As Filed: September 17, 1997 SEC File No. 333-29923
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 2 to
Registration Statement on Form S-3
Under the Securities Act of 1933
LARSON DAVIS INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada 87-0429944
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1681 West 820 North, Provo, Utah 84601 (801) 375-0177
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Dan J. Johnson, 1681 West 820 North, Provo, Utah 84601 (801) 375-0177
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Keith L. Pope, Esq.
Kruse, Landa & Maycock, L.L.C.
Eighth Floor, Bank One Tower
50 West Broadway
Salt Lake City, Utah 84101-2006
Telephone: (801) 531-7090
Telecopy: (801) 531-7091
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this registration statement.
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, 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered(1) Per Unit(2) Price Registration Fee
- ---------------------------------- ------------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock(3) 4,090,999 $8.50 $34,773,492 10,538(4)
</TABLE>
[FN]
(1) There are also registered pursuant to rule 416 such additional number of
securities as may be issuable under the antidilution provisions of the
Company's warrants to purchase common stock.
(2) Estimated solely for purposes of calculating the registration fee.
(3) The price of the Common Stock is based on the closing price for the Common
Stock of $8.50 as reported by Nasdaq on June 18, 1997 (rule 457(c)).
(4) Previously paid.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
section 8(a), may determine.
Preliminary Prospectus
4,090,999 Shares
LARSON DAVIS INCORPORATED
Common Stock
This Prospectus relates to the public offering by certain shareholders (the
"Selling Shareholders") of (i) 1,715,832 shares of common stock, par value
$0.001 per share (the "Common Stock"), of LarsonoDavis Incorporated (the
"Company") issued or issuable on the exercise of outstanding warrants to
purchase shares of Common Stock at a purchase price of $5.30 per share (the
"$5.30 Warrants"); (ii) 384,335 shares of Common Stock issuable on the exercise
of outstanding warrants to purchase shares of Common Stock at $6.25 per share
(the "$6.25 Warrants"); (iii) 100,000 shares of Common Stock issuable on the
exercise of outstanding options to purchase shares of Common Stock at a purchase
price of $4.75 per share of Common Stock (the "$4.75 Options"); (iv) 1,715,832
shares of Common Stock issuable on the exercise of warrants to be issued to
purchase shares of Common Stock at a purchase price of $8.75 per share (the
"$8.75 Warrants"); and (v) 175,000 shares of Common Stock currently outstanding
or issuable on the exercise of options granted pursuant to an employee benefit
plan of the Company (the "Employee Options" and, together with the $4.75
Options, the "Options"). (See "SELLING SHAREHOLDERS" and "PLAN OF
DISTRIBUTION.")
The Common Stock is quoted on the Nasdaq National Market ("Nasdaq National
Market") under the trading symbol "LDII." The last price for the Common Stock
as of September 15, 1997, as reported by Nasdaq National Market, was $8.25.
This Offering Involves Certain Risks. (See "RISK FACTORS.")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE OR OTHER
REGULATORY AUTHORITY, NOR HAS THE COMMISSION OR ANY
STATE OR OTHER REGULATORY AUTHORITY PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting Discounts Proceeds to Selling
Price to Public(1) and Commissions(2) Shareholders(3)
------------------ ---------------------- -------------------
<S> <C> <C> <C>
Per Share $8.25 - $8.25
Total $33,750,741 - $33,750,741
</TABLE>
[FN]
(1) The price per share for the securities offered by the Selling Shareholders
is estimated at the last price for the Common Stock of $8.25 per share as
reported by Nasdaq National market on September 15, 1997.
(2) It is anticipated that the securities being sold by the Selling
Shareholders will be sold in privately negotiated transactions or through
broker-dealers in individual transactions in which normal commissions and
other charges will be made by the broker-dealer. There is no agreement
between any broker-dealer and the Company with respect to such sales. (See
"PLAN OF DISTRIBUTION.")
(3) All amounts received on the sale of the Common Stock will be received by
the Selling Shareholders, and there will be no proceeds to the Company.
The Company anticipates that it will incur costs related to this offering
of approximately $42,500. (See "PLAN OF DISTRIBUTION.")
The date of this Prospectus is , 1997.
The Selling Shareholders may offer the Common Stock through or to
securities brokers or dealers designated by them in the trading market for the
Common Stock or in other transactions negotiated by the Selling Shareholders.
Any such sale of Common Stock by Selling Shareholders must be accompanied by, or
follow the delivery of, a Prospectus that is part of a current registration
statement relating to the Common Stock being offered, unless a Selling
Shareholder elects to rely on Rule 144 or another exemption from the
registration requirements in connection with a particular transaction. The
Selling Shareholders and any broker, dealer, or agent that participates with the
Selling Shareholders in the sale of the Common Stock offered hereby may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commissions or discounts received by
them and any profit on the resale of the Common Stock purchased by them may be
deemed to be underwriting commissions under the Securities Act. (See "SELLING
SHAREHOLDERS" and "PLAN OF DISTRIBUTION.")
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Shareholders. In connection with this offering, the Company
estimates that it will incur costs of approximately $42,500 for filing and
listing fees, legal, accounting, printing, and other items. Any separate costs
of the Selling Shareholders will be borne by them. Commissions or discounts
paid in connection with the sale of securities will be paid by the Selling
Shareholders and will be determined by agreement between the Selling
Shareholders and the broker-dealer through, or to which, the securities are to
be sold and may vary depending on the broker-dealers' commission or mark up
schedule, the size of the transaction, and other factors. (See "PLAN OF
DISTRIBUTION.")
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's following reports are hereby incorporated by reference into this
Prospectus:
. Annual report on Form 10-KSB for the fiscal year ended June 30, 1996.
. Transition Report on Form 10-K for the six months ended December 31,
1996, as amended September ___, 1997.
. Quarterly reports on Form 10-Q for the quarters ended September 30,
1996, March 31, 1997, as amended September ___, 1997, and June 30, 1997,
as amended September ___, 1997.
. Interim report on Form 8-K dated January 23, 1997.
. The description of the Company's Common Stock included in its
registration statement of Form 8-A, SEC Number 0-17020, effective March
4, 1997.
In addition, all documents subsequently filed by the Company pursuant to
sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the termination of the offering described in this Prospectus
shall be deemed to be incorporated into this Prospectus by this reference.
Any statement contained in a document incorporated or deemed to be
incorporated herein shall be deemed to be modified or superseded for purpose of
this Prospectus to the extent a statement contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such material can be inspected and copied at the public
reference facilities of the Commission in Washington, D.C., and certain regional
offices. Copies can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at the prescribed rates. (See "ADDITIONAL
INFORMATION AND INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.")
The Company will provide, without charge, a copy of the information
incorporated in this Prospectus by reference, including copies of the periodic
reports of the Company filed with the Commission (not including the exhibits
thereto), to anyone requesting a copy. Requests should be directed to Deanna
Collins, Administrative Assistant, LarsonoDavis Incorporated, 1681 West 820
North, Provo, Utah 84601, telephone (801) 375-0177.
No person is authorized to provide any information or to make any
representation not contained in this Prospectus and any such information or
representation made or given must not be relied on as having been authorized by
the Company. Neither the delivery of this Prospectus nor any sale under this
Prospectus shall, under any circumstance, create any implication that the
information in this Prospectus is current as of such date.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by detailed information
and financial statements appearing elsewhere in this Prospectus and the periodic
reports of the Company filed with the Commission that are incorporated into this
Prospectus by reference.
The Company
The Company is engaged in the design, development, manufacturing, and
marketing of analytical instruments. The Company has been in the business of
developing, manufacturing, and marketing precision acoustical and vibration
instrumentation since 1981. The Company is currently attempting to
commercialize two additional families of products, its mass spectrometry related
instruments (the "Sensar Technology"), and its polymer analysis technology (the
"CrossCheck Technology"). In 1996, the Company initiated sales of its time-of-
flight mass spectrometer, the TOF 2000, to the semiconductor industry through an
exclusive marketing agreement with a major distributor to this market. The
Company is currently refining other related technologies to design low-cost,
high-speed, mass spectrometry-based data acquisition and digital processing
products for potential applications in other industries.
The Company is dedicating significant amounts to technological research,
product development, and marketing strategies. The Company believes that the
patents underlying its technologies represent significant advances on existing
products in the analytical instrumentation market and that it can design and
produce instruments that are technically superior to those available today.
However, much of the potential success of the Company depends on the successful
development of commercial products, the existence or creation of a market demand
for any products that may be developed, the ability of the Company to achieve
significant market penetration for any such products in several large markets,
and the ability of the Company to produce and market any such products on a
profitable basis. Such an effort requires a significant dedication of time,
expertise, and money, and there can be no assurance of ultimate success.
This Prospectus and the Company's reports filed with the Commission contain
certain forward looking statements and information relating to the Company and
its business that are based on the beliefs of management of the Company and
assumptions made concerning information then currently available to management.
Such statements reflect the views of management of the Company at the time they
are made and are not intended to be accurate descriptions of the future. The
discussion of the future business prospects of the Company is subject to a
number of risks and assumptions, including the completion of commercial products
within projected time frames, the market acceptance of products to be developed,
the ability of the Company to successfully address technical and manufacturing
problems in producing new products, the Company's ability to enter into
strategic alliances, joint ventures, or other collaborative arrangements with
established industry partners, the success of the marketing efforts of the
Company and the entities with which it has agreements, and the ability of the
Company to obtain the necessary financing to successfully complete its goals.
Should one or more of these or other risks materialize or if the underlying
assumptions of management prove incorrect, actual results of the Company may
vary materially from those described in the forward looking statements. The
Company does not intend to update these forward looking statements, except as
may occur in the regular course of its periodic reporting obligations.
The Company has three active wholly-owned subsidiaries, Larson Davis
Laboratories ("LDL"), LarsonoDavis, Ltd. ("LTD"), and Sensar Corporation
("Sensar"). Unless the context otherwise requires, when used herein, the term
"Company" refers to Larson Davis Incorporated and its subsidiaries.
The Company's principal executive offices are located at 1681 West 820
North, Provo, Utah 84601. The Company's telephone number at that location is
(801) 375-0177.
The Offering
This offering relates to the sale by the Selling Shareholders of up to
4,090,999 shares of Common Stock, either currently issued and outstanding or
issuable on the exercise of the $5.30, $6.25 and $8.75 Warrants (collectively,
the "Warrants") and the Options.
The Warrants and $4.75 Options were, or will be, issued in private
placements (the "Private Placements") to a limited number of investors. The
Private Placements were, and will be, conducted in reliance on exemptions from
the registration requirements of the Securities Act and, as such, the Warrants
and $4.75 Options issued in the Private Placements and any Common Stock that may
be issued on exercise of the Warrants or $4.75 Options are restricted securities
and are not transferable, except pursuant to a registration statement or an
available exemption from registration.
This Prospectus is part of a registration statement filed to meet the
Company's contractual obligation to permit the sale by the Selling Shareholders
of the Common Stock to be issued on exercise of the Warrants and $4.75 Options.
(See "PLAN OF DISTRIBUTION.")
<TABLE>
<CAPTION>
<S> <C>
Securities offered by the Selling Shareholders 4,090,999 shares of Common
Stock. (See "PLAN OF
DISTRIBUTION.")
Common Stock outstanding before offering 11,652,714 shares(1)
Common Stock outstanding after offering 14,936,719 shares(2)
No Net Proceeds The Company will not receive
any proceeds from the sale of
the Common Stock by the
Selling Shareholders. (See
"USE OF PROCEEDS.")
Nasdaq Symbol LDII
</TABLE>
[FN]
(1) Does not include (i) options to purchase 2,861,841 shares of Common Stock
at exercise prices ranging from $2.00 to $10.50 per share with an average
weighted exercise price of $5.32 per share; (ii) the Options; or (iii) the
Warrants. (See "PRINCIPAL SHAREHOLDERS" and "PLAN OF DISTRIBUTION.")
(2) Does not include options to purchase 2,842,732 shares of Common Stock at
exercise prices ranging from $2.00 to $10.50 per share with an average
weighted exercise price of $5.34 per share.
Use of Proceeds
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Shareholders. If the Selling Shareholders elect to exercise all of
the outstanding Warrants and Options, for which there is no obligation, the
Company would receive gross proceeds of approximately $22,948,000. (See "USE OF
PROCEEDS.")
RISK FACTORS
The acquisition of the Common Stock involves certain risks. The following
factors, in addition to the other information and financial data set forth
elsewhere in this Prospectus or incorporated herein by reference, should be
considered carefully in evaluating the Company and its business before making an
investment in the Common Stock offered hereby.
The Company's Activities
Risks Inherent in the Development of Marketable Products. The Company's
current losses are partially the result of increased expenses associated with
the effort to develop commercial products based on the Company's acquired and
internally developed technology. Since September 30, 1995 (the fiscal quarter
immediately prior to the acquisition of Sensar Corporation), the Company's
research and development expenses have increased from an average of
approximately 14% of revenues to an average of approximately 34% of revenues.
Over the same period of time, selling, general, and administrative expenses have
increased from approximately 48% of revenues to approximately 56% of revenues.
While the Company has recently introduced some new products, it is anticipated
that the development effort will continue to require the expenditure of
significant amounts. The Company is currently budgeting approximately
$1,500,000 per quarter for this effort, although continuation is dependent
on adequate funds being available to the Company, of which no assurance can be
given. There can be no assurance that the technology of the Company can be
developed into marketable products that will be sufficiently successful to
recover these costs and the carrying value of the related technology. In the
event the Company is unable to develop sufficiently successful products, it may
be required to write the carrying value of the related technology reflected on
its balance sheets down and charge such reduction to current operations, thereby
increasing the losses of the Company.
Risks Associated With Delays in the Company's Development Efforts. The
Company has experienced delays in the development and introduction of marketable
products, both in its acoustics and vibration products and products based on
recently acquired technology. The introduction of several recent planned
acoustic and vibration products and its Jaguar Mass Spectrometer were delayed
by several months to approximately one year. As a result of such delays,
revenues from new products have been lower than anticipated. Continuing
delays in the introduction of products will result in ongoing losses until
such time as revenues from new products increase significantly. Such losses
may make it difficult or impossible for the Company to obtain the necessary
funding to continue its development effort.
Continuing Need for Additional Funds. The extent of the Company's
additional funding needs for development of its technology and expansion of its
business cannot currently be estimated, but it is likely that the interest of
the Company's shareholders will continue to be diluted as the Company seeks
funding through the sale of additional securities or through joint venture or
industry partnering arrangements. The operations of the Company have not
provided the capital necessary to meet the Company's funding requirements and
the Company does not anticipate that they will in the short-term. The cash
needs of the Company during the preceding two fiscal years to pay the costs of
its development, business acquisitions and dispositions, and operating losses
have been primarily met by the sale of equity securities. The Company received
net proceeds in excess of $1,600,000 and $9,300,000 from such sales in the years
ended June 30, 1995 and 1996, respectively, and in excess of $1,500,000 in the
six months ended December 31, 1996. Since December 31, 1996, the Company has
received gross proceeds of in excess of $4,000,000 from the exercise of
Warrants. There can be no assurance that this source of funds (or any other
source) will be available to the Company when required or, if available, that
such funds can be obtained on terms acceptable or favorable to the Company.
(See "Financial Statements" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" included in the Company's
transition report on Form 10-K for the six months ended December 31, 1996,
incorporated herein by reference.)
Continuing Significant Losses. The Company had a net loss of $1,479,468
and $2,822,547 for the three and six months ended June 30, 1997, $1,643,920 for
the six months ended December 31, 1996, and $1,706,248 and $311,617 for the
years ended June 30, 1996 and 1995, respectively. The Company expects continued
losses in the future. If the Company continues to experience ongoing operating
losses, this may adversely affect the Company's ability to obtain any additional
financing it may need in the future and may ultimately adversely affect the
Company's ability to continue as a going concern.
Risks Associated With Patent Protections. The technology recently acquired
by the Company is subject to various patents. These patents have primarily been
granted since 1990. None of the patents have been the subject of patent
litigation. Patents provide protection to the inventor for a limited time
(typically 17 to 20 years), require disclosure of the patented concept which may
permit others to accomplish the same end by different methods, and can be
challenged. To the extent that the Company is not able to successfully defend
its patents in the case of a challenge or it loses its patent protection, either
through the passage of time or the successful duplication of the result without
patent infringement, the Company would no longer be able to prevent competitors
from manufacturing and marketing products directly competitive to its proposed
products. Such a result may have a material adverse impact on the future of the
Company.
Dependence on Independent Representatives. The Company's products are
marketed through independent representatives. The Company does not have control
over the business of such representatives. The loss or business failure of one
or more of these representatives could have a material adverse impact on the
business of the Company.
Dependence on SAES Getters. The Company markets its TOF 2000 product to
the semiconductor industry primarily through SAES Getters S.p.A. ("SAES").
SAES did not meet its minimum sales requirements in 1996 and it is not
anticipated that it will meet these requirements in 1997. While the fact
of SAES to meet these requirements permits the Company to market the product
directly or to license it to another third-party, if SAES continues to not
meet its minimum sales requirements, this could adversely affect the future
prospects of the Company.
Dependence on Key Employees. The business of the Company is to some extent
dependent on its management and technical team and their substantial experience.
The loss of one or more of these individuals could result in adverse effects on
the Company's proposed activities. The Company does not maintain key man life
insurance on any of its employees for the benefit of the Company. (See
"DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT" included in the Company's
transition report on Form 10-K for the six months ended December 31, 1996,
incorporated herein by reference.)
Intense Competition. The development and marketing of precision analytical
instruments is highly competitive. Many of the Company's competitors have
greater financial resources, broader development programs, greater customer
recognition, and a greater number of managerial and technical personnel.
Because the Company's resources are limited and it has not established a
significant market share for its products, there can be no assurance that it
will be able to compete effectively. (See "BUSINESS: Competition" included in
the Company's transition report on Form 10-K for the six months ended December
31, 1996, incorporated herein by reference.)
Risks of International Sales. Sales outside the United States make up
a significant portion of the Company's revenues. Accordingly, the Company's
future results could be adversely affected by a variety of factors, including
changes in foreign currency exchange rates, changes in a specific country's
or region's political or economic conditions, trade protection measures,
import or export licensing requirements, the overlap of different tax
structures, unexpected changes in regulatory requirements, and natural
disasters.
Risk of Line of Credit Becoming Unavailable. The Company currently has
an operating line of credit of up to $3,000,000, subject to limitations
based on the levels of its qualified accounts receivable and inventory.
The Company was not in compliance with certain of the loan covenants
associated with this line of credit at June 30, 1997. However, the Company
obtained a waiver of all violations at that time and the parties subsequently
amended the loan covenants so that the Company is currently in compliance.
If the Company for any reason violates the loan covenants or other provisions
of the agreement in the future, it would need to obtain a waiver or the
lending institution could cancel the operating line of credit. If this line
of credit were not available, it could materially adversely affect the
Company.
Potential Adverse Effect of Future Charges Related to Capitalized Costs.
Included in the Company's balance sheets are product technology acquisition
costs, license rights, software development costs, and goodwill. Such costs are
capitalized and amortized over the estimated useful lives of the associated
assets, ranging from five to fifteen years. As of June 30, 1997, the Company
had intangible assets, net of accumulated amortization, with respect to these
items of $4,960,255. This amount will be expensed over the remaining
amortization periods and will consequently reduce earnings in future periods.
Additionally, the Company had a $2,756,784 long-term contractual arrangement
that is recognized as cash is received from royalties payable on technology
licensed by the Company. Although the Company currently expects that the royalty
stream will continue and its future operations will prove sufficiently
profitable to realize the recorded value of the underlying intangible assets,
there can be no assurance of this. (See "Financial Statements" included in the
Company's transition report on Form 10-K for the six months ended December 31,
1996, and quarterly report on Form 10-Q for the quarter ended June 30, 1997,
incorporated herein by reference.)
General Risks Relating to Offering
Potential Adverse Market Impact of Offering. This Prospectus relates to
the sale of up to 4,090,999 shares of Common Stock by the Selling Shareholders.
The Company will not receive any proceeds from these sales and has prepared this
Prospectus in order to meet its contractual obligations to the Selling
Shareholders. The shares that can be sold by the Selling Shareholders under
this Prospectus represent approximately 35% of the currently issued and
outstanding Common Stock. The sale of such a significant block of stock, or
even the possibility of its sale, may adversely affect the trading market for
the Common Stock and reduce the prices available in that market.
Risks Associated With the Potential Exercise of the Substantial Options and
Warrants Outstanding. The Company has issued and outstanding the Warrants and
Options and, in addition, options to purchase up to 2,842,732 shares of Common
Stock. Of this amount, 2,312,256 shares of Common Stock are subject to options
held by executive officers and directors with exercise prices ranging from
$2.0625 to $10.50 per share. The existence of such rights to acquire Common
Stock at fixed prices may prove a hindrance to future equity and debt financing
by the Company and the exercise of such rights will dilute the percentage
ownership interest of the stockholders of the Company and may dilute the value
of their ownership. The sale of the Common Stock pursuant to this Prospectus
and the possible future sale of Common Stock issuable on the exercise of other
outstanding rights could adversely affect the prevailing market price of the
Company's Common Stock. Further, the holders of the outstanding rights may
exercise them at a time when the Company would otherwise be able to obtain
additional equity capital on terms more favorable to the Company. (See "PLAN OF
DISTRIBUTION" and "SELLING SHAREHOLDERS.")
Potential for the Issuance of Additional Common Stock. The Company has an
authorized capital of 290,000,000 shares of Common Stock, par value $0.001 per
share, and 10,000,000 shares of Preferred Stock. As of September 15, 1997,
11,652,714 shares of Common Stock and no shares of Preferred Stock were issued
and outstanding, with an additional 6,126,737 shares of Common Stock reserved
for issuance on the exercise or conversion of the Warrants, Options, and other
outstanding rights to acquire Common Stock. The Company's board of directors
has authority, without action or vote of the shareholders, to issue all or part
of the authorized but unissued shares. Any such issuance will dilute the
percentage ownership of shareholders and may dilute the book value of the
Company's Common Stock.
Lack of Due Diligence Review. The Selling Shareholders reviewed certain
information concerning the Company, its business, and its proposed activities in
connection with their acquisition of the Warrants and Options. However, no
securities broker-dealer or other person has been engaged to perform any due
diligence or similar review of this offering or the Company on behalf of the
Selling Shareholders, persons who may purchase Common Stock in this offering, or
any other person.
Lack of Objective Standards in the Determination of Purchase and Exercise
Price. The terms of the Warrants and the Options were determined by
negotiations between the Company and the Selling Shareholders holding such
Warrants and Options. These negotiations took into account the history of, and
recent prices for, the Common Stock as quoted on Nasdaq, the business history
and prospects of the Company, an assessment by the Company's management, the
Company's need for capital, the number of securities to be offered, and the
general condition of the securities market. The prices at which the Selling
Shareholders may sell shares of Common Stock in this offering will be
individually negotiated or based on the market price for the Common Stock at the
time of the transactions. Such prices do not necessarily bear a relationship to
the assets, earnings, or book value of the Company or any other traditional
criteria of value. (See "MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS" included in the Company's transition report on Form 10-K for the six
months ended December 31,1996, incorporated herein by reference and "PLAN OF
DISTRIBUTION.")
No Dividends. The Company has not paid, and does not plan to pay,
dividends on its Common Stock in the foreseeable future, even if it were
profitable. (See "PLAN OF DISTRIBUTION.") Earnings, if any, are expected to be
used to advance the Company's activities and for general corporate purposes,
rather than to make distributions to shareholders.
Lack of Recent Shareholder Meetings. The Company currently has a
shareholders' meeting scheduled for June 25, 1997. Prior to that, the Company
had not held a meeting of its shareholders for the purpose of electing directors
or for any other purpose since 1992. Under Nevada law, the Company has been
required since inception to have an annual shareholders' meeting for the
election of directors, but has not done so recently because of the costs
involved in the preparation and mailing of required proxy materials and
conducting meetings. The Common Stock of the Company was recently admitted to
listing on the Nasdaq National Market which requires, among other things, that
the Company hold an annual meeting and distribute certain information, including
an annual report containing audited financial information and quarterly reports
containing unaudited financial information, to its shareholders. The Company
currently plans to meet these requirements. However, if it fails to do so, the
Company's shareholders would have to obtain such information from sources other
than the Company and the Company's Common Stock could be delisted from the
Nasdaq National Market which could adversely affect the liquidity of the market
for the Company's Common Stock and, potentially, the Company's ability to obtain
equity or debt based financing. In any year in which the Company has not held
or does not hold a shareholders' meeting, a shareholder may force the Company to
call such a meeting for the election of directors and such other purposes as may
come before the shareholders for consideration. Such a meeting could result in
a change in management.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
by the Selling Shareholders. The Company anticipates that it will incur costs
of approximately $42,500 in connection with the transactions described in this
Prospectus, including filing fees, transfer agent costs, printing costs, listing
fees, and legal and accounting fees. Certain of the Selling Shareholders have
recently provided the Company with an aggregate of $4,069,393 as the payment of
the exercise price of $5.30 Warrants they committed to exercise by January 31,
1997. These holders have agreed to exercise the remainder of the $5.30
Warrants, with an aggregate exercise price of $5,024,517, on or before the date
that is 90 days subsequent to the date the Registration Statement of which this
Prospectus forms a part is declared effective by the SEC. If they fail to do
so, the exercise price of all the $5.30 Warrants will be $6.25 per share. If
all of the Warrants and Options outstanding after the exercise of the $5.30
Warrants are subsequently exercised in order to sell all of the Common Stock
subject to this Prospectus, of which there is no assurance, the Company would
receive additional gross proceeds of approximately $17,923,000. To the extent
that net proceeds from the exercise of the Warrants and Options are received by
the Company, such proceeds will be used to fund the expansion of the business of
the Company, the development of the Sensar and CrossCheck Technology, and
general and administrative expenses.
PLAN OF DISTRIBUTION
Restricted Nature of Securities
The Warrants and $4.75 Options were issued in private placements and they,
together with any Common Stock issued on their exercise, are restricted
securities as that term is defined in the rules and regulations adopted under
the Securities Act. The Warrants, $4.75 Options, and Common Stock issued on the
exercise of the Warrants and $4.75 Options may not be transferred in the absence
of registration under the Securities Act or the availability of an applicable
exemption from the registration requirements of the Securities Act and
applicable state securities laws. The Common Stock to be issued on exercise of
the Employee Options will be issued pursuant to a registration statement on Form
S-8 and, as such, will not be restricted securities. However, as a result of
the status of the holders of such stock, they would be required to sell the
stock pursuant to Rule 144 or some other applicable exemption from the
registration requirements of the Securities Act. The Registration Statement of
which this Prospectus forms a part is filed to register the sale by the Selling
Shareholders of the Common Stock issued and to be issued on exercise of the
Warrants and Options.
Sale of Common Stock by Selling Shareholders
The Common Stock may be sold from time to time by the Selling Shareholders
or by pledgees, transferees, or other successors in interest, on the Nasdaq
National Market (or such other exchange on which the securities are listed at
the time of sale) at prices and terms then prevailing or related to the then
current market price, or directly to purchasers in privately negotiated
transactions. The Common Stock may be sold by various methods, including, but
not limited to, (a) directly to a purchaser in a privately negotiated
transaction; (b) to securities brokers or dealers as principals; (c) in market
transactions through broker-dealers that may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders and/or the
purchasers of the Common Stock for whom they may act as agent; (d) in block
transactions in which a broker or dealer may act as an agent of the Selling
Shareholder or may position and resell all or a portion of the block as a
principal in order to facilitate the transaction; (e) in connection with a
foreclosure or other transaction by the holder of a security interest in the
stock; or (f) in transactions exempt from the registration requirements of the
Securities Act, including transactions made in reliance on Rule 144. The
Selling Shareholders, and any dealers or brokers that participate in the
distribution of the Common Stock, may be deemed to be "underwriters" as that
term is defined in the Securities Act, and any profit on the sale of Common
Stock by them and any discounts, commissions, or concessions received by any
such dealers or brokers, may be deemed to be underwriting discounts and
commissions under the Securities Act. The Company has no understandings or
arrangements with broker-dealers in connection with such sales.
The Common Stock may be sold by the Selling Shareholders from time to time
in one or more transactions at a fixed price, which may be changed, or at
varying prices determined at the time of sale, or at negotiated prices. The
Company will pay the expenses of this offering incident to the registration of
the offer and sale of the Common Stock to the public, other than commissions and
discounts of broker-dealers through which such Common Stock is sold. The
Company does not intend to enter into any agreement with any securities dealer
concerning solicitation of offers to purchase the Common Stock.
Determination of Offering Price
With respect to the shares of Common Stock offered for sale by the Selling
Shareholders, such shares shall be sold from time to time at such prices as the
Selling Shareholders shall determine may be in their best interests and at which
a willing buyer can be found. Such prices may not be related to the assets,
earnings, or book value of the Company or any other recognized criteria of
value.
There can be no assurance that the Selling Shareholders will sell any or
all of the Common Stock subject to this Prospectus.
SELLING SHAREHOLDERS
The following table sets forth certain information, as of the date of this
Prospectus, with respect to the Selling Shareholders and the shares of Common
Stock to be sold by them. The percentage calculations for the Warrants and
Options include the Common Stock held by the indicated Selling Shareholders and
assume the exercise of all of the Warrants or Options, as appropriate, held by
that Selling Shareholder. The percentage calculations for the number of shares
subject to Warrants, Options, and the total number of shares held by each
Selling Shareholder gives effect to the purchase of Common Stock on the exercise
of the respective Warrants and/or Options held by such Selling Shareholder.
Except as specifically noted, none of the Selling Shareholders hold securities
of the Company that are not being sold pursuant to this Prospectus.
The Selling Shareholders named below who hold Warrants and $4.75 Options
confirmed at the time they acquired the Warrants or the $4.75 Options that such
securities were acquired for investment purposes only and without a view toward
their resale and acknowledged the existence of restrictions on resale applicable
to such securities. Such Selling Shareholders can sell such securities only in
limited circumstances. The Company is not aware of any intention by any Selling
Shareholder to sell the Warrants or $4.75 Options prior to their conversion or
exercise. This offering relates only to the sale of shares of Common Stock held
or to be held by the Selling Shareholders named in the following table on
exercise of the Warrants or $4.75 Options. If a Selling Shareholder sells the
Warrants or $4.75 Options held by such Selling Shareholder prior to exercising
such securities to acquire shares of Common Stock, the shares of Common Stock
issued to any subsequent holder on the ultimate exercise of the transferred
Warrants or $4.75 Options will not be registered and may not be resold pursuant
to this offering.
Brian G. Larson, Larry J. Davis, and Dan J. Johnson, three of the Selling
Shareholders who are offering an aggregate of 175,000 shares of Common Stock,
are directors and officers of the Company. Mr. Larson and Mr. Davis are also
the original founders of the Company. The shares held by Mr. Larson and Mr.
Davis have not previously been registered, but have been held for a sufficient
period that they would be eligible for sale under the exemption from
registration set forth in Rule 144 adopted under the Securities Act. Certain of
the shares to be offered by Mr. Johnson will be issued on the exercise of a
portion of the Employee Options held by Mr. Johnson. These shares will be
issued pursuant to a registration statement on Form S-8 and, as such, will not
be restricted securities. However, as a result of his status with the Company,
Mr. Johnson would be obligated to comply with Rule 144 or some other exemption
from the registration requirements of the Securities Act in order to currently
sell his shares in the absence of the Registration Statement of which this
Prospectus forms a part. Additional information concerning the relationship
between the Company and these individuals is included in the Company's
transition report on Form 10-K for the six months ended December 31, 1996, and
annual report on Form 10-KSB for the year ended June 30, 1996, and will be
updated from time to time in the periodic reports of the Company filed with the
Securities and Exchange Commission.
<TABLE>
<CAPTION>
Now Owned Securities After Offering
------------------------ ------------- -------------------------
Selling Shareholders Number Percent(1) To Be Sold(2) Number Percent(3)
- ---------------------------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Brian G. Larson
Common Stock 392,827 3.4% 75,000 317,827 2.1%
Employee Options 530,000 4.4% 0 530,000 3.4%
--------- ------- ---------
Total 922,827 7.6% 75,000 847,827 5.5%
Larry J. Davis
Common Stock 793,025 6.8% 50,000 743,025 5.0%
Employee Options 720,000 5.8% 0 720,000 4.6%
--------- ------- ---------
Total 1,513,025 12.2% 50,000 1,463,025 9.3%
Dan J. Johnson
Common Stock 30,891 0.3% 30,891 0 0.0%
Employee Options 671,365 5.4% 19,109(6) 652,256 4.2%
--------- ------- ---------
Total 702,256 5.7% 50,000 652,256 4.2%
Laura Huberfeld
Common Stock 113,920 1.0% 113,920 0 0.0%
$5.30 Warrants(4) 186,288 1.6% 186,288 0 0.0%
$8.75 Warrants 300,208 2.5% 300,208 0 0.0%
--------- ------- ---------
Total 600,416 4.9% 600,416 0 0.0%
Naomi Bodner
Common Stock 113,920 1.0% 113,920 0 0.0%
$5.30 Warrants(4) 186,288 1.6% 186,288 0 0.0%
$8.75 Warrants 300,208 2.5% 300,208 0 0.0%
--------- ------- ---------
Total 600,416 4.9% 600,416 0 0.0%
Connie Lerner
Common Stock 158,603 1.4% 142,303 16,300 0.1%
$5.30 Warrants(4) 232,697 2.0% 232,697 0 0.0%
$8.75 Warrants 375,000 3.1% 375,000 0 0.0%
--------- ------- ---------
Total 766,300 6.3% 750,000 16,300 0.1%
Congregation Ahavas
Tzdokah Z'Chesed(5)
Common Stock 140,480 1.2% 140,480 0 0.0%
$5.30 Warrants(4) 229,728 1.9% 229,728 0 0.0%
$8.75 Warrants 370,208 3.1% 370,208 0 0.0%
--------- ------- ---------
Total 740,416 6.0% 740,416 0 0.0%
Ezer Mzion Organization(5)
Common Stock 278,480 2.4% 140,480 138,000 0.9%
$5.30 Warrants(4) 229,728 1.9% 229,728 0 0.0%
$8.75 Warrants 370,208 3.1% 370,208 0 0.0%
--------- ------- ---------
Total 878,416 7.2% 740,416 138,000 0.9%
Jeffrey Rubin
Common Stock 1,792 0.0% 0 1,792 0.0%
$6.25 Warrants 83,584 0.7% 83,584 0 0.0%
--------- ------- ---------
Total 85,376 0.7% 83,584 1,792 0.0%
Robert Cohen
Common Stock 8,000 0.1% 0 8,000 0.1%
$6.25 Warrants 139,307 1.2% 139,307 0 0.0%
--------- ------- ---------
Total 147,307 1.2% 139,307 8,000 0.1%
Lenore Katz
Common Stock 0 0.0% 0 0 0.0%
$6.25 Warrants 27,861 0.2% 27,861 0 0.0%
--------- ------- ---------
Total 27,861 0.2% 27,861 0 0.0%
Jeffrey Cohen
Common Stock 0 0.0% 0 0 0.0%
$6.25 Warrants 27,861 0.2% 27,861 0 0.0%
--------- ------- ---------
Total 27,861 0.2% 27.861 0 0.0%
Allyson Cohen
Common Stock 0 0.0% 0 0 0.0%
$6.25 Warrants 27,861 0.2% 27,861 0 0.0%
--------- ------- ---------
Total 27,861 0.2% 27,861 0 0.0%
Shawn Zimberg
Common Stock 0 0.0% 0 0 0.0%
$6.25 Warrants 27,861 0.2% 27,861 0 0.0%
--------- ------- ---------
Total 27,861 0.2% 27,861 0 0.0%
Competitive Edge
Consultants, Inc.
Common Stock 0 0.0% 0 0 0.0%
$6.25 Warrants 50,000 0.4% 50,000 0 0.0%
--------- ------- ---------
Total 50,000 0.4% 50,000 0 0.0%
Brian Finkel
Common Stock 0 0.0% 0 0 0.0%
Options 100,000 0.9% 100,000 0 0.0%
--------- ------- ---------
Total 100,000 0.9% 100,000 0 0.0%
</TABLE>
[FN]
(1) The percentage ownership of Common Stock is calculated based on the total
number of issued and outstanding shares of 11,652,714 as of September 15,
1997. The percentage ownership of each category of Warrants and Options
assumes the exercise of that category of Warrants or Options, as the case
may be, held by the individual Selling Shareholder. The percentage
calculation for the total held by each Selling Shareholder assumes the
exercise of all of the Warrants and Options held by that Selling
Shareholder.
(2) Reflects the number of shares to be sold pursuant to the offering described
in this Prospectus. The sale of the shares not being sold in this offering
by Selling Shareholders who are not also officers and directors of the
Company is covered by other effective registration statements.
(3) The percentage ownership calculations after the offering assume the
exercise of all Warrants and Options necessary to issue all of the shares
of Common Stock subject to this offering, increasing the issued and
outstanding Common Stock to 14,936,719. In addition, the percentage
calculations for Messrs. Larson, Davis, and Johnson assume the exercise of
the total Employee Options held by each of them.
(4) Reflects the remaining number of shares subject to the $5.30 Warrants,
after the exercise of a portion of these Warrants on or before January 31,
1997.
(5) These Warrants were gifted to the respective entities from two of the
Selling Shareholders as part of a charitable donation.
(6) Assumes the exercise by Mr. Johnson of Employee Options which expire June
30, 1998, to acquire 19,109 shares of Common Stock at an exercise price of
$3.00 per share.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The description of the Company's Common Stock is incorporated by this
reference to the Company's registration statement on Form 8-A, SEC File Number
0-17020, effective March 4, 1997.
The transfer agent for the Company's Common Stock is Progressive Transfer
Company, 1981 East 4800 South, Suite 100, Salt Lake City, Utah 84117, telephone
(801) 277-1400.
LEGAL MATTERS
The law firm of Kruse, Landa & Maycock, L.L.C., Salt Lake City, Utah,
counsel to the Company, has rendered an opinion that the shares of Common Stock
issuable on exercise of the Warrants will be, when issued in accordance with the
terms of the Warrant Agreements, legally issued, fully paid, and nonassessable
under Nevada corporation laws.
EXPERTS
The consolidated financial statements of the Company as of December 31 and
June 30, 1996, and for the six months and the year then ended, incorporated by
reference in this Prospectus, have been audited by Grant Thornton LLP, certified
public accountants, as stated in their report, and have been so incorporated by
reference in reliance on the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of the Company as of June 30, 1995,
and the two years then ended, incorporated by reference in this Prospectus, have
been audited by Peterson, Siler and Stevenson (currently known as Pritchett,
Siler & Hardy, P.C.), certified public accountants, as stated in their report,
and have been so incorporated by reference in reliance on the authority of such
firm as experts in accounting and auditing.
ADDITIONAL INFORMATION AND
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied
at the public reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; Room 1204, Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604; and Room 1100,
Jacob K. Javits Federal Building, 26 Federal Plaza, New York, New York 10278.
Copies of such materials can be obtained from the public reference facilities of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
The Company's Common Stock is listed on the Nasdaq National Market and
trades under the symbol "LDII." Reports and other information concerning the
Company can be inspected at the offices of Nasdaq at 1735 "K" Street, N.W.,
Washington, D.C. 20006-1500.
The Company, by this reference, hereby incorporates its transition report
on Form 10-K for the six months ended December 31, 1996, as amended September
___, 1997, its annual report on Form 10-KSB for the fiscal year ended
June 30, 1996, its quarterly report on Form 10-Q for the quarters ended
June 30, 1997, as amended September ___, 1997, March 31, 1997, as amended
September ___, 1997, and September 30, 1996, and its interim report on
Form 8-K dated January 23, 1997, into this Prospectus. The Company also
incorporates the description of its Common Stock included in its
registration statement on Form 8-A, SEC Number 0-17020.
In addition, all documents subsequently filed by the Company pursuant to
sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the termination of the offering described in this Prospectus
shall be deemed to be incorporated in this Prospectus by this reference.
Additional information regarding the Company and the Securities offered
hereby is contained in the registration statement and exhibits thereto, of which
this Prospectus forms a part, filed with the Commission under the Securities
Act. This Prospectus omits certain information contained in the registration
statement. For further information, reference is made to the registration
statement and to the exhibits and other schedules filed therewith. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete, and where such contract or
other document is an exhibit to the registration statement or a report
incorporated herein by this reference, each such statement is deemed to be
qualified and amplified in all respects by the provisions of the exhibit.
Copies of the complete registration statement, including exhibits, may be
examined at, or copies obtained from the offices of, the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, on the payment of prescribed fees for
reproduction.
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The articles of incorporation of the Company provide for the
indemnification of the officers and directors to the full extent permitted by
Nevada corporate law. Such indemnification includes the advancement of costs
and expenses and extends to all matters, except those in which there has been
intentional misconduct, fraud, a knowing violation of law, or the payment of
dividends in violation of the Nevada Revised Statutes and could include
indemnification for liabilities under the provisions of the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the 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 the Company of expenses incurred or paid by a
director, officer, or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities subject to this
offering, the Company 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page LARSON DAVIS
<S> <C> INCORPORATED
Prospectus Summary.............................3
Risk Factors...................................5
Use of Proceeds................................8
Plan of Distribution...........................8
Selling Shareholders..........................10 4,090,999 Shares
Description of Securities to be Registered....12 of Common Stock
Legal Matters.................................12
Experts.......................................12
Additional Information and Incorporation of
Certain Information by Reference............13
Commission Position on Indemnification for
Securities Act Liabilities..................13 PROSPECTUS
</TABLE>
No dealer, salesman, or other
person has been authorized in
connection with this offering to give
any information or to make any
representation other than as
contained in this Prospectus and, if
made, such information or
representation must not be relied on
as having been authorized by the
Company. This Prospectus does not
constitute an offer to sell or the
solicitation of an offer to buy any
securities covered by this Prospectus
in any state or other jurisdiction to
any person to whom it is unlawful to
make such offer or solicitation in
such state or jurisdiction. __________, 1997
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the
distribution of the securities being registered:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee $ 10,538
Legal fees 5,962
State "blue sky" fees and expenses (including attorneys' fees) 1,000
Accounting fees and expenses 5,000
Transfer agent fees 1,500
Printing expenses 1,000
Listing fees 17,500
---------
Total $ 42,500
=========
</TABLE>
All expenses, except the SEC fees, are estimates.
The Selling Shareholders will not bear any portion of the foregoing
expenses, but will pay fees in connection with the sale of the Common Stock
offered hereby in those transactions completed to or through securities broker
and/or dealers in the form of markups, markdowns, or commissions.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.037 of the Nevada corporation law and "ARTICLE VII.
INDEMNIFICATION OF DIRECTORS AND OFFICERS" of the Registrant's articles of
incorporation provide for indemnification of the Registrant's directors and
officers in a variety of circumstances, which may include liabilities under the
Securities Act of 1933, as amended.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons pursuant to the
foregoing provisions, the Registrant has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is contrary to
public policy as expressed in the Securities Act and, therefore, is
unenforceable. (See "ITEM 17. UNDERTAKINGS.")
ITEM 16. EXHIBITS
Copies of the following documents are included as exhibits to this
Registration Statement, pursuant to item 601 of regulation S-K.
Exhibits
<TABLE>
<CAPTION>
SEC
Exhibit Reference
No. No. Title of Document Location
- ------- --------- ---------------------------------------------- ----------------------
<S> <C> <C> <C>
1 (3) Articles of Incorporation, as amended Exhibit to report on
November 3, 1987 Form 10-K for the year
ended June 30, 1988*
2 (3) Certificate of Amendment to the Exhibit to report on
Articles of Incorporation Form 10-K for the year
ended June 30, 1989*
3 (3) Designation of Rights, Privileges, and Registration Statement
Preferences of 1995 Series Preferred Stock filed on Form SB-2,
Exhibit 3, SEC File
No. 33-59963*
4 (3) Bylaws Registration Statement
filed on Form S-18,
Exhibit 5, SEC File
No. 33-3365-D*
5 (4) Form of $5.30 Warrant with list of
investors Initial Filing
6 (4) Form of $6.25 Warrant with list of
investors Initial Filing
7 (4) Form of $8.75 Warrant with list of
investors Initial Filing
8 (4) Agreement between LarsonoDavis Incorporated Exhibit to report on
and Warrant Holders dated September 19, 1995 Form 10-KSB for the
year ended
June 30, 1995*
9 (4) Agreement between LarsonoDavis Registration Statement
Incorporated and Warrant Holders dated filed on Form S-3
March 6, 1996 Exhibit 8, SEC File
No. 333-1505*
10 (10) Second Amendment to Agreement to Issue
Warrants to Congregation Ahavas Tzdokah
Z'Chesed dated June 5, 1997 Initial Filing
11 (10) Second Amendment to Agreement to Issue Warrants
to Ezer Mzion Organization dated June 5, 1997 Initial Filing
12 (10) Second Amendment to Agreement to Issue Warrants
to Laura Huberfeld and Naomi Bodner
dated June 5, 1997 Initial Filing
13 (10) Second Amendment to Agreement to Issue Warrants
to Connie Lerner dated June 5, 1997 Initial Filing
14 (5) Opinion of Kruse, Landa & Maycock, L.L.C.
regarding legality of Common Stock This Filing
15 (23) Consent of Grant Thornton LLP,
independent certified public accountants This Filing
16 (23) Consent of Pritchett Siler & Hardy, P.C.,
previous auditors for the Company
(formerly Peterson, Siler & Stevenson, P.C.) This Filing
17 (23) Consent of Kruse, Landa & Maycock, L.L.C. See Exhibit No. 14
</TABLE>
[FN]
*Incorporated by reference
ITEM 17. UNDERTAKINGS
Post-Effective Amendments. [Regulation S-K, Item 512(a)]
The undersigned Registrant hereby undertakes:
(1) 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.
(2) That for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of the securities at that time to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Incorporation of Exchange Act Filings. [Regulation S-K, Item 512(b)]
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
Indemnification. [Regulation S-K, Item 512(h)]
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the 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 the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the 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, the 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 public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Rule 430. [Regulation S-K, Item 512(i)]
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance on rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Amendment
No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Provo, state of Utah, on
the 17th day of September, 1997.
LARSON DAVIS INCORPORATED
By /s/ Brian G. Larson
Brian G. Larson, President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to the Registration Statement has been signed by the
following persons in the capacities indicated on this 17th day of September,
1997.
Brian G. Larson, Director and
President (Principal Executive Officer)
Larry J. Davis, Director and Vice-
President
Dan J. Johnson, Director and Vice- /s/ Brian G. Larson
President By Brian G. Larson, Attorney-in-Fact
William E. Hosker, Director
Gerard L. Seelig, Director
Craig E. Allen, Principal Financial
and Accounting Officer
KRUSE, LANDA & MAYCOCK, L.L.C.
EIGHTH FLOOR, BANK ONE TOWER
50 WEST BROADWAY (300 SOUTH)
SALT LAKE CITY, UTAH 84101-2034
TELEPHONE: (801) 531-7090
ATTORNEYS AT LAW TELECOPY: (801) 531-7091
(801) 359-3954
September 17, 1997
Board of Directors
Larson Davis Incorporated
1681 West 820 North
Provo, Utah 84601
Re: Larson Davis Incorporated
Registration Statement on Form S-3
Gentlemen:
We have been engaged by Larson Davis Incorporated (the "Company") to
render our opinion respecting the legality of certain securities to be offered
and sold pursuant to the registration statement on Form S-3 being filed by the
Company with the Securities and Exchange Commission (the "Registration
Statement"). Capitalized terms used but not defined herein have the same
meanings as set forth in the Registration Statement.
In connection with this engagement, we have examined the following:
1. Articles of incorporation of the Company;
2. Bylaws of the Company;
3. The Registration Statement; and
4. Unanimous consents of the Company's board of directors.
We have examined such other corporate records and documents and have made
such other examination as we deemed relevant.
Based upon the above examination, we are of the opinion that the Common
Stock to be sold pursuant to the Registration Statement will be, when sold in
accordance with the terms set forth in the Registration Statement, legally
issued, fully paid, and nonassessable under the Nevada Revised Statutes, as
amended.
This firm consents to being named in the Prospectus included in the
Registration Statement as having rendered the foregoing opinion and as having
represented the Company in connection with the Registration Statement.
Sincerely yours,
/s/ Kruse, Landa & Maycock, L.L.C.
KRUSE, LANDA & MAYCOCK, L.L.C.
KL&M/KLP:pjc
CONSENT
We have issued our reports dated August 30, 1996 and March 12, 1997 accompanying
the consolidated financial statements of Larson Davis Incorporated and
Subsidiaries appearing in the Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1996 and the Transition Report on Form 10-K for the six months
ended December 31, 1996, respectively, both appearing in the 1996 Annual Report
of the Company to its shareholders, which are incorporated by reference in this
Registration Statement. We consent to the incorporation by reference in the
Registration Statement of the aforementioned reports and to the use of our name
as it appears under the caption "Experts".
/s/ Grant Thornton, LLP
GRANT THORNTON, LLP
Provo, Utah
September 12, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the accompanying
Amendment No. 2 to the registration statement on Form S-3, of our report dated
August 4, 1995, relating to the June 30, 1995 financial statements of Larson-
Davis Incorporated, appearing in the annual report of Larson-Davis Incorporated
on Form 10-KSB for the year ended June 30, 1996, and appearing in the transition
report on Form 10-K for the six month period ended December 31, 1996 and to the
reference to us under the caption "Experts".
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
September 17, 1997
