Rule 424(b)(3)
SEC No. 33-59963
Supplement to Prospectus
September 8, 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 supplements to the Prospectus dated August 16, and
September 1, 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 $1,250,000 from the
exercise of all of the $2.50 Warrants and has issued the 500,000
shares of Common Stock subject to such Warrants. 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") in consideration of the
early exercise of the $2.50 Warrants. As disclosed in the
Prospectus, the Company has agreed to pay 6% of the amount
received, or $75,000, 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.
