present or
future subsidiaries.

The foregoing includes a summary of certain provisions of the Underwriting
Agreement which has been filed as an exhibit to the Registration Statement.

Prior to this Offering, there has been no public market for the Securities.
The initial public offering price for the Securities and the exercise price of
the Warrants have been determined by negotiations between the Company and the
Underwriters. Among the factors considered in the negotiations were an analysis
of the areas of activity in which the Company is engaged, the present state of
the Company's

46
<PAGE>
business, the Company's financial condition, the Company's prospects, an
assessment of management, the general condition of the securities markets at the
time of this Offering and the demand for similar securities of comparable
companies. The public offering price of the Securities and the exercise price of
the Public Warrants do not necessarily bear any relationship to assets,
earnings, book value or other criteria of value applicable to the Company.

The Representative was organized in August 1993, was registered as a broker
in June 1995, and became a member firm of the NASD in June 1995. The
Representative is principally engaged in retail brokerage and market making
activities and various corporate finance projects. The Representative has acted
as a placement agent in private offerings and has participated as a member of
the underwriting syndicate or as a selected dealer in one public offering and it
has acted two times as the lead manager in only two public offering of
securities. While certain of the officers of the Representative have significant
experience in corporate finance and the underwriting of securities, no assurance
can be given that the Representative's lack of experience as a lead managing
underwriter of public offerings will not adversely affect this Offering and the
subsequent development of a liquid public market in the Company's securities.

LEGAL MATTERS

The validity of the Securities being offered hereby will be passed upon for
the Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., Orlando,
Florida. Certain matters are being passed upon for the Underwriters by Gersten,
Savage, Kaplowitz, Fredericks & Curtin, LLP, New York, New York.

EXPERTS

The financial statements as of December 31, 1995 and December 31, 1996
included in this Prospectus have been so included in reliance on the report of
Most Horowitz & Company, LLP, independent certified public accountants, given on
the authority of said firm as experts in auditing and accounting.

AVAILABLE INFORMATION

The Company is not presently a reporting company and does not file reports
or other information with the Securities and Exchange Commission (the "SEC" or
"Commission"). Upon effectiveness of the Registration Statement filed with the
SEC in connection with this Offering, the Company will become a reporting
company. Further, the Company will register its securities under the Securities
Exchange Act of 1934 ("Exchange Act"). Accordingly, upon effectiveness of its
Exchange Act registration, the Company will be subject to the additional
reporting requirements of the Exchange Act and in accordance therewith will file
reports, proxy statements and other information with the Commission. In
addition, after the effective date of this Offering, the Company intends to
furnish its shareholders with annual reports containing audited financial
statements and interim reports, in each case as it may determine to furnish or
as may be required by law. The fiscal year of the Company ends on December 31 of
each year.

The Company has filed with the Washington, DC Office of the Commission a
Registration Statement on Form SB-2 (with all amendments, exhibits and schedules
thereto, the "Registration Statement") under the Securities Act of which this
Prospectus forms a part. This Prospectus does not contain all of the information
set forth in the Registration Statement, as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the Securities offered hereby, reference is hereby made to such
Registration Statement. Statements contained in this Prospectus concerning the
provisions or contents of any contract or other document referred to herein are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.

Copies of the Registration Statement may be inspected without charge at the
Commission's principal office at 450 Fifth Street, N.W, Room 1024, Washington,
D.C. 20549; and at the following Regional Offices

47
<PAGE>
of the Commission, except that copies of the exhibits may not be available at
certain of the Regional Offices: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of all or any
part of such material may be obtained from the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549 upon payment of certain fees prescribed
by the Commission. The Commission maintains a worldwide web site on the Internet
at http://www.sec.gov that contains reports and other information concerning the
Company filed electronically with the Commission.

48
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.

FINANCIAL STATEMENTS

INDEX

<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT......................................................... F-2

BALANCE SHEET
December 31, 1995 and 1996 and March 31, 1997 (Unaudited).......................... F-3

STATEMENT OF OPERATIONS
Years ended December 31, 1995 and 1996 and three months ended March 31, 1996 and
1997 (Unaudited)................................................................... F-4

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Years ended December 31, 1995 and 1996 and three months ended March 31, 1997
(Unaudited)........................................................................ F-5

STATEMENT OF CASH FLOWS
Years ended December 31, 1995 and 1996 and three months ended March 31, 1996 and
1997 (Unaudited)................................................................... F-6

NOTES TO FINANCIAL STATEMENTS........................................................ F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

Stockholders and Board of Directors
Apollo International of Delaware, Inc.
Apollo Beach, Florida

We have audited the accompanying balance sheet of Apollo International of
Delaware, Inc., as of December 31, 1995 and 1996, and the related statements of
operations, stockholders' equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Apollo International of
Delaware, Inc., as of December 31, 1995 and 1996, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, although, as discussed in Note 13,
certain conditions indicate that the Company may be unable to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might be necessary should the Company be unable to continue as
a going concern.

New York, New York
February 6, 1997, February 10, 1997
as to Note 9

MOST HOROWITZ & COMPANY, LLP

F-2
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.
BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- MARCH 31, 1997
1995 1996 (UNAUDITED)
---------- ------------- --------------
<S> <C> <C> <C>
ASSETS (NOTE 9)
CURRENT ASSETS
Cash (Note 12)...................................................... $ 5,840 $ 34,099 $ 45,816
Accounts receivable (Note 4)........................................ 7,734 387,277
Unbilled account receivable (Note 10)............................... 20,000 20,000
Inventory (Note 5).................................................. 108,921 228,157 201,437
Other current assets................................................ 4,553 8,077 5,132
---------- ------------- --------------
TOTAL CURRENT ASSETS.............................................. 119,314 298,067 659,662
DEFERRED SOFTWARE COSTS (Note 6)...................................... 214,941 658,820 690,693
FIXED ASSETS (Note 7)................................................. 18,940 111,102 120,272
DEFERRED COSTS OF PROPOSED PUBLIC OFFERING (Note 15).................. 73,650 109,741
DEFERRED FINANCING COSTS (Note 4)..................................... 69,230 60,576
OTHER ASSETS.......................................................... 3,543 3,132 3,030
---------- ------------- --------------
TOTAL ASSETS...................................................... $ 356,738 $ 1,214,001 $ 1,643,974
---------- ------------- --------------
---------- ------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Trade notes and accounts payable and accrued expenses (Note 8)...... $ 134,984 $ 575,034 $ 665,359
Payroll taxes payable............................................... 10,146 101,924 135,611
Loans payable--stockholders (Note 9)................................ 7,774 142,468 530,211
Note payable--line of credit (Note 14).............................. 257,241
Loan payable--other................................................. 8,700
Deferred income (Note 10)........................................... 20,000 20,000
---------- ------------- --------------
TOTAL CURRENT LIABILITIES......................................... 152,904 839,426 1,617,122
ACCOUNTS PAYABLE--NONCURRENT (Notes 3 and 6).......................... 66,505 125,000 125,000
NONCURRENT LOANS PAYABLE--STOCKHOLDERS (Note 9)....................... 104,540 70,916 67,864
DEFERRED INCOME TAXES PAYABLE (Note 11)............................... 40,000
---------- ------------- --------------
TOTAL LIABILITIES................................................. 363,949 1,035,342 1,809,986
---------- ------------- --------------
COMMITMENTS (Notes 4, 10 and 15)
STOCKHOLDERS' EQUITY (DEFICIT) (Notes 3 and 15)
Preferred stock, $.01 par value; authorized: 5,000,000 shares;
issued and outstanding: none
Common stock, $.01 par value; authorized: 15,000,000 shares; issued
and outstanding: 1,451,526 as of December 31, 1995 and 2,811,434
as of December 31, 1996 and March 31, 1997 (Unaudited)............ 7,682 21,280 21,280
Additional paid-in capital.......................................... 572,428 2,325,404 2,325,404
Deficit............................................................. (587,321) (2,153,025) (2,499,363)
Less prepaid rent................................................... (15,000) (13,333)
---------- ------------- --------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT).............................. (7,211) 178,659 (166,012)
---------- ------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT).............. $ 356,738 $ 1,214,001 $ 1,643,974
---------- ------------- --------------
---------- ------------- --------------
</TABLE>

See notes to financial statements

F-3
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
1995 31, 1996
--------- ---------- THREE MONTHS
ENDED MARCH 31,
1996 1997
--------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
SALES (NOTE 10)............................................... $ 294,734 $ 126,835 $ 437,799
COST OF SALES................................................. (197,803) (24,722) (234,525)
---------- --------- ---------
GROSS PROFIT.............................................. 96,931 102,113 203,274
---------- --------- ---------

EXPENSES
Research and development.................................... $(233,073) (334,750) (108,723) (106,366)
General and administrative.................................. (294,089) (1,253,031) (139,142) (394,460)
--------- ---------- --------- ---------
TOTAL EXPENSES............................................ (527,162) (1,587,781) (247,865) (500,826)
--------- ---------- --------- ---------
LOSS FROM OPERATIONS...................................... (527,162) (1,490,850) (145,752) (297,552)

INTEREST EXPENSE AND AMORTIZATION AND WRITE-OFF OF DISCOUNT
AND DEFERRED FINANCING COSTS (Notes 3, 4 and 14)............ (189,882) (8,362) (48,786)
--------- ---------- --------- ---------
LOSS BEFORE INCOME TAXES AND EXTRAORDINARY INCOME......... (527,162) (1,680,732) (154,114) (346,338)

DEFERRED INCOME TAXES (Note 11)............................... (40,000) 40,000 40,000
--------- ---------- --------- ---------
LOSS BEFORE EXTRAORDINARY INCOME.......................... (567,162) (1,640,732) (114,114) (346,338)

EXTRAORDINARY INCOME FROM FORGIVENESS OF INDEBTEDNESS (Note
3).......................................................... 75,028
--------- ---------- --------- ---------
NET LOSS.................................................. $(567,162) $(1,565,704) $(114,114) $(346,338)
--------- ---------- --------- ---------
--------- ---------- --------- ---------

AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (Note 3).......... 1,385,243 2,622,393 1,455,919 2,811,434
--------- ---------- --------- ---------
--------- ---------- --------- ---------
LOSS PER COMMON SHARE
Loss before extraordinary income............................ $ (.41) $ (.63) $ (.08) $ (.12)
Extraordinary income........................................ .03
--------- ---------- --------- ---------

NET LOSS.................................................. $ (.41) $ (.60) $ (.08) $ (.12)
--------- ---------- --------- ---------
--------- ---------- --------- ---------
</TABLE>

See notes to financial statements

F-4
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
COMMON STOCK
(NOTE 3) ADDITIONAL PREPAID
-------------------- PAID-IN RENT
SHARES AMOUNT CAPITAL DEFICIT (NOTE 10) TOTAL
--------- --------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance--January 1, 1995................... 961,452 $ 2,781 $ 247,329 $ (20,159) $ 229,951

1995, issuances of shares to investors
($.75 to $.94, per share)................ 384,580 3,846 326,154 330,000
1995, issuance of anti-dilutive shares..... 105,494 1,055 (1,055)
Net loss for the year ended December 31,
1995..................................... (567,162) (567,162)
--------- --------- ----------- ----------- -----------
Balance--December 31, 1995............... 1,451,526 7,682 572,428 (587,321) (7,211)

1996, issuance of shares to investors
($.94, per share)........................ 5,343 53 4,947 5,000
April 5, 1996, issuance of shares to
landlord ($.94, per share)............... 21,366 214 19,786 $ (20,000)
May 1996, issuance of shares under bridge
financing ($.47, per share), net of
expenses of $12,220...................... 200,000 2,000 79,780 81,780
June 1996, issuance of shares to consultant
($.10, per share)........................ 299,000 2,990 27,010 30,000
June 1996, issuance of shares to consultant
($.94, per share)........................ 25,000 250 23,250 23,500
June 13, 1996, conversion of loan
payable--stockholder ($.94, per share)... 64,994 650 60,190 60,840
June 20, 1996, conversion of loan
payable--other ($.94, per share)......... 203,726 2,037 188,666 190,703
July 1, 1996, conversion of debentures
($2.25, per share)....................... 25,333 253 56,747 57,000
August to November 1996, issuance of shares
under private placement ($3.00, per
share), net of expenses of $287,749...... 500,000 5,000 1,207,251 1,212,251
September 1996, issuance of shares to
vendor ($3.00, per share)................ 3,500 35 10,465 10,500
October 1996, issuance of shares to
consultant ($3.00, per share)............ 25,000 250 74,750 75,000
December 1996, adjustment to
anti-dilutive shares..................... (13,354) (134) 134
Amortization of prepaid rent............... 5,000 5,000
Net loss for the year ended December 31,
1996..................................... (1,565,704) (1,565,704)
--------- --------- ----------- ----------- --------- -----------
Balance--December 31, 1996............... 2,811,434 21,280 2,325,404 (2,153,025) (15,000) 178,659
Amortization of prepaid rent............... 1,667 1,667
Net loss for the three months ended March
31, 1997 (Unaudited)..................... (346,338) (346,338)
--------- --------- ----------- ----------- --------- -----------
Balance--March 31, 1997 (Unaudited)...... 2,811,434 $ 21,280 $ 2,325,404 $(2,499,363) $ (13,333) $ (166,012)
--------- --------- ----------- ----------- --------- -----------
</TABLE>

See notes to financial statements

F-5
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1995 1996
------------- ----------- THREE MONTHS ENDED MARCH
31
-------------------------
1996 1997
------------ -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.................................................. $ (567,162) $(1,565,704) $ (114,114) $ (346,338)
Adjustments to reconcile net loss to net cash used in
operating activities
Write-off and amortization of discount and deferred
financing costs..................................... 122,070 14 8,654
Amortization of deferred software costs............... 72,586 3,440 39,453
Deferred income....................................... 20,000
Depreciation and amortization......................... 4,105 15,568 2,469 6,928
Loss on sales of accounts receivable.................. 9,621
Amortization of prepaid rent.......................... 5,000 1,667
Capitalization of software costs...................... (214,941) (266,465) (46,241) (71,326)
Forgiveness of indebtedness........................... (75,028)
Deferred income taxes................................. 40,000 (40,000) (40,000)
Increase (decrease) in cash flows from
Accounts receivable................................. (168,085) (110,934) (379,543)
Unbilled account receivable......................... (20,000)
Inventory........................................... (108,921) (119,236) 28,521 26,720
Other current assets................................ (4,553) (3,524) 4,553 2,945
Other assets........................................ (3,953) (410)
Trade notes and accounts payable and accrued
expenses.......................................... 189,001 400,189 78,156 90,325
Payroll taxes payable............................... 10,146 91,778 16,881 33,687
------------- ----------- ------------ -----------
NET CASH USED IN OPERATING ACTIVITES (656,278) (1,521,230) (177,665) (586,828)
------------- ----------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets................................. (17,227) (107,319) (29,137) (15,996)
------------- ----------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock.................... 355,000 1,299,031 5,000
Proceeds from loan payable--stockholder................... 112,314 189,102 23,472 384,691
Proceeds from loan payable--other......................... 178,087 142,170 8,700
Proceeds from sales of accounts receivable................ 150,730
Proceeds from bridge financing............................ 135,720
Proceeds from convertible debentures...................... 54,980 34,980
Increase in note payable--line of credit.................. 257,241
Payments of notes payable--bridge financing............... (250,000)
Costs of proposed public offering......................... (73,650) (36,091)
Payments of loans payable--stockholders................... (27,192)
------------- ----------- ------------ -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES........... 467,314 1,656,808 205,622 614,541
------------- ----------- ------------ -----------
INCREASE (DECREASE) IN CASH......................... (206,191) 28,259 (1,180) 11,717

CASH--beginning............................................. 212,031 5,840 5,840 34,099
------------- ----------- ------------ -----------
CASH--ending................................................ $ 5,840 $ 34,099 $ 4,660 $ 45,816
------------- ----------- ------------ -----------
------------- ----------- ------------ -----------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest.................................... NONE $ 41,813 $ 2,186 $ 9,844
------------- ----------- ------------ -----------
------------- ----------- ------------ -----------
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITY--1996
The Company issued shares of common stock in exchange for reductions in future
rent (Note 10)
Loans payable--stockholders were converted into common stock (Note 3)
Loan payable--other was converted into common stock (Note 3)
Convertible debentures were converted into common stock (Note 3)
Accounts payable to a consultant and a vendor were converted into common stock
(Note 3)
Capitalized software costs also included $250,000 acquired for future payments
and common stock (Note 6)
The Company issued shares of common stock in exchange for a factoring fee
(Note 4).

See notes to financial statements

F-6
<PAGE>
APOLLO INTERNATIONAL OF DELAWARE, INC.
NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Apollo International of Delaware, Inc. (Company) was incorporated in
November 1994 to develop, manufacture and distribute electric power protection
and control products, utilizing computer and fiber optics technologies, for
industry and electric utilities. The Company was in the development stage
through December 31, 1995.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INVENTORY

Inventory was stated at the lower of cost or market, using the first-in,
first-out method.

FIXED ASSETS

Equipment and furniture and computer software were stated at cost and are
being depreciated on the straight-line method over their estimated useful lives
of five and three years, respectively.

Leasehold improvements were stated at cost and are being amortized over the
life of the lease (Note 10) or lives of the asset, whichever is less.

SOFTWARE COSTS

Costs of software to be sold, which were incurred after technological
feasibility has been established and until it is available for general release,
have been capitalized and are being amortized on the straight-line method over
the estimated economic lives of the related products or three years, whichever
is less.

DEFERRED INCOME TAXES

Deferred income taxes have been provided on timing differences between
financial statement and income tax reporting resulting from computer software
costs and net operating loss carryforwards.

REVENUE RECOGNITION

Revenue from product sales has been recognized upon shipment.

DEFERRED FINANCING COSTS AND DISCOUNTS

Deferred financing costs have been capitalized and are being amortized on
the straight-line method over the term of the related financing agreement.

Discounts on the bridge financing and convertible debentures have been
amortized on the interest method over the term of the related notes payable.

F-7
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK BASED COMPENSATION

Stock based compensation of nonemployees and employees have been valued on
the fair value based method and the intrinsic value based method, respectively.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs have been charged to operations as incurred.

ADVERTISING COSTS

Advertising costs are expensed as incurred and are included in general and
administrative expenses. For the years ending December 31, 1995 and 1996 and the
three months ended March 31, 1996 and 1997, advertising costs were $3,869,
$35,072, $2,695 (Unaudited) and $4,000 (Unaudited), respectively.

LOSS PER COMMON SHARE

Loss per common share was computed based on the weighted average number of
common shares and common share equivalents outstanding during the year. All
shares and per share amounts have been retroactively restated to reflect the
stock split on May 10, 1996. The 299,000 shares issued in June 1996 (Note 3) and
the 105,494 shares issued under anti-dilution provisions, as subsequently
adjusted by 13,354 shares (Note 3), have been treated as outstanding for all
periods or from date of original issuance, respectively, in calculating loss per
common share because such shares were issued at prices below the proposed public
offering price (Note 15).

Fully-dilutive loss per common share has not been presented because it was
anti-dilutive.

3. CAPITALIZATION

PREFERRED STOCK

In June 1996, the Company authorized 5,000,000 shares of $.01, par value,
preferred stock.

COMMON STOCK

In November 1994, the Company authorized 100,000 shares of $.01, par value,
common stock.

Effective October 1995, the Company issued 105,494 shares of common stock
under anti-dilution provisions of previously issued common stock. In December
1996, the Company cancelled 13,354 of such shares.

RECAPITALIZATION AND STOCK SPLIT

Effective May 10, 1996, the Company increased its authorized common stock to
15,000,000 shares and authorized a 10.6828 for 1 stock split, without a change
in par value. As a result of the split, the Company issued 1,339,860 additional
shares of common stock and transferred $7,105 from additional paid-in capital to
common stock. All shares and per share amounts have been retroactively restated
to reflect the stock split.

LOAN PAYABLE--STOCKHOLDER

During January to April 1996, a stockholder advanced the Company $60,840. On
June 13, 1996, the advances were converted into 64,994 shares of common stock.

F-8
<PAGE>
3. CAPITALIZATION (CONTINUED)
LOANS PAYABLE--OTHER

During January to April 1996, the Company borrowed an aggregate of $178,087,
payable on demand, with interest at 18%, per annum. On June 20, 1996, the loans
and accrued interest thereon of $12,616 were converted into 203,726 shares of
common stock.

CONVERTIBLE DEBENTURES

During March/April and May 1996, the Company sold convertible debentures in
the aggregate face amount of $47,000 and $10,000, respectively, for proceeds of
$44,980 and $10,000, respectively. The debentures were due in March and April
2001, with interest at 11.625% to 12.625%, per annum, payable annually. On July
1, 1996, the debentures were converted into 25,333 shares of common stock.

CONSULTING AGREEMENTS

In May 1996, the Company entered into a business consulting agreement in
exchange for, at the Company's option: (a) $30,000 in cash or (2) 299,000 shares
of common stock and 400,000 warrants to purchase shares of common stock. Each
warrant is exercisable at $5.50, per share, commencing June 1998 through May
2001. If the Company does not close an initial public offering before June 1,
1997, the Company will be entitled to cancel the warrants and redeem the shares
for $1.00. In June 1996, the Company issued the shares of common stock and
warrants to the consultant (Note 14).

In June 1996, the Company issued 25,000 shares of common stock to a
consultant, at $.94, per share, the fair value of the shares (Note 14).

In June 1996, the Company entered into a business consulting agreement
through June 2001, in exchange for 250,000 warrants to purchase shares of common
stock, each exercisable to purchase one share of common stock at $4, per share,
commencing June 1, 2000 to June 1, 2002.

In November 1996, the Company entered into a business consulting agreement
with a stockholder in exchange for 250,000 warrants to purchase shares of common
stock, each exercisable to purchase one share, at $5.50, per share, commencing
June 1, 2000 to June 1, 2002.

BRIDGE FINANCING

On May 15, 1996, the Company completed a bridge financing for aggregate
proceeds of $250,000 and issued notes payable of $250,000, with interest at 12%,
per annum, and 200,000 shares of common stock. In connection with the bridge
financing, the Company paid an underwriter a discount of $25,000 and a
nonaccountable expense allowance of $7,500.

The Company allocated $.47, per share, of the proceeds of the bridge
financing to the common stock, the value of the shares at the date of issuance.

The notes payable issued with the bridge financing were repaid with proceeds
from the private placement and the unamortized discount and deferred financing
costs of $80,945 and $17,462, respectively, were written-off.

STOCK OPTION PLAN

In June 1996, the Company adopted a stock option plan under which it may
grant both qualified and nonqualified options to purchase up to 500,000 shares
of common stock to directors, officers and key employees. Options shall be
exercisable for a period of up to ten years (five years for qualified options)

F-9
<PAGE>
3. CAPITALIZATION (CONTINUED)
from the date of the grant at no less than the fair value on the date of the
grant (five years and 110% of fair market value for stockholders owning 10% or
greater).

During the year ended December 31, 1996, the Company granted qualified
options, under the plan, to purchase 261,500 shares of common stock at $4, per
share, none of which are exercisable.

FORGIVENESS OF INDEBTEDNESS

On September 17, 1996, the Company settled an accounts payable to a vendor
of $110,528 in exchange for $25,000 in cash and the issuance of 3,500 shares of
common stock (including 1,100 shares issued directly to the shareholder of the
vendor). The Company valued the shares at $3, per share, the value of the
private placement and, as such, recorded forgiveness of indebtedness income of
$75,028.

PRIVATE PLACEMENT

In November 1996, the Company completed a private placement of 500,000
shares of common stock and 250,000 warrants for an aggregate of $1,500,000. Each
warrant is exercisable to purchase one share of common stock at a price of
$5.50, per share, for a period of four years, commencing two years from the
later of (i) the closing of the private placement or (ii) the date of the
proposed public offering.

In connection with the private placement, the Company paid the underwriter a
commission of $150,000 and a nonaccountable expense allowance of $45,000, and
incurred other expenses of $92,749.

WARRANTS

In July 1996, the Company borrowed $50,000 from a consultant, which was
repaid in August 1996, without interest. As consideration for the loan, the
Company issued to such consultant a warrant to purchase 50,000 shares of common
stock, exercisable at $5.50 per share, commencing June 30, 2000 until June 30,
2002.

In September and November 1996, the Company issued warrants to three
employees, each exercisable to purchase 50,000 shares of common stock at $5.50,
per share, commencing at the earlier of (1) one year from the proposed public
offering or (2) September 26, 1998 through September 26, 2001 and November 1,
2001, respectively.

RESERVED SHARES

The values of all options and warrants have been deemed immaterial as all
were issued with exercise prices in excess of their fair values.

As of December 31, 1996 and March 31, 1997 (Unaudited), common stock was
reserved as follows:

<TABLE>
<S> <C>
Warrants--consultants............................................ 950,000
Stock option plan................................................ 500,000
Warrants--private placement...................................... 250,000
Warrants--employees.............................................. 150,000
Shares to be issued in connection with license agreement (Note
6)............................................................. 41,666
---------
1,891,666
---------
---------
</TABLE>

F-10
<PAGE>
4. SALES OF ACCOUNTS RECEIVABLE

On October 31, 1996, the Company entered into an agreement to sell, without
notification, with full recourse and subject to credit approval, all existing
and future accounts receivable to a finance company owned by certain
stockholders of the Company, in exchange for 94% of the invoiced amount. Upon
becoming delinquent, as defined, the Company will repurchase the accounts
receivable for 94% of the amount invoiced. The agreement limits uncollected
accounts receivable sold to $425,000. The Company will also pay a fee equal to
1%, per month, of the uncollected accounts receivable sold in excess of 30 days
(Note 14).

As of December 31, 1996, the uncollected accounts receivable sold were
$160,350, of which 88% were from two customers. For the year ended December 31,
1996, the loss on sales of accounts receivable and fees were $9,621, which have
been charged to interest expense. In addition, the Company incurred a fee in
connection with the agreement of 25,000 shares of common stock which the Company
valued at $3, per share, the fair value of the shares.

5. INVENTORY

As of December 31, 1995 and 1996 and March 31, 1997 (Unaudited), inventory
consisted of:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Raw materials............................................ $ 164,362 $ 201,437
Work-in-progress......................................... $ 108,921 30,785
Finished goods........................................... 33,010
---------- ---------- ----------
$ 108,921 $ 228,157 $ 201,437
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

6. DEFERRED SOFTWARE COSTS

For the year ended December 31, 1996, the Company capitalized software costs
of $516,465, which included a fee of $250,000 to use certain licensed software
within the Company's software products. The fee is payable to a company owned by
a stockholder, as follows: (1) $62,500, in cash, on the earlier of September 1,
1998 or the last day of the first quarter which the gross revenues of the
Company exceeds $500,000, subject to available cash flow, (2) one-half of the
balance up to $125,000, in cash, due each subsequent quarter the gross revenues
of the Company exceeds $500,000, subject to available cash flow, (3) 20,833
shares of common stock issuable upon the successful running of the licensed
software within the Company's product and (4) 20,833 shares of common stock
issuable upon a successful beta test. The shares will be valued at $3 per share,
the fair value of the shares.

7. FIXED ASSETS

As of December 31, 1995 and 1996 and March 31, 1997 (Unaudited), fixed
assets consisted of:

<TABLE>
<CAPTION>
1995 1996 1997
--------- ---------- ----------
<S> <C> <C> <C>
Equipment and furniture.................................... $ 19,212 $ 111,187 $ 122,837
Computer software.......................................... 3,515 15,192 19,538
Leasehold improvements..................................... 3,667 3,667
--------- ---------- ----------
22,727 130,046 146,042
Less accumulated depreciation and amortization............. 3,787 18,944 25,770
--------- ---------- ----------
$ 18,940 $ 111,102 $ 120,272
--------- ---------- ----------
--------- ---------- ----------
</TABLE>

F-11
<PAGE>
8. TRADE NOTES AND ACCOUNTS PAYABLE

Through December 31, 1996, the Company converted accounts payable of
$114,701 to notes payable, all of which bear interest at 18%, per annum, and are
due on June 1, 1997.

9. LOANS PAYABLE--STOCKHOLDERS

As of December 31, 1996 and March 31, 1997 (Unaudited), loans
payable--stockholders consisted of:

Note payable for inventory purchases, bearing interest at 2% above the
prime rate (10.25%, at December 31, 1996), per annum. The note is
collateralized by all the assets of the Company(a)(b)(c)............ $ 92,134 $ 449,151
Note payable in equal monthly installments of $1,600, including
interest at 10.5%, per annum, through June 15, 1998, when the
balance is due...................................................... 85,121 85,121
Account payable due from proceeds of public offering (Note 15)........ 23,000 23,000
Loans payable on demand, without interest............................. 13,129 40,803
---------- ----------
213,384 598,075
Less noncurrent portion............................................... 70,916 67,864
---------- ----------
$ 142,468 $ 530,211
---------- ----------
---------- ----------
</TABLE>

(a) Payable with interest in amounts equal to 50% of the outstanding balance
during any quarter which gross revenues of the Company exceeds $500,000,
subject to available cash flow, and in full by June 30, 1998.

(b) Subsequent to December 31, 1996 and through February 10, 1997 and then to
March 31, 1997, the Company borrowed an additional $305,911 and $51,106
(Unaudited), respectively, under the same terms.

(c) On May 19 and 28, 1997 (Unaudited), the note was amended to defer the final
payment date to December 31, 1999 and change the collateral to inventory and
equipment purchased with advances under the note.

For the year ended December 31, 1996 and three months ended March 31, 1997,
interest expense to stockholders was $22,539 and $10,241 (Unaudited),
respectively.

10. COMMITMENTS

LEASE

The Company is committed under noncancellable leases for office and research
space requiring minimum annual rents of $51,600 and $18,648 through March 31,
1999 and October 31, 1998, respectively. In addition, the Company issued the
landlord 21,366 shares of common stock in exchange for $20,000, payable in equal
installments over 36 months, by reductions of future monthly rent.

For the years ending December 31, 1995 and 1996 and the three months ended
March 31, 1996 and 1997, rent expense was $10,736, $55,192, $6,070 (Unaudited)
and $21,261 (Unaudited), respectively.

F-12
<PAGE>
10. COMMITMENTS (CONTINUED)
EMPLOYMENT AGREEMENT

In June 1996, the Company entered into an employment agreement with an
officer (chief executive officer and president) through June 2001, which
annually shall automatically be extended for one year beginning on the fifth
anniversary of the agreement. The agreement provides for an annual base
compensation of $150,000, with annual increases based on cost of living
increases, plus increases up to $100,000, if the Company's gross revenues are in
excess of $10,000,000 and if income before interest and income taxes are 10% of
gross revenues. Upon death, the executive or his estate shall receive an amount
equal to one year's base salary, payable over 12 months. Upon permanent
disability, the officer shall receive an amount equal to three times the base
salary, payable over 36 months, plus insurance and other benefits, etc. for
three years. Upon termination by the Company, the officer shall receive an
amount equal to the balance of the agreement, payable upon termination, plus
insurance and other benefits, etc., for two years. Upon nonrenewal of the
agreement by the Company, the officer shall receive one year's base salary
payable over 12 months. Upon a termination within nine months of a change in
control of the Company, the officer shall receive an amount equal to the balance
of the agreement, but for no less than a three year period.

During 1996, the Company also entered into employment agreements with four
additional officers for terms of four years, except one with a term of two
years, and all are automatically renewable for two year terms, unless
terminated. The agreements provided for annual base salaries of $120,000,
$100,000, $80,000 and $80,000, subject to increases for annual cost of living
adjustments.

One officer is also entitled to receive additional compensation equal to
1 1/2% of the net sales proceeds, as defined, of the Company's products within
the United States. Another officer is entitled to receive additional
compensation equal to 3% of the net sales proceeds of the Company's products
outside North America. The agreements also provide for severance payments upon
death, permanent disabilities or termination by the Company of the officer equal
to six months base salary, plus insurance and other benefits for six months.

EQUIPMENT LEASE

The Company is also committed under a noncancellable lease for office
equipment requiring, future minimum annual lease payments of $5,136, through
March, 2000.

CONSULTING AGREEMENT

In December 1996, the Company entered into an agreement with a stockholder
to provide consulting services commencing with the month following the closing
of the Company's proposed public offering (Note 15) through September 1, 1997 in
exchange for $4,000, per month.

DEFERRED INCOME

For the year ended December 31, 1996, sales included $60,000 from the design
and development of certain hardware and software using the Company's underlying
products. As of December 31, 1996, the Company has completed all requirements of
the agreement, except the field operations and, as such, the Company has
deferred the final additional $20,000 of sales.

11. INCOME TAXES

Through November 30, 1995, the Company had elected as an "S" Corporation for
Federal and state purposes and, as such, was not required to pay income taxes.

F-13
<PAGE>
11. INCOME TAXES (CONTINUED)
For the years ended December 31, 1995 and 1996 and for the three months
ended March 31, 1996 (Unaudited) and 1997 (Unaudited), the tax effects of timing
differences which gave rise to deferred income taxes were as follows:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
----------------------- ---------------------
1995 1996 1996 1997
---------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Net operating loss carryforwards........................ $ 40,000 $ 760,000 $ 60,000 $ 135,000
Computer software costs................................. (80,000) (170,000) (19,000) (15,000)
Less valuation allowance................................ (550,000) (1,000) (120,000)
---------- ----------- --------- ----------
$ (40,000) $ 40,000 $ 40,000 NONE
---------- ----------- --------- ----------
---------- ----------- --------- ----------
</TABLE>

As of December 31, 1995 and 1996 and March 31, 1997 (Unaudited), the tax
effect of deferred income taxes payable were as follows:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ----------- -----------
<S> <C> <C> <C>
Net operating loss carryforwards.................................. $ 40,000 $ 800,000 $ 935,000
Computer software costs........................................... (80,000) (250,000) (265,000)
Less valuation allowance.......................................... (550,000) (670,000)
---------- ----------- -----------
$ (40,000) NONE NONE
---------- ----------- -----------
---------- ----------- -----------
</TABLE>

As of December 31, 1996 and March 31, 1997, the Company had net operating
loss carryforwards available to reduce future taxable income of approximately
$2,095,000 expiring through 2011 and $365,000 (Unaudited) expiring through 2012,
respectively.

12. CONCENTRATION OF CASH

The Company, from time to time, had cash in financial institutions in excess
of insured limits. In assessing its risk, the Company's policy is to maintain
funds only with reputable financial institutions.

13. GOING CONCERN

The Company has incurred net losses since inception and, as of December 31,
1996, their current liabilities exceeded their current assets by $541,359. These
factors raise doubt about the Company's ability to continue as a going concern.
Management believes the net proceeds of the proposed public offering (Note 15)
will provide the necessary cash to resolve these matters. The financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.

14. SUBSEQUENT EVENTS

LINE OF CREDIT AGREEMENT

On January 1, 1997, the Company converted their agreement to sell accounts
receivable (Note 4) to a revolving line of credit agreement through December 31,
1998. Under the agreement, the Company may borrow 94.5% of individual eligible
accounts receivable, up to $500,000 of such accounts receivable. Borrowings
under the line of credit (1) bear interest at 1%, per month, payable monthly,
plus the additional 5.5% of the individual eligible accounts receivable-payable
upon repayment, and (2) are collateralized by the individual account receivable.
The borrowings are due upon collection or six months, which ever is sooner.

F-14
<PAGE>
14. SUBSEQUENT EVENTS (CONTINUED)
Subsequent to December 31, 1996 and through February 3, 1997 and then to
March 31, 1997, the Company borrowed $62,886 and $194,355 (Unaudited),
respectively, under the line of credit.

STOCK OPTIONS

In February 1997, the Company granted qualified options under the stock
option plan (Note 3) to purchase 90,000 shares of common stock, at $4, per
share.

LOSS PER COMMON SHARE (UNAUDITED)

In February 1997, the FASB issued Statement No. 128, "Earnings Per Share",
which changes the calculations and disclosures of earnings per share. As of
January 1, 1997, the Company adopted Statement No. 128 without material effect.

COMMON STOCK (UNAUDITED)

In June 1997, stockholders contributed an aggregate of 25,000 shares of
common stock to the Company without consideration (Note 3).

In June 1997, the Company issued 17,360 shares of common stock to a
stockholder under anti-dilution provisions.

In June 1997, the Company repurchased and retired 299,000 shares of common
stock from a consultant in exchange for the reduction of the exercise price of
warrants, held by the consultant, to purchase 400,000 shares of common stock
from $5.50 to $3.00, per share (Note 3).

15. PROPOSED PUBLIC OFFERING (UNAUDITED)

The Company has entered into an agreement with an underwriter for a proposed
public offering, anticipated to be for 800,000 shares of common stock at a price
of $5, per share, plus 800,000 warrants (Public Warrants) at a price of $.25,
per warrant, for an aggregate of $4,200,000. Each Public Warrant shall be
exercisable for one share of common stock at a price of $5.50, per share, for a
period of four years, commencing two years from the date of the public offering.
Upon certain conditions, the warrants will be redeemable by the Company at $.25,
per warrant. The offering will also provide for an overallotment option of
120,000 shares and 120,000 warrants.

The underwriter shall be entitled to a 10% discount and 3% nonaccountable
expense allowance. Upon closing of the public offering, the Company will sell to
the Underwriter, for $10, a warrant to purchase 80,000 shares of common stock at
$8.25, per share, and 80,000 Public Warrants at $.4125 per warrant, exercisable
for five years commencing one year from the public offering. In addition, upon
the closing of the public offering, the Company will enter into a three year
consulting agreement with the underwriter for $2,333.33, per month, payable at
closing.

The Company anticipates other costs of the proposed public offering of
$448,260.

16. INTERIM FINANCIAL STATEMENT (UNAUDITED)

In the opinion of management, the interim unaudited financial statements as
of March 31, 1997 reflect all material adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position, the results of operations and cash flows. Interim results are not
necessarily indicative of the results of the entire year.

F-15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, OR ANY UNDERWRITER OR BROKER/DEALER. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANY PERSON
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 7
Use of Proceeds................................ 17
Dilution....................................... 18
Capitalization................................. 19
Dividend Policy................................ 20
Management's Discussion of Plan of
Operations................................... 20
Business....................................... 24
Management..................................... 29
Beneficial Ownership of Principal Stockholders
and Management............................... 36
Certain Transactions........................... 37
Description of Securities...................... 39
Shares Eligible for Future Sale................ 42
Underwriting................................... 44
Legal Matters.................................. 48
Experts........................................ 48
Available Information.......................... 48
Financial Statements........................... F-1
</TABLE>

------------------------

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

800,000 SHARES OF COMMON STOCK
AND
800,000 REDEEMABLE COMMON STOCK
PURCHASE WARRANTS

APOLLO INTERNATIONAL
OF DELAWARE, INC.
---------------------

PROSPECTUS

---------------------

MAY DAVIS GROUP, INC.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 11 of the Certificate of Incorporation of Apollo International of
Delaware, Inc. (the "Registrant") eliminates the personal liability of directors
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, that such elimination of the personal
liability of a director of the Registrant does not apply to (i) any breach of
the director's duty of loyalty to the Registrant or its stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) actions prohibited under Section 174 of the
Delaware General Corporation Law (i.e., liabilities imposed upon directors who
vote for or assent to the unlawful payment of dividends, unlawful repurchases or
redemption of stock, unlawful distribution of assets of the Registrant to the
stockholders without the prior payment or discharge of the Registrant's debts or
obligations, or unlawful making or guaranteeing of loans to directors), or (iv)
any transaction from which the director derived an improper personal benefit. In
addition, Article 11 of the Registrant's Certificate of Incorporation, provides
that the Registrant shall indemnify its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law, as amended from time
to time.

Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

Section 145 further provides that a corporation may indemnify a person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interest of the corporation, and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper. To the extent that a director, officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to above, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith. Expenses (including attorneys' fees) incurred by an
officer or

II-1
<PAGE>
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of any
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.

The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 145 of the Delaware General Corporation Law shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.

The Company's Board of Directors and its executive officers entered into
indemnification agreements with the Company. The terms of indemnification and
advancement of expenses follow the indemnification and expense advancement
provisions of Delaware's General Corporation Law. In addition, the indemnitee
under the agreements is entitled to indemnification against all expenses
actually and reasonably incurred by him or on his behalf in connection with
serving as a witness in any proceeding (as defined in the agreement) by virtue
of his or her status with the Company. The agreements also provide a procedural
mechanism under which the indemnitee can claim and obtain indemnification,
including a procedure for the Board or independent counsel to determine
entitlement to indemnification under specific situations. In the event the
indemnitee does not receive the indemnification to which he would otherwise be
entitled under the terms of the agreement, the indemnitee is entitled to seek a
judicial determination. In the event the indemnitee seeks a judicial
adjudication to enforce his or her rights under, or to recover damages for
breach of, the agreement, the indemnitee is entitled to recover from the Company
his or her reasonable legal fees and other expenses in connection with the legal
proceeding, subject to proration in the event the amount of the aware is less
than the amount of indemnification sought.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
Registration fee.................................................. 3,760
National Association of Securities Dealers, Inc................... 2,500*
NASDAQ listing fee................................................ 8,500*
Printing and engraving expenses................................... 100,000
Accounting fees and expenses...................................... 100,000*
Legal fees and expenses........................................... 141,000*
Blue sky fees and expenses........................................ 65,000*
Transfer agent and registrar fees................................. 7,500*
Underwriters' non-accountable expense allowance (assuming no
exercise of over-allotment option).............................. 126,000*
Miscellaneous..................................................... 20,000*
---------
Total......................................................... $ 574,260*
</TABLE>

- ------------------------

* Estimated expenses.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

Within the past three years, the Company has sold the following securities
without registration
under the Securities Act of 1933, as amended, (the "Securities Act") in reliance
on exemptions from registration afforded by the Securities Act or the rules and
regulations promulgated thereunder.

II-2
<PAGE>
In December 1994, a total of 694,382 shares of Common Stock were issued to
David W. Clarke, Christine Clewes, W. Haines Knox and Mathias E. Lukens, Jr.,
the Company's founders, for a total consideration of $110.

From December 21, 1994 to December 7, 1995, the Company issued 651,650
shares of common stock to eight accredited investors for total proceeds of
$580,000 pursuant to a private placement conducted by the Company to accredited
investors. The sales of these securities was made in reliance on Regulation D,
Rule 506 of the Securities Act, which provides exemptions for transactions not
involving a public offering. With regard to the Company's reliance upon the
exemption from registration provided by Regulation D, Rule 506 of the Securities
Act, certain inquiries were made by the Company to establish that such sale
qualified for such exemption. In particular, the Company confirmed that with
respect to such exemption (i) the investor made representations that he was an
"accredited investor" within the meaning of Regulation D of the Securities Act
in relation to such investments, and (ii) the purchaser gave written assurance
of his investment intent, and the certificate for the securities bear a legend
accordingly.

In October 1995 and June 1997, the Company issued to certain shareholders
(accredited investors who purchased securities in the Company's private
placement referenced above) a total of 105,494 and 17,360 shares of Common
Stock, respectively pursuant to anti-dilution provisions of certain prior
subscription agreements between those shareholders and the Company, the
certificates of which bear the same restrictive legend as the certificates they
received in respect of the private placement.

In January 1996, a total of 5,343 shares of Common Stock were issued to two
accredited investors for total proceeds of $5,000 pursuant to a private
placement conducted by the Company. The sales of these securities was made in
reliance on Regulation D, Rule 506 of the Securities Act, which provides
exemptions for transactions not involving a public offering. With regard to the
Company's reliance upon the exemption from registration provided by Regulation
D, Rule 506 of the Securities Act, certain inquiries were made by the Company to
establish that such sales qualified for such exemption. In particular, the
Company confirmed that with respect to such exemption (i) each investor made
representations that he or she was an "accredited investor" within the meaning
of Regulation D of the Securities Act in relation to such investments, and (ii)
each purchaser gave written assurance of his or her investment intent, and the
certificates for the securities bear a legend accordingly.

From March 6, 1996 to May 1, 1996, the Company issued convertible debentures
to six accredited investors (two of whom were then security holders of the
Company) pursuant to a private placement of $54,980 of such debentures. The
debentures were issued for an aggregate face value of $57,000. The debentures
were convertible into common stock at a conversion rate of $2.25 per share and
all of the holders converted their debentures into a total of 25,333 shares of
Common Stock in July 1996. The placement of the debentures was made in reliance
upon Regulation D, Rule 506 of the Securities Act, which provides exemptions for
transactions not involving a public offering. With regard to the Company's
reliance upon the exemption from registration provided by Regulation D, Rule
506, certain inquiries were made by the Company to establish that such sales
qualified for such exemption. In particular, the Company confirmed that with
respect to such exemption (i) each investor made representations that he or she
was an "accredited investor" within the meaning of Regulation D of the
Securities Act in relation to such investments, and (ii) each purchaser gave
written assurance of his or her investment intent, and the certificate for the
debentures (and the common stock issued upon conversion of such debentures) bear
a legend accordingly.

Effective April 1996, the Company issued 21,366 shares of Common stock to
two accredited investors (collectively, the Company's landlord) in consideration
of a rent reduction valued at $20,000 over the life of the Company's lease, in
reliance upon Section 4(2) of the Securities Act. The investors were provided
information about the Company or had access to such information, and the
investors were provided opportunities to review the information about the
Company and were permitted to ask questions of management concerning the
information provided or made available. The purchasers gave written assurance of
their investment intent, and the certificates for the securities bear a legend
accordingly. The

II-3
<PAGE>
investors were sophisticated in that they had such knowledge and experience in
financial and business matters so as to be capable of evaluating the risks of
such investment.

In May 1996, the Company issued 299,000 shares of Common Stock and a warrant
for 400,000 shares of Common Stock, exercisable at $5.50 per share to one
accredited investor for consulting services rendered to the Company valued at
$30,000 in reliance upon Regulation D, Rule 506 of the Securities Act, which
provides exemptions for transactions not involving a public offering. With
regard to the Company's reliance upon the exemption from registration provided
by Regulation D, Rule 506 of the Securities Act, certain inquiries were made by
the Company to establish that such sale qualified for such exemption. In
particular, the Company confirmed that with respect to such exemption (i) the
investor made representations that he was an "accredited investor" within the
meaning of Regulation D of the Securities Act in relation to such investments,
and (ii) the purchaser gave written assurance of his investment intent, and the
certificate for the securities bears a legend accordingly. In June 1997, the
Company repurchased the 299,000 shares in exchange for modification of the
warrants. The warrants were modified, changing the exercise price from $5.50 per
share to $3.00 per share and deleting the registration provisions. The warrants
are exercisable commencing one year from the Effective Date until May 10, 2001.

In May 1996, the Company issued a total of $250,000 in 12% redeemable
promissory notes and 200,000 shares of Common Stock to four accredited
investors. The notes and common stock were sold as units in that each investor
purchasing a note received the note plus a number of shares of common stock
equal to one half of the principal amount of the note (except for one investor
which received shares equaling in number twice the principal amount of the
note). The offering was conducted by the May Davis Group, Inc. as placement
agent, who received a commission of 10% of the gross proceeds. The sales of
these securities were made in reliance upon Regulation D, Rule 506 of the
Securities Act, which provides exemptions for transactions not involving a
public offering. With regard to the Company's reliance upon the exemption from
registration provided by Regulation D, Rule 506 of the Securities Act, certain
inquiries were made by the Company to establish that such sales qualified for
such exemption. In particular, the Company confirmed that with respect to such
exemption (i) each investor made representations that he or she was an
"accredited investor" within the meaning of Regulation D of the Securities Act
in relation to such investments and (ii) each purchaser gave written assurance
of his or her investment intent, and the certificates for the securites bear a
legend accordingly.

In June 1996, one accredited investor (director and shareholder of the
Company) and one of his affiliated entities (also an accredited investor),
converted a total of $190,703 of debt owed by the Company into a total of
203,726 shares of Common Stock. The sale of these securities was made in
reliance upon Section 4(2) of the Securities Act. The purchaser gave written
assurance of his investment intent, and the certificates for the securities bear
a legend accordingly.

In June 1996, an accredited investor (an officer, director and principal
shareholder of the Company) converted $60,840 of debt owed by the Company to
64,994 shares of Common Stock. The sale of these securities was made in reliance
upon Section 4(2) of the Securities Act. The purchaser gave written assurance of
his investment intent, and the certificates for the securities bear a legend
accordingly.

In June 1996, the Company issued a total of 12,500 shares of Common Stock to
two accredited investors for consulting services in respect of the Company's
business plan, which shares were valued at $.94 per share. The shares were
issued in reliance upon Section 4(2) of the Securities Act. Each investor was
provided information about the Company or had access to such information, and
each investor was provided opportunities to review the information about the
Company and was permitted to ask questions of management concerning the
information provided or made available. Each purchaser gave written assurance of
his or her investment intent, and the certificates for the securities bear a
legend accordingly. On May 29, 1997, these investors returned all of the shares
to the Company for cancellation, surrendering all their right, title and
interest in and to such shares without consideration.

II-4
<PAGE>
In June 1996, the Company issued a total of 12,500 shares of Common Stock to
one consultant for services rendered to the Company, which shares were valued at
$.94 per share. The shares were issued in reliance upon Section 4(2) of the
Securities Act. The investor was provided information about the Company or had
access to such information, and the investor was provided opportunities to
review the information about the Company and was permitted to ask questions of
management concerning the information provided or made available. The investor
gave written assurance of his investment intent, and the certificates for the
securities bear a legend accordingly. The investor was sophisticated in that he
had such knowledge and experience in financial and business matters so as to be
capable of evaluating the risks of such investment. On May 28, 1997, this
investor returned all of the shares to the Company for cancellation,
surrendering all his right, title and interest in and to such shares without
consideration.

In September 1996, the Company paid $25,000 in cash and issued 3,500 shares
of Common Stock to two consultants of the Company in payment of an account
payable in the amount of $85,528 in reliance upon Section 4(2) of the Securities
Act. Each investor was provided information about the Company or had access to
such information, and each investor was provided opportunities to review the
information about the Company and was permitted to ask questions of management
concerning the information provided or made available. Each purchaser gave
written assurance of his or her investment intent, and the certificates for the
securities bear a legend accordingly. Each investor gave written assurance of
his or her investment intent, and the certificates for the securities bear a
legend accordingly. These investors were sophisticated in that they had such
knowledge and experience in financial and business matters so as to be capable
of evaluating the risks of such investment.

From August 5, 1996 through November 14, 1996, the Company issued to 26
accredited investors an aggregate of 500,000 shares of Common Stock and 250,000
Common Stock purchase warrants for gross proceeds of $1,500,000 pursuant to a
private placement to accredited investors that commenced June 25, 1996. The
minimum offering closed in August 1996 and the Company had subsequent closings
until the maximum offering of $1,500,000 was met on November 14, 1996. Upon the
effective date of this Registration Statement, the warrants will have the same
exercise price and terms of the Public Warrants to be offered by the Company in
its initial public offering under this Registration Statement. The private
placement was conducted by the May Davis Group, Inc. as placement agent, which
was paid a commission of 10% and a non-accountable expense allowance of 3%, each
of which was calculated on the gross proceeds. The sales of these securities
were made in reliance upon Regulation D, Rule 506 of the Securities Act, which
provides exemptions for transactions not involving a public offering. With
regard to the Company's reliance upon the exemption from registration provided
by Regulation D, Rule 506 of the Securities Act, certain inquiries were made by
the Company to establish that such sales qualified for such exemption. In
particular, the Company confirmed that with respect to such exemption (i) each
investor made representations that he or she was an "accredited investor" within
the meaning of Regulation D of the Securities Act in relation to such
investments and (ii) each purchaser gave written assurance of his or her
investment intent, and the certificates for the securites bear a legend
accordingly.

In June 1996, the Company issued to one accredited investor in respect of
business consulting services a warrant for 250,000 shares of Common Stock
exercisable at $4.00 per share commencing June 1, 2000 and terminating June 1,
2002 and a warrant for 50,000 shares of Common Stock exercisable at $5.50 per
share commencing June 30, 2000 and terminating June 30, 2002, in reliance upon
the exemption from registration provided by Regulation D, Rule 506 of the
Securities Act. With regard to the Company's reliance upon the exemption from
registration provided by Regulation D, Rule 506 of the Securities Act, certain
inquiries were made by the Company to establish that such issuance qualified for
such exemption. In particular, the Company confirmed that with respect to such
exemption (i) the investor made representations that he was an "accredited
investor" within the meaning of Regulation D of the Securities Act in relation
to such investment, and (ii) the investor gave written assurance of his
investment intent, and the certificate for the securities bear a legend
accordingly.

II-5
<PAGE>
In September and November 1996, the Company issued to each of three
accredited investors (officers of the Company) a warrant, each exercisable for
50,000 shares of Common Stock (for an aggregate of 150,000 shares), at an
exercise price of $5.50 per share. The warrants are exerciseable commencing 12
months from the first to occur of (i) the Effective Date or (ii) September 26,
1998, until September 26, 2001 as to two warrants and November 1, 1998 until
November 1, 2001 as to the third warrant. The issuance of these securities was
made in reliance upon Section 4(2) of the Securities Act. Each purchaser gave
written assurance of his or her investment intent, and the certificates for the
securities bear a legend accordingly.

In October 1996, the Company issued a total of 25,000 shares of Common Stock
to one accredited investor for facilitating the Company's factoring agreement,
which shares were valued at $3.00 per share. The shares were issued in reliance
upon the exemption from registration provided by Regulation D, Rule 506 of the
Securities Act. With regard to the Company's reliance upon the exemption from
registration provided by Regulation D, Rule 506 of the Securities Act, certain
inquiries were made by the Company to establish that such sale qualified for
such exemption. In particular, the Company confirmed that with respect to such
exemption (i) the investor made representations that he was an "accredited
investor" within the meaning of Regulation D of the Securities Act in relation
to such investments and (ii) each purchaser gave written assurance of his
investment intent, and the certificates for the securities bear a legend
accordingly.

In December 1996, the Company issued to one accredited investor (a director
of the Company) in respect of business consulting services warrant for 250,000
shares of Common Stock, exercisable at $5.50 per share commencing June 1, 1998
and terminating June 1, 2002, in reliance upon Section 4(2) of the Securities
Act. The purchaser gave written assurance of his investment intent, and the
certificates for the securities bear a legend accordingly.

II-6
<PAGE>
ITEM 27. EXHIBITS

The following exhibits are filed as part of this registration statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------

<C> <S>
1.1 Form of Underwriting Agreement*
1.2 Form of Underwriters' Warrant*
3.1 Amended and Restated Articles of Incorporation*
3.2 Amended and Restated ByLaws*
3.2.1 Amendment to ByLaws*
4.1 Specimen of Common Stock Certificate*
4.2 Specimen of Warrant Certificate*
4.3 Form of Warrant Agreement between the Company and American Stock Transfer & Trust Company, as Warrant
Agent*
4.4 Form of Warrant issued to investors in the Company's private placement, dated August 5, 1996 through
November 14, 1996*
4.5 Warrant dated September 26, 1996 in favor of Steven D. Smith, as amended*
4.6 Warrant dated September 26, 1996 in favor of Don P. Louw, as amended*
4.7 Form of Amended Warrant dated October 29, 1996 in favor of Perryman Corporation N.V.
4.8 Form of Amended Warrant dated October 29, 1996 in favor of Richgrove, N.V.
4.9 Form of Amended Warrant dated October 29, 1996 in favor of Cherryhills, N.V.
4.10 Warrant dated June 25, 1996 in favor of Imagine Holdings*
4.11 Warrant dated December 15, 1996 in favor of Mathias E. Lukens, Jr.*
4.12 Form of Registration Rights Agreement between the Company and certain investors dated in May 1996*
4.13 Form of Registration Rights Agreement between the Company and private placement investors dated August
5, 1996* through November 14, 1996*
4.14 Warrant dated June 30, 1996 in favor of Imagine Holdings*
4.15 Warrant dated November 1, 1996 in favor of Robert Swatland*
5 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., Counsel for the Company
10.1 1996 Stock Option Plan*
10.2 Stock Purchase Agreement between the Company and Christine Clewes, dated June 13, 1996*
10.3 Stock Purchase Agreement between the Company and Frank Mancini, dated June 24, 1996*
10.4 Stock Purchase Agreement between the Company and Framan, a business entity, dated June 24, 1996*
10.5 Consulting Agreement between the Company and Perryman Corporation, N.V. dated May 10, 1996*
10.6 Amended & Restated Consulting Agreement between the Company and Imagine Holdings, dated June 1, 1996*
10.7 Lease between the Company and South Hillsborough Community Bank Office/Complex, Richard L. Phagan, dated
October 31, 1995*
10.7.1 Lease between the Company and South Hillsborough Community Bank Office/Complex, dated October 24, 1996*
10.8 Amended and Restated Consulting Agreement between the Company and Matthias E. Lukens, Jr. dated November
30, 1996*
10.9 Consulting Agreement between the Company and Frank J. Mancini dated December 20, 1996*
10.10 Agreement between the Company and Phasetronics, Inc., dated January 31, 1996*
10.11 Agreement between the Company and Phasetronics, Inc. dated January 31, 1996*
</TABLE>

II-7
<PAGE>
<TABLE>
<C> <S>
10.12 Sale of Accounts Receivable Agreement between the Company and Queensbury, Inc. dated October 31, 1996*
10.13 Cash Advance and Security Agreement and amendment thereto between Frank J. Mancini and the Company*
10.13.1 Second Amendment to Cash Advance and Security Agreement dated May 19, 1997*
10.13.2 Third Amendment to Cash Advance and Security Agreement dated May 27, 1997*
10.14 Form of indemnification agreement for directors and officers*
10.15 Revolving Line of Credit Agreement between the Company and Queensbury, Inc.*
10.16 Amended and Restated License Agreement between the Company and Mathias E. Lukens, Jr., d/b/a WHR
Partners, dated December 16, 1997*
10.17 Stock Purchase Agreement between the Company and Mathias E. Lukens, Jr., d/b/a WHR Partners, dated
December 16, 1997*
10.18 Executive Employment Agreement between the Company and David W. Clarke*
10.19 Executive Employment Agreement between the Company and Christine Clewes*
10.20 Executive Employment Agreement between the Company and Donald P. Louw*
10.21 Executive Employment Agreement between the Company and Steven D. Smith*
10.22 Executive Employment Agreement between the Company and Robert Swatland*
10.23 Form of Financial Advisor and Investment Banking Agreement between the Company and May Davis Group,
Inc.*
23.1 Consent of Most Horowitz & Company, LLP
27 Financial Data Schedule*
99.1 Form of Agreement Among Underwriters**
99.2 Form of Selected Dealer Agreement**
99.3 Form of domestic distribution agreement*
99.4 Form of international distribution agreement*
</TABLE>

- ------------------------

* Previously filed

** To be filed by amendment

ITEM 28. UNDERTAKINGS.

(a) The small business issuer will:

(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered, (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and

(iii) Include any additional or changed material information on the
plan of distribution.

(2) For determining liability under the Act, treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide
offering.

II-8
<PAGE>
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

(b) The small business issuer will provide to the underwriter at the closing
specified in the underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit prompt
delivery to each purchaser.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

(d) The small business issuer will:

(1) For determining any liability under the Act, treat the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the small business issuer under Rule 424(b)(l) or (4) or 497(h)
under the Act as part of this registration statement as of the time the
Commission declared it effective.

(2) For determining any liability under the Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
BONA FIDE offering of those securities.

II-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 5 to Registration Statement on Form SB-2 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Apollo Beach, State of Florida, on June 18, 1997.

APOLLO INTERNATIONAL OF DELAWARE, INC.

By: /s/ DAVID W. CLARKE
-----------------------------------------
David W. Clarke
PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 5 to the Registration Statement on Form SB-2 has been signed by the
following persons in the capacities and on the dates indicated.

SIGNATURES TITLE DATE
- ------------------------------ -------------------------- -------------------

/s/ DAVID W. CLARKE
- ------------------------------ President, Chief Executive June 18, 1997
David W. Clarke Officer, and Chairman

/s/ CHRISTINE CLEWES Vice President of
- ------------------------------ Marketing, Secretary and June 18, 1997
Christine Clewes Director

/s/ STEVEN D. SMITH
- ------------------------------ Vice President of June 18, 1997
Steven D. Smith Operations and Director

*
- ------------------------------ Director June 18, 1997
Mathias E. Lukens, Jr.

*
- ------------------------------ Director June 18, 1997
Frank J. Mancini

*
- ------------------------------ Director June 18, 1997
Gregory C. Hamilton

* By David W. Clarke pursuant to power of attorney

II-10
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------- -----------

<C> <S> <C>
4.7 Form of Amended Warrant dated October 29, 1996 in favor of Perryman Corporation N.V.
4.8 Form of Amended Warrant dated October 29, 1996 in favor of Richgrove N.V.
4.9 Form of Amended Warrant dated October 29, 1996 in favor of Cherryhills N.V.
5. Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., Counsel for the Company.
23.1 Consent of Most Horowitz & Company, LLP
</TABLE>

<PAGE>

Exhibit 4.7

Form of Amended

Warrant to Purchase 100,000 shares of Common Stock

APOLLO INTERNATIONAL OF DELAWARE, INC.

Common Stock Purchase Warrant

October 29, 1996

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED
EFFECTIVE UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS
AVAILABLE.

THIS CERTIFIES THAT Perryman Corporation N.V. (hereinafter sometimes
called the "Holder"), is entitled to purchase from Apollo International of
Delaware, Inc., a Delaware corporation (the "Company"), at the price and during
the period hereinafter specified, up to 100,000 shares of the Company's common
stock, $.01 par value (the "Common Stock").

This Warrant, together with warrants of like tenor, is subject to
adjustment in accordance with Paragraph 7 of this Warrant.

1. The rights represented by this Warrant shall be exercisable, at
any time commencing one year from the effective date of the Company's
registration statement for an initial public offering of its securities (the
"Effective Date"), until May 10, 2001 (the "Exercise Period") at a purchase
price of $5.50 per share (the "Exercise Price"), subject to adjustment in
accordance with Paragraph 7. After May 10, 2001, the Holder shall have no
right to purchase any shares of Common Stock underlying this Warrant.

2. The rights represented by this Warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at

1
<PAGE>

the end hereof properly executed) at the principal executive office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); and (ii) payment to the Company of the Exercise Price
then in effect for the number of shares of Common Stock specified in the
above-mentioned purchase form together with applicable stock transfer taxes, if
any. This Warrant shall be deemed to have been exercised, in whole or in part
to the extent specified, immediately prior to the close of business on the date
this Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 2, and the person or person in whose name or names
the certificates for shares of Common Stock shall be issuable upon such exercise
shall become the holder or holders of record of such shares of Common Stock at
that time and date. The certificate or certificates for the shares of Common
Stock so purchased shall be delivered to such person or persons within a
reasonable time, not exceeding thirty (30) days, after this Warrant shall have
been exercised.

3. Neither this Warrant nor the shares of Common Stock issuable upon
exercise hereof have been registered under the Securities Act of 1933, as
amended (the "1933 Act") nor under any state securities law and shall not be
transferred, sold, assigned or hypothecated in violation thereof. If permitted
by the foregoing, any such transfer, sale, assignment or hypothecation shall be
effected by the Holder surrendering this Warrant for cancellation at the office
or agency of the Company referred to in Paragraph 2 hereof, accompanied by an
opinion of counsel satisfactory to the Company and its counsel, stating that
such transferee is a permitted transferee under this Paragraph 3 and that such
transfer does not violate the 1933 Act or such state securities laws.

4. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise of this Warrant will, upon issuance, be duly
and validly issued, fully paid and nonassessable and no personal liability will
attach to the Holder thereof. The Company further covenants and agrees that
during the Exercise Period, the Company will at all times have authorized and
reserved a sufficient number of shares of its Common Stock to provide for the
exercise of this Warrant.

5. The Warrant shall not entitle the Holder to any rights, including,
without limitation, voting rights, as a stockholder of the Company.

6. The Exercise Price and Exercise Period in effect at any time and
the number and kind of securities purchaseable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as follows:

a. If the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the effective date or record date, as the case may be, for
such sale, dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the

<PAGE>

number of shares of Common Stock outstanding after giving effect to such action,
and the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such action.

b. Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Paragraph 7a. above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock initially issuable
upon exercise of this Warrant by the Exercise Price in effect on the date hereof
and dividing the product so obtained by the Exercise Price, as adjusted.

c. Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares of Common Stock purchasable upon the exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of shares of Common
Stock as are initially issuable pursuant to this Warrant.

d. In addition to the modification provisions of Section 1.b.
hereof, the Company may, but under no circumstances is obligated to, modify the
terms of this Warrant to provide for an earlier commencement of the Exercise
Period, or to extend the Exercise Period or to lower the Exercise Price, at any
time prior to the expiration of this Warrant.

7. This Agreement shall be governed by and in accordance with the
laws of the State of Florida, without regard to its conflicts of laws
principles.

IN WITNESS WHEREOF, APOLLO INTERNATIONAL OF DELAWARE, INC. has caused
this Warrant to be signed by its duly authorized officer as of the date set
forth on the first page hereof.

APOLLO INTERNATIONAL OF DELAWARE, INC.

By:
---------------------------------
David W. Clarke
President

3
<PAGE>

EXERCISE FORM

To Be Executed by the Holder
in Order to Exercise Warrant

The undersigned Holder hereby irrevocably elects to exercise this Warrant
and to purchase _____ shares of the Company's Common Stock issuable upon the
exercise of such Warrant, and requests that certificates for such securities
shall be issued in name of:

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(please print or type name and address)

_____________________________________________________________________
(please insert social security or other identifying number)

and be delivered:

_____________________________________________________________________
(please insert social security or other identifying number)

and if such number of shares of Common Stock shall not be all the shares
evidenced by this Warrant Certificate, that a new Warrant Certificate for the
balance of such shares be registered in the name of, and delivered to, the
Holder.

<PAGE>

Exhibit 4.8
Form of Amended

Warrant to Purchase 150,000 shares of Common Stock

APOLLO INTERNATIONAL OF DELAWARE, INC.

Common Stock Purchase Warrant

October 29, 1996

THIS CERTIFIES THAT Richgrove N.V. (hereinafter sometimes called the
"Holder"), is entitled to purchase from Apollo International of Delaware, Inc.,
a Delaware corporation (the "Company"), at the price and during the period
hereinafter specified, up to 150,000 shares of the Company's common stock, $.01
par value (the "Common Stock").

This Warrant, together with warrants of like tenor, is subject to
adjustment in accordance with Paragraph 7 of this Warrant.

1. The rights represented by this Warrant shall be exercisable, at
any time commencing one year from the effective date of the Company's
registration statement for an initial public offering of its securities (the
"Effective Date"), until May 10, 2001 (the "Exercise Period") at a purchase
price of $3.00 per share (the "Exercise Price"), subject to adjustment in
accordance with Paragraph 7. After May 10, 2001, the Holder shall have no
right to purchase any shares of Common Stock underlying this Warrant.

2. The rights represented by this Warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at

<PAGE>

5. The Warrant shall not entitle the Holder to any rights, including,
without limitation, voting rights, as a stockholder of the Company.

<PAGE>

number of shares of Common Stock outstanding after giving effect to such action,
and the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such action.

7. This Agreement shall be governed by and in accordance with the
laws of the State of Florida, without regard to its conflicts of laws
principles.

IN WITNESS WHEREOF, APOLLO INTERNATIONAL OF DELAWARE, INC. has caused
this Warrant to be signed by its duly authorized officer as of the date set
forth on the first page hereof.

APOLLO INTERNATIONAL OF DELAWARE, INC.

By:
-------------------------------
David W. Clarke
President

<PAGE>

EXERCISE FORM
-------------
To Be Executed by the Holder
in Order to Exercise Warrant

------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(please print or type name and address)

------------------------------------------------------------------------
(please insert social security or other identifying number)

and be delivered:

------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(please print or type name and address)

------------------------------------------------------------------------
(please insert social security or other identifying number)

<PAGE>

Exhibit 4.9

Form of Amended

Warrant to Purchase 150,000 shares of Common Stock

APOLLO INTERNATIONAL OF DELAWARE, INC.

Common Stock Purchase Warrant

October 29, 1996

THIS CERTIFIES THAT Cherryhills N.V. (hereinafter sometimes called the
"Holder"), is entitled to purchase from Apollo International of Delaware, Inc.,
a Delaware corporation (the "Company"), at the price and during the period
hereinafter specified, up to 150,000 shares of the Company's common stock, $.01
par value (the "Common Stock").

This Warrant, together with warrants of like tenor, is subject to
adjustment in accordance with Paragraph 7 of this Warrant.

1. The rights represented by this Warrant shall be exercisable, at
any time commencing one year from the effective date of the Company's
reproduction statement for an initial public offering of its securities (the
"Effective Date"), until May 10, 2001 (the "Exercise Period") at a purchase
price of $3.00 per share (the "Exercise Price"), subject to adjustment in
accordance with Paragraph 7. After May 10, 2001, the Holder shall have no
right to purchase any shares of Common Stock underlying this Warrant.

2. The rights represented by this Warrant may be exercised at any
time within the Exercise Period above specified, in whole or in part, by (i) the
surrender of this Warrant (with the purchase form at

<PAGE>

5. The Warrant shall not entitle the Holder to any rights, including,
without limitation, voting rights, as a stockholder of the Company.

<PAGE>

the number of shares of Common Stock outstanding after giving effect to such
action, and the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such action.

7. This Agreement shall be governed by and in accordance with the
laws of the State of Florida, without regard to its conflicts of laws
principles.

IN WITNESS WHEREOF, APOLLO INTERNATIONAL OF DELAWARE, INC. has caused
this Warrant to be signed by its duly authorized officer as of the date set
forth on the first page hereof.

APOLLO INTERNATIONAL OF DELAWARE, INC.

By:
-------------------------------
David W. Clarke
President

<PAGE>

EXERCISE FORM

To Be Executed by the Holder
in Order to Exercise Warrant

--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(please print or type name and address)

--------------------------------------------------------------------
(please insert social security or other identifying number)

and be delivered:

--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
(please print or type name and address)

--------------------------------------------------------------------
(please insert social security or other identifying number)

<PAGE>
EXHIBIT 5

June 19, 1997

Apollo International of Delaware, Inc.
6542 U.S. Highway 41
Apollo Beach, Florida 33572

Gentlemen:

You have requested our opinion in connection with the Registration Statement
on Form SB-2 (the "Registration Statement") of Apollo International of Delaware,
Inc. (the "Company") relating to the following securities of the Company (the
"Securities") to be issued pursuant to the Company's initial public offering and
pursuant to exercise of registered warrants as set forth therein:

(a) 920,000 shares of Common Stock (including 120,000 shares which the
Underwriters have the option to purchase to cover over-allotments) (the "Common
Stock");

(b) 920,000 redeemable Common Stock Purchase Warrants (including 120,000
warrants which the Underwriters have the option to purchase to cover
over-allotments) (the "Warrants"); and

(c) 920,000 shares of Common Stock issuable upon exercise of said Warrants
(including 120,000 over-allotment option) pursuant to the Warrant Agreement
between the Company and American Stock Transfer & Trust Company to be executed
in connection with the Company's initial offering (the "Warrant Agreement").

We have made such examination of the corporate records and proceedings of
the Company and have taken such further action as we deemed necessary or
appropriate to the rendering of our opinion herein.

Based on the foregoing, we are of the opinion that the Common Stock and
Warrants, when issued as contemplated by the Registration Statement, will be
legally issued, fully paid and non-assessable. We are of the opinion that the
Common Stock underlying the Warrants, when paid for and issued as contemplated
by the Warrant Agreement, will be legally issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to our firm under the heading "Legal Matters" therein.

Sincerely,

/s/GREENBERG TRAURIG HOFFMAN
LIPOFF ROSEN & QUENTEL, P.A.

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent the use in this Registration Statement on Form SB-2 of our
report dated February 6, 1997 and February 10, 1997, as to Note 9, relating to
the financial statements of Apollo International of Delaware, Inc. and the
reference to our Firm under the caption "Experts" in the prospectus.

/s/ Most Horowitz & Company, LLP

New York, New York
June 18, 1997