UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10KSB
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended September 30, 1995
Commission file Number 33-9868-A
InVision Technology, Inc. (formerly IMProCOM, Inc.)
(Exact name of registrant as specified in its charter.)
Nevada, U.S.A. 88-0212471
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 Carswell Avenue, Holly Hill, FL 32117
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code:
(904) 254-8100
Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [ ] NO [X]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will
be contained, to the best of registant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [X]
Issuer's revenues for its most recent fiscal year are $149,225.
The aggregate estimated market value of the voting stock held by
non-affiliates of the issuer as of March 31, 1996, is $-0- based upon the
assumption that all directors and officers of the Company, and their
families, are affiliates.
At January 31, 1996, 4,293,822 shares of common stock, $.001 par value
per share were outstanding.
<PAGE>
Part I
Item 1. Description of Business.
Business Development
The Registrant (the "Company" or "InVision") was incorporated under the laws
of the State of Nevada on October 3, 1985, under the name IMProCOM, Inc.
Since then, it has engaged in the design, development and marketing of
computer based technologies involving image graphics processing and data
retrieval. The Company ended its development stage on September 17, 1990.
InVision uses these technologies in computer driven security management
systems. The Company believes that these systems, with their digital image
detection devices, are current with industry standards. The Company also
believes that the redefinition and repackaging of its products along with
proper marketing of these products, as described below, will allow it,
assuming adequate financial resources are available to the Company, to
penetrate the distribution, reseller and system integration marketplaces.
The Company changed its name to InVision Technology, Inc. effective as of
March 15, 1996.
Business of Issuer
The InVision systems provide solutions to the three primary security system
objectives of surveillance, detection and data storage and retrieval. In
addition, the systems can be installed with access control features to
further protect a facility. The InVision modularly designed system can be
installed in a custom designed form depending upon the specific needs of
the customer. The Company believes that its newly packaged "box" products
will allow customers to purchase complete solutions to its surveillance
needs which are not overly difficult to install and use.
The Company's initial phase of research and development of the products has
been completed. Production and product installations for larger customers
have been completed and services for those customers continue. The first
customer installation, at the Charlotte Branch of the Federal Reserve Bank
of Richmond, was successfully completed in the summer of 1989. The
Charlotte Branch was a new facility designated as a test site for several
pilot projects within the Federal Reserve Bank (FRB) system. Since the
facility opened, numerous representatives of other FRB's have visited the
site and observed the InVision system in operation often with Company
presence to help illustrate the features of the system. The Company has
now performed a total of ten installations. In addition to the Charlotte
Branch FRB, the Company has installed systems at Baltimore FRB, Chicago FRB,
Richmond FRB, NASA's Kennedy Space Center, LaSalle National Bank, Southeast
Energy Management Corp., Advantor Corp., Ogden Government Services and CSX
Transportation, Inc. The Company also installed additional equipment and/or
modifications to the existing systems at Charlotte Branch FRB, Baltimore FRB,
Chicago FRB, Richmond FRB and LaSalle National Bank. Expenses prior to the
Charlotte FRB contract were primarily for research and development. The
amount allocated during each of the last two fiscal years on Company
sponsored research and development activities was $112,034 in 1995 and
$84,347 in 1994.
The Company's technologies have potential application in a variety of
educational, commercial, medical and industrial settings, but the security
industry appears to management to offer the greatest opportunity. The
security industry, in general, is relatively insulated from the fluctuations
in overall economic activity and is a growth industry of significant size.
Demand for electronic security systems is strongest where risk of exposure
is greatest. Financial institutions, government buildings, cultural
institutions and museums, military facilities and public utilities are
primary examples. All have high security needs and tend to have less concern
about the cost, concentrating instead on reliability and effectiveness.
<PAGE>
Since inception, the Company's strategy has been to develop and install
sophisticated security systems in major companies and institutions using
third parties to sell the systems and participate in the installations.
While the Company has sold ten systems, along with many additions to the
existing systems, the sales pattern has been very irregular and below
expectation. Management believes the poorer than anticipated sales of its
existing systems are in great part a result of:
- General economic conditions.
- Delays in establishing a broad marketing program due to limited
financial resources.
- Long lead time and volatility inherent in large systems sales.
- The Company's small financial size and lack of a long established
track record.
The Company intends to change its focus from just a "custom shop" focusing
on high-end jobs to providing a product line available to all markets.
In addition to continuing to offer its current products, the Company intends
to redefine, reconfigure and repackage its existing products into separate,
individual products which may be sold as individual products in order to
penetrate the distribution, reseller and system integration marketplaces.
As the base line technology for these new "box" products is derived from the
Company's existing high end Patriot systems, the Company will be able to
provide customers an upgrade path for their expanding surveillance needs
without having to replace their existing equipment. The modification,
reconfiguration and repackaging of the Company's products has begun and is
expectedto be completed throughout fiscal year 1996. The Company expects to
begin shipping initial products from this effort in the June quarter.
The complete InVision systems are comprised of black and white or color
video cameras, access control, alarm input and output, videotape recorders,
a central computer and an operator console that performs system control and
management functions. Through the console, an operator, utilizing
sophisticated graphics software, can tune or reprogram system parameters,
enhance images, examine alarm situations close-up and review questionable
events. The system continues recording while these other functions are
being performed. The motion detection features trigger audible alarms that
signal the operator and initiate recording by otherwise dormant cameras.
The console can also be programmed to establish thresholds for remote
cameras and to vary recording speeds and media. The system can record
digitally on magnetic tape and disk drives as well as on video tape.
The basic system can be installed with four cameras, one recorder and a
console. As a modular system, cameras may be added in clusters of four and
other components can be increased as well. Enhancement features such as
magnification of targeted images, zooming, panning and real time recording
are standard. In addition, the system has been designed to operate under
extreme environmental conditions.
Most video based security systems poorly utilize recording tape. InVision
effects tape conservation through a variety of techniques including: (i)
variable frame per record recording (under operator control), (ii) motion
and edge detection that conserves by not recording until activated by
movement, and (iii) programming of thresholds through which false alarms
may be eliminated.
Under the modular concept, pricing of the product has been designed on a
features used basis. Customers with limited initial needs can reduce
selected features and accordingly lower their costs. As needs increase,
features can be quickly added. The introduction by the Company of the new
modular "box" products will facilitate the upgrades by customers.
<PAGE>
The Company believes its technology is current with industry instandards.
The Company is pursuing the "box" products approach in an attempt to move
the Company's product line to the lead in the market. The Company believes
that none of its competitors currently offer products in a similar fashion
to the "box" product PC based modular systems. No patents have been
obtained, as the Company believes that the patent process would force
disclosure of technological detail and eventually erode competitive
advantage. Design protection features have been incorporated into the
systems and the Company is confident such a course is prudent.
The system has been designed to keep the amount of production resources to
a minimum. A variety of vendors do all manufacturing and parts assembly.
Computer software is designed and written by the Company. To reduce the
possibility of concept theft, the Company uses multiple suppliers who work
on segmented tasks. All contracts with suppliers who modify commodity
devices for the Company include design protection agreements. The Company's
current software is a DOS based package, which is the current standard in
the video surveillance industry. The Company intends to translate its
existing software into a Windows based platform capable of supporting 32 bit
applications (Windows 95, Windows NT and Windows 3.1.1), which development
the Company expects will be completed by the beginning of September, 1996.
Where possible, the Company utilizes modular parts, boards, components and
chips made to its specifications. The vendors perform quality control
before delivering to the customer's site. Final assembly and quality
control of the system is done at the customer site by the Company, prior to
turnover to the customer.
In an effort to penetrate the European marketplace, the Company is pursuing
a strategic partnership with Grange Associates ("Grange"), an existing
national UK company which is currently established in the security industry.
The Company expects that Grange's contacts will provide a low cost and
relatively fast entry into the European market and will establish some
instant credibility for the Company's product lines and enable penetration
across markets.
The Company currently has seven full time employees. If successful in
expanding the Company's business to implement the redesign, reconfiguration
and repackaging of the existing products into the "box" products, the
Company expects to expand its employee base to approximately twenty-two
employees.
Item 2. Description of Property.
As of February 1, 1996, the Company leases offices, consisting of
approximately 5,680 square feet, $4.24 per square foot per year, at 230
Carswell Avenue, Holly Hill, Florida. It is a lease expiring January 31,
1997, with an option to extend for one (1) year. The site is not materially
important to the business.
Item 3. Legal Proceedings.
There are no unsettled material pending legal proceedings to which the
Company is a party or of which any of its property is the subject, and none
are anticipated.
In February 1995, Frederick M. Jenner, the former CEO, treasurer and a
former director of the Company, and Annette H. Greene Jenner, the former
Executive Vice-President and a former director of the Company (collectively,
the "Jenners"), filed a lawsuit against the Company, Dominion Capital, Inc.
("Dominion"), Sandra Shiflett, a former director of the Company and an
employee of Dominion ("Ms. Shiflett"), Raymond A. Yerly, a former director
of the Company and an employee of Dominion ("Mr. Yerly"), and William J.
Hopke, a former CEO and director of the Company and an employee of Dominion
("Mr. Hopke"), claiming damages in excess of $1,000,000 and seeking the
dissolution of the Company. The Jenners alleged that (1) Dominion had
breached an agreement to use its best efforts to fund a $3.5 - 5
<PAGE>
million loan to the Company; (2) Dominion had failed to fund a $2.5 million
loan request made by Mr. Jenner pursuant to a revolving Credit Agreement between
Dominion and the Company; (3) Dominion, Ms. Shiflett, Mr. Yerly and Mr.
Hopke had breached fiduciary duties to the Company by (a) refusing to allow
Mr. Jenner unilaterally to cause the Company to borrow $2.5 million and by
(b) substantially curtailing the Company's ability to obtain funds under the
Credit Agreement; and (4) Dominion, Ms. Shiflett, Mr. Yerly and Mr. Hopke
had further breached fiduciary duties to the Company by (a) approving
expenditures for an "unnecessary" audit of the Company's books and records,
(b) prohibiting Mr. Jenner from entering the Company's headquarters, and (c)
"participating in a program designed to bring about the demise of the
Company and the surrender of the assets to Dominion."
On September 5, 1995, the Company, Dominion, Ms. Shiflett, Mr. Yerly and Mr.
Hopke entered into a settlement agreement (the "Settlement Agreement") with
Mr. Jenner and Ms. Greene Jenner, which the Settlement Agreement was
approved by the court on October 17, 1995. As part of the Settlement
Agreement, (1) the Company and Florida Airways, Inc., The successor to
NPM, Inc., entered into an Amendment to Lease modifying, amending and
bringing about the termination of the lease with respect to the previous
executive offices of the Company located at 10 Aviator Way, Ormond Beach,
Florida, (2) 1,459,083 shares of common stock and options to acquire an
additional 1,200,000 shares of common stock were transferred to the Company
from the Jenners, (3) the Jenners executed a release in favor of all named
parties to the lawsuit whereby the Jenners released such parties from all
claims and liabilities, including those arising out of the lawsuit and all
obligations arising out of Mr. Jenner's employment agreement with the
Company and (4) the Jenners, Ms. Shiflett and Mr. Yerly resigned as officers
and directors of the Company effective as of October 17, 1995. Also as part
of the Settlement Agreement, (A) the Company conveyed to Mr. Jenner all of
its interest in the life insurance policy maintained by the Company for his
benefit and (B) the Company, Dominion, Ms. Shiflett, Mr. Yerly and Mr. Hopke
executed a release in favor of the Jenners, whereby such parties released
the Jenners from all claims and liabilities, including those arising out of
the lawsuit and out of Mr. Jenner's employment agreement with the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No items were submitted to shareholders during the fourth quarter of fiscal
year 1995.
On March 15, 1996, an amendment to the Articles of Incorporation of the
Company effecting the name change from IMProCOM, Inc. to InVision
Technology, Inc. was approved by written consent of stockholders holding
a majority of the outstanding voting stock of the Company.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters.
There is no established current public trading market for InVision common
stock, and no dividends have been declared during the last two fiscal years
with respect to the common stock. At the end of the 1995 fiscal year, there
were approximately 350 record security holders.
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Conditions and
Results of Operations.
Liquidity
Management believes that the working capital ratio and the ratio of current
assets to current liabilities reflects its lack of liquidity. Continual
losses from operations during the year, settlement of litigation for contract
termination, and the loss on abandonment of assets have eroded the Company's
liquidity. In the absence of a marked increase in the volume of the
Company's sales activities, or an infusion of additional funds from outside
sources, the Company will be unable to continue its operations beyond the
next fiscal year.
Expanded marketing efforts by the Company are not included in projected
operations, because the Company intends to explore the marketing offered by
third parties, such as the Anixter agreement and the strategic partnership
with Grange Associates, described in the Description of Business.
The possibility of multiple concurrent larger projects exists. The Company
has bids pending on several projects which have not yet been awarded.
However, if orders were to be received by the Company, the Company will need to
obtain additional capital or financing in order to meet bonding requirements
and fund the production process.
Capital Resources
The Company's capital resources are primarily proprietary software and
hardware development. Because of its ongoing research and development, the
Company does not anticipate any material changes to such resources.
Management believes that the results from continuing research and
development will enhance productivity, reduce costs and create a stronger
market.
In order to make up for the shortcomings of the Company's capital resources,
Trilon Dominion Partners, LLC (See Item 11) has verbally agreed to provide
to the Company advances of up to an additional $700,000 for working capital
purposes, on terms which as of the date of this filing have yet to be
finalized.
Results of operations
Contract revenues and cost of contract revenues decreased during 1995.
Operating expenses increased primarily as the result of technological
obsolescence of inventory, increased staffing, higher wages, marketing
expenses and administrative infrastructure.
Research and development costs increased from the prior year due to greater
product modifications and enhancements.
Other income (expense) increased as the result of the loss on the abandonment
of assets, loss on contract termination and loss on the impairment of long
lived assets.
Item 7. Financial Statements.
The response to this item is submitted in a separate section of this report.
Item 8. Changes in and Disagreements with Accountants and Financial
Disclosure.
Not applicable.
<PAGE>
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act.
The following table sets forth information with respect to the persons who
are, at the present time, directors and/or executive officers of the Company.
The terms of office of all the directors and executive officers will expire
following the 1996 Annual Meeting of Shareholders and 1996 Annual Meeting
of Directors.
Name Period Served Term To Expire
Jack R. Sauer, 43, CEO CEO since Mar. 1996 Feb. 1997
and director Director since Dec. 20,
1995
M. Thomas Makmann, 49, Since Mar. 1996 Feb. 1997
president and chief
operating officer
Ronald W. Cantwell, 52, Since Dec. 20, 1995 Feb. 1997
vice-president, treasurer,
assistant secretary and
director
Gregory B. Price, 32, Since Dec. 20, 1995 Feb. 1997
vice-president, secretary
and assistant treasurer
William J. Hopke, 40, Since fiscal year 1991 Feb. 1997
director
Jack R. Sauer, 43, has been the chairman and chief executive officer of
the Company since March 1, 1996, and has been a director of the Company
since December 20, 1995. A graduate of Bernard M. Baruch College, Mr. Sauer
is the chief financial officer, vice-president and a director of VC Holdings,
Inc. a Delaware corporation ("VCH"), which is wholly-owned by Ronald W.
Cantwell. VCH has 100% of the voting rights and management of Trilon
Dominion Partners, LLC, a Delaware limited liability company (the "LLC"),
the majority stockholder of the Company. Mr. Sauer is on the board of
Accessware, Inc.
M. Thomas Makmann, 49, was hired as a consultant of the LLC effective
as of March 1, 1996, and has been serving as the president and chief
operating officer of the Company since that date. A graduate of Michigan
Technology University, Mr. Makmann most recently served as the president of
Sytron Corporation, a wholly-owned subsidiary of Rexon Corporation, from
1993 to 1995. Prior to Sytron, he held key managerial positions at Maxtor
Corporation, Archive Corporation, Shugart Associates, Memorex Corporation
and Control Data Corporation.
Ronald W. Cantwell, 52, has been the vice-president, treasurer,
assistant secretary and director of the Company since December 20, 1995.
A graduate of the University of Wisconsin, Mr. Cantwell is the president
and a director of VCH. He is on the board of Odyssey Nutriceutical Science,
Inc., Caldera Environmental Corporation and Morrison International, Inc.
Gregory B. Price, 32, has been the vice-president, secretary and
assistant treasurer of the Company since December 20, 1995. Mr. Price is a
graduate of the University of Charlotte.
<PAGE>
William J. Hopke, 40, has been a director of the Company since 1991 and
served as CEO of the Company from January 27, 1995 through March 1, 1996. A
graduate of Christopher Newport College, Mr. Hopke is the executive
vice-president and a director of VCH. He is on the board of Advanced Materials,
Inc., Caldera Environmental Corporation, EPL Technologies, Inc., Morrison
International, Inc., Organogenesis, Inc., Pets RX, Inc., SpectraCell Labs,
Inc. and Wilshire Technologies, Inc.
The Company has not yet established a slate of nominees for the 1996 Annual
Meeting.
There are no family relationships among the Company's executive officers,
directors and nominees.
Mr. Sauer, Mr. Cantwell and Mr. Hopke are all officers and directors of VCH.
Mr. Makmann is a consultant of the LLC and Mr. Price is an employee of
InVision Technology, Inc.
Item 10. Executive Compensation.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name
and Other Restricted All
Principal Annual Stock Options/ LTIP Other
Position Year Salary Bonus Comp Award(s) SARs Payouts Comp
($) ($) ($) ($) (#) ($) ($)
Frederick M. 1995 229,993 -0- -0- -0- -0- -0- 2,870*
Jenner, CEO 1994 129,567 -0- -0- -0- -0- -0- 17,475
1993 58,423 -0- -0- -0- -0- -0- -0-
William J. 1995 -0- -0- -0- -0- -0- -0- -0-
Hopke, CEO 1994 -0- -0- -0- -0- -0- -0- -0-
1993 -0- -0- -0- -0- -0- -0- -0-
Jack R. 1995 -0- -0- -0- -0- -0- -0- -0-
Sauer, CEO 1994 -0- -0- -0- -0- -0- -0- -0-
1993 -0- -0- -0- -0- -0- -0- -0-
John G. 1995 115,000 2,382 -0- -0- -0- -0- 864**
Perry, 1994 -0- -0- -0- -0- -0- -0- -0-
President 1993 -0- -0- -0- -0- -0- -0- -0-
* Term life insurance premium amount of $2,870.
** Term life insurance premium amount of $864.
<PAGE>
Mr. Jenner resigned as CEO of the Company effective as of January 27, 1995.
Effective as of such date, Mr. Hopke became CEO of the Company and served as
CEO until March 1, 1996. Effective as of March 1, 1996, Mr. Sauer became CEO
of the Company.
Mr. Jenner resigned as the chairman of the Board of Directors and as the Chief
Technical Officer of the Company effective as of October 17, 1995.
The amounts listed above do not include Mr. Jenner's accrued salary amounts of
$18,170, $75,214 and $121,346 for the years 1995, 1994 and 1993, respectively.
On October 17, 1995, as part of the Settlement Agreement, the Company was
released of its obligation to pay these amounts to Mr. Jenner.
The Company granted Mr. Jenner, the former CEO, options which were to expire in
January 1996, to purchase common stock in the Company at $.25 per share. At
September 30, 1995, the number of shares as to which options were exercisable
was 1,200,000. Subsequent to year end, the former CEO conveyed the options to
the Company.
The Company granted Mr. Perry, the prior President, options which were to expire
in June, 1997, to purchase 65,000 shares of common stock in the Company at $1.00
per share. During the year, he exercised 107 of the options. Subsequent to
year end, the prior President conveyed the remaining options to the Company.
The Company does not pay any of the directors a fee for their services as
directors.
Item. 11 Security Ownership of Certain Beneficial Owners and Management.
Name of Beneficial Owner
(Address is included Percent of
for persons known to Amount and Nature Outstanding
hold more than 5%) of Beneficial Ownership Stock
Trilon Dominion Partners, LLC 3,367,802 owned directly 78.4%
P.O. Box 26532
Richmond, VA
William J. Hopke * -0- 0%
Jack R. Sauer * -0- 0%
Ronald W. Cantwell * 3,367,802 owned indirectly 78.4%
Gregory B. Price -0- 0%
M. Thomas Makmann -0- 0%
All Officers and Directors 3,367,802 individually and jointly, 78.4%
as a Group record and beneficial including
those owned by Trilon Dominion
Partners, LLC
* Officers and directors of VCH.
Note. The numbers shown above include duplication, because where shares are
beneficially owned by more than one person or entity, they are reported as
beneficially owned by all such persons or entities.
<PAGE>
Dominion Capital, Inc. ("Dominion"), a Virginia corporation, transferred
ownership of 3,367,802 shares of the common stock of the Company to the LLC.
The transfer was made pursuant to the terms of a Contribution Agreement (the
"Contribution Agreement") between Dominion and the LLC, whereby Dominion
contributed all of its interest in a specified portfolio of investments
(including the InVision common stock) in exchange for a non-voting Class B
membership interest in the LLC. The only other member of the LLC is VCH, the
sole manager of the LLC and the holder of 100% of the voting interests in the
LLC.
The shares of InVision common stock held by Dominion were the subject of the
legal proceedings referred to above on the closing date of the transactions
contemplated by the Contribution Agreement, and thus were held by Dominion for
the benefit of the LLC pending the conclusion of such proceedings. On September
5, 1995, a settlement in the legal proceedings was agreed to among the
parties and the shares were subsequently transferred to the LLC on November
1, 1995. See Item 3. Legal Proceedings.
Item 12. Certain Relationships and Related Transactions.
1. Mr. Jenner, the former CEO of the Company, had a total accrued salary
of $536,384, net of an $80,000 loan, through September 30, 1995. The Company
was released from its obligations to pay such accrued salary to Mr. Jenner in
connection with the execution of the Settlement Agreement.
2. During the year ended September 30, 1995, Dominion, holder of
approximately 59% of the outstanding common stock of the Company at September
30, 1995, exercised its 2,650,000 standing stock warrants pursuant to its line
of credit agreement with the Company. The agreement stipulated the warrants
were exercisable at $1.00 per share. In lieu of a cash payment, Dominion
converted its outstanding debt on the line of credit with the Company in the
amount of $2,650,000 to stock.
During the year ended September 30, 1995, Dominion amended its line of credit
with the Company. The amended agreement provided a total available amount of
$900,000 to draw on for operations. The agreement also provided for the
following:
1. The borrowing is evidenced by a grid promissory note dated,
September 18, 1995. Interest is due at a rate of prime plus one
percent, payable on the earlier of demand for such payment by
Dominion or quarterly beginning on September 30, 1995.
2. The former CEO and his wife had pledged 876,083 shares of common
stock of the Company held by them as collateral for the payment of
the note. Subsequent to the year end, the former CEO and his wife
agreed to convey the shares of common stock to the Company.
3. The payment of the note is collateralized by a pledge of
substantially all of the tangible and intangible assets of the
Company.
By September 30, 1995, the Company had borrowed $825,000 under this line of
credit agreement.
In addition to the line of credit agreement, Dominion loaned the Company
$100,000 on February 1, 1995, evidenced by a grid promissory note. The terms of
the note are the same as the terms of the line of credit agreement as described
above.
The prime rate was 8.75% at September 30, 1995.
<PAGE>
During the year ended September 30, 1995, $54,493 of interest was paid by the
issuance of 54,493 shares of stock at $1.00 per share in lieu of a cash payment.
At September 30, 1995, the Company owed Dominion $19,036 in accrued interest on
the outstanding debt.
Pursuant to the Contribution Agreement, Dominion contributed to the LLC all of
its right, title and interest in and to the shares of common stock of the
Company, in addition to all of its right, title and interest in and to the
$100,000 grid promissory note and the $900,000 grid promissory note.
3. The LLC has verbally agreed to provide to the Company advances of up to
an additional $700,000 for working capital purposes, on terms which as of the
date of this filing have yet to be finalized.
Part IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) Articles of Incorporation and By-Laws
(4) Instruments defining the rights of security holders, including indentures
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report. On December 15, 1995, the Company filed a Form
8-K describing the terms of the Contribution Agreement and the Settlement
Agreement.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
InVision Technology, Inc.
Date: May __, 1996 _______________________________
Jack R. Sauer, CEO and Director
Date: May __, 1996 _______________________________
William J. Hopke, Director
Date: May __, 1996 _______________________________
Ronald W. Cantwell,
Vice-President and Director
<PAGE>
Form 10-KSB - Annual Report
Item 7
Financial Statements
Year Ended September 30, 1995
InVision Technology, Inc.
Holly Hill, Florida
<PAGE>
Report of Independent Certified Public Accountants
To the Board of Directors and Shareholders of
InVision Technology, Inc.
We have audited the accompanying balance sheet of InVision Technology, Inc. as
of September 30, 1995, and the related statements of operations, shareholders'
deficit, and cash flows for the years ended September 30, 1005 and 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InVision Technology, Inc. as
of September 30, 1995, and the results of its operations and its cash flows for
the years ended September 30, 1995 and 1994, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a net working capital deficiency that raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2 to the financial statements. The
ultimate outcome of these uncertainties cannot presently be determined.
Accordingly, no adjustments have been made in the accompanying financial
statements.
/s/James Moore & Co.
Holly Hill, Florida
January 31, 1996
(except for Note 15, as to
which the date is March 15, 1996)
<PAGE>
<TABLE>
InVision Technology, Inc.
Balance Sheet
<CAPTION>
September 30, 1995
__________________
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 18,215
Accounts receivable 126,934
Inventories, net <Note 3> 255,348
Prepaid expenses 12,849
_______
Total current assets 413,346
_______
Property and equipment:
Furniture and equipment 47,619
Software and hardware <Note 4> 70,296
Leasehold improvements 35,000
_______
152,915
Accumulated depreciation and amortization 64,565
_______
Property and equipment, net 88,350
Other assets 1,689
_______
Total assets $503,385
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
InVision Technology, Inc.
Balance Sheet (Continued)
<CAPTION>
September 30, 1995
__________________
<S> <C>
Liabilities and shareholders' deficit
Current liabilities:
Accounts payable $ 136,443
Accrued loss on open contracts <Note 1> 48,257
Deferred revenue 265,993
Deferred revenue on shipments to distributor 125,420
Accrued officers' salaries <Notes 8 and 14> 456,384
Loan from shareholder <Notes 8, 12 and 14> 925,000
Due to officer <Notes 8 and 14> 110,577
Due to shareholder <Notes 8 and 14> 19,036
_________
Total current liabilities 2,087,110
_________
Commitments <Notes 2, 5, 7, 9, 10 and 14> _
Shareholders' deficit <Notes 5, 8 and 14>
Common stock, $.001 par value:
Authorized shares - 50,000,000
Issued and outstanding shares -
5,753,012 5,753
Additional paid-in capital 5,768,871
Accumulated deficit <7,358,349>
___________
Total shareholders' deficit <1,583,725>
___________
Total liabilities and shareholders' deficit $ 503,385
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
InVision Technology, Inc.
Statement of Operations
<CAPTION>
Year ended September 30,
1995 1994
__________________________
<S> <C> <C>
Revenues <Notes 8 and 11> $ 149,225 $ 268,973
Cost of revenues earned 145,783 184,426
__________________________
3,442 84,547
__________________________
Costs and other operating expenses:
Loss on holding inventory 310,636 11,018
Selling and promotion 660,373 543,203
General and administrative 642,766 425,021
Research and development 112,034 84,347
Depreciation and amortization 171,085 109,046
__________________________
Total costs and operating expenses 1,896,894 1,172,635
__________________________
Loss from operations <1,893,452> <1,088,088>
Other income <expense>:
Other income 5,000 9,000
Interest income 821 1,759
Interest expense <Note 8> < 89,623> < 118,613>
Loss on abandonment of assets < 86,702> -0-
Loss on impairment of long-lived assets <Note 1> < 37,585> -0-
Loss on contract termination <Notes 8 and 14> < 110,577> -0-
Gain on lease termination 20,677 -0-
___________________________
Total other income <expense> < 297,989> < 107,854>
___________________________
Net loss $<2,191,441> $<1,195,942>
Loss per share $< .44 > $< .40 >
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
InVision Technology, Inc.
Statement of Shareholders' Deficit
For The Years Ended September 30, 1995 and 1994
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital Deficit Total
______________________________________________
<S> <C> <C> <C> <C>
Balance at October 1, 1993 $ 3,025 $3,043,690 $<3,970,966> $< 924,251>
Issuance of common stock
23,309 shares 24 23,285 - 23,309
Net loss - - <1,195,942> <1,195,942>
______________________________________________
Balance at September 30, 1994 3,049 3,066,975 <5,166,908> <2,096,884>
Issuance of common stock
2,704,600 shares<Note 8> 2,704 2,701,896 - 2,704,600
Net loss - - <2,191,441> <2,191,441>
______________________________________________
Balance at September 30, 1995 $ 5,753 $5,768,871 $<7,358,349> $<1,583,725>
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
InVision Technology, Inc.
Statement of Cash Flows
Increase <Decrease> in Cash and Cash Equivalents
<CAPTION>
Year ended September 30,
1995 1994
____________________________
<S> <C> <C>
Operating activities
Net loss $<2,191,441> $<1,195,942>
____________________________
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization
(including allocation to research and
development and selling and promotion) 228,641 150,177
Non-cash interest 54,493 -
Loss on abandonment of assets 86,702 -
Loss on impairment of long-lived assets 37,585 -
Loss on sale of asset 923 -
Changes in operating assets and liabilities:
Accounts receivable < 87,822> < 6,158>
Inventories 33,134 < 99,332>
Prepaid expenses 6,939 < 8,419>
Accounts payable 102,597 < 8,077>
Accrued loss on open contracts 48,257 -
Deferred revenue 71,912 194,136
Deferred revenue on shipments to distributors 125,420 -
Accrued interest payable to shareholder 19,036 < 17,369>
Accounts payable to officers < 1,267> < 579>
Accrued officers' salaries < 95,278> 74,202
Due to officer 110,577 -
Other assets 8,114 21,750
Other accrued expenses < 26,623> 2,678
____________________________
Total adjustments 723,340 303,009
____________________________
Net cash used by operating activities <1,468,101> < 892,933>
____________________________
Investing activities
Sale of property and equipment 3,900 -
Purchase of property and equipment < 62,007> < 70,703>
____________________________
Net cash used by investing activities < 58,107> < 70,703>
____________________________
Financing activities
Proceeds from issuance of common stock 107 -
Loan from shareholder 1,500,000 850,000
____________________________
Net cash provided by financing activities 1,500,107 850,000
____________________________
Net decrease in cash and cash equivalents < 26,101> < 113,636>
Cash and cash equivalents at beginning of year 44,316 157,952
____________________________
Cash and cash equivalents at end of year $ 18,215 $ 44,316
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 16,094 $ 112,673
Supplemental schedule of noncash investing and
financing activities
Issuance of common stock in lieu of cash $ 2,650,000 $ -
payment on debt
Retirement of debt with borrowings on new debt $ - $ 1,650,000
Issuance of common stock in lieu of cash $ 54,493 $ 23,309
payment for interest
<FN>
See accompanying notes.
</TABLE>
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements
September 30, 1995
1. Significant Account Policies
Description of business
InVision Technology, Inc. (the Company) was incorporated on October 3, 1985.
Since then it has engaged in the design, development, production and marketing
of computer driven security management systems.
Cash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, bank demand deposit accounts and temporary investments with original
maturities of three months or less at the time of purchase.
Concentrations of credit risk
Substantially all accounts receivable are due from entities in the security
industry. These accounts receivables are in the ordinary course of business.
Payments are due as work progresses, and no collateral is required. Receivables
of $108,488 were due from one customer at September 30, 1995.
The Company has demand deposits with aggregate bank balances at September 30,
1995, of $36,837, with a bank which is part of a branch banking system covering
the State of Florida. The Company has no policy requiring collateral or other
security to support its deposits, although all demand deposits with banks are
federally insured up to $100,000 under FDIC protection.
Inventory
Inventory is stated at the lower of cost, determined on the first-in, first-out
basis, or market.
Property and equipment
Property and equipment are stated at cost. Depreciation and amortization is
provided for financial reporting purposes using the straight-line method over
estimated useful lives of 1 to 10 years.
On September 5, 1995, the Company modified its facilities lease to a month to
month arrangement. The modification provided for the sale, to the lessor, of
the leasehold improvements in the facility once certain stipulations were met.
The transaction was completed subsequent to year end. Therefore, the leasehold
improvements are being carried in the financial statements at their net
realizable value of $35,000 at September 30, 1995. The resulting loss
recognized in the financial statements is $37,585.
Income recognition
For financial reporting purposes, sales under contracts to customers other
than distributors are recorded in results of operations when final shipments
are made. Progress payments received prior to final shipment are included in
deferred revenue until the contract is complete and shipped.
Anticipated losses on contracts are provided for and shown as a liability and
included in cost of revenues earned.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
1. Significant Accounting Policies (Continued)
Income recognition (Continued)
Sales are made to a distributor under terms allowing certain rights of return on
unsold merchandise held by the distributor. This agreement can be terminated by
either party upon written notice, at which time the Company repurchases unsold
inventory. Accordingly, recognition of sales to the distributor and related
gross profit is deferred until the merchandise is resold by the distributor.
Loss per share
Loss per share amounts are computed on the weighted average total number of
common shares outstanding during the respective years totaling 4,974,900 in
1995 and 3,025,168 in 1994, respectively.
2. Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. The Company has experienced substantial operating
losses for the past several years and as of September 30, 1995, the Company has
a shareholders' deficit of $1,583,725. In addition, the Company's sales do not
generate working capital sufficient to meet future operating requirements.
These factors indicate that the Company maybe unable to continue in existence.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
Management is currently pursuing options to solve its financial problems.
Management is currently following plans to focus on their current product line
and review and improve their marketing strategies in an effort to increase
sales. At present, it is not possible to determine the ultimate outcome of
these matters.
3. Inventory
Inventory consists of the following at September 30, 1995:
Work in progress $247,382
Components 7,966
_______
$255,348
The inventory amounts are presented net of a $319,997 inventory valuation
allowance.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
4. Capitalized Software and Hardware to be Marketed
In prior years, certain software and hardware modification and enhancement costs
developed by the Company were capitalized. During the year ended September 30,
1995, the estimated useful lives of these assets was revised to reflect their
ability to generate significant revenue. Amortization and depreciation of these
software and hardware costs included in depreciation and amortization expense
for the years ended September 30, 1995 and 1994 was $132,593 and $55,350,
respectively. At September 30, 1995, these assets had a net book value of $0.
5. Stock Options and Warrants
The Company granted the former CEO options, which were to expire in January
1996, to purchase common stock in the Company at $.25 per share. At September
30, 1995, the number of shares as to which options were exercisable was
1,200,000. Subsequent to year end, the former CEO conveyed the options to the
Company as described in Note 14.
The Company granted the prior President options, which were to expire in June,
1997, to purchase 65,000 shares of common stock in the Company at $1.00 per
share. During the year, he exercised 107 of the options. Subsequent to year
end, the prior President conveyed the remaining options to the Company as
described in Note 14.
Outstanding warrants and options during the year are summarized as follows:
Outstanding, beginning of year 2,762,200 1,265,000
Expired during the year < 112,200> -
Exercised during the year
(at $1.00 per share) <2,650,000> < 107>
___________ ___________
Outstanding, end of year - 1,264,893
___________ ___________
Range of exercise price - $.25 - $1.00
During the year ended September 30, 1995, 2,650,000 warrants were exercised as
described in Note 8. No options or warrants were exercised during the year
ended September 30, 1994.
6. Income Taxes
Effective October 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes". Under the liability method,
deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. There was no cumulative
effect of adopting Statement 109 as of October 1, 1993.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
6. Income Taxes (Continued)
The Company has net operating loss carryforwards of approximately $7,180,600 and
$6,595,600 at September 30, 1995, for financial reporting and federal tax
purposes, respectively. These carryforwards will begin to expire in fiscal year
2001. For financial reporting purposes, a valuation allowance has been
recognized.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes substantial
limitations on the use of carryforwards upon the occurrence of an "ownership
change" (as defined in Section 382 of the Code). An "ownership change" can
result from issuances of equity securities.
Significant components of the Company's deferred tax assets and liabilities as
of September 30, 1995, are as follows:
Deferred tax assets:
Accrued officer salaries $ 68,500
Net operating loss carryforwards 990,000
___________
Total 1,058,500
Valuation allowance for deferred
tax assets <1,058,500>
___________
Net deferred tax assets $ -
Deferred tax liability:
Depreciation 9,600
Valuation allowance for deferred
tax liability < 9,600>
___________
Net deferred tax liability $ -
7. Operating Leases
Expenses charged against operations for operating lease commitments totaled
approximately $133,002 and $124,055 for the years ended September 30, 1995 and
1994, respectively. The Company had no long-term lease commitments at September
30, 1995.
8. Related Party Transactions
Loan from shareholder
During the year ended September 30, 1995, Dominion Capital, Inc. holder of 59%
of the outstanding common stock of the Company at September 30, 1995, exercised
its 2,650,000 outstanding stock warrants pursuant to its line of credit
agreement with the Company. The agreement stipulated the warrants were
exercisable at $1.00 per share. In lieu of a cash payment, Dominion converted
its outstanding loan on the line of credit with the Company in the amount of
$2,650,000 to stock.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
8. Related Party Transactions (Continued)
During the year ended September 30, 1995, Dominion amended its line of credit
agreement with the Company. The amended agreement provided a total available
amount of $900,000 to draw on for operations. The agreement also provided for
the following:
1. The borrowing is evidenced by a grid promissory note date, September
18, 1995. Interest is due at a rate of prime plus one percent, payable
on the earlier of demand for such payment by Dominion or quarterly
beginning on September 30, 1995.
2. The former CEO and his wife had pledged 876,083 shares of common stock
of the Company held by them as collateral for the payment of the note.
Subsequent to the year end, the former CEO and his wife agreed to
convey the shares of common stock to the Company.
3. The payment of the note is collateralized by a pledge of substantially
all of the tangible and intangible assets of the Company.
By September 30, 1995, the Company had borrowed $825,000 under this line of
credit agreement.
In addition to the line of credit agreement, Dominion loaned the Company
$100,000 on February 1, 1995, evidenced by a grid promissory note. The terms
of the note are the same as the terms of the line of credit agreement as
described above.
The prime rate was 8.75% at September 30, 1995.
During the year ended September 30, 1995 and 1994, respectively, $54,493 and
$23,309 of interest was paid by the issuance of 54,493 and 23,309 shares of
stock at $1.00 per share in lieu of a cash payment. At September 30, 1995, the
Company owed Dominion $19,036 in accrued interest on the outstanding debt.
Accrued salaries
The former CEO and his wife elected to partially defer $18,170 and $75,214 of
their salaries during the years ended September 30, 1995 and 1994, respectively.
Total deferred salaries as of September 30, 1995 and 1994, respectively, was
$456,384 and $551,652. Subsequent to the year ended September 30, 1995, the
Company was released of its obligation to pay this liability, as described in
Note 14.
Due to officer
Subsequent to the year ended September 30, 1995, the Company entered into an
agreement releasing it of any commitments under an executive agreement with its
former President, as described in Note 14. In consideration of the release, the
Company incurred a loss totaling $110,577, which is accrued in the financial
statements as of September 30, 1995.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
8. Related Party Transactions (Continued)
Due from officer
During the year ended September 30, 1995, the Company advanced $80,000 to its
former CEO. The entire balance was outstanding at September 30, 1995.
Subsequent to the year ended September 30, 1995, the prior officer was released
of his obligation to repay this debt, as described in Note 14. This receivable
has been netted against the accrued salaries due to the officer in the
accompanying financial statements.
Sales to officers
During the year ended September 30, 1995, the former CEO purchased a vehicle
from the Company. The sale resulted in a loss of $923, which is reflected in
the financial statements as of September 30, 1995.
Included in contract revenues for the year ended September 30, 1995, are sales
to officers of the Company totaling $5,117.
9. Outstanding Letter of Credit
In accordance with a contract with a customer, at September 30, 1995, the
Company had a $200,000 outstanding letter of credit.
10. Commitments
At September 30, 1995, the Company had an executive agreement with the former
CEO for a renewal term beginning June 21, 1993, and continuing to July 21, 1998.
The original agreement dated December 1, 1989, set the executive's salary at
$120,000 per annum with 15% increases per annum. Bonuses were also provided
based on 2% of the total annual gross sales payable when the annual gross sales
exceeded one million dollars. The executive could be terminated for cause after
3 months written notice with salary and any earned bonus or other employee
benefits due to the termination date. Subsequent to the year ended September
30, 1995, the Company was released of any commitments under the agreement, as
described in Note 14.
At September 30, 1995, the Company had an executive agreement with its former
President for a term beginning June 1, 1994, and continuing to September 30,
1996. The agreement set the executive's salary at $115,000 per annum. Bonuses
were 2% of the total annual net sales payable annually. In addition to the
salary, bonuses and benefits, the Company had granted the Executive a series of
options to purchase common stock of the Company. The options were exercisable
at a price of $1.00 per share and scheduled to expire three years after
issuance. An option to acquire 65,000 shares of stock was issued to the
Executive upon the successful completion of the additional financing (Note 8)
following the commencement of his employment. An additional option to
acquire 30,000 shares was to be granted upon the successful completion of the
first year of employment, contingent upon the successful conversion of the
Dominion debt to equity investment and the infusion of an additional $2.5-$4
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
10. Commitments (Continued)
million of equity investment. An additional option to acquire 30,000 shares
was to be granted upon the successful completion of the second year of
employment, also contingent upon successful conversion of the Dominion debt
to equity investment and the infusion of an additional $2.5-$4 million of
equity investment. If the contract was renewed for an additional year, an
additional option to acquire 30,000 shares was to be granted upon the
successful completion of the third year of employment. Subsequent to the
year ended September 30, 1995, the Company was released of any commitments under
the agreement, as described in Note 14.
11. Economic Dependence
A material part of the Company's business is dependent on a few customers, the
loss of which could have a severe impact on the Company. For the year ended
September 30, 1995 and 1994, respectively, $101,453 (68%) and $148,430 (55%) of
revenues were attributable to three and four customers, respectively, of which
each generated revenues greater than 10% of the total revenues for the year.
12. Fair Value of Financial Instruments
The estimated fair value of the Company's line of credit and demand note payable
to shareholder approximates their carrying value, $925,000, at September 30,
1995. The line of credit and demand note payable are based on variable rates
of interest which reflect current rates at which the Company could borrow
funds with similar remaining maturities.
13. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
14. Litigation and Settlement Agreement
On October 1, 1994, the ownership of the issued and outstanding common stock of
the Company was as follows:
Shares Percentage
_________ __________
The former Chief Executive Officer and
Treasurer (the former CEO) and his wife 1,459,083 48%
Dominion Capital, Inc. 663,309 22
Others 926,020 30
_________ __________
3,048,412 100%
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
14. Litigation and Settlement Agreement (Continued)
On January 13, 1995, Dominion Capital, Inc. exercised warrants to purchase
2,650,000 shares of the Company's common stock and accepted 54,493 shares of
the Company's common stock in lieu of a cash payment for interest due to them,
resulting in the ownership of the issued and outstanding stock on that date as
follows:
Shares Percentage
_________ __________
The former CEO and his wife 1,459,083 25%
Dominion Capital, Inc. 3,367,802 59%
Others 926,020 16%
_________ __________
5,752,905 100%
On January 27, 1995, the Board of Directors elected a new Chief Executive
Officer and Treasurer.
On February 2, 1995, litigation was instituted by the former CEO and his wife
against the Company, Dominion Capital, Inc. and three of the members of the
Board of Directors of the Company.
On June 30, 1995, Dominion Capital, Inc. agreed to transfer the shares it owned
in the Company to Trilon Dominion Partners, LLC.
On September 5, 1995, the Company, in cooperation with the former CEO and his
wife, concluded negotiations with the lessor of the building housing its
administrative offices and operating facilities, resulting in the lease becoming
a month-to-month lease.
On October 17, 1995, the Company and its former President released one another
from all commitments arising out of the Company's executive employment agreement
with its former President (Note 10). In exchange for the Company terminating
the agreement, the former President agreed to convey to the Company his 107
shares of the Company's common stock and 64,893 outstanding options. The
release resulted in a loss to the Company of $110,577. Accordingly, a provision
for the loss of $110,577 has been charged to operations in the accompanying
financial statements for the year ended September 30, 1995.
On October 17, 1995, the terms of a settlement agreement dated September 5,
1995, between the former CEO and his wife, the Company, Dominion Capital, Inc.,
and three of the members of the Board of Directors of the Company were
satisfied, resulting in the following:
(1) Dismissal of the litigation and mutual releases in favor of all of the
parties.
(2) Resignation by the former CEO and his wife as officers and members of
the Board of Directors of the Company.
<PAGE>
InVision Technology, Inc.
Notes to Financial Statements (Continued)
September 30, 1995
14. Litigation and Settlement Agreement (Continued)
(3) Cessation of employment by the former CEO and his wife.
(4) Conveyance to the Company by the former CEO and his wife of 1,459,083
shares of the Company's common stock.
(5) Cancellation of options held by the former CEO to purchase 1,200,000
shares of the Company's common stock.
(6) Release by the Company to the former CEO of a term life insurance
policy on his life in the face amount of $1,000,000. The Company has
no future liability for premium payments on the policy.
(7) Release by the former CEO and his wife of any claim for deferred
salary, recorded by the Company at September 30, 1995.
On November 1, 1995, Dominion Capital, Inc. conveyed to Trilon Dominion
Partners, LLC its grid promissory note dated September 18, 1995, providing the
Company a line of credit of $900,000 ($825,000 of which was outstanding at
September 30, 1995), and its grid promissory note for $100,000, all of which
was outstanding at September 30, 1995.
As of November 1, 1995, the ownership of the issued and outstanding common stock
of the Company is as follows:
Shares
______
Shares outstanding prior to conveyance by
the former President and CEO and his wife 5,753,012
Shares conveyed to the Company 1,459,190
_________
4,293,822
Percentage
__________
Owned by:
Trilon Dominion Partners, LLC 3,367,802 78%
Others 926,020 22
_________ __________
4,293,822 100%
15. Subsequent Event
Effective in March 1996, the Company changed its name to InVision Technology,
Inc.
<PAGE>
Securities and Exchange Commission
Washington, DC 20549
1995
Form 10-KSB
Annual Report
InVision Technology, Inc.
Exhibits
<PAGE>
Exhibit Table Number Description Page
____________________ ___________ ____
(3) Articles of Incorporation 1
(3) By-Laws 4
(4) Instruments defining the rights 18
of security holders, including indentures
Attached under separate cover delivery by United Parcel Service Next Day Air.
