ROBOTIC VISION SYSTEMS INC, S-3, 1996-01-12

ROBOTIC VISION SYSTEMS INC
S-3, 1996-01-12
INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL

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<PAGE>

As Filed with the Securities and Exchange Commission on January 12, 1996
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ROBOTIC VISION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 11-2400145
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

425 RABRO DRIVE EAST
HAUPPAUGE, NEW YORK 11788
(516) 273-9700
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

PAT V. COSTA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ROBOTIC VISION SYSTEMS, INC.
425 RABRO DRIVE EAST
HAUPPAUGE, NEW YORK 11788
(516) 273-9700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

COPIES OF ALL COMMUNICATIONS AND NOTICES TO:

IRA I. ROXLAND, ESQ.
PARKER DURYEE ROSOFF & HAFT
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017
TEL: (212) 599-0500
FAX: (212) 972-9487

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time after the effective date of this Registration Statement as the Selling
Stockholders shall determine.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box./ /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box./X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering./ /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
- --------------------------------------------------------------------------------

<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE* PRICE* REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value............ 369,856 shs. $22.50 $8,321,760 $2,869.57
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>

* Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(c).

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

ROBOTIC VISION SYSTEMS, INC.

(Cross Reference Sheet Pursuant to Item 501 of Regulation S-K)

Items in Form S-3 Location in Registration Statement
- ----------------- or Heading in Prospectus
----------------------------------

1. Forepart of the Registration Facing Page of the Registration
Statement and Outside Front Statement; Cross-Reference Sheet;
Cover Page of Prospectus Outside Front Cover Page

2. Inside Front and Outside Back Table of Contents; Available
Cover Pages of Prospectus Information; Incorporation of
Certain Documents by Reference

3. Summary Information, Risk The Company
Factors and Ratio of Earnings
to Fixed Charges

4. Use of Proceeds Cover Page; Selling Stockholders

5. Determination of Offering Price Cover Page; Selling Stockholders

6. Dilution *

7. Selling Security Holders Selling Stockholders

8. Plan of Distribution Cover Page; Selling Stockholders

9. Description of Securities Incorporation of Certain Documents
to be Registered by Reference

10. Interests of Named Experts Legal Opinion; Experts

11. Material Changes *

12. Incorporation of Certain Incorporation of Certain
Information by Reference Information by Reference

13. Disclosure of Commission *
Position on Indemnification
for Securities Act Liabilities

______________________

* Not Applicable
<PAGE>

PROSPECTUS
369,856 SHARES

ROBOTIC VISION SYSTEMS, INC.

COMMON STOCK

________________________

This Prospectus relates to 369,856 shares of common stock, par value $0.01
per share (the "Common Stock"), of Robotic Vision Systems, Inc. (the "Company"),
which shares are being offered for sale by the persons named herein under the
caption "Selling Stockholders" (the "Selling Stockholders"). The Company will
not receive any of the proceeds from the sale of shares by the Selling
Stockholders. See "Selling Stockholders."

The Common Stock is quoted on The Nasdaq National Market (the "NASDAQ-NM")
under the symbol "ROBV." On January 8, 1996, the closing last sale price of the
Common Stock as reported by the NASDAQ-NM was $22.50 per share.

________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

________________________

The Selling Stockholders, or their pledgees, donees, transferees or other
successors, may sell the Common Stock in any of three ways: (i) through
broker-dealers; (ii) through agents or (iii) directly to one or more purchasers.
The distribution of the Common Stock may be effected from time to time in one or
more transactions (which may involve crosses or block transactions) (A) in the
over-the-counter market, or (B) in transactions otherwise than in the
over-the-counter market. Any of such transactions may be effected at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or at fixed prices. The Selling
Stockholders may effect such transactions by selling the Common Stock to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders
and/or commissions from purchasers of the Common Stock for whom they may act as
agent (which discounts, concessions or commissions will not exceed those
customary in the types of transactions involved). The Selling Stockholders and
any broker-dealers or agents that participate in the distribution of the Common

<PAGE>

Stock might be deemed to be underwriters, and any profit on the sale of the
Common Stock by them and any discounts, commissions or concessions received by
any such broker-dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act of 1933, as amended (the "Securities
Act").

The Company has agreed to bear all expenses (other than selling discounts,
concessions and commissions) in connection with the registration and sale of the
Common Stock being offered by the Selling Stockholders. The Company has agreed
to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.

The Common Stock being offered hereby by the Selling Stockholders has not
been registered for sale under the securities laws of any state or jurisdiction
as of the date of this Prospectus. Brokers or dealers effecting transactions in
the Common Stock should confirm the registration thereof under the securities
law of the state in which such transactions occur, or the existence of any
exemption from registration.

________________________

The date of this Prospectus is , 1996
<PAGE>

TABLE OF CONTENTS

The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 2

Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus at any time
does not imply that the information contained herein is correct as of any time
subsequent to its date.

<PAGE>

THE COMPANY

GENERAL

Robotic Vision Systems, Inc. (the "Company") produces automated 3-
dimensional ("3-D") vision-based systems for inspection and measurement and is a
leader in advanced electro-optical sensor technology.

The Company's core business is its Electronics Division which supplies
inspection equipment to the semiconductor industry. The Company also has an
Aircraft Safety Division which is developing an ice detection product for the
aviation industry. The Electronics Division's LS-Series lead scanning systems
offer automated high-speed 3-D semiconductor package lead inspection with the
added feature of non-contact scanning of the packages in their shipping trays.
The systems use a laser-based, non-contact, 3-D measurement technique to inspect
and sort quad flat packs, thin quad flat packs, plastic leaded chip carriers,
ball grid arrays and thin small outline packs from their carrying trays. The
system measurements include coplanarity, total package height, true position
spread and span, as well as lead angle, width, pitch and gap.

Acuity Imaging, Inc. ("Acuity"), which became a wholly-owned subsidiary of
the Company on September 20, 1995, designs, develops, manufactures and supplies
machine vision systems to a diversity of markets.

The Company was incorporated in New York in 1976 and reincorporated in
Delaware in 1977. Its executive offices are located at 425 Rabro Drive East,
Hauppauge, New York 11788; telephone (516) 273-9700.

RECENT DEVELOPMENT

On October 23, 1995, the Company consummated a merger with International
Data Matrix, Inc., a privately owned company located in Clearwater, Florida
("IDM"), pursuant to which IDM became a wholly owned subsidiary of the Company
(the "IDM Merger"). IDM markets a line of 2-D Data Matrix-TM- code readers and
is widely recognized in the emerging high-density 2-D bar code segment of the
bar code industry. The IDM Merger was structured as a tax-free organization and
accounted for as a pooling of interests. As a consequence of the IDM Merger,
the Company issued 369,856 shares of its Common Stock to the Selling
Stockholders in exchange for all of the outstanding shares of IDM common stock.
See "Selling Stockholders."

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance therewith,
the Company files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Regional Offices of the Commission at 7 World
Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60621. Copies of such material may be
obtained from the Public Reference Section of the Commission at prescribed rates
by writing to the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.

The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, copies of which can be obtained from the
Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Incorporated herein by reference are the following documents filed by the
Company with the Commission (File No. 0-8623) under the Exchange Act:

(a) The Company's Annual Report on Form 10-K for its fiscal year ended
September 30, 1995 (the "Annual Report");

(b) The Company's Current Report on Form 8-K dated October 3, 1995,
relating to the Company's acquisition by merger of Acuity;

(d) The Company's Registration Statement on Form 8-A for a description
of the Common Stock.

All documents filed by the Company with the Commission pursuant to Sections
13, 14 and 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of this offering, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing.

2
<PAGE>

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
incorporated into this Prospectus by reference (other than the exhibits to such
documents). Requests or such copies should be directed to Robert H. Walker,
Secretary, Robotic Vision Systems, Inc., 425 Rabro Drive East, Hauppauge, New
York 11788; telephone number: (516) 273-9700.

SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
Selling Stockholders, all of whom acquired their respective shares of RVSI
Common Stock pursuant to the terms of that certain Agreement and Plan of Merger
and Reorganization dated October 20, 1995 by and between RVSI and IDM by which
IDM became a wholly owned subsidiary of RVSI. The 58 Selling Stockholders named
below, at least 26 of which are "accredited investors", as such term is defined
in Rule 501, promulgated under the Securities Act, acquired their shares of RVSI
Common Stock absent registration under the Securities act by reason of the
exemption from such registration afforded by the provisions of Section 4(2)
thereof and Regulation D promulgated thereunder. The Company will receive no
proceeds from the sale of the shares by the Selling Stockholders.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF SHARES OF NUMBER OF SHARES OF OF SHARES OF COMMON PERCENTAGE OF COMMON
NAME OF SELLING COMMON STOCK AT COMMON STOCK OFFERED STOCK AFTER THE STOCK AFTER THE
STOCKHOLDER DECEMBER 31, 1995 FOR SALE OFFERING OFFERING
- --------------- -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Telxon
Corporation(1)(2) 55,933 55,933 - -

Dennis G. Priddy(1)(3) 53,718 53,718 - -

Houston Venture
Partners(1)(4) 32,422 32,422 - -

Finovelec(1) 29,184 29,184 - -

Charles C. Johnston(1) 26,859 26,859 - -

Factory Systemes(1) 21,615 21,615 - -

Jay Rosenstein(1) 19,696 19,696 - -

William D. Moses 13,792 13,792 - -

Jack B. Tamarkin 11,587 11,587 - -

Sam Simon 10,232 10,232 - -

Stephen M. Wagman(5) 9,792 9,792 - -

Irwin Thomases, Trustee 8,594 8,594 - -

IDI 1,606 1,606 - -

Itochu Electronics Corp. 7,674 7,674 - -

Michael I. Monus 7,558 7,558 - -

3
<PAGE>

Michael C. Tamarkin 5,433 5,433 - -

Tokyo Electric Co. Ltd. 5,116 5,116 - -

John M. Antonucci 3,890 3,890 - -

Robert A. Goodman(6) 3,837 3,837 - -

George H. Henry 3,581 3,581 - -

Blanche Weiss Trust 3,077 3,077 - -

Sara Lee Augusta 2,628 2,628 - -

Michael Simon 2,628 2,628 - -

Dr. and Mrs. Harry Wagman 2,499 2,499 - -

Jonathan Berman 2,018 2,018 - -

Bertram Tamarkin 1,752 1,752 - -

Morris Simon 1,752 1,752 - -

Nathan Monus 1,752 1,752 - -

Noel Levine 1,752 1,752 - -

Anita T. Shapiro 1,752 1,752 - -

Greg Kilma/Pamela Alexander 1,368 1,368 - -

Pharmagraphics, Inc. 1,330 1,330 - -

Treleaven Trust 1,330 1,330 - -

Irene Peplowski 1,151 1,151 - -

Dr. Bertram Katz 1,151 1,151 - -

Jason C. Priddy 1,023 1,023 - -

Erin M. Priddy 1,023 1,023 - -

John W. Dorsey 833 833 - -

Carl W. Treleaven 792 792 - -

Howard M. Gitten 782 782 - -

Barbara Goldberg 639 639 - -

Scott Lewis 516 516 - -

Mary E. Cymbalski 511 511 - -

Christen V. Nielsen 511 511 - -

Phillip Colangelo, Custodian 378 378 - -

Patrice Jones Family Trust 360 360 - -

Patrick Bamas 296 296 - -

Jacques Chatain 296 296 - -

Bernard Daugeras 296 296 - -

Jean Jacquin 296 296 - -

Jean-Marc Patouillaud 296 296 - -

Sandra L. Spangler 255 255 - -

4
<PAGE>

Ethel Wagman 191 191 - -

Alain Lacoste 148 148 - -

Richard Kittilsen 127 127 - -

William Allen 127 127 - -

Patrice Jones, Custodian 53 53 - -

Patrice Jones, Custodian 48 48 - -
--------- ---------

369,856 369,856 - -
--------- ---------
--------- ---------
</TABLE>

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

(1) Prior to the IDM Merger, such person beneficially owned more than 5% of
the outstanding common stock of IDM.

(2) Prior to the IDM Merger, Telxon Corporation had the right, and exercised
such right, to nominate two persons to IDM's board of directors.

(3) Prior to the IDM Merger, Dennis G. Priddy, the founder of IDM, was IDM's
President and a director.

(4) Prior to the IDM Merger, Houston Venture Partners had the right, and
exercised such right, to nominate one person to IDM's board of directors.

(5) Prior to February 1995, Stephen M. Wagman was a director of IDM.

(6) Prior to the IDM Merger, Robert A. Goodman was a director of IDM.

5
<PAGE>

them and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.

LEGAL OPINION

The legality of the Common Stock offered hereby will be passed upon for
the Company by Parker Duryee Rosoff & Haft A Professional Corporation, 529 Fifth
Avenue, New York, New York 10017. Jay M. Haft, of counsel to such Firm and a
director of the Company, beneficially owns 158,946 shares of Common Stock of the
Company, as well as options and warrants to acquire an additional 357,600 shares
of such Common Stock. Members of Parker Duryee Rosoff & Haft, other than Mr.
Haft, beneficially own 148,625 shares of Common Stock of the Company and
warrants to acquire an additional 72,667 shares of Common Stock of the Company.

EXPERTS

The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-K for the year ended September
30, 1995 and the supplemental financial statements of the Company and its
consolidated subsidiaries included in this Prospectus as of September 30,
1995 and 1994 and for each of the three years in the period ended September
30, 1995, except Acuity Imaging, Inc. and subsidiaries for the years ended
September 30, 1995 and December 31, 1994, and except Itran Corporation for
the year ended December 31, 1993 have been audited by Deloitte & Touche LLP
as stated in their reports which are incorporated by reference and appear
herein, respectively, in the Registration Statement. The financial statements
of Acuity Imaging, Inc. and subsidiaries and Itran Corporation for the
periods indicated above (consolidated with those of the Company) have been
audited by Arthur Andersen LLP as stated in their reports, which are
incorporated by reference and included herein. Such financial statements and
supplemental financial statements of the Company and its consolidated
subsidiaries are incorporated by reference and included herein, respectively,
in reliance upon the respective reports of such firms given upon their
authority as experts in accounting and auditing. Both of the foregoing firms
are independent auditors.

The financial statements of International Data Matrix, Inc. as of
September 30, 1995 and December 31, 1994 and for the nine months ended
September 30, 1995 and the year ended December 31, 1994 incorporated in this
Prospectus by reference from the Company's Current Report on Form 8-K/A-1
dated October 23, 1995, and the financial statements of Acuity Imaging, Inc.
(formerly Automatix Incorporated) as of December 31, 1993 and for each of the
two years in the period ended December 31, 1993 incorporated in this
Prospectus by reference from the Company's Current Report on Form 8-K dated
October 3, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given their authority as experts in accounting and auditing. The
financial statements of Acuity Imaging, Inc. as of December 31, 1994 and for
the year then ended incorporated in this Prospectus by reference from the
Company's Current Report on Form 8-K dated october 3, 1995 have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, which is incorporated herein by reference and
has been so incorporated in reliance upon the authority of said firm as
experts in accounting and auditing.

6
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Robotic Vision Systems, Inc. and
Subsidiaries:

We have audited the accompanying supplemental consolidated balance sheets of
Robotic Vision Systems, Inc. and subsidiaries (the "Company") as of September
30, 1995 and 1994, and the related supplemental consolidated statements of
income, stockholders' equity, and cash flows for each of the three years in the
period ended September 30, 1995. 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 did not audit the
financial statements of Acuity Imaging, Inc. and subsidiaries ("Acuity"), a
wholly-owned subsidiary, for the years ended September 30, 1995 and December 31,
1994 and 1993, respectively, which statements reflect total assets constituting
12% and 30% of consolidated total assets as of September 30, 1995 and 1994,
respectively, and total revenues constituting 29%, 46%, and 47% of consolidated
total revenues for the years ended September 30, 1995, 1994 and 1993,
respectively. Those financial statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for Acuity, is based solely on the report of such other
auditors, with the exception that in 1993, we audited the financial statements
of a subsidiary of Acuity, which statements reflect total revenues constituting
22% of consolidated total revenues of the Company for the year ended
September 30, 1993.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an 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.

The supplemental consolidated financial statements give retroactive effect to
the merger of Robotic Vision Systems, Inc. and subsidiaries and International
Data Matrix, Inc. ("IDM") as of October 23, 1995, which has been accounted for
as a pooling of interests as described in Note 2 to the supplemental
consolidated financial statements. Generally accepted accounting principles
proscribe giving effect to a consummated business combination

F-1
<PAGE>

accounted for by the pooling of interests method in financial statements that do
not cover the date of consummation. These supplemental consolidated financial
statements do not extend through the date of consummation, however, they will
become the historical consolidated financial statements of the Company after
financial statements covering the date of consummation of the business
combination are issued.

In our opinion, based on our audits and the reports of the other auditors, such
supplemental consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
September 30, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended September 30, 1995
in conformity with generally accepted accounting principles after financial
statements are issued for a period which includes the date of consummation of
the merger described above.

/s/ Deloitte & Touche LLP

Jericho, New York
December 15, 1995

F-2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Acuity Imaging, Inc.:

We have audited the consolidated balance sheets of Acuity Imaging, Inc. (a
Delaware corporation and a wholly owned subsidiary of Robotic Vision Systems,
Inc.) and subsidiaries as of September 30, 1995 and December 31, 1994, and
the related consolidated statements of operations and cash flows for the
years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Acuity
Imaging, Inc. and subsidiaries at September 30, 1995 and December 31, 1994,
and the results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.

On September 20, 1995, Robotic Vision Systems, Inc. acquired Acuity Imaging,
Inc.

/s/ Arthur Andersen LLP

Boston, Massachusetts
November 6, 1995

F-3
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
Itran Corporation:

We have audited the balance sheets of Itran Corporation (a Delaware
corporation) as of December 31, 1993, and the related statements of
operations, stockholders' investment and cash flows for the year then ended.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Itran Corporation as of
December 31, 1993, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.

On January 24, 1994, Itran Corporation merged with Automatix, Incorporated
with Automatix as the surviving corporation. The surviving corporation was
renamed Acuity Imaging, Inc.

/s/ Arthur Andersen LLP

Boston, Massachusetts
February 4, 1994

F-4

<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTES 1995 1994
----- ---- ----
RESTATED RESTATED
(NOTE 2) (NOTE 2)
<S> <C> <C> <C>
ASSETS 9

CURRENT ASSETS:
Cash and cash equivalents $ 16,424,000 $ 2,104,000
Investments 1,000,000 1,495,000
Receivables - net 3 12,082,000 7,221,000
Inventories 4 8,461,000 4,416,000
Deferred income taxes 5 2,375,000 1,163,000
Prepaid expenses and other 154,000 163,000
------------ ------------
Total current assets 40,496,000 16,562,000

PLANT AND EQUIPMENT - NET 6 4,145,000 2,863,000

OTHER ASSETS 7 1,748,000 1,483,000

INVESTMENTS 1,989,000 1,500,000
------------ ------------
$ 48,378,000 $ 22,408,000
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Notes payable 10 $ 270,000 $ 649,000
Loan payable 9 1,385,000 -
Accounts payable 7,988,000 4,669,000
Accrued expenses and other current liabilities 8 5,473,000 4,154,000
Advance contract payments received 1,078,000 912,000
------------ ------------
Total current liabilities 16,194,000 10,384,000

LOAN PAYABLE - 1,015,000

OTHER LIABILITIES 78,000 216,000
------------ ------------

TOTAL LIABILITIES 16,272,000 11,615,000
------------ ------------

COMMITMENTS AND CONTINGENCIES 12, 15

STOCKHOLDERS' EQUITY: 13
Common stock, $.01 par value; shares
authorized, 30,000,000; shares issued and
outstanding, 1995 - 15,175,000 and 1994 - 13,224,000 152,000 132,000
Additional paid-in capital 109,834,000 97,285,000
Accumulated deficit (78,023,000) (86,755,000)
Cumulative translation adjustment 143,000 131,000
------------ ------------
Total stockholders' equity 32,106,000 10,793,000
------------ ------------

$ 48,378,000 $ 22,408,000
------------ ------------
------------ ------------
</TABLE>

See notes to supplemental consolidated financial statements.

F-5
<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTES 1995 1994 1993
----- ---- ---- ----
RESTATED RESTATED RESTATED
(NOTE 2) (NOTE 2) (NOTE 2)
<S> <C> <C> <C> <C>
REVENUES 14 $65,260,000 $47,839,000 $39,640,000

COST OF REVENUES 28,726,000 22,391,000 19,493,000
----------- ----------- -----------
GROSS PROFIT 36,534,000 25,448,000 20,147,000
----------- ----------- -----------

OPERATING COSTS AND EXPENSES:
Research and development costs 10,435,000 8,013,000 6,425,000
Selling, general and administrative expenses 16,888,000 13,936,000 11,544,000
Merger expenses 2 1,305,000 - 1,091,000
Interest income (431,000) (123,000) (44,000)
Interest expense 153,000 232,000 368,000
----------- ----------- -----------

28,350,000 22,058,000 19,384,000
----------- ----------- -----------

INCOME BEFORE BENEFIT FROM
INCOME TAXES 8,184,000 3,390,000 763,000

BENEFIT FROM INCOME TAXES 5 649,000 291,000 398,000
----------- ----------- -----------

NET INCOME $ 8,833,000 $ 3,681,000 $ 1,161,000
----------- ----------- -----------
----------- ----------- -----------

NET INCOME PER SHARE:

Primary $ 0.55 $ 0.25 $ 0.10
----------- ----------- -----------
----------- ----------- -----------
Fully diluted $ 0.53 $ 0.25 $ 0.10
----------- ----------- -----------
----------- ----------- -----------

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:

Primary 16,199,000 14,593,000 13,750,000
----------- ----------- -----------
----------- ----------- -----------
Fully diluted 16,572,000 14,795,000 13,750,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See notes to supplemental consolidated financial statements.

F-6
<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK
---------------------- ADDITIONAL CUMULATIVE STOCK-
NUMBER PAID-IN ACCUMULATED TRANSLATION HOLDERS'
NOTES OF SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT EQUITY
----- ----------- -------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance October 1, 1992 (as
previously reported) 10,987,000 $110,000 $ 89,284,000 $(88,759,000) $140,000 $ 775,000

Changes resulting from acquisition
accounted for as pooling-of-interests 2 192,000 2,000 2,898,000 (2,838,000) - 62,000
---------- -------- ------------ ------------ -------- ----------

Balance, October 1, 1992 (Restated) 11,179,000 112,000 92,182,000 (91,597,000) 140,000 837,000
Shares issued to the Defined Contribution
Stock Ownership and Deferred Compensation
Plan 11 16,000 - 22,000 - - 22,000
Offering costs incurred in connection
with registration of shares and
warrants - - (80,000) - - (80,000)
Shares issued in connection with the
exercise of stock options 13 22,000 1,000 20,000 - - 21,000
Warrants issued for professional
services rendered 13 - - 125,000 - - 125,000
Warrants issued in connection
with the settlement of litigation 13 - - 25,000 - - 25,000
Translation adjustment - - - - (3,000) (3,000)
Net income - - - 1,161,000 - 1,161,000
---------- -------- ------------ ------------ -------- ----------

Balance, September 30, 1993 (Restated) 11,217,000 113,000 92,294,000 (90,436,000) 137,000 2,108,000
Shares issued to the Defined Contribution
Stock Ownership and Deferred
Compensation Plan 11 9,000 - 36,000 - - 36,000
Shares and warrants issued in connection
with private equity placement, net of
offering costs 13 1,360,000 14,000 3,790,000 - - 3,804,000
Shares issued in connection with private
placement of subsidiary, net of
offering costs 13 59,000 - 491,000 - - 491,000
Warrants issued for professional services 13 - - 38,000 - - 38,000
Shares issued in connection with the
exercise of stock options 13 336,000 3,000 368,000 - - 371,000
Shares issued in connection with the exercise
of warrants 13 243,000 2,000 268,000 - - 270,000
Translation adjustment - - - - (6,000) (6,000)
Net income - - - 3,681,000 - 3,681,000
---------- -------- ------------ ------------ -------- ----------

Balance, September 30, 1994 (Restated) 13,224,000 132,000 97,285,000 (86,755,000) 131,000 10,793,000
Shares issued to the Defined Contribution
Stock Ownership and Deferred
Compensation Plan 11 12,000 - 60,000 - - 60,000
Shares and warrants issued in connection
with private equity placement, net of
offering costs 13 1,110,000 11,000 9,375,000 - - 9,386,000
Shares issued in connection with private
placement of subsidiary, net of
offering costs 13 119,000 2,000 1,763,000 - - 1,765,000
Warrants issued for professional services 13 - - 92,000 - - 92,000
Shares issued in connection with the exercise
of stock options 13 386,000 4,000 770,000 - - 774,000
Shares issued in connection with the exercise
of warrants 13 324,000 3,000 489,000 - - 492,000
Change in year end of pooled companies 2 - - - (101,000) - (101,000)
Translation adjustment - - - - 12,000 12,000
Net income - - - 8,833,000 - 8,833,000
---------- -------- ------------ ------------ -------- ----------

Balance, September 30, 1995 (Restated) 15,175,000 $152,000 $109,834,000 $(78,023,000) $143,000 $32,106,000
---------- -------- ------------ ------------ -------- ----------
---------- -------- ------------ ------------ -------- ----------
</TABLE>

See notes to supplemental consolidated financial statements.

F-7
<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
RESTATED RESTATED RESTATED
(NOTE 2) (NOTE 2) (NOTE 2)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 8,833,000 $ 3,681,000 $ 1,161,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Deferred income taxes (1,212,000) (579,000) (584,000)
Depreciation and amortization 1,575,000 1,065,000 791,000
Interest expense - 84,000 310,000
Provision for doubtful accounts receivable 80,000 - 82,000
Issuance of common stock and warrants for professional
services rendered 92,000 38,000 125,000
Issuance of common stock - Defined Contribution Stock
Ownership and Deferred Compensation Plan 60,000 36,000 22,000
Warrants issued as settlement of litigation - - 25,000
Other 39,000 32,000 7,000
Changes in assets and liabilities:
Receivables (5,027,000) (1,959,000) (155,000)
Inventories (4,366,000) (684,000) (1,672,000)
Prepaid expenses and other current assets 39,000 (28,000) 25,000
Other assets (640,000) (369,000) (677,000)
Accounts payable 3,723,000 805,000 1,687,000
Accrued expenses and other current liabilities 1,613,000 (758,000) 908,000
Advance contract payments received 365,000 176,000 315,000
Other liabilities (136,000) (35,000) (90,000)
------------ ----------- -----------

Net cash provided by operating activities 4,308,000 1,153,000 2,280,000
------------ ----------- -----------

INVESTING ACTIVITIES:
Additions to plant and equipment (2,521,000) (1,689,000) (1,243,000)
Purchase of investments (1,484,000) (2,984,000) -
Proceeds from maturity of investments 1,500,000 - -
------------ ----------- -----------

Net cash used in investing activities (2,505,000) (4,673,000) (1,243,000)
------------ ----------- -----------

FINANCING ACTIVITIES:
Issuance of common stock and warrants - private
equity placements (less offering costs) 10,306,000 4,068,000 (80,000)
Issuance of common stock in connection with the exercise
of stock options and warrants 1,266,000 641,000 21,000
Notes payable 837,000 563,000 208,000
Proceeds from bank loan 1,970,000 1,015,000 -
Payment of short-term debt and related accrued interest (1,551,000) (3,491,000) -
------------ ----------- -----------

Net cash provided by financing activities 12,828,000 2,796,000 149,000
------------ ----------- -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 3,000 (6,000) (3,000)

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 14,634,000 (730,000) 1,183,000

CASH AND CASH EQUIVALENTS:
Beginning of year 1,790,000 2,834,000 1,651,000
------------ ----------- -----------

End of year $ 16,424,000 $ 2,104,000 $ 2,834,000
------------ ----------- -----------
------------ ----------- -----------
</TABLE>

See notes to supplemental consolidated financial statements.

F-8
<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993 (CONTINUED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION - Interest paid $ 157,000 $ 1,390,000 $ 29,000
--------- ----------- --------
--------- ----------- --------
- Taxes paid $ 581,000 $ 386,000 $ 92,000
--------- ----------- --------
--------- ----------- --------

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment acquired under capital leases $ 9,000 $ 16,000 $ -
--------- ----------- --------
--------- ----------- --------

Notes payable and accrued interest satisfied by private
offering of common stock of subsidiary $ 785,000 $ 227,000 $ -
--------- ----------- --------
--------- ----------- --------

Accounts payable satisfied by private offering of common stock
of subsidiary $ 60,000 $ - $ -
--------- ----------- --------
--------- ----------- --------
</TABLE>

See notes to supplemental consolidated financial statements.

F-9
<PAGE>

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES

A. DESCRIPTION OF BUSINESS - Robotic Vision Systems, Inc. and
subsidiaries (the "Company") is principally engaged in the development,
manufacture and marketing of automated two dimensional and three dimensional
vision-based systems for inspection and measurement products which have a
variety of commercial and military applications.

B. PRINCIPLES OF CONSOLIDATION - The supplemental consolidated financial
statements include the financial statements of Robotic Vision Systems, Inc.,
Acuity Imaging, Inc. and subsidiaries (a wholly-owned subsidiary) ("Acuity"),
and International Data Matrix, Inc. (a wholly-owned subsidiary) ("IDM"). All
significant intercompany transactions and balances have been eliminated in
consolidation.

The supplemental consolidated financial statements of the Company have been
prepared to give retroactive effect to the business combination with IDM
(Note 2) which occurred on October 23, 1995 and has been accounted for as a
pooling of interests.

C. REVENUES AND COST OF REVENUES - The Company recognizes revenue on its
standard electronic inspection and measurement products upon shipment. Revenue
from the licensing of software is recognized when the software is delivered if
collectibility is probable and there are no significant vendor obligations.
Engineering service and support revenue is recognized when such services are
rendered. The Company recognizes revenues and related cost of revenues
associated with the long-term contracts using the percentage-of-completion
method of accounting, measured by the percentage of total costs incurred in
relation to total estimated costs at completion. Contract costs include
material, direct labor, manufacturing overhead and other direct costs. The
degree of accuracy with which the Company is able to estimate the profit to be
realized on fixed-price long-term contracts is greater as the contract
approaches completion; accordingly, the Company reviews its estimates
periodically and records adjustments thereto as required. On firm fixed-price
contracts which are in the early stages of completion, and for which estimates
of profit cannot be reasonably determined, the Company utilizes the percentage-
of-completion method recognizing revenue in amounts equal to costs incurred
until such time that profit margins can be reasonably estimated. If a loss is
anticipated on a contract, the entire amount of the estimated loss is accrued in
the period in which the loss becomes known.

Revenues are billed in accordance with the terms of each contract. The
Company estimates that all of its unbilled receivables at September 30,
1995 will become billable during the ensuing twelve months.

D. CASH AND CASH EQUIVALENTS - Cash and cash equivalents includes money
market accounts and certain debt securities issued by the United States
government with an original maturity of three months or less.

F-10
<PAGE>

E. INVESTMENTS - Investments consist of certain debt securities issued by
the United States government with maturities through November 1997. The
Company's intention is to hold such investments until their maturity, therefore,
such investments are recorded at their amortized cost. As of September 30,
1995, the aggregate fair value of investments maturing within one year was
approximately $993,000 and the fair value of investments with maturities of
longer than one year was approximately $2,020,000. The aggregate unrealized
gain as of September 30, 1995 was approximately $24,000. As of September 30,
1994, the aggregate fair value of investments maturing within one year was
approximately $1,478,000 and the fair value of investment with maturities of
longer than one year was approximately $1,447,000. The aggregate unrealized
loss as of September 30, 1994 was approximately $70,000.

F. PLANT AND EQUIPMENT - Plant and equipment is recorded at cost less
accumulated depreciation and amortization and includes the costs associated with
demonstration equipment and other equipment internally developed by the Company.
The cost of internally developed assets includes direct material and labor costs
and applicable factory overhead. Depreciation is computed by the straight-line
method over estimated lives ranging from two to eight years. Leasehold
improvements are amortized over the lesser of their respective estimated useful
lives or lease terms.

G. INVENTORIES - Inventories are stated at the lower of cost (using the
first-in, first-out cost flow assumption) or market.

H. SOFTWARE DEVELOPMENT COSTS - Software development costs are
capitalized in accordance with Statement of Financial Accounting Standards No.
86. Capitalized software development costs are amortized primarily over a five-
year period, which is the estimated useful life of the software. Amortization
begins in the period in which the related product is available for general
release to customers.

I. RESEARCH AND DEVELOPMENT COSTS - The Company charges research and
development costs for Company-funded projects to operations as incurred.
Research and development costs which are reimbursable under customer-funded
contracts are treated as contract costs.

J. INCOME TAXES - Deferred tax assets and liabilities are determined
based on the differences between the financial accounting and tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse.

K. FOREIGN CURRENCY TRANSLATION - Assets and liabilities of the Company's
European subsidiary are translated at the exchange rate in effect at the balance
sheet date. Income statement accounts are translated at the average exchange
rate for the year. The resulting translation adjustments are excluded from
operations and accumulated as a separate component of stockholders' equity.
Transaction gains are included in net income and totaled $4,000, $19,000 and $0
in 1995, 1994 and 1993, respectively.

L. INCOME PER SHARE - Net income per common share is computed by dividing
each year's net income by the respective weighted average number of shares of
common stock outstanding during the period, after giving effect to dilutive
options and warrants. The effect of options and warrants was calculated using
the modified treasury stock method for the years ended September 30, 1994 and
1993.

F-11
<PAGE>

M. FAIR VALUE OF FINANCIAL INSTRUMENTS - The following methods and
assumptions were used to estimate the fair value of each class of financial
instruments:

A. CASH AND CASH EQUIVALENTS - The carrying amounts approximate fair
value because of the short maturity of these instruments.

B. INVESTMENTS - Fair value equals quoted market value.

C. RECEIVABLES - The carrying amount approximates fair value because
of the short maturity of these instruments.

D. DEBT - The carrying amounts approximate fair value because of the
relatively short maturity of those instruments.

N. RECLASSIFICATION - Certain amounts in the 1993 and 1994 financial
statements have been reclassified to conform with the 1995 presentation.

2. ACQUISITIONS

A. INTERNATIONAL DATA MATRIX, INC.

On October 23, 1995, the Company acquired the outstanding shares of
IDM for approximately 370,000 shares of the Company's common stock,
having a market value at the date of the merger of approximately
$8,183,000. IDM is a developer and seller of computerized visual
inspection equipment. This acquisition has been accounted for as a
pooling of interests and accordingly, the supplemental consolidated
financial statements have been restated to include the accounts of
IDM for all periods presented. The accompanying September 30, 1994
and 1993 supplemental consolidated financial statements include
IDM's amounts for the years ended December 31, 1994 and 1993. The
accompanying supplemental consolidated financial statement for the
year ended September 30, 1995 include the operations of IDM on a
common fiscal year. IDM's net loss for the period October 1, 1994
through December 31, 1994 of $154,000, included twice in the
accompanying supplemental consolidated statements of income as a
result of conforming fiscal years, has been included as an
adjustment to consolidated accumulated deficit. As of September 30,
1995, $145,000 of expense have been incurred related to this merger.

The following is a reconciliation of certain restated amounts with
amounts previously reported:

YEARS ENDED SEPTEMBER 30,
-------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues:
As previously reported $63,644,000 $46,781,000 $38,677,000
Effect of IDM pooling of interests 1,616,000 1,058,000 963,000
----------- ----------- -----------
As restated $65,260,000 $47,839,000 $39,640,000
----------- ----------- -----------
----------- ----------- -----------

Net income (loss):
As previously reported $9,956,000 $4,417,000 $1,569,000
Effect of IDM pooling of interests (1,123,000) (736,000) (408,000)
----------- ----------- -----------
As restated $8,833,000 $3,681,000 $1,161,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-12

<PAGE>

YEARS ENDED SEPTEMBER 30,
------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net income (loss) per share:
Primary:
As previously reported $ 0.63 $ 0.31 $ 0.13
Effect of IDM pooling of interests (0.08) (0.06) (0.03)
------ ------ ------
As restated $ 0.55 $ 0.25 $ 0.10
------ ------ ------
------ ------ ------

Fully diluted:
As previously reported $0.61 $0.30 $0.13
Effect of IDM pooling of interests (0.08) (0.05) (0.03)
------ ------ ------
As restated $0.53 $0.25 $0.10
------ ------ ------
------ ------ ------
</TABLE>

B. ACUITY IMAGING, INC. AND SUBSIDIARIES

On September 20, 1995, the Company acquired the outstanding shares of
Acuity for approximately 1,448,000 shares of the Company's common
stock, having a market value at the date of the merger of
approximately $31,141,000. Acuity is a developer and seller of
computerized visual inspection equipment. Outstanding Acuity stock
options were converted into options to purchase approximately 114,000
shares of the Company's common stock. This acquisition has been
accounted for as a pooling of interests. The accompanying September
30, 1994 and 1993 supplemental consolidated financial statements
include Acuity's amounts for the years ended December 31, 1994 and
1993. The accompanying supplemental consolidated financial statement
for the year ended September 30, 1995 include the operations of Acuity
on a common fiscal year. Acuity's net income for the period October
1, 1994 through December 31, 1994 of $255,000, included twice in the
accompanying supplemental consolidated statements of income as a
result of conforming fiscal years, has been included as an adjustment
to consolidated accumulated deficit. Included in the operating
results of the Company for the year ended September 30, 1995 are
approximately $19,153,000 of revenues and $1,188,000 of net loss of
Acuity prior to the date of acquisition (September 20, 1995).
Expenses of $1,160,000 have been incurred related to this merger.

C. MERGER OF ACUITY (FORMERLY AUTOMATIX INCORPORATED) WITH ITRAN CORP.

On January 26, 1994, Acuity (formerly Automatix Incorporated
["Automatix"]) merged with Itran Corp. ("Itran") in a tax-free
exchange of approximately 1,483,000 registered shares of Automatix
common stock for substantially all of Itran's outstanding common and
preferred stock. Itran was a developer and seller of computerized
visual inspection equipment. Automatix was the surviving corporation
and, simultaneously with the merger, changed its name to Acuity
Imaging, Inc. Outstanding Itran stock options were converted into
options to purchase approximately 162,000 shares of Acuity's common
stock. The merger has been accounted for as a pooling of interests.
Expenses of approximately $1,091,000 were incurred related to this
merger.

F-13
<PAGE>

3. RECEIVABLES

Receivables at September 30, 1995 and 1994 consisted of the following:

1995 1994
---- ----
<S> <C> <C>
Billed accounts receivable $11,078,000 $6,801,000
Unbilled accounts receivable 1,298,000 702,000
----------- ----------
Total 12,376,000 7,503,000
Less allowance for doubtful accounts receivable 294,000 282,000
----------- ----------
Receivables - net $12,082,000 $7,221,000
----------- ----------
----------- ----------
</TABLE>

Unbilled receivables primarily relate to sales recorded on standard
products which have been shipped, but have not yet been finally accepted by
the customer. The Company has no significant remaining obligations
relating to these unbilled receivables and collectibility is probable.

4. INVENTORIES

Inventories at September 30, 1995 and 1994 consisted of the following:

1995 1994
---- ----
<S> <C> <C>
Raw materials $2,223,000 $ 994,000
Work-in-process 5,515,000 2,904,000
Finished goods 533,000 393,000
Field engineering parts and components 190,000 125,000
---------- ----------
Total $8,461,000 $4,416,000
---------- ----------
---------- ----------

</TABLE>

5. INCOME TAXES

The benefit from income taxes for the fiscal years ended September 30,
1995, 1994 and 1993 consisted of the following:

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 3,676,000 $ 1,377,000 $ 676,000
State 677,000 264,000 214,000
Utilization of net operating loss carryforwards (3,790,000) (1,353,000) (704,000)
----------- ----------- ---------
563,000 288,000 186,000
----------- ----------- ---------

Deferred:
Federal 1,983,000 891,000 -
State 371,000 108,000 -
Adjustment of valuation allowance (3,566,000) (1,578,000) (584,000)
----------- ----------- ---------
(1,212,000) (579,000) (584,000)
----------- ----------- ---------
Total $ (649,000) $ (291,000) $(398,000)
----------- ----------- ---------
----------- ----------- ---------

</TABLE>

The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109") during fiscal 1993. The
adoption of SFAS 109 was made as of the beginning of the fiscal year on a
prospective basis. This accounting change had no effect on the Company's
financial statements as of the date of adoption. However, the adoption of
SFAS 109 resulted in an increase in the income tax benefit recognized in
fiscal 1993 and,

F-14
<PAGE>

therefore, an increase in net income of $584,000 ($0.04 per common share
for both primary and fully diluted).

The adjustments of the valuation allowance during fiscal 1995, 1994 and
1993 emanate from the Company's profitable operations during those years
and the extent to which the Company can substantiate projected future
earnings. The deferred tax assets as of September 30, 1995 and 1994 are
equivalent to the benefit to be derived from net operating loss
carryforwards that were expected to be utilized to offset future taxable
income projected as of the respective balance sheet dates. The deferred
tax assets at September 30, 1995 and 1994 have been limited to the benefit
to be derived from projected future income, primarily due to the Company's
projected future profitability currently being primarily dependent on one
existing product line.

A reconciliation between the statutory U.S. Federal income tax rate and the
Company's effective tax rate for the years ended September 30, 1995, 1994
and 1993 is as follows:

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
U.S. Federal statutory rate 34.0% 34.0% 34.0%
Increases (reductions) due to:
State taxes - net of Federal tax benefit 5.5 6.0 11.3
Utilization of net operating loss carryforwards (43.0) (38.9) (51.2)
Anticipated future utilization of net operating
loss carryforwards (14.8) (17.1) (76.5)
Nondeductible merger expenses - - 11.1
Net operating loss not producing current tax
benefits 9.5 7.4 18.1
Other - net .9 - 1.0
----- ----- -----
Total (7.9%) (8.6%) (52.2%)
----- ----- -----
----- ----- -----
</TABLE>

The net deferred tax asset at September 30, 1995, 1994 and 1993 is
comprised of the following:

DEFERRED TAX ASSETS (LIABILITIES) 1995 1994 1993
--------------------------------- ---- ---- ----
<S> <C> <C> <C>
Net operating loss carryforwards $ 9,975,000 $ 12,355,000 $ 13,578,000
Tax credit carryforwards 1,708,000 1,129,000 810,000
Accrued liabilities 1,047,000 760,000 807,000
Inventories 524,000 460,000 423,000
Property and equipment (101,000) 78,000 227,000
Receivables 137,000 130,000 111,000
------------ ------------ ------------
13,290,000 14,912,000 15,956,000
Less valuation allowance (10,915,000) (13,749,000) (15,372,000)
------------ ------------ ------------
Total $ 2,375,000 $ 1,163,000 $ 584,000
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

As of September 30, 1995, Robotic Vision Systems, Inc. ("RVSI") had Federal
net operating loss carryforwards of approximately $11,997,000. Such loss
carryforwards expire in the fiscal years 2001 through 2007. Additionally,
RVSI had Federal income tax credits of approximately $847,000 and state
income tax credits of approximately $499,000. The utilization of the
carryforwards to offset future tax liabilities is dependent upon the
Company's ability to generate sufficient taxable income during the
carryforward periods.

F-15
<PAGE>

As of September 30, 1995, Acuity had Federal net operating loss
carryforwards of approximately $11,851,000 and foreign net operating loss
carryforwards relating to its United Kingdom subsidiary of approximately
$349,000. Such loss carryforwards expire in the fiscal years 1996 through
2010. In addition, Acuity has available approximately $325,000 of unused
investment tax credits. Because of the changes in ownership, as defined in
the Internal Revenue Code, which occurred in January 1994 and September
1995 (Note 2), certain of the net operating loss carryforwards and credits
are subject to annual limitations.

As of September 30, 1995, IDM had Federal net operating loss carryforwards
of approximately $3,400,000. Such loss carryforwards expire in the fiscal
years 2006 through 2010. In addition, IDM has available approximately
$37,000 of unused general business tax credits. Because of the changes in
ownership, as defined in the Internal Revenue Code, which occurred in
October 1995 (Note 2), certain of the net operating loss carryforwards and
credits are subject to annual limitations.

6. PLANT AND EQUIPMENT

Plant and equipment at September 30, 1995 and 1994 consisted of the
following:

1995 1994
---- ----
<S> <C> <C>
Machinery and equipment $2,208,000 $1,970,000
Furniture, fixtures and other equipment 2,215,000 1,185,000
Demonstration equipment 2,633,000 1,875,000
Leasehold improvements 457,000 274,000
---------- ----------
Total 7,513,000 5,304,000
Less accumulated depreciation and amortization 3,368,000 2,441,000
---------- ----------
Plant and equipment - net $4,145,000 $2,863,000
---------- ----------
---------- ----------
</TABLE>

7. OTHER ASSETS

Other assets at September 30, 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>

1995 1994
---- ----
<S> <C> <C>
Software development costs, net of accumulated
amortization of $738,000 and $413,000, respectively $1,274,000 $1,064,000
Other 474,000 419,000
---------- ----------
Total $1,748,000 $1,483,000
---------- ----------
---------- ----------
</TABLE>

Certain software development costs totaling $535,000 and $433,000 have been
capitalized during the fiscal years ended September 30, 1995 and 1994,
respectively. Amortization expense relating to software development costs
for 1995, 1994 and 1993 was $325,000, $239,000 and $137,000, respectively.

F-16
<PAGE>

8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at September 30, 1995 and
1994 consisted of the following:

1995 1994
---- ----
<S> <C> <C>
Accrued wages and related employee benefits $1,622,000 $1,663,000
Accrued sales commissions 1,827,000 540,000
Accrued warranty and other product related costs 675,000 575,000
Other 1,349,000 1,376,000
---------- ----------
Total $5,473,000 $4,154,000
---------- ----------
---------- ----------
</TABLE>

9. LOAN PAYABLE

In March 1995, Acuity obtained a revolving line of credit that provided for
borrowings up to the lesser of $3,500,000 or 80 percent of eligible
accounts receivable, as defined, plus 50 percent of unpledged domestic cash
and cash equivalents. Interest was payable monthly at a rate of prime plus
.5 percent. Borrowings under the line were secured by substantially all
assets of Acuity. The agreement required, among other covenants, that
Acuity maintain minimum levels of profitability, current ratio, net worth
and limits the levels of leverage.

After the merger with RVSI, the line of credit balance of $1,375,000 was
repaid with the proceeds from a 90-day note payable from a new bank,
guaranteed by RVSI. The note is collateralized by certain investments and
cash equivalents of RVSI. The note has a maturity date of December 28,
1995. At September 30, 1995, the outstanding balance under the note was
$1,385,000, bearing interest at 8.25 percent.

10. NOTES PAYABLE

RVSI had a line of credit agreement with a bank under which RVSI could
borrow up to $1,500,000 against certain customer accounts receivable and
inventory. $63,000 was outstanding under this agreement at September 30,
1994. Borrowings under the agreement bore interest at the higher of the
bank's prime rate or the Federal funds rate plus one-half of one percent.
The agreement expired in June 1995.

At September 30, 1994, IDM had several short-term notes payable outstanding
totaling approximately $236,000 to certain of its then existing
stockholders at interest rates ranging from 7 to 10 percent. All
outstanding balances were either repaid or satisfied through the
issuance of shares of IDM common stock sold in IDM's 1995 private
placement (Note 13). IDM also had outstanding $350,000 of loans
representing bridge financing from three institutional investors (the
"Investors"). These loans bore interest at the rate of 8 percent.

In January and February 1995, IDM obtained additional bridge financing
totaling $280,000 from the Investors. All amounts owed to the Investors
were satisfied through the 1995 private placement of IDM's common stock
(Note 13). In addition, in June through September 1995, these Investors,
as well as a former stockholder of IDM common stock, loaned IDM a total of
$270,000 for working capital purposes. Such loans bore interest at the
rate of 10 percent and were secured by certain accounts receivable,
inventory, and equipment. Such amounts were repaid in October 1995.

F-17
<PAGE>

11. EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT PLAN - The Company has a noncontributory pension plan for
employees who meet certain minimum eligibility requirements. The level of
retirement benefit is based on a formula which considers both employee
compensation and length of credited service.

Plan assets are invested in pooled bank investment accounts, and the fair
value of such assets is based on the quoted market prices of underlying
securities in such accounts. The Company funds pension plan costs based on
minimum and maximum funding criteria as determined by independent actuarial
consultants.

The components of net pension cost for the fiscal years ended September 30,
1995, 1994 and 1993 are summarized as follows:
<TABLE>
<CAPTION>

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned during the period $158,000 $143,000 $ 91,000
Interest on projected benefit obligations 83,000 62,000 49,000
Estimated return on plan assets (56,000) (52,000) (43,000)
Other - amortization of actuarial gains and
net transition asset (20,000) (30,000) (32,000)
-------- -------- --------
Net pension cost $165,000 $123,000 $ 65,000
-------- -------- --------
-------- -------- --------
</TABLE>

The funded status of the plan compared with the accrued expense included in
the Company's consolidated balance sheet at September 30, 1995 and 1994 is
as follows:

1995 1994
---- ----
<S> <C> <C>
Fair value of plan assets $ 810,000 $ 724,000
---------- -----------
Actuarial present value of benefit obligation:
Accumulated benefit obligation, including
vested benefits of $754,000 and $636,000 in
1995 and 1994, respectively 933,000 790,000
Effect of projected compensation increases 340,000 226,000
---------- -----------
Projected benefit obligation for services rendered to date 1,273,000 1,016,000
---------- -----------
Projected benefit obligation in excess of plan assets (463,000) (292,000)
Unrecognized net loss 217,000 67,000
Remaining unrecognized net transition asset being
amortized over 11 years (86,000) (122,000)
Unrecognized prior service costs 34,000 40,000
---------- -----------
Accrued pension cost $(298,000) $ (307,000)
---------- -----------
---------- -----------
</TABLE>

Significant assumptions used in determining net periodic pension cost and
related pension obligations are as follows:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Discount rate 8.00% 7.50%
Rate of compensation increase 4.00% 4.00%
Expected long-term rate of return on assets 8.25% 8.25%
</TABLE>
F-18

<PAGE>

DEFINED CONTRIBUTION STOCK OWNERSHIP AND DEFERRED COMPENSATION PLAN - The
Company has a defined contribution plan for all eligible employees, as
defined by the Plan. The Plan provides for employee cash contributions
ranging from two to ten percent of compensation and matching employer
contributions of Company stock at a rate of 25 percent of an employee's
contribution, limited to a maximum of six percent of a participant's
compensation. The Plan also provides for additional employer contributions
of Company stock at the discretion of the Company's Board of Directors.
The Company incurred $83,000, $60,000 and $36,000 for employer
contributions to the Plan in 1995, 1994 and 1993, respectively. In 1995,
1994 and 1993, the Company issued 12,000, 9,000 and 16,000 shares,
respectively, of its common stock to the Plan related to its prior year
contribution.

STOCK APPRECIATION RIGHTS - During fiscal 1992, the Company entered into a
stock appreciation rights agreement with its President. Under the terms of
the agreement, the President will receive a cash payment equal to the
appreciation in the market value of a fixed number of shares of the
Company's common stock if certain conditions are met.

The Company records the compensation expense related to this agreement at
the date that the amount of payment to be made can be reasonably estimated.
The Company recorded compensation expense of $90,000 and $85,000 related to
this agreement during fiscal 1995 and 1994, respectively. No compensation
expense was recorded relating to this agreement during fiscal 1993. No
additional compensation may be earned under this agreement.

12. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES - The Company has entered into operating lease agreements
for equipment, and manufacturing and office facilities. The minimum
noncancelable scheduled rentals under these agreements are as follows:
<TABLE>
<CAPTION>

YEAR ENDING SEPTEMBER 30:
-------------------------
FACILITIES EQUIPMENT TOTAL
---------- --------- -----
<S> <C> <C> <C>
1996 $919,000 $99,000 $1,018,000
1997 800,000 87,000 887,000
1998 791,000 54,000 845,000
1999 817,000 20,000 837,000
2000 705,000 4,000 709,000
Thereafter 341,000 - 341,000
---------- --------- ----------
Total $4,373,000 $ 264,000 $4,637,000
---------- --------- ----------
---------- --------- ----------
</TABLE>

Rent expense for 1995, 1994 and 1993 was $798,000, $755,000 and $694,000,
respectively.

LITIGATION - During fiscal 1992, the Company instituted an action against
Cybo Systems, Inc. ("Cybo"), alleging that Cybo breached certain agreements
between the parties with respect to the sale by the Company to Cybo of all
of the assets of its welding and cutting systems business.

In response to the action brought by the Company, Cybo asserted claims
against the Company alleging, among other things, breach of contract and
warranties, fraud, bad faith, trespass and conversion. Cybo is seeking
aggregate damages in excess of $10,000,000. The Company

F-19
<PAGE>

believes that Cybo's claims are without merit and plans to defend against
them vigorously. The Company's management, after discussion with legal
counsel, believes that the ultimate outcome of this matter will not have a
material adverse impact on the Company's consolidated financial position or
results of operations.

UNITED STATES GOVERNMENT CONTRACTS - Certain of the Company's contracts are
subject to audit by applicable United States governmental agencies. Until
such audits are completed, the ultimate profit on these contracts cannot be
finally determined; however, in the opinion of management, the final
contract settlements will not have a material adverse effect on the
Company's consolidated financial position or results of operations.

13. STOCKHOLDERS' EQUITY

PRIVATE EQUITY PLACEMENTS - During fiscal 1995, the Company entered into
an agreement with a group of investors. Under the agreement, the
Company received approximately $9,386,000, after expenses, in exchange
for the issuance of 1,110,000 shares of the Company's common stock. The
Company also issued warrants exercisable through June 2000 to purchase
approximately 68,000 shares of the Company's common stock at exercise
prices ranging from $8.75 to $9.00 per share.

During fiscal 1995, IDM entered into an agreement with a group of
investors and certain then existing stockholders. Under the agreement,
IDM received approximately $1,765,000 after expenses, in exchange for
46,447 shares of IDM's common stock (approximately 119,000 equivalent
shares of RVSI common stock). IDM used approximately $785,000 of the net
proceeds to satisfy certain notes payable and related accrued interest
and $60,000 of the net proceeds to satisfy certain accounts payable.

During fiscal 1994, the Company entered into an agreement with a group
of investors. Under the agreement the Company received approximately
$3,804,000, after expenses, in exchange for the issuance of 1,360,000
shares of the Company's common stock. The Company also issued warrants
exercisable through December 1999 to purchase 51,000 shares of the
Company's common stock at an exercise price of $3.75 per share.

During fiscal 1994, IDM entered into an agreement with an investor and
certain existing stockholders. Under the agreement, IDM received
approximately $491,000, after expenses, in exchange for 22,796 shares of
IDM's common stock (approximately 59,000 equivalent shares of RVSI
common stock). IDM used approximately $227,000 of the net proceeds to
satisfy certain notes payable and related accrued interest.

WARRANTS ISSUED FOR SERVICES RENDERED - During fiscal 1995, the Company
issued warrants under certain agreements granting the holders thereof
the right through July 1999 to purchase up to approximately 82,000
shares of the Company's common stock at exercise prices ranging from
$5.81 to $23.38 per share as compensation for professional services
rendered. The Company recorded an expense of approximately $92,000
related to the issuance of such warrants.

During fiscal 1994, the Company issued warrants for the purchase of
30,000 shares of the Company's common stock at an exercise price of
$4.69 per share as compensation for

F-20
<PAGE>

professional services rendered. The Company recorded an expense of
approximately $38,000 related to the issuance of such warrants.

During fiscal 1993, the Company issued warrants under certain agreements
granting the holders thereof the right through June 1998 to purchase up
to approximately 227,000 shares of the Company's common stock at
exercise prices ranging from $0.88 to $3.00 per share as compensation
for professional services rendered. The Company recorded an expense of
approximately $125,000 related to the issuance of such warrants.

WARRANT ISSUED IN SETTLEMENT OF LITIGATION - During fiscal 1993, the
Company issued warrants in connection with the settlement of a lawsuit
to purchase up to 25,000 shares of the Company's common stock at an
exercise price of $4.37 per share. The expiration date of such warrants
is November 1, 1996. The Company recorded an expense of approximately
$25,000 related to the issuance of such warrants.

WARRANTS EXERCISED - During fiscal 1995, the Company received
approximately $492,000 in connection with the issuance of approximately
324,000 shares of its common stock upon the exercise of warrants to
purchase such shares at prices ranging between $1.00 and $4.38 per
share.

During fiscal 1994, the Company received approximately $270,000 in
connection with the issuance of approximately 243,000 shares of its
common stock upon the exercise of warrants to purchase such shares at
prices between $0.88 and $4.38 per share.

WARRANTS OUTSTANDING - As of September 30, 1995, there were warrants
outstanding to purchase approximately 1,198,000 shares of the Company's
common stock with exercise prices ranging between $1.00 and $23.38 per
share.

STOCK OPTION PLANS - The Company has four stock option plans (the 1977,
1982, 1987 and 1991 plans) which provide for the granting of options to
employees or directors at prices and terms as determined by the Board of
Directors' Stock Option Committee (the "Committee"). With respect to
the 1977 and 1987 plans, option prices may not be less than the fair
market value at date of grant. Any excess of the fair market value of
shares under option at the date of grant over the exercise price is
charged to operations over the period in which the stock options vest.
All options issued by the Company to date have exercise prices which
were equal to market value of the Company's common stock at the date of
grant. No new options may be granted under the 1977 and 1982 plans.

F-21
<PAGE>

The following table sets forth summarized information concerning the
Company's stock options:
<TABLE>
<CAPTION>

NUMBER OF EXERCISE
SHARES PRICE RANGE
---------- ---------------
<S> <C> <C>
Options outstanding for shares of common stock at October 1, 1992 1,475,862 $0.53 - $38.72
Granted 471,486 0.88 - 9.29
Canceled or expired (111,472) 0.53 - 17.43
Exercised (21,528) 0.53 - 1.44
--------- -------------
Options outstanding for shares of common stock at September 30, 1993 1,814,348 0.53 - 38.72
Granted 305,074 3.63 - 15.06
Canceled or expired (32,285) 0.53 - 21.51
Exercised (335,982) 0.53 - 17.43
--------- -------------
Options outstanding for shares of common stock at September 30, 1994 1,751,155 0.53 - 38.72
Granted 246,699 4.25 - 22.50
Canceled or expired (52,924) 0.53 - 17.43
Exercised (380,574) 0.53 - 17.43
--------- -------------
Options outstanding for shares of common stock at September 30, 1995 1,564,356 $0.53 - $38.72
--------- -------------
--------- -------------
Options exercisable at September 30, 1995 888,492
---------
---------
Shares reserved for issuance at September 30, 1995 2,140,021
---------
---------

</TABLE>

14. SEGMENT AND PRINCIPAL CUSTOMER INFORMATION

For the purposes of segment reporting, management considers the Company to
operate in one industry, the machine vision industry.

During 1995, revenues from a single customer represented 16 percent of
total revenues. No other customer accounted for more than 10 percent of
total revenues for fiscal 1995, 1994 and 1993.

Foreign export sales accounted for 64 percent, 41 percent and 52 percent
of the Company's revenues in fiscal 1995, 1994 and 1993, respectively.

The Company's domestic and foreign export sales during the years ended
September 30, 1995, 1994 and 1993 are set forth below:

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
North America $23,727,000 $28,034,000 $19,485,000
Asia/Pacific Rim 34,133,000 17,528,000 15,959,000
Europe 7,400,000 2,277,000 4,196,000
----------- ----------- -----------
Total $65,260,000 $47,839,000 $39,640,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

15. SUBSEQUENT EVENT
On November 20, 1995, the Company obtained a revolving line of credit from
a bank that provides for maximum borrowings of $6,000,000. The agreement
expires on January 31, 1999. Borrowings under the agreement are secured by
all accounts receivable of the Company and will bear interest at the
adjusted LIBOR rate, as defined, plus two percent. The Company will pay a
commitment fee of one quarter of one percent per annum on any unused
portion of the credit facility. The terms of the agreement, among other
matters, require the Company to maintain certain tangible net worth, debt
to equity, working capital, and earnings before depreciation and
amortization to long-term debt ratios and restrict the payment of cash
dividends.
* * * * * * *

F-22

<PAGE>

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses in connection with
the offering described in the Registration Statement:

<TABLE>
<S> <C>
Registration Fee. . . . . . . . . . . . . . . . . . . . . . . . . $ 2,869.57
Accounting Fees and Expenses. . . . . . . . . . . . . . . . . . . 15,000.00
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 3,500.00
Printing and Reproduction . . . . . . . . . . . . . . . . . . . . 1,500.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 130.43
-----------
Total Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,000.00
-----------
-----------
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article SEVENTH of the Certificate of Incorporation of Robotic Vision
Systems, Inc. (the "Registrant") provides with respect to the indemnification
of directors and officers that the Registrant shall indemnify to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law, as
amended from time to time, each person that such Section grants the Registrant
power to indemnify. Article TENTH of the Certificate of Incorporation of the
Registrant also provides that no director shall be liable to the corporation
or any of its stockholders for monetary damages for breach of fiduciary duty
as a director, except with respect to (1) a breach of the director's duty of
loyalty to the corporation or its stockholders, (2), acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (3) liability under Section 174 of the Delaware General Corporation Law
or (4) a transactions from which the director derived an improper personal
benefit, it being the intention of the foregoing provision to eliminate the
ability of the corporation's directors to the corporation or its stockholders
to the fullest extent permitted by Section 102(b)(7) of Delaware General
Corporation Law, as amended from time to time.

Section 145 of Delaware Corporation Law provides, inter alia, that to
the extent a director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding, whether civil, criminal, administrative or investigative or in
defense of any claim, issue, or matter therein (hereinafter, a "Proceeding"),
by reason of the fact that he is or was a director, officer, employee or agent
of a corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise (collectively an "Agent"
of the corporation), he shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.

II-1

<PAGE>

Section 145 also provides that a corporation may indemnify any person
who was or is a party or is threatened to be made a party to any threatened
Proceeding by reason of the fact that he is or was an Agent of the corporation,
against expenses (including attorney's fees) judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided, however, that
in an action by or in the right of the corporation, the corporation may not
indemnify such person in respect of any claim, issue, or matter as to which he
is adjudged to be liable to the corporation unless, and only to the extent
that, the Court of Chancery or the court in which such proceeding was brought
determines that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is reasonably entitled to indemnity.

ITEM 16. EXHIBITS

<TABLE>
<S> <C>
5 Opinion of Parker Duryee Rosoff & Haft
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of Arthur Andersen LLP
23(c) Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5
hereof)

</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(7) That for the purpose of determining any liability under the Securities
Act of 1933, as amended (the "Securities Act"), each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(8) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.

(9) To remove from registration any means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.

(10) That, for purposes of determining any liability under the Securities
Act, each filing of Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that is incorporated by reference in the Registration

II-2

<PAGE>

Statement, shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to Item 15 of this Part II to the Registration Statement,
or otherwise, Registrant 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. In the
event that a claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a director, officer
or controlling person of Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against the public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

II-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Hauppauge, and State of New York, on the 12th
day of January, 1996.

ROBOTIC VISION SYSTEMS, INC.

By: /S/PAT V. COSTA
------------------------
Pat V. Costa
President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Pat V. Costa and Robert H. Walker, and each of
them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

<S> <C> <C>
SIGNATURE TITLE DATE
--------- ----- ----

Chairman of the
/s/Pat V. Costa Board, President and
- ----------------------- Director (Principal January 12, 1996
Pat V. Costa Executive Officer)

II-4

<PAGE>

Executive Vice
President,
Secretary/Treasure
and Director
/s/Robert H. Walker (Principal Financial January 12, 1996
- ----------------------- Officer and Principal
Robert H. Walker Accounting Officer

/s/Howard Stern Senior Vice President
- ----------------------- and Director January 12, 1996
Howard Stern

- ----------------------- Director
Donald F. Domnick

/s/Jay M. Haft
- ----------------------- Director January 12, 1996
Jay M. Haft

- ----------------------- Director
Frank A. DiPietro

- ----------------------- Director
Mark J. Lerner

/s/Ofer Gneezy
- ----------------------- Director January 12, 1996
Ofer Gneezy

- ----------------------- Director
Donald J. Kramer

</TABLE>

II-5

<PAGE>

EXHIBIT 5

January 12, 1996

Robotic Vision Systems, Inc.
425 Rabro Drive East
Hauppauge, New York 11788

Re: Registration Statement on Form S-3
Under the Securities Act of 1933

Ladies and Gentlemen:

In our capacity as counsel to Robotic Vision Systems, Inc., a Delaware
corporation (the "Company"), we have been asked to render this opinion in
connection with a Registration Statement on Form S-3, being filed
contemporaneously herewith by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Registration
Statement"), covering an aggregate of 369,856 shares of Common Stock, $.01
par value (the "Common Stock"), which have been included in the Registration
Statement for the respective accounts of the several persons identified in
the Registration Statement as Selling Stockholders.

In that connection, we have examined the Certificate of Incorporation and
the By-Laws of the Company, both as amended to date, the Registration
Statement, corporate proceedings of the Company relating to the issuance of
the Common Stock and such other instruments and documents as we have deemed
relevant under the circumstances.

In making the aforesaid examinations, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies
furnished to us as original or photostatic copies. We have also assumed that
the corporate records furnished to us by the Company include all corporate
proceedings taken by the Company to date.

Based upon and subject to the foregoing, we are of the opinion that:

(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware.

<PAGE>

Robotic Vision Systems, Inc.
January 12, 1996
Page 2

(2) The Common Stock has been duly and validly authorized and issued
and is fully paid and non-assessable.

We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Opinion" in the prospectus forming a part of the Registration
Statement.

Very truly yours,

PARKER DURYEE ROSOFF & HAFT

By: /s/ Ira Roxland
-----------------------------
A Member of the Firm

<PAGE>

EXHIBIT 11

ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES

FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
COMPUTATION OF PER SHARE AMOUNTS

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
PRIMARY:
Net income $ 8,833,000 $ 3,681,000 $ 1,161,000
Income related to the assumed purchase of U.S.
government securities (net of income taxes) - - 229,000
----------- ----------- -----------
Adjusted net income $ 8,833,000 $ 3,681,000 $ 1,390,000
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of common shares 13,796,000 12,573,000 11,202,000

Assumed number of shares issued
from common share equivalents 2,403,000 2,020,000 2,548,000
----------- ----------- -----------
Weighted average number of common and
common equivalent shares 16,199,000 14,593,000 13,750,000
----------- ----------- -----------
----------- ----------- -----------
Net income per share:
Primary $ 0.55 $ 0.25 $ 0.10
----------- ----------- -----------
----------- ----------- -----------

FULLY DILUTED:
Net income $ 8,833,000 $ 3,681,000 $ 1,161,000
Income related to the assumed purchase of U.S.-
government securities (net of income taxes) - - 149,000
----------- ----------- -----------
Adjusted net income $ 8,833,000 $ 3,681,000 $ 1,310,000
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of common shares 13,796,000 12,573,000 11,202,000

Assumed number of shares issued
from common share equivalents 2,776,000 2,222,000 2,548,000
----------- ----------- -----------
Weighted average number of common and
common equivalent shares 16,572,000 14,795,000 13,750,000
----------- ----------- -----------
----------- ----------- -----------
Net income per share:
Fully diluted $ 0.53 $ 0.25 $ 0.10
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

NOTE: The effect of options and warrants was calculated using the modified
treasury stock method for the years ended September 30, 1994 and 1993.

<PAGE>
EXHIBIT 23(a)

INDEPENDENT AUDITOR'S CONSENT

We consent to the use in this Registration Statement of Robotic Vision
Systems, Inc. on Form S-3 of our report dated December 15, 1995 on the
supplemental consolidated financial statements of Robotic Vision Systems,
Inc. as of September 30, 1995 and 1994 and for each of the three years in the
period ended September 30, 1995, appearing in the Prospectus, which is part
of this Registration Statement.

We also consent to the incorporation by reference in this Registration
Statement of Robotic Vision Systems, Inc. on Form S-3 of our report dated
December 8, 1995, appearing in the Annual Report on Form 10-K of Robotic
Vision Systems, Inc. for the year ended September 30, 1995, relating to the
financial statements of International Data Matrix, Inc. as of September 30,
1995 and December 31, 1994 and for the nine months ended September 30, 1995
and the year ended December 31, 1994, appearing in the Current Report on
Form 8-K/A-1 dated October 23, 1995 of Robotic Vision Systems, Inc. and to
the incorporation by reference of our report dated February 11, 1994,
relating to the financial statements of Acuity Imaging, Inc. (formerly
Automatix Incorporated) as of December 31, 1993 and for each of the two years in
the period ended December 31, 1993, appearing in the Current Report on Form 8-K
dated October 3, 1995 of Robotic Vision Systems, Inc.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

/s/DELOITTE & TOUCHE LLP

Jericho, New York
January 8, 1996

<PAGE>

Exhibit 23(b)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated November 6, 1995 covering the audited financial statements of Acuity
Imaging, Inc. as of September 30, 1995 and December 31, 1994 and for the years
then ended, and our report dated February 4, 1994 covering the audited
financial statements of Itran Corporation as of December 31, 1993 and for the
year then ended included in or made a part of this registration statement. We
also hereby consent to the incorporation by reference in this registration
statement of our report dated November 6, 1995 covering the audited financial
statements of Acuity Imaging, Inc. as of September 30, 1995 and December 31,
1994 and for the years then ended, and our report dated February 4, 1994
covering the audited financial statements of Itran Corporation as of
December 31, 1993 and for the year then ended, included in Robotic Vision
Systems, Inc.'s Form 10-K, for the year ended September 30, 1995 and our report
dated February 13, 1995 (except for the matters discussed in Notes 7 and 13, as
to which the dates are July 19, 1995 and July 11, 1995, respectively) included
in Robotic Vision Systems, Inc.'s Form 8-K dated October 3, 1995 and to all
references to our Firm included in this registration statement.

ARTHUR ANDERSEN LLP

Boston, Massachusetts
January 8, 1996