<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
[ ] Transition Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended: JUNE 30, 1996
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Commission File No. 0-23142
VISTA TECHNOLOGIES INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 13-3687830
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
167 S. San Antonio Road, Suite 9, Los Altos, California 94022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 947-1750
--------------------------
Former Address:
1250 Oakmead Parkway, Suite 210, Sunnyvale, California 92088-3599
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock, without par
value, outstanding as of August 31, 1996: 7,626,112 shares.
Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
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<PAGE>
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VISTA TECHNOLOGIES INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
Part I. FINANCIAL INFORMATION ........................................ 3
Item 1. Financial Statements:
Consolidated Balance Sheets at June 30, 1996
and March 31, 1996 ...................................... 3
Consolidated Statements of Operations for the
Three Months ended June 30, 1996 and 1995 ............... 5
Consolidated Statements of Cash Flows for the
Three Months ended June 30, 1996 and 1995 ............... 6
Consolidated Statement of Changes in Stockholders'
Equity for the Three Months ended June 30, 1996 ......... 7
Notes to Unaudited Consolidated Financial Statements
at June 30, 1996 ........................................ 8
Item 2. Management's Discussion and Analysis or Plan of Operation:
Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................... 14
Part II. Other Information:
Item 5. Other Events ...................................... 17
Item 6. Exhibits and Reports on Form 8-K .................. 19
Signatures ............................................................. 20
</TABLE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Report under the caption "Management's
Discussion and Analysis or Plan of Operation" and elsewhere constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results or performance of the Company to be materially different from future
results or performance expressed or implied by such forward-looking
statements. Such factors, include, among others: market acceptance of new
technologies and services; the sufficiency of financial resources available to
the Company and its corporate affiliates; economic, competitive, governmental
and technological factors affecting the Company's operations, markets,
services and prices; and other factors described in this Report and in prior
filings by the Company with the Securities and Exchange Commission. The
Company's actual results could differ materially from those suggested or
implied by any forward-looking statements as a result of such risks.
<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, March 31,
1996 1996
------------- -------------
<S> <C> <C>
ASSETS:
Current assets:
Cash ...................................... $ 576,350 $ 288,312
Accounts receivable:
Trade .................................. 75,612 29,515
VAT .................................... 2,973 41,434
Related parties ........................ 768,231 214,454
Stock subscriptions receivable ............ 500,000 962,500
Prepaid expenses and other ................ 219,628 256,081
------------ ------------
Total current assets .................. 2,142,794 1,792,296
Investment securities:
Available for sale ........................ 2,850,000 2,475,000
Held to maturity .......................... 116,450 115,468
Long-term VAT receivables ................... 193,200 191,571
Property and equipment, net ................. 1,178,281 1,219,798
Investment in equity investees .............. 1,388,185 468,350
Other assets ................................ 3,220 7,299
------------ ------------
Total Assets ................................ $ 7,872,131 $ 6,269,782
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE> 4
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
<TABLE>
<CAPTION>
June 30, March 31,
1996 1996
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable, trade ................... $ 419,791 $ 520,825
Accounts payable, officers ................ -- 29,535
Accrued expenses .......................... 735,238 633,206
Current portion of notes payable .......... 371,591 296,591
Current portion of long-term debt ......... 138,362 137,351
Current portion of obligations under
capital leases ......................... 67,588 67,588
------------ ------------
Total current liabilities ............. 1,732,570 1,685,096
------------ ------------
Long-term liabilities:
Notes payable, net of current portion ..... 277,777 277,777
Long-term debt, net of current portion .... 471,228 463,240
Obligations under capital leases, net
of current portion ..................... 155,241 196,956
------------ ------------
Total long-term liabilities ........... 904,246 937,973
------------ ------------
Minority Interest ........................... 705,563 653,306
------------ ------------
Commitments and Contingencies
Total liabilities ..................... 3,342,379 3,276,375
------------ ------------
Stockholders' Equity:
Preferred stock, $.001 par value,
15,000,000 shares authorized,
none issued or outstanding ............ -- --
Common stock, $.005 par value;
15,000,000 shares authorized,
issued and outstanding,
7,006,105 shares at June 30, 1996 and
5,256,105 shares at March 31, 1996 .... 35,032 26,281
Additional paid-in capital ................ 20,122,346 18,026,096
Unrealized loss on securities
available for sale ...................... 187,500 (187,500)
Accumulated deficit ....................... (16,051,073) (15,247,045)
Foreign currency translation adjustments .. 235,947 375,575
------------ ------------
Total stockholders' equity ............ 4,529,752 2,993,407
------------ ------------
Total Liabilities and Stockholders' Equity .. $ 7,872,131 $ 6,269,782
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
<PAGE> 5
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months ended June 30,
---------------------------
1996 1995
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<S> <C> <C>
REVENUES ....................................... $ 786,075 $ 471,973
------------ ------------
COSTS AND EXPENSES:
General and administrative .................. 1,004,567 1,133,457
Depreciation and amortization ............... 56,654 45,857
------------ ------------
Total costs and expenses ............... 1,061,221 1,179,314
------------ ------------
OTHER (INCOME) EXPENSES:
Foreign currency exchange loss .............. (4,480) --
Realized loss (gains) on
trading securities ........................ -- 152,496
Interest .................................... 8,439 --
Other ....................................... -- 223,684
------------ ------------
Net other (income) expense ............. 3,959 376,180
------------ ------------
LOSS FROM OPERATIONS ................... (279,105) (1,083,521)
EQUITY INVESTEES INCOME (LOSS) ................. (472,665) --
------------ ------------
LOSS BEFORE INCOME TAXES, MINORITY
INTEREST AND EXTRAORDINARY LOSS ...... (751,770) (1,083,521)
INCOME TAXES ................................... -- --
------------ ------------
LOSS BEFORE MINORITY INTEREST AND
EXTRAORDINARY LOSS ................... (751,770) (1,083,521)
MINORITY INTEREST .............................. (52,257) (563)
------------ ------------
NET LOSS BEFORE EXTRAORDINARY LOSS ..... (804,027) (1,084,084)
EXTRAORDINARY LOSS ............................. -- --
------------ ------------
NET LOSS ............................... $ (804,027) $ (1,084,084)
============ ============
NET LOSS PER COMMON SHARE:
Before extraordinary loss .............. $ (0.12) $ (0.77)
Extraordinary loss ..................... -- --
------------ ------------
Net loss per common share .............. $ (0.12) $ (0.77)
============ ============
Weighted average number of
common shares outstanding .................... 6,778,160 1,411,523
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
<PAGE> 6
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months ended June 30,
--------------------------------
1996 1995
-------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ............................................. $ (804,027) $ (1,084,084)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization ................... 56,654 45,857
Write off of impaired and abandoned assets, net . -- --
Realized (gain) loss on trading securities ...... -- 152,496
Minority interest ............................... 52,257 563
Equity investees (income) loss, net ............. -- --
Stock issued for services ....................... -- --
Compensation related to issued non-employee
stock options ................................. -- --
Changes in operating assets and liabilities,
net of foreign currency translation:
Accounts receivable:
Trade ..................................... (46,097) 134,562
VAT ....................................... 38,461
Related parties ........................... (553,777)
Prepaid expenses ............................ 36,453 8,786
Other current assets ........................ -- (17,787)
Other assets ................................ 4,079 (7,746)
Bank overdraft protection ................... -- 36,983
Accounts payable, trade ..................... (101,034) 237,359
Accounts payable, officers .................. (29,535) --
Accrued expenses ............................ 102,032 44,894
Other liabilities ........................... 39,672 --
------------ ------------
Net Cash Provided By (Used By) Operating Activities .. (1,204,863) (448,117)
------------ ------------
INVESTING ACTIVITIES:
Proceeds from sales of trading securities ............ -- 250,630
Repayment of capital lease obligations ............... -- --
Purchase of trading securities ....................... -- --
Purchase of property and equipment ................... (15,137) (73,608)
Loss on investment -- held to maturity ............... -- (5,596)
Purchase of investment -- held to maturity ........... (919,835) --
------------ ------------
Net Cash Provided By (Used By) Investing Activities .. (934,972) 171,426
------------ ------------
FINANCING ACTIVITIES:
Issuance of notes payable ............................ -- 115,315
Payment of long-term debt ............................ -- --
Sale of common stock ................................. 2,567,501 --
Redeemed stock of subsidiary ......................... -- (277,777)
------------ ------------
Net Cash Provided By (Used By) Financing Activities .. 2,567,501 (162,462)
------------ ------------
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH ...... (139,628) 12,639
------------ ------------
NET INCREASE (DECREASE) IN CASH ...................... 288,038 (426,514)
Cash at beginning of period .......................... 288,312 649,708
------------ ------------
CASH AT END OF PERIOD ................................ $ 576,350 $ 223,194
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ....................................... $ 24,655 $ 23,548
Income taxes ................................... -- $ --
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
<PAGE> 7
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Common Stock Additional Foreign Total
--------------------- Paid-in Unrealized Accumulated currency Stockholders'
Shares Amount Capital Loss deficit adjustments Equity
---------- --------- ------------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
March 31, 1996... 5,256,105 $ 26,281 $ 18,026,096 $ (187,500) $(15,247,045) $ 375,575 $ 2,993,407
Common stock
issued for cash
in private
placement........ 100,000 500 212,000 -- -- -- 212,500
Common stock
issued to
Vista Laser
Centers of
the Pacific Inc.
in exchange for
500,000 shares of
series B
preferred stock
of VLC-Pacific... 500,000 2,500 485,350 -- -- -- 487,850
Common stock
issued to
Vista Laser
Centers of
the Northeast Inc.
in exchange for
675,000 shares of
series B
preferred stock
of VLC-Northeast. 450,000 2,250 537,750 -- -- -- 540,000
Common stock
issued to
Vista Laser
Centers of
the Northwest Inc.
in exchange for
500,000 shares of
series B
preferred stock
of VLC-Northwest. 500,000 2,500 397,500 -- -- -- 400,000
Exercise of
stock option by
Pharma Patch..... 200,000 1,000 499,000 -- -- -- 500,000
Adjustment for
investment in
VLC-Southwest.... -- -- (35,350) -- -- -- (35,350)
Foreign
currency
adjustments...... -- -- -- 375,000 -- (139,628) 235,372
Net loss for
the three
months ended
June 30, 1996.... -- -- -- -- (804,027) -- (804,027)
---------- --------- ------------ ---------- ------------ ----------- -------------
Balance at
June 30, 1996 ... 7,006,105 $ 35,032 $ 20,122,346 $ 187,500 $(16,051,073) $ 235,947 $ 4,529,752
========== ========= ============ ========== ============ =========== =============
</TABLE>
See accompanying notes to financial statements.<PAGE>
<PAGE> 8
VISTA TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
NOTE 1 -- INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements of Vista
Technologies Inc., a Nevada corporation (the "Company" or "Vista") at June 30,
1996, and for the three months periods ended June 30, 1996 and 1995 have been
prepared by the Company pursuant to the rules of the Securities and Exchange
Commission (the "Commission"). In the opinion of the Company's management,
such unaudited financial statements include all adjustments necessary for a
fair presentation of financial position, results of operations and cash flows
for the interim periods covered by such statements. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to the Commission's rules. Reference is made to Note 1 of
the Notes to Consolidated Financial Statements contained in the Company's
Annual Report on Form 10-KSB for the fiscal year ended March 31, 1996 for a
summary of significant accounting policies utilized by the Company. It is
suggested that the financial statements at June 30, 1996 be read in
conjunction with the audited consolidated financial statements and notes
thereto included in the Company's latest Annual Report on Form 10-KSB.
Results of operations for the three months ended June 30, 1996 and 1995 may
not necessarily be indicative of results for the full fiscal year.
NOTE 2 -- PRINCIPLES OF CONSOLIDATION; FOREIGN CURRENCY TRANSLATION;
INTEREST IN CONSOLIDATED SUBSIDIARIES
(a) Principles of Consolidation
The consolidated financial statements include accounts of the Company, and all
wholly-owned and majority-owned subsidiaries. Investments in companies in
which the Company's ownership interests range from 20 to 50 percent, and in
which the Company exercises influence over operating and financial policies,
are accounted for using the equity method. Investments in companies in which
the Company's ownership interest is currently in excess of 50% but for which
majority interest is considered only temporary and investments in companies in
which the Company's financial interest exceeds 20 percent but in which the
Company has limited or no voting rights are accounted for using the equity
method. Other investments are accounted for using the cost method. All
significant intercompany accounts and transactions have been eliminated. The
Company's subsidiaries in Italy, Sweden and the Netherlands have been
consolidated at June 30, 1996 using the subsidiaries' respective fiscal
quarters ended March 31, 1996 and have been consolidated at June 30, 1995
using their respective fiscal quarters ended March 31, 1995.
(b) Foreign Currency Translation
Financial statements of international subsidiaries are translated into US
dollars using the exchange rate at each balance sheet date for assets and
liabilities and an average exchange rate for each period for revenues,
expenses, gains and losses. Where the local currency is the functional
currency, translation adjustments are recorded as a separate component of
stockholders' equity.
The balance sheet and income statement data for the foreign subsidiaries have
been translated from their respective foreign currency to U.S. dollars using
the following exchange rates:
<PAGE> 9
<TABLE>
<CAPTION>
Average Rate Average Rate
for the for the
Three Months Three Months
Foreign June 30, 1996 Ended Ended
Subsidiary Currency Spot Rate June 30, 1996 June 30, 1995
- ---------- -------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Vista-UK Pounds Sterling n/a n/a $ 1.598
Vista-Italy Lira $ 0.001 $ 0.001 0.001
ConVista Gilders 0.585 0.614 0.647
Vista-Sweden Krona 0.149 0.144 0.138
</TABLE>
(c) Minority Interest
Minority interest represents the minority stockholders' proportionate share of
the equity in Vista-Italy. At June 30, 1996, the Company owned 73.57% of the
capital stock of Vista-Italy.
NOTE 3 -- LOSS PER COMMON SHARE
Loss per common share is based on the weighted average number of common shares
outstanding. Common equivalent shares relating to stock options and warrants
are excluded from the computation as their effect is anti-dilutive.
NOTE 4 -- CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments with an original maturity
of three months or less to be cash equivalents.
NOTE 5 -- STOCK SUBSCRIPTIONS RECEIVABLE
The Company has recorded stock subscriptions receivable as a current asset as
of March 31, 1996 and June 30, 1996, because all such receivables were paid
before the issuance of the Company's financial statements.
NOTE 6 -- INVESTMENT SECURITIES
The Company accounts for investment securities under the provisions of SFAS
No. 115. This standard requires that individual debt and equity securities be
classified into one of three categories: trading, held-to-maturity or
available-for-sale.
Trading securities are bought and held principally for the purpose of selling
them in the near term. Held-to-maturity securities are those securities in
which the Company has the ability and intent to hold the security until
maturity. All other securities not included in trading or held-to-maturity
are classified as available-for-sale.
Trading securities and available-for-sale securities are recorded at fair
value. Held-to-maturity securities are recorded at amortized cost, adjusted
for the amortization or accretion of premiums or discounts. Unrealized
holding gains and losses on trading securities are included in earnings.
Unrealized holding gains and losses, net of the related tax effect, on
available-for-sale securities are excluded from earnings and are reported as a
separate component of stockholders' equity until realized. Realized gains and
losses from the sale of securities are determined on a specific identification
basis.
<PAGE> 10
A decline in the market value of any available-for-sale or held-to-maturity
security below cost that is deemed other than temporary results in a reduction
in carrying amount to fair value. The impairment is charged to earnings and a
new cost basis for the security is established. Premiums and discounts are
amortized or accreted over the life of the related held-to-maturity security
as an adjustment to yield using the effective interest method. Dividend and
interest income are recognized when earned.
The amortized cost, gross unrealized holding gains, gross unrealized holding
losses and fair value for available-for-sale and held-to-maturity securities
by major security type and class of security at June 30, 1996, were as
follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Amortized Holding Holding Fair
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Available-for-sale:
Equity securities .... $ 2,662,500 $ 187,500 $ -- $ 2.850,000
Held-to-maturity:
8.75% Italian bonds .. 115,468 -- (5,343) 110,125
</TABLE>
The 8.75% Italian bonds mature in 1997.
NOTE 7 -- RECLASSIFICATION
Certain 1995 amounts have been reclassified to conform to the 1996
presentation.
NOTE 8 -- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30, 1996 and
March 31, 1996:
<TABLE>
<CAPTION>
June 30, March 31,
1996 1996
------------ ------------
<S> <C> <C>
Excimer lasers and other technical equipment .. $ 1,896,394 $ 1,896,394
Office furniture and equipment ................ 82,522 67,385
----------- -----------
1,978,916 1,963,779
Less accumulated depreciation ................. (800,635) (743,981)
----------- -----------
$ 1,178,281 $ 1,219,798
=========== ===========
</TABLE>
<PAGE> 11
NOTE 9 -- COMMITMENTS AND CONTINGENCIES
(a) Employment Agreements
The Company has employment agreements with its executive officers, the terms
of which expire at various times through January 15, 1999. Such agreements
provide for minimum salary levels, as well as for incentive bonuses which are
payable if specified management and operational goals are attained.
(b) Exchange Agreement
In order to induce a stockholder to advance $100,000 under a deed of debenture
to MICRA Instruments Limited (a wholly owned subsidiary of Medical Development
and Research, Inc.), the Company entered into an exchange agreement on June
28, 1995 with the stockholder. The exchange agreement provides the
stockholder with the option of exchanging the unpaid principal and interest of
the debenture for fully paid and nonassessable shares of the Company's common
stock issued under Regulation S at a conversion price of $1.25 per share at
any time prior to repayment of the debenture by MICRA. As of June 30, 1996,
the stockholder has not exercised this option.
(c) Legal Judgment
In 1991 and 1993, Vista-Italy and Laser Vision Centers, Inc. ("LVCI") entered
into agreements to license trademarks and develop territorial marketing
strategies. The companies exchanged shares of their respective common stock
as consideration under the agreements.
In 1993, LVCI filed suit for termination of these agreements and a default
judgment was entered in LVCI's favor rescinding all prior agreements among the
parties. In connection with this judgment, Vista-Italy recorded the
cancellation of Vista-Italy shares of common stock it had issued to LVCI, a
return of LVCI shares previously delivered to Vista-Italy and a note payable
for $175,000 plus related legal fees. Vista-Italy filed a motion to vacate
the judgment which was denied by the trial court; the trial court's decision
was recently affirmed on appeal and the appellate court denied Vista-Italy's
application for a rehearing by the appellate court. Vista-Italy plans to
petition for an appeal to the Missouri Supreme Court.
(d) Insurance and Indemnification
Use of laser systems by health care professionals using laser equipment and
other laser vision correction ("LVC") services may give rise to claims against
the Company or its affiliates by persons alleging injury. The Company's
subsidiaries generally do not currently have malpractice liability insurance.
The Company believes that claims alleging defects in laser systems will be
covered by manufacturers' warranties and the manufacturer's product liability
insurance, and that the Company and its affiliates could take advantage of
such insurance by adding such suppliers to potentially adverse lawsuits.
There can be no assurance that laser suppliers will carry product liability
insurance or that any such insurance will be adequate to protect the Company.
Generally speaking, the policy of the Company's operating subsidiaries and
regional joint ventures is to require that ophthalmologists who perform laser
procedures by use of LVC equipment maintain their own professional liability
insurance.
(e) Physician Commitments
In two separate instances, a physician planning to associate with a Regional
Joint Venture sponsored by the Company has been advised by a third party that
<PAGE> 12
it contends the physician breached commitments or obligations to the third
party by the physician's decision to associate with one of the Company's
Regional Joint Ventures.
In one of these matters, the third party contends that its plan of operations
to enter the business of providing access to LVC equipment in association with
a physician in Hawaii has been damaged due to that physician's decision to
affiliate with a Regional Joint Venture sponsored by Vista. The third party
recently filed a civil action in the state court of Hawaii seeking injunctive
relief and damages which names two physicians and the Company as defendants.
On the date the action was filed, at a hearing not attended by the defendants,
the court issued an ex parte temporary restraining order expiring on September
6, 1996 which prohibits the defendants from using confidential information, if
any, obtained by them from the plaintiff. Although discovery has not yet
commenced, the Company does not believe that any of the defendants received
confidential information from the plaintiff. The terms of the temporary
restraining order do not prohibit either physician from affiliating with
Regional Joint Ventures sponsored by Vista, and the Company believes the
plaintiff's claims are without merit and will not result in material liability
to the Company or its Regional Joint Venture affiliate.
In the other dispute, the third party contends that a physician breached
fiduciary duties to the third party and misappropriated client lists and data,
and the claimant also has threatened to hold the Company and certain other
parties responsible as well as the physician. To date, this dispute has
resulted in the filing of legal proceedings. Based on information currently
known to the Company, the Company believes these claims are without merit.
NOTE 10 -- ESTABLISHMENT OF ADDITIONAL REGIONAL JOINT VENTURES
The Company's business strategy is to expand in North America by organizing
and sponsoring independently financed regional enterprises ("Regional Joint
Ventures") in which the Company will obtain a significant equity interest and
long-term fee-based consulting arrangements. As of March 31, 1996, two such
Regional Joint Ventures, Vista Laser Centers of Michigan, Inc. and Vista Laser
Centers of the Southwest, Inc. had been formed.
During the current fiscal period, the Company made additional investments in
Regional Joint Ventures as follows:
In May 1996, the Company issued 450,000 shares of its common stock in
exchange for 675,000 shares of 5% Series B convertible preferred stock
in Vista Laser Centers of the Northeast, Inc. (VLC-Northeast).
In May 1996, the Company issued 500,000 shares of its common stock in
exchange for 500,000 shares of 5% Series B convertible preferred stock
in Vista Laser Centers of the Northwest, Inc. VLC-Northwest).
In May 1996, the Company issued 500,000 shares of its common stock in
exchange for 500,000 shares of 5% Series B convertible preferred stock
in Vista Laser Centers of the Pacific, Inc. (VLC-Pacific).
VLC-Northeast, VLC-Northwest and VLC-Pacific have been organized to establish,
own and manage laser vision correction centers.
The Company does not exercise control over any of the Regional Joint Ventures
insofar as it has granted or has committed to grant to one or more local
affiliates of each of the Regional Joint Ventures an irrevocable five year
proxy to vote the Series A and Series B preferred shares owned by the Company.
<PAGE> 13
NOTE 11 -- SUBSEQUENT EVENTS
(a) Cash Received
Subsequent to June 30, 1996 the Company received $1,512,500 in cash related to
the following:
(i) In July 1996, Pharma Patch PLC exercised options to purchase
200,000 shares of the Company's common stock resulting in
proceeds to the Company of $500,000.
(ii) In August, the Company completed the sale of 100,000 shares of
its common stock on a Regulation S basis for cash proceeds of
$212,500.
(iii) In August, the Company received $800,000 from the sale of an 8%
promissory note to Pharma Patch PLC. The Company has pledged
200,000 shares of Technical Chemical and Products, Inc. common
stock as collateral to secure the promissory note due on
December 31, 1996, but the maturity date may be extended by
Vista up to two times for an additional six months each so long
as Vista is not in default on its loan obligations.
(b) Agreement With Refractive Services-800, Inc.
From July 1995 through June 1996, a foreign corporate investor named
Refractive Services-800, Inc. provided at least $100,000 in initial seed
capital to each of five Regional Joint Ventures (for an aggregate investment
of $520,00) to finance initial organizational expenses and costs of
negotiating agreements with vision care professionals and seeking additional
financing. In exchange for that investment, and in view of the high risks
associated with a start-up enterprise, Refractive Services-800, Inc. received
shares of a 10% Series A convertible preferred issue of the Regional Joint
Venture with a liquidation preference equal to five times its cash investment
in four Regional Joint Ventures and six times its cash investment in one other
Regional Joint Venture.
The Company recently negotiated an agreement effective July 18, 1996 to
acquire the Series A preferred shares owned by Refractive Services-800, Inc.
in all five of these Regional Joint Ventures in exchange for 520,000 shares of
Vista common stock. In addition, Vista agreed to purchase all of the capital
stock in Refractive Services 800 Corp., a Nevada corporation ("RS-800") for
$50,000 from Refractive Services-800, Inc. Refractive Services-800, Inc.
organized RS-800 to acquire rights to, and offer the use of, certain 800 and
900 telephone numbers for telemarketing purposes at the election of Regional
Joint Ventures.
(c) Conversion of Interests in Regional Joint Ventures from Preferred to
Common Stock
The Company has agreed to convert shares of Series A and Series B preferred
stock held by the Company in certain Regional Joint Ventures (VLC-Michigan,
VLC-Northeast, VLC-Northwest, VLC-Pacific and VLC-Southwest) into shares of
common stock of the Regional Joint Ventures, in each instance at a one-for-one
conversion ratio.
<PAGE> 14
VISTA TECHNOLOGIES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Consolidated Financial Statements and notes thereto appearing elsewhere in
this Report.
INTRODUCTION AND PLAN OF OPERATION
Vista commenced business operations in February 1994. The Company
acquired controlling equity interests in European subsidiaries during 1994.
Vista developed a strategic plan in mid-1995 to sponsor and invest in Regional
Joint Ventures to conduct additional businesses engaged in providing access to
laser vision correction ("LVC") equipment and related services ("LVC
Services") in regional markets of North America.
Since commencing operations, the Company has financed its business
operations, acquisition and expansion activities primarily from the issuance
or sale of equity securities. From February 1994 through March 31, 1996, the
Company had received approximately $7,437,500 from the sale of 1,197,500
shares of common stock and 1,225,000 warrants, approximately $278,000 from the
sale of convertible debt instruments, and had issued an additional 3,692,756
shares of common stock and 259,000 warrants in connection with the acquisition
of other assets and investments. During the quarter ended March 31, 1996,
Vista also received approximately $712,500 from the sale of 300,000 shares of
common stock and issued an additional 1,450,000 shares of common stock in
connection with the acquisition of other assets and investments.
At June 30, 1996, the Company had an accumulated deficit of $16,051,000.
The Company's net loss for the most recent three months ended June 30, 1996
was $804,000 and its net loss for the fiscal year ended March 31, 1996 was
$3,815,000. Vista's European subsidiaries have not operated profitably since
their inception. Although its Italian subsidiary generated positive cash flow
from operations in fiscal 1996 and for the most recent three months ended June
30, 1996, and Vista-Sweden's cash flow from operations was approximately cash
neutral during such periods, there can be no assurance that European
operations will be profitable in the future.
The Company's operating management anticipates Vista will continue to
incur losses for the immediate near term due to the Company's current level of
fixed expenses for general and administrative expenses and depreciation, but
at a lower rate than that experienced in the fiscal year ended March 31, 1996.
Losses are expected to continue until such time as revenues increase to a
level necessary to absorb fixed costs. No assurances can be given as to
whether or when revenue increases may be achieved. Revenue increases will be
dependent, among other things, in part upon expanding use of the Company's
services by physicians, general public acceptance of laser surgery to correct
refractive disorders and competitive factors.
Management's strategy developed in mid-1995 has been to expand its
participation in a developing market for LVC Services in the United States,
while at the same time minimizing Vista's short-term cash requirements for
such expansion. Since insurance reimbursement is not available, the Company's
management believes the skills and reputation of health care professionals
involved in recommending and performing refractive eye procedures are an
important and often critical element in the patient's decision to elect an LVC
refractive procedure. Vista has therefore designed and is implementing a
program to organize and sponsor U.S. and Canadian Regional Joint Ventures in
alliance with prominent physicians that are to be largely independently
financed and will offer advantages of equity incentives and management control
to skilled and prominent ophthalmologists experienced in a variety of LVC
treatments, procedures and post-operative care.
<PAGE> 15
Vista plans to continue to seek additional capital through the private
placement and/or public sale of its equity securities, use of equipment lease
financing, and sale of marketable securities to finance the Company's
operations and expansion plans in North America.
The Company's business activities are subject to both predictable and
unforeseen risks incident to the creation of new businesses with a limited
history of operations. Prospective investors should consider the frequency
with which newly developed businesses encounter unforeseen expenses,
difficulties, complications and delays, and other factors such as the
Company's losses from its continuing operations.
RESULTS OF OPERATIONS: THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO
THREE MONTHS ENDED JUNE 30, 1995
REVENUES: During the three months ended June 30, 1996 (the "1996
Period"), Vista's consolidated revenues from operations were $786,000, an
increase of 66.5% compared to $472,000 in consolidated revenues for the three
months ended June 30, 1995 (the "1995 Period"). Consolidated revenues in the
1996 Period principally included $379,000 attributable to the operations of
Vista-Italy, approximately a 59% increase compared to $239,000 in the 1995
Year, and $402,000 from the operations of Vista-Sweden, an increase of
approximately 77% over $227,000 in the 1995 Year. These increases were in
part attributable to $48,000 of revenues in the 1996 Period at a new LVC
Services center opened in August 1995 in Malmo, Sweden, and otherwise are
attributable to a 54% increase in the number of LVC procedures performed at
other locations of Vista-Italy and Vista-Sweden.
The following chart summarizes certain information as to the number of
LVC surgical procedures performed at Vista's European centers for the periods
indicated.
<TABLE>
<CAPTION>
3 Months ended June 30,
-------------------------
1996 1995
------ ------
<S> <C> <C>
Italy (3 centers in each period)............ 431 388
Sweden (1 center in 1995 period and
2 centers in 1996 period) ................ 266 65
------ ------
Totals ......................... 697 453
====== ======
</TABLE>
During July 1996, Vita-Italy established a fourth Italian center in Palermo,
Italy.
OPERATING EXPENSES: Costs and expenses of operations for the 1996
Period were $1,061,000 a decrease of 10% compared to costs and expenses of
operations of $1,179,000 in the 1995 Year. Costs and expenses in the 1996
Period consisted of $1,005,000 in general and administrative expenses, a 11%
decrease compared to the 1995 Period, and $57,000 in depreciation and
amortization, a $11,000 increase compared to the 1995 Period. General and
administrative expenses for the 1996 Year included $136,000 for Vista-Italy
and $308,000 for Vista-Sweden. Costs and expenses of operations were reduced
in part by the absence of costs of operations in England closed in June 1995.
The Company's European subsidiaries sustained losses from operations in the
1996 Period that were significantly reduced compared to the 1995 Period.
Vista-Italy generated positive cash flow from operations in the 1996 Period
and Vista-Sweden's cash flow from operations was marginally cash positive.
<PAGE> 16
Profitable operations from European operating subsidiaries in the future will
be dependent upon increasing revenues, as to which there can be no assurance.
Other major components of the Company's general and administrative expenses in
the 1996 Period included approximately $518,000 of general and administrative
expenses at the Vista parent corporation level.
OTHER EXPENSES AND INCOME: Other net expenses in the 1996 Period
totalled $4,000, a reduction of $372,000 compared to $376,000 in other net
expenses in the prior 1995 Period. Interest expense in the 1996 Period
remained approximately the same compared to the prior 1995 Period.
NET LOSS: Net loss for the 1996 Period was $804,000, equal to a net
loss of $0.12 per common share, compared to a net loss in the 1995 Period of
$1,084,000, or $0.77 per common share.
LIQUIDITY AND CAPITAL RESOURCES
Vista's principal capital requirements include cash requirements to
finance programs to acquire additional LVC equipment and support activities of
Regional Joint Ventures sponsored by the Company since June 1995, working
capital for management and administration and, in the future, anticipated
requirements to finance sales and marketing. Subject to the availability of
adequate capital, as to which there can be no assurance, expenditures for
additional excimer laser equipment may be significant during the foreseeable
future to support the Company's program of expanding LVC Services and
supporting the activities of Regional Joint Ventures.
As of June 30, 1996, the Company had $576,000 in cash and consolidated
working capital of $410,000. Consolidated working capital improved by
$303,000 from consolidated working capital of $107,000 at March 31, 1996.
Consolidated working capital during the three months ended June 30, 1996
increased by $2,568,000 in cash received from the sale of common stock that
was partially offset by $1,205,000 of net cash used by operating activities
and $919,000 applied to equity investments. Additional cash was generated
subsequent to June 30, 1996 by (i) the exercise of a stock option by Pharma
Patch Plc in July 1996 for $500,000, (ii) the private placement sale of
100,000 shares of common stock in August 1996 for $212,500 and (iii) the sale
of an 8% promissory note to Pharma Patch in August 1996 for $800,000. The
Company's assets include 200,000 restricted shares of Technical Chemicals and
Products, Inc. common stock (the "TCPI Shares") which were registered under
the Securities Act of 1933 on June 20, 1996 for possible resale by the Company
after approximately October 23, 1996. See "Investment in Technical Chemicals
and Products, Inc." in Item 1 of the Company's Report on Form 10-KSB for the
fiscal year ended March 31, 1996. The TCPI Shares have been pledged as
collateral by the Company to secure its $800,000 promissory note to Pharma
Patch that is due on December 31, 1996, but may be extended by Vista up to two
times for an additional six months each so long as Vista is not in default on
its loan obligations.
Vista plans to continue to seek additional capital through the private
placement and/or public sale of its equity securities, use of equipment lease
financing, and sale of marketable securities to finance the Company's
operations and expansion plans in North America.
Although the Company's European operating subsidiaries appear to have
achieved positive or neutral cash flow levels of operations, Vista's
management anticipates that its consolidated operations will incur negative
cash flows for the immediate future, primarily due to fixed expenses for
corporate general and administrative overhead. Management is actively
pursuing strategies to increase the Company's revenues and reduce its negative
cash flow. Based on currently planned activities, management believes that
its cash and marketable securities resources at June 30, 1996 are sufficient
to fund the Company's operations for at least the next 12 months. There can
be no assurance that the Company's consolidated revenues will increase to the
point that operating expenses will be fully absorbed by revenues from
operations.
<PAGE> 17
U.S. DOLLAR PRESENTATION AND FOREIGN CURRENCY FLUCTUATIONS
The Company publishes its consolidated financial statements in U.S.
dollars after translating transactions in foreign currencies to U.S. dollars.
A significant portion of the Company's consolidated revenues and expenses are
collected and paid in local currency of its European operating subsidiaries,
i.e. Italian lira and Swedish krona. Income and expense items in foreign
currencies are translated at the weighted average exchange rate prevailing
during the period, except that expenses related to nonmonetary assets and
liabilities are translated at historical rates. In periods when the U.S.
dollar depreciates against relevant foreign currencies, reported earnings
attributable to transactions in foreign currencies may be materially enhanced.
In periods when the U.S. dollar appreciates against the relevant foreign
currencies, however, reported earnings attributable to transactions in foreign
currencies may be materially reduced. Fluctuations in the exchange rate
between relevant foreign currencies and the U.S. dollar may also affect the
book value of the Company's consolidated assets and the amount of its
stockholders' equity. Except as otherwise stated in this Report, all monetary
amounts have been presented in U.S. dollars.
PART II -- OTHER INFORMATION
ITEM 5. OTHER EVENTS
RELOCATION OF PRINCIPAL OFFICE
In late August 1996, the Company relocated its principal executive
offices to 167 S. San Antonio Road, Suite 9, Los Altos, California 94022,
telephone numbers (800) 249-3819 or (415) 947-1750. The lease for the
Company's new corporate offices in Los Altos, California provides for a base
rental of $2,084 per month adjusted at the end of each year during the
five-year term for changes in the consumer price index and in any event not
less than a 3% increase nor more than a 7% increase per year.
SALES OF COMMON STOCK SUBSEQUENT TO JUNE 30, 1996
As part of certain agreement and financing transactions between the
Company and Pharma Patch Plc in March 1996, Vista granted Pharma Patch PLC an
option exercisable at any time on or before September 30, 1996 to purchase up
to an additional 250,000 newly issued shares of the Company's common stock at
an option exercise price of $2.50 per share in cash (the "Six Month Option").
On July 18, 1996, Pharma Patch PLC exercised 200,000 shares subject to the Six
Month Option at an exercise price of $500,000 paid to the Company in cash.
On June 13, 1996, the Company received $212,500 in proceeds from the
sale of 100,000 shares of the Company's common stock at $2.125 per share under
a Regulation S offshore private placement transaction with two foreign
investors, Solar Ventures Limited as to 50,000 shares and Armilla Holdings
Limited as to 50,000 shares. The quoted closing market price for the
Company's common stock on June 13, 1996 was $3.25 per share. No fees or
commissions to third parties were paid in connection with this offering.
On August 14, 1996, the Company received $212,500 in proceeds from the
sale of 100,000 shares of the Company's common stock at $2.125 per share under
a Regulation S offshore private placement transaction with one foreign
investor, Paget Trading Ltd. The quoted closing market price for the
Company's common stock on August 9, 1996, the date of the agreement, was
$2.875 per share. No fees or commissions to third parties were paid in
connection with this offering.
<PAGE> 18
PURCHASE OF CERTAIN ASSETS FROM REFRACTIVE SERVICES-800, INC.
From July 1995 through June 1996 date, a foreign corporate investor
named Refractive Services-800, Inc. invested $520,000 in cash in five Regional
Joint Ventures sponsored by the Company. See "North American Regional Joint
Venture Investments and Affiliates" in Item 1 of the Company's Annual Report
on Form 10-KSB for the fiscal year ended March 31, 1996. In exchange for that
investment, and in view of the high risks associated with making the initial
investment in start-up enterprises that had yet to negotiate any agreements
for proposed business operations, Refractive Services-800, Inc. received
shares of a 10% Series A convertible preferred issue of the five Regional
Joint Ventures with a liquidation preference equal to five times its cash
investment (six times its cash investment in the case of VLC-Northeast).
Vista negotiated an agreement on July 18, 1996 to acquire all Series A
Preferred shares in five Regional Joint Ventures originally purchased by
Refractive Services-800, Inc. for $520,000. In exchange, Vista has agreed to
issue to Refractive Services-800, Inc. a total of 520,000 shares of Vista
common stock. The Company also agreed to purchase for $50,000 in cash all of
the capital stock in Refractive Services 800 Corp., a Nevada corporation
organized by Refractive Services-800, Inc. in 1995 to acquire rights to
certain 800 and 900 telephone numbers for telemarketing purposes at the
election of Regional Joint Ventures.
$800,000 SECURED LOAN FROM PHARMA PATCH PLC
On August 26, 1996, the Company borrowed $800,000 from Pharma Patch PLC
in exchange for an 8% Secured Promissory Note (the "8% Secured Note"). The
Company's assets include 200,000 restricted shares of Technical Chemicals and
Products, Inc. common stock (the "TCPI Shares") which were registered under
the Securities Act of 1933 on June 20, 1996 for possible resale by the Company
after approximately October 23, 1996. See "Investment in Technical Chemicals
and Products, Inc." in Item 1 of the Company's Report on Form 10-KSB for the
fiscal year ended March 31, 1996. The TCPI Shares have been pledged as
collateral by the Company to secure its obligations under the 8% Secured Note.
Principal and interest on the 8% Secured Note are payable on December
31, 1996, or earlier in the event Vista elects to sell all or any portion of
its interest in the TCPI Shares. In the event net proceeds from a sale of a
portion of the TCPI Shares is insufficient to provide for full payment of the
8% Secured Note, the unpaid balance of the 8% Secured Note will remain due on
its original maturity date of December 31, 1996 or earlier in the event of a
subsequent sale of TCPI Shares for the account of the Company.
The original maturity date of the 8% Secured Note may be extended by
Vista up to two times, for an additional six months each, so long as Vista
pays all accrued interest at the date of each renewal and is not otherwise in
default on its loan obligations. Pharma Patch PLC has the right to accelerate
the maturity date of the loan if the fair value market of TCPI Shares pledged
as collateral falls to less than 150% of the unpaid principal of the 8%
Secured Note unless Vista, within five business days after notice, prepays a
sufficient amount of the note principal so that the fair market value of TCPI
Shares then pledged as collateral is not less than 150% of the remaining
unpaid principal of the 8% Secured Note.
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS: The following exhibits are filed with this Report or, as
indicated below, are incorporated by reference to the Company's prior filings
with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ---------------------------------------------------
<S> <C>
10.35 Regulation S Offshore Transaction Subscription Agreement dated
June 7, 1996 between the Registrant and Armilla Holdings Limited
as to the sale of 50,000 shares of common stock for $106,250.
10.36 Regulation S Offshore Transaction Subscription Agreement dated
June 7, 1996 between the Registrant and Solar Ventures Ltd. as to
the sale of 50,000 shares of common stock for $106,250.
10.37 Notice of Election to Exercise Stock Option dated July 18, 1996 by
Pharma Patch PLC as to 200,000 shares at $2.50 per share.
10.38 Regulation S Offshore Transaction Subscription Agreement dated
August 9, 1996 between the Registrant and Paget Trading Ltd. as to
the sale of 100,000 shares of common stock for $212,500.
10.39 8% Secured Promissory Note for $800,000 dated August 26, 1996
issued by the Registrant to Pharma Patch PLC.
10.40 Pledge Agreement dated August 26, 1996 between the Registrant and
Pharma Patch PLC as to collateral security interest in 200,000
shares of Technical Chemicals and Products, Inc. common stock
securing Registrant's $800,000 secured promissory note.
27 Financial Data Schedule at June 30, 1996.
</TABLE>
(b) REPORTS ON FORM 8-K: The Company filed a Current Report on Form 8-K
dated as of May 13, 1996 concerning a change in its independent accountants.
<PAGE>
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Date: September 6, 1996
VISTA TECHNOLOGIES INC.
---------------------------------
(Registrant)
By: /s/ Thomas A. Schultz
-----------------------------
Thomas A. Schultz, President and
Chief Executive Officer
By: /s/ Kenneth G. Howling
-----------------------------
Kenneth G. Howling, Vice President of Finance,
Treasurer, Chief Financial Officer and
Chief Accounting Officer
<PAGE> 1
Rev-S-96b
VISTA TECHNOLOGIES INC.
(a Nevada corporation)
REGULATION S OFFSHORE TRANSACTION SUBSCRIPTION AGREEMENT
Up to 100,000 shares of Common Stock at $2.125 per share
Any interest in the VISTA TECHNOLOGIES INC. securities subscribed to
hereunder may be resold within the jurisdiction of the United States
or to U.S. Persons [as defined in Rule 902(o) of Regulation S under
the United States Securities Act of 1933 ("Securities Act")] by or
for the account of the undersigned Foreign Investor only: (i)
pursuant to a registration statement under the Securities Act; or
(ii) pursuant to an applicable exemption, if any, from such
registration. The resale of these securities under Rule 903 of
Regulation S and other regulations under the Securities Act, if
applicable, is prohibited before the expiration of any restricted
period required by Rule 903 of Regulation S, which restricted period
cannot commence until all securities included in this Offering have
been sold and fully paid for.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Vista Technologies Inc.
1250 Oakmead Parkway, Suite 210
Sunnyvale, California 92088-3599
FAX No. (408) 746-3630
1. SUBSCRIPTION TO COMMON STOCK. The undersigned, an individual not
residing in nor a resident of the United States, or alternatively a company
organized under the laws of the jurisdiction of its organization or
incorporation set forth on the signature page hereof (herein called the
"Foreign Investor"), hereby subscribes for the purchase of the number of
shares of common stock, par value $0.005 per share (the "Common Stock") in
Vista Technologies Inc., a Nevada corporation ("VISTA") indicated on the
signature page hereof for the account of the Foreign Investor upon the terms
and conditions set forth in this Subscription Agreement. The subscription
price for each share of VISTA common stock offered hereby is $2.125 per share
in good U.S. funds, payable in cash upon acceptance hereof.
2. DESCRIPTION OF OFFERING.
2.1. Regulation S Offering. VISTA is offering up to a maximum of
100,000 shares of VISTA Common Stock, par value $.005 per share (the
"Shares"), on a "best efforts" basis to a limited number of qualified
investors in a private placement offering of securities exempt from the
registration requirements of the United States Securities Act of 1933, as
amended (the "Securities Act"). The offering of such Shares to investors who
are not U.S. persons as defined in Rule 902(o) of Regulation S ("Regulation
S") promulgated under the Securities Act is herein called the "Offering". All
of the Shares offered to Foreign Investors are being offered at a price of
$2.125 per Share in U.S. funds. There are no minimum amount of subscriptions
required in order for VISTA to accept any subscriptions to the Offering. The
Offering will terminate on June 30, 1996 unless extended at the option of
VISTA for an additional period of not more than 30 days. VISTA reserves the
right to terminate the Offering at any time, whether or not the maximum Shares
have been sold.
Regulation S Subscription Agreement -1-<PAGE>
<PAGE> 2
3. OTHER REPRESENTATIONS AND WARRANTIES OF THE FOREIGN INVESTOR. In
connection with this Agreement and the transactions contemplated herein, the
Foreign Investor represents and warrants to VISTA as follows:
3.1. The Foreign Investor has been duly formed and is validly existing
as a corporation or other legal entity in good standing under the laws of its
jurisdiction of incorporation set forth on the signature page to this
Agreement. The Foreign Investor is not organized under the laws of the United
States, is not a "U.S. Person" as that term is defined in Rule 902(o) of
Regulation S, and is not an "affiliate" of VISTA as that term is used in
regulations promulgated under the Securities Act or associated with any
individual or entity which may be deemed an "affiliate" of VISTA as of the
date hereof. Neither the Foreign Investor, nor any person affiliated with it,
is or has been for the past three months, an officer, director, controlling
shareholder or otherwise in a position to control, select or influence the
management and policies of VISTA.
3.2. The Foreign Investor was not formed for the purpose of investing
in Regulation S securities or formed for the purpose of investing in this
Agreement and the Shares of VISTA. The Foreign Investor is not registered as
an issuer under the Securities Act and is not required to be registered with
the U.S. Securities and Exchange Commission under the Investment Company Act
of 1940, as amended. The Foreign Investor is entering into this Agreement and
is participating in the Offering for its own account, and not on behalf of any
U.S. Person as defined in Rule 902(o) of Regulation S.
3.3. No offer to enter into this Agreement has been made by VISTA to
the Foreign Investor in the United States other than as permitted in the case
of an account managed by a professional fiduciary resident in the United
States within the meaning of Section 902(o)(2) of Regulation S. At the times
of the offer and execution of this Agreement and, to the best knowledge of the
Foreign Investor, at the time the Offering originated, the Foreign Investor
was located and resident outside the United States other than as permitted in
the case of an account managed by a professional fiduciary resident in the
United States within the meaning of Section 902(o)(2) of Regulation S.
3.4. Neither the Foreign Investor, nor any of its affiliates nor any
person acting on its behalf or any behalf of any such affiliate, has engaged,
or will engage, in any activity undertaken for the purpose of, or that could
reasonable be expected to have the effect of, conditioning the markets in the
United States for the Shares or for any securities that are convertible into
or exercisable for Shares of VISTA, including but not limited to effecting any
sale of VISTA securities to or through the Foreign Investor or any of its
affiliates prior to the expiration of any restricted period contained in
Regulation S (any such activity being defined herein as a "Directed Selling
Effort"). To the best knowledge of the undersigned, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the Shares are being
purchased for investment purposes by the Foreign Investor. The Foreign
Investor, and to the best knowledge of the Foreign Investor, each distributor,
if any, participating in this Offering of VISTA Shares, has agreed that all
offers and sales of any securities included in the Offering prior to the date
hereof and through the expiration of the any restricted period set forth in
Rule 903 of Regulation S (as the same may be amended from time to time
hereafter) shall not be made to U.S. Persons or for the account or benefit of
U.S. Persons, and shall otherwise be made in compliance with the provisions of
Regulation S and any other applicable provisions of the Securities Act. The
Foreign Investor and its representatives have not conducted any Directed
Selling Effort as that term is used and defined in Rule 902 of Regulation S
and will not engage in any such Directed Selling Effort within the United
States through the expiration of any restricted period set forth in Rule 903
of Regulation S.
Regulation S Subscription Agreement -2-<PAGE>
<PAGE> 3
3.5. The Foreign Investor acknowledges and agrees that following the
expiration of any restricted period provided by Rule 903 of Regulation S, any
interest in this Agreement or in the Shares subscribed to hereunder may be
resold within the jurisdiction of the United States or to U.S. Persons [as
defined in Rule 902(o) of Regulation S] by or for the account of the parties
hereto only: (i) pursuant to a registration statement under the Securities
Act, or (ii) if applicable, pursuant to an exemption from such registration
for sales by a person other than an issuer, underwriter or dealer as those
terms are used in Section 4(1) and related provisions of the Securities Act
and regulations thereunder, or pursuant to another exemption from
registration, and only following the expiration of any restricted period (if
applicable) required by Regulation S. The Foreign Investor acknowledges that
this Agreement and the VISTA Shares have not been registered under the
Securities Act or qualified under state securities laws of the United States,
and that the transferability hereof and thereof within the jurisdiction of the
United States is restricted by the Securities Act as well as such state laws.
The Foreign Investor acknowledges that this Agreement and the Shares are being
sold in reliance upon the transaction exemption afforded by Regulation S in
connection with an offshore offer and sale of securities of VISTA not within
or subject to the jurisdiction of the United States markets. The Foreign
Investor acknowledges it has received a copy of Regulation S, is familiar with
and understands the terms thereof, and has had the opportunity to consult with
its legal counsel concerning this Agreement and Regulation S.
The Foreign Investor acknowledges that if any transfer of the
Shares is proposed to be made in reliance upon an exemption under the
Securities Act, the issuer of the securities may require an opinion of counsel
satisfactory to the issuer that such transfer may be made pursuant to an
applicable exemption under the Securities Act. The Foreign Investor
acknowledges that, so long as appropriate, a legend similar to the following
may appear on the certificates representing the VISTA Shares subscribed for
hereunder: "These securities have not been registered under the Securities
Act of 1933 and may be reoffered and sold only if registered or if an
exemption from such registration is available in the opinion of counsel
satisfactory to the issuer".
3.6. The Foreign Investor has not received any general solicitation or
advertising regarding the Offering or this Agreement. The Foreign Investor
has sufficient knowledge and experience in financial and business matters so
that it is able to evaluate the merits and risks of the Offering and this
Agreement. The Foreign Investor has had substantial experience in previous
private and public purchases of speculative and restricted securities.
3.7. The Foreign Investor acknowledges that an investment in the Shares
offered hereby is speculative, involves a high degree of risk, and should not
be purchased by persons who cannot afford the loss of their entire investment,
and represents that the Foreign Investor has relied only on the information
contained herein or otherwise provided in writing by duly authorized
representatives of VISTA. The Foreign Investor has carefully read and
reviewed this Subscription Agreement and all of VISTA's filings with the
Securities and Exchange Commission incorporated by reference herein
(including, without limitation, the section entitled "Cautionary Statements
for Purposes of the 'Safe Harbor' Provisions of the Private Securities
Litigation Reform Act of 1995" in Vista's Report on Form 10-QSB for the Period
ended December 31, 1995), as described in Section 4 of this Agreement, and has
asked such questions of management of VISTA and received such additional
information as he, she or it deems necessary in order for the Foreign Investor
to make an informed decision with respect to the purchase of the Shares. The
undersigned Foreign Investor has received complete and satisfactory answers to
all such inquiries. The Foreign Investor has not received oral or written
representations or assurances from VISTA or any representatives of VISTA,
other than as set forth in this Agreement.
Regulation S Subscription Agreement -3-<PAGE>
<PAGE> 4
3.8. This Agreement has been duly authorized, executed and delivered by
the Foreign Investor and is a valid and binding agreement enforceable in
accordance with its terms, subject only to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
to or affecting creditors' rights generally and to general principles of
equity. The Foreign Investor has full power and authority necessary to enter
into this Agreement and to perform its obligations hereunder.
3.9. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by the Foreign Investor of any of the terms or provisions
of, or constitute a default under, its charter documents, its memorandum or
articles of association or incorporation, its by-laws, any action of its
directors or shareholders, or any indenture, mortgage, deed of trust or other
agreement or instrument to which the undersigned is a party or by which it or
any of its properties or assets are bound, or any existing applicable law,
rule or regulation or any applicable decree, judgment or order of any court,
regulatory body, administrative agency or other governmental body having
jurisdiction over the undersigned or any of its properties or assets.
4. REPRESENTATIONS AND WARRANTIES OF VISTA.
By its acceptance of any subscription from the Foreign Investor
hereunder, VISTA represents and warrant to the Foreign Investor as follows:
4.1. VISTA is duly organized and validly existing in good standing as a
corporation under the laws of Nevada with corporate power to enter into this
Agreement and to conduct its business as presently conducted.
4.2. VISTA is a "Reporting Issuer" as defined in Rule 902(l) of
Regulation S and will cause all the materials required to be filed by it
pursuant to Section 13(a) of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act") to be filed with the Securities and Exchange
Commission for a period of at least three (3) months following the completion
of the Offering. VISTA is not an investment company registered or required to
register as such under the United States Investment Company Act of 1940.
4.3. The common stock of VISTA is a class of securities registered
under Section 12(g) of the Exchange Act, and VISTA has filed all reports and
documents required to be filed pursuant to the Exchange Act for a period of at
least twelve months preceding the date hereof. All documents filed by VISTA
with the Securities and Exchange Commission pursuant to the Exchange Act for
its most recent full fiscal year and subsequent thereto are available from
VISTA and should be reviewed by the Foreign Investor, including the following
filings which are incorporated herein by reference:
Filings by VISTA with the Securities and Exchange Commission
incorporated by reference:
Annual Report on Form 10-KSB for the Fiscal Year ended March 31, 1995
Proxy Statement dated May 26, 1995 for Special Meeting of Stockholders
Quarterly Report on Form 10-QSB for the Period ended June 30, 1995
Quarterly Report on Form 10-QSB for the Period ended September 30, 1995
Quarterly Report on Form 10-QSB for the Period ended December 31, 1995
Current Report on From 8-K dated as of March 1, 1996
Any other documents filed by VISTA pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Agreement and prior to the sale of all Shares in this Offering also shall be
deemed to be incorporated by reference in this Agreement and to be a part
hereof from the date of filing such documents.
Regulation S Subscription Agreement -4-<PAGE>
<PAGE> 5
4.4. VISTA agrees to make available to the Foreign Investor, prior to
this subscription, the opportunity to ask questions of, and receive written
answers from, authorized representatives of VISTA concerning the terms and
conditions of this Offering, the operations of VISTA and its affiliated
companies, and any other relevant matters, and to obtain any additional
written information, to the extent that the VISTA possesses such information
or can acquire it without unreasonable effort or expense, necessary to verify
the accuracy of the information furnished to the Foreign Investor in
connection with this Offering.
4.5. VISTA has not offered any securities covered by this Offering to
any persons in the United States nor to any U.S. Person nor to any
identifiable group or groups of U.S. citizens in the United States or abroad.
4.6. The VISTA Shares, when issued and delivered upon payment of the
subscription price, will each be duly and validly authorized and issued, fully
paid and nonassessable securities of VISTA and will not subject the holders
thereof to personal liability by reason of being such holders.
4.7. This Agreement, upon its acceptance by VISTA, has been duly
authorized, executed and delivered by VISTA and is a valid and binding
agreement enforceable in accordance with its terms, subject only to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general application to or affecting creditors' rights
generally and to general principles of equity. VISTA has full power and
authority necessary to enter into this Agreement and to perform its
obligations hereunder.
4.8. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by VISTA of any of the terms or provisions of, or
constitute a default under, its articles of incorporation or association, its
by-laws, any action of its directors or shareholders, or any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party or by which it or any of its properties or assets are bound, or any
existing applicable law, rule or regulation or any applicable decree, judgment
or order of any court, regulatory body, administrative agency or other
governmental body having jurisdiction over the undersigned or any of its
properties or assets.
5. OTHER TERMS AND AGREEMENTS.
5.1. Each of the parties understand that no governmental agency of any
jurisdiction has passed upon or made any recommendation or endorsement of the
Shares, the transactions contemplated by this Agreement, or an investment in
the Shares.
5.2. Each of the undersigned agrees to pay its own expenses incident to
the performance of its obligations hereunder.
5.3. Each of the undersigned agree this Agreement shall be governed by
and construed in accordance with the laws of the Republic of Ireland, and
without regard to principles of conflicts of law.
5.4. This Agreement may be executed in one or more counterparts and it
is not necessary that the signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement. The headings of the sections of this Agreement have been
inserted for convenience of reference only, and shall not be deemed to be a
part of this Agreement.
5.5. Time shall be of the essence of this Agreement.
Regulation S Subscription Agreement -5-<PAGE>
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
as of the respective dates set forth below.
FOREIGN INVESTOR:
ARMILLA HOLDINGS LIMITED
- -------------------------------------------------------
[Full Legal Name]
By: /s/ John Trevor Greer Donnelley
- -------------------------------------------------------
[Authorised Signature]
Name of Signing Officer: John Trevor Greer Donnelley
-------------------------------------
Title of Signing Officer: Director
-------------------------------------
Principal Address of Foreign Investor: Trident Corp. Services (Bahamas) Ltd.
-------------------------------------
Providence House East Hill Street
P.O. Box N-3
-------------------------------------
Nassau
-------------------------------------
Bahamas
-------------------------------------
Jurisdiction in which Foreign Investor is Incorporated or Organized:
BRITISH VIRGIN ISLANDS
- --------------------------------------
Number of VISTA Shares subscribed for ( 50,000 Shares) at $2.125 per Share
--------------
equals $106,250.
--------
Date: June 7, 1996
---------
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This Agreement is accepted as of June 7, 1996
--------
for VISTA TECHNOLOGIES INC.:
By: /s/ Thomas A. Schultz
----------------------------
[Authorised Signature]
Name and Title of Signing Officer: THOMAS A. SCHULTZ, President
----------------------------------------
Rev-S-96b
Regulation S Subscription Agreement -6-
<PAGE> 1
Rev-S-96b
VISTA TECHNOLOGIES INC.
(a Nevada corporation)
REGULATION S OFFSHORE TRANSACTION SUBSCRIPTION AGREEMENT
Up to 100,000 shares of Common Stock at $2.125 per share
Any interest in the VISTA TECHNOLOGIES INC. securities subscribed to
hereunder may be resold within the jurisdiction of the United States
or to U.S. Persons [as defined in Rule 902(o) of Regulation S under
the United States Securities Act of 1933 ("Securities Act")] by or
for the account of the undersigned Foreign Investor only: (i)
pursuant to a registration statement under the Securities Act; or
(ii) pursuant to an applicable exemption, if any, from such
registration. The resale of these securities under Rule 903 of
Regulation S and other regulations under the Securities Act, if
applicable, is prohibited before the expiration of any restricted
period required by Rule 903 of Regulation S, which restricted period
cannot commence until all securities included in this Offering have
been sold and fully paid for.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Vista Technologies Inc.
1250 Oakmead Parkway, Suite 210
Sunnyvale, California 92088-3599
FAX No. (408) 746-3630
1. SUBSCRIPTION TO COMMON STOCK. The undersigned, an individual not
residing in nor a resident of the United States, or alternatively a company
organized under the laws of the jurisdiction of its organization or
incorporation set forth on the signature page hereof (herein called the
"Foreign Investor"), hereby subscribes for the purchase of the number of
shares of common stock, par value $0.005 per share (the "Common Stock") in
Vista Technologies Inc., a Nevada corporation ("VISTA") indicated on the
signature page hereof for the account of the Foreign Investor upon the terms
and conditions set forth in this Subscription Agreement. The subscription
price for each share of VISTA common stock offered hereby is $2.125 per share
in good U.S. funds, payable in cash upon acceptance hereof.
2. DESCRIPTION OF OFFERING.
2.1. Regulation S Offering. VISTA is offering up to a maximum of
100,000 shares of VISTA Common Stock, par value $.005 per share (the
"Shares"), on a "best efforts" basis to a limited number of qualified
investors in a private placement offering of securities exempt from the
registration requirements of the United States Securities Act of 1933, as
amended (the "Securities Act"). The offering of such Shares to investors who
are not U.S. persons as defined in Rule 902(o) of Regulation S ("Regulation
S") promulgated under the Securities Act is herein called the "Offering". All
of the Shares offered to Foreign Investors are being offered at a price of
$2.125 per Share in U.S. funds. There are no minimum amount of subscriptions
required in order for VISTA to accept any subscriptions to the Offering. The
Offering will terminate on June 30, 1996 unless extended at the option of
VISTA for an additional period of not more than 30 days. VISTA reserves the
right to terminate the Offering at any time, whether or not the maximum Shares
have been sold.
Regulation S Subscription Agreement -1-<PAGE>
<PAGE> 2
3. OTHER REPRESENTATIONS AND WARRANTIES OF THE FOREIGN INVESTOR. In
connection with this Agreement and the transactions contemplated herein, the
Foreign Investor represents and warrants to VISTA as follows:
3.1. The Foreign Investor has been duly formed and is validly existing
as a corporation or other legal entity in good standing under the laws of its
jurisdiction of incorporation set forth on the signature page to this
Agreement. The Foreign Investor is not organized under the laws of the United
States, is not a "U.S. Person" as that term is defined in Rule 902(o) of
Regulation S, and is not an "affiliate" of VISTA as that term is used in
regulations promulgated under the Securities Act or associated with any
individual or entity which may be deemed an "affiliate" of VISTA as of the
date hereof. Neither the Foreign Investor, nor any person affiliated with it,
is or has been for the past three months, an officer, director, controlling
shareholder or otherwise in a position to control, select or influence the
management and policies of VISTA.
3.2. The Foreign Investor was not formed for the purpose of investing
in Regulation S securities or formed for the purpose of investing in this
Agreement and the Shares of VISTA. The Foreign Investor is not registered as
an issuer under the Securities Act and is not required to be registered with
the U.S. Securities and Exchange Commission under the Investment Company Act
of 1940, as amended. The Foreign Investor is entering into this Agreement and
is participating in the Offering for its own account, and not on behalf of any
U.S. Person as defined in Rule 902(o) of Regulation S.
3.3. No offer to enter into this Agreement has been made by VISTA to
the Foreign Investor in the United States other than as permitted in the case
of an account managed by a professional fiduciary resident in the United
States within the meaning of Section 902(o)(2) of Regulation S. At the times
of the offer and execution of this Agreement and, to the best knowledge of the
Foreign Investor, at the time the Offering originated, the Foreign Investor
was located and resident outside the United States other than as permitted in
the case of an account managed by a professional fiduciary resident in the
United States within the meaning of Section 902(o)(2) of Regulation S.
3.4. Neither the Foreign Investor, nor any of its affiliates nor any
person acting on its behalf or any behalf of any such affiliate, has engaged,
or will engage, in any activity undertaken for the purpose of, or that could
reasonable be expected to have the effect of, conditioning the markets in the
United States for the Shares or for any securities that are convertible into
or exercisable for Shares of VISTA, including but not limited to effecting any
sale of VISTA securities to or through the Foreign Investor or any of its
affiliates prior to the expiration of any restricted period contained in
Regulation S (any such activity being defined herein as a "Directed Selling
Effort"). To the best knowledge of the undersigned, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the Shares are being
purchased for investment purposes by the Foreign Investor. The Foreign
Investor, and to the best knowledge of the Foreign Investor, each distributor,
if any, participating in this Offering of VISTA Shares, has agreed that all
offers and sales of any securities included in the Offering prior to the date
hereof and through the expiration of the any restricted period set forth in
Rule 903 of Regulation S (as the same may be amended from time to time
hereafter) shall not be made to U.S. Persons or for the account or benefit of
U.S. Persons, and shall otherwise be made in compliance with the provisions of
Regulation S and any other applicable provisions of the Securities Act. The
Foreign Investor and its representatives have not conducted any Directed
Selling Effort as that term is used and defined in Rule 902 of Regulation S
and will not engage in any such Directed Selling Effort within the United
States through the expiration of any restricted period set forth in Rule 903
of Regulation S.
Regulation S Subscription Agreement -2-<PAGE>
<PAGE> 3
3.5. The Foreign Investor acknowledges and agrees that following the
expiration of any restricted period provided by Rule 903 of Regulation S, any
interest in this Agreement or in the Shares subscribed to hereunder may be
resold within the jurisdiction of the United States or to U.S. Persons [as
defined in Rule 902(o) of Regulation S] by or for the account of the parties
hereto only: (i) pursuant to a registration statement under the Securities
Act, or (ii) if applicable, pursuant to an exemption from such registration
for sales by a person other than an issuer, underwriter or dealer as those
terms are used in Section 4(1) and related provisions of the Securities Act
and regulations thereunder, or pursuant to another exemption from
registration, and only following the expiration of any restricted period (if
applicable) required by Regulation S. The Foreign Investor acknowledges that
this Agreement and the VISTA Shares have not been registered under the
Securities Act or qualified under state securities laws of the United States,
and that the transferability hereof and thereof within the jurisdiction of the
United States is restricted by the Securities Act as well as such state laws.
The Foreign Investor acknowledges that this Agreement and the Shares are being
sold in reliance upon the transaction exemption afforded by Regulation S in
connection with an offshore offer and sale of securities of VISTA not within
or subject to the jurisdiction of the United States markets. The Foreign
Investor acknowledges it has received a copy of Regulation S, is familiar with
and understands the terms thereof, and has had the opportunity to consult with
its legal counsel concerning this Agreement and Regulation S.
The Foreign Investor acknowledges that if any transfer of the
Shares is proposed to be made in reliance upon an exemption under the
Securities Act, the issuer of the securities may require an opinion of counsel
satisfactory to the issuer that such transfer may be made pursuant to an
applicable exemption under the Securities Act. The Foreign Investor
acknowledges that, so long as appropriate, a legend similar to the following
may appear on the certificates representing the VISTA Shares subscribed for
hereunder: "These securities have not been registered under the Securities
Act of 1933 and may be reoffered and sold only if registered or if an
exemption from such registration is available in the opinion of counsel
satisfactory to the issuer".
3.6. The Foreign Investor has not received any general solicitation or
advertising regarding the Offering or this Agreement. The Foreign Investor
has sufficient knowledge and experience in financial and business matters so
that it is able to evaluate the merits and risks of the Offering and this
Agreement. The Foreign Investor has had substantial experience in previous
private and public purchases of speculative and restricted securities.
3.7. The Foreign Investor acknowledges that an investment in the Shares
offered hereby is speculative, involves a high degree of risk, and should not
be purchased by persons who cannot afford the loss of their entire investment,
and represents that the Foreign Investor has relied only on the information
contained herein or otherwise provided in writing by duly authorized
representatives of VISTA. The Foreign Investor has carefully read and
reviewed this Subscription Agreement and all of VISTA's filings with the
Securities and Exchange Commission incorporated by reference herein
(including, without limitation, the section entitled "Cautionary Statements
for Purposes of the 'Safe Harbor' Provisions of the Private Securities
Litigation Reform Act of 1995" in Vista's Report on Form 10-QSB for the Period
ended December 31, 1995), as described in Section 4 of this Agreement, and has
asked such questions of management of VISTA and received such additional
information as he, she or it deems necessary in order for the Foreign Investor
to make an informed decision with respect to the purchase of the Shares. The
undersigned Foreign Investor has received complete and satisfactory answers to
all such inquiries. The Foreign Investor has not received oral or written
representations or assurances from VISTA or any representatives of VISTA,
other than as set forth in this Agreement.
Regulation S Subscription Agreement -3-<PAGE>
<PAGE> 4
3.8. This Agreement has been duly authorized, executed and delivered by
the Foreign Investor and is a valid and binding agreement enforceable in
accordance with its terms, subject only to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
to or affecting creditors' rights generally and to general principles of
equity. The Foreign Investor has full power and authority necessary to enter
into this Agreement and to perform its obligations hereunder.
3.9. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by the Foreign Investor of any of the terms or provisions
of, or constitute a default under, its charter documents, its memorandum or
articles of association or incorporation, its by-laws, any action of its
directors or shareholders, or any indenture, mortgage, deed of trust or other
agreement or instrument to which the undersigned is a party or by which it or
any of its properties or assets are bound, or any existing applicable law,
rule or regulation or any applicable decree, judgment or order of any court,
regulatory body, administrative agency or other governmental body having
jurisdiction over the undersigned or any of its properties or assets.
4. REPRESENTATIONS AND WARRANTIES OF VISTA.
By its acceptance of any subscription from the Foreign Investor
hereunder, VISTA represents and warrant to the Foreign Investor as follows:
4.1. VISTA is duly organized and validly existing in good standing as a
corporation under the laws of Nevada with corporate power to enter into this
Agreement and to conduct its business as presently conducted.
4.2. VISTA is a "Reporting Issuer" as defined in Rule 902(l) of
Regulation S and will cause all the materials required to be filed by it
pursuant to Section 13(a) of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act") to be filed with the Securities and Exchange
Commission for a period of at least three (3) months following the completion
of the Offering. VISTA is not an investment company registered or required to
register as such under the United States Investment Company Act of 1940.
4.3. The common stock of VISTA is a class of securities registered
under Section 12(g) of the Exchange Act, and VISTA has filed all reports and
documents required to be filed pursuant to the Exchange Act for a period of at
least twelve months preceding the date hereof. All documents filed by VISTA
with the Securities and Exchange Commission pursuant to the Exchange Act for
its most recent full fiscal year and subsequent thereto are available from
VISTA and should be reviewed by the Foreign Investor, including the following
filings which are incorporated herein by reference:
Filings by VISTA with the Securities and Exchange Commission
incorporated by reference:
Annual Report on Form 10-KSB for the Fiscal Year ended March 31, 1995
Proxy Statement dated May 26, 1995 for Special Meeting of Stockholders
Quarterly Report on Form 10-QSB for the Period ended June 30, 1995
Quarterly Report on Form 10-QSB for the Period ended September 30, 1995
Quarterly Report on Form 10-QSB for the Period ended December 31, 1995
Current Report on From 8-K dated as of March 1, 1996
Any other documents filed by VISTA pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Agreement and prior to the sale of all Shares in this Offering also shall be
deemed to be incorporated by reference in this Agreement and to be a part
hereof from the date of filing such documents.
Regulation S Subscription Agreement -4-<PAGE>
<PAGE> 5
4.4. VISTA agrees to make available to the Foreign Investor, prior to
this subscription, the opportunity to ask questions of, and receive written
answers from, authorized representatives of VISTA concerning the terms and
conditions of this Offering, the operations of VISTA and its affiliated
companies, and any other relevant matters, and to obtain any additional
written information, to the extent that the VISTA possesses such information
or can acquire it without unreasonable effort or expense, necessary to verify
the accuracy of the information furnished to the Foreign Investor in
connection with this Offering.
4.5. VISTA has not offered any securities covered by this Offering to
any persons in the United States nor to any U.S. Person nor to any
identifiable group or groups of U.S. citizens in the United States or abroad.
4.6. The VISTA Shares, when issued and delivered upon payment of the
subscription price, will each be duly and validly authorized and issued, fully
paid and nonassessable securities of VISTA and will not subject the holders
thereof to personal liability by reason of being such holders.
4.7. This Agreement, upon its acceptance by VISTA, has been duly
authorized, executed and delivered by VISTA and is a valid and binding
agreement enforceable in accordance with its terms, subject only to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general application to or affecting creditors' rights
generally and to general principles of equity. VISTA has full power and
authority necessary to enter into this Agreement and to perform its
obligations hereunder.
4.8. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by VISTA of any of the terms or provisions of, or
constitute a default under, its articles of incorporation or association, its
by-laws, any action of its directors or shareholders, or any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party or by which it or any of its properties or assets are bound, or any
existing applicable law, rule or regulation or any applicable decree, judgment
or order of any court, regulatory body, administrative agency or other
governmental body having jurisdiction over the undersigned or any of its
properties or assets.
5. OTHER TERMS AND AGREEMENTS.
5.1. Each of the parties understand that no governmental agency of any
jurisdiction has passed upon or made any recommendation or endorsement of the
Shares, the transactions contemplated by this Agreement, or an investment in
the Shares.
5.2. Each of the undersigned agrees to pay its own expenses incident to
the performance of its obligations hereunder.
5.3. Each of the undersigned agree this Agreement shall be governed by
and construed in accordance with the laws of the Republic of Ireland, and
without regard to principles of conflicts of law.
5.4. This Agreement may be executed in one or more counterparts and it
is not necessary that the signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement. The headings of the sections of this Agreement have been
inserted for convenience of reference only, and shall not be deemed to be a
part of this Agreement.
5.5. Time shall be of the essence of this Agreement.
Regulation S Subscription Agreement -5-<PAGE>
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
as of the respective dates set forth below.
FOREIGN INVESTOR:
SOLAR VENTURES LTD.
- -------------------------------------------------------
[Full Legal Name]
By: /s/ Raymond Terence Gibson
- -------------------------------------------------------
[Authorised Signature]
Name of Signing Officer: Raymond Terence Gibson
-----------------------------------
Title of Signing Officer: Director
-----------------------------------
Principal Address of Foreign Investor: Trident Trust Co (BVI) Ltd
-----------------------------------
Trident Chambers P.O. Box 146
-----------------------------------
Road Town, Tortola
-----------------------------------
British Virgin Islands
-----------------------------------
Jurisdiction in which Foreign Investor is Incorporated or Organized:
BRITISH VIRGIN ISLANDS
- --------------------------------------
Number of VISTA Shares subscribed for ( 50,000 Shares) at $2.125 per Share
--------------
equals $106,250.
--------
Date: June 7, 1996
---------
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This Agreement is accepted as of June 7, 1996
--------
for VISTA TECHNOLOGIES INC.:
By: /s/ Thomas A. Schultz
----------------------------
[Authorised Signature]
Name and Title of Signing Officer: THOMAS A. SCHULTZ, President
----------------------------------------
Rev-S-96b
Regulation S Subscription Agreement -6-
<PAGE> 1
NOTICE OF ELECTION TO EXERCISE
STOCK OPTION granted by VISTA TECHNOLOGIES INC.
To: Vista Technologies Inc.
1250 Oakmead Parkway, Suite 210
Sunnyvale, California 94086-3599
FAX No. (408) 746-2534
Attention: Dorothy Van Zanten, Controller
cc: William M. Curtis, Secretary
FAX No. (714) 831-4141
Gentlemen:
The undersigned hereby elects to exercise 200,000 of the shares of common
stock covered by that certain "Six-Month Option" option granted to Pharma
Patch PLC by Vista Technologies Inc. under Section 2 of that certain Agreement
dated as of March 1, 1996 between Pharma Patch PLC and Vista Technologies Inc.
The option exercise price of $2.50 per share equals a total exercise price
payable by Pharma Patch PLC of $500,000. Payment of the exercise price by a
combination of cash deposited to the account of Vista Technologies on July 18,
1996 and an accounting of certain funds advanced for Vista Technologies Inc.
by Pharma Patch PLC has been provided under separate cover to Dorothy Van
Zanten of Vista Technologies Inc. (After giving effect to the above, a total
50,000 shares remain unexercised under the Six-Month Option.)
This will confirm our representation and warranty to Vista Technologies
Inc. that Pharma Patch PLC is acquiring such shares for its own account for
investment and without a view to the sale or other distribution of such
shares. You are instructed to issue, register and deliver the stock
certificate for a total of 200,000 shares of the Company's common stock as
follows:
Pharma Patch PLC
15/16 FitzWilliam Place
Dublin 2
Ireland
Very truly yours,
Pharma Patch PLC
Dated: July 18, 1996 By: /s/ Murray D. Watson
-------------------------------
Murray D. Watson, Chairman
and Chief Executive Officer
<PAGE> 1
Rev-S-96c VISTA TECHNOLOGIES INC.
(a Nevada corporation)
REGULATION S OFFSHORE TRANSACTION SUBSCRIPTION AGREEMENT
Up to 100,000 shares of Common Stock at $2.125 per share
Any interest in the VISTA TECHNOLOGIES INC. securities subscribed to
hereunder may be resold within the jurisdiction of the United States
or to U.S. Persons [as defined in Rule 902(o) of Regulation S under
the United States Securities Act of 1933 ("Securities Act")] by or
for the account of the undersigned Foreign Investor only: (i)
pursuant to a registration statement under the Securities Act; or
(ii) pursuant to an applicable exemption, if any, from such
registration. The resale of these securities under Rule 903 of
Regulation S and other regulations under the Securities Act, if
applicable, is prohibited before the expiration of any restricted
period required by Rule 903 of Regulation S, which restricted period
cannot commence until all securities included in this Offering have
been sold and fully paid for.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Vista Technologies Inc.
1250 Oakmead Parkway, Suite 210
Sunnyvale, California 92088-3599
FAX No. (408) 746-3630
1. SUBSCRIPTION TO COMMON STOCK. The undersigned, an individual not
residing in nor a resident of the United States, or alternatively a company
organized under the laws of the jurisdiction of its organization or
incorporation set forth on the signature page hereof (herein called the
"Foreign Investor"), hereby subscribes for the purchase of the number of
shares of common stock, par value $0.005 per share (the "Common Stock") in
Vista Technologies Inc., a Nevada corporation ("VISTA") indicated on the
signature page hereof for the account of the Foreign Investor upon the terms
and conditions set forth in this Subscription Agreement. The subscription
price for each share of VISTA common stock offered hereby is $2.125 per share
in good U.S. funds, payable in cash upon acceptance hereof.
2. DESCRIPTION OF OFFERING.
2.1. Regulation S Offering. VISTA is offering up to a maximum of
100,000 shares of VISTA Common Stock, par value $.005 per share (the
"Shares"), on a "best efforts" basis to a limited number of qualified
investors in a private placement offering of securities exempt from the
registration requirements of the United States Securities Act of 1933, as
amended (the "Securities Act"). The offering of such Shares to investors who
are not U.S. persons as defined in Rule 902(o) of Regulation S ("Regulation
S") promulgated under the Securities Act is herein called the "Offering". All
of the Shares offered to Foreign Investors are being offered at a price of
$2.125 per Share in U.S. funds. There are no minimum amount of subscriptions
required in order for VISTA to accept any subscriptions to the Offering. The
Offering will terminate on August 31, 1996 unless extended at the option of
VISTA for an additional period of not more than 30 days. VISTA reserves the
right to terminate the Offering at any time, whether or not the maximum Shares
have been sold.
Regulation S Subscription Agreement -1-<PAGE>
<PAGE> 2
3. OTHER REPRESENTATIONS AND WARRANTIES OF THE FOREIGN INVESTOR. In
connection with this Agreement and the transactions contemplated herein, the
Foreign Investor represents and warrants to VISTA as follows:
3.1. The Foreign Investor has been duly formed and is validly existing
as a corporation or other legal entity in good standing under the laws of its
jurisdiction of incorporation set forth on the signature page to this
Agreement. The Foreign Investor is not organized under the laws of the United
States, is not a "U.S. Person" as that term is defined in Rule 902(o) of
Regulation S, and is not an "affiliate" of VISTA as that term is used in
regulations promulgated under the Securities Act or associated with any
individual or entity which may be deemed an "affiliate" of VISTA as of the
date hereof. Neither the Foreign Investor, nor any person affiliated with it,
is or has been for the past three months, an officer, director, controlling
shareholder or otherwise in a position to control, select or influence the
management and policies of VISTA.
3.2. The Foreign Investor was not formed for the purpose of investing
in Regulation S securities or formed for the purpose of investing in this
Agreement and the Shares of VISTA. The Foreign Investor is not registered as
an issuer under the Securities Act and is not required to be registered with
the U.S. Securities and Exchange Commission under the Investment Company Act
of 1940, as amended. The Foreign Investor is entering into this Agreement and
is participating in the Offering for its own account, and not on behalf of any
U.S. Person as defined in Rule 902(o) of Regulation S.
3.3. No offer to enter into this Agreement has been made by VISTA to
the Foreign Investor in the United States other than as permitted in the case
of an account managed by a professional fiduciary resident in the United
States within the meaning of Section 902(o)(2) of Regulation S. At the times
of the offer and execution of this Agreement and, to the best knowledge of the
Foreign Investor, at the time the Offering originated, the Foreign Investor
was located and resident outside the United States other than as permitted in
the case of an account managed by a professional fiduciary resident in the
United States within the meaning of Section 902(o)(2) of Regulation S.
3.4. Neither the Foreign Investor, nor any of its affiliates nor any
person acting on its behalf or any behalf of any such affiliate, has engaged,
or will engage, in any activity undertaken for the purpose of, or that could
reasonable be expected to have the effect of, conditioning the markets in the
United States for the Shares or for any securities that are convertible into
or exercisable for Shares of VISTA, including but not limited to effecting any
sale of VISTA securities to or through the Foreign Investor or any of its
affiliates prior to the expiration of any restricted period contained in
Regulation S (any such activity being defined herein as a "Directed Selling
Effort"). To the best knowledge of the undersigned, this Agreement and the
transactions contemplated herein are not part of a plan or scheme to evade the
registration provisions of the Securities Act, and the Shares are being
purchased for investment purposes by the Foreign Investor. The Foreign
Investor, and to the best knowledge of the Foreign Investor, each distributor,
if any, participating in this Offering of VISTA Shares, has agreed that all
offers and sales of any securities included in the Offering prior to the date
hereof and through the expiration of the any restricted period set forth in
Rule 903 of Regulation S (as the same may be amended from time to time
hereafter) shall not be made to U.S. Persons or for the account or benefit of
U.S. Persons, and shall otherwise be made in compliance with the provisions of
Regulation S and any other applicable provisions of the Securities Act. The
Foreign Investor and its representatives have not conducted any Directed
Selling Effort as that term is used and defined in Rule 902 of Regulation S
and will not engage in any such Directed Selling Effort within the United
States through the expiration of any restricted period set forth in Rule 903
of Regulation S.
Regulation S Subscription Agreement -2-<PAGE>
<PAGE> 3
3.5. The Foreign Investor acknowledges and agrees that following the
expiration of any restricted period provided by Rule 903 of Regulation S, any
interest in this Agreement or in the Shares subscribed to hereunder may be
resold within the jurisdiction of the United States or to U.S. Persons [as
defined in Rule 902(o) of Regulation S] by or for the account of the parties
hereto only: (i) pursuant to a registration statement under the Securities
Act, or (ii) if applicable, pursuant to an exemption from such registration
for sales by a person other than an issuer, underwriter or dealer as those
terms are used in Section 4(1) and related provisions of the Securities Act
and regulations thereunder, or pursuant to another exemption from
registration, and only following the expiration of any restricted period (if
applicable) required by Regulation S. The Foreign Investor acknowledges that
this Agreement and the VISTA Shares have not been registered under the
Securities Act or qualified under state securities laws of the United States,
and that the transferability hereof and thereof within the jurisdiction of the
United States is restricted by the Securities Act as well as such state laws.
The Foreign Investor acknowledges that this Agreement and the Shares are being
sold in reliance upon the transaction exemption afforded by Regulation S in
connection with an offshore offer and sale of securities of VISTA not within
or subject to the jurisdiction of the United States markets. The Foreign
Investor acknowledges it has received a copy of Regulation S, is familiar with
and understands the terms thereof, and has had the opportunity to consult with
its legal counsel concerning this Agreement and Regulation S.
The Foreign Investor acknowledges that if any transfer of the
Shares is proposed to be made in reliance upon an exemption under the
Securities Act, the issuer of the securities may require an opinion of counsel
satisfactory to the issuer that such transfer may be made pursuant to an
applicable exemption under the Securities Act. The Foreign Investor
acknowledges that, so long as appropriate, a legend similar to the following
may appear on the certificates representing the VISTA Shares subscribed for
hereunder: "These securities have not been registered under the Securities
Act of 1933 and may be reoffered and sold only if registered or if an
exemption from such registration is available in the opinion of counsel
satisfactory to the issuer".
3.6. The Foreign Investor has not received any general solicitation or
advertising regarding the Offering or this Agreement. The Foreign Investor
has sufficient knowledge and experience in financial and business matters so
that it is able to evaluate the merits and risks of the Offering and this
Agreement. The Foreign Investor has had substantial experience in previous
private and public purchases of speculative and restricted securities.
3.7. The Foreign Investor acknowledges that an investment in the Shares
offered hereby is speculative, involves a high degree of risk, and should not
be purchased by persons who cannot afford the loss of their entire investment,
and represents that the Foreign Investor has relied only on the information
contained herein or otherwise provided in writing by duly authorized
representatives of VISTA. The Foreign Investor has carefully read and
reviewed this Subscription Agreement and all of VISTA's filings with the
Securities and Exchange Commission incorporated by reference herein
(including, without limitation, the section entitled "Cautionary Statements
for Purposes of the 'Safe Harbor' Provisions of the Private Securities
Litigation Reform Act of 1995" in Vista's Report on Form 10-QSB for the Period
ended December 31, 1995), as described in Section 4 of this Agreement, and has
asked such questions of management of VISTA and received such additional
information as he, she or it deems necessary in order for the Foreign Investor
to make an informed decision with respect to the purchase of the Shares. The
undersigned Foreign Investor has received complete and satisfactory answers to
all such inquiries. The Foreign Investor has not received oral or written
representations or assurances from VISTA or any representatives of VISTA,
other than as set forth in this Agreement.
Regulation S Subscription Agreement -3-<PAGE>
<PAGE> 4
3.8. This Agreement has been duly authorized, executed and delivered by
the Foreign Investor and is a valid and binding agreement enforceable in
accordance with its terms, subject only to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
to or affecting creditors' rights generally and to general principles of
equity. The Foreign Investor has full power and authority necessary to enter
into this Agreement and to perform its obligations hereunder.
3.9. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by the Foreign Investor of any of the terms or provisions
of, or constitute a default under, its charter documents, its memorandum or
articles of association or incorporation, its by-laws, any action of its
directors or shareholders, or any indenture, mortgage, deed of trust or other
agreement or instrument to which the undersigned is a party or by which it or
any of its properties or assets are bound, or any existing applicable law,
rule or regulation or any applicable decree, judgment or order of any court,
regulatory body, administrative agency or other governmental body having
jurisdiction over the undersigned or any of its properties or assets.
4. REPRESENTATIONS AND WARRANTIES OF VISTA.
By its acceptance of any subscription from the Foreign Investor
hereunder, VISTA represents and warrant to the Foreign Investor as follows:
4.1. VISTA is duly organized and validly existing in good standing as a
corporation under the laws of Nevada with corporate power to enter into this
Agreement and to conduct its business as presently conducted.
4.2. VISTA is a "Reporting Issuer" as defined in Rule 902(l) of
Regulation S and will cause all the materials required to be filed by it
pursuant to Section 13(a) of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act") to be filed with the Securities and Exchange
Commission for a period of at least three (3) months following the completion
of the Offering. VISTA is not an investment company registered or required to
register as such under the United States Investment Company Act of 1940.
4.3. The common stock of VISTA is a class of securities registered
under Section 12(g) of the Exchange Act, and VISTA has filed all reports and
documents required to be filed pursuant to the Exchange Act for a period of at
least twelve months preceding the date hereof. All documents filed by VISTA
with the Securities and Exchange Commission pursuant to the Exchange Act for
its most recent full fiscal year and subsequent thereto are available from
VISTA and should be reviewed by the Foreign Investor, including the following
filings which are incorporated herein by reference:
Filings by VISTA with the Securities and Exchange Commission
incorporated by reference:
Annual Report on Form 10-KSB for the Fiscal Year ended March 31,
1996
Proxy Statement dated May 26, 1995 for Special Meeting of
Stockholders
Any other documents filed by VISTA pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Agreement and prior to the sale of all Shares in this Offering also shall be
deemed to be incorporated by reference in this Agreement and to be a part
hereof from the date of filing such documents.
Regulation S Subscription Agreement -4-<PAGE>
<PAGE> 5
4.4. VISTA agrees to make available to the Foreign Investor, prior to
this subscription, the opportunity to ask questions of, and receive written
answers from, authorized representatives of VISTA concerning the terms and
conditions of this Offering, the operations of VISTA and its affiliated
companies, and any other relevant matters, and to obtain any additional
written information, to the extent that the VISTA possesses such information
or can acquire it without unreasonable effort or expense, necessary to verify
the accuracy of the information furnished to the Foreign Investor in
connection with this Offering.
4.5. VISTA has not offered any securities covered by this Offering to
any persons in the United States nor to any U.S. Person nor to any
identifiable group or groups of U.S. citizens in the United States or abroad.
4.6. The VISTA Shares, when issued and delivered upon payment of the
subscription price, will each be duly and validly authorized and issued, fully
paid and nonassessable securities of VISTA and will not subject the holders
thereof to personal liability by reason of being such holders.
4.7. This Agreement, upon its acceptance by VISTA, has been duly
authorized, executed and delivered by VISTA and is a valid and binding
agreement enforceable in accordance with its terms, subject only to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general application to or affecting creditors' rights
generally and to general principles of equity. VISTA has full power and
authority necessary to enter into this Agreement and to perform its
obligations hereunder.
4.8. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated herein, do not and will not conflict with or
result in a breach by VISTA of any of the terms or provisions of, or
constitute a default under, its articles of incorporation or association, its
by-laws, any action of its directors or shareholders, or any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party or by which it or any of its properties or assets are bound, or any
existing applicable law, rule or regulation or any applicable decree, judgment
or order of any court, regulatory body, administrative agency or other
governmental body having jurisdiction over the undersigned or any of its
properties or assets.
5. OTHER TERMS AND AGREEMENTS.
5.1. Each of the parties understand that no governmental agency of any
jurisdiction has passed upon or made any recommendation or endorsement of the
Shares, the transactions contemplated by this Agreement, or an investment in
the Shares.
5.2. Each of the undersigned agrees to pay its own expenses incident to
the performance of its obligations hereunder.
5.3. Each of the undersigned agree this Agreement shall be governed by
and construed in accordance with the laws of the Republic of Ireland, and
without regard to principles of conflicts of law.
5.4. This Agreement may be executed in one or more counterparts and it
is not necessary that the signatures of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement. The headings of the sections of this Agreement have been
inserted for convenience of reference only, and shall not be deemed to be a
part of this Agreement.
5.5. Time shall be of the essence of this Agreement.
Regulation S Subscription Agreement -5-<PAGE>
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
as of the respective dates set forth below.
FOREIGN INVESTOR:
PAGET TRADING LTD.
- -------------------------------------------------------
[Full Legal Name]
By:
---------------------------------------------------
[Authorised Signature] Trevor Robinson Donnelly
Name of Signing Officer: TREVOR ROBINSON DONNELLY
--------------------------------------
Title of Signing Officer: DIRECTOR
--------------------------------------
Principal Address of Foreign Investor: c/o TRIDENT TRUST CO. (B.V.I.) LTD.
--------------------------------------
TRIDENT CHAMBERS, P.O. BOX 146
--------------------------------------
ROAD TOWN, TORTOLA,
BRITISH VIRGIN ISLANDS
--------------------------------------
Jurisdiction in which Foreign Investor is Incorporated or Organized:
BRITISH VIRGIN ISLANDS
- --------------------------------------
Number of VISTA Shares subscribed for (100,000 Shares) at $2.125 per Share
--------------
equals $212,500.
--------
Date: August 9, 1996
---------
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This Agreement is accepted as of August 9, 1996
--------
for VISTA TECHNOLOGIES INC.:
By: /s/ Thomas A. Schultz
----------------------------
[Authorised Signature]
Name and Title of Signing Officer: THOMAS A. SCHULTZ, President
----------------------------------------
Rev-S-96c
Regulation S Subscription Agreement -6-
<PAGE> 1
8% SECURED PROMISSORY NOTE
$800,000.00 Los Altos, California
August 26, 1996
FOR VALUE RECEIVED, the undersigned VISTA TECHNOLOGIES INC., a Nevada
corporation (herein referred to as the "Borrower") promises to pay in lawful
currency of the United States of America, to the order of PHARMA PATCH PLC, a
company organized under the laws of Ireland, sometimes referred to herein as
"Lender", at the Lender's principal office, 15/16 FitzWilliam Place, Dublin 2,
Ireland, or such other place as the Lender may designate in writing from time
to time, the principal sum of EIGHT HUNDRED THOUSAND DOLLARS ($800,000) with
interest thereon from the date of this Note at the rate of eight percent (8%)
per annum. Interest shall be computed on the basis of a 365 day year for the
actual number of days accruing in the period for which such interest is
payable. Payments received hereunder shall be credited first to accrued and
unpaid interest and thereafter to unpaid principal.
The entire $800,000 principal amount of this Note shall be advanced by the
Lender to the Borrower in lawful currency of the United States of America on
the date of this Note.
1. This Note is secured by all of the Borrower's right, title and
interest in 200,000 shares of common stock (the "Pledged Shares") in Technical
Chemicals and Products, Inc. ("TCPI") pursuant to that certain Pledge
Agreement bearing even date herewith between Borrower and Lender (the "Pledge
Agreement").
2. (a) Subject to the following terms and conditions, interest and
principal shall be payable on the first to occur of the following events:
(i) December 31, 1996; or
(ii) The sale for the account of the Borrower of any portion of its
interest in the Pledged Shares (as defined below) consisting of
TCPI pledged under the Pledge Agreement described below. Upon any
such sale of the Pledged Shares, net proceeds of such sale shall
be applied first to payment of all accrued and unpaid interest
hereunder and the balance of any such net proceeds shall be
applied to payment of unpaid principal hereunder. In the event
net proceeds from any such sale of Pledged Shares are insufficient
to provide for full payment of principal and interest accrued on
this Note, the remaining portion of this Note shall be due and
payable on the maturity date set forth in paragraph (a) above or
earlier in the event of a subsequent sale of Pledged Shares for
the account of the Borrower;
(b) further provided, however, that the Lender shall have the
right, upon five business days' prior written notice to the Borrower, to
accelerate the maturity date of this Note to the extent required to maintain
Minimum Collateral (as hereinafter defined). In the event the
<PAGE>
<PAGE> 2
fair value market of the Pledged Shares shall be less than 150% of the unpaid
principal of this Note for at least five consecutive business days, the Lender
at its option may accelerate the maturity of this Note in increments of
$25,000 or any multiple thereof such that, after giving effect to payment of
the portion of this Note so accelerated, the fair market value of the Pledged
Shares (excluding any Pledged Shares required to be sold in the event any
portion of the principal then due is not promptly paid) is not less than the
Minimum Value. For the purposes of this Note and the Pledge Agreement, the
fair market value of the Pledged Shares at any relevant date shall be the
closing sale price for such shares of TCPI common stock as reported by the
Nasdaq Stock Market, and the term "Minimum Collateral" shall mean Pledged
Shares with a fair market value of not less than 150% of the unpaid principal
of this Note. In the event the Lender shall provide notice to the Borrower in
accordance with this paragraph (b), the Borrower shall cause a sufficient
amount of the unpaid principal of this Note to be paid in increments of
$25,000 or any multiple thereof within five (5) business days thereafter so
that the fair market value of the Pledged Shares retained as collateral for
this Note is not less than the Minimum Value.
(c) and further provided, that the maturity date of this Note
set forth in paragraph 2(a) above may be extended up to two (2) times for an
additional six (6) months each time under the following conditions:
(i) Lender has received from Borrower a written request for such
extension prior to the original maturity date or any then-
effective extension period;
(ii) Borrower pays to Lender at the time the request is made for each
six-month extension all interest then accrued and unpaid on this
Note;
(iii) The value of the Pledged Shares at such time shall be not less
than the Minimum Collateral; and
(iv) Borrower is otherwise in compliance with and not in default under
any of the terms and conditions of this Note and the Pledge
Agreement.
3. Notwithstanding anything contained in this Promissory Note or the
Pledge Agreement securing this loan and any other instruments given as
security for this loan (individually and collectively "Loan Documents"),
Lender shall not declare a default under any of the Loan Documents or exercise
any of the remedies granted to Lender in any of the Loan Documents and
Borrower shall not be in default unless and until Lender shall have given
Borrower: (a) in the case of a monetary default under paragraph 6(A), written
notice of such default and five (5) days has elapsed without the cure of such
default; and (b) in the case of a non-monetary default under paragraph 6(B),
written notice of such default and ten (10) days has elapsed without the
Borrower's commencement of the cure of the same followed by Borrower's
diligent prosecution of such cure. No period of grace shall exist for any
event of default described in paragraph 6(C) below.
2<PAGE>
<PAGE> 3
4. Borrower shall have the right to prepay the principal of this Note
at any time and from time to time, in whole or in part in increments of
$100,000 or any even multiple thereof, without the payment of any premium or
penalty, provided that any such prepayment shall be accompanied by the payment
of all accrued and unpaid interest on this Note through the date of
prepayment.
5. If any payment of principal or interest is not made when due, or
in the event of default in the performance of any of the terms of this Note,
the Pledge Agreement referred to below, or any other instrument given in
connection with this Note, then the entire principal sum and accrued interest
shall become due and payable at the option of the holder of this Note upon ten
(10) days written notice to Borrower, and thereafter the principal sum and
accrued interest shall bear interest at eleven percent (11%) per annum.
Failure to exercise this option shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
6. The occurrence of any of the following will constitute an event of
default under this Note:
(A) Borrower fails to pay principal or interest due hereunder on or
before the expiration of the fifth day of grace therefore as set
forth in this Note; or
(B) Borrower fails to perform any other obligation secured hereby or
as set forth in the Pledge Agreement when the same should be
performed if said failure has not been cured within the tenth day
of grace therefore as set forth in this Note; or
(C) The Borrower (i) makes an assignment for the benefit of creditors
or admits in writing its inability to pay its debts generally as
they become due, (ii) applies to any tribunal for the appointment
of a trustee or receiver for any substantial part of its assets,
(iii) commences any voluntary proceedings under any bankruptcy,
reorganization, arrangement, insolvency, or other liquidation law
in any jurisdiction, (iv) is the subject of any such involuntary
bankruptcy proceeding, and Borrower indicates its approval,
consent or acquiescence to such proceeding, or (v) is the subject
of an order appointing a trustee or receiver, adjudicating either
bankruptcy or insolvency, or approving a petition in an
involuntary proceeding and such order remains in effect for sixty
days.
Upon the occurrence of any event of default hereunder, the entire unpaid
balance of the principal debt herein evidenced, with interest thereon at the
rate herein specified, shall become immediately due and payable.
7. If from any circumstances whatsoever, fulfillment of any
provisions of this Note at the time performance of such provision is due shall
involve transcending the limit of validity prescribed by the usury statute or
any other law, then ipso facto the obligation to be fulfilled shall be reduced
to the limit of such validity, so that in no event shall any exaction be
possible under this Note that is in excess of the limit of such validity, but
such obligation shall be fulfilled
3<PAGE>
<PAGE> 4
to the limit of such validity. The provisions of this paragraph shall control
every other provision of this Note and the Pledge Agreement given as security
therefor.
8. In the event that Borrower is in default hereunder and the Holder
hereof consults an attorney regarding the enforcement of any of its rights
under this Note or the Pledge Agreement referred to below, or if this Note is
placed in the hands of an attorney for collection, or if suit be brought to
enforce this Note or the Pledge Agreement, the Borrower promises to pay all
costs thereof, including reasonable attorneys' fees.
9. This Note is delivered, made in, and shall be construed, enforced,
and otherwise governed by the laws of the State of California.
10. Presentment and demand for payment, notice of dishonor, protest,
and notice of protest are hereby waived. No course of dealing between the
Borrower and the Lender of this Note or any delay on the part of the Lender in
exercising any rights under this Note shall operate as a waiver of any rights
of any holder of this Note.
11. If the due date for any payment on this Note falls on a Saturday,
Sunday, or legal holiday, then said date shall be extended to the next
business day.
12. This Note shall inure to the benefit of the Lender, its successors
and assigns, including each transferee, assignee or endorsee of this Note.
IN WITNESS WHEREOF, the Borrower has executed this Note in the
City of Los Altos, State of California as of the date first written above.
VISTA TECHNOLOGIES INC.
By: /s/ Thomas A. Schultz
-----------------------------------
Thomas A. Schultz, its President
ATTEST:
/s/ William M. Curtis
- ----------------------------
William M. Curtis, Secretary
4
<PAGE> 1
PLEDGE AGREEMENT
On the terms and conditions stated herein, VISTA TECHNOLOGIES INC., a
Nevada corporation (herein collectively called the "Debtor"), does hereby
pledge and hypothecate to PHARMA PATCH PLC, a company organized under the laws
of the Republic of Ireland (herein called the "Secured Party") and does hereby
deposit with Secured Party, as collateral security for the obligations secured
hereby, certificate no. FN-2052, evidencing in the aggregate 200,000 shares of
the common stock of Technical Chemicals and Products, Inc. (the "Pledged
Shares"). Such Pledged Shares, and any other collateral deposited hereunder,
are herein called the "Collateral". The Collateral is hereby pledged to
secure the following:
(a) Payment and performance of all existing and future obligations of the
Debtor pursuant to that certain 8% secured promissory note dated August
26, 1996 (the "Note") issued by Debtor to Secured Party in the original
principal amount of $800,000; and
(b) The expenses, including attorneys' fees, incurred or paid by Secured
Party in the preservation or enforcement of the rights of the Secured
Party under this Pledge Agreement or in the collection by Secured Party
of the obligations of the Debtor pursuant to the Note.
DEBTOR AND SECURED PARTY AGREE AS FOLLOWS:
1. Delivery of Collateral
The certificates for the Pledged Shares shall be delivered by the Debtor
to counsel for the Secured Party, the Law Office of Kevin J. Quinn, 11400 West
Olympic Blvd., 2nd Floor, Los Angeles, California 90064-1544, upon the advance
of funds pursuant to the Note and shall be accompanied by instruments of
assignment duly executed in blank with signatures appropriately guaranteed.
Said counsel, as agent for the Secured Party, shall place the certificates for
the Pledged Shares and related assignments in a safe deposit box with a state
or federal bank within the State of California , to be held subject to the
terms and conditions contained in this Pledge Agreement, and will advise the
Debtor of the location of such safe deposit box.
Secured Party may at any time deliver the Pledged Shares or any other
Collateral or any part thereof to the Debtor, and the receipt of the Debtor
shall be a complete and full acquittance for the Collateral so delivered, and
the Secured Party shall thereafter be discharged from any liability or
responsibility therefor.
2. Representations and Warranties of Debtor
2.1 Debtor represents and warrants to Secured Party that at the time
the Collateral is deposited in pledge with Secured Party hereunder, all of
such Collateral shall be free and clear of all claims, mortgages, pledges,
liens and other encumbrances of any nature whatsoever arising as a result of
any acts of the Debtor, except for that certain Lock Up Agreement dated
January
<PAGE>
<PAGE> 2
16, 1996 executed by the Debtor in favor of Deutsche Morgan Grenfell.C. J.
Lawrence Inc. The Secured Party acknowledges receipt of a copy of the Lock Up
Agreement and agrees to be bound by the provisions thereof in exercising any
rights under this Pledge Agreement.
2.2 So long as any of the obligations secured hereby shall be
outstanding and unpaid, Debtor shall not assign, sell, transfer, hypothecate
or pledge the Collateral or any interest therein except with the prior written
consent of the Secured Party.
3. Voting of Pledged Shares in the Absence of Default
Unless and until such time as the Pledged Shares are sold pursuant to the
Uniform Commercial Code of the State of California to satisfy a default
hereunder, Debtor shall be entitled to exercise as Debtor shall deem proper,
all rights to exercise voting power with respect to the Pledged Shares.
4. Effect of Termination of Issuer, Stock Dividend
In the event of the dissolution or liquidation (in whole or in part) of
Technical Chemicals and Products, Inc. ("TCPI") during the term of this Pledge
Agreement, any sum paid upon or with respect to any of the Collateral shall be
paid over to the Secured Party, to be held by it as collateral security for
the obligations of Debtor hereunder. In case any stock dividend shall be
declared on any of the Collateral, or any shares of stock or fraction thereof
shall be issued pursuant to any stock split involving any of the Collateral,
or any distribution of capital shall be made on any of the Collateral, or any
property shall be distributed upon or with respect to the Collateral pursuant
to a recapitalization or reclassification of capital of TCPI, or to the
reorganization thereof, or any other property shall be distributed upon or
with respect to the Collateral, the shares or other properties so distributed
shall be delivered to the Secured Party to be held as part of the Collateral
hereunder.
5. Sale of Collateral
In the event of a default by Debtor under the Note or this Pledge Agree-
ment, Secured Party may, at its election, do any one or more of the following,
all of which are authorized by Debtor: (a) exercise any or all of the rights
accruing to a secured party under the California Uniform Commercial Code upon
default by a debtor; and (b) sell or otherwise dispose of the Collateral at
public or private sale as hereinafter described.
Upon the occurrence of an event of default under the Note or this Pledge
Agreement, Secured Party shall have the right, at its option, to sell, assign,
transfer and deliver all or any part of the Collateral, at any brokers' board
or exchange or at public or private sale, subject to the provisions of the
Uniform Commercial Code of the State of California. The parties hereto agree
that a commercially reasonable notice of a sale of the Collateral shall
require publication of a notice of such sale, with a description of the
Collateral and the time and place of sale, at least 10 days prior to the time
of sale in the Western Edition of the Wall Street Journal. Any
2
<PAGE>
<PAGE> 3
such sale shall be for cash and, in connection therewith, Debtor and/or
Secured Party may impose reasonable conditions required by applicable federal
or state securities laws or to comply with contractual restrictions heretofore
made by the Debtor with TCPI as to the resale of the Collateral. Upon each
such sale, Secured Party, unless prohibited by a provision of any applicable
statute, may purchase all or any part of the Collateral being sold at a price
not less than the then fair market value thereof as quoted on the Nasdaq Stock
Market system, free from and discharged of all trusts, claims, right of
redemption and equities of the Debtor. The Secured Party shall deliver the
Collateral in accordance with the terms of any such sale. If the proceeds of
any sale of the Collateral shall be insufficient to pay all amounts due upon
an event of default hereunder, including interest, collection costs and
expense of sale, Debtor shall remain obligated and liable for any deficiency
with respect thereto.
All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by Secured Party in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement thereof,
shall become a part of the obligations secured hereunder.
Any notice required to be given by Secured Party of a sale or other
disposition of the Collateral or any other intended action by Secured Party,
deposited in the United States mail, certified or registered mail, return
receipt requested postage prepaid and duly addressed to Debtor at least ten
(10) calendar days prior to such proposed action shall constitute reasonable
and fair notice to Debtor of any such action.
6. Events of Default
The occurrence of any of the following shall be an event of
default under this Agreement: (a) failure to pay up any debt or other
obligation secured hereby when due if said failure has not been expressly
excused under the terms of the obligations secured hereby or waived in writing
by Secured Party and if said failure is not cured within the applicable period
of grace provided by the Note after written notice thereof has been given to
Debtor by Secured Party; or (b) failure to perform any other obligation
secured by this Pledge Agreement when the same should be performed if said
failure has not been cured within ten (10) days after written notice thereof
has been given to Debtor by Secured Party.
7. Execution of Endorsements, Assignments, etc.
Upon the occurrence of an event of a default under the Note or this
Pledge Agreement, Secured Party shall have the right for and in the name,
place and stead of Debtor to execute endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any of the
Collateral.
3
<PAGE>
<PAGE> 4
8. Return of Collateral.
Upon the satisfaction in full of all obligations secured hereunder,
Debtor shall be entitled to the return of all remaining Collateral as well as
such incidental property and cash as are then held in pledge hereunder which
have not been used or applied toward the payment or satisfaction of such
obligations.
9. Notice
All notices required to be or otherwise given hereunder to Debtor or
Secured Party shall be delivered as follows:
(a) If to Debtor, when delivered by hand or mailed, by certified
or registered mail, postage prepaid, return receipt requested to:
Vista Technologies Inc.
Attention: President
167 S. San Antonio Road, Suite 9
Los Altos, California 94022
or to such other person or address as Debtor shall designate in writing;
(b) If to Secured Party, when delivered by hand or mailed, by
certified or registered mail, postage prepaid, return receipt requested to:
Pharma Patch PLC
Attention: Chairman of the Board
15/16 FitzWilliam Place
Dublin 2, Ireland
with a copy to:
Kevin J. Quinn
11400 West Olympic Blvd., 2nd Floor
Los Angeles, California 90064-1544
or to such other person or address as Secured Party shall designate in
writing.
10. No Waiver
No course of dealing between Debtor and the Secured Party or any
delay on the part of the Secured Party in exercising any rights under this
Agreement shall operate as a waiver of any rights of the Secured Party
hereunder.
4
<PAGE>
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
26th day of August, 1996.
<TABLE>
<S> <C>
DEBTOR: VISTA TECHNOLOGIES INC.
By: /s/ Thomas A. Schultz
---------------------------------
Thomas A. Schultz, President
and Chief Executive Officer
SECURED PARTY: PHARMA PATCH PLC.
By: /s/ Murray D. Watson
---------------------------------
Murray D. Watson, Chairman
and Chief Executive Officer
5
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from
the Consolidated Statements of Operations and Consolidated
Balance Sheets of Vista Technologies Inc. and Subsidiaries
and is qualified in its entirety by reference to such
consolidated financial statements.
</LEGEND>
<CIK> 0000895725
<NAME> VISTA TECHNOLOGIES INC.
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> Mar-31-1997
<PERIOD-START> Apr-01-1996
<PERIOD-END> Jun-30-1996
<PERIOD-TYPE> 3-MOS
<CASH> 576
<SECURITIES> 0
<RECEIVABLES> 847
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,143
<PP&E> 1,979
<DEPRECIATION> 801
<TOTAL-ASSETS> 7,872
<CURRENT-LIABILITIES> 904
<BONDS> 0
0
0
<COMMON> 35
<OTHER-SE> 4,495
<TOTAL-LIABILITY-AND-EQUITY> 7,872
<SALES> 786
<TOTAL-REVENUES> 786
<CGS> 0
<TOTAL-COSTS> 1,601
<OTHER-EXPENSES> (4)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> (804)
<INCOME-TAX> 0
<INCOME-CONTINUING> (804)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (804)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
