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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
______________________________
Form S-8
Registration Statement
Under
The Securities Act of 1933
_______________________________
NETWORK SYSTEMS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-0460247
(state of incorporation) (I.R.S. employer identification no.)
200 North Elm Street
Greensboro, North Carolina 27401
(336) 271-8400
(Address and telephone number of Registrant's principal executive offices)
STOCK PROMOTION AGREEMENT WITH PALM STATE EQUITIES, INC.
(Full title of the plan)
_____________________
William C. Ray, Esq.
Vice President, General Counsel, and Secretary
Network Systems International, Inc.
200 North Elm Street
Greensboro, North Carolina 27401
(336) 271-8400
(Name, address, and telephone number of agent for service)
_____________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount of
Title of Amount to Offering Aggregate Registration
Securities be Price Offering Fee
to be Registered Per Share Price
Registered
Common Stock,
$.001 par 37,500 $3.37 $126,375 $37.28
value
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to the Note to Part I of Form S-8, the information
specified in Items 1 and 2 of Form S-8 has not been filed with
the Securities and Exchange Commission as part of this
Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference
in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-KSB for
the fiscal year ended September 30, 1997, filed
December 30, 1997, pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and
(b) The Registrant's Quarterly Report on Form 10-QSB
for the quarter ended December 31, 1997, filed February
6, 1998, pursuant to Section 13(a) or 15(d) of the
Exchange Act;
The Registrant's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 1998, filed May 14,
1998, pursuant to Section 13(a) or 15(d) of the
Exchange Act;
The Registrant's Quarterly Report on Form 10-QSB
for the quarter ended June 30, 1998, filed August 7,
1998, pursuant to Section 13(a) or 15(d) of the
Exchange Act;
The Registrant's Proxy Statement filed January 28,1998;
The Registrant's Form NT-10K filed December 30,1997;
The Registrant's Form 8-K filed January 26, 1998;
The Registrant's Form 8-K filed April 29, 1998;
The Registrant's Form 8-K filed June 1, 1998; and
The Registrant's Form 8-K filed July 23, 1998.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act, on or after the
date of this Registration Statement and before the filing of a
post-effective amendment indicating that all securities offered
hereby have been sold or that de-registers all securities covered
hereby remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof
from the date of filing of those documents.
Item 4. Description of Securities.
The authorized capital stock of the Registrant consists of
100,000,000 shares of common stock, $.001 par value per share.
As of the date of this Registration Statement, the Registrant had
outstanding 7,611,754 shares common stock. Each shareholder of
record is entitled to one vote per share on all matters to be
voted upon by the shareholders. The Registrant's Articles of
Incorporation do not provide for cumulative voting. The
shareholders are entitled to receive dividends when, as, and if
declared from time to time by the Registrant's Board of
Directors. The Registrant's common stock does not have any
preemptive rights.
Item 5. Interest of Named Experts and Counsel.
William C. Ray, Esq., who is rendering the opinion regarding
the validity of the shares of common stock being registered by
this Registration Statement, is the Vice President, General
Counsel, and Secretary of the Registrant. Mr. Ray also
beneficially owns 350,481 shares of the Registrant's common
stock.
Item 6. Indemnification of Directors and Officers.
Nevada law authorizes the Registrant to indemnify any person
who was or is a party, or threatened to be made a party, to any
proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding,
including any appeal, if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. In the case of an action by or on behalf
of a corporation, indemnification may not be made if the person
seeking indemnification is adjudged liable, unless the court in
which the action was brought determines the person is fairly and
reasonably entitled to indemnification. The indemnification
provisions under Nevada law require indemnification if a director
or officer has been successful on the merits or otherwise in
defense of any action, suit, or proceeding to which he or she was
a party by reason of the fact that he or she is or was a director
or officer of the corporation. The indemnification authorized
under Nevada law is not exclusive and is in addition to any other
rights granted to officers and directors under the Articles of
Incorporation or Bylaws of the Registrant or any agreement
between officers and directors and the corporation. A
corporation may purchase and maintain insurance or furnish
similar protection on behalf of any officer or director against
any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising
out of the status, as an officer or director, whether or not the
corporation would have the power to indemnify him or her against
such liability under Nevada law.
The Registrant's Bylaws and Articles of Incorporation
provide for the indemnification of the Registrant's directors and
officers, and persons who serve at the request of Registrant as
directors or officers of another corporation, against any
liability incurred in connection with the defense or settlement
of any claim, action, suit, or proceeding that the director or
officer was a party to by reason of the fact that he is or was a
director or officer of the Registrant, or other corporation,
except that the director or officer will not be indemnified for
any liability arising from action that constitute negligence or
willful misconduct.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Description
Number
4.1 Stock Promotion Agreement dated July 16,
1997, between the Registrant and Palm
State Equities, Inc.
5.1 Opinion of William C. Ray, Esq.
regarding the legality of the securities
being registered.
15 Consent of Pender Newkirk & Company.
23.1 Consent of William C. Ray, Esq.
(contained in Exhibit 5.1).
24 Power of Attorney (Included on signature
page)
Item 9. Undertakings.
The undersigned hereby undertakes:
(1) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange
Act) 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.
(2) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 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 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, such 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 Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing a Form S-8
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Greensboro, State of North Carolina, on the 25th day of
September, 1998.
NETWORK SYSTEMS INTERNATIONAL,INC.
By: /s/ Michael Spohn
Michael Spohn
Chief Financial Officer
POWER OF ATTORNEY
Pursuant to section 6(a) of the Securities Act of 1933, each
of the undersigned hereby appoints and constitutes Michael Spohn
(with full power to act alone), his attorney-in-fact, with full
power of substitution, for him and on his behalf, in any and all
capacities, to sign, execute, and file with the Securities and
Exchange Commission this Registration Statement on Form S-8 under
the Securities Act of 1933, as amended, and any amendments
relating thereto, granting unto said attorney, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done to effectuate the same as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Robbie M. Efird President, Chief Executive 9/18/98
Robbie M. Efird Officer,and Director
/s/ E. W. Miller, Jr. Executive Vice President 9/18/98
E. W. Miller, Jr. and Director
/s/ David F. Christian Director 9/18/98
David F. Christian
/s/ James W. Moseley Director 9/21/98
James W. Moseley
/s/ Richard R. King Director 9/18/98
Richard R. King
/s/ David P. Reynolds Director 9/21/98
David P. Reynolds
EXHIBIT 4.1
July 16, 1997
Mr. Rick Tuberosa
President, Palm State Equities, Inc.
721 Imar Drive
Sun City Center, FL 33573
Re: Stock Promotion - Network Systems International, Inc.
Dear Rick:
Please allow this correspondence to serve as written
documentation of our verbal agreement with reference to the
above-captioned matter. We have agreed that in exchange for
Palm State Equities' efforts in promoting the stock of
Network Systems International, Inc., Palm State will be
issued company stock for services rendered as follows:
(1)If, during the next 60 day period from the above date,
Palm State promotes the stock of Network Systems
International, Inc. to the extent that it legitimately
trades at a minimum bid price of $3.00 per share and
continuously maintains such price for a period of 30 days
thereafter, upon application and acceptance of Network
Systems International, Inc. by NASDAQ for listing on Small
Cap, then, and in such event, Palm State Equities, Inc. will
be issued TWENTY-FIVE THOUSAND (25,000) shares of common
stock in Network Systems International, Inc. for services
rendered.
(2)In addition to the above, for each successive increase
in stock price of $1.00 (above the $3.00 level reference
above) during the next SIX (6) month period that
legitimately holds such price for a period of THIRTY (30)
consecutive days after reaching such level, Palm State
Equities, Inc. will be awarded TEN THOUSAND (10,000) shares
of common stock of Network Systems International, Inc.
I trust that the above accurately reflects our
understanding and agreement for payment of services
rendered for the promotion of our stock. Should you
have any questions, please contact me immediately.
Yours very truly,
/s/ William C. Ray
EXHIBIT 5.1
William C. Ray
Attorney at Law
2800 Spring House Place
Greensboro, NC 27410
September 25,1998
Network Systems International, Inc.
200 North Elm Street
Greensboro, North Carolina 27401
Re: Registration Statement on Form S-8
Gentlemen:
This refers to the Registration Statement on Form
S-8 (the "Registration Statement") filed on September
25, 1998, by Network Systems International, Inc. (the
"Company") with the Securities and Exchange Commission.
The Registration Statement was filed to register under
the Securities Act of 1933 to total sum of 37,500
shares of the Company's stock, $.001 par value (the
"Shares"), issued to Palm State Equities, Inc. ("Palm
State") as compensation for stock promotion services
rendered to the Company pursuant to the Stock Promotion
Agreement (the "Stock Promotion Agreement") dated July
16, 1997, between Palm State and the Company.
In connection with the foregoing, I have acted as
the Company's counsel and examined originals, or copies
certified to my satisfaction, of all such corporate
records of the Company, certificates of public
officials and officers of the Company and the documents
that I deemed necessary to form a basis for the opinion
expressed below.
Based on the foregoing and having regard for legal
considerations that I deemed relevant, when issued for
consideration specified in the Stock Promotion
Agreement, will be legally issued, fully paid and
nonassessable.
I consent to the filing of this opinion as Exhibit
5.1 to the Registratioon Statement.
Very truly yours,
/s/ William C. Ray
William C. Ray
EXHIBIT 15
Consent of Independent Auditors
We hereby consent to the use in the Registration Statement
on Form S-8, to be filed by Network Systems International,
Inc. of our Auditors' Opinion dated November 14, 1997,
accompanying the consolidated financial statement of Network
Systems International, Inc. and subsidiaries as of September
30, 1997.
/s/ Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
September 24, 1998
