<PAGE> 1
As filed with the Securities and Exchange Commission on January 16, 1998
Registration No. 333-_____
================================================================================
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
(770) 242-7566
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
JULIA B. NORTH, PRESIDENT
5801 Goshen Springs Road
Norcross, Georgia 30071
(770) 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, LLP
1230 PEACHTREE STREET, N.E., SUITE 3100
ATLANTA, GEORGIA 30309
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>
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Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered share (1) (2) price (1) registration fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.00025 per share . . 2,710,000 $1.34 $3,631,400 $1,072
=================================================================================================================
</TABLE>
(1) The shares of Common Stock are being registered hereby for the account
of certain shareholders of the Company. No other shares of Common Stock
are being registered pursuant to this offering. Pursuant to Rule 416,
this Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may be issued because of future
stock dividends, stock distributions, stock splits, or similar capital
readjustments.
(2) 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
SUBJECT TO COMPLETION, DATED JANUARY 16, 1998
PROSPECTUS
2,710,000 SHARES
VSI ENTERPRISES, INC.
COMMON STOCK
______________
The 2,710,000 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
January 15, 1998, the last reported sale price for the Common Stock, as
reported on the Nasdaq SmallCap Market, was $1.34 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>
================================================================================================================
OFFERING UNDERWRITING PROCEEDS TO PROCEEDS
PRICE TO DISCOUNTS AND SELLING 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
================================================================================================================
</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
$15,000. See "Plan of Distribution."
______________
The date of this Prospectus is January __, 1998
<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, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997;
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997;
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997;
5. The Company's Current Report on Form 8-K dated January 3,
1997;
6. The Company's Current Report on Form 8-K dated September 18,
1997;
7. The Company's Form 8-K/A (Amendment No. 1) dated October 6,
1997 to its Current Report on Form 8-K dated September 18,
1997; and
8. 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.
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<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.
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<PAGE> 5
THE COMPANY
GENERAL
VSI Enterprises, Inc. (the "Company"), through its five wholly-owned
subsidiaries, is in the network multimedia/videoconferencing business. The
Company, along with its strategic partners, offers customers turnkey solutions
by supplying videoconferencing products and services, as well as transmission
equipment and a complete internal network, to support video, voice and data
applications. Its core business is the design, manufacture and marketing of
interactive group and desktop videoconferencing systems (the "VSI Systems").
The VSI Systems may be sold individually, or in conjunction with the Company's
businesses that design, market and install network and transmission technology
products and services. 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 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 1,200 videoconferencing systems to
approximately 250 customers, including NationsBank, Duracell, BellSouth, NYNEX
and Johnson & Johnson, as well as various federal and state 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.
On July 31, 1992, the Company acquired substantially all of the
outstanding shares of Common Stock of CyberVision, n.v., a Belgian corporation.
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 a distributor of the Company's videoconference systems 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 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").
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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"). INS is an integration firm specializing in the
connectivity of multi-protocol environments, ranging from small, local area
networks to large, enterprise-wide networks employing WAN technologies to
connect multiple sites.
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. ETI sells network services such as
Centrex, frame relay and basic rate interface, primary rate interface and ISDN
connections on behalf of a number of major telecommunications providers.
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
On November 14, 1997, the Company announced the resignation of B.R.
Brewer as the Chief Financial Officer and Group President of the Company and as
a member of its Board of Directors, effective immediately. Mr. Brewer has
accepted a position as Chief Financial Officer of a privately held
Atlanta-based company that has plans to go public as part of its growth
strategy. The Company has appointed E. Anthony Godfrey to replace Mr. Brewer
as the Chief Financial Officer and Secretary of the Company. Mr. Godfrey has
served in various capacities with the Company since 1991, including most
recently as Controller.
On September 15, 1997, the Company elected Judi North, age 50, as its
President and Chief Executive Officer and as a director of the Company,
effective October 16, 1997. Ms. North has served in various capacities with
BellSouth Telecommunications over the past 25 years, including most recently as
President of its Consumer Services Division. Richard K. Snelling will remain
the Company's Chairman of the Board.
On August 18, 1997, the United States Court for the Northern District
of Georgia, Atlanta Division, dismissed with prejudice a lawsuit previously
filed against the Company and its Chief Executive Officer. The lawsuit was
filed on January 3, 1997 and alleged securities violations by the Company and
its Chief Executive Officer.
On July 15, 1997, Mark E. Munro resigned all his positions with the
Company and its subsidiaries, including his position as a director of the
Company and as the Chief Executive Officer and director of VSI Network
Solutions, Inc., d/b/a Eastern Telecom.
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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 $6,706,894 and $5,340,557 during the years ended
December 31, 1996 and 1995, respectively. As a consequence, the Company had an
accumulated deficit of $24,124,509 and $17,417,615 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
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<PAGE> 8
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.
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 1996 and fiscal 1995,
revenues from international sales represented approximately 13% of the
Company's net product sales. 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 and related services to a number of major customers. During fiscal
1996, approximately 14% of the Company's total revenues were to NYNEX. There
can be no assurance that the loss of this customer 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 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
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<PAGE> 9
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.
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. Although the Company's
Common Stock currently is trading at a price in excess of $1.00 per share,
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.
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<PAGE> 10
USE OF PROCEEDS
The Company will not receive any of the cash 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.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 1, 1997 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>
Ken Burke . . . . . . . . . . . . . . . . . . . 100,000 * 100,000 0 0
Larry M. Carr and Sharon Carr, JTWROS(1) . . . 2,183,479(2) 4.8 150,000 2,033,489(2) 4.4
Frank Hilliard . . . . . . . . . . . . . . . . 164,073 * 50,000 114,073 *
Bruce Pecaro . . . . . . . . . . . . . . . . . 170,000 * 80,000 90,000 *
Theodore M. Rains . . . . . . . . . . . . . . . 441,914 * 100,000 341,919 *
Edward S. Redstone(3) . . . . . . . . . . . . . 3,399,441(4) 7.4 480,000 2,919,441(5) 6.4
Smith, Gambrell & Russell, LLP(5) . . . . . . . 100,000 * 100,000 0 0
Richard K. Snelling(6) . . . . . . . . . . . . 1,612,601(7) 3.5 80,000 1,532,601(7) 3.3
John C.W. Taylor . . . . . . . . . . . . . . . 120,000 * 120,000 0 0
NRT Contract Manufacturing, Inc. . . . . . . . 150,000 * 100,000 50,000 *
Tandberg, ASA . . . . . . . . . . . . . . . . . 800,000 1.7 800,000 0 0
KredietBank, NV(8) . . . . . . . . . . . . . . 550,000 1.2 550,000 0 0
</TABLE>
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(1) Mr. Carr serves as a director of the Company.
(2) Includes 65,000 shares of Common Stock subject to stock options which
are exercisable within the next sixty days and 250,000 shares of
Common Stock subject to presently exercisable Common Stock Purchase
Warrants.
(3) Mr. Redstone serves as a director of the Company.
(4) Includes 35,000 shares of Common Stock subject to stock options which
are exercisable within the next sixty days and 2,500 shares of Common
Stock owned by Mr. Redstone's spouse.
(5) 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.
(6) Mr. Snelling serves as Chairman of the Board of the Company.
(7) Includes 501,546 shares subject to stock options which are exercisable
within the next sixty days, 80,000 shares owned by Mr. Snelling's
spouse, 100,000 shares owned by Richard K. Snelling and Barbara M.
Snelling Charitable Remainder Unitrust and 433,919 shares owned by
SnellTel, a company controlled by Mr. Snelling.
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<PAGE> 11
(8) Shares are being pledged as collateral for a loan by KredietBank, NV
to one of the Company's subsidiaries pursuant to the terms of a stock
pledge agreement by and between the Company and KredietBank, NV.
Shares will be issued by the Company only in the event of a default on
the debt by the Company's subsidiary.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 60,000,000
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.
TRANSFER AGENT
SunTrust Bank, Atlanta, acts as the Transfer Agent for the Common
Shares of the Company.
-10-
<PAGE> 12
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 $15,000.
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 January 15, 1998, Smith,
Gambrell & Russell, LLP owned an aggregate of 100,000 shares of Common Stock,
which shares are being offered hereby. See "SELLING SHAREHOLDERS."
-11-
<PAGE> 13
EXPERTS
The financial statements of the Company as of December 31, 1996 and
1995 and for the fiscal years ended December 31, 1996, 1995 and 1994,
incorporated in this Prospectus by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 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.
-12-
<PAGE> 14
<TABLE>
<S> <C>
=================================================== ===================================================
NO DEALER, SALESPERSON, OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION NOT CONTAINED IN THIS VSI ENTERPRISES, INC.
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 2,710,000 SHARES
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY COMMON STOCK
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.
___________________________
P R O S P E C T U S
TABLE OF CONTENTS
Page JANUARY __, 1998
----
Available Information . . . . . . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . . 8
Selling Shareholders . . . . . . . . . . . . . 9
Description of Securities . . . . . . . . . . 10
Plan of Distribution . . . . . . . . . . . . . 11
Legal Matters . . . . . . . . . . . . . . . . 11 5801 GOSHEN SPRINGS ROAD
Experts . . . . . . . . . . . . . . . . . . . 12 NORCROSS, GEORGIA 30071
(770) 242-7566
=================================================== ===================================================
</TABLE>
<PAGE> 15
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 . . . . . . . . . . . . . . . . . . . $ 1,072
Blue Sky Qualification Fees and Expenses . . . . . . . . . 2,500
Legal Fees and Expenses . . . . . . . . . . . . . . . . . 5,000
Accounting Fees and Expenses . . . . . . . . . . . . . . . 2,000
Transfer Agent Fees . . . . . . . . . . . . . . . . . . . 500
Printing, Materials, and Postage . . . . . . . . . . . . . 1,500
Miscellaneous Expenses . . . . . . . . . . . . . . . . . . 2,428
-------
Total . . . . . . . . . . . . . . . . . . . . . . $15,000
======
</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.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
5.1 - Opinion of Smith, Gambrell & Russell, LLP
23.1 - Consent of Grant Thornton LLP
23.3 - Consent of Smith, Gambrell & Russell (contained in their opinion filed as
Exhibit - 5.1 hereto)
24.1 - Powers of Attorney (contained on signature page to this Registration Statement)
</TABLE>
II-1
<PAGE> 16
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> 17
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
November, 1997.
VSI ENTERPRISES, INC.
By: /s/ Julia B. North
-----------------------------------------------------
Julia B. North, President and Chief Executive Officer
(Principal Executive and Financial Officer)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Julia B. North and Richard K. Snelling
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him, in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
including a Registration Statement filed under Rule 462(b) of the Securities
Act of 1933, as amended, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents may lawfully do or cause to be done by virtue
hereof.
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/ Julia B. North President and November 28, 1997
- ------------------------------------------------ Chief Executive Officer
Julia B. North
/s/ Anthony Godfrey Controller November 28, 1997
- ------------------------------------------------ (Principal Accounting Officer)
Anthony Godfrey
/s/ Richard K. Snelling Chairman of the Board November 28, 1997
- ------------------------------------------------
Richard K. Snelling
/s/ Leo M. Cortjens Director November 28, 1997
- ------------------------------------------------
Leo M. Cortjens
/s/ Carleton A. Brown Director November 28, 1997
- ------------------------------------------------
Carleton A. Brown
/s/ Larry M. Carr Director November 28, 1997
- ------------------------------------------------
Larry M. Carr
/s/ Edward S. Redstone Director November 28, 1997
- ------------------------------------------------
Edward S. Redstone
</TABLE>
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page No.
------ ---------------------- --------
<S> <C>
5.1 Opinion of Smith, Gambrell & Russell, LLP
23.1 Consent of Grant Thornton LLP
</TABLE>
<PAGE> 1
EXHIBIT 5.1
January 15, 1998
Board of Directors
VSI Enterprises, Inc.
5801 Goshen Springs Road
Norcross, Georgia 30071
RE: VSI Enterprises, Inc.
Registration Statement on Form S-3
2,710,000 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; and
(4) The Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, relating to the sale of up to
2,710,000 shares of Common Stock (the "Registration
Statement").
<PAGE> 2
Based upon such examination and upon examination of such other
instruments and records as we have deemed necessary, we are of the opinion that
the 2,710,000 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, LLP
/s/ Robert T. Molinet
---------------------
Robert T. Molinet
RTM:rjc
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated February 21, 1997 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, 1996 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
January 14, 1998
