Rule 424(b)(3)
SEC No. 33-59963
Supplement to Prospectus
September 1, 1995
LARSON DAVIS INCORPORATED
THIS COMPREHENSIVE SUPPLEMENT IS A PART OF AND SHOULD BE READ IN
CONJUNCTION WITH THE PROSPECTUS OF LARSON DAVIS INCORPORATED (THE
"COMPANY") DATED AUGUST 1, 1995 (THE "PROSPECTUS").
This comprehensive supplement incorporates and supersedes the
previous supplement to the Prospectus dated August 16, 1995.
Capitalized terms used but not defined herein have the same
meaning as set forth in the Prospectus.
License Agreement
The Company has executed a definitive agreement with Harris Miller
Miller & Hanson, Inc. ("HMMH"), pursuant to the agreement in
principle described in the Prospectus. Under the terms of the
agreement the Company has granted an exclusive license to HMMH to
use the Company's ANOMS software in the airport noise and operations
monitoring industry. HMMH has also assumed the management and
implementation of the Company's current airport noise monitoring
contracts and pending bid proposals.
HMMH paid a one-time royalty fee to the Company of $125,000 on
closing, will pay a license fee of $12,500 per month, or an aggregate
of $150,000 per year, to the Company, and will pay a royalty of 2.5%
to 4% of the total revenues generated by HMMH from the airport noise
and operations monitoring business. HMMH will bid and pursue future
airport noise monitoring contracts and has agreed to use its best
efforts to specify use of the Company's hardware in future contracts.
The Company has agreed to provide such hardware at a 25% discount
from its standard pricing.
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In conjunction with this agreement, the Company will assign to HMMH
a contract recently awarded to the Company by the City of Chicago
for monitoring systems to be installed at O'Hara and Midway airports,
subject to approval by the City of Chicago. It is anticipated that
the Company will provide a estimated $1,000,000 to $1,200,000 of sound
monitoring equipment and services in connection with the City of
Chicago contract.
The term of the agreement is for a period of ten years, although HMMH
has the option to terminate (and relinquish its license rights) at any
time after three years and the option to extend the term for an
additional five years.
Warrant Exercise
The Company has received an aggregate of $1,234,615 from the exercise
of $2.50 Warrants to acquire 493,846 shares of Common Stock. The
Company agreed to grant the holders of the $2.50 Warrants additional
warrants to acquire the same number of shares at $4.50 per share of
Common Stock (the "$4.50 Warrants"), if they exercised the $2.50
Warrants on or before August 31, 1995, and the Company anticipates
that the holder of the remaining $2.50 Warrants to acquire 6,154
shares of Common Stock may also exercise his rights. As disclosed
in the Prospectus, the Company has agreed to pay 6% of the amount
received, or $74,077 ($75,000 if all $2.50 Warrants are exercised),
to Neil Sullivan and Micahel Cunniff as a finder's fee. The Company
has also agreed to pay Messrs. Sullivan and Cunniff 3% of the amount
it receives on the exercise of the $4.50 Warrants. The holders of the
$4.50 Warrants have demand registration rights similar to those of the
$2.50 and $3.50 Warrants and the Company is currently preparing a
registration statement for filing with the Securities and Exchange
Commission with respect to the resale of the Common Stock to be issued
on exercise of the $4.50 Warrants.
Additional Warrants
The Company has also reached a memorandum of understanding with the
holders of the $3.50 and $4.50 Warrants (who are all Selling
Shareholders) that if the $3.50 Warrants are exercised by October 1,
1995, and the $4.50 Warrants exercised by November 1, 1995, the
Company will issue, pro rata in proportion to the number of $3.50
and $4.50 Warrants exercised, additional warrants to acquire up to
500,000 shares at $4.50 per share of Common Stock and 1,000,000
shares at $5.75 per share of Common Stock. These warrants will be
exercisable for a period of two years subsequent to their issuance
and will contain demand registration rights substantially similar
to the rights associated with the $2.50, $3.50, and $4.50 Warrants.
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Plan of Distribution
On a trade date of August 16, 1995, Laura Huberfeld and Naomi Bodner,
Selling Shareholders named in the Prospectus, each sold 17,500 shares
of the Common Stock of the Company to Bear, Stearns, & Co., Inc.,
which acted as principal in this transaction. Such shares were or
will be resold by Bear, Stearns & Co., Inc., as part of its normal
market making activity.
