CYCOMM INTERNATIONAL INC, S-3/A, 1997-01-13

CYCOMM INTERNATIONAL INC
S-3/A, 1997-01-13
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

Previous: ALLIED DEVICES CORP, 10KSB40, 1997-01-13

Next: INSIGNIA FINANCIAL GROUP INC, SC 13D/A, 1997-01-13

<PAGE> 1

As filed with the Securities and Exchange Commission on January 13, 1997
Registration No. 333-15963
- -----------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-------------

AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CYCOMM INTERNATIONAL INC.
(Exact Name of Registrant as Specified in Its Charter)

-------------

WYOMING 54-1779046
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

-------------------- -----------

1420 Springhill Road, Suite 420, McLean, Virginia 22102, (703) 903-9548
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal
Executive Offices)

------------------

ALBERT I. HAWK
President and Chief Executive Officer
Cycomm International Inc.
1420 Springhill Road, Suite 420, McLean, Virginia 22102, (703) 903-9548
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)

Copy to:
DAVID J. LEVENSON, ESQ.
Venable, Baetjer, Howard & Civiletti, LLP
1201 New York Avenue, N.W.
Washington, D.C. 20005
--------------------
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 of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /

Cover of Registration Statement continued on following page

<PAGE> 2

Cover of Registration Statement continued from previous page

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 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. / /

The registrant hereby amends this Registration Statement on such date
and 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.

<PAGE> 3

CYCOMM INTERNATIONAL INC.

Cross Reference Sheet Showing Location in Prospectus of Information
Required by Items of Form S-3 Pursuant to Item 501(b) of Regulation S-K

<TABLE>
<CAPTION>
Item No. Registration Statement Heading Location in Prospectus

- -------- ------------------------------- -----------------------

<S> <C> <C>
1. Forepart of Registration Statement Cover Page of Registration
and Outside Front Cover Page of Statement; Outside Front
Prospectus Cover Page of Prospectus

2. Inside Front and Outside Back Inside Front Cover and
Cover Pages of Prospectus Outside Cover Page of
Prospectus

3. Summary Information, Risk Factors Prospectus Summary; Risk
and Ratio of Earnings to Fixed Factors
Charges

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Not Applicable

6. Dilution Not Applicable

7. Selling Security Holders Selling Security Holders
and Plan of Distribution

8. Plan of Distribution Selling Security Holders
and Plan of Distribution

9. Description of Securities Description of Securities
to be Registered

10. Interests of Named Experts and Not Applicable
Counsel

11. Material Changes Not Applicable

12. Incorporation of Certain Not Applicable
Information by Reference

13. Disclosure of Commission Position Indemnification
on Indemnification for Securities
Act Liabilities
</TABLE>

<PAGE> 4

Prospectus
Cycomm International Inc.
1,381,978 Common Shares
505,000 Warrants to Purchase Common Shares

--------------------------------------------

This Prospectus relates to (a) 1,381,978 Common Shares of Cycomm
International Inc., a Wyoming corporation ("Cycomm"), being offered
from time to time by stockholders of Cycomm (the "Selling Security
Holders"), which consists of (i) 71,978 Common Shares previously issued
to Midcomm, Inc. in connection with certain obligations of Cycomm, (ii)
800,000 Common Shares previously issued in connection with the exercise
of Cycomm's Series A Convertible Redeemable Preferred Stock and 500,000
Common Shares underlying warrants (the "XL Warrants"), issued in
connection with the acquisition of XL Computing Corporation, and (iii)
5,000 Common Shares previously issued and 5,000 Common Shares issuable
upon conversion of warrants (the "Wall Street Warrants"), in connection
with the settlement of a dispute with The Wall Street Group and (b) the
XL Warrants and Wall Street Warrants, being offered from time to time
by the Selling Security Holders. This registration statement also
covers the issuance and sale to holders of the XL Warrants and Wall
Street Warrants of Common Shares upon the conversion of the XL Warrants
and Wall Street Warrants.

The XL Warrants are exercisable at any time until March 20, 1999 at an
exercise price of $3.75 per share. The Wall Street Warrants are
exercisable at any time until November 30, 2000 at an exercise price of
$4.75 per share. Unless exercised before their respective expiration
dates, the XL Warrants and the Wall Street Warrants will expire and
will be of no value. See "Description of Securities."

The names of the Selling Security Holders and their respective holdings
are set forth under "Selling Security Holders." The Common Shares, XL
Warrants or Wall Street Warrants may be offered by the Selling Security
Holders from time to time in transactions for their own accounts (which
may include block transactions), in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be
changed, at market prices prevailing at the time of the sale, at prices
related to such prevailing market prices or at negotiated prices. The
Selling Security Holders may effect such transactions by selling Common
Shares, XL Warrants or Wall Street Warrants to or through broker-
dealers, and such broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the Selling Security
Holders or the purchasers of Common Shares, XL Warrants or Wall Street
Warrants for whom/which such broker-dealers may act as agent or to
whom/which they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
None of the proceeds from the sale of the Common Shares, XL Warrants or
Wall Street Warrants by the Selling Security Holders pursuant to this
Prospectus will be received by Cycomm. Cycomm will receive an aggregate
of $1,898,750, assuming all of the XL Warrants and Wall Street Warrants
are exercised.

Cycomm's Common Shares are traded on the American Stock Exchange, Inc.
("AMEX") and on The Alberta Stock Exchange ("ASE") under the symbol
"CYI." On November 7, 1996, the closing price of a Common Share was
$3.625 as reported on AMEX. See "Selling Security Holders and "Plan of
Distribution." The XL Warrants and Wall Street Warrants are not listed
on any exchange.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.

--------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is January 13, 1997

<PAGE> 5

AVAILABLE INFORMATION

Cycomm is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
the American Stock Exchange, Inc. ("AMEX"), and in accordance therewith
files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information may
be inspected and copied at certain regional offices of the Commission
located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and 75 Park Place, 14th Floor, New
York, New York 10007 and at AMEX, 86 Trinity Place, New York, New York
10006-1881, and may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549-1004. Copies of such
material can be obtained from the Public Reference Section of the
Commission, Washington, DC 20549, at prescribed rates. In addition,
Cycomm is an electronic filer and the Commission maintains a Website
that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. The address of the Commission's Website is
http://www.sec.gov.

Cycomm has filed with the Commission, a Registration Statement on
Form S-3 under the Securities Act of 1933 as amended (the "Securities
Act"). As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information set forth in
the Registration Statement and exhibits thereto which Cycomm has filed
with the Commission and to which reference is hereby made.

Cycomm furnishes or makes available to its shareholders annual
reports containing financial and other information. Cycomm also from
time to time furnishes to its shareholders other reports containing
information about material corporate developments. The annual reports
contain financial information that has been examined and reported upon,
with an opinion expressed by, independent chartered accountants. Such
reports will be provided upon request to Cycomm.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

All documents previously filed with the Commission pursuant to the
annual and periodic reporting provisions of the Exchange Act since May
31, 1996, the end of the Company's latest fiscal year, are incorporated
in this Prospectus by reference, specifically including the following:

1. Cycomm's annual report on Form 10-KSB for the fiscal
year ended May 31, 1996, as amended;

2. Cycomm's Form 10-QSB for the quarter ended August 31,
1996, as amended;

3. Cycomm's Forms 8-K filed June 21, 1996, as amended, and
November 29, 1996.

All other documents subsequently filed by Cycomm with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the termination of the offering covered by this
Prospectus shall be deemed to be incorporated by reference herein and
to be part hereof from the date any such document is filed. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the 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,
modified or supersedes that statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

Cycomm will provide without charge to each person to whom a
Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the documents that are incorporated by
reference herein (other than exhibits to such documents which are not
specifically incorporated by reference into such documents). Requests
should be directed to Corporate Secretary, Cycomm International Inc.,
1420 Springhill Road, Suite 420, McLean, Virginia; telephone (703)
903-9548.

No person has been authorized to give any information or to make
any representation not contained in or incorporated by reference in
this Prospectus, and, if given or made, such information or
representation not contained herein must not be relied upon as having
been authorized. This Prospectus does not

<PAGE> 6

constitute an offer to sell, or the solicitation of an offer to
purchase, any of the securities offered by this Prospectus, in any
jurisdiction to or from any person to or from whom it is unlawful to
made such offer or solicitation of an offer, or proxy solicitation in
such jurisdiction. Neither the delivery of this Prospectus nor the
issuance or sale of any securities hereunder shall under any
circumstances create any implication that there has been no change in
the information set forth herein since the date hereof or delivered and
incorporated by reference herein since the date hereof.

<PAGE> 7

<TABLE>
<CAPTION>
TABLE OF CONTENTS

PAGE NUMBER
<S> <C>
PROSPECTUS SUMMARY......................................................................... 5

RISK FACTORS............................................................................... 5

BUSINESS................................................................................... 7

THE OFFERING............................................................................... 14

USE OF PROCEEDS............................................................................ 15

PLAN OF DISTRIBUTION ...................................................................... 15

SELLING SECURITY HOLDERS................................................................... 15

DESCRIPTION OF SECURITIES.................................................................. 16

EXPERTS.................................................................................... 17

LEGAL MATTERS.............................................................................. 17

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES................................................................................ 18
</TABLE>

<PAGE> 8

PROSPECTUS SUMMARY

The following summary information is qualified in its entirety by the
more detailed information and financial statements and notes thereto
appearing elsewhere in this Prospectus and incorporated by reference in
this Prospectus.

THE COMPANY

Cycomm International Inc., a Wyoming corporation ("Cycomm"),
through its subsidiaries and interests in other corporations, designs
and develops privacy products for the telecommunications industry and
government, particularly for voice, data, and fax landline and wireless
systems. In addition, Cycomm designs, develops and manufactures secure
and ruggedized computing products. Cycomm's principal business is
carried out by its subsidiaries and Cycomm performs administrative
functions. Unless the context otherwise requires, references in the
Prospectus to "Cycomm" refers to Cycomm International Inc. and its
subsidiaries and interests in other corporations.

Cycomm has four active, wholly owned subsidiaries consisting of
(i) Cycomm Corporation, an Oregon corporation ("Cycomm U.S."), (ii) XL
Computing Corporation, a Delaware corporation ("XL Computing"), (iii)
XL Computing Canada, Inc., a Quebec corporation ("XL Computing
Canada") and (iv) Val-Comm, Inc., a New Mexico corporation
("Val-Comm"). Cycomm also has a 25.5% interest in Sistemas de
Recepcion de Satelite Galactica C.A. ("Galactica"). See "Business."

Cycomm's principal executive offices are located at 1420
Springhill Road, Suite 420, McLean, Virginia 22102, and its telephone
number is (703) 903-9548.

RISK FACTORS

The securities offered by this Prospectus are speculative and
involve a high degree of risk. Prospective investors should carefully
consider the following factors before purchasing the securities offered
hereby.

Lack of Profits and Auditors' Going Concern Disclosure.

Since the commencement of its business operations in 1986, Cycomm
has experienced a history of losses. Cycomm has been engaged primarily
in the design and development of cellular privacy products since 1990
and, accordingly, has not received any significant revenues. For the
fiscal years ended May 31, 1996, 1995 and 1994, Cycomm incurred losses
of $7,784,605, $4,630,446, and $9,061,502, respectively. As reported
in Cycomm's Form 10-QSB for the quarter ended August 31, 1996, Cycomm
incurred losses of $1,033,997, and cash and cash equivalents decreased
by $1,865,113 for that period. As a result of Cycomm's significant
losses and negative cash flows from operations, Cycomm's ability to
continue as a going concern is uncertain and is dependent upon
achieving a profitable level of operations. Cycomm has implemented a
cost-cutting program in its communications security products operations
by which it will attempt to reduce costs by eliminating the
manufacturing and distribution functions it is currently performing and
to instead license its products in exchange for royalties. This
program is expected to enable Cycomm to lower overhead by reducing its
lease obligations and personnel expenses. Cycomm also intends to focus
most of its financial resources and personnel on increasing the sales
and market share of the business segment involved in providing
value-added computer and telecommunications systems, from which
management believes the greatest potential for profits may be achieved.
See "Dependence upon Telecommunications Privacy Products for Revenues";
"Potential Additional Capital Requirements; Dependence on Equity and
Debt Financing to Fund Operations"; "Business - Cycomm's Business
Strategy."

Dependence Upon Telecommunications Privacy Products for Revenues.

Cycomm believes that there will be a demand for telecommunications
privacy products. Further, in light of media stories publishing
cellular telephone conversations involving famous individuals, Cycomm
believes that security concerns involving cellular transmission have
increased. As a result, cellular service carriers and independent
cellular telephone dealers have indicated the need for
telecommunication privacy products, including Cycomm's privacy
products. Since Cycomm U.S.'s products all relate to securing
telephone conversations

<PAGE> 9

and data transmissions, Cycomm U.S. will not meet its business
objectives in the event that sales of products do not materialize. See
"Competition";"Business-Market for Cycomm's Products and Services."

Potential Additional Capital Requirements; Dependence on Equity and
Debt Financing to Fund Operations.

Cycomm has experienced significant operating losses and has not
yet achieved a level of profitable operations. In the event that
Cycomm is unable to generate adequate cash flows, Cycomm may be
required to seek additional financing to complete its business
objectives. If additional capital is necessary, Cycomm does not
anticipate that it will raise such capital through registered, public
offerings. Cycomm, traditionally, has raised capital through the
private placement of its equity and debt securities and anticipates
that it will raise additional capital in the same manner, if necessary.
In Cycomm's Form 10-QSB, filed for the period ending August 31, 1996,
Cycomm stated that it anticipates that holders of Cycomm's convertible
debentures will exercise their conversion options and that Cycomm's
working capital would not be required to retire these debentures. This
statement was based upon management's experience with past holders of
Cycomm's convertible debentures, and the fact that none of the
convertible debentures will mature during the next two years. No
assurance can be given that current holders of these convertible
debentures will exercise their conversion options, or that Cycomm will
not be required to retire these debentures using its working capital or
any other source of funds. No assurance can be given that Cycomm will
be able to raise additional financing to meet its business objectives.
Failure to obtain additional working capital in a timely manner could
have a material adverse effect on Cycomm, its operations, financial
results and prospects. In the event Cycomm is required to raise
additional capital through private placement of its securities, such
placement of securities will have the effect of diluting existing
shareholders of their ownership interest in Cycomm. See "Lack of
Profits and Going Concern Disclosure."

Competition.

The secure communications market is highly competitive and subject
to rapid technological advances. Cycomm's future success is dependent
on obtaining technological superiority in its products, its ability to
upgrade its products from time to time and its ability to respond to
technological change in the communications industry. The entry of
large established telecommunications equipment suppliers or consumer
electronics manufacturers into the market segments targeted by Cycomm
could negatively affect Cycomm's competitive position. Further, there
can be no assurance that other companies will not adopt technology
which is similar or equally as effective as those adopted by Cycomm or
that new technology will not render Cycomm's current technology
obsolete. See "Intellectual Property Protection."

Intellectual Property Protection.

Cycomm has or has applied for patent protection for certain of its
principal proprietary technologies. There can be no assurance that the
patent applications will be successful, that any patents issued are or
will be valid, or that others will not develop functionally equivalent
or superior technology that does not infringe on Cycomm's patents.
There can also be no assurance that Cycomm's existing patents will go
unchallenged or that non-disclosure and confidentiality agreements with
employees and others will provide meaningful protection for Cycomm's
trade secrets. In addition, Cycomm's commercial success may depend on
its future products not infringing on the intellectual property rights
of others. If any of its products infringes on such rights, Cycomm may
be required to obtain a license from the holder of the intellectual
property rights in order to make, use or sell the product in the
jurisdiction in which the infringement occurs. There can be no
assurance that such license will be available to Cycomm on acceptable
terms, if at all. If not, Cycomm may be prohibited from manufacturing
or selling the infringing product in the jurisdiction of infringement,
and may be forced to commit substantial resources to patent
infringement litigation. In either event, this could have a material
adverse effect on Cycomm's business, results of operations and business
prospects. See "Competition."

Fluctuation of Stock Price.

Cycomm's Common Shares are listed on AMEX and ASE and have traded
between $7.31 and $2.88 on such exchanges, during the twelve month
period ended October 31, 1996. In addition, in recent years the stock
market in general, and the market for shares of small capitalization
stock in particular, have experienced price fluctuations. As a result,
factors such as Cycomm's and its competitors' announcements, including
products, patents, technology, strategic alliances and financial
results could cause the price of Cycomm's Common Shares to fluctuate
substantially.

<PAGE> 10

BUSINESS

Cycomm, through its subsidiaries and interests in other
corporations, designs and develops security products for the
telecommunications industry and government, particularly for voice,
data, and fax landline and wireless systems. Cycomm's principal
business is carried out by its subsidiaries and Cycomm performs
administrative functions. Cycomm receives revenues from the sale of
cellular privacy products to distributors of cellular telephones and
cellular service carriers, and from the development and sale of certain
telecommunications equipment for high-security clearance U.S.
governmental agencies.

Cycomm was formed on April 30, 1986, under the laws of the
Province of Ontario, by the amalgamation of Webbwood Mobile Home
Estates Limited and its wholly-owned subsidiary 658676 Ontario Limited.
After undergoing several name changes to reflect various business
ventures, Cycomm entered the telecommunications industry in May 1990
and changed its name to Cycomm International Inc. on February 20, 1992.
Effective November 1, 1995, Cycomm redomiciled and continued under the
laws of the State of Wyoming.

Cycomm has four active, wholly owned subsidiaries consisting
of Cycomm U.S., XL Computing, XL Computing Canada, and Val-Comm.
Cycomm also has a 25.5% interest in Galactica a Venezuela company
engaged in the business of developing cellular telephone systems in
Venezuela.

<PAGE> 11

Cycomm's principal executive offices are located at 1420
Springhill Road, Suite 420, McLean, Virginia 22102, and its telephone
number is (703) 903-9548.

Subsidiaries

Cycomm U.S. Located in Portland, Oregon, this wholly-owned
subsidiary provides security through both encryption and scrambling of
voice and facsimile signals for the wireless and wireline
telecommunications industry. Cycomm U.S. is a leader in cellular
security products and is developing new technologies to meet the rapid
expansion of wireless applications and customer demands.

On March 15, 1995, as amended on April 11, 1995, Cycomm U.S.,
entered into an agreement with Datotek, Inc. ("Datotek"), a wholly
owned subsidiary of AT&T Corp. ("AT&T"), under which Cycomm U.S.
acquired certain assets and products of Datotek's Advanced Cellular
Privacy System ("ACPS") business. ACPS is an analog-based scrambler
system which provides privacy for cellular communications. Cycomm U.S.
also obtained a five-year exclusive license for the use of ACPS
technology and certain licenses, agreements, customers and sales
contracts of ACPS. AT&T will support the integration of ACPS's
existing systems into Cycomm U.S.'s privacy products. AT&T also
granted Cycomm U.S. a non-exclusive, royalty-free license for its
current and future Telephone Security Device ("TSD") technology which
is currently used in AT&T's wireless and wireline products. Cycomm U.S.
will utilize the TSD technology in its existing and future cellular
telephone privacy systems in order to make them compatible with AT&T's
current and future TSD-encrypted voice systems.

Total consideration for the acquisition was $1,617,500 and
consisted of $250,000 cash, a $430,000 promissory note payable and
Common Shares of Cycomm with an assigned value of $937,500.

XL Computing. Effective March 15, 1996, Cycomm entered into a
Stock Purchase Agreement by and among Cycomm and XL Vision, Inc.
("XLV") and XL Computing whereby Cycomm acquired 100% of the
outstanding stock of XL Computing from XLV for an aggregate purchase
price of $5,785,165.

XL Computing is based in Sebastian, Florida and is engaged in the
design, manufacturing, sale and support of secure, ruggedized, TEMPEST
specified (TEMPEST is the classified standard for securing computer
equipment and peripherals), computer and communication equipment for
niche markets worldwide. XL Computing presently employs 85 people, all
located at its Sebastian, Florida facility, a 44,000 square feet leased
complex. The lease expires on March 12, 2001, with two options to
extend the lease for five years, respectively.

Cycomm acquired 100% of the outstanding stock of XL Computing in
exchange for cash of $2,000,000, a promissory note in the amount of
$635,165 payable in installments with a balloon payment to be made on
December 31, 1996, 30,000 shares of Series A Convertible Redeemable
Preferred Stock ("Series A Preferred Stock") valued at $3,000,000 and
acquisition costs of $150,000, for an aggregate purchase price of
$5,785,165. Cycomm also granted XL Warrants to purchase 500,000 Common
Shares of Cycomm

<PAGE> 12

at $3.75 per share. See "Description of Securities - XL
Warrants." In March 1996, Cycomm issued a series of convertible
debentures, and received gross proceeds of $1,800,000 to Cycomm; such
proceeds were used to fund the cash portion of the XL Computing
acquisition.

XL Computing Canada. On June 3, 1996, Cycomm incorporated
9036-8028 Quebec, Inc., a wholly-owned subsidiary, for the sole purpose
of acquiring certain assets of M3i Technologies Inc. and M3i Systems
Inc. (collectively, the "Seller"). On June 21, 1996, Cycomm completed
the Asset Purchase Agreement by and among Cycomm and 9036-8028 Quebec,
Inc. (collectively, the "Buyer") and the Seller whereby the Buyer
acquired substantially all of the assets of the Seller, for an
aggregate purchase price, subject to earn-out provisions, of a maximum
of $5,000,000. The Seller designs and markets ruggedized mobile
computing and communications systems primarily to the utility and
public safety markets. The principal product of XL Computing Canada is
PCMobile, a ruggedized portable RF ready computer currently being sold
into the state and local public safety markets.

The maximum purchase price of $5,000,000 consisted of $1,000,000
in cash and up to $4,000,000 in Common Shares of Cycomm, payable on a
quarterly basis at the average current market price for the quarter of
issuance. The amount of Common Shares is subject to earn-out
provisions based on the achievement of certain unit sales volumes for a
five year period. The earn-out provisions will be fully satisfied upon
Cycomm recording approximately $31,000,000 in revenues from the sales
of computer units. Subsequent to completing the transaction, Cycomm
changed the name of 9036-8028 Quebec, Inc. to XL Computing Canada Inc.

XL Computing Canada expanded Cycomm's ruggedized computer product
line by adding state, local and commercial markets to XL Computing's
core government and military business. In addition, by integrating the
secure communications technology of Cycomm and utilizing the design and
manufacturing capabilities of XL Computing, significant cost advantages
will be achieved as the PCMobile line begins full-scale production.

Val-Comm. Val-Comm is a communications, engineering and
consulting company, located in Albuquerque, New Mexico, which provides
feasibility studies for possible development projects and custom
communications equipment developed for classified U.S. government
agencies. These activities can include prototype development but
generally involve the modification of one or more products available
from unrelated companies into an integrated communications system to
meet its clients' requirements. Such work involves classified U.S.
government contracts for which Val-Comm maintains U.S. government
facilities security clearances.

Val-Comm has a complementary engineering capability and a high
level security clearance which enables it to contract on U.S.
government projects requiring such levels of security clearance. On
March 27, 1996, the Voting Trust governing Val-Comm was dissolved
subsequent to Cycomm's continuance from the province of British
Columbia to the State of Wyoming.

Galactica. Cycomm entered into a Stock Purchase Agreement with
Corporation Inc., S.A., a subsidiary of Inelectra, S.A. ("Inelectra")
on October 29, 1993 and acquired a 25.5% interest in Galactica.
Inelectra is a large diversified Venezuelan corporation with interests
in engineering and construction as well as the telecommunications
industry. Galactica is a telecommunications systems integration and
distribution company located in Venezuela, which specializes in the
design, supply, installation and maintenance of digital
telecommunications networks for voice, data and video through the use
of digital links (microwave, UHF, satellite and fiber optics) as well
as television reception and retransmission systems utilizing satellites
in UHF-VHF bands. CANTV, the Venezuelan national telephone company,
has advised a consortium of companies, of which Galactica is a member,
that it has been selected as one of the few groups to act as a primary
supplier of outside plant telecommunications and related equipment to
CANTV. In April 1994, Corporation Inc. S.A. purchased the remaining
49% of Galactica, giving Inelectra majority control with a 74.5%
interest.

Cycomm does not anticipate any future funding requirements in
connection with its equity investments in Galactica and will continue
to focus on developing its current relationships and investments to
position Cycomm in South America.

Market for Cycomm 's Products and Services

General. Cellular telephone service is a form of
telecommunications designed to provide high quality wireless telephone
service to a large number of simultaneous users from hand held, vehicle
mounted or fixed radio telephones. Cellular telephones are designed to
meet the growing demands of an

<PAGE> 13

increasingly mobile society and allow people to have instantaneous
communications for business, pleasure or safety. In the United States,
Europe and other developing areas the construction and use of cellular
systems during the past five years has accelerated and is expected to
continue for the next ten years until the next generation of
technologies is commercialized.

Wireless Security. Beginning in the early 1990's, public
awareness of the ease of unauthorized cellular telephone monitoring
increased. A radio scanner available from consumer electronic stores
can be easily modified to receive all cellular bands, thus allowing
users' telephone calls to be intercepted. Cellular conversations
generally take place within a single cell site, so cell site switching
offers little, if any, additional protection.

Cycomm's full line of products provide an array of protection
against unwanted eavesdropping on calls and is a critical protection to
business, governmental and professional groups which need to protect
industrial secrets and clients' confidential information. Cycomm's
sophisticated voice privacy technology scrambles or encrypts the
cellular and landline calls so that all an eavesdropper hears is
garbled speech.

Voice Security Systems. Cycomm began to develop its cellular
security products in response to security concerns. Cycomm believes
that the commercial success of its cellular security products depends
upon both the level of security and voice quality such products
provide. Commercial security products must balance the degree of
security provided by encoding of speech with the decoded voice quality
of such speech. Cycomm believes that the best product is a security
product that would make it difficult and prohibitively expensive to
intercept a conversation while maintaining voice quality at such a
level that the user finds it difficult to discern any degradation
compared to normal cellular usage. Cycomm's voice security products
are designed to balance the need for security with the desire for a
high level of voice quality.

Computer Security. Computers, monitors, keyboards, printers and
related peripherals produce emissions that can be intercepted with
relatively inexpensive equipment through the building structure from
various distances. In this regard, it is possible to obtain the
content being inputted or transmitted on such computers or related
peripherals.

Cycomm manufacturers a full line of TEMPEST and EMI
(Electro-Magnetic Interface) computers, both stationary and portable
and related products that protect against the interception of
emissions.

Ruggedized Computers. Off the shelf computers are designed to be
operated in stable, controlled environments, such as offices or homes.
As end user applications demand mobile computing, traditional computers
will not operate or are susceptible to damage under harsh conditions.
The growing market for value added ruggedized computers has paralleled
the growth in mobile computing requirements, applications and end
users.

Cycomm manufactures a full line of ruggedized computers and
peripherals for operation under harsh environments. This ruggedized
technology is an extension of the TEMPEST and EMI manufacturing process
from which Cycomm produces a product line that is both rugged and
TEMPEST compliant.

Cycomm's Business Strategy

Cycomm. Cycomm has focused on three segments of the
communications and security market: 1) voice and data network
providers; 2) hardware manufactures; and 3) value-added computer and
telecommunications systems providers. It also has pursued a strategy
of alliances with other segments of the computing and
telecommunications industry to commercialize applications of its
technologies to meet other emerging security requirements. Included in
this strategy is the Fall 1996 roll out of its "Slice" CSD (cellular
security device) technology developed with Bell Laboratories and resold
by Lucent Technologies, Inc. ("Lucent").

Cycomm's marketing strategy envisions the installation by the
various cellular carriers of Cycomm's Privacy Rack Mobil Telephone
Switching Office ("MTSO"), which allows any cellular telephone call to
be sent in scrambled form over the air without the need for special
decoders at the receiving telephone end. Currently, Cycomm has
installed more than 30 cellular security systems in various cities in
North America, Mexico and Africa. Sales of Cycomm cellular security
products, primarily MTSOs, have been made to major cellular service
carriers throughout North America, including Bell Cellular of Canada,
McCaw Cellular Communications, Inc. (now AT&T Wireless) through its
various Cellular One subsidiaries, Bellsouth Cellular Corp., Rochester
Mobile, Air Touch, Southern New England Bell, Alltel Cellular and Nynex
Cellular.
<PAGE> 14

In addition, Cycomm believes that the establishment of an 800
number privacy service through its PrivaCall Network ("PrivaCall") will
supplement the cellular carriers' service offering. An 800 number
privacy service will allow a subscriber, having a Cycomm privacy device
on the cellular telephone, to call an 800 number while roaming outside
the owner's home area. The radio link between the cellular phone and
PrivaCall's facility is secured while the signal to the called phone is
in the clear.

Currently, the majority of cellular service carriers in the United
States utilize analog transmission and industry projections are that
analog backbone systems will continue to dominate the market for the
next five years. As digital cellular systems continue to grow, the
industry is expected to operate in a dual-mode phase with products that
will incorporate both analog and digital capability. During this phase
the analog portions of user's calls will continue to be protected by
the use of security technologies and products installed in, or attached
to, such dual-mode phones. Cycomm has developed the Slice CSD
technology as a platform to provide security for voice, fax and data
transmissions that utilize digital cellular service.

XL Computing and XL Computing Canada. XL Computing's primary
customers are the United States and foreign governments; XL Computing
Canada targets police and fire, other local and state public safety
agencies, and the commercial, industrial and utility markets. These
companies have fourteen full time sales persons. While some direct
sales are made, the majority of revenues are generated by systems
integrators, other third party resellers, vendors and Original
Equipment Manufacturers ("OEM"). A substantial portion of revenues is
derived from foreign customers, which is expected to continue and grow.

Cycomm's Product Line and Services

Cycomm has developed the Series 300 Privacy system as an
integrated set of products that, working together, provide a complete
privacy solution for individuals, corporations and cellular carriers.
Individual needs are addressed through privacy units for cellular
phones that secure communication from cellular phone to cellular phone,
or cellular phone to landline phone, with no involvement or support
from the cellular carrier. In this case, each user must have a privacy
unit on their phone. Corporations use the Privacy Rack to secure calls
into a building switch board or PBX, negating the requirement to have a
privacy unit on each phone in the building. In this case, calls are
secure from the cell phone to the PBX. Finally, the MTSO Privacy Rack
is available for cellular carriers to incorporate into their switching
equipment and offer a privacy service to their subscribers. With the
carrier service, each individual cellular subscriber need only purchase
one device for their cell phone. They are able to call anyone through
the carrier's service, with no need for the called party to have a
privacy unit on their phone, and still have a secure cellular line.

Handheld Privacy Unit or HPU-300 ("Slice HPU"). The Slice HPU provides
voice privacy for the Motorola MicroTAC(TM) series of hand-held
cellular telephones using signal scrambling technology. The Slice HPU
attaches easily between the MicroTAC telephone and the battery.
Privacy is activated and deactivated from the phone keypad, providing
flexible operation and protection of sensitive information.

Cellular Privacy Unit or CPU-300 ("CPU"). The CPU is a small box that
connects between the handset and the phone transceiver of many mobile
and transportable cellular phones, such as car phones and bag phones.
Privacy is activated and deactivated through the hand-set keypad.

Cellular Security Device ("Slice CSD"). The Slice CSD incorporates
voice encryption security in a Cycomm Slice package for the Motorola
MicroTAC line of cellular phones. The Slice CSD uses Lucent Surity(TM)
encryption technology, acquired from Lucent in 1995, and is compatible
with Lucent's TSD 3600 family of products. Over 10,000 TSDs are
installed in various agencies of the US Government. The Slice CSD has
been under development since late 1995 with contract support from Bell
Laboratories, and began initial shipments in August 1996.

Telephone Privacy Unit or TPU-300 ("TPU"). This is a landline
telephone version of the CPU. It attaches to a landline telephone
simply by plugging the telephone into the TPU and then plugging the TPU
into the telephone wall outlet. It allows private communications to
take place between cellular and landline telephones or between landline
telephones without the necessity for the cellular service provider
having installed an MTSO Privacy Rack.

MTSO Privacy Rack. This is a standard 19-inch telephone rack with
power supplies and digital network interface modules which would be
purchased by the cellular service carrier. It is a universal platform
that connects to the 24-channel digital telephone network in North
America (in its 24-channel form) or to

<PAGE> 15

the 30-channel format used in Europe and other parts of the world (in
its 30-channel form). The MTSO rack holds up to 24 voice privacy
cards. Multiple racks may be used for larger customer bases. The
digital interconnect is accomplished via the T-1, 24 Channel Digital
Interface Module. Cycomm has also developed a modified version of the
MTSO Privacy Rack, for use by Regional Bell Operating Companies to
satisfy their requirements for providing cellular security service
connections.

PrivaCall Network. PrivaCall provides secured roaming or 800-number
communications by exclusively utilizing Cycomm's privacy products.
PrivaCall utilizes a customized version of Cycomm's MTSO Privacy Rack
equipment to allow telephone users with Cycomm's privacy products to
place secure cellular telephone calls anywhere in North America by
dialing a special 800 number. Any user of the service can place a
secure cellular or landline telephone call to another party without
that called party having a decoding device at the receiving end. As
with the MTSO equipment developed by Cycomm for cellular service
carriers, the cellular transmission is protected from unauthorized
monitoring and the call is transferred in a decoded format over the
telephone line portion of the communications link from the MTSO to the
called party.

Cycomm views the PrivaCall operation as a key marketing service
since it can be utilized anywhere, is cost effective to the customer
and requires no interaction with a particular cellular service carrier.
Cycomm also believes this concept provides an enhancement to the
services provided by cellular service carriers who have purchased
Cycomm's MTSO privacy products for local city areas as these carriers,
acting as re-sellers for such 800 privacy services, can now offer
roaming capabilities outside their own protected MTSO territories.

XL Computing and XL Computing Canada Product Lines and Services

XL Computing and XL Computing Canada manufacture and sell a complete
line of computers and peripherals from a ruggedized laptop computer to
an "office in a suitcase" for the Mobile Field Office market that
incorporates Cycomm's encryption technology. Transmission options
include both wired and a variety of wireless modes including satellite
links. Security options range from encryption to a "TEMPEST"
configuration.

TEMPEST Pentium Computer. The TEMPEST Pentium Computer (486KT)
incorporates an Intel Pentium(TM) microprocessor into the industry
standard ISA/PL1 bus packaged TEMPEST 205P Cabinet. This unit has been
tested to meet NSTISSAM TEMPEST - 1/92 and AMSG emission
specifications.

TEMPEST Laptop Computer. The TEMPEST laptop computer incorporates an
Intel 486DX41100 driven laptop computer into an aluminum alloy case.
The 486LT is significantly more rugged than commercial units and will
meet the strictest TEMPEST requirements.

TEMPEST Inkjet Printer. The 3414T is the TEMPEST version of the
popular Hewlett Packard 320 Inkjet Printer. Monochrome and color
versions are available. The 3414T supports 3OOdpi (color) at up to 3
pages per minute.

TEMPEST Monitors. XL Computing offers a full line of ruggedized
TEMPEST and EMI compliant monitors. The EMI and TEMPEST designs use a
combination of containment and suppression techniques that retain the
OEM cabinetry. A high quality OCLI glass screen with anti-reflective
coating is incorporated into the display providing maximum resolution
and brightness.

Rugged Laser Printer. The 3418T deskjet printer meets and exceeds
standards for printing in the military environment. The 3418T based on
the popular Deskjet 340 from Hewlett Packard, is shock isolated to
accommodate the shock and vibration of the severe military platform.
It is also shielded to meet EMI/RFI (and TEMPEST) requirements of these
demanding applications. The rugged design allows for easy access to
all OEM functionality, while providing a high degree of protection
required in the harsh environment to which it will be exposed. This
printer has been engineered to survive the shock and vibration
environmental extremes found in ground-mobile and shipboard
applications. The rugged printer offers performance identical to the
commercial version of the printer. Modular construction and ease of
access to all LRUs (line replaceable units) supports an MTTR (mean time
to repair) of less than 30 minutes.

Mobile Field Office Systems. The rugged mobile imaging and
communications system ("MICS") is a portable office that fits into a
lightweight, rugged, suitcase-type carrier suitable for commercial
travel. This self-contained system is easily taken into harsh field
environments and provides personnel with the capability to accomplish
their data collection and transmission tasks using landline, cellular
and satellite communications with

<PAGE> 16

state-of-the-art technology in the military environment. Standard
peripherals include a ruggedized computer (486 or Pentium driven) a
removable hard disk drive, modem, fax card, cellular phone, printer,
scanner, and a battery backup. A digital camera is an optional feature
allowing the operator to take pictures or collect data and immediately
transfer it to other users or a central location.

PCMobile 486. The PCMobile 486 is a "ruggedized" mobile computer
specifically developed for optimal mobility, flexibility and
performance under severe operating conditions. It is ideal for field
service and public safety. The PCMobile is certified to be used almost
anywhere, performing reliably in spite of extreme conditions. The
rugged magnesium housing makes the PCMobile spill and shock-proof and
preserves the unit's structural integrity even at high temperatures.
The light blue casing reflects rather than absorbs light, helping to
maintain the electronic circuitry at lower operating temperatures.
Rubber gaskets are fitted around door openings and between case mating
parts. All external connectors have been rain-tested. The PCMobile
also stands up to vibration and meets the standards for protection from
electrostatic discharge.

<PAGE> 17

Recent Developments

In September 1996, Cycomm issued $400,000 of 10% convertible
debentures due September 30, 1998, which are convertible at the option
of the holder into Common Shares of Cycomm at the lesser of $4.80 per
share or a range of 80% to 82% of the average closing bid of Cycomm's
Common Shares as reported by the American Stock Exchange for five
consecutive trading days prior to conversion. The debentures are fully
eligible for conversion after February 2, 1997.

In October 1996, Cycomm completed a private placement of 155,000
Common Shares for gross proceeds of $589,000.

Reliance Upon Certain Customers/Suppliers

Although Cycomm relies on a limited number of companies to
manufacture its products, it believes that the specific parts employed
in the manufacturing process are available from a variety of suppliers.
Further, management believes that additional manufacturing sources
could be found if necessary.

Cycomm is not dependent upon any single customer that purchases
its products. Sales to three major customers comprise 25%, 20% and 9%
respectively, of sales for the year ended May 31, 1996. Sales to one
major customer amounted to 20% of sales for the year ended May 31,
1995.

Research and Development

During fiscal 1996 and 1995, Cycomm spent $749,041 and $505,505
respectively, on research and product development, primarily for
development of products complementary to the existing line of cellular
voice privacy products. Cycomm anticipates additional research and
development expenditures on future development of products.

Environmental Issues

Compliance cost with environmental laws has not been material and
is not expected to materially adversely affect the business of Cycomm.

Employees

Cycomm currently employs approximately 143 people, of which
approximately 125 are employed in the United States and 18 in Canada.
Approximately 16 employees work in customer sales and service, 22 work
in administration, 30 work in research and development and 75 employees
work in manufacturing.

Patents

Cycomm is the assignee of U.S. Patent No. 4,864,566 issued on
September 5, 1989, entitled "Precise Multiplexed Transmission and
Reception of Analog and Digital Data Through a Narrow-Band Channel."
This patent covers the basic synchronization that makes it possible to
achieve a certain level of voice quality and security. Cycomm voice
privacy products are partially protected by this patent because an
adaptation of the synchronization technique is used. Furthermore,
protection is enhanced by using large amounts of microcode embedded in
microprocessor chips that are dependent upon semi-custom gate array
circuits. Both microcode and circuits are proprietary.

On May 14, 1996, Cycomm received, as assignee, U.S. Patent No.
5,517,683 entitled "Conforment Compact Portable Cellular Phone Case
System and Connector." The patent covers Cycomm's Slice packaging and
functionality, as it applies to a number of potential applications for
the Motorola MicroTAC line of cellular

<PAGE> 18

phones. Cycomm's current Slice products, the Series 300BPU and Series
500 CSD, now have full patent protection. Management plans to pursue
new products and licensing opportunities to exploit the Slice
technology, and to protect against any infringement of the Slice patent
claims.

Cycomm uses a voice scrambling, privacy technique referred to as
"Variable Split Band Inversion." The technique is not patented by
Cycomm since it is a known technique and Cycomm purchases the
integrated circuit presently utilized from a third-party vendor.
However, any usage of a scrambling method over a communications network
is difficult to implement while retaining good speech quality when the
speech is decoded at the remote end of the conversation. Cycomm's
proprietary technology is used in conjunction with this scrambler
integrated circuit to accomplish the task of bringing decoded voice
quality up to a level acceptable to the general business user.
Management believes that the lack of patent protection does not present
a material risk to Cycomm because it is better protected with
proprietary means since Cycomm believes that other competitors may try
to avoid the patent procedure through the use of different circuits or
software.

Cycomm is the assignee of U.S. Patent No. 4,972,479 issued on
November 20, 1990 entitled "Method and Apparatus for Providing
Privacy/Security in a Communication System" (the "Patent"). The Patent
covers apparatus and methods for providing privacy on communications
systems which include radio links in a manner which does not require
both a scrambler and descrambler at each called party location. This
allows the cellular user to route calls in encrypted form through a
central location and then on to the called party in decoded form
without the necessity of routing the call through a cellular service
carrier's MTSO. In addition, Cycomm owns certain trademarks in the
marketing of Cycomm's cellular and telephone voice privacy products.

Regulatory Approvals

Cycomm's products are subject to approval by the Federal
Communications Commission (the "FCC") in the United States. The FCC
requires that products not exceed certain levels of radio wave
emanation so that they will not interfere with other electronic
equipment. Furthermore, telephone products must meet certain standards
for interfacing into the telephone line, such as impedance matching and
isolation. All of the Cycomm products have received FCC approval for
both radiation and telephone connection.

In general, the FCC approval processes is objective. Product
designs are required to meet these objective criteria and
specifications. In the event that a Cycomm privacy product fails a
test, the production of the product will be delayed.

To date, Cycomm has been able to comply with all government
requirements without incurring significant costs. However, Cycomm
cannot determine the extent to which future earnings may be affected by
new legislation or regulations affecting its industry.

Competition

The markets for privacy and encryption products and secure and
rugged computing are niche value added markets. As the markets grow
and/or Cycomm is successful, it is anticipated that competitors will
enter these markets. Such competitors, who may be bigger and better
capitalized than Cycomm, will face significant cost and time
commitments necessary to compete directly with Cycomm. In this regard,
Cycomm believes that its focus on niche markets of which it has
developed various strategic relationships, its proprietary technology
and the uncertainty of the developing markets are barriers to entry
against competitors.

THE OFFERING

The securities covered by this Prospectus are to be offered and
sold from time to time by and on behalf of the persons referred to
herein as "Selling Security Holders" and whose names and holdings are
set forth under "Selling Security Holders." Cycomm will not receive
any proceeds from the sale of Common Shares, XL Warrants, CRG Options
or Wall Street Warrants and will bear all of the expenses of the
offering. The Selling Security Holders will receive all sales proceeds
and will not bear any of the offering expenses. Cycomm will receive an
aggregate of $1,898,750 upon the exercise of the XL Warrants and Wall
Street Warrants.

As of October 11, 1996, there were 7,617,087 Common Shares of
Cycomm issued and outstanding. Assuming exercise of all the XL
Warrants, CRG Options and Wall Street Warrants and issuance of all

<PAGE> 19

underlying shares to be sold by the Selling Security Holders, there
will be 9,004,065 Common Shares of Cycomm issued and outstanding. See
"Description of Securities."

USE OF PROCEEDS

Assuming all of the XL Warrants and Wall Street Warrants are
exercised, Cycomm will receive $1,898,750 before deducting expenses
associated with this offering of approximately $36,574. Cycomm intends
to use the proceeds from the exercise of warrants for working capital
and for general corporate purposes.

Cycomm will not receive any proceeds upon the sale of Common
Shares by the Selling Security Holders.

PLAN OF DISTRIBUTION

Cycomm will receive proceeds upon the exercise of the XL Warrants
and Wall Street Warrants, but will not receive any proceeds from the
sale of the Common Shares. See "Use of Proceeds."

Under the Exchange Act, any person engaged in a distribution of
the Common Shares offered by this Prospectus may not simultaneously
engage in market making activities with respect to the Common Shares
during the applicable "cooling off" period prior to the commencement of
such distribution. In addition, and without limiting the foregoing,
the Selling Security Holder will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder including,
without limitation, Rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of Common Shares by the Selling
Security Holder. The applicable provisions of the Exchange Act and the
rules and regulations thereunder may affect the marketability of the
Common Shares and the ability of any person to engage in market making
activities for the Common Shares.

With regard to the Common Shares offered by Selling Security
Holders, such shares may be sold on the AMEX or ASE or in private
transactions at prices to be determined at the time of sale. Such
Common Shares may be offered through broker-dealers, acting on the
Selling Security Holder's behalf, who may offer the Common Shares at
then current market prices. Any sales may be by block trade. The
Selling Security Holders and any brokers, dealers or others who
participate with the Selling Security Holders in the distribution of
such Common Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions or fees received by
such persons and any profit on the resale of such shares purchased by
such person may be deemed to be underwriting commissions or discounts
under the Securities Act. The Selling Security Holders may sell all or
none of the Common Shares. Cycomm will not receive any proceeds from
the sale of the Common Shares by the Selling Security Holders.

SELLING SECURITY HOLDERS

The following table identifies Selling Security Holders as of
October 31, 1996, and indicates (i) the number of Common Shares
beneficially owned by the Selling Security Holders, (ii) the amount to
be offered for the Selling Security Holders' account, and (iii) the
number of shares and percentage of outstanding shares of Common Shares
to be owned by Selling Security Holders after the sale of the Common
Shares offered by each Selling Security Holder pursuant to this
Offering.

<TABLE>
<CAPTION>
Beneficial Shares Beneficial Shares
Name of Selling Owned Prior to Shares to be Owned After
Security Holder Offering Sold Offering

-----------------------------------------------------------------------------------------
Number Percent Number Percent

<S> <C> <C> <C> <C> <C>
XL Vision, Inc. 1,300,000 16.5% 1,300,000 -0- -0-

Midcomm, Inc. 71,978 * 71,978 -0- -0-

Donald Kirsch 7,500(1) * 7,500(2) -0- -0-

Anapol, Schwartz,
Weiss & Cohen, P.C. 2,500(3) * 2,500(4) -0- -0-
-------------------
* Less than 1%
</TABLE>

<PAGE> 20

(1) Includes 3,750 Common Shares issuable upon exercise of the Wall
Street Warrant issued to Mr. Kirsch . See "Description of Securities."

(2) Assuming exercise of the Wall Street Warrant issued to Mr. Kirsch.
See "Description of Securities."

(3) Includes 1,250 Common Shares issuable upon conversion of the Wall
Street Warrant issued to Anapol, Schwartz, Weiss & Cohen, P.C. See
"Description of Securities."

(4) Assuming exercise of the Wall Street Warrant issued to Anapol,
Schwartz, Weiss & Cohen. See "Description of Securities."

DESCRIPTION OF SECURITIES

Common Shares

Cycomm is authorized to issue an unlimited number of Common
Shares, without par value, of which 7,617,087 were outstanding as of
October 11, 1996, and an unlimited number of Preference Shares, without
par value, issuable in series.

All issued and outstanding Common Shares are, and the Common
Shares to be issued upon the exercise of the XL Warrants and the Wall
Street Warrants will be, fully paid and non-assessable. Each holder of
record of Common Shares is entitled to one vote for each Common Share
so held on all matters requiring a vote of shareholders, including the
election of directors. There are no preferences, conversion rights,
preemptive rights, subscription rights, or restrictions or transfers
attached to the Common Shares. In the event of liquidation,
dissolution, or winding up of Cycomm, the holders of Common Shares are
entitled to participate in the assets of Cycomm available for
distribution after satisfaction of the claims of creditors.

The Preference Shares may be issued at any time and from time to
time in one or more series. Except as provided in the Series A
Preferred Stock, the Board of Directors, without further shareholder
approval, may determine the rights, and preferences of each series of
Preference Shares. The issuance of Preference Shares by the Board of
Directors with voting conversion or other rights could have the effect
of delaying, deferring, or preventing a change in control of Cycomm, or
could adversely affect the voting power of the holders of Common
Shares.

Wall Street Warrants

In January 1996, pursuant to a settlement agreement between
The Wall Street Group, Inc., Donald Kirsch and Cycomm, 3,750 Common
Shares were issued to Donald Kirsch (the "Kirsch Shares"), 1,250 Common
Shares were issued to Anapol, Schwartz, Weiss and Cohan, P.C. (the
"Anapol Shares"). In addition, Warrants to purchase 3,750 Common
Shares were issued to Donald Kirsch (the "Kirsch Warrant") and Warrants
to purchase 1,250 Common Shares were issued to Anapol, Schwartz, Weiss
and Cohan, P.C. (the "Anapol Warrant," and together with the Kirsch
Warrant, the "Wall Street Warrants").

The Kirsch Warrant when exercised, will entitle the holder
thereof, to receive 3,750 Common Shares. The Anapol Warrant, when
exercised, will entitle the holder thereof, to receive 1,250 Common
Shares. The exercise price for both the Anapol Warrant and Kirsch
Warrant is $4.75 per Common Share (the "Exercise Price"). Both the
Anapol Warrant and Kirsch Warrant are exercisable, in whole or in part
(but not for less than 1000 Common Shares), at any time until November
30, 2000.

Adjustments. Upon any reorganization, reclassification of
the capital stock of Cycomm, or any merger or consolidation of Cycomm
with or into another corporation in which Cycomm is not the surviving
entity, or any sale or transfer of all or substantially all of Cycomm's
properties and assets to any other entity, the Wall Street Warrants
will thereafter be exercisable for the number of shares of stock or
other securities or property of Cycomm or the successor corporation
resulting from such consolidation or merger, as the case may be, to
which the holder of shares deliverable upon exercise or conversion of
the Wall Street Warrants would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if the Wall
Street Warrants had been exercised or converted immediately before such
reorganization, merger consolidation or transfer, all subject to
further adjustments as provided in the Wall Street Warrants. Without
the prior written consent of the holders of the Wall Street Warrants,
Cycomm may not make any dividend or other distribution in respect of
its Common Shares or issue any

<PAGE> 21

Common Shares or securities convertible into or exercisable for the
purchase of its Common Shares, otherwise than for cash at a price per
Common Share at least equal to the Exercise Price. The number of
Common Shares issuable upon the exercise of the Wall Street Warrants
and the Exercise Price must be proportionately adjusted in the event of
splits subdivision or combinations.

Registration Rights. Pursuant to the Stock Purchase
Agreement, in the event Cycomm engages in a public offering of any of
its securities, other than a registration relating solely to employee
benefit plans or to a Rule 145 transaction or a registration on a
registration form that does not permit secondary offerings, Cycomm must
use its best efforts to include the Kirsch Shares, Anapol Shares,
Kirsch Warrants, Anapol Warrants and Common Shares underlying the
Kirsch Warrants and Anapol Warrants.

Voting Rights. The Wall Street Warrants do not entitle the
holders to any voting rights or other rights as stockholders of Cycomm.

XL Warrants

On March 21, 1996, Cycomm entered into a Stock Purchase
Agreement by and among Cycomm, XLV and XL Computing whereby Cycomm
acquired 100% of the outstanding stock of XL Computing from XLV for an
aggregate purchase price of $5,785,165, which purchase price included
the XL Warrant.

The XL Warrant when exercised, will entitle the holder
thereof, to receive 500,000 Common Shares at an exercise price of $3.75
per Common Share (the "XL Warrant Exercise Price"). The XL Warrant is
exercisable, in whole or in part (but not for less than 50,000 Common
Shares), at any time until March 20, 1999.

Adjustments. Upon any reorganization, reclassification of
the capital stock of Cycomm, or any merger or consolidation of Cycomm
with or into another corporation in which Cycomm is not the surviving
entity, or any sale or transfer of all or substantially all of Cycomm's
properties and assets to any other entity, the XL Warrant will
thereafter be exercisable for the number of shares of stock or other
securities or property of Cycomm or the successor corporation resulting
from such consolidation or merger, as the case may be, to which the
holder of shares deliverable upon exercise or conversion of the XL
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if the XL Warrant had been
exercised or converted immediately before such reorganization, merger
consolidation or transfer, all subject to further adjustments as
provided in the XL Warrant. Without the prior written consent of the
holders of the XL Warrant, Cycomm may not make any dividend or other
distribution in respect of its Common Shares or issue any Common Shares
or securities convertible into or exercisable for the purchase of its
Common Shares, otherwise than for cash at a price per Common Share at
least equal to the XL Warrant Exercise Price. The number of Common
Shares issuable upon the exercise of the XL Warrants and the XL Warrant
Exercise Price must be proportionately adjusted in the event of splits
subdivision or combinations.

Registration Rights. Pursuant to the stock purchase
agreement, in the event Cycomm engages in a public offering of any of
its securities, other than a registration relating solely to employee
benefit plans or to a Rule 145 transaction or a registration on a
registration form that does not permit secondary offerings, Cycomm must
use its best efforts to include the XL Warrant and the shares
underlying the XL Warrants.

Voting Rights. The XL Warrants do not entitle the holders to
any voting rights or other rights as stockholders of Cycomm.

EXPERTS

The consolidated financial statements of Cycomm incorporated by
reference in this Prospectus have been audited by Ernst & Young,
Independent Chartered Accountants, as indicated in their report with
respect thereto, and incorporated herein by reference in reliance upon
the authority of such firm as experts in accounting and auditing.

LEGAL MATTERS

The legality of the Common Shares offered by this Prospectus will
be passed upon for Cycomm by Hirst & Applegate, Cheyenne, Wyoming.

<PAGE> 22

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES

The Wyoming Business Corporation Act ("WBCA"), W.S. 17-16-850 et
seq., provides for indemnification of Cycomm's officers, directors,
employees, and agents against liabilities which they may incur in such
capacities.

Under Section 1 of Article IX of Cycomm's Bylaws, Cycomm has the
power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of Cycomm) by
reason of the fact that he or she is or was a director, officer,
employee, or agent of Cycomm, or is or was serving at the request of
Cycomm as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred in
connection with such action, suit, or proceeding if he or she acted in
good faith and in a manner reasonably believed to be in or not opposed
to the best interests of Cycomm, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the conduct
was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendre or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests
of Cycomm, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.

Cycomm also has power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending,
or completed action or suit by or in the right of Cycomm to procure a
judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of Cycomm, or is or was serving at
the request of Cycomm as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to
the best interests of Cycomm; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in
the performance of his or her duty to Cycomm 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 circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court deems
proper.

Section 2 of Article IX of Cycomm's Bylaws provides that, to the
extent that a director, officer, employee, or agent of Cycomm has been
successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in paragraphs (a) or (b) of Section 1 of
Article IX of the Bylaws, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in
connection therewith.

Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit, or proceeding may be paid by Cycomm in
advance of the final disposition of such action, suit, or proceeding as
authorized in the manner provided in Section 3 of Article IX of the
Bylaws upon receipt of an undertaking by or on behalf of the director,
officer, employee, or agent to repay that amount unless it shall
ultimately be determined that he is entitled to be indemnified by
Cycomm as authorized.

Section 3 of Cycomm's Bylaws provides that any indemnification
under paragraphs (a) or (b) of Section 1 of Article IX of the Bylaws
(unless ordered by a court) shall be made by Cycomm only as authorized
in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances
because the applicable standard of conduct has been met as set forth in
paragraph (a) or (b) of Section 1 of Article IX of the Bylaws. Such
determination shall be made: (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding; (2) if a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion; or (3) by the
shareholders.

<PAGE> 23

Pursuant to Section 4 of Article IX of Cycomm's Bylaws, the
indemnification provided by Section IX of Cycomm shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his or her
official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors, and administrators of that person.

Section 5 of Article IX of Cycomm's Bylaws provides that Cycomm
shall have power to purchase and maintain insurance on behalf of any
persons who are or were directors, officers, employees, or agents of
Cycomm, or are or were serving at the request of Cycomm as directors,
officers, employees, or agents of another corporation, partnership,
joint venture, trust, or other enterprise against any liability
asserted against them and incurred by them in any such capacity or
arising out of their status whether or not Cycomm would have the power
to indemnify them against such liability under the provisions of this
section.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or others
pursuant to the foregoing provisions, Cycomm has been informed that in
the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore
unenforceable

<PAGE> 24

Part II. Information Not Required in Prospectus

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses in
connection with distribution of the Common Shares hereby registered.
All amounts are estimated except the SEC and American Stock Exchange
fees and are expressed in U.S. dollars.

<TABLE>
<CAPTION>
Payable by Registrant
----------------------
<S> <C>
SEC Registration fee U.S. $2,574
American Stock Exchange fee U.S. $17,500
Legal fees U.S. $10,000
Accounting fees U.S. $5,000
Printing Costs U.S. $500
Miscellaneous fees U.S. $1,000

------------
Total U.S. $36,574
</TABLE>

Item 15. Indemnification of Directors and Officers.

The Wyoming Business Corporation Act ("WBCA"), W.S. 17-16-850 et
seq., provides for indemnification of Registrant's officers, directors,
employees, and agents against liabilities which they may incur in such
capacities. A summarization of circumstances in which such
indemnification may be available follows, but is qualified by reference
to Registrant's Articles of Incorporation and the text of the statute.

In general, any officer, director, employee, or agent may be
indemnified against expenses, fines, settlements, or judgments arising
in connection with a legal proceeding to which such person is a party,
as a result of such relationship, if that person's actions were in good
faith, reasonably believed by him or her to be in (or at least not
opposed to) the Registrant's best interests, and in the case of any
criminal proceeding, he or she had no reasonable cause to believe his
or her conduct was unlawful. Unless such person is successful upon the
merits in such an action, indemnification may be awarded only after a
determination by decision of the Board of Directors (by directors not
at the time parties to the proceeding) or by majority shareholder vote
(excluding shares held or controlled by directors who are at the time
parties to the proceeding), or by opinion of special legal counsel.

The circumstances under which indemnification would be made in
connection with an action brought on behalf of the Registrant are
generally the same as stated above, except that indemnification is
permitted only for reasonable expenses.

In addition, the Registrant has statutory authority to purchase
insurance to protect its officers, directors, employees, and agents
against any liabilities asserted against them, or incurred in
connection with their service in such capacities. Further, the
Registrant may advance or reimburse funds to a director who is a party
to a proceeding, for reasonable expenses incurred in connection with a
proceeding.

<PAGE> 25

conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendre or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best
interests of Cycomm, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful.

<PAGE> 26

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits
3.1 Certificate of Incorporation(1)

3.2 Certificate of Incorporation on Change of Name(1)

3.3 Certificate of Continuance(1)

3.4 Restated Bylaws of Cycomm*

5.1 Opinion re legality

10.1 Stock Purchase Agreement between Mel K. and Pauline J. Pfeffer
and Cycomm Corporation(2)

10.2 Joint Venture Agreement between Cycomm Corporation and Cellular
Service Group, Inc. dated April 1, 1992(2)

10.3 Agreement By and Among Cycomm International Inc. and Cycomm
Corporation and Datotek, Inc. and AT&T Corp.(3)

10.4 Voting Trust Agreement - Cycomm Corporation(3)

10.5 Release Agreement - Cycomm Corporation(3)

10.6 Stock Purchase Agreement among Cycomm International Inc.,
Cycomm Corporation, and Cellular Service Group(3)

10.7 GEC-Marconi Secure Systems and Cycomm Corporation Distributor
Agreement dated April 29, 1992(3)

10.8 Cycomm Corporation and GEC-Marconi Secure Systems
Distributor Agreement dated May 1, 1992(3)

10.9 Bell Cellular Contract(3)

10.10 Stock Purchase Agreement among and between XL Vision,
Inc., Cycomm International Inc. and XL
Computing Corporation(4)

10.11 Asset Purchase Agreement among 9036-8028 Quebec, Inc.,
Cycomm International Inc. and M3i Technologies, Inc.
and M3i Systems Inc. dated June 21, 1996(5)

10.12 Management Services Agreement - Peter Hickey(6)

10.13 Management Services Agreement - Rick E. Mandrell(6)

10.14 Management Services Agreement - Gordon Collett(6)

10.15 Management Services Agreement - Albert I. Hawk(6)

21.1 Subsidiaries of Cycomm(3)

23.1 Consent of Ernst & Young, Independent Chartered Accountants*

23.2 Consent of Hirst & Applegate (included in their opinion filed
as Exhibit 5.1).

-------------------------------
* Previously filed
<PAGE> 27

(1) Incorporated by reference to Cycomm's Registration Statement on
Form 20-F dated November 21, 1990.

(2) Incorporated by reference to Cycomm's Registration Statement on
Form 8-A dated December 23, 1992.

(3) Incorporated by reference to Cycomm's Registration Statement on
Form F-1 filed with Commission on May 9, 1995, amended on June 20,
1995.

(4) Incorporated by reference to Cycomm's Form 8-K dated March
21, 1996.

(5) Incorporated by reference to Cycomm's Exhibit to Form 8-K
dated June 21, 1996.

(6) Incorporated by reference to Cycomm's Exhibit to Form 8-K
dated April 5, 1996.

Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:

(1)To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of
Securities Act of 1933 ("Securities Act");

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2)That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3)To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, Cycomm has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of Cycomm
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, Cycomm will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(c) 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 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.

<PAGE> 28

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 McLean, State of
Virginia, on January 10, 1996.

Cycomm International Inc.

/s/Albert I. Hawk

------------------------------
Albert I. Hawk, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ Albert I. Hawk Date: January 10, 1997

------------------------------------
Albert I. Hawk, President, Chief
Executive Officer and Chairman of the Board
(Principal executive officer)

/s/ Rick E. Mandrell Date: January 10, 1997

------------------------------------
Rick E. Mandrell, Chief Operating
Officer and Director
(Principal financial or accounting officer)

/s/ Hubert R. Marleau Date: January 10, 1997

------------------------------------
Hubert R. Marleau, Director

<PAGE> 1

January 9, 1997

Cycomm International Inc.
1420 Springhill Road
Suite 420
McLean, Virginia 22102

Ladies and Gentlemen:

RE: REGISTRATION ON FORM S-3

We have acted as counsel to Cycomm International Inc., a
Wyoming corporation (the "Company"), in connection with (i) the registration of
1,381,978 shares of its common stock, no par value (its "Common Shares"), for
sale by certain stockholders of Company and (ii) the registration of 505,000
warrants for the purchase of the Common Shares (the "Warrants") for sale by
certain holders thereof.

We have examined such documents, corporate records, certificate
of officers of the Company and other instruments, and have reviewed such laws
and regulations, as we have deemed necessary. In the course of such
examination, we have assumed the genuineness of all signatures; the legal
capacity of all natural persons; the authenticity of all documents submitted to
us as originals; the conformity to original documents of all documents
submitted to us as certified, photostatic or facsimile copies; and the
authenticity and completeness of the originals of all such copies. As to any
facts material to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of officers and
other representatives of the Company and others.

Based upon and subject to the foregoing, and subject to the
other limitations and qualifications set forth herein, we are of the opinion
that the Common Shares and Warrants have been duly authorized for issuance by
the Company and that the Common Shares are, and the Common

<PAGE> 2

Cycomm International Inc.
January 9, 1997
Page 2

shares underlying the Warrants upon exercise, will be, validly issued, fully
paid and nonassessable.

The foregoing opinion is subject to the qualifications that:

(a) legality, validity or enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of
creditors generally;

(b) general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing,
regardless of whether enforcement is considered in proceedings
at law or in equity;

(c) our opinion is limited to matters governed by the laws
of Wyoming and no opinion is expressed herein as to any matter
governed by the laws of any other jurisdiction;

(d) the opinions expressed herein are strictly limited to
the matters stated herein and no other opinions may be implied
beyond the matters expressly so stated.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus that forms a part thereof.

Very truly yours,

HIRST & APPLEGATE, P.C.

/s/ John J. Metzke

BY: JOHN J. METZKE