<PAGE> 1
As filed with the Securities and Exchange Commission on October 30, 1996
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
VSI ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 84-1104448
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5801 Goshen Springs Road
Norcross, Georgia 30071
(404) 242-7566
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
BILL R. BREWER, PRESIDENT
5801 Goshen Springs Road
Norcross, Georgia 30071
(404) 242-7566
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
ROBERT T. MOLINET, ESQ.
SMITH, GAMBRELL & RUSSELL
3343 PEACHTREE ROAD, N.E., SUITE 1800
ATLANTA, GEORGIA 30326
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>
==============================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.00025 per share........ 7,679,700 $2.28 $17,509,716 $5,306
==============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the filing fee pursuant
to Rule 457(c) under the Securities Act of 1933.
----------------------
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
7,679,700 SHARES
VSI ENTERPRISES, INC.
COMMON STOCK
The 7,679,700 shares of Common Stock (the "Common Stock") of VSI
Enterprises, Inc. (the "Company") offered hereby are being sold by certain
holders of the Common Stock of the Company named herein under "Selling
Shareholders." Unless the context otherwise requires, the holders of the
Common Stock selling shares hereunder are hereinafter collectively referred to
as the "Selling Shareholders." The Company will not receive any proceeds from
the sale of the Common Stock by the Selling Shareholders. See "Selling
Shareholders," "Plan of Distribution" and "Use of Proceeds."
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"VSIN" and on the Boston Stock Exchange under the symbol "VSI." On October 25,
1996, the average of the closing bid and asked price for the Common Stock, as
reported on the Nasdaq SmallCap Market, was $2.41 per share.
SEE "RISK FACTORS" ON PAGES 6 TO 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT
IN THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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OFFERING UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING PROCEEDS TO
PUBLIC COMMISSIONS SHAREHOLDERS COMPANY
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share................ See Text See Text See Text See Text
Total.................... Below Below Below Below
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</TABLE>
The Selling Shareholders have advised the Company that they may elect to
offer for sale and to sell the Common Stock from time to time in one or more
transactions through brokers in the over-the-counter market, in private
transactions, or otherwise, in each case at market prices then prevailing or
obtainable. Accordingly, sales prices and proceeds to the Selling Shareholders
will depend upon price fluctuations and the manner of sale. The Selling
Shareholders may effect such transactions by selling to or through one or more
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, brokerage commissions or similar fees in amounts which
may vary from transaction to transaction. Such brokerage commissions and
charges and the legal fees, if any, will be paid by the Selling Shareholders.
The Company will bear all other expenses in connection with registering the
shares offered hereby, which expenses are estimated to total approximately
$25,000. See "Plan of Distribution."
The date of this Prospectus is ___________, 1996
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to certain informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") 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 maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can also be obtained at prescribed rates by writing to the
Securities and Exchange Commission, Public Reference Section, 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, the Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding the Company at http://www.sec.gov. Such reports, proxy statements
and other information concerning the Company may also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006-1506 and the Boston Stock Exchange, One Boston
Place, Boston, MA 02108.
The Company has filed a Registration Statement on Form S-3 (together with
all amendments and exhibits filed or to be filed in connection therewith, the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Common Stock offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of documents
are necessarily summaries of such documents, and each statement is qualified in
its entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission pursuant to
the 1934 Act are hereby incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
4. The Company's Current Report on Form 8-K dated June 28, 1996;
5. The Company's Amendment No. 1 on Form 8-K/A dated September 10,
1996 to its Current Report on Form 8-K dated June 28, 1996;
6. The Company's Current Report on Form 8-K dated October 2, 1996; and
7. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A as filed with the
Commission on November 12, 1991.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified and superseded, to constitute a part of
this Prospectus.
-2-
<PAGE> 4
The Company will provide without charge to each person to whom a
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Prospectus (excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents). Please direct such requests
to Investor Relations Department, VSI Enterprises, Inc., 5801 Goshen Springs
Road, Norcross, Georgia 30071, telephone number (770) 242-7566.
-3-
<PAGE> 5
THE COMPANY
GENERAL
VSI Enterprises, Inc. (the "Company") engages in the business of
designing, manufacturing, and marketing turnkey interactive group
videoconferencing systems (the "VSI Systems"). Each VSI System is designed
with open software and modular subsystems which allow a VSI System to be
expanded or reconfigured as technologies, user requirements, or new
applications evolve. The Company's products are designed to allow multiple
participants at geographically dispersed sites to see and hear each other on
live television and share graphical and pictorial information using standard
commercially available telecommunications transmission facilities. The Company
integrates standard video, audio, and transmission components with its own
proprietary video, audio, and computer control components and software.
The Company's open software and modular subsystems streamline production
and allow the product to be tailored to meet customers' specific needs without
the necessity of custom design. The Company's lead product, introduced in
November 1993, is marketed under the trade name Omega(TM). Customers are
offered a variety of option packages to fit specific applications. Customers
are also offered upgrade packages that make the Company's new product
compatible with older models. To date, the Company has sold over 1,190
videoconferencing systems to approximately 250 customers, including such
companies as NationsBank, NYNEX, Duracell and Johnson & Johnson, as well as
various federal government departments and agencies.
The Company was incorporated under the laws of Delaware on September 19,
1988 as Fi-Tek III, Inc. ("Fi-Tek") for the purpose of raising capital and to
seek out business opportunities in which to acquire an interest. On August 21,
1990, the Company acquired 89.01% of the total common stock and common stock
equivalents then issued and outstanding of Videoconferencing Systems, Inc., a
Delaware corporation ("VSI"). VSI was founded in 1985 through the acquisition
of a portion of the assets of a Sprint Corporation videoconferencing
subsidiary. In December 1990, the Company changed its name from Fi-Tek III,
Inc. to VSI Enterprises, Inc. During the first half of 1991, the Company
acquired the remaining additional outstanding shares of common stock of VSI.
The Company's U.S. operations are conducted principally through VSI.
On July 31, 1992, the Company acquired substantially all of the
outstanding shares of Common Stock of CyberVision, n.v., a Belgian corporation,
in exchange for 1,340,000 shares of Common Stock of the Company and 130,000
Common Stock Purchase Warrants of the Company. In April 1994, the Company
changed the name of CyberVision, n.v. to Videoconferencing Systems, n.v.
(hereinafter referred to as "VSI Europe") to permit both companies to market
products under the common trade name of "VSI." VSI Europe is an integrator and
distributor of videoconference components (including those of the Company) in
Europe and has installed videoconference room systems at sites in the United
Kingdom, France, Germany, Belgium, the Netherlands, Luxembourg, Italy, Denmark,
Sweden, Spain, Portugal, Ireland and Switzerland. VSI Europe has offices
located in London, Paris and Antwerp.
In April 1995, the Company acquired cR Solutions, a software company whose
products include a reservation system for the management of videoconferencing
systems. This business is being operated by the Company through its VSI
Solutions, Inc. subsidiary ("VSI Solutions"). The Company acquired cR
Solutions in exchange for 188,000 shares of Common Stock of the Company plus
contingent consideration based on future sales by the Company of cR Solutions
products.
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<PAGE> 6
On June 28, 1996, the Company acquired Integrated Network Services, Inc.
("INS"), a company engaged in the design, installation and support of local and
wide area networks, primarily for the healthcare industry. This business will
be operated by the Company through its VSI Network Services, Inc. subsidiary
("VSINS"). The Company acquired INS in exchange for 500,000 shares of Common
Stock of the Company in a transaction accounted for as a pooling of interests.
On October 2, 1996, the Company acquired Eastern Telecom, Inc. ("ETI"), a
company engaged in the business of marketing and sales of telecommunications
services and products. This business will be operated as a wholly-owned
subsidiary of the Company. The Company acquired ETI in exchange for 2,007,339
shares of Common Stock of the Company and $3.5 million cash.
VSI, VSI Europe, VSI Solutions, VSINS and ETI will continue their
respective businesses as operating subsidiaries of the Company. References to
the Company herein refer to VSI Enterprises, Inc., VSI, VSI Europe, VSI
Solutions, VSINS and ETI as a consolidated operation, unless the context
indicates otherwise.
The Company's principal executive offices and manufacturing facilities are
located at 5801 Goshen Springs Road, Norcross, Georgia 30071, and its telephone
number is (770) 242-7566.
RECENT DEVELOPMENTS
In June 1996, the Company elected John R. Evans, age 47, as its Vice
President of Operations. From May 1995 to June 1996, Mr. Evans served as
Southeastern Sales Director of the Company. Mr. Evans served in various
capacities with BellSouth Corporation from 1974 to 1994, including most
recently as its Director of Broadband Planning.
In July 1996, Edward S. Redstone, age 68, was elected to the Board of
Directors of the Company. Mr. Redstone has been a private investor since 1994.
From 1984 to 1994, he served as Chairman of the Board of Martha's Vineyard
National Bank.
In October 1996 the Company elected Mark E. Munro, age 34, as its
President - Sales/Marketing and Distribution. In addition, at the Company's
November 1996 Board meeting, Mr. Munro will be elected to the Board of
Directors of the Company. Mr. Munro has served as President of Eastern
Telecom, Inc., a telecommunications company acquired by the Company in October
1996, since 1987.
In August 1996, the Company announced changes in the responsibilities of
its executive officer management team. Bill R. Brewer was named President and
Chief Operating Officer, and Leo M. Cortjens was named President of Corporate
and Product Development and Chief Technical Officer, reporting to Mr. Brewer.
Richard K. Snelling, the Company's Chairman and Chief Executive Officer,
assumed direct responsibility and oversight of VSI Europe.
On September 30, 1996, the Company issued $5,000,000 of 5% Convertible
Debentures due September 1999 (the Debentures"), the proceeds of which were
utilized to fund the cash portion of the acquisition of ETI and for working
capital purposes. The Debentures are convertible into shares of Common Stock
of the Company at the option of the holder at any time and by the Company at
any time subsequent to September 30, 1997 in the event that the price per share
of the Common Stock of the Company has increased by not less than 50% from the
time of funding to the time of conversion by the Company. Any conversions
(whether by the Company or the Debenture holders) shall be at a price equal to
the lesser of (i) 80% of the current market value of the Common Stock of the
Company or (ii) the market value of the Common Stock of the Company at the date
of funding.
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<PAGE> 7
RISK FACTORS
THE PURCHASE OF THE SECURITIES OFFERED HEREBY INVOLVES SIGNIFICANT RISKS.
PROSPECTIVE INVESTORS SHOULD GIVE CAREFUL ATTENTION TO THE FOLLOWING STATEMENTS
RESPECTING CERTAIN RISKS APPLICABLE TO THE OFFERING.
Dependence upon Subsidiaries. Since the Company's sole business
henceforth is expected to be that of its subsidiaries, the Company is subject
to the risks associated with being wholly dependent upon the performance of its
subsidiaries.
Working Capital Requirements; Need for Additional Financing. The Company
may require additional capital or other financing to finance its operations and
continued growth. The Company may seek additional equity financing through the
sale of securities on a public or a private placement basis on such terms as
are reasonably attainable. There can be no assurance that the Company will be
able to obtain such financing when needed, or that if obtained, it will be
sufficient or on terms and conditions acceptable to the Company.
No History of Profitability. After eight years of operations, the Company
has not reported any profits for a full year of operations. The Company
incurred net losses of $4,592,340 and $2,662,354 during the years ended
December 31, 1995 and 1994, respectively. As a consequence, the Company had an
accumulated deficit of $17,353,654 and $12,761,314 at the end of each of these
periods, respectively. There can be no certainty regarding the Company's
ability to achieve or sustain profitability in the future. Whether or not VSI
is able to operate profitably, the Company may require additional capital to
finance its operations. Management believes that the Company's ability to
continue operations is dependent upon successfully obtaining additional funds
through debt or equity financing to provide working capital and other funds for
operations, and ultimately, the achievement of profitability. There can be no
assurance that the Company will be successful in achieving these goals.
Technological Change and New Products. The market for the Company's
products is characterized by rapidly changing technology, evolving industry
standards and frequent product introductions. Product introductions are
generally characterized by increased functionality and better picture quality
at reduced prices. The introduction of products embodying new technology may
render existing products obsolete and unmarketable. The Company's ability to
successfully develop and introduce on a timely basis new and enhanced products
that embody new technology, and achieve levels of functionality and price
acceptable to the market will be a significant factor in the Company's ability
to grow and to remain competitive. If the Company is unable, for technological
or other reasons, to develop competitive products in a timely manner in
response to changes in the industry, the Company's business and operating
results will be materially and adversely affected.
Integration of Acquired Businesses. An important element of the Company's
growth strategy is to expand through acquisitions. The Company's future
success is dependent upon its ability to finance and effectively integrate
acquired businesses with the Company's operations. Although the Company
believes that it will be able to effect such integration, there can be no
assurance that INS, ETI or future acquisitions will be successfully integrated
or that any such acquisition will otherwise be successful. In addition, the
financial performance of the Company is now and will continue to be subject to
various risks associated with the acquisition of businesses, including the
financial effects associated with the integration of such businesses. There
can be no assurance that the Company's acquisition strategy will be successful.
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<PAGE> 8
Dependence on Third Parties. Substantially all of the Company's
components, subsystems and assemblies are made by outside vendors. Disruption
in supply, a significant increase in price of one or more of these components
or failure of a third-party supplier to remain competitive in functionality or
price could have a material adverse effect on the Company's business and
operating results. There can be no assurance that the Company will not
experience such problems in the future. Similarly, excessive rework costs
associated with defective components or process errors associated with the
Company's anticipated new product line of videoconferencing systems could
adversely affect the Company's business and operating results.
Foreign Sales and Operations. During fiscal 1995, revenues from
international sales represented approximately 22% of the Company's net product
sales, as compared to 27% of net product sales during the year ended December
31, 1994. The Company's profitability and financial condition therefore will
be impacted by the success of these foreign operations. International sales
and operations are subject to inherent risks, including difficulties and delays
in obtaining pricing approvals and reimbursement, unexpected changes in
regulatory requirements, tariffs and other barriers, political instability,
difficulties in staffing and managing foreign operations, longer payment
cycles, greater difficulty in accounts receivable collection and adverse tax
consequences. Currency translation gains and losses on the conversion to
United States dollars from international operations could contribute to
fluctuations in the Company's results of operations. If for any reason
exchange or price controls or other restrictions on the conversion or
repatriation of foreign currencies were imposed, the Company's operating
results could be adversely affected. There can be no assurance that these
factors will not have an adverse impact on the Company's future international
sales and operations and, consequently, on the Company's operating results.
Concentration of Customers. The Company sells videoconferencing systems
to a number of major customers. During fiscal 1995, approximately 20% of the
Company's net product sales were to Duracell International and approximately
11% of the Company's net product sales were to NYNEX. There can be no
assurance that the loss of one or more of these customers will not have an
adverse effect on the Company's operations.
Dependence on Key Employees and Management Growth. The Company's
development, management of its growth and other activities depend on the
efforts of key management and technical employees. Competition for such
persons is intense. The Company uses incentives, including competitive
compensation and stock option plans, to attract and retain well-qualified
employees. There can be no assurance, however, that the Company will continue
to attract and retain personnel with the requisite capabilities and experience.
The loss of one or more of the Company's key management or technical personnel
also could adversely affect the Company. The Company does not have employment
agreements with its key management personnel or technical employees. The
Company's future success is also dependent upon its ability to effectively
attract, retain, train, motivate and manage its employees. Failure to do so
could have a material adverse effect on the Company's business and operating
results.
Competition. Competition in the video communications market is intense.
In the videoconferencing market, the Company's primary competitors are
PictureTel Corporation, Compression Labs, Incorporated and VTEL Corporation,
each of which has greater resources and market share than those of the Company.
The Company expects other competitors, some with significantly greater
technical and financial resources, to enter the videoconferencing market. If
the Company cannot continue to offer new videoconferencing products with
improved performance and reduced cost, its competitive position will erode.
Moreover, competitive price reductions may adversely affect the Company's
results of operations.
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<PAGE> 9
Fluctuations in Quarterly Performance. The Company's product sales have
historically been derived primarily from the sale of videoconferencing systems
and related equipment, the market for which is still developing. In addition,
the Company's revenues occur predominantly in the third month of each fiscal
quarter. Accordingly, the Company's quarterly results of operations are
difficult to predict, and delays in the closing of sales near the end of the
quarter could cause quarterly revenues and, to a greater degree, operating
and net income to fall substantially short of anticipated levels. The
Company's total revenues and net income levels could also be adversely affected
by cancellations or delays of orders, interruptions or delays in the supply of
key components, changes in customer base or product mix, seasonal patterns of
capital spending by customers, delays in purchase decisions due to new product
announcements by the Company or its competitors, increased competition and
reductions in average selling prices.
No Assurance of Continued Trading Market in Company Securities. The
Company's Common Stock is traded on the Nasdaq SmallCap Market and on the
Boston Stock Exchange. There is no assurance that a public market for the
Company's Common Stock will continue to be made or that persons purchasing the
Company's securities will be able to avail themselves of a public trading
market for the Common Shares in the future.
In order for the Company's Common Stock to be eligible for continued
listing on the Nasdaq SmallCap Market, the Common Stock must, among other
things, have a minimum bid price per share of $1.00; provided, however that the
Company is not required to maintain the $1.00 per share minimum bid price if it
maintains market value of public float of not less than $1 million and capital
and surplus of not less than $2 million. The Company's Common Stock currently
is trading at a price in excess of $1.00 per share and as of June 30, 1996, the
Company had in excess of $2 million in capital and surplus. Net losses in
future periods, however, may result in the Company's capital and surplus
falling below Nasdaq's minimum requirements. There can be no assurance that
the Company will remain in compliance with Nasdaq's continued listing
requirements. If the Common Stock is delisted by Nasdaq, the trading market
for the Common Stock will be adversely affected, as price quotations for the
Common Stock will not be as readily obtainable.
No Dividends. The Company has never paid cash dividends on its Common
Stock and has no plans to pay cash dividends in the foreseeable future. The
policy of the Company's Board of Directors is to retain all available earnings
for use in the operation and expansion of the Company's business.
Possible Issuance of Preferred Stock. The Company is authorized to issue
up to 800,000 shares of Preferred Stock, $.00025 par value (the "Preferred
Stock"). Preferred Stock may be issued in one or more series, the terms of
which may be determined at the time of issuance by the Board of Directors,
without further action by stockholders, and may include voting rights
(including the right to vote as a series on particular matters), preferences as
to dividends and liquidation, conversion and redemption rights and sinking fund
provisions. No Preferred Stock is currently outstanding and the Company has no
present plans for the issuance thereof. The issuance of any Preferred Stock
could affect the rights of the holders of Common Stock, and therefore, reduce
the value of the Common Stock and make it less likely that holders of Common
Stock would receive a premium for the sale of their shares of Common Stock. In
particular, specific rights granted to future holders of Preferred Stock could
be issued to restrict the Company's ability to merge with or sell its assets to
a third party.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of shares
of the Common Stock by the Selling Shareholders. See "Selling Shareholders"
for a list of those persons who will receive the proceeds from such sales.
-8-
<PAGE> 10
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of October 15, 1996 by
the shareholders of the Company who are offering securities pursuant to this
Prospectus (the "Selling Shareholders"). "Beneficial Ownership" includes
shares for which an individual, directly or indirectly, has or shares voting or
investment power or both. All of the listed persons have sole voting and
investment power over the shares listed opposite their names unless otherwise
indicated in the notes below.
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
------------------------ -----------------------
NUMBER SECURITIES TO NUMBER
NAME OF BENEFICIAL BENEFICIALLY PERCENT BE SOLD BENEFICIALLY PERCENT
OWNER OWNED OF CLASS IN OFFERING OWNED OF CLASS
- ------------------ ------------ -------- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Jose I. Amaya...................................... 705 * 705 0 0
Michael D. Anderson................................ 4,230 * 4,230 0 0
Linda Barnett...................................... 705 * 705 0 0
Garth E. Beard..................................... 5,287 * 5,287 0 0
Andre van den Bogaert(1)........................... 60,000(2) * 25,000 35,000(2) *
William J. Boing................................... 5,287 * 5,287 0 0
B.R. Brewer(3)..................................... 152,9774 * 4,608 148,369(4) *
Roger D. Brown..................................... 13,825 * 13,825 0 0
John T. Buchanan................................... 5,000 * 5,000 0 0
Kevin T. Burks..................................... 1,410 * 1,410 0 0
Larry M. Carr and Sharon R. Carr, JTWROS(5)........ 1,893,880(6) 4.8 45,000 1,848,880(6) 4.7
Peter Clarke....................................... 122,091 * 122,091 0 0
Peter Clarke, II................................... 1,410 * 1,410 0 0
Robert Connely..................................... 10,173 * 10,173 0 0
Susan M. Daignault................................. 5,287 * 5,287 0 0
John E. Daly....................................... 23,042 * 23,042 0 0
Charles B. Dedwylder and Diana
Dedwylder, JTWROS................................ 5,000 * 5,000 0 0
Bruce M. Done...................................... 4,608 * 4,608 0 0
James R. Driver.................................... 1,057 * 1,057 0 0
Tom Eaton.......................................... 4,794 * 4,794 0 0
Peggy Edwards...................................... 9,165 * 9,165 0 0
Tom Edwards........................................ 9,165 * 9,165 0 0
</TABLE>
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* Less than 1% of outstanding shares.
(1) Mr. Van den Bogaert serves as a director of the Company.
(2) Includes 35,000 shares subject to presently exercisable stock options.
(3) Mr. Brewer serves as President and Chief Operating Officer of the
Company.
(4) Includes 62,000 shares subject to presently exercisable stock options.
(5) Mr. Carr serves as a director of the Company.
(6) Includes 50,000 shares subject to presently exercisable stock options
and 250,000 shares subject to presently exercisable Common Stock
Purchase Warrants.
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<PAGE> 11
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
------------------------ -----------------------
NUMBER SECURITIES TO NUMBER
NAME OF BENEFICIAL BENEFICIALLY PERCENT BE SOLD BENEFICIALLY PERCENT
OWNER OWNED OF CLASS IN OFFERING OWNED OF CLASS
- ------------------ ------------ -------- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Fairway Capital, Limited(7)........................ 538,307 1.4 538,307 0 0
Raymond P. Fry and Marilyn T. Fry' JTWROS.......... 5,000 * 5,000 0 0
Ned Greel Giddens.................................. 352 * 352 0 0
Alex R. Godinez.................................... 1,410 1,410 0 0
Donald D. Grantges and Carol S.
Grantges' JTWROS................................. 23,000 * 23,000 0 0
James P.S. Griffith' Jr............................ 20,000 * 20,000 0 0
Joseph E. Groft.................................... 1,410 * 1,410 0 0
Frank W. Hilliard.................................. 26,000 * 26,000 0 0
William L. Hixon' Jr............................... 10,000 * 10,000 0 0
Rod Hollenbeck..................................... 63,817 * 63,817 0 0
Infinity Investors' Ltd.(7)........................ 763,776 1.9 763,776 0 0
John R. James...................................... 705 * 705 0 0
Richard Derek Jordan............................... 352 * 352 0 0
James J. Keefe..................................... 352 * 352 0 0
Kenneth R. Leggett................................. 10,000 * 10,000 0 0
Frank A. Liddell' Jr............................... 25,000 * 25,000 0 0
James L. Lollar.................................... 10,000 * 10,000 0 0
Michael K. Love.................................... 15,000 * 15,000 0 0
Patricia A. Lyons.................................. 3,525 * 3,525 0 0
James McGuire...................................... 3,525 * 3,525 0 0
Mark E. Munro(8)................................... 2,007,339(9) 5.2 2,007,339(9) 0 0
Susan S. Munro..................................... 2,007,339(10) 5.2 2,007,339(10) 0 0
Kathleen A. Murray................................. 3,225 * 3,225 0 0
</TABLE>
- -----------------------------------
* Less than 1% of outstanding shares.
(7) Shares are issuable by the Company upon the conversion of 5%
Convertible Debentures due September 1999. The Convertible Debentures
are convertible into shares of Company Common Stock on the basis of a
floating conversion ratio dependent in part on the market price of the
Company Common Stock at the time of conversion and, therefore, cannot
be determined at this time. The number of shares of Company Common
Stock listed as beneficially owned by the Selling Stockholder assumes
that all of the Convertible Debentures beneficially owned by such
Selling Stockholder were converted on October 25, 1996. The Company
has reserved for issuance, and this Prospectus includes, up to
4,000,000 shares of Common Stock issuable upon the conversion of the
Convertible Debentures, as follows: Fairway Capital, Limited - 826,840
shares; Infinity Investors, Ltd. - 1,173,160 shares; and Southbrook
International Investments, Ltd. - 2,000,000 shares. The Convertible
Debentures limit the conversion right of the holder thereof such that
the maximum number of shares of Company Common Stock issuable upon
conversion of such Convertible Debentures may not exceed 4.9% of the
then issued and outstanding shares of Company Common Stock following
such conversion.
(8) Mr. Munro serves as President - Sales/Marketing and Distribution of the
Company.
(9) Includes 1,003,670 shares owned by Mr. Munro's spouse. Mr. Munro's
address is 300 Metro Center Boulevard, Warwick, Rhode Island 02886.
(10) Includes 1,003,669 shares owned by Ms. Munro's spouse. Ms. Munro's
address is 300 Metro Center Boulevard, Warwick, Rhode Island 02886.
-10-
<PAGE> 12
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
------------------------ -----------------------
NUMBER SECURITIES TO NUMBER
NAME OF BENEFICIAL BENEFICIALLY PERCENT BE SOLD BENEFICIALLY PERCENT
OWNER OWNED OF CLASS IN OFFERING OWNED OF CLASS
- ------------------ ------------ -------- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Kathleen E. Murray 2,300 * 2,300 0 0
Jerry W. O'Rear and Margaret O'Rear, JTWROS........ 23,041 * 23,041 0 0
Bruce L. Pecaro.................................... 30,000 * 30,000 0 0
Vincent J. Pecaro and Gerrie A. Pecaro............. 42,000 * 42,000 0 0
Richard L. Peranton................................ 25,000 * 25,000 0 0
Mark Putnam........................................ 38,845 * 38,845 0 0
April Rains........................................ 2,500 * 2,500 0 0
Theodore M. Rains.................................. 45,000 * 45,000 0 0
Edward S. Redstone(11)............................. 2,382,500(12) 6.1 500,000 1,882,500(12) 4.8
Bart Riley......................................... 5,287 * 5,287 0 0
Manuel Riveros..................................... 5,287 * 5,287 0 0
Dianne Rogers...................................... 122,091 * 122,091 0 0
Sean Rogers........................................ 1,410 * 1,410 0 0
Christina Ruenger.................................. 16,130 * 16,130 0 0
Stuart R. Russell.................................. 2,500 * 2,500 0 0
Antonio Saavedra................................... 3,535 * 3,525 0 0
Jack Sable......................................... 63,017 * 63,817 0 0
R. Allen Schubert.................................. 10,000 * 10,000 0 0
Richard A. Schubert................................ 25,000 * 25,000 0 0
Allen B. Slack, Jr................................. 2,500 * 2,500 0 0
Cathy Slack........................................ 2,500 * 2,500 0 0
Larry Slack........................................ 2,500 * 2,500 0 0
Larry and Kathy Slack, JTWROS...................... 5,000 * 5,000 0 0
Renerick Spencer Slack............................. 2,500 * 2,500 0 0
Smith, Gambrell & Russell(13)...................... 50,000 * 50,000 0 0
Eric Smith......................................... 1,410 * 1,410 0 0
Richard K. Snelling(14)............................ 1,095,721(15) 2.8 46,082 1,049,639(15) 2.7
Southbrook International Investments, Ltd.(7)...... 1,302,083 3.2 1,302,083 0 0
Stewart W. Stanbro................................. 1,762 * 1,762 0 0
Edmund W. Trainor.................................. 10,000 * 10,000 0 0
</TABLE>
- -----------------------------------
* Less than 1% of outstanding shares
(11) Mr. Redstone serves as a director of the Company.
(12) Includes 20,000 shares subject to presently exercisable stock options
and 2,500 shares owned by Mr. Redstone's spouse. Mr. Redstone's
address is 709 Monument Street, Concord, Massachusetts 01742.
(13) Smith, Gambrell & Russell, LLP serves as the Company's outside legal
counsel. The shares of Common Stock offered hereby were issued to
Smith, Gambrell & Russell, LLP in payment of legal services rendered
to the Company.
(14) Mr. Snelling serves as Chairman of the Board and Chief Executive
Officer of the Company.
(15) Includes 186,666 shares subject to presently exercisable stock options
and 229,498 shares owned by Mr. Snelling's spouse.
-11-
<PAGE> 13
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
------------------------ -----------------------
NUMBER SECURITIES TO NUMBER
NAME OF BENEFICIAL BENEFICIALLY PERCENT BE SOLD BENEFICIALLY PERCENT
OWNER OWNED OF CLASS IN OFFERING OWNED OF CLASS
- ------------------ ------------ -------- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
NFSC/FMT SEP APX-868647 fbo
Jeffrey M. Travis................................ 5,500
Ramon Van Kallen................................... 352 * 352 0 0
Dennis Vehovic..................................... 7,000 * 7,000 0 0
J. Virgil Waggoner................................. 20,000 * 20,000 0 0
James M. Walker' Jr................................ 7,000 * 7,000 0 0
Joseph H. Wombwell................................. 15,000 * 15,000 0 0
</TABLE>
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 46,000,000 shares
of Common Stock of $.00025 par value and 800,000 shares of Preferred Stock of
$.00025 par value, issuable in series, the relative rights and preferences of
which may be designated by the Board of Directors.
COMMON STOCK
Each record holder of Common Stock is entitled to one vote for each share
held on all matters properly submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not permitted by the
Certificate of Incorporation. Holders of outstanding Common Shares are
entitled to those dividends declared by the Board of Directors out of legally
available funds; and, in the event of liquidation, dissolution, or winding up
of the affairs of the Company, holders are entitled to receive, ratably, the
net assets of the Company available to holders of Common Shares after
distribution is made to the preferred stockholders (see "Preferred Stock,"
below). Holders of outstanding Common Shares have no preemptive, conversion,
or redemptive rights. All of the issued and outstanding Common Shares are, and
all unissued shares when issued pursuant to the exercise of Warrants will be,
duly authorized, validly issued, fully paid, and nonassessable.
PREFERRED STOCK
The Company is authorized to issue up to 800,000 shares of $.00025 par
value Preferred Stock, none of which is outstanding. The Board of Directors
has the power, without further action by the stockholders, to divide any and
all shares of Preferred Stock into series and to fix and determine the relative
rights and preferences of the Preferred Stock, such as the designation of
series and the number of shares constituting such series, dividend rights,
redemption and sinking fund provisions, liquidating and dissolution
preferences, conversion or exchange rights and voting rights, if any.
Issuances of Preferred Stock by the Board of Directors may result in such
shares having senior dividend and/or liquidation preferences to the holders of
shares of Common Stock and may dilute the voting rights of such holders.
Issuances of Preferred Stock, while providing desirable flexibility in
connection with possible acquisitions and other corporate purposes, could,
among other things, adversely affect the voting rights of holders of the Common
Stock. In addition, the issuance of Preferred Stock could make it more
difficult for a third party to acquire a majority of the outstanding voting
stock. Accordingly, the issuance of Preferred Stock may be used as an
"anti-takeover" device without further action on the part of the stockholders
of the Company. The Company has no present plans to issue any shares of
Preferred Stock.
-12-
<PAGE> 14
TRANSFER AGENT
SunTrust Bank, Atlanta, acts as the Transfer Agent for the Common Shares
of the Company.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby for the benefit of the Selling
Shareholders were originally issued by the Company pursuant to the private
placement exemption from registration provided in Sections 3(b) and/or 4(2) of
the Securities Act of 1933, as amended. The Company has agreed to register the
shares for resale by the Selling Shareholders. The Company will not receive
any of the proceeds from the sale of such shares by the Selling Shareholders.
The Common Stock may be sold from time to time by the Selling
Shareholders, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise, at prices and at terms then prevailing
or at prices related to the then current market price, or in negotiated
transactions. Accordingly, sales prices and proceeds to the Selling
Shareholders will depend upon market price fluctuations and the manner of sale.
The shares may be sold by one or more of the following, without limitation:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction, (b) purchases by a broker or dealer as
principal and resale by such broker or dealer or for its account pursuant to
the Prospectus, as supplemented, (c) an exchange distribution in accordance
with the rules of such exchange, and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In addition, any
securities covered by the Prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 rather than pursuant to the Prospectus, as
supplemented. From time to time the Selling Shareholders may engage in short
sales, short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and deliver the
shares in connection therewith.
From time to time Selling Shareholders may pledge their shares pursuant to
the margin provisions of their respective customer agreements with their
respective brokers. Upon a default by a Selling Shareholder, the broker may
offer and sell the pledged shares of Common Stock from time to time as
described hereunder.
The Selling Shareholders may effect transactions by selling to or through
one or more broker-dealers, and such broker-dealers may receive compensation in
the form of underwriting discounts, brokerage commissions or similar fees in
amounts which may vary from transaction to transaction. The Selling
Shareholders will pay such brokerage commissions and charges, as well as the
fees and expenses of any counsel retained by them in connection with this
offering. The Company will bear all other expenses in connection with
registering the shares offered hereby, which expenses are estimated to total
approximately $25,000.
LEGAL MATTERS
Certain legal matters with respect to the legality of the shares of Common
Stock offered hereby have been passed upon for the Company by Smith, Gambrell &
Russell, LLP, Atlanta, Georgia. As of October 15, 1996, Smith, Gambrell &
Russell, LLP owned an aggregate of 50,000 shares of Common Stock, which shares
are being offered hereby. See "SELLING SHAREHOLDERS."
-13-
<PAGE> 15
EXPERTS
The financial statements of the Company as of December 31, 1995 and 1994
and for the fiscal years ended December 31, 1995 and 1994, and for the nine
month period ended December 31, 1993 incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by the firm of Grant Thornton LLP,
independent auditors, as set forth in their report thereon and are so
incorporated in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The financial statements of Integrated Network Services, Inc. as of and
for the years ended December 31, 1995 and 1994 incorporated in this Prospectus
by reference to the Company's Current Report on Form 8-K/A dated September 10,
1996 have been audited by the firm of Tiller, Stewart & Company LLC,
independent auditors, as set forth in their reports thereon and are so
incorporated in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
-14-
<PAGE> 16
==============================================================================
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION AND REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
-----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information .......................................... 2
Incorporation of Certain Documents by Reference ................ 2
The Company .................................................... 4
Risk Factors ................................................... 6
Use of Proceeds ................................................ 8
Selling Shareholders ........................................... 9
Description of Securities ...................................... 12
Plan of Distribution ........................................... 13
Legal Matters .................................................. 13
Experts ........................................................ 14
</TABLE>
==============================================================================
==============================================================================
VSI ENTERPRISES, INC.
7,679,700 SHARES
COMMON STOCK
P R O S P E C T U S
___________, 1996
5801 Goshen Springs Road
Norcross, Georgia 30071
(770) 242-7566
===============================================================================
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below are estimates of the fees and expenses payable by the
Company in connection with the offer and sale of the Common Stock:
<TABLE>
<S> <C>
SEC Registration Fee............................. $ 5,306
Blue Sky Qualification Fees and Expenses......... 2,000
Legal Fees and Expenses.......................... 5,000
Accounting Fees and Expenses..................... 1,500
Transfer Agent Fees.............................. 500
Printing, Materials, and Postage................. 5,000
Miscellaneous Expenses........................... 5,694
-------
Total...................................... $25,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation provides that in actions other
than in the right of the Company, the Company indemnifies directors and
officers of the Company against costs, charges, expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with any action, suit or proceeding if he acted
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Company.
With respect to actions by or in the right of the Company, the Company
indemnifies directors and officers of the Company against costs, charges and
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of any action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Company; except that no indemnification shall be made
in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Company, unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expense which the court shall deem proper.
The indemnification provisions contained in the Company's Certificate of
Incorporation are substantially coextensive with the provisions of Section 145
of the Delaware General Corporation Law, which sets forth the applicable terms,
conditions and limitations governing the indemnification of officers, directors
and other persons.
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
5.1 - Opinion of Smith, Gambrell & Russell
23.1 - Consent of Grant Thornton LLP
23.2 - Consent of Tiller, Stewart & Company LLC
23.3 - Consent of Smith, Gambrell & Russell (contained in
their opinion filed as Exhibit - 5.1 hereto)
II-1
<PAGE> 18
24.1 - Powers of Attorney
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) 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 of 1933, each such post-effective amendment 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; and
(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.
(b) The undersigned Registrant hereby undertakes 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 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.
(c) 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 provisions referred to in Item 15
above, 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, 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 of 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.
II-2
<PAGE> 19
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 of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norcross, State of Georgia, on the 28th day of
October, 1996.
VSI ENTERPRISES, INC.
By: /s/ Richard K. Snelling
------------------------------------------
Richard K. Snelling, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
following capacities on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard K. Snelling Chairman of the Board, October 28, 1996
- ----------------------------------- and Chief Executive Officer
Richard K. Snelling
/s/ B. R. Brewer President, Chief Operating October 28, 1996
- ----------------------------------- Officer and Secretary
B. R. Brewer (Principal Financial
and Accounting Officer)
/s/ Leo M. Cortjens Director October 28, 1996
- -----------------------------------
Leo M. Cortjens
Director October __, 1996
- -----------------------------------
Andre Van den Bogaert
Director October __, 1996
- -----------------------------------
Carleton A. Brown
* Director October 29, 1996
- -----------------------------------
Larry M. Carr
* Director October 29, 1996
- -----------------------------------
A. John Knapp, Jr.
* Director October 29, 1996
- -----------------------------------
Edward S. Redstone
</TABLE>
*By: /s/ Richard K. Snelling
-----------------------------------------
Richard K. Snelling, as attorney-in-fact
pursuant to powers of attorney filed with
this Registration Statement
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page No.
- ------- ---------------------- --------
<S> <C> <C>
5.1 Opinion of Smith, Gambrell & Russell
23.1 Consent of Grant Thornton LLP
23.2 Consent of Tiller, Stewart & Company LLC
24.1 Powers of Attorney
</TABLE>
<PAGE> 1
EXHIBIT NUMBER 5.1
<PAGE> 2
Robert T. Molinet
(404) 264-2643
October 28, 1996
Board of Directors
VSI Enterprises, Inc.
5801 Goshen Springs Road
Norcross, Georgia 30071
RE: VSI Enterprises, Inc.
Registration Statement on Form S-3
7,679,700 Shares of Common Stock
Gentlemen:
We have acted as counsel for VSI Enterprises, Inc. (the "Company") in
connection with the proposed public offering by certain of its shareholders of
shares of the Company's $.00025 par value Common Stock (the "Common Stock")
covered by the above-described Registration Statement.
In connection therewith, we have examined the following:
(1) The Certificate of Incorporation of the Company, as amended,
certified by the Secretary of State of the State of Delaware;
(2) The Restated By-Laws of the Company, as amended, certified as
correct and complete by the Secretary of the Company;
(3) The minute book of the Company, certified as correct and
complete by the Secretary of the Company;
(4) The Registration Statement on Form S-3 filed with the
Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, relating to the sale of up to
7,679,700 shares of Common Stock (the "Registration
Statement"); and
(5) A Certificate of Good Standing for the Company issued by the
Secretary of State of the State of Delaware.
Based upon such examination and upon examination of such other
instruments and records as we have deemed necessary, we are of the opinion that:
<PAGE> 3
Board of Directors
VSI Enterprises, Inc.
October 28, 1996
Page 7
(A) The Company has been duly incorporated under the laws of the
State of Delaware and is validly existing and in good standing
under the laws of that state; and
(B) The 7,679,700 shares of Common Stock covered by said
Registration Statement to be sold by the selling shareholders
referenced therein have been legally authorized by the Company
and when sold in accordance with the terms described in the
Registration Statement, will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm under the caption "Legal Matters"
in the Prospectus contained in said Registration Statement. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
SMITH, GAMBRELL & RUSSELL
/s/ Robert T. Molinet
Robert T. Molinet
RTM:rjc
<PAGE> 1
EXHIBIT NUMBER 23.1
<PAGE> 2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated February 16, 1996 accompanying the consolidated
financial statements of VSI Enterprises, Inc. and Subsidiaries and the
accompanying schedule included in the Annual Report on Form 10-K for the year
ended December 31, 1995 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
Atlanta, Georgia
October 28, 1996
<PAGE> 1
EXHIBIT NUMBER 23.2
<PAGE> 2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated June 12, 1996 and July 30, 1996 accompanying
the financial statements of Integrated Network Services, Inc. as of and for the
years ended December 31, 1995 and 1994, respectively, included in the current
report on Form 8-K/A of VSI Enterprises, Inc. dated September 10, 1996 which is
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/ Tiller, Stewart & Company, LLC
Atlanta, Georgia
October 28, 1996
<PAGE> 1
EXHIBIT NUMBER 24.1
<PAGE> 2
STATE OF TEXAS
COUNTY OF TARRANT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Larry M. Carr, a Director of VSI
ENTERPRISES, INC., a Delaware corporation, do constitute and appoint Richard K.
Snelling and B.R. Brewer my true and lawful attorneys-in-fact, each with full
power of substitution, for me in any and all capacities, to sign, pursuant to
the requirements of the Securities Act of 1933, a Registration Statement on
Form S-3 for VSI ENTERPRISES, INC., and to file the same with the Securities
and Exchange Commission, together with all exhibits thereto and other documents
in connection therewith, and to sign on my behalf and in my stead, in any and
all capacities, any amendments to said Registration Statement, incorporating
such changes as said attorneys-in-fact deem appropriate, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute or substitutes,
may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 29th day of
October, 1996.
/s/ Larry M. Carr
----------------------------------------
Larry M. Carr
ACKNOWLEDGMENT
BEFORE me this 29th day of October, 1996, came Larry M. Carr, personally
known to me, who in my presence did sign and seal the above and foregoing Power
of Attorney and acknowledged the same as his true act and deed.
/s/ Jean E. Knapp
----------------------------------------
NOTARY PUBLIC
State of Texas
-------------------------------
My Commission Expires:
1-17-1998
----------------------------------------
<PAGE> 3
STATE OF GEORGIA
COUNTY OF GWINNETT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Leo M. Cortjens, a Director of VSI
ENTERPRISES, INC., a Delaware corporation, do constitute and appoint Richard K.
Snelling and B.R. Brewer my true and lawful attorneys-in-fact, each with full
power of substitution, for me in any and all capacities, to sign, pursuant to
the requirements of the Securities Act of 1933, a Registration Statement on
Form S-3 for VSI ENTERPRISES, INC., and to file the same with the Securities
and Exchange Commission, together with all exhibits thereto and other documents
in connection therewith, and to sign on my behalf and in my stead, in any and
all capacities, any amendments to said Registration Statement, incorporating
such changes as said attorneys-in-fact deem appropriate, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute or substitutes,
may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 24th day of
October, 1996.
/s/ Leo M. Cortjens
----------------------------------------
Leo M. Cortjens
ACKNOWLEDGMENT
BEFORE me this 24th day of October, 1996, came Leo M. Cortjens, personally
known to me, who in my presence did sign and seal the above and foregoing Power
of Attorney and acknowledged the same as his true act and deed.
/s/ Kathy Munson
----------------------------------------
NOTARY PUBLIC
State of Georgia
My Commission Expires:
7/22/99
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<PAGE> 4
STATE OF TEXAS
COUNTY OF HARRIS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, A. John Knapp, Jr., a Director of
VSI ENTERPRISES, INC., a Delaware corporation, do constitute and appoint
Richard K. Snelling and B.R. Brewer my true and lawful attorneys-in-fact, each
with full power of substitution, for me in any and all capacities, to sign,
pursuant to the requirements of the Securities Act of 1933, a Registration
Statement on Form S-3 for VSI ENTERPRISES, INC., and to file the same with the
Securities and Exchange Commission, together with all exhibits thereto and
other documents in connection therewith, and to sign on my behalf and in my
stead, in any and all capacities, any amendments to said Registration
Statement, incorporating such changes as said attorneys-in-fact deem
appropriate, hereby ratifying and confirming all that said attorneys-in-fact,
or their substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 24th day of
October, 1996.
/s/ A. John Knapp, Jr.
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A. John Knapp, Jr.
ACKNOWLEDGMENT
BEFORE me this 24th day of October, 1996, came A. John Knapp, Jr.,
personally known to me, who in my presence did sign and seal the above and
foregoing Power of Attorney and acknowledged the same as his true act and deed.
/s/ J. Paulette Starr
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NOTARY PUBLIC
State of Texas
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My Commission Expires:
10/26/98
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<PAGE> 5
STATE Of MASSACHUSETTS
COUNTY OF MIDDLESEX
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Edward S. Redstone, a Director of
VSI ENTERPRISES, INC., a Delaware corporation, do constitute and appoint
Richard K. Snelling and B.R. Brewer my true and lawful attorneys-in-fact, each
with full power of substitution, for me in any and all capacities, to sign,
pursuant to the requirements of the Securities Act of 1933, a Registration
Statement on Form S-3 for VSI ENTERPRISES, INC., and to file the same with the
Securities and Exchange Commission, together with all exhibits thereto and
other documents in connection therewith, and to sign on my behalf and in my
stead, in any and all capacities, any amendments to said Registration
Statement, incorporating such changes as said attorneys-in-fact deem
appropriate, hereby ratifying and confirming all that said attorneys-in-fact,
or their substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 29th day of
October, 1996.
/s/ Edward S. Redstone
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Edward S. Redstone
ACKNOWLEDGMENT
BEFORE me this 29th day of October, 1996, came Edward S. Redstone,
personally known to me, who in my presence did sign and seal the above and
foregoing Power of Attorney and acknowledged the same as his true act and deed.
/s/ David Gleahy
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NOTARY PUBLIC
State of Massachusetts
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My Commission Expires:
June 14, 2002
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