VITECH AMERICA INC, 424B2, 1996-11-05

VITECH AMERICA INC
424B2, 1996-11-05
ELECTRONIC COMPUTERS

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<PAGE>

PROSPECTUS

2,000,000 SHARES
VITECH AMERICA, INC.
COMMON STOCK

VITECH AMERICA, INC. (the "Company") is hereby offering 2,000,000 shares
of common stock, no par value per share (the "Common Stock").

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that any such market will develop upon
completion of this offering. The Common Stock has been approved for quotation
on the Nasdaq National Market(R) under the symbol "VTCH." The initial public
offering price will be $10.00 per share and has been determined by
negotiation between the Company and H.J. Meyers & Co., Inc., as the
representative (the "Representative") of the several underwriters (the
"Underwriters"). For a description of the factors considered in determining
the initial public offering price, see "Underwriting." Concurrently with this
offering, the Company is registering the resale, from time to time, of an
additional 40,994 shares of Common Stock by certain selling shareholders.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY
BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.

THE SECURITIES OFFERED HEREBY 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.

================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- --------------------------------------------------------------------------------
Per Share .............. $10.00 $0.80 $9.20
Total (3) .............. $20,000,000 $1,600,000 $18,400,000
================================================================================

(1) Does not include additional compensation to be received by the
Representative in the form of: (i) a non-accountable expense allowance
equal to 2% of the gross proceeds of this offering ($400,000, or $460,000
if the Underwriters' over-allotment option is exercised in full); and
(ii) warrants to purchase up to 200,000 shares of Common Stock at an
exercise price equal to 140% of the initial public offering price per
share of Common Stock exercisable for a period of four years commencing
one year from the date of this Prospectus (the "Representative's
Warrants"). In addition, the Company has agreed to indemnify the
Underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."

(2) Before deducting expenses of the offering payable by the Company,
estimated to be $350,000, excluding the Representative's non- accountable
expense allowance.

(3) The Company has granted the Underwriters an option, exercisable within 45
days from the date of this Prospectus, to purchase up to 300,000
additional shares of Common Stock solely to cover over-allotments, if
any. If the over-allotment option is exercised in full, the total Price
to Public, Underwriting Discounts and Commissions, and Proceeds to
Company will be $23,000,000, $1,840,000, and $21,160,000, respectively.
See "Underwriting."

The shares of Common Stock are offered on a "firm commitment" basis by the
Underwriters when, as, and if delivered to, and accepted by, the
Underwriters, and subject to prior sale, withdrawal, or cancellation of the
offer without notice and their right to reject orders in whole or in part. It
is expected that delivery of the certificates representing the shares of
Common Stock will be made at the offices of H.J. Meyers & Co., Inc., 180
Maiden Lane, New York, New York 10038 on or about November 7, 1996.

H.J. MEYERS & CO., INC.

The date of this Prospectus is November 1, 1996

<PAGE>

The Company will furnish its shareholders with annual reports containing
audited financial statements and such other periodic reports as the Company
may from time to time deem appropriate or as may be required by law.

------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

DESCRIPTION OF PICTURES

Inside Front Cover:

The Vitech logo with a description of the Company as follows:

"A fully integrated manufacturer providing complete multimedia and network
computing solutions."

Picture #1: Picture of a father and his son playing a computer game on a
multimedia personal computer.

Picture #2: The Vitech Vision(TM) personal multimedia computer.

Picture #3: The Vitech MultiShow(TM) multimedia kit.

Picture #4: The Vitech Easynet(TM) networking kit.

Inside Rear Cover:

Picture #1: A picture from a Vitech advertisement showing two hands touching
with the caption: "Vitech Integrated Solutions."

Picture #2: Various networking components.

Picture #3: The Vitech Easynet(TM) networking kit.

Picture #4: An array of network servers and other high-end personal
computers.

Picture #5: The Vitech MultiShow(TM) multimedia kit, speakers, and a computer
CD ROM.

Picture #6: The Vitech Vision(TM) line of personal computers.

Picture #7: The Vitech logo.
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and the notes thereto
appearing elsewhere in this Prospectus. Unless otherwise indicated herein,
the information in this Prospectus does not give effect to (i) the exercise
of the Underwriters' over-allotment option, (ii) the Representative's
Warrants, (iii) options to purchase up to 4,000,000 shares of Common Stock
issued to members of management exercisable at prices ranging from $15.00 per
share to $25.00 per share, (iv) up to 200,000 shares of Common Stock reserved
for issuance upon the exercise of options which may be granted pursuant to
the Company's 1996 Stock Option Plan (the "Plan"), 20,000 of which options
have been granted prior to the date of this Prospectus, or (v) up to 27,296
shares of Common Stock issuable upon the exercise of warrants issued by the
Company in August 1996 (the "August 1996 Private Placement".) The information
in this Prospectus relating to the Common Stock has been restated to reflect
an 8,000-for-one stock split effected on July 26, 1996. As used in this
Prospectus, the term "Company" refers to Vitech America, Inc., a Florida
corporation, and its wholly- owned subsidiary Bahia Tecnologia Ltda., a
Brazil corporation ("Bahia").

THE COMPANY

Vitech America, Inc. (the "Company") is engaged in the manufacture and
distribution of computer equipment and related products, as well as the
financing of the purchase thereof, in the Federal Republic of Brazil. The
Company's principal operations are conducted in Brazil by its wholly-owned
Brazilian subsidiary, Bahia. The parent company, Vitech America, Inc.,
sources products in the United States and throughout the world for Bahia and
engages in the distribution of those products to Bahia. Principally all of
the consolidated revenues of the Company are recognized in Brazil by Bahia.
For the six month period ended June 30, 1996, 92% of the consolidated
revenues of the Company were recognized in Brazil by Bahia as compared to 33%
of the consolidated revenues for the year ended December 31, 1995. The
Company's products, which include personal computers and multimedia systems
and related peripheral products, networking and system integration equipment,
and cellular telephones and accessories, are marketed under Company-owned and
other brand names for distribution through a variety of channels in the
Brazilian marketplace. In addition, the Company maintains an engineering
support service dedicated to assisting the Company's customers in effecting
networking and system integration solutions.

The Company has experienced substantial growth since inception, with
consolidated revenues and consolidated net income increasing from $1,156,253
and $44,288, respectively, for the period between June 24, 1993, the
inception of the Company, and December 31, 1993, to $17,407,363 and $149,570,
respectively, for the year ended December 31, 1994, and $48,488,996 and
$6,904,834, respectively, for the year ended December 31, 1995. Consolidated
revenues and consolidated net income were $26,080,299 and $2,704,140,
respectively, for the six months ended June 30, 1996 as compared to
$20,457,048 and $397,721, respectively, for the six months ended June 30,
1995.

As a result of the increasing stability of the economy and the growth of a
middle class in Brazil, demand for computer equipment and related products in
Brazil has increased significantly over the last five years. Based upon news,
trade reports, and the Company's experience, the Company believes that the
market for computer equipment and related products in Brazil is expected to
grow at the rate of approximately 30% annually. The Company believes that it
is particularly well-positioned to capitalize upon such anticipated growth
based upon: (i) the Company's knowledge of prevailing customs, importation
practices, technology and labor bases, marketing dynamics, and economic
conditions in Brazil, together with the Company's existing relationships with
U.S. and Asian suppliers and understanding of technology development; (ii)
the Company's integrated manufacturing, research and development, sales, and
warehousing facilities in Brazil; (iii) the Company's existing distribution
arrangements with retailers and others in Brazil; and (iv) the Company's
ability to provide flexible financing alternatives to potential purchasers of
the Company's products.

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<PAGE>

As part of the Company's operating strategy, the Company intends to
utilize a significant portion of the proceeds of this offering as follows:

o to expand inventory;

o to expand consumer financing operations;

o to expand marketing activities;

o to repay indebtedness; and

o to increase manufacturing capacity.

The Company was incorporated on June 24, 1993 under the laws of the State
of Florida. Its principal executive offices are located at 8807 Northwest
23rd Street, Miami, Florida 33172, and its telephone number is (305)
477-1161. Bahia was incorporated on May 8, 1995 under the laws of Brazil.

THE OFFERING

Common Stock Offered by the
Company...................... 2,000,000 shares

Common Stock Outstanding Prior
to the Offering.............. 8,013,648 shares

Common Stock Outstanding After
the Offering................. 10,013,648 shares

Risk Factors................... Investment in the shares of Common Stock
offered hereby involves a high degree of
risk and immediate and substantial dilution
from the price to the public. See "Risk
Factors," "Dilution," and "Certain
Transactions."

Use of Proceeds................ To expand inventory, to expand consumer
financing operations, to expand marketing
activities, to repay indebtedness, to
increase manufacturing capacity, and for
general corporate and working capital
purposes.

Nasdaq National Market(R)
Trading Symbol............... "VTCH"

4
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SUMMARY FINANCIAL DATA

The following tables set forth certain summary financial data of the
Company. The summary statement of operations data for the years ended
December 31, 1995 and 1994 and the period from June 24, 1993 (inception) to
December 31, 1993 are derived from the Consolidated Financial Statements of
the Company, which have been audited by Pannell Kerr Forster PC, independent
certified public accountants. The summary statement of operations data for
the six months ended June 30, 1996 and 1995 and the summary balance sheet
data as of June 30, 1996 have been derived from the unaudited consolidated
statements of the Company. The Consolidated Financial Statements for the
periods indicated above, and the report thereon, appear elsewhere in this
Prospectus. The data in such tables should be read together with "Selected
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial
Statements and the notes thereto, appearing elsewhere herein.

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
Period June
24, 1993
(Inception)
Six Months Ended June 30, Year Ended December 31, to December
------------------------------ ------------------------------ -------------
1996 1995 1995 1994 31, 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Sales ..................... $26,080,299 $20,457,048 $48,488,996 $17,407,363 $1,156,253
Cost of sales ............. 18,688,336 19,067,617 39,156,239 16,483,232 903,544
Gross profit .............. 7,391,963 1,389,431 9,332,757 924,131 252,709
Selling, general and
administrative expenses .. 2,462,646 819,380 1,234,108 505,448 181,139
Income from operations .... 4,929,317 570,051 8,098,649 418,683 71,570
Interest and financing expense 1,688,947 163,978 328,278 171,743 14,282
Net income ................ $ 2,704,140 $ 397,721 $ 6,904,834 $ 149,570 $ 44,288
Net income per share Common and
Common Stock equivalents (1) $ .32 $ .05 $ .84 $ .02 --
Weighted average number of
shares of Common and Common
Stock equivalents
outstanding .............. 8,503,853 8,041,988 8,293,914 8,000,000 8,000,000
</TABLE>

BALANCE SHEET DATA:

As of June 30, 1996
---------------------------------------------------
Actual Pro forma (2) As Adjusted (3)
------------- ------------- ---------------
Current Assets ...... $23,640,435 $24,940,070 $38,025,292
Working capital ..... $ 7,598,941 $ 7,533,798 $25,183,798
Total assets ........ $26,150,724 $27,535,974 $40,425,120
Long-term debt ...... $ 0 $ 0 $ 0
Total liabilities ... $16,041,494 $17,406,272 $12,841,494
Shareholders' equity . $10,109,230 $10,129,702 $27,583,626

- ------
(1) Restrictions presently exist on the ability of Bahia to distribute excess
retained earnings in U.S. dollars to the U.S. parent company, Vitech
America, Inc. See "Dividend Policy" and "Risk Factors -- Limitation on
Subsidiary to Repatriate Excess Retained Earnings."

(2) Adjusted to reflect the sale of warrants exercisable for up to 27,296
shares of Common Stock, 13,648 shares of Common Stock, and $1,364,778
aggregate principal amount of debentures issued in the August 1996
Private Placement and the application of the net proceeds therefrom. See
"Capitalization" and "Use of Proceeds."

(3) Adjusted to reflect the sale of the 2,000,000 shares of Common Stock
offered hereby (after deducting underwriting discounts and commissions
and estimated offering expenses) and the application of the net proceeds
therefrom. See "Use of Proceeds" and "Capitalization."

5
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors, in addition to the other information set forth in this
Prospectus, including the Consolidated Financial Statements and the notes
thereto, in evaluating an investment in the shares of Common Stock offered
hereby.

LIMITED OPERATING HISTORY

The Company was organized in June 1993. While the Company has been
profitable since its inception, investors in this offering will have only a
limited operating history to consider in evaluating the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business."

MANAGEMENT OF GROWTH

The Company has experienced substantial growth since inception with
consolidated revenues and consolidated net income increasing from $ 1,156,253
and $ 44,288, respectively, for the period between June 24, 1993, the
inception of the Company, and December 31, 1993, to $17,407,363 and $149,570,
respectively, for the year ended December 31, 1994 and to $48,488,996 and
$6,904,834, respectively, for the year ended December 31, 1995. Consolidated
revenues and consolidated net income were $26,080,299 and $2,704,140,
respectively, for the six months ended June 30, 1996 compared to $20,457,048
and $397,721, respectively, for the six months ended June 30, 1995. There can
be no assurance that such growth will continue. While management has
successfully managed such growth to date and the Company's infrastructure has
been sufficient to support such growth, there can be no assurance that, if
such growth continues, the Company's infrastructure will continue to be
sufficient to support such larger enterprise. See "Risk Factors -- Dependence
on Key Personnel; Recruitment of Additional Personnel," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business -- Employees," and "Management."

FLUCTUATION OF QUARTERLY RESULTS

The Company's quarterly net sales and operating results may vary
significantly as a result of, among other things, historical seasonal
purchasing patterns in Brazil, the volume and timing of orders received
during a quarter, variations in sales mix, and delays in production
schedules. Accordingly, the Company's historical financial performance is not
necessarily a meaningful indicator of future results and, in general,
management expects that the Company's financial results may vary materially
from period to period. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

CUSTOMER CONCENTRATION

During the year ended December 31, 1995, the Company was engaged as a
contract manufacturer of video cassette recorders by Casas Bahia, a leading
retailer of consumer electronic products in Brazil. Such sales accounted for
approximately 15% of the Company's sales during such period. Such sales
accounted for approximately 14% of the Company's sales during the six month
period ended June 30, 1996. In addition, the Company has a contractual
relationship with Casas Bahia pursuant to which the Company will manufacture
televisions and video cassette recorders. While such contract expired on
August 31, 1996, the Company has continued its relationship with Casas Bahia
to supply the agreed to quantities associated with such contract. While
management believes that the Company's contract manufacturing relationship
with Casas Bahia will continue, there can be no assurance that such
relationship will be maintained. Accordingly, the loss of Casas Bahia as a
customer could have a material adverse effect on the Company. Other than
Casas Bahia and Vitoria Tecnologia S.A., an affiliate through common
ownership, no one customer of the Company accounted for more than 5% of the
Company's sales during such period. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and "Business --
Customers," and "Business."

DEPENDENCE ON SUPPLIERS; CREDIT ARRANGEMENTS

During the year ended December 31, 1995, the Company had only one supplier
which accounted for in excess of 10% of purchases. During the six month
period ended June 30, 1996, the Company had four suppliers which each
accounted for in excess of 10% of purchases. Substantially all of the
Company's inventory has, and will be, purchased from manufacturers and
distributors with whom the Company has entered into non-

6
<PAGE>

exclusive agreements, which are typically cancelable upon 30 days written
notice. There can be no assurance that such agreements will not be canceled.
While the Company does not believe that the loss of any one supplier would
have a material adverse effect upon the Company since the components utilized
in most products sold by the Company are available from multiple sources, the
Company's future success will depend in part on its ability to maintain
relationships with existing suppliers and to develop new relationships with
additional suppliers. The loss of, or significant disruptions in
relationships with, suppliers could have a material adverse effect on the
Company's business since there can be no assurance that the Company will be
able to replace lost suppliers on a timely basis. See "Business --
Procurement and Materials Management."

To date, the Company has materially benefited from extended credit terms
that the Company has received from certain of its suppliers. Such terms
enable the Company to defer payment during a significant portion of the
Company's transport and manufacturing cycle thereby permitting the Company to
increase its volume of purchases for components, parts, and equipment. In the
event that the Company's suppliers were to impose more stringent credit terms
with respect to the Company, in the absence of sufficient alternative
financing on favorable terms, the Company could be materially adversely
affected. In such event, there can be no assurance that the Company will
obtain alternative financing on favorable terms, or at all. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "Business -- Procurement and Materials
Management."

COMPETITION

The manufacturing and distribution of computer equipment and related
products is highly competitive and requires substantial capital. The Company
competes with, and will compete with, numerous international, national, and
regional companies, many of which have significantly larger operations and
greater financial, marketing, human, and other resources than the Company,
which may give such competitors competitive advantages, including economies
of scale and scope. Competitors include internationally recognized companies
such as IBM, Acer, and Compaq. No assurance can be given that the Company
will successfully compete in any market in which it conducts or may conduct
operations.

POLITICAL AND ECONOMIC UNCERTAINTY

Notwithstanding the recent stability of the Brazilian economy and Brazil's
unrestricted foreign exchange market, the Brazilian economy has been
characterized by frequent and occasionally substantial intervention by the
Brazilian Government. The Brazilian Government has, in the past,
substantially influenced monetary, credit, tariff, and other policies,
including exchange rates, and has utilized price and wage controls, the
restriction of bank accounts, capital controls, and restrictions on exports
to influence the economy, including to reduce extremely high levels of
inflation. In addition, the Brazilian political environment has been
characterized by high levels of uncertainty since the country returned to
civilian rule in 1985. Furthermore, there have been periodic strikes among
workers in Brazil's public sector, and any such incidents in the future could
have a material adverse effect on the Company's operations during such
periods. Future changes in, or the implementation of, such policies, and
increased Brazilian political uncertainty, could also have a material adverse
effect on the Company and its financial results. See "Conditions in Brazil."

FOREIGN EXCHANGE RISK

The relationship of Brazil's currency to the value of the U.S. dollar, and
the relative rate of devaluation of Brazil's currency, may affect the
Company's operating results. In particular, the Company's accounts receivable
are denominated in the Brazilian local currency, the Real, while the
Company's operating results are recorded in U.S. dollars. Accordingly, any
significant devaluation of the Real relative to the U.S. dollar could have a
material adverse effect on the Company's operating results. Prior to 1995,
the Company did not engage in hedging transactions to reduce the Company's
exposure to risks associated with exchange rate fluctuation. Since such time,
the Company has engaged, and will continue to engage, in hedge transactions
as it deems appropriate. While translation losses have not had a material
effect on the Company's financial position, the Company did experience a
translation loss of approximately $374,000 for the six months ended June 30,
1996. See "Conditions in Brazil" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

7
<PAGE>

CONSEQUENCES OF TECHNOLOGICAL CHANGES

The market for the Company's products is characterized by continuous and
rapid technological advances and evolving industry standards. Compatibility
with industry standards in areas such as operating systems and communications
protocols is material to the Company's marketing strategy and product
development efforts. In order to remain competitive, the Company must respond
effectively to technological changes by continuing to enhance and improve its
existing products to incorporate emerging or evolving standards and by
successfully developing and introducing new products that meet customer
requirements. There can be no assurance that the Company will successfully
develop, market, or support such products or that the Company will respond
effectively to technological changes or new product announcements or
introductions by others. In the event that the Company does not enhance and
improve its products, the Company's sales and financial results could be
materially adversely affected. In addition, there can be no assurance that,
as a result of technological changes, a portion of the inventory of the
Company would not be rendered obsolete. See "Business -- Products."

POSSIBLE NEED FOR ADDITIONAL FINANCING

Based on the Company's operating plan, the Company believes that the net
proceeds of this offering, together with projected cash flows from continuing
operations and existing and contemplated sources of credit, including the
financing of consumer debt portfolios generated from the sales of the
Company's products to end- users, will be sufficient to satisfy its capital
requirements and finance its plans for expansion for at least the next twelve
months. Such belief is based on certain assumptions, and there can be no
assurance that such assumptions are correct. Accordingly, there can be no
assurance that such resources will be sufficient to satisfy the Company's
capital requirements for such period. After such twelve-month period, the
Company may require additional financing in order to meet its current plans
for expansion. There can be no assurance that the Company will be able to
obtain such additional capital on a timely basis, on favorable terms, or at
all. In any of such events, the Company may be unable to implement its
current plans for expansion. See "Use of Proceeds," "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Business -- Business Strategy."

DEPENDENCE ON KEY PERSONNEL; RECRUITMENT OF ADDITIONAL PERSONNEL

The Company is dependent upon the efforts and abilities of Georges C. St.
Laurent, III, its Chairman of the Board and Chief Executive Officer, and
William C. St. Laurent, its President and Chief Operating Officer. Each of
such individuals is a substantial shareholder of the Company and has entered
into an employment agreement with the Company which terminates on December
31, 1998. The loss or unavailability of the services of either of these
individuals for any significant period of time could have a material adverse
effect on the Company's business prospects. The Company has obtained, and is
the sole beneficiary of, key-person life insurance in the amount of $2
million on the life of each of Messrs. Laurent and has agreed with the
Representative that such insurance shall be kept in effect until at least
three years from the date hereof. There can be no assurance that such
insurance will continue to be available on reasonable terms, or at all.

The ability of the Company to attract and retain highly skilled personnel
is critical to the operations of the Company. To date, the Company has been
able to attract and retain the personnel necessary for its operations.
However, there can be no assurance that the Company will be able to do so in
the future, particularly in light of the Company's expansion plans. If the
Company is unable to attract and retain personnel with necessary skills when
needed, its business and expansion plans could be materially adversely
affected. See "Management."

AFFILIATED TRANSACTIONS AND CONFLICTS OF INTEREST

From inception through mid-1996, the Company bought and sold products to
and from Victoria Tecnologia S.A., an entity controlled by William C. St.
Laurent, the President and Chief Operating Officer of the Company. The
Company also received loans in 1995 and sold certain of its accounts
receivables during 1996 to Mr. Georges C. St. Laurent, Jr., the father of
Georges C. St. Laurent, III, the Company's Chairman of the Board and Chief
Executive Officer, and William C. St. Laurent. The terms of these
transactions were no less favorable to

8
<PAGE>

the Company than could be obtained from unaffiliated parties. To the extent
the Company enters into transactions with affiliated persons and entities in
the future, it will do so only on terms no less favorable to the Company than
those available from unaffiliated parties. See "Certain Transactions" and the
Notes to the Company's Financial Statements dated December 31, 1995 and June
30, 1996.

EXPIRATION OF TAX-EXEMPT STATUS

The government of the State of Bahia, Brazil has issued a decree that
exempts the Company, through and including the year 2003, from the payment of
state import duties, state sales tax, and state services tax. The Company is
exempted from the payment of Brazilian federal income tax through and
including the year 2004. The abatement will continue during the exemption
period provided that 20% of the budgeted production goals negotiated from
time to time by the Company and the federal government of Brazil in units are
met in each year during the Company's exemption period. Accordingly, upon the
expiration of the Company's tax-exempt status, or the inability of the
Company and the federal government of Brazil to renegotiate such budgeted
production goals, the Company's after-tax earnings may be expected to decline
substantially. While the Company and the federal government of Brazil have
agreed to budgeted production goals in the past, there can be no assurance
that they will successfully do so in future periods. Without the exemption,
the Company would have been subject to additional Brazilian federal income
tax of approximately $2.8 million in 1995. The Company is not exempted from
the payment of a federal social contribution tax of 9.09% of income. See
"Conditions in Brazil."

ASSETS OUTSIDE THE U.S.; ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN
PERSONS

While the Company is a U.S. corporation with executive offices in Florida,
it is a holding company for Bahia, which is domiciled in Brazil. For the
foreseeable future, a substantial portion of the Company's assets will be
held or used outside the U.S. (in Brazil). Enforcement by investors of civil
liabilities under the Federal securities laws may also be affected by the
fact that while the Company is located in the U.S., its principal subsidiary
and operations are located in Brazil. Although the Company's executive
officers and directors are residents of the U.S., all or a substantial
portion of the assets of the Company are located outside the U.S.

NO DIVIDENDS

The Company has not paid any cash dividends on the Common Stock since its
inception and does not anticipate paying cash dividends on the Common Stock
in the foreseeable future. For the foreseeable future, the Company intends to
reinvest earnings of the Company, if any, in the development and expansion of
its business. See "Dividend Policy."

LIMITATION ON SUBSIDIARY TO REPATRIATE EXCESS RETAINED EARNINGS

For the foreseeable future, Bahia, the Company's Brazilian subsidiary,
does not intend to distribute any excess retained earnings to its U.S.
parent, but to reinvest such earnings, if any, in the development and
expansion of its business. Substantially all of the retained earnings of the
Company on a consolidated basis are attributable to Bahia. Bahia is exempt
from the payment of Brazilian federal income tax through and including the
year 2004. Tax exemption benefits cannot be distributed as dividends to the
Company in U.S. dollars and are segregated for capital reserves and
offsetting accumulated losses in accordance with Brazilian law. For the year
ended December 31, 1995 and the six months ended June 30, 1996, the tax
exemption benefits amounted to $2,832,000 or approximately $0.34 per share
and $609,932 or approximately $0.08 per share, respectively.

In the future, should Bahia wish to remit retained earnings in excess of
the tax exemption benefits, Brazilian law requires the registration of the
foreign capital upon which those retained earnings were made in order to send
such earnings abroad in currency other than the Real. Currently, the Company
is undergoing the routine administrative procedure necessary to permit such
remittances. While the Company believes that such administrative steps will
allow Bahia to remit excess retained earnings if it so chooses, there can be
no assurance that such administrative procedure will be approved by the
Central Bank of Brazil and accordingly might result in the inability of Bahia
to remit excess retained earnings to its U.S parent. In the event that the
Company fails to have such routine administrative procedure approved by the
Central Bank of Brazil, shareholders of the Company may find it difficult to
realize value on their investment either through the receipt of dividends or
in the appreciation of the value of their equity. See "Management's
Discussion and Analysis of Financial Condition and Result of Operation."

9
<PAGE>

DILUTION

Upon the closing of this offering, investors in this offering will incur
immediate substantial dilution of approximately $7.25 in the per share net
tangible book value of their Common Stock. At June 30, 1996, giving effect to
the receipt by the Company of the estimated net proceeds from the sale of the
shares of Common Stock offered hereby, and the Company's August 1996 Private
Placement, the Company had a net proforma tangible book value of
approximately $2.75 per share. Net tangible book value is the amount of the
Company's total assets minus intangible assets and liabilities. See
"Dilution."

ARBITRARY OFFERING PRICE

The initial public offering price of the shares of Common Stock offered
hereby has been determined by negotiations between the Company and the
Representative. Among the factors considered in determining this price were
the Company's current financial condition and prospects, market prices of
similar securities of comparable publicly traded companies, and the general
condition of the securities market. However, the initial public offering
price of the shares of Common Stock offered hereby does not necessarily bear
any relationship to the Company's assets, book value, earnings, or other
established indicia of value. See "Underwriting."

EXERCISE OF WARRANTS AND OPTIONS

Upon completion of this offering, options and warrants to purchase a
substantial number of shares of Common Stock will be outstanding, including
the 27,296 shares underlying the warrants issued in the August 1996 Private
Placement, the 200,000 shares underlying the Representative's Warrants,
70,000 options issued to directors and consultants, and the 4,000,000 options
issued to William and Georges St. Laurent. In addition, Georges C. St.
Laurent, Jr. has an option to convert a note into 5.925% of the shares of
Common Stock outstanding at any time during the term of such note. Meris
Financial Incorporated ("Meris") had an option to convert its note into
approximately 4.7% of issued or issuable Common Stock and an additional
option to purchase 5% of issued or issuable Common Stock. The Meris options
terminated on October 30, 1996, when the debt to Meris was repaid in full.
Holders of such options and warrants have the opportunity to profit from a
rise in the market price of the Common Stock, if any, without assuming the
risk of ownership. See "Certain Transactions."

The existence of such options and warrants may adversely affect the terms
under which the Company could obtain additional equity capital. The exercise
of these warrants and options may materially adversely affect the market
price of the Common Stock. In addition, the Company has agreed it will
register under federal and state securities laws the Representative's Warrant
and the securities issuable thereunder, under certain circumstances.

SHARES ELIGIBLE FOR FUTURE SALE

The sale, or availability for sale, of a substantial number of shares of
Common Stock in the public market subsequent to this offering pursuant to
Rule 144 under the Securities Act ("Rule 144") or otherwise could materially
adversely affect the market price of the Common Stock and could impair the
Company's ability to raise additional capital through the sale of its equity
securities or debt financing. The availability of Rule 144 to the holders of
restricted securities of the Company would be conditioned on, among other
factors, the availability of certain public information concerning the
Company. All of the 8,013,648 shares of Common Stock currently outstanding
are "restricted securities" as that term is defined in Rule 144 and may,
under certain circumstances, be sold without registration under the
Securities Act. Ordinarily, any shares issuable upon exercise of options
granted under the Plan, pursuant to Rule 701 under the Securities Act, could
be sold publicly commencing 90 days after the Company becomes a reporting
company under the Exchange Act. All of the Company's executive officers and
directors have agreed not to sell their shares of Common Stock for a period
of 24 months from the date of this Prospectus without the Representative's
prior written consent, provided, however, that each of Georges C. St.
Laurent, the Chairman of the Board of Directors and Chief Executive Officer
of the Company, and William C. St. Laurent, the President and Chief Operating
Officer of the Company, are each entitled to pledge such number of shares of
Common Stock as may be required to secure loans in the amount of $1,000,000
each. The 13,648 shares of Common Stock issued in the Company's August 1996
Private Placement are eligible for sale pursuant to the Selling Shareholders
Prospectus commencing 30 days from the date of this Prospectus.

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF SECURITIES PRICES

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that any trading market therefor will
develop, or, if any such market develops, that it will be sustained.

10
<PAGE>

Accordingly, purchasers of the shares of Common Stock offered hereby may
experience difficulty selling or otherwise disposing of their shares of
Common Stock. The market price of the Common Stock following this offering
may be highly volatile. Factors such as announcements by the Company or its
competitors concerning acquisitions or dispositions, new procedures, proposed
governmental regulations, and general market conditions may have a
significant impact on the market price of the Common Stock. See
"Underwriting."

On July 16, 1996, the National Association of Securities Dealers, Inc.
("NASD") issued a notice of acceptance of Acceptance, Waiver, and Consent
(the "AWC") whereby the Representative was censured and ordered to pay fines
and restitution to retail customers in the amount of $250,000 and
approximately $1.025 million, respectively. The AWC was issued in connection
with the claims by the NASD that the Representative charged excessive markups
and markdowns in connection with the trading of four certain securities
originally underwritten by the Representative. The activities in question
occurred during the periods between December 1990 and October 1993. The
Representative has informed the Company that the fines and refunds will not
have a material adverse effect on the Representative's operations and that
the Representative has effected remedial measures to help ensure that the
subject conduct does not recur. As of the date of this Prospectus, all fines
and restitution associated with such activities have been paid. In the event
that the foregoing activities materially adversely affect the
Representative's ability to act as a market maker for the Common Stock, and
other market makers do not continue to make a market in the Common Stock, a
market for and liquidity of the said shares may be adversely affected.

If the Representative should exercise its registration rights to effect a
distribution of the Representative's Warrants or the shares of Common Stock
issuable upon the exercise of such Warrants (the "Warrant Shares"), the
Representative, prior to and during such distribution, may be unable to make
a market in the Company's securities for a period of up to 60 days depending
upon a variety of factors. Such restriction shall commence from the time the
Representative plans to effect such distribution until the distribution of
the Representative's Warrants or the Warrant Shares has been completed unless
the Representative qualifies at the time as a "passive market maker," which
is based in part on the Representative's net purchases not exceeding 30% of
the average daily trading volume during the two month period prior to the
date of the filing of the post-effective amendment relating to such
distribution. In the latter event, the Representative's market making
activities during the distribution will be subject to certain conditions,
including not effecting a transaction at a price that exceeds the highest
independent bid price for the Warrant Shares at the time of the transaction.
If the Representative ceases making a market in the Common Stock, the market
and market prices for the Common Stock may be materially adversely affected,
and holders thereof may be unable to sell or otherwise dispose of shares of
Common Stock. The holders of the Representative's Warrants will have certain
demand and "piggyback" registration rights with respect to such warrants and
the Warrant Shares, commencing one year after the date hereof. See "Shares
Eligible for Future Sale" and "Underwriting -- Representative's Warrants."

CONTROL OF THE COMPANY BY MANAGEMENT

Immediately following this offering, the management of the Company will
own 78.46% of the outstanding shares of Common Stock (76.18% if the
Underwriter's over-allotment option is exercised in full, but exclusive of
options granted to management). Accordingly, the management of the Company
will have the ability to elect the Company's entire Board of Directors and
control the outcome of all matters submitted to a vote of the shareholders of
the Company. Notwithstanding the foregoing, the Company has agreed, for the
three-year period following the closing of this offering, to permit an
observer designated by the Representative and acceptable to the Company to
attend all meetings of the Board of Directors. See "Principal Shareholders,"
"Description of Securities," and "Underwriting."

GOVERNMENT REGULATION

The manufacture of computer equipment and related products is subject to
various forms of government regulation in the United States and Brazil. The
Company and its operations are affected by technology transfer and licensing
regulations, tariff regulations, regulations governing currency conversion
and transfers of profits between jurisdictions, and labor regulations, among
others. While the Company does not believe that such regulations adversely
effect the Company or its business presently, there can be no assurance that
such regulations will not materially adversely affect the Company in the
future. See "Conditions in Brazil."

11
<PAGE>

In addition, the government of Brazil has exercised, and continues to
exercise, substantial influence over many aspects of the private sector in
Brazil. See "Conditions in Brazil."

AUTHORIZATION OF PREFERRED STOCK; POSSIBLE ANTI-TAKEOVER EFFECTS

The Board of Directors is authorized to issue shares of preferred stock
and to determine the dividend, liquidation, conversion, redemption, and other
rights, preferences, and limitations of such shares without any further vote
or action of the shareholders. Accordingly, the Board of Directors is
empowered, without shareholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting, or other rights which could
adversely affect the voting power or other rights of the holders of the
Common Stock. In the event of issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging and
delaying or preventing a change in control of the Company. The Company has no
present intention to issue any shares of its preferred stock, although there
can be no assurance that the Company will not do so in the future. See
"Description of Securities -- Preferred Stock."

12
<PAGE>

THE COMPANY

The Company is engaged in the manufacture and distribution of computer
equipment and related products, as well as the financing of the purchase
thereof, in the Federal Republic of Brazil. The Company's principal
operations are conducted in Brazil by its wholly-owned Brazilian subsidiary,
Bahia. The parent company, Vitech America, Inc., sources products in the
United States and throughout the world for Bahia and engages in the
distribution of those products to Bahia. Principally all of the consolidated
revenues of the Company are recognized in Brazil by Bahia. For the six month
period ended June 30, 1996, 92% of the consolidated revenues of the Company
were recognized in Brazil by Bahia as compared to 33% of the consolidated
revenues for the year ended December 31, 1995. The Company's products, which
include personal computers and multimedia systems and related peripheral
products, networking and system integration equipment, and cellular
telephones and accessories, are marketed under Company-owned and other brand
names for distribution through a variety of channels in the Brazilian
marketplace. In addition, the Company maintains an engineering support
service dedicated to assisting the Company's customers in effecting
networking and system integration solutions.

The Company has experienced substantial growth since inception, with
consolidated revenues and consolidated net income increasing from $1,156,253
and $44,288, respectively, for the period between June 24, 1993, the
inception of the Company, and December 31, 1993, to $17,407,363 and $149,570,
respectively, for the year ended December 31, 1994, and to $48,488,996 and
$6,904,834, respectively, for the year ended December 31, 1995. Consolidated
revenue and consolidated net income for the six months ended June 30, 1996
were $26,080,299 and $2,704,140, respectively, as compared to $20,457,048 and
$397,721, respectively, for the six months ended June 30, 1995.

As part of the Company's operating strategy, the Company intends to
utilize a significant portion of the proceeds of this offering as follows:

o to expand inventory;

o to expand consumer financing operations;

o to expand marketing activities;

o to repay indebtedness; and

o to increase manufacturing capacity.

13
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,000,000 shares of
Common Stock offered hereby, after deducting estimated offering expenses and
underwriting discounts payable by the Company, are estimated to be
approximately $17,650,000. The Company intends to utilize the net proceeds of
this offering as follows:

Amount Percent
------------ ---------
Expansion of inventory $5,000,000 28.3%
Expansion of consumer financing operations $5,000,000 28.3%
Expansion of marketing activities $ 500,000 2.8%
Repayment of Indebtedness $4,565,000 25.9%
Increase manufacturing capacity $2,150,000 12.2%
General corporate and working capital purposes $ 435,000 2.5%

The foregoing represents the Company's best estimate of its allocation of
the net proceeds of the sale of the shares of Common Stock offered hereby
based upon the Company's currently contemplated operations and existing and
contemplated sources of credit, the Company's business plan, and current
economic and industry conditions and is subject to reapportionment among the
categories listed above or to new categories in response to, among other
things, changes in its plans, regulations, industry conditions, and future
revenues and expenditures. The amount and timing of expenditures may vary
depending on a number of factors, including changes in the Company's
contemplated operation or business plan and changes in economic and industry
conditions.

The Company intends to use approximately $4,565,000 of the estimated net
proceeds from this offering to repay indebtedness. Approximately $1,365,000
of the estimated net proceeds of this offering will be used to repay the
principal amount of, and accrued and unpaid interest on, the senior
debentures issued in the August 1996 Private Placement. Such debentures bear
a 9% annual interest rate and mature on the earlier of fifteen months from
the date of the initial closing of such private placement or the date of the
closing of a public offering of securities of the Company. The proceeds of
such debentures are being used for general working capital purposes.
Approximately $1,800,000 of the estimated net proceeds of this offering will
be used to repay a short- term loan made on October 25, 1996, bearing an 18%
annual interest rate, to Georges St. Laurent Jr. Such loan was used to repay
a note payable to Meris. The Meris note bore a 12% annual interest rate and,
according to the modification agreement associated with such note, matured on
November 1, 1996. Such note was guaranteed by the two majority shareholders
of the Company. The proceeds from such note were used for the expansion of
inventory and general working capital purposes. See "Certain Transactions."
Approximately $1,400,000 of the estimated net proceeds of this offering will
be used to repay short-term debt with various banks in Brazil. Such debt
consists of discounted accounts receivable and lines of credit and bears
interest at rates ranging from 3% to 4% per month. Such debt matures on a
rotating basis and has been used for general working capital purposes. Such
debt is also guaranteed by the two majority shareholders of the Company.

Based on the Company's business plan, the Company believes that the net
proceeds of this offering, together with revenues from continuing operations
and existing and contemplated sources of credit, including the financing of
consumer debt portfolios generated from the sales of the Company's products
to end-users, will be sufficient to permit the Company to conduct its
operations as currently contemplated for at least the next twelve months.
Such belief is based upon certain assumptions, and there can be no assurance
that such resources will be sufficient for such purpose. The Company may be
required to raise substantial additional capital in the future in order to
expand operations. In addition, contingencies may arise which may require the
Company to obtain additional capital. There can be no assurance that the
Company will be able to obtain such capital from any other sources on
favorable terms or at all. See "Capitalization," "Management's Discussion and
Analysis of Financial Conditions and Results of Operations," and "Business --
Business Strategy."

Pending use of the net proceeds of the sale of the shares of Common Stock
offered hereby, the Company intends to invest such funds in short-term,
interest-bearing, investment-grade obligations. Any additional proceeds
received upon the exercise of the Underwriters' over-allotment option or the
Representative's Warrants, as well as income from investments, if any, will
be added to working capital.

14
<PAGE>

DIVIDEND POLICY

The Company has not declared or paid any dividends on the Common Stock
since inception and does not intend to pay any dividends to its shareholders
in the foreseeable future. The Company currently intends to reinvest
earnings, if any, in the development and expansion of its business. The
declaration of dividends in the future will be at the discretion of the Board
of Directors and will depend upon the earnings, capital requirements, and
financial position of the Company, general economic conditions, and other
pertinent factors.

In addition, the Company's ability to declare or pay cash dividends is
subject to certain limitations in the ability of Bahia to repatriate excess
retained earnings. See "Risk Factors -- Limitation on Subsidiary to
Repatriate Excess Retained Earnings."

15
<PAGE>

DILUTION

At June 30, 1996, the proforma net tangible book value of the Company was
$10,129,702, or approximately $1.26 per share of Common Stock based on
8,013,648 shares of Common Stock outstanding, after giving effect to the
issuance of 13,648 shares of Common Stock in the Company's August 1996
Private Placement. The net tangible book value per share represents the
amount of the Company's total assets less the amount of its intangible assets
and liabilities, divided by the number of shares of Common Stock outstanding.
After giving effect to the receipt of net proceeds (estimated to be
approximately $17,650,000) from the sale of the shares of Common Stock
offered hereby, the proforma net tangible book value of the Company at June
30, 1996, would be $27,583,626, or approximately $2.75 per share of Common
Stock. This would result in dilution to the public investors (i.e., the
difference between the estimated initial public offering price per share of
Common Stock and the net tangible book value thereof after giving effect to
this offering) of approximately $7.25 per share. The following table
illustrates the per share dilution:

<TABLE>
<CAPTION>
Per Share of
Common Stock
--------------------
<S> <C> <C>
Initial public offering price ............................ $10.00
Proforma net tangible book value at June 30, 1996 ... $1.26
Increase in proforma net tangible book value
attributable to new investors ..................... $1.49
--------
Proforma net tangible book value after this offering $ 2.75
--------
Dilution of net tangible book value to new investors ..... $ 7.25
========
</TABLE>

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

<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average Price
------------------------- -------------------------- ---------------
Number Percent Number Percent Per Share
------------ --------- ------------- --------- ---------------
<S> <C> <C> <C> <C> <C>
Existing shareholders 8,013,648 80.03% $ 326,870 1.6% $ .04
New investors ........ 2,000,000 19.97% $20,000,000 98.4% $10.00
------------ --------- ------------- --------- ---------------
Total .............. 10,013,648 100.00% $20,326,870 100.0% $ 2.03
============ ========= ============= ========= ===============

</TABLE>

16
<PAGE>

CAPITALIZATION

The following table sets forth the actual capitalization of the Company at
June 30, 1996, a pro forma capitalization to give effect to the sale of
13,648 shares of Common Stock and the issuance of $1,364,778 aggregate
principal amount of debentures in the Company's August 1996 Private
Placement, and as adjusted to give effect to the sale of the 2,000,000 shares
of Common Stock offered hereby and to the application of the net proceeds
therefrom.

<TABLE>
<CAPTION>
As of June 30, 1996
----------------------------------------------
Actual Pro Forma As Adjusted
------------- ------------- -------------
<S> <C> <C> <C>
Short-term debt $ 6,156,476 $ 7,521,254 $ 2,956,476
Long-term debt $ 0 $ 0 $ 0
Shareholders' equity
Preferred Stock, no par value; Authorized,
3,000,000 shares; issued and outstanding, no
shares actual,
no shares as adjusted $ 0 $ 0 $ 0
Common Stock, no par value; Authorized,
30,000,000 shares; issued and outstanding,
8,000,000 shares actual, 8,013,648 shares
pro forma, and 10,013,648 shares, as
adjusted $ 306,398 $ 326,870 $17,780,794
Retained earnings(1) $ 9,802,832 $ 9,802,832 $ 9,802,832
------------- ------------- -------------
Total shareholder equity $10,109,230 $10,129,702 $27,583,626
------------- ------------- -------------
Total Capitalization $16,265,706 $17,650,956 $30,540,102
============= ============= =============

</TABLE>

- ------
(1) Restrictions presently exist on the ability of Bahia to distribute excess
retained earnings in U.S. Dollars to the U.S. parent company, Vitech
America, Inc. See "Dividend Policy" and "Risk Factors -- Limitation on
Subsidiary to Repatriate Excess Retained Earnings."

17
<PAGE>

SELECTED FINANCIAL DATA

The following selected statements of operations data for each of the years
in the two year period ended December 31, 1995 and the period from June 24,
1993 to December 31, 1993 and the balance sheet data at December 31, 1995 and
1994 are derived from, and are qualified by reference to, the consolidated
financial statements and the notes thereto included elsewhere herein audited
by Pannell Kerr Forster PC, independent certified public accountants, as
indicated in their report with respect thereto, also included elsewhere in
this Prospectus. The selected statement of operations for the six month
periods ended June 30, 1996 and 1995 and the balance sheet data as of June
30, 1996 and 1995 have been derived from the unaudited consolidated
statements of the Company. The unaudited financial statements have been
prepared on the same basis as the audited consolidated financial statements
and, in the opinion of management, include all adjustments, consisting only
of normal recurring adjustments necessary for a fair statement of the
information set forth therein. The results presented are not necessarily
indicative of results expected for any future period.

STATEMENT OF OPERATIONS DATA:

Period June
24, 1993
Six Months Ended June 30, Year Ended December 31, (Inception)
------------------------------ ------------------------------ to December
1996 1995 1995 1994 31, 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Sales $26,080,299 $20,457,048 $48,488,996 $17,407,363 $1,156,253
Cost of sales 18,688,336 19,067,617 39,156,239 16,483,232 903,544
Gross profit 7,391,963 1,389,431 9,332,757 924,131 252,709
Selling, general and administrative
expenses 2,462,646 819,380 1,234,108 505,448 181,139
Income from operations 4,929,317 570,051 8,098,649 418,683 71,570
Interest and financing expense 1,688,947 163,978 328,278 171,743 14,282
Net income $ 2,704,140 $ 397,721 $ 6,904,834 $ 149,570 $ 44,288
Net income per share of Common and
Common Stock equivalents(1) $ .32 $ .05 $ .84 $ .02 --
Weighted average number of shares
of Common and Common Stock
equivalents outstanding 8,503,853 8,041,988 8,293,914 8,000,000 8,000,000
</TABLE>

BALANCE SHEET DATA:

<TABLE>
<CAPTION>
As of June 30, As of December 31,
------------------------------ --------------------------------------------
1996 1995 1995 1994 1993
------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Current Assets $23,640,435 $10,146,796 $21,267,881 $7,595,246 $1,320,967
Working capital $ 7,598,941 $ 755,080 $ 6,412,154 $ 403,181 $ 298,525
Total assets $26,150,724 $10,289,693 $22,260,817 $7,692,321 $1,373,128
Long-term debt 0 0 0 0 0
Total liabilities $16,041,494 $ 9,391,716 $14,855,727 $7,192,065 $1,022,442
Shareholders' equity $10,109,230 $ 897,977 $ 7,405,090 $ 500,256 $ 350,686
</TABLE>

18
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
information contained in the Consolidated Financial Statements and the Notes
thereto appearing elsewhere in this prospectus.

OVERVIEW

The Company is a manufacturer and distributor of computer equipment and
related products for markets in Brazil. Based on continuing efforts by
management to maximize long-term profit margins and increase penetration into
the marketplace directly to end-users, the Company has evolved from a
Miami-based distributor dedicated to sales of computer peripheral products
for large original equipment manufacturers ("OEM") in 1993 to a vertically
integrated manufacturer and integrator of complete computer systems and
business network systems selling directly to end-users in 1996. This
evolution has left the Company with a diversified customer base widely
distributed throughout Brazil. For the six month period ended June 30, 1996,
the Company had over 2,600 customers as compared to one customer during the
period ended December 31, 1993. As the Company establishes and maintains
relationships with end-users of its products, the Company has developed a
clearly defined channel for marketing additional hardware products, such as
updated peripheral products, new computers, new network products, as well as
services, such as internet access services. The Company markets its products
throughout Brazil under the trademarks EasyNet(TM), MultiShow(TM), and Vitech
Vision(TM).

In June 1993, Vitech America, Inc. was incorporated for the purpose of
sourcing, purchasing, seeking supplier credit in order to distribute products
to its sole customer, Vitoria Tecnologia S.A. ("Vitoria"), an affiliate of
the Company through common ownership. A 16,000 square foot warehouse with
adjoining offices was leased to receive, inspect, process incoming quality
control, consolidate, ship, and administer purchases and accounts payable. In
1993 and 1994, the Company distributed electronic parts and finished
peripheral products, such as small capacity hard disk drives of 40 megabyte
to 120 megabyte capacity, floppy disk drives, and dot matrix printers,
multimedia products, networking products, and other related products. The
products were ultimately destined to a few large-and medium-sized Brazilian
OEM computer manufacturers and distributors.

In order to take advantage of the large margins available with in-country
distribution of computer products in Brazil, on March 7, 1995, Bahia was
organized as a wholly-owned subsidiary of the Company to act as the Company's
manufacturing and distribution entity in Brazil. The creation of Bahia marked
the transformation of the Company from a low-margin U.S.-based distributor to
a high-margin vertically integrated manufacturer using the model of other
direct distribution computer companies. Simultaneously with the development
and expansion of Bahia's operation and independent of Vitoria, the Company
shifted its focus and dependence away from Vitoria, a company principally
engaged in sales to OEM's and resellers. Similarly, the Company's customer
base shifted to a diversified group of end users. The Company did not in any
material respect assume the prior activity of Vitoria. In 1996, management of
Vitoria disclosed to the Company that based on lack of competitive tax and
fiscal incentives in the State of Espirito Santo, Vitoria ceased all
manufacturing and selling operations. Since that time, Vitoria has paid all
outstanding amounts owed to the Company.

Management negotiated directly with the Governor of the State of Bahia to
create a High Technology Park in Ilheus, Bahia, approximately 1,200
kilometers north of Rio de Janeiro on the Brazilian coast. To create
incentives to attract high technology companies, the state government
declared a total exemption from ICMS, the State of Bahia value added tax, for
those companies residing in the technology park. Bahia was the pilot project
and first company to receive this incentive. Additionally, since the State of
Bahia lies within the Northeast Regional Development Area (SUDENE), the new
facilities were eligible for, and received, an exemption from corporate
income tax. Ilheus has its own deep water port and is close to the major
markets in Brazil. In September 1995, the Company commenced leasing a 160,000
square foot factory at such location.

In 1995, with the creation of Bahia and its manufacturing facilities, the
Company introduced its own brand of computers and also began to sell
integrated business network solutions through its own reseller network. In
1996, the Company launched its "10X Promotion" of the Vitech Vision(TM) brand
PCs direct to end-users, paying a commission to the reseller, but ultimately
retaining the client for itself. The strategy of attaining the end- user adds
to the long-term viability of the distribution network created by the Company
to bring new technology

19
<PAGE>

products to market in the future. Those potential products include hardware
upgrades, software, internet access services, data network services, and
integrated business systems. In addition to its branded computer, Vitech also
sells the MultiShow(TM) brand of Brazilian Portuguese multimedia kits and the
EasyNet(TM) brand of networking kits.

The evolution of the Company from a Miami-based distributor to a
vertically integrated manufacturer and integrator of complete computer
systems has resulted in the current business model which management believes
will maximize the long-term profit margin of the Company. This business model
consists of a U.S. operation, Vitech America, Inc., which serves as the sole
distributor to its subsidiary, Bahia. Vitech America, Inc. purchases
components worldwide for consolidation and processing at its Miami operation
to be sold and shipped to Bahia. Bahia serves as the Company's manufacturing
and sales operation in Brazil. Because of the tax-exempt status that Bahia
has attained, Vitech America, Inc. sells the components to Bahia at a gross
margin of approximately 9%. This has resulted in substantially all of the
consolidated earnings of the Company being attributable to Bahia. For the
foreseeable future, the Company will continue with this model in order to
maximize the earnings in Brazil which will be reinvested in Bahia for the
continued growth of the Company's Brazilian operations.

Although the Company's financial statements are presented in U.S. dollars
in accordance with generally accepted accounting principles, the Company's
transactions are consummated in both the Brazilian Real and the U.S. dollar.
Inflation and devaluation have had, and may continue to have, an effect on
the Company's results of operations and financial condition. Although the
Company has used Brazilian Real futures and options contracts, during 1996,
in an effort to hedge against currency risks, its highest coverage at any one
time has only met 20% of its exposure consisting of accounts receivable
denominated in Reals, net of accounts payable and other current liabilities
denominated in Reals. The Company plans to continue to use hedging activities
to offset currency risks as appropriate. See "Risk Factors -- Foreign
Exchange Risk."

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain line
items from the Company's statement of operations as a percentage of the
Company's consolidated revenues:

<TABLE>
<CAPTION>
Period June
24, 1993
Six Months Ended Year Ended (Inception)
June 30, December 31, to December
---------------- ---------------- -------------
1996 1995 1995 1994 31, 1993
------ ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Sales ............................. 100% 100% 100% 100% 100%
Cost of sales ..................... 71.7 93.2 80.8 94.7 78.1
Gross profit ...................... 28.3 6.8 19.2 5.3 21.9
Selling, general and administrative
expenses ......................... 9.4 4.0 2.5 2.9 15.7
Income from operations ............ 18.9 2.8 16.7 2.4 6.2
Interest and financing expense .... 6.5 .8 .7 1.0 1.2
Net income ........................ 10.4 1.9 14.2 .9 3.8
</TABLE>

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

Sales increased by $5,623,251, or approximately 27.5% to $26,080,299 for
the six months ended June 30, 1996 as compared to $20,457,048 for the six
months ended June 30, 1995. Such increase in sales was primarily attributable
to increased demand by the Company's customers, the broadening of the
Company's customer base, and the further establishment of the Company's
brands in the Brazilian marketplace. During the six months ended June 30,
1996, the Company had sales to approximately 2,650 different customers as
compared to less than 20 different customers during the six months ended June
30, 1995.

Cost of sales during the six months ended June 30, 1996 were $18,688,336,
representing 71.7% of the sales during the period, as compared to $19,067,617
for the six months ended June 30, 1995, representing 93.2% of sales for the
period. The decrease in cost of sales as a percentage of sales during the six
months ended June 30,

20
<PAGE>

1996, when compared to the six months ended June 30, 1995, was attributable
to the Company's continuing business strategy of the transformation from
being solely a Miami-based distributor to being a vertically integrated
manufacturing and distribution company attaining a broad spectrum of clients
throughout Brazil. As a result of this transformation, the Company has been
able to achieve higher margins through vertical integration. The decrease was
also attributable to the Company's migration from peripheral products and
related products to a full line of branded computer systems and network
solutions with greater aggregated value and greater control over pricing to
the customer.

Selling, general, and administrative expenses increased by $1,643,266, or
approximately 200% to $2,462,646 for the six months ended June 30, 1996 as
compared to $819,380 for the six months ended June 30, 1995. Such increase
was primarily related to the increased costs associated with the creation of
Bahia and its manufacturing facility being brought on line as well as the
increased selling activity in Brazil associated with marketing directly to
end-users. Selling, general, and administrative expense as a percentage of
sales was 9.4% for the six months ended June 30, 1996, compared to 4% for the
six months ended June 30, 1995. This increase in the selling, general, and
administrative expense as a percentage of sales was primarily attributable to
the creation of Bahia as well as the broadening of the Company's customer
base.

Income from operations increased by $4,359,266 to $4,929,317 for the six
months ended June 30, 1996 as compared to $570,051 for the six months ended
June 30, 1995. Such increase was primarily attributable to the aforementioned
increase in sales, the decrease in cost of sales, and the decrease in cost of
sales as a percentage of sales which more than offset the increase in
selling, general, and administrative expenses. Income from operations as a
percentage of sales increased to 18.9% for the six months ended June 30, 1996
from 2.8% for the six months ended June 30, 1995. This increase was primarily
attributable to the aforementioned decrease in cost of sales as a percentage
of sales which more than offset the increase in selling, general, and
administrative expenses as a percentage of sales.

Interest and financing expense increased by $1,524,969, or 930%, to
$1,688,947 for the six months ended June 30, 1996 as compared to $163,978 for
the six months ended June 30, 1995. This increase was primarily attributable
to the Company's increased use of debt financing to support its working
capital needs and to support its sales to end-users. Specifically, $1,166,342
of this increase was attributable to the Company's sale of accounts
receivable to an affiliate of the Company in connection with the Company's
10X consumer financing program which was introduced in early 1996. The
$1,166,342 represented the discount on the consumer debt portfolios which had
a face value of approximately $10,400,000. See "Certain Transactions" and
Note 8 to the Company's Financial Statements dated June 30, 1996.

Net income increased by $2,306,419, or approximately 580%, to $2,704,140
for the six months ended June 30, 1996 as compared to $397,721 for the six
months ended June 30, 1995. The increase in net income was primarily
attributable to the aforementioned increase in income from operations more
than offsetting the increase in interest and financing expense. Net income as
a percentage of sales increased to 10.4% for the six months ended June 30,
1996 from 1.9% for the six months ended June 30, 1995. This increase was
primarily attributable to the aforementioned decrease in the cost of sales as
a percentage of sales more than offsetting the increases in selling, general,
and administrative expenses as a percentage of sales.

During the six month period ended June 30, 1996, the Company experienced a
foreign currency exchange loss of $373,627 from the settlement of certain
receivables and payables denominated in the Real and the translation of
financial statements from the Brazilian Real to the U.S. Dollar. At June 30,
1996, the Company had a net exposure to currency fluctuations of
approximately $7,450,000. Additionally, at June 30, 1996, the Company had
$8,238,729 of exposure to currency rate fluctuations as a result of the
Company's sale of receivables to a related party. See "Certain Transactions."

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Sales increased by $31,081,633, or approximately 178.6% to $48,488,996 for
the year ended December 31, 1995 as compared to $17,407,363 for the year
ended December 31, 1994. Such increase in sales was primarily attributable to
increased demand by the Company's affiliated customer Vitoria Tecnologia
S.A., a greater variety of products, and acceptance of the Company as a
supplier of quality value-oriented products with post-sale support.

21
<PAGE>

Cost of sales during the year ended December 31, 1995 were $39,156,239,
representing 80.8% of sales during the year, as compared to $16,483,232 for
the year ended December 31, 1994, representing 94.7% of sales for the year.
The increase was attributable to increases in sales during the year ended
December 31, 1995 compared to the year ended December 31, 1994. The decrease
in cost of sales as a percentage of sales during the year ended December 31,
1995, when compared to the year ended December 31, 1994, was primarily
attributable to the Company's changing business strategy from being solely a
Miami-based distributor to being a vertically integrated manufacturing and
distribution company to take advantage of the higher margins available by
selling to Brazilian customers and the Company's migration from peripherals
and related products to finished computers and network solutions.

Selling, general, and administrative expenses increased by $728,660, or
approximately 144.2% to $1,234,108 for the year ended December 31, 1995 as
compared to $505,448 for the year ended December 31, 1994. Such increase was
primarily attributable to an increase in sales associated activities related
to an increase in sales, as well as the increased costs associated with the
creation and operation of Bahia. Selling, general, and administrative expense
as a percentage of sales was reduced to 2.5% of sales for the year ended
December 31, 1995 from 2.9% of sales for the year ended December 31, 1994,
reflecting greater sales efficiency in relation to overhead.

Income from operations increased by $7,679,966, or 1,834.3% to $8,098,649
for the year ended December 31, 1995 as compared to $418,683 for the year
ended December 31, 1994. Such increase was attributable to the aforementioned
increases in sales, which more than offset the increases in cost of sales and
selling, general, and administrative expenses. Income from operations as a
percentage of sales increased to 16.7% for the year ended December 31, 1995,
from 2.4% for the year ended December 31, 1994. This increase was primarily
attributable to the aforementioned increase in sales, reduction in cost of
sales as a percentage of sales, and reduction in selling, general, and
administrative costs as a percentage of sales.

Interest expense increased by $156,535, or by 91.1%, to $328,278 for the
year ended December 31, 1995 as compared to $171,743 for the year ended
December 31, 1994. This increase was primarily attributable to the Company's
increased use of debt financing to support its working capital requirements
during the year ended December 31, 1995.

Net income increased by $6,755,264, or 4,516.5%, to $6,904,834 for the
year ended December 31, 1995 as compared to $149,570 for the year ended
December 31, 1994. The increase in net income was attributable to the
aforementioned increases in income from operations, which more than offset
the increase in interest expense. Net income as a percentage of sales
increased to 14.2% for the year ended December 31, 1995 from 0.9% for the
year ended December 31, 1994. This increase was attributable to the
aforementioned increase in income from operations as a percentage of sales
and the reduction of interest expense as a percentage of sales for the year
ended December 31, 1995 as compared to the year ended December 31, 1994.

During the year ended December 31, 1995, the Company experienced a foreign
currency exchange loss of $16,229 from the settlement of certain receivables
and payables denominated in the Brazilian Real and the translation of
financial statements from the Brazilian Real to the U.S. Dollar. At December
31, 1995, the Company had a net exposure to currency fluctuations of
approximately $3,418,000.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO PERIOD ENDED DECEMBER 31, 1993

Sales increased by $16,251,110, or approximately 1,405.5% to $17,407,363
for the year ended December 31, 1994 as compared to $1,156,253 for the period
June 24, 1993, the inception of the Company, to December 31, 1993. Such
increase in sales was primarily attributable to increased demand by the
Company's customer, Vitoria Tecnologia S.A., an affiliate of the Company.

Cost of sales during the year ended December 31, 1994 were $16,483,232,
representing 94.7% of sales during the year, as compared to $903,544 for the
period ended December 31, 1993, representing 78.1% of sales for the year. The
increase was attributable to increases in sales during the year ended
December 31, 1994 over the period ended December 31, 1993, while the increase
in cost of sales as a percentage of sales during the period ended December
31, 1994, when compared to the year ended December 31, 1993 was primarily
attributable to increased competition and lower margins in the distributive
environment.

22
<PAGE>

Selling, general, and administrative expenses increased by $324,309, or
approximately 179% to $505,448 for the year ended December 31, 1994, as
compared to $181,139 for the period ended December 31, 1993. Such increase
was primarily attributable to the fact that 1994 was the first full calendar
year of operations compared to 1993 the organizational period of the Company,
as well as increases in marketing activities and the increase in management
personnel and related expenses to support the Company's increased sales
activities. Selling, general and administrative expense as a percentage of
sales decreased to 2.9% of sales for the year ended December 31, 1994 from
15.7% of sales for the period ended December 31, 1993, reflecting increased
efficiency of the organization per sales dollar.

Income from operations increased by $347,113, or 485% to $418,683 for the
year ended December 31, 1994 as compared to $71,570 for the period ended
December 31, 1993. Such increase was primarily attributable to the
aforementioned increases in sales offset by increases in cost of sales and
selling, general, and administrative expenses. Income from operations as a
percentage of sales decreased to 2.4% for the year ended December 31, 1994
from 6.2% for the period ended December 31, 1993. This decrease was primarily
attributable to the aforementioned increase in cost of sales as a percentage
of sales, resulting in a smaller gross profit and smaller resulting operating
profit.

Interest expense increased by $157,461, or 1,102.5%, to $171,743 for the
year ended December 31, 1994 as compared to $14,282 for the period ended
December 31, 1993. This increase was attributable to the Company's increased
use of debt financing to support its working capital requirements during the
year ended December 31, 1994.

Net income increased by $105,282, or 237.7%, to $149,570 for the year
ended December 31, 1994 as compared to $44,288 for the period ended December
31, 1993. The increase in net income was attributable to the aforementioned
increases in sales offset by increases in cost of sales, selling, general,
and administrative expense, and interest expense. Net income as a percentage
of sales decreased to 0.9% for the year ended December 31, 1994 from 3.8% for
the period ended December 31, 1993. This decrease was attributable to the
aforementioned decrease in income from operations as a percentage of sales as
well as increases in both interest expense and provision for income tax as
percentages of sales for the year ended December 31, 1994, as compared to the
period ended December 31, 1993.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash requirements have been to fund increased levels
of inventories and accounts receivable. The Company has historically
satisfied its working capital requirements principally through cash flow from
operations and debt financing.

At June 30, 1996, the Company had a working capital surplus of $7,598,941
compared to $6,412,154 at December 31, 1995. This increase in working capital
was primarily attributable to the increased levels of inventory which more
than offset the increases in accounts payable, short-term borrowings, and
decreases in accounts receivable.

Net cash provided by operating activities for the six months ended June
30, 1996 was $1,999,856. During the six months ended June 30, 1995, the
Company used $927,572 of cash in operating activities. The increase in cash
provided was primarily attributable to the decrease in accounts receivable
and increase in net income and income and other taxes payable which more than
offset increases in inventory. Net cash used by operating activities for the
year ended December 31, 1995 was $2,455,581, as compared to $37,946 for the
year ended December 31, 1994. Such increase was primarily attributable to the
increase in accounts receivable associated with the increased level of sales.

Net cash used in investing activities was $1,566,457 for the six months
ended June 30, 1996, as compared to $47,286 for the six months ended June 30,
1995. Such increase was primarily attributable to capital expenditures
relating to the purchase of furniture and fixtures, computer equipment, and
warehouse equipment. Net cash used in financing activities was $345,239 for
the six months ended June 30, 1996, as compared to $1,280,672 in net cash
provided from financing activities for the six months ended June 30, 1995.
The increase in net cash used by financing activities was primarily
attributable to the repayments on a note payable to a related party which
more than offset the increases in the proceeds under lines of credit and
other borrowings. See "Certain Transactions."

23
<PAGE>

Accounts receivable days outstanding increased from 86.8 days at December
31, 1994 to 114 days at December 31, 1995. Such increase was primarily
attributable to the transformation of the Company's business from a
distributor to a vertically integrated manufacturer selling principally to
end-users. Until the third quarter of 1995, the majority of the Company's
sales were to Vitoria on open terms. Beginning in the third quarter of 1995,
the Company commenced selling to end-users with terms of between 0 and 120
days. Also contributing to the increase in the Company's accounts receivable
days outstanding was a nationwide tightening of liquidity which occurred in
Brazil during the fourth quarter of 1995.

During the six month period ended June 30, 1996, the Company received
property valued at $417,258 as settlement of an outstanding accounts
receivable. Such property consisted of two parcels of real property located
in Brazil. The first parcel was a warehouse located in Sao Paulo, Brazil
valued at approximately $200,000 and the other parcel is a condominium in
Guarapari, Brazil. The Company is presently evaluating the potential sale of
such properties based on market conditions. The value was based upon a
certified appraisal of the properties which approximated the face value of
the related receivables. The transaction was recorded on the financial
statements as a payment on account.

On August 30, 1996, the Company completed a private placement issuing 27.3
units to 11 accredited investors for $50,750 per unit. Each unit consisted of
a $50,000 principal amount of 9% senior debentures, 1,000 common stock
purchase warrants with an exercise price per share of $10, and 500 shares of
Common Stock. The debentures mature on the date which is the earlier of (i)
fifteen months from the date of the closing of the August 1996 Private
Placement and (ii) the date of the closing of a public offering of securities
of the Company. The $1,299,635 in net proceeds of the August 1996 Private
Placement are being used for general corporate and working capital purposes.
Approximately $1,365,000 of the estimated net proceeds from this offering
will be used to repay the principal amount of, and accrued and unpaid
interest on the senior debentures issued in such private placement.

The Company has an overdraft facility of $200,000 with Eastern National
Bank in Miami, Florida, with which the Company maintains its primary banking
relationship. As of June 30, 1996, there was $100,000 drawn on the overdraft
facility.

On June 28, 1996, the Company secured a line of credit in the amount of $1
million with Deutsch- Sudamerikanische Bank expiring June 30, 1997 to support
letter of credits which the Company may issue to secure purchase obligations.
As of June 30, 1996 there were no funds drawn on such line of credit. Such
lines require the Company to provide a cash deposit equal to 30% of each
letter of credit. The credit agreement is secured by a lien of all personal
property owned by the Company.

The Company had borrowings under lines of credit for placing product at
its distributors and resellers in the amount of $792,210 as of June 30, 1996.
The rates of interest on these lines varies by contract and client and
averages from 3% to 4% per month.

The Company had open invoices receivable from its clients factored at
various banks in the amount of $602,349 at June 30, 1996. The Company bears
full recourse of these receivables. The rates of interest on these
receivables varies by contract and client and averages 3% per month.

The Company borrowed $2,000,000 at 9% interest per year from Georges C.
St. Laurent, Jr., a related party, on May 26, 1995. This note is convertible
into 5.925% of the Common Stock. At December 31, 1995 the Company also had a
note in the amount of $1,911,917 bearing 6% interest per year. As of June 30,
1996, the balance on such note was $661,917. See "Certain Transactions."

The Company has allocated approximately $2,150,000 from the proceeds of
this offering to increase manufacturing facilities. The proceeds will be used
principally to equip the Company's manufacturing plant and administrative
center in Ilheus, Brazil. In connection with the development thereof, the
Company has secured a $3.4 million loan to fund the development of such
facility. The terms of commitment provide for a six year term loan with
interest payable at 4% above the long-term rate imposed by the Central Bank
of Brazil (currently 16% per annum). The payment of interest is delayed for
the first year and is thereafter payable quarterly. Payments of principal
shall be made at maturity. The loan will be secured by the real property and
building in Ilheus, Brazil.

The Company owns an underdeveloped parcel of land near Ilheus, Brazil held
for investment. The Company has no present intention to develop such land.

24
<PAGE>

Other than as stated above, the Company does not plan to make any
significant capital expenditures during the next fiscal year.

The Company borrowed $2,000,000 at 12% per year interest from Meris on
October 28, 1995. The Company repaid this loan in full on October 30, 1996
with the proceeds from a short-term loan, bearing an 18% annual interest
rate, obtained from Georges C. St. Laurent, Jr. Approximately $1,800,000 of
the estimated net proceeds of this offering will be used to repay such
short-term loan. See "Use of Proceeds."

The Company has had success in creating good relations with suppliers
which are interested in entering into the Brazilian market. The Company has
provided an opportunity to enter the Brazilian technology sales channel to
these suppliers who have willingly offered favorable terms to the Company.
The increase in supplier credit has allowed the Company to diversify its
product line as well as increase sales. Average days outstanding on accounts
payable balances to suppliers was in excess of 50 days when compared to
industry averages of 30 days or less. The Company has continued to develop
these key strategic relationships as a means to fortify its product offering
and support growth without incurring additional interest-bearing debt.

The Company has a three year employment agreement with its President and
with its Chief Executive Officer. Under the terms of the agreements each
individual will receive annual compensation of $240,000 subject to annual
increases. Each of such agreements will terminate on December 31, 1998. See
"Management -- Employment Agreements."

IMPACT OF INFLATION ON RESULTS OF OPERATIONS, LIABILITIES AND ASSETS

For many years prior to July 1994, the Brazilian economy was characterized
by high rates of inflation and devaluation of the Brazilian currency against
the U.S. Dollar and other currencies. However, since the implementation in
July of 1994 of the Brazilian government's latest stabilization plan, the
"Real Plan," (See "Conditions in Brazil") inflation, while continuing, has
been significantly reduced and the rate of devaluation has substantially
diminished. The Company has assessed the movement of the Brazilian currency
based upon the trading ranges stated by the policy of the Central Bank of
Brazil and has been able to offset any material effects of inflation. The
Company uses Brazilian Real futures and options contracts from the Chicago
Mercantile Exchange in order partially to offset Brazilian currency exposure.
There can be no assurance that the Real Plan will continue to be effective in
combating inflation and devaluation of Brazil's currency or that the
Company's assessment of the movement of Brazilian currency will be correct in
the future. Inflation for the year ended December 31, 1995 was 22%. As of
July 1996, inflation was estimated to be 12% for the year ended December 31,
1996. See "Conditions in Brazil."

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In March 1995, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of" ("SFAS 121"). SFAS 121 requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. SFAS 121 is effective for fiscal years beginning after
December 15, 1995. The Company believes that the adoption of SFAS 121 will
not have a material impact on its financial statements.

In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
SFAS 123 establishes a fair value based method of accounting for stock-based
employee compensation plans; however, it also allows companies to continue to
measure costs for such plans using the method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"). Companies that elect to continue with the accounting
under APB 25 must provide certain pro forma disclosures of net income, as if
SFAS 123 had been applied. The accounting and disclosure requirements of SFAS
123 are effective for the Company for transactions entered into during the
year ended December 31, 1996. The Company is currently evaluating its
alternatives under SFAS 123, and its impact on operating results is not
presently known.

25
<PAGE>

BUSINESS

INTRODUCTION

The Company has experienced substantial growth since inception, with
consolidated revenues and consolidated net income increasing from $1,156,253
and $44,288, respectively, for the period between June 24, 1993, the
inception of the company, and December 31, 1993 to $17,407,363 and $149,570,
respectively, for the year ended December 31, 1994 and to $48,488,996 and
$6,904,834, respectively, for the year ended December 31, 1995. Consolidated
revenues and net income for the six months ended June 30, 1996 were
$26,080,299 and $2,704,140, respectively, as compared to $20,457,048 and
$397,721, respectively, for the six months ended June 30, 1995.

As a result of the increasing stability of the economy and the growth of a
middle class in Brazil, demand for computer equipment and related products in
Brazil has increased significantly over the last five years. Based upon news,
trade reports and the Company's experience, the Company believes that the
market for computer equipment and related products in Brazil is expected to
grow at the rate of approximately 30% annually. The Company believes that it
is particularly well-positioned to capitalize upon such anticipated growth
based upon: (i) the Company's extensive knowledge of prevailing customs,
importation practices, technology and labor bases, marketing dynamics, and
economic conditions in Brazil, together with the Company's existing
relationships with U.S. and Asian suppliers and understanding of technology
development; (ii) the Company's integrated manufacturing, research and
development, sales, and warehousing facilities in Brazil; (iii) the Company's
existing distribution arrangements with retailers and others in Brazil; and
(iv) the Company's ability to provide flexible financing alternatives to
potential purchasers of the Company's products.

As part of the Company's operating strategy, the Company intends to
utilize a significant portion of the proceeds of this offering as follows:

o to expand inventory;

o to expand consumer financing operations;

o to expand marketing activities;

o to repay indebtedness; and

o to increase manufacturing capacity.

BUSINESS STRATEGY

The Company's strategy has been to utilize: (i) the Company's knowledge of
prevailing customs, importation practices, technology and labor bases,
marketing dynamics, and economic conditions in Brazil, together with the
Company's existing relationships with U.S. and Asian suppliers and
understanding of technology development; (ii) the Company's integrated
manufacturing, research and development, sales, and warehousing facilities in
Brazil; (iii) the Company's existing distribution arrangements with retailers
and others in Brazil; and (iv) the Company's ability to provide flexible
financing alternatives to potential purchasers of the Company's products to
gain market share and satisfy the increasing demand for consumer electronic
products in Brazil.

26
<PAGE>

As part of the Company's operating strategy, the Company will endeavor the
following:

Expansion of Inventory. The Company intends to expand its inventory in an amount
sufficient to keep pace with its expected sales volume. The Company believes
that increased purchases of certain products will permit it to realize
economies of scale as a result of more favorable pricing.

Expansion of Direct Marketing Program and Consumer Financing for Retail Consumer
Market. The Company has historically focused its marketing for computer
equipment and related products on value added resellers ("VARs"), system
integrators, and distributors. With the expansion of manufacturing and credit
facilities, and the further development of its distribution system, the
Company has targeted the retail consumer market by offering computer
equipment and related equipment products with innovative and flexible credit
arrangements in order to satisfy consumer demand in Brazil for such products.
The Company intends to utilize the consumer relationships formed in
connection with such financing activities to create ongoing sales of
technology products and services directly to end users, such as internet
access services.

Expansion of Distribution Channels. The Company will continue to develop its
distribution channels by providing enhanced customer services and post-sale
support and expanding credit arrangements. The Company has developed its
internal sales force to assist VARs, system integrators, distributors, and
resellers relative to the Company's existing and new product lines.

Identification of Products. The Company will continue to identify high
technology products for which substantial demand exists or can be created,
with particular emphasis on products which the Company can manufacture,
import, or assemble in Brazil.

Training. The Company will continue to provide training and skill enhancement of
the indigenous work force in Brazil to manufacture and assemble the Company's
products. The Company believes that its deployment of a trained work force in
facilities geographically separated from major urban areas enables the
Company to obtain favorable profit margins by sustaining low cost
manufacturing.

Fortification of the Company's Brands and Trade Names. The Company intends to
further establish its Vitech Vision(TR) and other brand and trade names as
recognized and reliable brands in Brazil for computer equipment products. The
Company continuously evaluates new products, the demand for its current
products, and its overall product mix, and seeks to develop distribution
relationships with vendors of products that enhance the Company's product
offerings.

PRODUCTS

Computer Systems

The computer products distribution industry is significant and growing in
Brazil, reflecting increasing demand in the country for computer products and
systems. The Company believes that Brazilians are highly nationalistic in
their attitudes and exhibit a strong preference for indigenous products.
"Vitech" is perceived as a Brazil-based manufacturer and distributor, and has
established a national identity through the marketing of its Vitech
Vision(TM), MultiShow(TM),and EasyNet(TM) product lines.

The Company offers a complete line of multimedia computer systems under
the Company's Vitech Vision(TM) brand name, including Pentium(TM) and Pentium
Pro(TR) based systems.

The Company also designs, develops, manufactures, and markets under its
MultiShow(TR) brand name a family of multimedia computer products. The
Company offers sound cards, speakers, multimedia titles, microphones, and
multimedia kits complete with user-friendly manuals written in Portuguese.
The demand for multimedia personal computers is increasing as personal
computers evolve from a task-oriented device primarily utilized for word
processing and spreadsheets to a more user-friendly multipurpose device for
increasingly diverse multimedia applications.

The Company's engineering staff is constantly evaluating components and
product sources from many manufacturers for purposes of incorporating quality
components into its computer products lines. Most of the

27
<PAGE>

components purchased by the Company for computer manufacture are readily
available from a large number of vendors worldwide. However, the loss by the
Company of its relationship with a significant vendor may have a material
adverse effect in the short term on the Company's operations until a new
source of reliable components can be identified.

Business Systems Integration; Client-Server Applications

The Company has created a family of products and services in response to
the need for client-server distributed computing solutions in Brazil. The
Company manufactures a range of powerful symmetrical multi- processor
super-servers. The Company markets a full line of local area network and wide
area network parts, including bridges, multiplexors, DSU/CSU, buffers,
modems, bridges, and routers.

The Company maintains engineering support services for the design of local
and wide area networks for system integrators and their customers. As a
developing country, Brazil has a large demand for distributed computing
solutions through the establishment of client-server networks. Many of the
Company's system integrator customers do not yet have the expertise to design
complex systems. In response, the Company established its own support team
that supplies technical expertise to design complex local area network or
wide area network systems for the system integrators as well as to the end
user. The Company holds several seminars each year in order to educate the
marketplace on the advantages of distributed computing and to train VARs and
system integrators in the latest techniques in this discipline.

Cellular Phones

The Company offers a variety of mobile cellular telephones and accessories
as well as rural cellular base stations (a single line which can accommodate
multiple telephone users) and related accessories. For the year ended
December 31, 1995, virtually all of the Company's cellular telephones were
Motorola products, and all of the base station equipment was acquired from
Tellular Corporation, although the Company believes that alternative
equipment is readily available in the market.

In an interview with the Estado de Sao Newspaper on July 19, 1996, Cesar
Michels, director of Planning for Cellcenter, a large Brazilian cellular
retailer, said that the total number of cellular subscribers in Brazil has
the potential to be as great as 20.0 million. With the number of today's
total subscribers at less than 1.0 million, the Company expects that the
growth will occur over the next four years. In Brazil, demand has been driven
by high population density, economic growth, and lack of adequate landline
service. Due to the limited availability and quality of landline service, the
Company believes that telephone users in Brazil will increasingly utilize
cellular systems, despite the fact that cellular phone service may be more
expensive to the consumer than conventional landline communications.

Contract Manufacturing

In order to utilize reserve manufacturing and purchasing capacity, the
Company manufactures two and four head video cassette recorders and 14-inch
and 20-inch color television sets. The video cassette recorders and
television sets are assembled under house brand names for exclusive
distribution by Casas Bahia, which is one of Brazil's largest electronic
retailers with over 200 outlets. Casas Bahia has contracted for 52,500 video
cassette recorders and has a standing order for 72,000 television sets to be
delivered during the eight month period which commenced in July 1996. While
such contract expired on August 31, 1996, the Company has continued its
relationship with Casas Bahia to supply the agreed to quantities associated
with such contract. While management believes that the Company's contract
manufacturing relationship with Casas Bahia will continue, there can be no
assurance that such relationship will be maintained.

FREIGHT FORWARDING AND IMPORTATION PROCEDURES

Virtually all of the products that the Company purchases are received and
consolidated in containers for sea or air freight to the Company's facilities
in Ilheus or Salvador, Brazil. These destinations contain good deep- water
ports with modern handling and storage facilities. The Company is
highly-sophisticated in Brazilian customs matters and is knowledgeable in
producing appropriate documentation to expedite customs clearance and
importation of components. Upon receipt in Brazil, the goods are expedited
through customs by Company personnel so that goods spend a minimum amount of
time at the port facility.

ENGINEERING AND MANUFACTURING

The Company has an experienced engineering department comprised of eight
engineers and 54 other technically trained personnel at its facilities. The
engineering department is responsible for designing products, pro

28
<PAGE>

ducing the technical specifications for components required for manufacture,
training personnel, line engineering, and quality control/quality assurance
programs. The engineering group constructs the bill of materials of
components that are required for manufacture and designs the manufacturing
line so that the tasks can be undertaken reliably within the capabilities of
the Company's specially trained labor force. The group also supports the
sales force and is responsible for the design of local area network or wide
area network systems for the Company's customers and their end users.

The Company's manufacturing facilities consist of a modern, 160,000 square
foot leased facility in Ilheus. See "Business -- Facilities." The Company
intends to build a plant and administration center in Ilheus, Brazil with the
cooperation and financial participation of the government of Bahia. The
Company has received a loan commitment from the development bank of the State
of Bahia of $3.4 million to begin construction of this facility. The terms of
commitment provide for a six year term loan with interest payable at 4% above
the long-term rate imposed by the Central Bank of Brazil (currently 16% per
annum). The loan proceeds are anticipated to pay for 100% of the construction
costs, and the Company has allocated approximately $2,150,000 from this
offering for acquisition of the equipment necessary to operate the facility.
Construction is expected to begin in late 1996 and occupancy is expected in
the first quarter of 1998. The State of Bahia will not have an ownership
interest in the facility. Upon completion of the facility, management
believes that the facility should allow the Company to continue to operate at
its anticipated capacity levels for at least 12 months.

PROCUREMENT AND MATERIALS MANAGEMENT

The Company, through its Miami, Florida facility, purchases components,
parts, and equipment worldwide for consolidation and shipment to destinations
in Brazil. The Company maintains a warehouse and containerization operation
in Miami, Florida where goods are booked into the Company's materials
handling system at the point of receipt. Certain testing is undertaken at the
Miami, Florida facility prior to shipment to Brazil as part of the Company's
quality assurance program. See "Business -- Quality Assurance and Service."
Virtually all of the products that the Company purchases are received and
consolidated in containers for sea or air freight to the Company's facilities
in Ilheus or Salvador, Brazil.

The Company's ability to source competitively priced computer components,
cellular telephones, and electronic products internationally is critical to
its success. The Company generally purchases components from manufacturers
and distributors pursuant to non-exclusive agreements. Since inception, the
Company has expanded its vendor base significantly. At present, the Company
has purchase contracts and orders with over 60 different vendors. The Company
does not regard any one supplier as essential to its operations since most of
the components the Company purchases are available from other sources at
competitive prices. During the year ended December 31, 1995, the Company had
only one supplier which accounted for in excess of 10% of its purchases.
During the six month period ended June 30, 1996, the Company had four
suppliers which each accounted for in excess of 10% of purchases. The Company
does not believe the loss of any supplier would have a material adverse
effect on its business as components and products required by the Company are
readily available in the marketplace.

The Company procures most of its products on extended credit terms. In the
ordinary course, the Company is not required to post security or provide
special documents in support of its purchases. The Company believes that
favorable credit terms have been obtained as a result of the credibility that
the Company has established with such vendors, as well as the desire of these
vendors to obtain access for their components and products in Brazil.

WORK FORCE AND TRAINING PROGRAM

The Company has elected to locate its facilities in remote regions of
Brazil in order to capitalize on lower costs. As such regions lack sufficient
technical educational facilities, the Company has created its own technical
training program to create a technically adept labor force by training
workers in various technical phases of assembly line manufacturing. The
Company believes that many of Brazil's cities and states do not have
sufficient technical educational facilities and, where such facilities do
exist, they are located in areas with higher labor costs. The Company
believes that this training will often confront and mitigate cultural
differences that may interfere with an employee's motivation and
productivity.

29
<PAGE>

The Company has designed internal training programs that build technical
skills for entry level employees. Entry level employees engage in assembly
work, packing, shipping, and cleaning and require a great deal of training
and supervision. The Brazilian national minimum wage is currently $114 per
month. All of the Company's entry level employees are compensated at a level
in excess of the minimum wage. Technical personnel have had training in a
technical school or at a university level. These workers are usually upwardly
mobile and are recruited either from other companies or technical schools.
While they must be taught specific work related details, they are usually
well-trained. Engineers are university trained and are paid generally from
between 5 to 10 times the minimum wage. See "Business -- Employees."

QUALITY ASSURANCE AND SERVICE

The Company addresses quality assurance at all stages of the production
process. First, components considered for use in standard systems are tested
for compatibility by the research staff. Second, incoming components receive
a physical damage inspection on receipt and again at the start of the
production process. A statistical sampling of components in every category is
electronically tested prior to assembly. Each complete unit is then
functionally tested at the end of the production process to demonstrate that
all components are engaged and fully operational.

Thereafter, each complete unit is "burned-in" for three hours. This
process involves running a test program which sequentially tests each
component to verify prescribed operation.

In addition, the Company provides support after the production process by
providing engineers and technicians who perform in-house and local on-site
servicing. The Company offers toll-free telephone support service to its
customers.

DISTRIBUTION AND MARKETING

The Company's marketing strategy is designed to eliminate as many levels
of distribution as possible in order to offer competitive pricing to the
customer. In the future, the possibility of Company owned retail stores in
some regions will be explored to further add to the control over margins and
to attain access to the end-user. The Company, operating through its sales
and marketing teams, has built an extensive distribution network consisting
of VARs, systems integrators, distributors, and retailers. This distribution
network includes access to large markets in Brazil for computer systems,
business systems integration, cellular telephones, and consumer electronic
products. Customers include small and medium-sized businesses, government
agencies, major retailers, and consumers. The Company's sales teams are in
regular contact with customers at each distribution level as well as with the
end-user. In this manner, the Company's sales, marketing, and engineering
personnel react to changing demands within the Company's customer base in
Brazil.

In 1996, the Company introduced the "10X Program", a financing program
which enables the consumer to pay for Company products purchased in equal
monthly installments. During the term of such financing, a first and
exclusive security interest in the product is retained by the Company and the
credit extended is guaranteed by the ultimate consumer as well as the
reseller. Management believes that the 10X Program utilizes the distribution
strengths of the distributor and the reseller, to which the Company pays a
commission, and benefits the Company by providing a database to be utilized
in future direct technology product sales.

The Company presently utilizes four sales teams comprising 13 persons in
its Sao Paulo facility. The teams work to market new product lines, to
receive input on existing product lines, and to make personal sales calls, as
well as accept, process, and administer sales orders, and coordinate
advertising and the logistics of product shipment.

In accordance with its policy to diversify its customer base, the Company
has successfully expanded and diversified its customer base from one customer
during 1993 to in excess of 2,650 customers at June 30, 1996. During the year
ended December 31, 1995, Casas Bahia and Vitoria Tecnologia S.A., an
affiliate of the Company, accounted for 15% and 76% respectively of the
Company's sales. For the six months period ending June 30, 1996, Casas Bahia
and Vitoria Tecnologia S.A. accounted for 14% and 30%, respectively, of the
Company sales.

30
<PAGE>

COMPETITION

The manufacturing and distribution of computer equipment and related
products is highly competitive and requires substantial capital. The Company
competes with, and will compete with, numerous international, national and
regional companies, many of which have significantly larger operations and
greater financial, marketing, human and other resources than the Company,
which may give such competitors competitive advantages, including economies
of scale and scope. Competitors include internationally recognized companies
such as IBM, Acer, and Compaq. No assurance can be given that the Company
will successfully compete in any market in which it conducts or may conduct
operations.

BACKLOG; UNFULFILLED CONTRACT MANUFACTURING OBLIGATIONS

The Company's backlog as of June 30, 1996, exclusive of unfulfilled
contract manufacturing backlog, was approximately $18,000,000. Backlog
consists of contracts or purchase orders with delivery dates scheduled within
the next 12 months. The Company currently expects to ship its entire current
backlog within the Company's current fiscal year. Variations in the magnitude
and duration of contracts received by the Company and customer delivery
requirements may result in substantial fluctuations in backlog from period to
period. Since customers may cancel or reschedule deliveries, backlog may not
be a meaningful indicator of future financial results. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

At December 31, 1995, the Company had no unfulfilled contract
manufacturing obligation. However, as a result of the agreement between the
Company and Casas Bahia, at June 30, 1996, the Company had an unfulfilled
contract manufacturing obligation of approximately $29,000,000.

REGULATION AND ENVIRONMENTAL MATTERS

The Company believes that its facilities and practices for controlling and
disposing of the limited amount of wastes it produces are in compliance with
applicable environmental laws and regulations in Brazil.

TRADEMARKS

The Company's trademarks, Vitech Vision(TM), Multi-Show(TM), and
EasyNet(TM) are owned by an affiliated third party and are licensed to the
Company under a long-term license agreement. The Company has an option to
purchase the trademarks from the licensee at a cost of $1.00. On October 23,
1996, the Company exercised its option to acquire such trademarks.

EMPLOYEES

As of June 30, 1996, the Company employed approximately 240 persons,
including three executive officers, 12 executive personnel, eight engineering
personnel, and 50 administrative personnel. The Company believes its employee
relations both in Brazil and the United States are satisfactory. None of the
Company's employees are subject to collective bargaining or union agreements.

FACILITIES

The Company leases, from an unaffiliated landlord, approximately 16,000
square feet of office and warehouse space in Miami, Florida. The office space
lease expires in August 1998. The Company pays annual rent of approximately
$102,000 plus its allocable share of real estate taxes, insurance, and other
assessments.

The Company's Brazilian operations are located in Sao Paulo and Bahia. The
Company leases approximately 7,500 square feet of office space in Sao Paulo.
The Company pays an annual rent of $48,000 on a lease which expires in
February 1997. In addition, the Company leases an additional 12,000 square
feet of warehouse space in Sao Paulo pursuant to a lease which expires in
June 1997 for an annual rent of $36,000. Such lease has an option to extend
the lease through June 1999.

The Company leases approximately 160,000 square feet of manufacturing and
administrative space in Ilheus for approximately $13,500 per month. Such
lease expires in December 1996, with an option for extension through December
1998.

31
<PAGE>

The Company believes that in the event that the lease with respect to any
of such facilities should not be renewed, alternative space will be available
at comparable rates.

In addition to the facilities discussed above, the Company owns, for
investment purposes, an undeveloped parcel of land near Ilheus, Bahia. The
Company does not plan to make material capital expenditures or improvements
with respect to this property during the next fiscal year.

LEGAL PROCEEDINGS

Meris has advised the Company that, irrespective of an Amendment
agreement, it has certain rights to an equity ownership position in the
Company. While the Company believes such claims are without merit, Georges C.
St. Laurent, III and William C. St. Laurent, the Chief Executive Officer and
Chief Operating Officer of the Company, respectively, have agreed to settle
such equity claims, should the need arise, from their personal share
holdings. Any expense associated with defending such claim will be incurred
as an expense by the Company. See "Certain Transactions."

Other than as discussed above, the Company knows of no other material
litigation or claims pending, threatened, or contemplated to which the
Company is or may become a party.

32
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors, proposed directors and executive officers of the Company
and their ages are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Georges C. St. Laurent, III 35 Chairman of the Board of Directors
and Chief Executive Officer
William C. St. Laurent ..... 31 President, Chief Operating Officer,
and Director
Mitchell E. Asher .......... 40 Chief Financial Officer, Treasurer, Secretary,
and Director
Joseph K. Meyer ............ 40 Proposed Director(1)
H.R. Shepherd .............. 75 Proposed Director(1)
</TABLE>

- ------
(1) Following this offering, Messrs. Meyer and Shepherd have agreed to join
the Board.

Georges C. St. Laurent, III has served as Chairman of the Board and Chief
Executive Officer of the Company since 1993. Between 1986 and January 1993,
Mr. St. Laurent operated a proprietary firm, GSL Trading Co., Miami, Florida,
which was engaged in the re-manufacturing of computer hardware for sale to
Brazil and other countries in Latin America. Between 1983 and 1986, Mr. St.
Laurent was a member of the Chicago Mercantile Exchange and was engaged in
trading activities for his proprietary account specializing in currency
options and futures market making. Since 1986 to the present, Mr. St. Laurent
has been a director of Clinica Kirpalmar, a not-for-profit Latin American
medical foundation. Mr. St. Laurent graduated from Yale University in 1982
and received a B.S. in Molecular Biology.

William C. St. Laurent has served as President and Chief Operating Officer
of the Company and a Director since 1993. Mr. St. Laurent has also served as
Vice Chairman of the Board of Directors of the Western Bank of Oregon from
January 1989 through January 1996. Mr. St. Laurent previously owned several
private foods processing companies located in Oregon from 1988 to 1992. Mr.
St. Laurent graduated from Cornell University with a B.S. in Hotel
Administration. Mr. St. Laurent also owns 100% of the voting shares of
Vitoria Tecnologia S.A., the primary customer of Vitech America, Inc. since
inception until Vitoria Tecnologia S.A. ceased manufacturing and selling
activities in March of 1996. William C. St. Laurent is the brother of Georges
C. St. Laurent III.

Mitchell E. Asher has been the Company's Chief Financial Officer,
Treasurer, and Secretary since June 1993. Between 1991 and 1992, Mr. Asher
was Controller and Chief Financial Officer for U.S. Computer of North
America, Inc., Miami, Florida, a Brazilian distributor and manufacturer of
computer peripherals and components. Between July 1989 and March 1991, Mr.
Asher conducted a proprietary business, Lahaina Licks, Ltd., Lahaina, Maui,
Hawaii which was engaged in the manufacture and distribution of specialty ice
cream. Prior thereto, between 1984 and 1990, Mr. Asher was employed by Seiko
Instruments USA, Inc., Torrence, California, a multi-national manufacturer
(including Manaus, Brazil), serving at various times as Controller of its
Consumer Products Division and for its Corporate Division as Corporate
Operations Manager and Accounting Manager. Between 1981 and 1984, Mr. Asher
was employed by Code-A-Phone Corporation, Portland, Oregon, a telephone
answering equipment manufacturer, where he served as Accounting Manager and
then Assistant Controller interfacing with factories in Asia. Between 1978
and 1981, Mr. Asher was Assistant Controller of California Mini Computer
Systems, Inc., Los Angeles, California. Prior thereto, between 1976 and 1978,
Mr. Asher was an auditor with Gulliver's, Inc., Marino Del Rey, California,
which was a specialty restaurant chain. Mr. Asher graduated from the
University of Southern California with a B.S. in Business Administration and
is a graduate of Pepperdine University where he received an MBA.

Joseph K. Meyer will become a director of the Company following this
offering. Mr. Meyer has served as president and chief executive officer of
Compass Advisors, Inc., an institutional financial and investment consulting
firm since 1991. Mr. Meyer is also president of Christina Partners, Inc., an
investment advisory and

33
<PAGE>

money management firm. Mr. Meyer also serves as principal of CAI Tradex
Clearing Corporation, which provides fully-disclosed securities brokerage
services to institutional clients. Prior to 1991 Mr. Meyer was first Vice
President and Senior Consultant at Kemper Securities Group, Inc. and Kemper
Consulting Group, respectively.

H.R. Shepherd will become a director of the Company following this
offering. Since 1993, Mr. Shepherd has served as special advisor to the
Chairman of Medeva PLC, an international pharmaceutical company. From 1955 to
1993 Mr. Shepherd served as Founder and Chairman of Armstrong
Pharmaceuticals, previously known as Aerosol Techniques, a pharmaceutical
drug delivery company which was acquired by Medeva PLC. Mr. Shepherd
presently is the Chairman of the Albert F. Sabin Vaccine Foundation.

Upon their joining the Board of Directors, Messrs. Meyer and Shepherd will
each be granted options to purchase 10,000 shares of Common Stock at an
exercise price of $12.00 per share.

Directors are elected at the Company's annual meeting of shareholders and
serve a term of one year or until their successors are elected and qualified.
Officers are appointed by the Board of Directors and serve at the discretion of
the Board of Directors, subject to the By-laws of the Company.

Upon the closing of this offering, the Company will establish a
Compensation Committee and an Audit Committee.

The Compensation Committee will administer the Company's stock option plan
and make recommendations to the full Board of Directors concerning
compensation, including incentive arrangements, of the Company's officers and
key employees. The Compensation Committee will be comprised of a majority of
independent directors upon establishment.

The Audit Committee will review the engagement of the independent
accountants and review the independence of the accounting firm. The Audit
Committee will also review the audit and non-audit fees of the independent
accountants and the adequacy of the Company's internal accounting controls.
The Audit Committee will consist of a majority of independent directors upon
establishment.

The Company has agreed with the Representative that, for a period of 36
months from the date of closing of this offering, the Company will allow an
observer designated by the Representative and acceptable to the Company to
attend all meetings of the Board of Directors. Such observer will have no
voting rights. He or she will be reimbursed for out-of-pocket expense
incurred in attending such meetings, and will be indemnified against any
claims arising out of participation at Board meetings, including claims based
on liabilities arising under the securities laws.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Florida Business Corporation Act permits the indemnification of
directors, employees, officers and agents of Florida corporations. The Company's
Amended and Restated Articles of Incorporation indemnify its directors and
officers to the fullest extent permitted by law.

At present, there is no pending litigation or proceeding involving a
director, officer, employee, or other agent of the Company as to which
indemnification is being sought, nor is the Company aware of any threatened
litigation that may result in claims for indemnification by any director,
officer, employee, or other agent.

Insofar as indemnification for liability arising under the Securities Act
may be permitted to 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.

EMPLOYMENT AGREEMENTS

Messrs. Georges C. St. Laurent, III and William C. St. Laurent are parties
to separate three-year employment agreements which terminate on December 31,
1998. Under the terms of each employment agreement, Messrs. St. Laurent and
St. Laurent will each receive annual compensation of $240,000. In the event
that either Georges C. St. Laurent, III or William C. St. Laurent were to die
or become disabled anywhere outside Brazil, that individual, or his estate,
would receive his annual compensation for twelve months. In the event that
either were to become disabled in Brazil, that individual would receive his
annual compensation for twenty-four

34
<PAGE>

months. In the event that either were to die in Brazil, that individual's
estate would receive that individual's compensation for the greater of
twenty-four months or the remaining term of the employment agreement. Both
such employment agreements include non-competition agreements with the
Company which preclude engagement in competitive activities in Latin America
or in the South Florida area as well as solicitation of customers and
employees for a period of twelve months following termination of employment.
Both agreements also require Messrs. St. Laurent and St. Laurent to maintain
the confidentiality of information and proprietary data relating to the
Company and its activities.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information relating to the compensation
paid by the Company for the past three fiscal years to: (i) the Company's
Chairman and Chief Executive Officer; and (ii) each of the Company's
executive officers who earned more than $100,000 during the fiscal year ended
December 31, 1995 (collectively, the "Named Executive Officers"):

<TABLE>
<CAPTION>
Stock All Other
Name and Principal Position Year Salary Bonus Options Compensation
--------------------------- ------ ---------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
Georges C. St. Laurent III,
Chairman of the Board and
Chief Executive Officer .. 1995 $120,000 $ 0 0 $ 0
1994 $ 96,000 $ 0 0 $ 0
1993 $ 0 $ 0 0 $ 0
William C. St. Laurent,
President and
Chief Operating Officer .. 1995 $120,000 $ 0 0 $4,500*
1994 $ 96,000 $ 0 0 $ 0
1993 $ 0 $ 0 0 $ 0
Mitchell E. Asher,
Chief Financial Officer .. 1995 $ 72,800 $15,000 0 $9,000*
1994 $ 65,000 $10,000 0 $3,750*
1993 $ 23,000 $ 0 0 $ 0
</TABLE>

- ------
* Mr. William C. St. Laurent and Mr. Mitchell E. Asher received a car
allowance of $750.00 each per month for all or a portion of the year.

The Company maintains keyman life insurance on the life of each of Georges
C. St. Laurent, III and William C. St. Laurent in the amount of $2,000,000
payable to the Company. These policies were acquired by the Company pursuant
to its undertaking to Meris in connection with a loan provided to the Company
on October 28, 1995. In addition, the Company obtained keyman insurance on
the life of William C. St. Laurent pursuant to its agreement with Georges C.
St. Laurent, Jr. in connection with his loan to the Company made on May 26,
1995. Georges C. St. Laurent, Jr. is the beneficiary of this policy. See
"Certain Transactions."

OPTION GRANTS IN LAST FISCAL YEAR

No options were granted to, or exercised by, any of the Named Executive
Officers during the fiscal year ended December 31, 1995.

GRANTS OF STOCK OPTIONS

On September 3, 1996, the Company authorized the issuance of options to
purchase up to 4,000,000 shares of Common Stock. Of such options, 2,040,000
options were issued to Georges C. St. Laurent, III, the Company's Chairman of
the Board and Chief Executive Officer and 1,960,000 options were issued to
William C. St. Laurent, the Company's President and Chief Operating Officer.
Of such options, 490,000 options are exercisable at $15.00 per share, another
490,000 options are exercisable at $20.00 per share and 980,000 options are
exercisable at $25.00 per share by William C. St. Laurent and 510,000 options
are exercisable at $15.00 per share, another 510,000 options are exercisable
at $20.00 per share and 1,020,000 options are exercisable at $25.00 per share
by Georges C. St. Laurent III. The options are exercisable for a four year
period beginning on the closing of the Company's initial public offering.

35
<PAGE>

1996 STOCK OPTION PLAN

The 1996 Stock Option Plan provides for the grant of options to purchase
up to 200,000 shares of Common Stock to employees, officers, directors, and
consultants of the Company. Options may be either "incentive stock options"
within the meaning of Section 422 of the United States Internal Revenue Code
of 1986, as amended (the "Code"), or non-qualified options. Incentive stock
options may be granted only to employees of the Company, while non-qualified
options may be issued to non-employee directors, consultants, and others, as
well as to employees of the Company.

The Plan will be administered by the Board of Directors or a committee
thereof, who determine, among other things, those individuals who shall
receive options, the time period during which the options may be partially or
fully exercised, the number of shares of Common Stock issuable upon the
exercise of each option, and the option exercise price.

The exercise price of an incentive stock option may not be less than the
fair market value per share of Common Stock on the date the option is
granted. The exercise price of a non-qualified option may be established by
the Board of Directors. The aggregate fair market value (determined as of the
date the option is granted) of Common Stock for which any person may be
granted incentive stock options which first become exercisable in any
calendar year may not exceed $100,000. No person who owns, directly or
indirectly, at the time of the granting of an incentive stock option to such
person, 10% or more of the total combined voting power of all classes of
stock of the Company (a "10% Shareholder") shall be eligible to receive any
incentive stock options under the Plan unless the exercise price is at least
110% of the fair market value of the shares of Common Stock subject to the
option, determined on the date of grant. Non-qualified options are not
subject to such limitation.

Incentive stock options may not be transferred by an optionee other than
by will or the laws of descent and distribution, and, during the lifetime of
an optionee, the option will be exercisable only by the optionee. In the
event of termination of employment other than by death or disability, the
optionee will have no more than three months after such termination during
which the optionee shall be entitled to exercise the option, unless otherwise
determined by the Board of Directors. Upon termination of employment of an
optionee by reason of death or permanent and total disability, such
optionee's options remain exercisable for one year thereafter to the extent
such options were exercisable on the date of such termination. No similar
limitation applies to non-qualified options.

Options under the Plan must be issued within ten years from the effective
date of the Plan. The effective date of the Plan is August 20, 1996.
Incentive stock options granted under the Plan cannot be exercised more than
ten years from the date of grant. Incentive stock options issued to a 10%
Shareholder are limited to five year terms. Options granted under the Plan
generally provide for the payment of the exercise price in cash and may
provide for the payment of the exercise price by delivery to the Company of
shares of Common Stock already owned by the optionee having a fair market
value equal to the exercise price of the options being exercised, or by a
combination of such methods. Therefore, if so provided in an optionee's
options, such optionee may be able to tender shares of Common Stock to
purchase additional shares of Common Stock and may theoretically exercise all
of his stock options with no additional investment other than the purchase of
his original shares.

Any unexercised options that expire or that terminate upon an employee's
ceasing to be employed by the Company become available again for issuance
under the Plan.

The Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the Plan may not be
increased without the consent of the shareholders of the Company.

Upon their joining the Board of Directors, Joseph K. Meyer and H.R.
Shepherd will each be granted options under the Plan to purchase 10,000
shares of Common Stock at an exercise price of $12.00 per share. Other than
as described above, to date, no options have been granted under the Plan.

36
<PAGE>

CERTAIN TRANSACTIONS

During the period from June 24, 1993 to December 31, 1993, the years 1994
and 1995, and the first six months of 1996, Vitech America, Inc. had as its
primary customer in Brazil, Vitoria Tecnologia S. A., an affiliate controlled
by William C. St. Laurent, the President and Chief Operating Officer of the
Company, to whom it sold products during those periods on open terms. Also,
Bahia, the Company's wholly owned subsidiary, bought and sold products to and
from Vitoria Tecnologia S.A. during the years ended December 31, 1995 and
1996 on a purely commercial basis at market prices no less favorable than if
the Company or its subsidiary bought or sold products to or from others.
Sales to Vitoria were $1,156,253 for the period from June 24, 1993 to
December 31, 1993, $17,407,363 for the year ended December 31, 1994 and
$36,677,077 for the year ended December 31, 1995 and $8,066,878 for the six
months ended June 30, 1996. In 1996, management of Vitoria Tecnologia S.A.
disclosed to the Company that based on lack of competitive tax and fiscal
incentives in the State of Espirito Santo, it had ceased all manufacturing
and selling operations. Since that time, Vitoria Tecnologia S.A. has paid all
outstanding amounts owed to the Company.

In 1993, Georges C. St. Laurent, Jr., the father of Georges C. St.
Laurent, III, the Company's Chairman of the Board and Chief Executive
Officer, and William C. St. Laurent, the President and Chief Operating
Officer of the Company, loaned to Vitoria Tecnologia S.A., an affiliate and
primary customer of the Company, the principal amount of $2,127,440. Such
loan was evidenced by a note bearing interest at 12% per annum. In 1994, as
an accommodation for Georges C. St. Laurent, Jr., for consideration received
by the Company in the amount of the note, the original note was transferred
from Vitoria Tecnologia S.A. to the Company and the rate of interest thereon
was reduced to 6% per annum. As of June 30, 1996, the amount of the note was
$661,917. In May 1995, Mr. Georges C. St. Laurent Jr. loaned the Company an
additional $2,000,000 pursuant to the terms of a secured note which bears
interest at the rate of 9% per annum. At June 30, 1996, the amount due on
such note was $2,000,000. Such note is convertible into 5.925% shares of
Common Stock at any time during the term thereof.

In June 1993, Georges C. St. Laurent, III, the Company's Chairman of the
Board of Directors and Chief Executive Officer, contributed in exchange for
4,080,000 shares of Common Stock, assets valued at approximately $306,000
(including $250,000 of inventory). This amount represented the cost of the
items contributed, which approximated fair market value, as agreed to by the
shareholders.

In connection with the Company's recently introduced 10X consumer finance
program designed to encourage consumer purchases in Brazil through
installment sales, Mr. Georges C. St. Laurent, Jr. agreed to purchase
consumer debt portfolios from the Company at discount rates established at
periodic intervals (currently at a discount allowing for annual return of
30%) but at no less favorable rates than would be charged in ordinary market
transactions in Brazil for comparable financing programs. Such debt
portfolios were acquired with recourse against the Company. At June 30, 1996,
consumer debt portfolios in the face amount of approximately $10,400,000 were
acquired by Mr. St. Laurent from the Company for $9,244,052.

The Company on July 1, 1996 entered into a long term license agreement
with a company controlled by William C. St. Laurent pursuant to which the
Company licensed the trademarks, VitechVision(TM), MultiShow(TM), and
EasyNet(TM) to the Company. The Company has an option to purchase the
trademarks from the licensee at a cost of $1.00. On October 23, 1996, the
Company exercised its option to acquire such trademarks.

For a description of employment agreements between the Company and its
officers, see "Management -- Employment Agreements."

Upon closing of this Offering, the Company will issue options for 50,000
shares of Common Stock to VMW, Inc., the Company's public relations firm.
Such options will have an exercise price of $12.00 per share.

On October 28, 1995, Meris entered into a Loan Agreement with the Company
pursuant to which Meris made available a loan to the Company in the principal
amount of $2,000,000. The loan was to mature on October 28, 1997 and bears
interest at the rate of 12% per annum payable monthly. The loan is secured by
the assets of the Company exclusive of inventory and receivables. In
connection with the loan, Meris received a guarantee by Georges C. St.
Laurent, III and William C. St. Laurent, the President and Chief Operating
Officer of the Company, and his wife Wendy St. Laurent, a stock pledge
agreement by such parties, a collateral assignment of various rights of the
St. Laurents as well as assignments of life insurance policies on the lives
of Messrs. St.

37
<PAGE>

Laurent and St. Laurent. The note was convertible into approximately 4.7% of
the shares of Common Stock. In addition, certain options were provided to
Meris which afforded them the right to purchase up to an aggregate of 5%
capital stock interest in the Company. On July 20, 1996, the Company and
Meris entered into an Amendment to such Loan Agreement pursuant to which the
Company is obligated to pay Meris $445,000 in installments between July 20,
1996 and November 1, 1996. In connection with the Amendment, the conversion
rights provided by the Note and the options were canceled provided all
payments of principal and interest under the Note are made as set forth
above. The Company has made all payments in accordance with such Amendment.
On October 30, 1996, the Company repaid the note in full with the proceeds
from a short-term loan, bearing a 18% annual interest rate, from Georges C.
St. Laurent, Jr. The Company intends to repay such short-term obligation with
a portion of the net proceeds of this offering. Meris has advised the Company
that, irrespective of the Amendment, it has certain rights to an equity
ownership position in the Company. While the Company believes such claims are
without merit, Georges C. St. Laurent, III and William C. St. Laurent have
agreed to settle such equity claims, should the need arise, from their
personal share holdings. Any expense associated with defending such claim
will be incurred as an expense by the Company. Meris is not an affiliate of
the Company.

38
<PAGE>

CONCURRENT OFFERING

The registration statement of which this Prospectus forms a part also
includes a Prospectus with respect to an offering by the Selling Shareholders
of 40,944 shares of the Selling Shareholders' Stock issued in connection with
the August 1996 Private Placement, which may be sold in the open market, in
privately negotiated transactions, or otherwise directly by the holders
thereof, subject to the following contractual restrictions. Each Selling
Shareholder has agreed not to sell, transfer, or otherwise publicly dispose
of the Selling Shareholders' Stock for up to 30 days from the date of this
Prospectus without the prior written consent of the Representative.

The Company will not receive any proceeds from the sale of any of the
Selling Shareholders' Stock. Sales of the Selling Shareholders' Stock or the
potential of such sales may have an adverse effect on the market price of the
shares of Common Stock offered hereby.

39
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of the date of this Prospectus,
and after the sale of shares of Common Stock offered hereby, by (i) each
person who is known by the Company to own beneficially more than 5% of the
Common Stock and (ii) all directors and executive officers of the Company as
a group.

<TABLE>
<CAPTION>
Percentage Beneficially
Owned(1)(2)
Name and Address ---------------------------------
of Beneficial Owner Number of Shares Before Offering After Offering
----------------------------------------- ---------------- --------------- --------------
<S> <C> <C> <C>
Georges St. Laurent, III ................ 3,980,550 49.67% 39.75%
c/o Vitech America, Inc.
8807 N.W. 23rd Street
Miami, FL 33172(3) (5)
William C. St. Laurent .................. 3,824,450 47.72% 38.19%
c/o Vitech America, Inc.
8807 N.W. 23rd Street
Miami, FL 33172(4)(5)
Mitchell E. Asher ....................... 52,000 .65% .52%
c/o Vitech America, Inc.
8807 N.W. 23rd Street
Miami, FL 33172(6)
All directors and executive officers as a
group (3 persons) ...................... 7,857,000 98.05% 78.46%
</TABLE>

- ------
(1) All shares are beneficially owned, and sole voting and dispositive power
is held, by the persons named, except as otherwise noted.

(2) Percentage of ownership is based on 8,013,648 shares of Common Stock
outstanding before the offering of shares hereby and 10,013,648 shares of
Common Stock outstanding immediately after the offering.

(3) Does not include options to purchase 2,040,000 shares of Common Stock.

(4) Includes 2,544,430 shares of Common Stock held by Wolf Partners, a family
Limited Partnership whose limited partners include a trust for the
benefit of Nicolas St. Laurent and Alexander St. Laurent, Mr. St.
Laurent's minor children, of which Mr. St. Laurent is the general
partner. Does not include options to purchase 1,960,000 shares of Common
Stock.

(5) Excludes options to purchase 26,520 shares and 25,480 granted by Georges
and William St. Laurent, respectively, to Mitchell E. Asher.

(6) Represents options to purchase 52,000 shares of Common Stock from Georges
and William St. Laurent proportional to their holdings.

40
<PAGE>

DESCRIPTION OF SECURITIES

GENERAL

The following description of the material terms of the Common Stock is
subject to the Florida Business Corporation Act (the "FBCA") and to the
provisions contained in the Company's Articles of Incorporation, as amended
(the "Articles of Incorporation"), and By-laws, as amended, copies of which
have been filed as exhibits to the Registration Statement of which this
Prospectus is a part. See "Available Information."

The Company's authorized capital stock consists of 30,000,000 shares of
Common Stock, no par value, and 3,000,000 shares of preferred stock, no par
value (the "Preferred Stock"). Immediately prior to this offering, there were
outstanding 8,013,648 shares of Common Stock and no shares of Preferred
Stock.

COMMON STOCK

The Company is authorized to issue 30,000,000 shares of Common Stock, no
par value per share, of which as of the date of this Prospectus, 8,013,648
shares of Common Stock are outstanding. All outstanding shares of Common
Stock are, and all shares of Common Stock to be outstanding upon completion
of this offering will be, validly authorized and issued, fully paid, and
non-assessable.

The holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of shareholders. Holders of
Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor.
In the event of a liquidation, dissolution, or winding up of the Company,
holders of Common Stock are entitled to share ratably all assets remaining
after payment of liabilities. Holders of Common Stock have no preemptive
rights and have no rights to convert their Common Stock into any other
securities.

For a period of 12 months from the date of this Prospectus, without the
prior written consent of the Representative, which consent shall not be
unreasonably withheld, the Company may not issue any securities, except debt
securities and shares issued pursuant to the exercise or conversion of (i)
options, warrants or other convertible securities outstanding as of the date
of this Prospectus, (ii) options granted in the future pursuant to the Plan
or (iii) shares of Common Stock issued in connection with an acquisition by
the Company. Also, for a period of 24 months from the date of this
Prospectus, the Company may not issue any shares of Common Stock pursuant to
Regulation S without the Representative's prior written consent.

PREFERRED STOCK

The Company is authorized to issue up to 3,000,000 shares of Preferred
Stock, no par value per share, of which no shares are outstanding as of the
date hereof. The preferred stock may be issued in one or more series, the
terms of which may be determined at the time of issuance by the Board of
Directors, without further action by shareholders, and may include voting
rights (including the right to vote as a series on particular matters),
preferences as to dividends and liquidation, conversion rights, redemption
rights, and sinking fund provisions. The issuance of any such preferred stock
could adversely affect the rights of the holders of Common Stock and,
therefore, reduce the value of the Common Stock. The ability of the Board of
Directors to issue preferred stock could discourage, delay, or prevent a
takeover of the Company. See "Risk Factors -- Preferred Stock; Possible
Anti-Takeover Effects."

NASDAQ NATIONAL MARKET(R)

The Common Stock has been approved for quotation on the Nasdaq National
Market(R) under the symbol "VTCH."

ANTI-TAKEOVER PROVISIONS OF FLORIDA LAW

The Company may be subject to the affiliated transaction ("Affiliated")
and the control-share acquisition provisions of Sections 607.0901 and
607.0902 of the FBCA.

The Affiliated provisions of the FBCA are designed to restrict the
occurrence of highly coercive takeovers. It also limits certain related party
transactions otherwise permissible under the FBCA. The law specifically pro-

41
<PAGE>

vides that certain transactions between a Florida corporation and an
interested shareholder or affiliate or associate of the interested
shareholder (the "Interested Shareholder"), defined as any person who
beneficially owns more than 10% of the outstanding voting shares of the
corporation, must be approved by the affirmative vote of at least two-thirds
of the holders of the other voting shares (the "Disinterested Shareholders").

Transactions that require the approval of two-thirds of the voting shares
beneficially owned by Disinterested Shareholders include: (1) mergers or
consolidations with the Interested Shareholder; (2) the sale, lease,
exchange, mortgage, pledge, transfer, or other disposition to the Interested
Shareholder of five percent or more of either the corporation's total assets
or total outstanding shares, or representing five percent or more of the
earning power or net income of the corporation; (3) issuance or transfers of
shares to the Interested Shareholder having a market value of five percent or
more of the total market value of the corporation's outstanding shares
(except pursuant to the exercise of stock warrants or rights, or a dividend
or distribution pro rata to all shareholders); (4) a liquidation or
dissolution of the corporation proposed by or pursuant to a written or
unwritten agreement or understanding with the Interested Shareholder; (5) a
reclassification of securities or other corporate reorganization with the
Interested Shareholder that has the effect of increasing the percentage
voting ownership of the Interested Shareholder by more than five percent; and
(6) any receipt by the Interested Shareholder of a benefit, directly or
indirectly, of any loans, advances, guarantees, pledges, other financial
assistance, or tax credits or advantages provided by or through the
corporation.

Transactions that are approved by majority of disinterested directors are
exempted from the above shareholder approval requirement. A "Disinterested
Director" is defined to mean any person who was a member of the corporation's
Board of Directors before the date the Interested Shareholder became the
beneficial owner of more than 10% of the outstanding voting shares of the
corporation, or anyone who subsequently becomes a member of the Board of
Directors with the approval of the majority of the Disinterested Directors.
There are currently no Disinterested Directors on the Company's Board and
therefore an affiliated transaction may be approved only by the majority of
the Company's Disinterested Shareholders, unless at any time during the three
years preceding the transaction, the corporation has had 300 or fewer
shareholders of record.

The control share acquisition provisions generally provide that control
shares of an issuing public corporation acquired in a control share
acquisition have no voting rights until voting rights are granted by a
resolution approved by a majority of shares entitled to vote excluding
control shares.

Control share acquisition provisions apply to "Issuing Public
Corporations" which are defined to include corporations with: (i) 100 or more
shareholders, excluding all nominees or brokers; (ii) principal offices in
Florida; and (iii) more than 10% of its shares owned by Florida residents.

"Control Shares" are defined as shares that, when acquired and added to
other shares owned by a person, enable that person to exercise voting power
with respect to shares of an Issuing Public Corporation within the ranges of
one-fifth to one-third, one-third to one-half, and one-half or more of the
outstanding voting power. This term does not include all shares owned by the
person but only those shares acquired to put the shareholder "over the top"
with respect to that particular range. The FBCA provides that shares acquired
within any 90-day period either before or after purchase are considered to be
one acquisition.

Approval of voting rights requires: (i) approval by each class entitled to
vote separately, by majority vote and (ii) approval by each class or series
entitled to vote separately, by a majority of all votes entitled to be cast
by that group excluding all Control Shares.

If an acquiring person proposes to make or has made a control share
acquisition, he may deliver to the Issuing Public Corporation an acquiring
person's statement ("APS"). The acquiring person may then request that the
Issuing Public Corporation call a special meeting of the shareholders at the
acquiring person's expense to consider granting rights to the Control Shares.

If no APS has been filed, any Control Shares acquired in a Control Share
acquisition by such person may, after 60 days has passed since the last
acquisition of Control Shares, be redeemed at their fair market value. If an
APS is filed, the shares are not subject to redemption unless the shares are
not accorded full voting rights by shareholders.

42
<PAGE>

The effect and intent of the control share acquisition provision is to
deter corporate takeovers. Therefore, it is more likely than not that control
of the Company will remain in the hands of the existing principal
shareholders. See "Principal Shareholders."

TRANSFER AND WARRANT AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 10,013,648 shares
of Common Stock outstanding (10,313,648 shares of Common Stock outstanding if
the Underwriters' over-allotment option is exercised in full). Of these
shares, the 2,000,000 shares of Common Stock offered hereby (2,300,000 shares
if the Representative's over-allotment option is exercised in full) will be
freely tradable without further registration under the Securities Act. Except
as set forth below, all shareholders of the Company have agreed not to
dispose of their shares for a period of 24 months from the date of this
offering without the Representative's prior written consent, provided,
however, that each of Georges C. St. Laurent, the Chairman of the Board of
Directors and Chief Executive Officer of the Company, and William C. St.
Laurent, the President and Chief Operating Officer of the Company, are each
entitled to pledge such number of shares of Common Stock as may be required
to secure loans in the amount of $1,000,000 each. The 13,648 shares of Common
Stock and the 27,296 warrants for shares of Common Stock issued in the
Company's August 1996 Private Placement are eligible for sale pursuant to the
Selling Shareholders Prospectus commencing thirty (30) days from the date of
this Prospectus.

All of the presently outstanding 8,013,648 shares of Common Stock are
"restricted securities" within the meaning of Rule 144 of the Securities Act
and, if held for at least two years, would be eligible for sale in the public
market in reliance upon, and in accordance with, the provisions of Rule 144
following the expiration of such two-year period. In general, under Rule 144
as currently in effect, a person or persons whose shares are aggregated,
including a person who may be deemed to be an "affiliate" of the Company as
that term is defined under the Securities Act, would be entitled to sell
within any three month period a number of shares beneficially owned for at
least two years that does not exceed the greater of (i) 1% of the then
outstanding shares of Common Stock, or (ii) the average weekly trading volume
in the Common Stock during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain requirements as to the manner of
sale, notice, and the availability of current public information about the
Company. However, a person who is not deemed to have been an affiliate of the
Company during the 90 days preceding a sale by such person and who has
beneficially owned shares of Common Stock for at least three years may sell
such shares without regard to the volume, manner of sale, or notice
requirements of Rule 144.

Prior to this offering, there has been no public market for the Company's
securities. Following this offering, the Company cannot predict the effect,
if any, that sales of shares of Common Stock pursuant to Rule 144 or
otherwise, or the availability of such shares for sale, will have on the
market price prevailing from time to time. Nevertheless, sales by the current
shareholders of a substantial number of shares of Common Stock in the public
market could materially adversely affect prevailing market prices for the
Common Stock. In addition, the availability for sale of a substantial number
of shares of Common Stock acquired through the exercise of the
Representative's Warrants or the currently outstanding options under the Plan
could materially adversely affect prevailing market prices for the Common
Stock. See "Risk Factors -Shares Eligible for Future Sale."

Up to an aggregate of 200,000 additional shares of Common Stock may be
purchased upon the exercise of options which may be granted under the Plan.
In addition, Georges St. Laurent, Jr. has an option to convert a note into
5.925% of the shares of Common Stock outstanding at any time during the term
of such note. Additionally, 50,000 shares of Common Stock may be purchased
upon exercise of options which will be granted to VMW, Inc. the Company's
public relations firm, upon closing of this Offering.

Up to 200,000 additional shares of Common Stock may be purchased by the
Representative during the period commencing on the first anniversary of the
date of this Prospectus and terminating on the fifth anniversary of the date
of this Prospectus through the exercise of the Representative's Warrants. Any
and all shares of

43
<PAGE>

Common Stock purchased upon the exercise of the Representative's Warrants may
be freely tradable, provided that the Company satisfies certain securities
registration and qualification requirements in accordance with the terms of
the Representative's Warrants. See "Underwriting."

CONDITIONS IN BRAZIL

ECONOMIC CONDITIONS

In 1995, for the third consecutive year, the economy of Brazil experienced
significant expansion. During the years ended December 31, 1993, 1994, and
1995, Brazil's gross domestic product ("GDP") increased by 4.1%, 9.4%, and
4.0%, respectively, and inflation receded from 1,149% during the year ended
December 31, 1992, 2,244% for the year ended December 31, 1993, and 1,294%
for the year ended December 31, 1994, to 22.0% for the year ended December
31, 1995. As of July, 1996, inflation was estimated to be 12% for the year
ended December 31, 1996. Such growth in GDP and decrease in inflation is
attributable to, among other things, significant reform initiatives which
have been implemented in Brazil's economy, including: (i) monetary
stabilization; (ii) public sector reforms designed to achieve more economic
stability and increased efficiency; (iii) privatization of activities which
could be efficiently undertaken by the private sector; (iv) increased public
health and basic education services; (v) trade reforms designed to provide
incentives to export-oriented and import- competitive industries; and (vi)
social security reforms. Together with such initiatives, Brazil has granted
to foreigners increased access to all sectors of the economy, thereby
resulting in significant increases in foreign investment in comparison to
prior periods. There can be no assurance that the Brazilian government will
be successful in its attempts to stabilize prices and the rate of inflation.
Price instability may have a material adverse effect on the Company.

Brazil's economy has been subject to numerous destabilizing factors,
including recent hyper-inflation, low foreign exchange reserves, and
fluctuations in world commodity prices. In response to these problems, among
others, the Brazilian government has frequently intervened in the Brazilian
economy. Such intervention has taken the form of monetary, credit, tariff,
and other policies, wage and price controls, restriction of bank accounts,
and capital and export controls. The Brazilian government has frequently
changed its policies with respect to the foregoing. There can be no assurance
that such changes in policy will not, directly or indirectly, have a material
adverse effect on the Company.

CURRENCY EXCHANGE FLUCTUATIONS

Since its introduction in July 1994, the Brazilian currency, the Real,
initially appreciated against the U.S. dollar, although, since such time, the
Real has experienced limited devaluation in relation to the U.S. dollar
within the forecasted range of the Brazilian government. On January 1, 1996,
the Real - U.S. dollar exchange rate (sell side) in the economical exchange
market, as published by the Central Bank of Brazil was R$0.976 per US$1.00
compared to R$1.0036 as of June 30, 1996. There is free convertibility of the
Real into U.S. dollars. The Central Bank of Brazil, consistent with most
central banks, intervenes in the currencies markets by buying and selling
foreign exchange on the formal exchange market in order to keep the average
exchange rate within prescribed limits. In the course of conducting its
operations, the Company has experienced no difficulties in Brazil in
purchasing foreign currencies at market rates.

POLITICAL ENVIRONMENT

The Brazilian political environment has been characterized by high levels
of uncertainty since the country returned to civilian rule in 1985 after 20
years of military government. The death of the President-elect in 1985 and
the resignation of another President in 1992, as well as frequent turnovers
in senior government officials, have resulted in the perceived absence of a
coherent and sustained policy to resolve Brazil's economic problems.

In December 1993, the Brazilian government commenced the implementation of
the country's latest stabilization plan, the Real Plan. The Real Plan has
sought to limit inflation by reducing certain public expenditures, collecting
liabilities owed to the Brazilian government, increasing taxes, continuing a
privatization program, and introducing a new currency, the Real, into
circulation. In October 1994, Fernando Henrique Cardoso, the former Minister
of Finance and the principal architect of the Real Plan, was elected
President. Since taking office in

44
<PAGE>

January 1995, Mr. Cardoso has continued the implementation of the Real Plan.
Although the rate of inflation has decreased substantially and the value of
the Real has stabilized as a result of the Real Plan, there can be no
assurance that the Real Plan will continue to reduce inflation or stabilize
the value of the Real or that the Brazilian government will continue to
implement the Real Plan in the future. The future success of the Real Plan is
dependent on the ability of the Brazilian government to maintain fiscal
restraint and tight monetary policy and effect long-term structural reforms,
including reform of the tax and social security systems and continued
privatization. Certain of such reforms may require the amendment of the
Brazilian constitution. The Company is not able to predict with any degree of
certainty the long-term effects of the Real Plan.

DEMOGRAPHICS

The Federal Republic of Brazil is a country of approximately 160 million
people in a land mass of 8.5 million square miles. The official language of
Brazil is Portuguese. More than one-half the population are under 24 years of
age. The country has a federal form of government comprising 23 states, three
territories and one federal district (Brasilia). Total GDP at December 31,
1995 was approximately $522 billion and foreign debt existing at that time
was approximately $169 billion. Primary exports of Brazil are machinery,
cars, soy beans, coffee, and citrus concentrates. Brazil is a full member of
Mercosur, an alliance with Argentina, Paraguay, and Uruguay that seeks to
eliminate tariffs in order to create free trade among its member nations.

45
<PAGE>

UNDERWRITING

The Underwriters named below have agreed, subject to the terms and
conditions of the Underwriting Agreement, between the Company and H.J. Meyers
& Co., Inc., as Representative of the Underwriters, to purchase from the
Company on a firm commitment basis the number of shares of Common Stock set
forth opposite their respective names. The Underwriting Agreement provides
that the obligations of the Underwriters are subject to certain conditions
precedent and that the Underwriters shall be obligated to purchase all of the
shares of Common Stock offered hereby if any of such securities are
purchased. The 8% underwriting discount set forth on the cover page of this
Prospectus will be allowed to the Underwriters at the time of delivery to the
Underwriters of the shares of Common Stock so purchased.

<TABLE>
<CAPTION>
Name of Underwriter Number of Shares
------------------- ----------------
<S> <C>
H.J. Meyers & Co., Inc. ............... 800,000
Neidiger, Tucker, Bruner, Inc. ........ 250,000
Madison Securities, Inc. .............. 125,000
J.W. Charles Securities, Inc. ......... 100,000
M.S. Farrell & Company, Inc. .......... 100,000
Frederick & Company, Inc. ............. 100,000
LT Lawrence & Co., Inc. ............... 100,000
Lew Lieberbaum & Co., Inc. ............ 100,000
M.H. Meyerson & Co., Inc. ............. 100,000
Culverwell & Co., Inc. ................ 75,000
Kashner Davidson Securities Corporation 75,000
Smith, Moore & Co. .................... 75,000
---------
Total ............................... 2,000,000
=========

</TABLE>

The Underwriters have advised the Company that they propose to offer the
shares of Common Stock to the public at an initial price of $10.00 per share
and that the Underwriters may allow certain dealers who are members of the
National Association of Securities Dealers, Inc. (the "NASD") a concession
not in excess of $0.40 per share of Common Stock, of which amount, not in
excess of $0.10, may be reallowed to certain dealers, who are members of the
NASD, and certain foreign dealers. After this offering, the public offering
price and concession may change.

The Company has granted to the Underwriters an option exercisable during
the 45-day period from the date of this Prospectus, to purchase up to a
maximum of 300,000 additional shares of Common Stock on the same terms set
forth above. The Underwriters may exercise such right only to satisfy
over-allotments in the sale of the shares of Common Stock.

The Company has agreed to pay to the Representative a non-accountable
expense allowance equal to two percent (2%) of the total proceeds of the
offering, or $400,000 ($460,000 if the Underwriters' the over-allotment
option is exercised in full), of which $25,000 has already been paid. In
addition to the Underwriters' commissions and Representative's expense
allowance, the Company is required to pay the costs of qualifying the shares
of Common Stock under federal and state securities laws, together with legal
and accounting fees, printing, and other costs in connection with this
offering, estimated to total approximately $350,000.

Upon completion of this offering, the Company will issue to the
Representative for nominal consideration, warrants (collectively, the
"Representative's Warrant") to purchase 200,000 shares of Common Stock. The
shares subject to the Representative's Warrant shall be identical to the
shares of Common Stock sold to the public, except for the purchase price as
provided below. The Representative's Warrant will be exercisable over a
period of four years commencing one year from the date of this Prospectus.
The per share exercise price will be $14.00 (140% of the initial public
offering price per share). During the one-year period commencing on the date
of this Prospectus, the Representative's Warrant and the securities issuable
upon the exercise thereof will not be transferable, except to officers of the
Underwriters and members of the selling group and officers and partners
thereof.

46
<PAGE>

The Representative's Warrants will contain anti-dilution provisions
providing adjustment in the event of any recapitalization, reclassification,
stock dividend, stock split, or similar transaction, including certain
issuances of securities by the Company at prices less than the Current Market
Price (as defined therein). The Representative's Warrants do not entitle the
Representative to any rights as a shareholder of the Company until such
Warrants are exercised and shares are purchased thereunder.

The Representative's Warrants and the securities issuable thereunder may
not be offered for sale, except in compliance with the applicable provisions
of the Securities Act. The Company has agreed that, if it shall cause a
Registration Statement to be filed with the Securities and Exchange
Commission, the Representative shall have the right during the seven-year
period commencing on the date of this Prospectus to include in such
Registration Statement the securities issuable upon its exercise at no
expense to the Representative. Additionally, the Company has agreed that upon
written request by the holder(s) of 50% or more of the shares issuable upon
exercise of the Representative's Warrant which is made during the exercise
period of the Representative's Warrant, the Company will, on up to two
separate occasions, register the securities issuable upon exercise thereof.
The initial registration will be at the Company's expense and the second
registration will be at the expense of the holder(s) of the Representative's
Warrants.

For the period during which the Representative's Warrants are exercisable,
the holder or holders thereof will have the opportunity to profit from a rise
in the market value of the Common Stock, with a resulting dilution in the
interests of the other shareholders of the Company. The holder or holders of
the Representative's Warrants can be expected to exercise it at a time when
the Company would, in all likelihood, be able to obtain any needed capital
from an offering of its unissued Common Stock on terms more favorable to the
Company than those provided for in the Representative's Warrants. Such facts
may adversely affect the terms on which the Company can obtain additional
financing. To the extent that the Representative realizes any gain from the
resale of the Representative's Warrants or the securities issuable
thereunder, such gain may be deemed additional underwriting compensation
under the Securities Act.

The Company has also agreed that, for a period of 24 months after the
closing date of this offering, if it participates in any merger,
consolidation or other transaction which the Representative has brought to
the Company, or for which the Company retains the Representative for
consultation or other services in connection therewith (including an
acquisition of assets or stock in which it pays for the acquisition, in whole
or in part, with shares of the Common Stock or other securities), then it
will pay for the Representative's services an amount that is equal to 0.875%
of the value of the purchase price of the transaction.

Each officer and director, and holders of all restricted stock of the
Company, have agreed that they will not sell any other shares of Common Stock
owned by them prior to this offering (or subsequently acquired under any
option, warrant, or convertible security owned prior to this offering) for 24
months following the closing date of this offering, without the
Representative's prior written consent, provided, however, that each of
Georges C. St. Laurent, the Chairman of the Board of Directors and Chief
Executive Officer of the Company, and William C. St. Laurent, the President
and Chief Operating Officer of the Company, are each entitled to pledge such
number of shares of Common Stock as may be required to secure loans in the
amount of $1,000,000 each, other than the 13,648 shares of Common Stock and
the 27,296 warrants for shares of Common Stock issued in the Company's August
1996 Private Placement. See "Shares Eligible for Future Sale."

The Company has agreed that for a period of 12 months from the date of
this Prospectus, it will not sell any securities (with the exception of debt
securities and shares of Common Stock issued upon exercise of currently
outstanding options and warrants, options granted under the Plan, and shares
of Common Stock issued in connection with an acquisition by the Company)
without the Representative's prior written consent, which shall not be
unreasonably withheld. Notwithstanding the foregoing, during such twelve
month period, the Company shall be entitled to consummate offerings of
convertible debt or convertible preferred stock, provided that the gross
proceeds of each such offering exceeds $50,000,000. The Company has also
agreed that for a period of 24 months from the date of this Prospectus, it
will not sell or issue any securities pursuant to Regulation S under the
Securities Act without the Representative's prior written consent.

In connection with this offering, the Company has agreed that, for the 36
month period commencing on the date of the Prospectus, the Representative has
the right to appoint a designee as an observer at all meetings of

47
<PAGE>

the Company's Board of Directors. This designee has the right to attend all
meetings of the Board of Directors and shall be entitled to receive
reimbursement for all out-of-pocket expenses of attendance at such meetings,
as well as any fees paid to outside directors solely for their attendance at
such meetings. In addition, such designee shall be indemnified to the same
extent as the Company's directors.

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.

The foregoing is a brief summary of certain provisions of the Underwriting
Agreement and does not purport to be a complete statement of its terms and
conditions. A copy of the Underwriting Agreement is on file with the
Securities and Exchange Commission as an exhibit to the Registration
Statement of which this Prospectus forms a part. See "Additional
Information."

On July 16, 1996, the NASD issued a notice of acceptance of the AWC
whereby the Representative was censured, and ordered to pay fines and
restitution to retail customers in the amount of $250,000 and approximately
$1.025 million, respectively. The AWC was issued in connection with claims by
the NASD that the Representative charged excessive markups and markdowns in
connection with the trading of four certain securities originally
underwritten by the Representative. The activities in question occurred
during periods between December 1990 and October 1993. The Representative has
informed the Company that the fines and refunds will not have a material
adverse effect on the Representative's operations and that the Representative
has effected remedial measures to help ensure that the subject conduct does
not recur. As of the date of this Prospectus, all fines and restitution
associated with such AWC have been paid.

Prior to this offering, there has been no public market for the shares of
Common Stock. Accordingly, the initial public offering price of the shares of
Common Stock offered hereby has been determined by negotiations between the
Company and the Representative. Factors considered in determining such price,
in addition to prevailing market conditions, including the history of, and
the prospects for, the industries in which the Company competes, the
prospects of the Company, and such other factors as were deemed relevant,
including an evaluation of management and the general economic climate.

LEGAL MATTERS

The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Atlas, Pearlman, Trop & Borkson P.A., Fort
Lauderdale, Florida. Atlas, Pearlman, Trop & Borkson own 26,500 shares of
Common Stock. Certain matters will be passed upon for the Underwriters by
Brock, Fensterstock, Silverstein, McAuliffe & Wade, LLC, New York, New York.

EXPERTS

The audited consolidated financial statements of Vitech America, Inc., as
of December 31, 1995 and for each of the three fiscal years in the period
ended December 31, 1995, included in this Prospectus, have been audited by
Pannell Kerr Forster PC, independent certified public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.

ADDITIONAL INFORMATION

The Company intends to furnish to its shareholders annual reports, which
will include financial statements audited by independent accountants, and
such other periodic reports as it may determine to furnish or as may be
required by law, including Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

The Company has filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, N.W., Washington D.C. 20549, a registration
statement on Form S-1 (the "Registration Statement") under the Securities Act
with respect to the securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits thereto, as permitted by the rules and regulations of

48
<PAGE>

the Commission. For further information, reference is made to the
Registration Statement and to the exhibits filed therewith. Statements
contained in this Prospectus as to the contents of any contract or other
document which has been filed as an exhibit to the Registration Statement are
qualified in their entirety by reference to such exhibits for a complete
statement of their terms and conditions. The Registration Statement and the
exhibits thereto may be inspected without charge at the offices of the
Commission and copies of all or any part thereof may be obtained from the
Commission's principal office at 450 Fifth Street, N.W., Washington D.C.
20549 or at certain of the regional offices of the Commission located at 7
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, upon payment of the fees
prescribed by the Commission. Electronic reports and other information filed
through the Electronic Data Gathering, Analysis, and Retrieval System are
publicly available through the Commission's website (http://www.sec.gov.) In
addition, following approval of the Common Stock for quotation on the Nasdaq
National Market, reports and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington D.C. 20006.

49
<PAGE>

INDEX TO FINANCIAL STATEMENTS

VITECH AMERICA INC.

<TABLE>
<CAPTION>
Page
Number
----------
<S> <C>
Independent Auditor's Report ...................................................................... F-2

Balance Sheet as of December 31, 1995 and 1994 .................................................... F-3

Statement of Income for the Years Ended December 31, 1995 and 1994, and for the Period June 24,
1993 (Inception) to December 31, 1993 ............................................................ F-4

Statement of Changes in Shareholders' Equity for the Years Ended December 31, 1995 and 1994, and
for the Period June 24, 1993 (Inception) to December 31, 1993 .................................... F-5

Statement of Cash Flows for the Years Ended December 31, 1995 and 1994, and for the Period June 24,
1993 (Inception) to December 31, 1993 ............................................................ F-6

Notes to Financial Statements ..................................................................... F-7

Balance Sheet as of June 30, 1996 (Unaudited) ..................................................... F-16

Statement of Income for the Six Months Ended June 30, 1996 and 1995 (Unaudited) ................... F-17

Statement of Changes in Shareholders' Equity for the Six Months Ended June 30, 1996 (Unaudited) ... F-18

Statement of Cash Flows for the Six Months Ended June 30, 1996 and 1995 (Unaudited) ............... F-19

Notes to Financial Statements (Unaudited) ......................................................... F-20
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Shareholders
Vitech America, Inc.

We have audited the accompanying balance sheet of Vitech America, Inc. and
Subsidiary as of December 31, 1995 and December 31, 1994, and the related
statements of income, changes in shareholders' equity, and cash flows for the
two years ended December 31, 1995 and 1994 and for the period June 24, 1993
(Inception) through December 31, 1993. 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 audits.

We conducted our audits 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 audits provide 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 Vitech America, Inc. as
of December 31, 1995 and 1994 and the related statements of income,
shareholders' equity, and cash flows for the two years ended December 31,
1995 and 1994 and for the period from June 24, 1993 (Inception) to December
31, 1993 in conformity with generally accepted accounting principles.

PANNELL KERR FORSTER PC

New York, New York
July 19, 1996, except for note 15 as to
which the date is September 3, 1996

F-2
<PAGE>

VITECH AMERICA, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
December 31,
-----------------------------
1995 1994
------------- ------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents .............................. $ 115,925 $ 45,906
Accounts receivable, net (including $11,031,023 and
$4,196,731 in 1995 and 1994, respectively, from an
affiliate) ........................................... 15,346,651 4,196,731
Inventories ............................................ 5,578,974 3,297,979
Deferred tax assets, net ............................... 102,530 54,630
Other current assets ................................... 123,801 --
------------- ------------
Total current assets .............................. 21,267,881 7,595,246
Property and equipment, net ................................. 295,646 85,275
Land held for development ................................... 592,000 --
Other assets ................................................ 105,290 11,800
------------- ------------
Total assets ...................................... $22,260,817 $7,692,321
------------- ------------
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable ................................. $ 7,030,201 $3,861,972
Borrowings under lines of credit ....................... -- 896,919
Accrued expenses ....................................... 161,948 95,088
Due to shareholder ..................................... 124,433 45,646
Income taxes payable ................................... 1,060,391 165,000
Notes payable -- related party ......................... 3,911,917 2,127,440
Short-term debt ........................................ 2,566,837 --
------------- ------------
Total current liabilities ......................... 14,855,727 7,192,065
------------- ------------
Commitments and contingencies
Shareholders' equity
Common stock, no par value, 30,000,000 shares
authorized, 8,000,000 shares issued and outstanding .. 306,398 306,398
Retained earnings ...................................... 7,098,692 193,858
------------- ------------
Total shareholders' equity ........................ 7,405,090 500,256
------------- ------------
Total liabilities and shareholders' equity ........ $22,260,817 $7,692,321
------------- ------------
</TABLE>

See notes to financial statements

F-3
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF INCOME

Period June
Year Ended 24, 1993
December 31, (Inception)
------------------------------ to December
1995 1994 31, 1993
------------- ------------- -------------
<S> <C> <C> <C>
Net sales (including $36,677,077 in 1995, $17,407,363
in 1994, and $1,156,253 in 1993 to an affiliate) ..... $48,488,996 $17,407,363 $1,156,253
Cost of sales ......................................... 39,156,239 16,483,232 903,544
------------- ------------- -------------
Gross profit ................................ 9,332,757 924,131 252,709
Selling, general and administrative expenses .......... 1,234,108 505,448 181,139
------------- ------------- -------------
Income from operations ...................... 8,098,649 418,683 71,570
Other expenses
Interest expense ................................. 328,278 171,743 14,282
Foreign currency exchange losses ................. 16,229 -- --
Other ............................................ 1,817 -- --
------------- ------------- -------------
Total other expenses ........................ 346,324 171,743 14,282
------------- ------------- -------------
Income before provision for income taxes .... 7,752,325 246,940 57,288
Provision for income taxes ............................ 847,491 97,370 13,000
------------- ------------- -------------
Net income .................................. $ 6,904,834 $ 149,570 $ 44,288
------------- ------------- -------------
Net income per common and common share equivalent ..... $ 0.84 $ 0.02 $ --
------------- ------------- -------------
Weighted average common and common share equivalents
outstanding ......................................... 8,293,914 8,000,000 8,000,000
------------- ------------- -------------

</TABLE>

See notes to financial statements

F-4
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND
1994 AND FOR THE PERIOD JUNE 24, 1993 (INCEPTION)
TO DECEMBER 31, 1993

<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
----------- ------------ ------------
<S> <C> <C> <C>
Issuance of 8,000,000 shares of common stock, June 24,
1993 consisting of 4,080,000 shares issued for assets
and 3,920,000 shares issued as founder's shares ........ $306,398 $ -- $ 306,398
Net income for the period from June 24, 1993
(inception) to December 31, 1993 ................. -- 44,288 44,288
----------- ------------ ------------
Balance at December 31, 1993 ............................ 306,398 44,288 350,686
Net income ............................................ -- 149,570 149,570
----------- ------------ ------------
Balance at December 31, 1994 ............................ 306,398 193,858 500,256
Net income ............................................ -- 6,904,834 6,904,834
----------- ------------ ------------
Balance at December 31, 1995 ............................ $306,398 $7,098,692 $7,405,090
----------- ------------ ------------

</TABLE>

See notes to financial statements

F-5
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF CASH FLOWS

Period June
Year Ended 24, 1993
December 31, (Inception)
------------------------------- to December 31,
1995 1994 1993
-------------- ------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income ........................................... $ 6,904,834 $ 149,570 $ 44,288
-------------- ------------- ---------------
Adjustments to reconcile net income to net cash used
in operating activities
Depreciation ...................................... 32,934 12,752 3,891
Loss on disposal of assets ........................ -- 4,200 --
Reserve for inventory obsolescence ................ -- 103,980 --
Changes in assets and liabilities
Increase in accounts receivable ................. (11,149,920) (1,780,116) (288,685)
Increase in inventories ......................... (2,280,995) (2,458,416) (693,687)
Increase in deferred tax asset .................. (47,900) (54,630) --
Increase in other assets ........................ (123,801) (4,800) --
Increase in trade accounts payable .............. 3,168,229 3,706,536 155,436
Increase in accrued expenses .................... 66,860 85,332 9,756
Increase in due to shareholder .................. 78,787 45,646 --
Increase in income taxes payable ................ 895,391 152,000 13,000
-------------- ------------- ---------------
Total adjustments ............................ (9,360,415) (187,516) (800,289)
-------------- ------------- ---------------
Net cash used in operating activities ........ (2,455,581) (37,946) (756,001)
-------------- ------------- ---------------
Cash flows from investing activities
Purchases of property and equipment .................. (249,295) (57,066) --
Investments in land held for development ............. (68,799) -- --
-------------- ------------- ---------------
Net cash used in investing activities ........ (318,094) (57,066) --
-------------- ------------- ---------------
Cash flows from financing activities
Deferred offering costs .............................. (87,500) -- --
Proceeds under lines of credit ....................... -- 52,669 844,250
Payments under lines of credit ....................... (896,919) -- --
Proceeds from notes payable -- related party ......... 2,006,887 -- --
Repayment of notes payable -- related party .......... (222,410) -- --
Proceeds from note payable ........................... 2,000,000 -- --
Proceeds from short-term borrowing -- bank ........... 217,994 -- --
Repayment of short-term borrowing -- bank ............ (174,358) -- --
-------------- ------------- ---------------
Net cash provided by financing activities .... 2,843,694 52,669 844,250
-------------- ------------- ---------------
Net increase (decrease) in cash and cash
equivalents ................................ 70,019 (42,343) 88,249
Cash and cash equivalents -- beginning of period ....... 45,906 88,249 --
-------------- ------------- ---------------
Cash and cash equivalents -- end of period ............. $ 115,925 $ 45,906 $ 88,249
-------------- ------------- ---------------
Supplemental disclosure of cash flow information
Cash paid during the period for Interest ............. $ 373,680 $ 154,506 $ 14,282
-------------- ------------- ---------------
Supplemental schedule of non-cash investing and
financing activities
Investment in land held for development acquired
through seller financing agreements ............... $ 523,201 $ -- $ --
-------------- ------------- ---------------
Assumption of a note payable to a related party from
Vitoria Technologia S.A. .......................... $ -- $ 2,127,440 $ --
-------------- ------------- ---------------
Assets contributed by shareholder in exchange for
issuance of 4,080,000 shares of common stock ...... $ -- $ -- $ 306,398
-------------- ------------- ---------------
</TABLE>

See notes to financial statements

F-6
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements
DECEMBER 31, 1995

NOTE 1 -- ORGANIZATION AND PRINCIPAL INDUSTRY

Vitech America, Inc. (the "Company"), a Florida corporation, was
incorporated in June 1993. The Company is engaged in the manufacture and
distribution of computer equipment and related products. On March 7, 1995,
the majority shareholders of the company formed Bahiatech Tecnologia Ltd.
(the "Subsidiary") and on October 12, 1995, the Company acquired a 99%
interest in the Subsidiary for $112,994. The Subsidiary, located in Ilheus,
Bahia, Brazil, is engaged in the assembly and sale of electric and electronic
equipment and their components. The Company sells its products to Vitoria
Tecnoligia S.A. (Vitoria), an affiliate located in Brazil, South America, and
to its subsidiary.

All of the Company's sales are concentrated in Brazil, with approximately
15% to one unrelated customer and 76% to Vitoria Tecnologia S.A. (an
affiliate through common ownership) in 1995.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CHANGE IN REPORTING ENTITY

The financial statements for 1995 include the accounts of the Company and
its subsidiary. The 1994 and 1993 financial statements include the accounts
of Vitech America, Inc., individually, since the subsidiary was not formed
until 1995.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements for 1995 include the accounts of the
Company and its subsidiary. All significant intercompany transactions and
balances have been eliminated in consolidation.

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 reporting
periods. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original
maturity of three months or less at the time of acquisition to be a cash
equivalent. The Company maintains its cash in bank deposit accounts which, at
times, may exceed federally insured limits. The Company has not experienced
any losses in such accounts. The Company believes it is not exposed to any
significant credit risk on cash and cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method)
or market.

DEFERRED OFFERING COSTS

Costs incurred directly related to the proposed public offering are
capitalized. Such costs will be offset against the proceeds received from the
proposed public offering.

F-7
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. The cost of maintenance and
repairs is charged against results of operations as incurred. Depreciation is
computed over the estimated service lives of the related assets using the
straight-line method. When assets are retired or otherwise disposed of, the
cost and accumulated depreciation are removed from the respective accounts
and any gain or loss is recognized.

REVENUE RECOGNITION

The Company's policy is to record revenues upon transfer of title to the
customer. Title transfers to the customer upon receipt of the merchandise by
the customer.

LAND HELD FOR DEVELOPMENT

Land held for development is carried at cost and comprises of undeveloped
parcels near Ilheus, Bahia, Brazil.

INCOME TAXES

The Company applies the asset and liability approach to financial
accounting and reporting for income taxes. The difference between the
financial statement and tax bases of assets and liabilities is determined
annually. Deferred income tax assets and liabilities are computed for those
differences that have future tax consequences using the currently enacted tax
laws and rates that apply to the period in which they are expected to affect
taxable income. Valuation allowances are established, if necessary, to reduce
the deferred tax asset to the amount that will more likely than not be
realized. Income tax expense is the current tax payable or refundable for the
period plus or minus the net change in the deferred tax assets and
liabilities.

The Subsidiary operates in the Northeast region of Brazil and enjoys an
exemption from income taxes through and including the year 2004. The
subsidiary is entitled to an exemption from income taxes on the Brazilian
operating profit ("Lucro da Exploracao") once twenty percent of the budgeted
production goals in units are met in each year during the exemption period.
This benefit is reported as a reduction of income tax expense for the period
in which earned.

PER SHARE INFORMATION

Per share information is based on the weighted average number of common
shares outstanding during each period and, the weighted average number of
common equivalent shares resulting from the assumed conversion of the
$2,000,000 promissory note (see note 6). Fully diluted earnings per common
and common equivalent shares are not presented as such amounts are the same
as primary earnings per share.

The Company expects to use a portion of the proceeds from the initial
public offering to repay certain outstanding debt. Earnings per share
adjusted for the effect of the expected repayment of this debt and the
issuance of additional shares of common stock for the year ended December 31,
1995, as if this transaction occurred on January 1, 1995, would have been
$0.67 on a primary and fully diluted basis.

TRANSLATION TO U.S. DOLLARS

The Subsidiary's assets and liabilities are translated into U.S. dollars
at exchange rates in effect at the balance sheet date for monetary items and
at historical rates for nonmonetary items. Revenue and expense accounts are
translated at the average exchange rate in effect during each month, except
for those accounts that relate to nonmonetary assets and liabilities which
are translated at historical rates.

F-8
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

EXEMPTION OF VALUE ADDED TAX (ICMS)

The Subsidiary is exempt from ICMS (Value Added Tax) on imported materials
and components, and on the sales of the finished products arising from such
raw materials through and including the year 2003. The benefits are reflected
in sales and cost of sales.

INTERNATIONAL OPERATIONS

The Company operates in one industry segment (the manufacture and
distribution of computer equipment and related products) and markets its
products and services through its foreign subsidiary located in Brazil. As a
result, a significant portion of the company's sales and operations are
subject to certain risks, including adverse developments in the foreign
political and economic environment, exchange rates, tariffs and other trade
barriers, staffing and managing foreign operations and potentially adverse
tax consequences. There can be no assurance that any of these factors will
not have a material adverse effect on the Company's financial condition or
results of operations in the future. Sales through the Company's foreign
subsidiary totalled $15,978,000, $-0- and $-0- for the years ended December
31, 1995 and 1994 and the period June 24, 1993 (inception) to December 31,
1993, respectively.

NOTE 3 -- RELATED PARTY TRANSACTIONS

The Company made sales to Vitoria Tecnologia S.A., an entity related
through common ownership, during 1995, 1994 and 1993 in the amounts of
$36,677,077, $17,407,363 and $1,156,253, respectively. Amounts due from
Vitoria, at December 31, 1995 and 1994, amounted to $11,031,023 and
$4,196,731, respectively. Additionally, during 1995, the Company purchased
$2,800,000 of inventory from Vitoria. In 1996, the Company received payment
on all outstanding amounts due from Vitoria.

As discussed in note 6, the Company has outstanding debt obligations to a
related party.

The Company has an employment agreement with its president dated January
1, 1995 and expiring one year from that date providing for payments of
$10,000 per month. At December 31, 1995, $146,667 was owed to the president
which amount includes compensation under the above agreement and unreimbursed
travel expenses. In addition, the Company has a management agreement with its
majority shareholder dated January 1, 1995, and expiring one year from that
date providing for payments of $10,000 per month. At December 31, 1995, the
shareholder owed the Company $22,234 for advances made on his behalf net of
amounts due under the above agreement. In January 1996, these two individuals
signed three year employment agreements which terminate on December 31, 1998.
Under the terms of the agreements each individual will receive annual
compensation of $240,000 subject to annual increases, as defined.

NOTE 4 -- INVENTORIES

Inventories are summarized as follows:

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Finished goods ............................. $1,753,970 $3,297,979
Components ................................. 3,814,762 --
Packaging .................................. 10,242 --
------------ ------------
$5,578,974 $3,297,979
------------ ------------
</TABLE>

Included in inventories at December 31, 1995 and 1994 are items
aggregating $925,336 and $2,233,987, respectively, which were in transit to
Vitoria. The shipments were made under terms which require title to pass when
the in-transit items are received by Vitoria.

F-9
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

NOTE 5 -- PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1995 and 1994, are summarized as
follows:

1995 1994
----------- ----------
Furniture and office equipment $252,863 $ 44,804
Warehouse equipment ........... 56,186 20,940
Transportation equipment ...... 34,373 34,373
----------- ----------
343,422 100,117
Less accumulated depreciation . 47,776 14,842
----------- ----------
$295,646 $ 85,275
----------- ----------

NOTE 6 -- NOTE PAYABLE -- RELATED PARTY

The Company had the following notes payable to an affiliate of the
shareholders' at December 31, 1995 and 1994:

<TABLE>
<CAPTION>
1995 1994
------------- ------------
<S> <C> <C>
6% promissory note payable on demand (assumed from Vitoria
Tecnologia, S.A.) ........................................... $1,911,917 $2,127,440
Promissory note payable, due on demand, bearing interest at 9% 2,000,000 --
------------- ------------
$3,911,917 $2,127,440
------------- ------------

</TABLE>

During 1995 and 1994, the Company incurred interest expense of $233,810
and $106,680, respectively, in connection with these obligations.

In connection with the 9% note payable, the Company granted the lender the
right to convert the note into 5.925% of the outstanding common stock of the
Company.

NOTE 7 -- SHORT-TERM DEBT

Short-term debt consists of the following at December 31, 1995:

<TABLE>
<CAPTION>
<S> <C>
Short-term debt due banks (resulting from discounted accounts receivable)
bearing interest at 5.5% per month and maturing on April 12, 1996 ............ $ 217,494
Short-term debt (US dollar denominated) due on the purchase of land,
noninterest- bearing, and payable in monthly installments through September
1996 ......................................................................... 349,343
Note payable -- Meris Financial Incorporated (a) ............................... 2,000,000
-------------
$2,566,837
-------------

</TABLE>

(a) On October 28, 1995, the Company entered into a loan agreement with Meris
Financial Incorporated. Pursuant to the agreement, the Company executed a
note payable in the amount of $2,000,000 with interest at 12% payable
monthly. Principal was due on October 28, 1997. The note is guaranteed by
the shareholders and collateralized by certain fixed assets of the
Company, real property of its affiliates, beneficial rights under certain
agreements held by the shareholders for options to purchase interests in
certain affiliates, all of the currently outstanding stock of the Company
and the shareholders' ownership interests in the Company's Brazilian
affiliates. The note was convertible, at any time up to maturity, into
approximately 4.7% of the issued or issuable common stock of the Company.
The Company incurred interest expense of $40,000 in connection with this
obligation during 1995.

F-10
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

Concurrent with the execution of the loan agreement, the lender and its
affiliate were granted options to purchase common stock in the Company.
The stock option agreements provide for options to purchase 4% of the
outstanding common stock of the Company, issued or issuable at the
exercise date, at an exercise price of $2,000,000 and an additional 1% at
an exercise price of $2,000,000. The options expire eighteen months from
October 28, 1995. No value has been assigned to the options.

In July 1996, the Company entered into a modification agreement whereby
the Company agreed to make payments of $20,000 during July 1996, $200,000
during August 1996, $125,000 during September 1996, $100,000 during
October 1996, each payment applied first to accrued unpaid interest and
the balance to principal outstanding. Remaining unpaid accrued interest
and principal is due November 1, 1996.

In addition, as long as the Company makes payments as set forth above,
Meris Financial Incorporated agreed not to exercise the conversion rights
and stock option agreements. Furthermore, the options will expire if the
debt is repaid in full as agreed.

NOTE 8 -- REVOLVING LINES-OF-CREDIT

The Company had the following lines-of-credit borrowings with one bank at
December 31, 1994:

<TABLE>
<CAPTION>
<S> <C>
$450,000 line-of-credit, due June 30, 1995, bearing interest at the
prime rate (8.5% at December 31, 1994) plus 1% ...................... $450,000
$400,000 line-of-credit, due June 30, 1995, bearing interest at the
prime rate (8.5% at December 31,1994) plus 2% ....................... 400,000
$50,000 line-of-credit, due June 30, 1995, bearing interest at the prime
rate (8.5% at December 31, 1994) plus 1% ............................ 46,919
-----------
$896,919
-----------

</TABLE>

The above lines-of-credit are collateralized by the Company's certificate
of deposit aggregating $10,094, plus certain personal assets provided by a
shareholder of the Company and a related party.

The Company repaid all borrowing under lines-of-credit during 1995. A new
revolving line-of-credit was established which allows for borrowings of up to
$100,000 at the prime rate plus 2%. The prime rate was 8.5% at December 31,
1995. The line-of-credit is collateralized by various Company assets and is
personally guaranteed by the Company's shareholders. At December 31, 1995, no
amounts were outstanding under this line-of-credit.

NOTE 9 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's significant financial instruments are cash and cash
equivalents, account receivables, trade accounts payable, accrued expenses
and short-term debt, all of which are classified as either current assets or
current liabilities. Their carrying amounts approximate their fair values
because of the short-term maturities of these instruments.

F-11
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

NOTE 10 -- INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- ----------
<S> <C> <C> <C>
Current
Federal...... $172,000 $130,000 $ 9,500
State........ 30,000 22,000 3,500
Foreign...... 699,991 -- --
----------- ----------- ----------
901,991 152,000 13,000
----------- ----------- ----------
Deferred
Federal...... (46,500) (49,000) --
State........ (8,000) (5,630) --
----------- ----------- ----------
(54,500) (54,630) --
----------- ----------- ----------
$847,491 $ 97,370 $13,000
----------- ----------- ----------

</TABLE>

There were no material reconciling items between the U.S. Federal
Statutory tax rate and the effective tax rate on U.S. based income.

Included in the accompanying balance sheet at December 31, 1995 and 1994,
are net deferred tax assets of $102,530 and $54,630, primarily relating to
inventory reserves for obsolescence and certain accrued expenses. No deferred
tax asset valuation allowance is required at December 31, 1995 and 1994.
Deferred tax liabilities primarily relate to depreciation on property and
equipment.

The Brazilian federal statutory income tax rate varies according to the
level of income and to the taxes and levies applicable to any one year. The
federal statutory income tax rate applicable to the subsidiary is a composite
rate approximating 48% for 1995. This rate includes a 9% federal levy on net
income, sometimes referred to as Social Contribution. The difference from the
effective tax rate and the composite rate relates to the income tax exemption
described in note 2.

In December 1995, changes were introduced in the Brazilian income tax
regulations effective January 1, 1996 which included a reduction of the
composite rate to 31%.

As of December 31, 1995, the Company has not provided for withholding or
U.S. federal income taxes on accumulated undistributed earnings of its
foreign subsidiary as they are restricted from distribution under Brazilian
law (see note 11) and they are considered by management to be permanently
reinvested.

NOTE 11 -- SHAREHOLDERS' EQUITY AND DIVIDENDS

All references to the number of shares of the Company's common stock and
per share amounts have been retroactively restated in the accompanying
financial statements to give effect to the eight thousand-for-one stock split
as discussed in note 15.

As of December 31, 1995, shareholders' equity consisted of $6,787,374 in
retained earnings generated from subsidiary operations. The Subsidiary is
exempt from the payment of Brazilian federal income tax through and including
the year 2004. Tax exemption benefits cannot be distributed as dividends to
the Company in US dollars and are segregated for capital reserves and
offsetting accumulated losses in accordance with Brazilian law. For the year
ended December 31, 1995, the tax exemption benefits amounted to $2,832,000
($0.34 per share). Should Bahia wish to remit retained earnings in excess of
the tax exemption benefits, Brazilian law requires the registration of the
foreign capital upon which those retained earnings were made in order to send
such earnings

F-12
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

abroad in currency other than the Brazilian currency. Currently, the Company
is in the process of taking the administrative steps necessary to permit such
remittances. While the Company believes that such administrative steps will
allow the Subsidiary to remit excess retained earnings, if it so chooses,
there can be no assurance that such administrative steps will comply with all
Brazilian laws and regulations.

On June 24, 1993, the Company issued 4,080,000 shares of common stock to
an individual whereby the individual became the majority shareholder of the
Company. In exchange for the common stock, the shareholder contributed the
following assets:

<TABLE>
<CAPTION>
<S> <C>
Inventories ........... $250,346
Property and equipment 49,052
Other assets .......... 7,000
-----------
$306,398
-----------

</TABLE>

The Company recorded the above assets and a corresponding capital
contribution at their cost which approximated fair market value as agreed to
by management and the shareholders.

NOTE 12 -- MAJOR SUPPLIERS

The Company purchased merchandise principally from suppliers located in
the United States. In 1995, purchases from one unrelated supplier accounted
for approximately 12% of total purchases. In 1994, purchases from three
unrelated suppliers accounted for approximately 39% of total purchases. In
1993, purchases from two related parties through common ownership accounted
for approximately 22% of total purchases.

NOTE 13 -- COMMITMENTS AND CONTINGENCIES

In August 1995, the Company entered into a three-year noncancelable lease
agreement for an office and warehouse building in Miami, Florida, at an
annual rental of approximately $102,000, increasing annually for changes in
the consumer price index. The lease requires the Company to pay for its
proportionate share of real estate taxes, insurance and other taxes and
assessments.

The Company leases warehouse and office space in Sao Paulo, Brazil at an
annual rental of $36,000 and $48,000 respectively. These leases expire June
30, 1997 and February 28, 1997, respectively.

The Company leases manufacturing and administrative space in Ilheus,
Brazil at a monthly rental of $13,500. This lease expires December 31, 1996.
In addition, the Company has various other operating lease agreements
primarily involving automobiles and office equipment. These leases are
noncancelable and expire at various dates through 1998.

Minimum lease commitments under the above operating leases (inclusive of
the warehouse and office lease) as of December 31, 1995 are as follows:

<TABLE>
<CAPTION>
<S> <C>
1996 $340,500
1997 148,850
1998 67,300
-----------
$556,650
-----------

</TABLE>

Rent expense under all operating leases in 1995, 1994 and 1993, was
approximately $185,300, $113,000 and $11,000, respectively.

Pursuant to an amendment of the articles of incorporation of the
Subsidiary, the Company is obligated to contribute $1,100,000 in exchange for
common shares on or before December 18, 1996.

F-13
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

The Company has executed a subordination agreement with one of its vendors
and the shareholders of the Company, in exchange for lines-of-credit
aggregating $1,500,000 for product purchases. As required by the agreements,
the note payable to a related party aggregating $1,911,917, is subordinate to
all obligations to the vendor by the Company. Additionally, a shareholder of
the Company is a guarantor for the payment of product purchases up to a
maximum amount of $1,500,000. Included in trade accounts payable at December
31, 1995, are amounts payable to the vendor aggregating $815,000 for product
purchases.

Vitech is subject to inspections and potential claims arising out of the
conduct of its business, principally in connection with tax, labor and
government regulatory matters. While the ultimate results of inspections,
claims, administrative processes and lawsuits cannot be determined,
management does not expect that the resolution of such matters will have a
material effect on the financial position or future results of operations of
the Company.

On June 28, 1996, the Company secured a line-of-credit in the amount of $1
million expiring June 30, 1997 to support letters-of-credit which the Company
may issue to secure purchase obligations. The agreement requires the Company
to provide a cash deposit equivalent to 30% of each letter-of-credit. The
credit agreement is secured by a lien on all personal property (as defined)
owned by the Company.

NOTE 14 -- PUBLIC OFFERING

The Company is in negotiations with a certain underwriter relating to a
contemplated public offering.

NOTE 15 -- SUBSEQUENT EVENTS

COMMON STOCK

On July 26, 1996, the Company's Board of Directors approved the following
resolutions: (i) an increase in the number of authorized common shares to
30,000,000 and a split to effect the issuance of 8,000 shares of common stock
in exchange for each share of common stock then outstanding and (ii) the
authorization of 3,000,000 shares of no par value preferred stock. The effect
of the stock split has been presented retroactively to the date of inception
in the accompanying financial statements.

PRIVATE PLACEMENT

On July 26, 1996 the Company issued a private placement memorandum
offering a minimum of twenty and a maximum of sixty units (the "Units") for
$50,750 per unit. Each unit consists of $50,000 principal amount of 9% senior
debentures, 1,000 common stock purchase warrants, and 500 shares, no par
value per share, of the Company's common stock. The principal amount of, and
the accrued and unpaid interest on, the debentures will be payable on the
date which is the earlier of (i) fifteen months from the date of the initial
closing of the offering and (ii) the date of the closing of a public offering
of securities of the Company. Interest on the Debentures will accrue at the
rate of 9% per annum payable semi-annually on July 31, and January 31,
beginning on January 31, 1997. The debentures are not otherwise redeemable
prior to maturity. Each warrant entitles the registered holder thereof to
acquire from the Company one share of common stock, no par value per share of
the Company at an exercise price per share of $10.00, subject to adjustment
as provided therein, for the period commencing on the date of the initial
closing and terminating on the third anniversary of such date.

On August 30, 1996, the Company completed this offering to eleven
accredited investors providing for the sale of 27.3 units for $50,750 per
unit.

F-14
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
December 31, 1995

STOCK OPTIONS

On August 20, 1996 the Board of Directors and the shareholders of the
Company adopted a stock option plan (the Plan). The Plan provides for the
grant of options to purchase up to 200,000 shares of common stock to
employees, officers, directors, and consultants of the Company at a price to
be determined by the board of directors (as defined). Options may be either
incentive stock options or non-qualified options. Incentive stock options may
be granted only to employees of the Company, while non-qualified options may
be issued to non- employee directors, consultants, and others, as well as to
employees of the Company.

On September 3, 1996, the Company authorized the issuance of options to
purchase up to 4,000,000 shares of Common Stock. 2,040,000 options were
issued to Georges C. St. Laurent, III, the Company's Chairman of the Board
and Chief Executive Officer and 1,960,000 options were issued to William C.
St. Laurent, the Company's President and Chief Operating Officer. 1,000,000
options are exercisable at $15.00 per share, another 1,000,000 options are
exercisable at $20.00 per share and the remaining 2,000,000 options are
exercisable at $25.00 per share. The options are exercisable for a four year
period beginning on the closing of the Company's proposed initial public
offering.

F-15
<PAGE>

VITECH AMERICA, INC.

BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
ASSETS

Current assets
Cash and cash equivalents ............................. $ 204,085
Accounts receivable, net .............................. 12,921,998
Inventories .......................................... 10,247,584
Deferred tax assets, net .............................. 92,530
Other current assets ................................. 174,238
------------
Total current assets ............................. 23,640,435
Property and equipment, net ................................ 1,795,399
Land held for development ................................. 586,640
Other assets .............................................. 128,250
------------
Total assets .................................... $26,150,724
------------

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S> <C>
Current liabilities
Trade accounts payable .................................................... $ 7,474,165
Borrowings under lines-of-credit .......................................... 892,210
Accrued expenses .......................................................... 138,850
Due to shareholder ........................................................ 3,429
Sales tax payable ......................................................... 1,027,439
Income taxes payable ...................................................... 1,241,135
Notes payable -- related party ............................................ 2,661,917
Short-term debt ........................................................... 2,602,349
------------
Total current liabilities ............................................ 16,041,494
------------
Commitments and contingencies
Shareholders' equity
Common stock, no par value, 30,000,000 shares authorized, 8,000,000 shares
issued and outstanding .................................................. 306,398
Retained earnings ......................................................... 9,802,832
------------
Total shareholders' equity ........................................... 10,109,230
------------
Total liabilities and shareholders' equity ........................... $26,150,724
------------

</TABLE>

See notes to financial statements.

F-16
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF INCOME
(UNAUDITED)

<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------
1995 1996
-------------- --------------
<S> <C> <C>
Net sales (including $19,588,155 and $8,066,878 to an affiliate in 1995
and 1996, respectively) ................................................. $20,457,048 $26,080,299
Cost of sales ............................................................ 19,067,617 18,688,336
-------------- --------------
Gross profit ......................................................... 1,389,431 7,391,963
Selling, general and administrative expenses ............................. 819,380 2,462,646
-------------- --------------
Income from operations ............................................... 570,051 4,929,317
-------------- --------------
Other expenses
Discount on sale of receivables ..................................... -- 1,166,342
Interest expense .................................................... 163,978 522,605
Foreign currency exchange losses .................................... -- 373,627
-------------- --------------
Total other expenses ........................................... 163,978 2,062,574
-------------- --------------
Income before provision for income taxes ....................... 406,073 2,866,743
Provision for income taxes ............................................... 8,352 162,603
-------------- --------------
Net income ........................................................... $ 397,721 $ 2,704,140
-------------- --------------
Net income per common and common share equivalent ........................ $ 0.05 $ 0.32
-------------- --------------
Weighted average common and common share equivalents outstanding ......... 8,041,988 8,503,853
-------------- --------------

</TABLE>

See notes to financial statements

F-17
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
----------- ------------- --------------
<S> <C> <C> <C>
Balance at December 31, 1995 ..................... $306,398 $7,098,692 $ 7,405,090
Net income for the six months ended June 30, 1996 -- 2,704,140 2,704,140
----------- ------------- --------------
Balance at June 30, 1996 ......................... $306,398 $9,802,832 $10,109,230
----------- ------------- --------------

</TABLE>

See notes to financial statements

F-18
<PAGE>

VITECH AMERICA, INC.

STATEMENT OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
1995 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net income ................................................... $ 397,721 2,704,140
------------- -------------
Adjustments to reconcile net income to net cash provided
(used) by operating activities
Depreciation ............................................ 9,936 72,065
Changes in assets and liabilities
Accounts receivable ................................ (3,834,757) 2,424,653
Inventories ........................................ 1,589,021 (4,668,610)
Deferred tax asset ................................. -- 10,000
Other assets ....................................... (8,472) (50,437)
Trade accounts payable ............................. 820,120 443,964
Accrued expenses ................................... 18,633 (23,098)
Due to shareholder ................................. 71,874 (121,004)
Income and other taxes payable ..................... 8,352 1,208,183
------------- -------------
Total adjustments ............................. (1,325,293) (704,284)
------------- -------------
Net cash provided (used) by operating
activities .................................. (927,572) 1,999,856
------------- -------------
Cash flows (used) by investing activities
Purchases of property and equipment .......................... (47,286) (1,566,457)
------------- -------------
Cash flows from financing activities
Deferred offering costs ...................................... -- (22,961)
Proceeds under lines of credit and other borrowings .......... -- 927,722
Repayment of notes payable -- related party .................. -- (1,250,000)
Repayment of short term debt ................................. (496,919) --
Proceeds from notes payables ................................. 1,777,591 --
------------- -------------
Net cash provided (used) by financing
activities .................................. 1,280,672 (345,239)
------------- -------------
Net increase in cash and cash equivalents ..... 305,814 88,160
Cash and cash equivalents -- beginning of period .................. 45,906 115,925
------------- -------------
Cash and cash equivalents -- end of period ........................ $ 351,720 204,085
------------- -------------
Supplemental disclosure of cash flow information
Cash paid during the period for
Interest ................................................ $ 154,226 388,627
------------- -------------
Income taxes ............................................ $ -- 189,826
------------- -------------
Supplemental disclosure of non-cash investing activity
During the period ended June 30, 1996, the Company's subsidiary
received property valued at $417,258 as settlement of an
outstanding accounts receivable

</TABLE>

See notes to financial statements

F-19
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements
(UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited financial statements of Vitech America, Inc.
(the Company) have been prepared in accordance with generally accepted
accounting principles for interim financial information. In the opinion of
management, all adjustments necessary for a fair presentation of the interim
financial statements have been included, and all adjustments are of a normal
and recurring nature. The financial statements as of and for the interim
period ended June 30, 1996 should be read in conjunction with the Company's
financial statements as of and for the year ended December 31, 1995.
Operating results for the six months ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1996.

The financial statements for 1996 include the accounts of the Company and
its subsidiary, Bahiatech Technologia, Ltd. The 1995 financial statements
include only the accounts of the company individually, since the subsidiary
was not operational until the second half of 1995. All of the Company's sales
are concentrated in Brazil, with approximately 14% to one customer and 31% to
Vitoria Tecnologia S.A. (an affiliate through common ownership) for the six
months ended June 30, 1996.

NOTE 2 -- INVENTORIES

Inventories as of June 30, 1996 consisted of the following:

<TABLE>
<CAPTION>
<S> <C>
Finished goods ...... $ 3,716,634
Components .......... 4,630,724
Packaging ........... 41,557
Consigned inventories 1,858,669
--------------
$10,247,584
--------------

</TABLE>

NOTE 3 -- PROPERTY AND EQUIPMENT

Property and equipment at June 30, 1996, are summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
Property ..................... $ 417,258
Furniture and office equipment 872,084
Warehouse equipment .......... 591,524
Transportation equipment ..... 34,373
-------------
1,915,239
Less accumulated depreciation 119,840
-------------
$1,795,399
-------------

</TABLE>

NOTE 4 -- NOTE PAYABLE - RELATED PARTY

The Company had the following notes payable to an affiliate of the
shareholders' at June 30, 1996:

<TABLE>
<CAPTION>
<S> <C>
6% promissory note payable on demand (assumed from
Vitoria Tecnologia, S.A.) ............................ $ 661,917
Promissory note payable, due on demand, bearing
interest at 9% ....................................... 2,000,000
-------------
$2,661,917
-------------

</TABLE>

During 1996, the Company incurred interest expense of $134,214, in
connection with these obligations.

F-20
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
(unaudited)

Note 4 -- Note payable - related party - (Continued)

In connection with the 9% note payable, the Company granted the lender the
right to convert the note into 5.925% of the outstanding common stock of the
Company.

NOTE 5 -- SHORT-TERM DEBT

Short-term debt consists of the following at June 30, 1996:

<TABLE>
<CAPTION>
<S> <C>
Bank loans payable (resulting from discounted accounts
receivable) due banks bearing an average interest rate
of 3% per month ........................................ $ 602,349
Note payable -- Meris Financial Incorporated ............ 2,000,000
------------
$2,602,349
------------

</TABLE>

NOTE 6 -- REVOLVING LINES-OF-CREDIT

The Company had the following lines-of-credit borrowings with various
banks at June 30, 1996:

<TABLE>
<CAPTION>
<S> <C>
$200,000 line-of-credit, due June 1997, bearing interest
at the prime rate plus 2% ............................... $100,000
Various bank borrowings expiring through September 1996 at
interest rates ranging from 3% to 4% per month .......... 792,210
-----------
$892,210
-----------

</TABLE>

The prime rate was 8.25% at June 30, 1996. The line-of-credit is
collateralized by various Company assets and is personally guaranteed by the
Company's shareholders.

NOTE 7 -- SHAREHOLDERS' EQUITY AND DIVIDENDS

All references to the number of shares of the Company's common stock have
been retroactively restated in the accompanying financial statements to give
effect to an eight thousand-for-one stock split.

As of June 30, 1996, shareholders' equity consisted of $9,391,471 in
retained earnings generated from subsidiary operations. The Subsidiary is
exempt from the payment of Brazilian federal income tax through and including
the year 2004. Tax exemption benefits cannot be distributed as dividends to
the Company in US dollars and are segregated for capital reserves and
offsetting accumulated losses in accordance with Brazilian law. For the six
months ended June 30, 1996, the tax exemption benefits amounted to $609,932
($0.08 per share). Should Bahia wish to remit retained earnings in excess of
the tax exemption benefits, Brazilian law requires the registration of the
foreign capital upon which those retained earnings were made in order to send
such earnings abroad in currency other than the Brazilian currency.
Currently, the Company is in the process of taking the administrative steps
necessary to permit such remittances. While the Company believes that such
administrative steps will allow the Subsidiary to remit excess retained
earnings, if it so chooses, there can be no assurance that such
administrative steps will comply with all Brazilian laws and regulations.

NOTE 8 - SALE OF RECEIVABLES

During the period January 1, 1996 through June 30, 1996, the Company's
subsidiary sold to an affiliate $10,410,394 of its trade accounts receivable
for $9,244,052 and, accordingly, recognized a discount on the sale in the
amount of $1,166,342, which is reflected in the accompanying statement of
income. At June 30, 1996, the affiliate has collected $2,171,665 of the
$10,410,394 of purchased receivables.

F-21
<PAGE>

VITECH AMERICA, INC.

Notes to Financial Statements - (Continued)
(unaudited)

NOTE 9 -- PER SHARE INFORMATION

Per share information is based on the weighted average of common shares
outstanding during each period and, the weighted average number of common
equivalent shares resulting from the assumed conversion of the $2,000,000
promissory note (see note 4). Fully diluted earnings per common and common
equivalent shares are not presented as such amounts are the same as primary
earnings per share.

The Company expects to use a portion of the proceeds from its initial
public offering to repay certain outstanding debt. Earnings per share
adjusted for the effect of the expected repayment of this debt and the
issuance of additional shares of common stock for the six months ended June
30, 1996, as if this transaction occurred on January 1, 1996, would have been
$0.29 on a primary and fully diluted basis.

F-22
<PAGE>

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No dealer, salesman, or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offer contained herein, and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company or any Underwriter. This Prospectus does not
constitute an offer of any securities other than those to which it relates or
an offer to sell, or a solicitation, in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. The delivery of this
Prospectus, under any circumstances, at any time, does not imply that the
information contained herein is correct as of any time subsequent to its
date.
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TABLE OF CONTENTS

Page
Prospectus Summary ......................... 3
Risk Factors .............................. 6
The Company ............................... 13
Use of Proceeds ........................... 14
Dividend Policy ........................... 15
Dilution .................................. 16
Capitalization ............................ 17
Selected Financial Data ................... 18
Management's Discussion and Analysis of
Financial Condition and Results of
Operation ................................ 19
Business .................................. 26
Management ................................ 33
Certain Transactions ...................... 37
Concurrent Offering ....................... 39
Principal Shareholders .................... 40
Description of Securities ................. 41
Shares Eligible for Future Sale ........... 43
Conditions in Brazil ...................... 44
Underwriting .............................. 46
Legal Matters ............................. 48
Experts ................................... 48
Additional Information .................... 48
Index to Financial Statements ............. F-1

Until November 29, 1996 (25 days after the commencement of this offering),
dealers effecting transactions in registered securities, whether or not
participating in the 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 subscriptions.

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2,000,000 SHARES

VITECH AMERICA, INC.

COMMON STOCK

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PROSPECTUS
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H.J. MEYERS & CO., INC.

November 1, 1996

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