As filed with the Securities and Exchange Commission
on November 13, 1997 Registration 33-89194
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM SB-2
ON
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MVSI, INC.
(Exact name of Registrant as specified in its charter)
Delaware 54-1707718
(State or other jurisdiction of
incorporation or organization) (IRS employer
identification number)
8133 Leesburg Pike, Suite 750
Vienna, Virginia 22182
(703) 356-5353
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Paul W. Richter, General Counsel and Secretary
MVSI, INC.
8133 Leesburg Pike, Suite 750
Vienna, Virginia 22182
(703) 356-5353
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies To:
THOMAS L. HANLEY, ESQ.
ROBERT B. MURPHY, ESQ.
Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
11921 Rockville Pike
Rockville, Maryland 20852
(301) 230-5200
Approximate date of commencement of proposed sale to public:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis, pursuant to Rule 415 under the
Securities Act of 1933, check the following box: x
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box
and list the Securities Act registration statement number of the earlier
effective registration for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box [ ].
THE REGISTRANT HEREBY AMENDS THIS POST-EFFECTIVE AMENDMENT TO THE
REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO
DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS POST EFFECTIVE AMENDMENT
TO THE REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
EXPLANATORY NOTE
This Post Effective Amendment No. 2 to the Registration
Statement on Form SB-2 on Form S-3 is being filed to reflect certain
material changes in the information included in the Post-Effective
Amendment No. 1 to the Form SB-2 Registration Statement on Form S-3 filed
by MVSI, Inc. (File No. 33-89194), which was declared effective on October
16, 1996, and the Form SB-2 Registration Statement (File No. 33-89184)
which was declared effective on August 14, 1995. The applicable filing fees
have been previously paid.
PROSPECTUS
MVSI, INC.
5,140,000 Class A Warrants
5,140,000 Shares, Underlying Class A Warrants
and
1,000,000 Shares, Underlying Class B Warrants
180,000 Units, Underwriters' Purchase Option
360,000 Shares, Underlying Underwriters' Purchase Option
360,000 Class A Warrants, Underlying Underwriters' Purchase Option
360,000 Shares, Underlying Class A Warrants Subject to
Underwriter's Purchase Option
By notice of redemption to be dated on or about November 14, 1997
(the "Notice of Redemption"), MVSI, Inc., a Delaware corporation
(the "Company") intends to call all of its outstanding Class A Warrants
and Class B Warrants for redemption for cash 30 days following the date
of the mailing of the Notice of Redemption (the "Redemption Date")
at a redemption price of $.05 per Class A Warrant and $.05 per Class
B Warrant (the "Redemption Price"). Prior to 5:00 p.m., local
New York City time, on the Redemption Date, each outstanding Class A
Warrant and outstanding Class B Warrant may be exercised and the
underlying shares of Common Stock, $.01 par value (the "Common Stock"),
may be purchased. The Common Stock and the Class A Warrants
are quoted on the Nasdaq National Market System ("NASDAQ" or "Nasdaq") under
the trading symbols "MVSI" and "MVSIW", respectively, since May 2, 1997.
From August 14, 1995 until May 1, 1997, the shares of Common Stock and
Class A Warrants were quoted on the Nasdaq SmallCap Market System.
On November 10, 1997, the last quoted bid price of the Common Stock
and Class A Warrants were $7.56 and $3.50, respectively. See "Price
Range of Common Stock and Class A Warrants."
After 5:00 p.m., local New York City time, on the Redemption Date
(the "Exercise Deadline"), and regardless of whether the Certificates
evidencing any Warrants shall have been surrendered, the right to exercise
the outstanding Class A Warrants and Class B Warrants (collectively,
the "Warrants") shall terminate and the holders thereof shall only be
entitled to receive the Redemption Price. SINCE IT IS THE TIME OF
RECEIPT RATHER THAN THE TIME OF MAILING THAT DETERMINES WHETHER WARRANTS
HAVE BEEN PROPERLY SURRENDERED FOR EXERCISE, HOLDERS WISHING TO EXERCISE
THEIR WARRANTS AND PURCHASE THE UNDERLYING COMMON STOCK SHOULD ALLOW
SUFFICIENT TIME FOR WARRANTS SENT BY MAIL TO BE RECEIVED BY THE
WARRANT AGENT, IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN THE
NOTICE OF REDEMPTION AND LETTER OF TRANSMITTAL, PRIOR TO THE EXERCISE
DEADLINE. HOLDERS MAY WISH TO USE REGISTERED MAIL, WITH APPROPRIATE
INSURANCE COVERAGE, OR SOME MEANS OF CERTIFIED, INSURED DELIVERY TO ENSURE
THAT WARRANTS BEING SURRENDERED FOR EXERCISE ARE RECEIVED ON OR BEFORE
THE EXERCISE DEADLINE.
The Prospectus relates to the resale, from time to time, of 5,140,000
Class A Warrants by certain holders thereof (the "Selling Securityholders")
which were acquired in connection with the Company's initial public
offering ("Offering") of securities, which public offering was declared
effective by the Securities and Exchange Commission ("Commission") on
August 14, 1995. This Prospectus also relates to the resale, from time to
time, of 180,000 Units, including 360,000 shares of Common Stock, $.01
par value, and 360,000 Class A Warrants, by the underwriters, and their
assigns, which comprise the Underwriters' Purchase Option issued to
the underwriters in connection with the Offering. This Prospectus also
relates to the issuance of 1,000,000 shares of Common Stock underlying
the Class B Warrants and issuable upon exercise of the Class B Warrants
and 5,140,000 shares of Common Stock underlying the Class A Warrants
and issuable upon the exercise of the Class A Warrants. See "Risk
Factors", "Recent Developments - Status of Underwriters' Purchase
Option" and "Description of Securities."
Each Class A Warrant entitles the holder to purchase one share of Common
Stock at $4.00 per share until August 14, 2000. Each Class B Warrant
entitles the holder to purchase one share of Common Stock at $4.20 per
share until August 14, 2000.
The Class A Warrants and Class B Warrants are redeemable by the Company
for $.05 per Warrant, at any time after August 14, 1997, upon 30 days
prior written notice, if the average closing bid price of the Common
Stock, as quoted by Nasdaq, equals or exceeds $8.00 per share, for any
20 consecutive trading days within a period of 30 days ending within 10
days prior to the date of the notice of redemption. The average closing bid
price of the Common Stock was $8.00 or greater for the consecutive 20-day
trading period from October 9, 1997 through November 5, 1997.
Upon 30 days prior written notice to all holders of the Class A Warrants,
the Company shall have the right to reduce the exercise price and/or extend
the term of the Class A Warrants in compliance with the requirements of
Rule 13e-4, as promulgated under the Securities Exchange Act of 1934,
as amended, (the "Exchange Act") to the extent applicable. See "Description
of Securities."
In connection with the Company's Offering, the Company agreed under
certain circumstances to pay to its underwriters a solicitation fee of four
percent of the exercise price of the Warrants. However, in September
1996, the underwriters waived their rights to receive a fee in connection
with the exercise of the Company's Warrants. See "Plan of Distribution."
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" COMMENCING ON PAGE 12 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
MVSI, INC.
The date of this Prospectus is November __, 1997.
TABLE OF CONTENTS Page
Available Information 5
Incorporation of Certain Information by Reference 5
Prospectus Summary 6
Selected Financial Data 12
Risk Factors 12
Price Range of Common Stock and Class A Warrants 18
Dividend Policy 18
Use of Proceeds 19
Description of Securities 19
Plan of Distribution 23
Certain Federal Income Tax Consequences 25
Legal Proceedings 26
Legal Matters 27
Experts 27
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement
on Form S-3 (File No. 33-89194) (together with any amendments or
supplements thereto) ("Registration Statement") under the Securities Act
with respect to the securities offered hereby. This Prospectus, which
constitutes part of the Registration Statement, omits certain of the
information contained in the Registration Statement and the exhibits and
schedules thereto on file with the Commission pursuant to the Securities Act
and the rules and the regulations of the Commission thereunder. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, and each such statement is qualified
in all respects by such reference. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, files reports,
proxy statements, and other information with the Commission. Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Seven World Trade Center, Suite 1300,
New York, New York 10048; and 500 West Madison Avenue, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates, or from the Commission's
Internet web site at http:\\www.sec.gov. In addition, such materials also
may be inspected and copied at the offices of The Nasdaq Stock Market,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company filed with the Commission,
File No. 0-26614, are incorporated herein by reference.
(1) The Company's Form SB-2 Registration Statement, and related
Prospectus, File No. 33-89194, dated August 14, 1995;
(2) Company's Post Effective Amendment #1 on Form S-3, File No. 33-89194,
dated October 11, 1996.
(3) The Company's Form 8-A Registration Statement, File No. 0-26614,
dated August 14, 1995;
(4) The Company's Annual Report on Form 10-KSB for the fiscal year
dated September 30, 1996;
(5) The Company's Current Report on Form 8-K, dated June 27, 1997;
(6) The Company's Current Report on Form 8-K, dated September
30, 1997;
(7) The Company's Current Report on Form 8-K, dated October 31,
1997;
(8) The Company Notice of Meeting and Proxy Statement, dated
March 11, 1997; and
(9) The Company's Quarterly Reports on Form 10-QSB for the
periods ending December 31, 1996, March 31, 1997 and June 30, 1997.
In addition, all reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the termination of the offering made hereby, shall be
deemed to be incorporated by reference into this Prospectus. Any statement
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes
such statement. Any statements so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
This Prospectus incorporates documents by reference, which are not
presented herein or delivered herewith. These documents are available upon
request from the Company at its principal executive offices located at
8133 Leesburg Pike, Suite 750, Vienna, Virginia 22182, Attn:
Paul Richter, Investor Relations, telephone (703) 356-5353, facsimile
(703) 356-5354.
PROSPECTUS SUMMARY
The following Summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial
statements and related notes thereto appearing elsewhere in this
Prospectus or incorporated by reference herein. See "Risk Factors" for
a discussion of certain risks associated with an investment in the
securities. Unless the context otherwise requires, the terms "MVSI" or
the "Company" refer to MVSI, Inc., a Delaware corporation, and its
subsidiaries. All references to years, unless otherwise noted,
refer to the Company's fiscal year, which ends on September 30 of each
year. The documents incorporated herein by reference may contain statements
deemed to be forward looking which are inherently uncertain.
Actual results may differ from those discussed in such forward looking
statements for the reasons, among others, set forth under the heading
"Risk Factors."
The Company
MVSI, Inc. ("Company"), through its five wholly-owned subsidiaries, is
a broad-based technology holding company based in Vienna, Virginia. The
following provides a brief summary of the primary business lines of each of
the Company's five subsidiaries.
The Company was incorporated in the State of Delaware on April 12, 1994.
The principal executive offices of the Company are located at 8133
Leesburg Pike, Suite 750, Vienna, Virginia 22182, telephone (703) 356-5353,
facsimile (703) 356-5354.
Wholly-Owned Subsidiaries of the Company
MVS Modular Vision Systems, Inc. ("MVS"), which was acquired on
November 1, 1994 by the Company, designs, develops, manufactures and
markets state-of-the-art, proprietary vision-based robotic and sensor
products and systems for productivity improvement and quality control
applications in the manufacturing workplace. MVS is based in a single
facility in Montreal, Quebec, Canada.
The business of MVS has remained the same business both prior to and
subsequent to its acquisition by the Company. The primary component of
MVS' products and systems is its three-dimensional and two-dimensional
camera and laser vision inspection technology. This technology utilizes
specialized cameras, lasers, optics and custom-designed high-speed
processing hardware and software for inspection, measurement and motion
control in industrial or manufacturing applications. MVS currently
markets and sells one principal computer chip inspection scanner product
and system: the MVS LaserVision QFP Lead Scanner (the "QFP Scanner"),
and also markets and sells one principal sensor product and system: the
MVS LaserVision Welding Sensor ("MVS Welding Systems"). The QFP Scanner
inspects Quad Flat Pack computer chips and is currently sold
to a single corporate semiconductor manufacturer in Korea. MVS is seeking
other customers for the QFP Scanner in the Far East and North America,
but there can be no assurances that MVS will be able to broaden its
customer base for the QFP Scanner. Further, MVS believes that the
product life for the QFP Scanner has peaked and that demand for the
QFP Scanner will decrease over the next 12 to 18 months. MVS is currently
evaluating possible designs for a new inspection scanner that is capable
of inspecting the new generation of computer chips that are being
produced by semiconductor manufacturers, but there can be no assurances
that MVS will attempt or be able to develop such a new inspection scanner
or that MVS will be able to successfully market and sell any such
new inspection scanner. MVS' competitors in the inspection scanner
industry have substantially greater financial, marketing and
engineering resources than MVS and possess not only a significant
market share of the inspection scanner business on a worldwide
basis but have also introduced new inspection scanners that are capable
of inspecting the new generation of computer chips.
MVS' Welding System is marketed worldwide, but principally to corporate
customers in North America and Europe. Since May 1997, MVS has focused
its sales efforts for the MVS Welding System on direct sales in North
America and sales through manufacturers' representatives, distributors
and sales agents outside of North America.
JMR Distributors, Inc. In October 1995, the Company acquired
privately-owned JMR Distributors, Inc. ("JMR"), a Virginia corporation, as
a wholly-owned subsidiary. JMR's sole facility is based in Lorton, Virginia,
a suburb of Washington, D.C., and is a contract manufacturer and
distributor of proprietary and generic memory module products for
computers, plotters, laser printers, process controllers and other
computer related industry devices using memory modules. JMR's products
are marketed nationally to major computer distributors and corporate
customers.
Socrates, Inc. In September 1996, the Company acquired privately-owned
Socrates, Inc. ("Socrates"), a Maryland corporation. Socrates is a
Washington, D.C. area based company engaged in the assembly,
integration and marketing of proprietary and generic computer
system products and services; computer systems integration,
telecommunications integration, Internet connectivity, and wide and
local area networking; and providing training on the use of computer
software programs to individuals, corporations and government.
Socrates' computer product systems and services are marketed nationally
to major computer distributors, corporate and government customers.
In October 1997, Socrates moved to a new 35,000 square foot office,
manufacturing and warehouse space in Largo, Maryland, a suburb of
Washington, D.C. This new center will serve as Socrates' principal
executive offices, primary manufacturing and engineering center,
corporate training center and primary warehouse facility. Socrates
has a sales office in West Chester, Pennsylvania and Hampton,
Virginia, and affiliated sales offices in Chicago,Illinois and Los
Angeles, California. Socrates has one computer sales and service center
in Virginia Beach, Virginia, which sells to individual and corporate
clients. As of the date of this Prospectus, Socrates is
preparing to open in December 1997 or January 1998 two additional
computer sales and service centers in the Newport News-Virginia
Beach, Virginia area. One of the Newport News-Virginia Beach, Virginia
area stores will sell computer hardware and software to employees of
Newport News Shipbuilding, Inc. and the other computer sales and
service center will sell to residents of the Newport News-Virginia
Beach, Virginia area.
On November 6, 1997, Socrates, Inc. entered into an agreement with
the Washington Sports & Entertainment, Inc. ("WSE") whereby Socrates,
Inc. would provide computer hardware, software and training services
to WSE; the Washington Wizards National Basketball Association
Professional Basketball Team and Washington Capitals National Hockey
League Professional Hockey Team, which are owned by WSE; and two major
sports and entertainment complexes in the greater Washington, D.C.
metropolitan area in which WSE has an ownership interest: the new
MCI Center in Washington, D.C. and US Airways Arena in
Largo, Maryland. The agreement has a three year term and also
entitles Socrates, Inc. to advertise at the MCI Center and US Airways
Arena and in television and cable shows and in print publications
sponsored or produced by WSE or its affiliates.
EXPERT, Inc. On June 16, 1997, the Company acquired privately owned
EXPERT, Inc. ("EXPERT"). EXPERT is a New York corporation based
in a single facility in Flushing Meadows, New York. EXPERT is a
contract assembler and marketer of proprietary and generic computer
system products and services for advanced computer systems integration
and networking. The Company exchanged 300,000 shares of Common Stock
for all of the outstanding shares of EXPERT common stock. The shares
of Common Stock issued to acquire EXPERT were "restricted securities"
under Rule 144 of the Securities Act of 1933, as amended.
Technet Computer Services, Inc. ("Technet"). The Company acquired
Technet as a wholly-owned subsidiary on September 1, 1997.
Technet is a Virginia corporation based in Vienna, Virginia, a suburb
of Washington, D.C., and is engaged in the business of providing
customized software development and maintenance services
to corporate and government customers. Technet's principal
executive offices are located in Vienna, Virginia and it has software
development centers in Madras, India, New Jersey and its Vienna-Virginia
principal executive offices. Technet was acquired by the
exchange of 400,000 shares of Common Stock for all of
the outstanding shares of Technet common stock. The shares of
Common Stock issued to acquire Technet were "restricted securities"
under Rule 144 of the Securities Act of 1933, as amended.
Restructuring of e-Net, Inc. Transaction
In August 1996, e-Net, Inc. ("e-Net"), a Delaware corporation,
entered into a letter of intent with the Company, whereby e-Net
would have become a wholly-owned subsidiary of the Company. Among
the principal terms and conditions of the proposed acquisition,
the Company would have exchanged, on a proposed tax-free basis,
4,000,000 restricted shares of its common stock, for all of e-Net's
8,000,000 shares of common stock. In addition, if the acquisition
were to be completed, e-Net's 2,000,000 Class A Warrants and
2,000,000 Class B Warrants would have been exercisable into a
total of 2,000,000 shares of the Company's Common Stock. The newly
issued MVSI securities in the acquisition could not have been sold
for a 24-month period ending September 1998. Edward Ratkovich,
the chairman and chief executive officer of the Company was a director
and is a principal stockholder and warrantholder of e-Net and Clive
Whittenbury, another director of the Company, is a director and a
stockholder of e-Net.
On January 14, 1997, the Company and e-Net entered into a Mutual
Cooperation Agreement. Pursuant to the Mutual Cooperation Agreement,
the Company and e-Net terminated the proposed acquisition of e-Net
by the Company, and took the following actions to restructure their
business relationship: (1) e-Net executed and issued to the Company
a Convertible Debenture in the principal amount of $1,275,080.76
and bearing interest at 9% per annum, which Convertible Debenture
evidenced monies loaned by the Company to e-Net up to and as of
January 14, 1997; (2) e-Net issued to the Company and its subsidiaries
a non-transferable, fully-paid, perpetual license to use the software
components of e-Net's Telecom 2000 technology; and (3) e-Net and the
Company agreed to extend to one another and their affiliates the most
favorable pricing, terms and conditions that are granted to any
customer for the purchase, license and support services with
regard to any products or services offered by it or its subsidiaries
(excluding pricing, terms and conditions offered either by the Company
or e-Net to the United States Government). The Company and
e-Net have also agreed in principal cooperate as strategic partners
in any joint technology projects that required or would benefit from
the integration or use of e-Net's technologies into any of the Company's
products. As of the date of this Prospectus, e-Net and Socrates are
test marketing the sale of e-Net's current release of Telecom 2000 as a
standard feature in computer systems assembled by and sold under the
name of Socrates to corporate and government customers.
The terms of the Convertible Debenture provided that the Company could,
at its option, and at any date prior to September 6, 2002, convert all or
any portion of the aggregate amount owing under the Convertible Debenture
into shares of e-Net Common Stock at a conversion ratio equal to
the per-share offering price in the event of an initial public
offering ("IPO") of e-Net's Common Stock. As the result of a pending
IPO by e-Net, the Company agreed to convert the Convertible Debenture for
250,000 shares of e-Net Common Stock in February 1997. On April 8,
1997, the Commission declared effective e-Net's initial public
offering registration statement on Form SB-2 (Registration No.
333-3860), which registration statement also registered for
resale the 250,000 shares of e-Net Common Stock, $.01 par value,
beneficially owned by the Company. e-Net's Common Stock, $.01
par value, commenced trading on the Nasdaq SmallCap Market System under the
trading symbol of "ETEL". The Company has agreed not to sell any of the
250,000 shares of e-NET Common Stock until the earlier of the date on which
the lead underwriter for e-Net's initial public offering of e-Net Common
Stock consents to such a sale or April 8, 1998.
e-Net develops, markets and supports open client, server and
integrated applications software that enables local, national and
international telephone communications, information exchange and commerce
over the Internet and private Internet Protocol ("IP") networks. e-Net's
software products are designed to deliver high levels of performance,
ease of use and security. These software products allow individuals
and organizations to execute secure, private voice communications
across the Internet and intranets, through the use of authentication
technology, for local national and international telephone
communications, information exchange and commerce. In addition,
through the use of e-Net's software, organizations can extend their
internal information systems and enterprise applications to
geographically dispersed facilities, remote offices and mobile
employees.
Recent Developments
Status of Underwriters' Purchase Option. Pursuant to the Offering, the
lead underwriter, Stratton Oakmont, Inc. of Lake Success, New York
(the "IPO Underwriter"), was issued an Underwriters' Purchase
Option to purchase 180,000 of the Company's Units, each Unit consisting of
two (2) shares of Common Stock and two Class A Warrants, which Units have
not been exercised as of the date of this Prospectus.
The IPO Underwriter was expelled from the securities industry by
the National Association of Securities Dealers, Inc. ("NASD") on
December 5, 1996. On or about January 24, 1997, the IPO Underwriter
sought protection from creditors by filing a petition under Chapter XI of
the U.S. Bankruptcy Code (Case Number 97-40501) (the "Bankruptcy Case")
in the United States Bankruptcy Court for the Southern District of
New York (Manhattan Division) (the "Bankruptcy Court"). Subsequent to
the filing of the petition, the Bankruptcy Court approved a
motion by the Securities Investor Protection Corporation to appoint
a Trustee for the IPO Underwriter in the Bankruptcy Case to liquidate
certain of the IPO Underwriters' assets under the Securities Investor
Protection Act of 1970 and U.S. Bankruptcy Code.
As a result of the aforementioned and pending bankruptcy proceedings
involving the IPO Underwriter, and the assertion of third party ownership
claims to the Underwriters' Purchase Option, the Company is uncertain
about the current ownership of the Underwriters' Purchase Option and
believes that the U.S Bankruptcy Code prevents the redemption of the
Class A Warrants underlying the Underwriters' Purchase Option at
this time. Therefore, the Company is uncertain as of the date of
this Prospectus when and if it would be able to redeem the Class A
Warrants underlying the Underwriters' Purchase Option. On November 12,
1997, the Company sent a letter to the Trustee for the Bankruptcy
Case, to notify the Trustee of the existence of the Underwriters' Purchase
Option. Once the legal ownership is determined, the owner could decide
to exercise the Underwriters' Purchase Option by paying the Company
$11.55 per Unit, aggregating $2,079,000 plus an additional $4.00 per
share of Common Stock that would be issued in lieu of the 360,000
Class A Warrants underlying the Underwriters' Purchase Option,
which entitlement to purchase would remain effective until August 14, 2000.
Amendment of the Warrant Agreement. On November 11, 1997, the Company
and the Warrant Agent amended the Warrant Agreement, dated
August 14, 1995, to eliminate a conflict in the original
language of the Warrant Agreement concerning the deadline for exercising
the Warrants in the event of a redemption. As amended, the Warrant
Agreement sets 5:00 p.m., New York City Time, on the Redemption Date
as the deadline for exercising the Warrants and provides holders of
the Warrants with the maximum period of time allowed under the
Warrant Agreement to exercise their Warrants in the event of a
redemption of the Warrants by the Company.
Use of Proceeds
The Company will not receive any proceeds from the sale of the
securities registered hereunder by the Selling Securityholders. If all
of the Warrants are exercised, the Company will receive proceeds of
approximately $23,879,000 (net of expenses estimated at $70,000).
However, there can be no assurance that any or all of the Warrants
will be exercised. Assuming the receipt of the maximum amount of
proceeds upon exercise of the Warrants, the Company expects that
approximately $5 million of such net proceeds will be used for
management and employee compensation; approximately $3 million will
be used to fund software support and development; approximately
$2.5 million will be applied to marketing and sales; approximately
$2 million will be used to acquire capital equipment; and the remaining
balance will be used for working capital and other general corporate
purposes, including stock repurchases and possible future acquisitions
and strategic alliances. While the Company continually reviews
possible acquisitions and strategic alliances and explores business
relationships with companies that have complementary businesses to
the businesses of the Company, it has not entered into any understanding
or agreement with respect to any acquisition or strategic alliance.
Pending application of the net proceeds, the Company may invest
such proceeds in short-term, marketable securities.
The Offering
Securities Offered by the Company 6,140,000 shares underlying the
Class A Warrants and Class B Warrants
Shares of Common Stock Outstanding
Prior to Offering 11,661,989 Shares
Shares of Common Stock Outstanding
After Offering Assuming Exercise
of the Warrants 16,599,192 Shares
Use of Net Proceeds of Sale of
Securities Offered by Company Management and employee compensation;
software support and development;
acquire capital equipment; and
working capital and other
general corporate purposes,
including mergers and acquisitions
and stock repurchases
How to Exercise Warrants Any holder of warrants desiring to
exercise should either (a)
complete the exercise form on the
back of warrant and forward it along
with the proper exercise price to the
Warrant Agent, or (b) request a broker
to effect the transaction. See "Plan
of Distribution."
Warrant Agent American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
(718) 921-8200
Attn: Isaac Kagan
Risk Factors An investment in the securities
offered hereby involves a high degree
of risk and immediate substantial
dilution of the book value of the
common stock and should be
considered only by persons who can
afford the loss of their entire
investment. See "Risk Factors."
Nasdaq National Market
System Symbols
Common Stock MVSI
Class Warrants MVSIW
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)
Nine Months Ended
June 30, 1997 Fiscal Year Ended September 30,
Pro Pro Forma
forma(1) Actual 1996(1) 1996 1995 1994 1993
Statement of
Operations Data:
Revenues 42,969 29,850 34,631 15,987 2,338 2,375 943
Income (loss)
from operations 1,439 1,326 (97) (197) (1,977) 131 (610)
Income (loss) before
taxes 1,643 1,326 304 226 (5,481) 34 (637)
Net Earnings (loss) 2,117 2,025 1,077 1,012 (5,481) 34 (642)
Earnings (loss) per
Common and common
equivalent shares
outstanding (2) 0.17 0.17 0.11 0.11 (1.10) 0.01 (0.11)
Weighted average
number of common
and common (2) 14,801 14,729 5,001 3,600 3,600
June 30, 1997 As Adjusted (3)
Balance Sheet Data:
Working Capital 9,562 33,441
Total Assets 22,305 46,184
Long Term Debt -- --
Stockholders' equity 17,139 41,018
________________________
(1) Pro forma data reflects the effect of the June 1997 and September 1997
acquisitions of EXPERT, Inc. and Technet Computer Services, Inc.,
respectively, as if they had occurred as of the beginning of each period.
(2) The June 30, 1997 financial data includes the dilutive effect of
6,125,000 warrants and earnings per share reflects a net income
adjustment permitted by generally accepted accounting principles.
(3) Adjusted to reflect the exercise of the warrants offered herein,
after deducting payment by the Company of expenses of this
offering estimated at $70,000. See "Use of Proceeds."
RISK FACTORS
The securities offered hereby are speculative and involve a high degree
of risk. Only those persons able to lose their entire investment should
consider making an investment in the securities offered hereby and purchase
these securities. Prospective investors, prior to making an investment
decision, should carefully read this prospectus and consider, along
with other matters referred to herein, the following risk factors:
In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective investors in evaluating
the Company and its business before purchasing the shares of Common Stock
offered hereby. Information contained in this Prospectus contains certain
forward-looking statements and information which may be identified by the
use of forward-looking terminology or as discussions of strategy.
No assurance can be given that the future results covered by the forward-
looking statements will be achieved or that the events contemplated thereby
will occur or have the effects anticipated. The following matters
constitute cautionary statements, including certain risks and uncertainties
that could cause actual results to vary materially from those covered
in such forward-looking statements. In addition, other factors could
cause actual results to vary materially from the anticipated results
covered in such forward-looking statements.
THE COMPANY
The Company, through its acquired wholly-owned subsidiaries,
is engaged in the following principal lines of business: (1) designs,
develops, manufactures and markets state-of-the-art, proprietary vision-based
robotic and sensor products and systems for productivity improvement and
quality control applications in the manufacturing workplace; (2) designs,
develops and markets proprietary computer product systems for large-scale
applications and integration; (3) assembles or manufactures computer
memory modules; and (4) provides training to individuals, corporations and
governments in the use of computer software programs and information
technologies.
The Company's subsidiaries have limited brand name recognition. Many of
the Company's competitors have significantly greater resources and
market share in the aforementioned business lines than the Company.
The Company can make no assurances that the Company will be able to
successfully compete in the future in any of its primary business lines.
The Company may use some of the proceeds from the offering to acquire
companies, which have complementary or similar business lines to the
Company's existing business lines. As of the date of this Prospectus,
the Company has not identified any such specific prospective acquisitions.
No Assurance of Future Profitability or Payment of Dividends
The Company can make no assurances that the future operations of the
Company will result in additional significant revenues or will be profitable.
Should the operations of the Company be profitable, it is likely that
the Company would retain much or all of its earnings in order to finance
future growth and expansion. Therefore, the Company does not presently intend
to pay dividends, and it is not likely that any dividends will be paid in the
foreseeable future. See "Dividend Policy."
Absence of Primary Market Maker
Since the expulsion from the securities industry of the IPO Underwriter,
the Company has not had a primary market maker for its shares of Common Stock
or Class A Warrants quoted on Nasdaq National Market System. Although the
Company has 20 market makers of record as of November 10,
1997 for its Common Stock, the Company is continuing its effort to attract a
suitable, national or major regional securities firm to publish research
reports on the Company and to act as the primary market maker for the
shares of its Common Stock quoted on the Nasdaq National Market System.
Possible Need for Additional Financing
The Company intends to use the proceeds from this offering for
management and employee compensation, software support and development,
acquire capital equipment, working capital and other general corporate
purposes, including stock repurchases and mergers and acquisitions.
There can be no assurance that the funds from this offering will be
sufficient for any one or more of these purposes. The Company may
require substantial amounts of the proceeds of this offering for operating
costs and working capital. The Company has made no arrangements to obtain
future additional financing, if required, and there can be no assurance
that such financing will be available, or that it will be available
on acceptable terms. See "Use of Proceeds."
Dependence on Major and International Customers
For the nine months ended June 30, 1997, the Company did not have
any individual customers, which accounted for more than ten percent of
its total revenues. For the nine months ended June 30, 1997, the Company
had two customers which accounted for approximately 20% and 10%,
respectively, of the Company's total revenues. For the year ended
September 30, 1996, the Company had one customer who accounted for
approximately 10% of total revenues and approximately 15% of
the Company's sales were to customers outside of North America.
The dependence on major and international customers subjects the Company
to significant financial risks in the operation of its business should a
major or international customer terminate, for any reason, its business
relationship with the Company. In such event, the financial condition
of the Company may be adversely affected and the Company may be required to
obtain additional financing, of which there is no assurance. Also,
dependence on international customers significantly increases the
Company's costs, e.g., travel, communication and delivery of products,
which are reflected in the Company's financial performance.
Dependence on Management
The Company's success is principally dependent on its current management
personnel for the operation of its business. In particular, Chairman of the
Board Ratkovich has played a substantial role in the development and
management of the Company, although there is no assurance that additional
managerial assistance will not be required. The analysis of new business
opportunities will be undertaken by or under the supervision of Chairman
of the Board Ratkovich and the management of the Company. The Company
entered into an employment agreement with Chairman of the Board Ratkovich
in February 1995, which terminates in January 2000. The agreement
contains non-compete provisions but is limited in geographical scope,
i.e., the Northern Virginia area. The Company has not purchased key-man
life insurance on Chairman of the Board Ratkovich. If the employment by
the Company of Chairman of the Board Ratkovich terminates, or he is unable
to perform his duties, the Company may be substantially affected.
Substantial Competition
Businesses in the United States and abroad that are engaged in either
the design, development, manufacture and marketing of machine vision-based
products and systems are few in number but highly competitive.
Businesses in the United States and abroad that are engaged in the
design, development and marketing of proprietary computer hardware
and software products and systems for corporate or government applications
and integration are large in number and also highly competitive.
Almost all of the companies with which the Company intends to compete
in its primary business lines, with the possible exception of the Welding
Systems, are substantially larger and have substantially greater resources
than the Company. It is also likely that other competitors will emerge
in the future.
The Company will compete with companies that have greater market
recognition, greater resources and broader capabilities than the Company.
As a consequence, there is no assurance that the Company will be able to
successfully compete in the marketplace.
Limitation on Director Liability
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation limits the liability of directors to the
Company or its stockholders for monetary damages for breach of a
director's fiduciary duty except for liability in four specific instances.
These are for (i) any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith
or which involve intentional misconduct or knowing violation of law,
(iii) unlawful payments of dividends or unlawful stock purchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which the director
derived an improper personal benefit. As a result of the Company's
charter provision and Delaware law, stockholders may have more limited
rights to recover against directors for breach of fiduciary duty
than as existing prior to the enactment of the law.
Arbitrary Offering Price
The price to the public of the securities offered hereby has been
arbitrarily determined by negotiations between the Company and Stratton
Oakmont, Inc., a former underwriter of the Company's initial public
offering of securities on August 14, 1995, and bears no relationship to the
Company's earnings, book value or any other recognized criteria of value.
The exercise price of $4.00 per share is substantially in excess of the net
tangible book value of $0.94 per share, derived from the Company's balance
sheet as of June 30, 1997, and in excess of the price received by the Company
for shares sold in prior transactions.
Requirements of Current Prospectus and State Blue Sky
Registration in Connection with the Exercise of the Warrants
The Company will be able to issue the shares of its Common Stock
upon the exercise of the Warrants and the underwriters' Unit Purchase
Option only if (i) there is a current prospectus relating to the
securities offered hereby under an effective registration statement
filed with the Commission, and (ii) such Common Stock is then qualified for
sale or exempt therefrom under applicable state securities laws of
the jurisdictions in which the various holders of Warrants reside.
Although the Company intends to maintain a current registration
statement, there can be no assurance that the Company will be successful
in maintaining a current registration statement. After a registration
statement becomes effective, it may require updating by the filing of
a post-effective amendment. The Company intends to qualify the sale of
the securities in a limited number of states, although certain
exemptions under certain state Blue Sky laws may permit the Warrants to be
exercised or transferred to purchasers in states other than those in which
the Warrants were initially qualified. The Company will be prevented,
however, from issuing Common Stock upon exercise of the Warrants in
those states where exemptions are unavailable and the Company has failed
to qualify the Common Stock issuable upon exercise of the Warrants.
The Company may decide not to seek, or may not be able to obtain
qualification of the issuance of such Common Stock in all of the states
in which the ultimate purchasers of the Warrants reside. In such a
case, the Warrants of those purchasers will expire and have no value
if such Warrants cannot be exercised or sold. Accordingly, the market
for the Warrants may be limited because of the Company's obligation to
fulfill both of the foregoing requirements. See "Description of Securities"
and "Plan of Distribution."
Additional Authorized Shares Available for Issuance
May Adversely Affect the Market
The Company is authorized to issue 50,000,000 shares of its
Common Stock, $.01 par value. As of November 10, 1997, the Company
had 11661,989 outstanding shares of Common Stock. As of November 10, 1997,
the Company had approximately 4,937,302 Class A Warrants outstanding.
If all of the outstanding Warrants offered hereby are exercised, there will
be a total of 16,599,192 shares of Common Stock issued and outstanding.
After reserving a total of 6,860,000 shares of Common Stock for issuance
upon the exercise of all the Warrants, if all of the Warrants are exercised,
the Company will have at least 32,400,000 shares of authorized but
unissued capital stock available for issuance without further shareholder
approval.
As a result, any issuance of additional shares of Common Stock may
cause current shareholders of the Company to suffer significant
dilution, which may adversely affect the market. Pursuant to the
terms of the Underwriting Agreement, entered into in connection with
the Company's initial public offering of securities on August 14, 1995,
the Company's officers, directors and principal stockholders agreed
not to sell, transfer, assign or issue any shares of Common Stock
for a period of 24 months following the date of the offering without
the consent of Stratton Oakmont, Inc. The 24-month period expired on
or about August 14, 1997. Since the expiration of the 24-month period
and as of the date of this Prospectus, the Company is not aware of any
dispositions of the shares of the Common Stock by the aforementioned
officers, directors and principal stockholders of the Company. The
Company does not believe that the pending bankruptcy case of Stratton
Oakmont, Inc. affected the obligation of the aforementioned officers,
directors and principal stockholders because Stratton Oakmont,
Inc.'s legal existence continued through the expiration of the
24-month period. The sale of a significant number of these
shares in the public market may adversely affect prevailing market
prices of the Company's securities following this offering.
See "Description of Securities", "Plan of Distribution" and
"Recent Developments - Status of Underwriters' Purchase Option."
Warrants Subject to Redemption
The Class A Warrants are currently exercisable. Each Class A
Warrant entitles the holder to purchase one share of Common
Stock at $4.00 per share until August 14, 2000. The Class A
Warrants are redeemable by the Company for $.05 per Warrant, upon
thirty (30) days' prior written notice, if the average closing price
or bid price of the Common Stock, as reported by the principal
exchange on which the Common Stock is quoted, Nasdaq or the
National Quotation Bureau, Incorporated, as the case may be,
equals or exceeds $8.00 per share, for any twenty (20) consecutive
trading days within a period of thirty (30) days ending within
ten (10) days of the notice of redemption. Upon thirty (30) days'
prior written notice to all holders of the Class A Warrants,
the Company shall have the right to reduce the exercise price and/or
extend the term of the Class A Warrants. Redemption of the Warrants
will force holders thereof to either (i) exercise such Warrants and
pay the exercise price at a time when it may be less than
advantageous economically to do so, or (ii) accept the redemption
price, which may be substantially less than the market value thereof
at the time of redemption, or (3) sell the Class A Warrants in the
open market. The resale of the securities is subject to Prospectus
delivery and other requirements of the Securities Act. Sales of
such securities or the potential of such sales at any time may
have an adverse effect on the market prices of the securities
offered hereby. See "Description of Securities" and
"Plan of Distribution."
The Company intends to qualify the sale of the securities in a
limited number of states, although certain exemptions under
certain state Blue Sky laws may permit the Warrants to be exercised
or transferred to purchasers in states other than those in which
the Warrants were initially qualified. The Company will be prevented,
however, from issuing Common Stock upon exercise of the Warrants in
those states where exemptions are unavailable and the Company has failed
to qualify the Common Stock issuable upon exercise of the Warrants. The
Company may decide not to seek, or may not be able to obtain qualification
of the issuance of such Common Stock in all of the states in which the
ultimate purchasers of the Warrants reside. In such case, the Warrants
of those purchasers will expire and have no value if such Warrants
cannot be exercised or sold. Accordingly, the market for the
Warrants may be limited because of the Company's obligation to fulfill the
foregoing requirements.
Exercise of Warrants May Have Dilutive Effect on Market
The Warrants will provide, during their term, an opportunity for the
holder to profit from a rise in the market price, of which there is
no assurance, with resulting dilution in the ownership interest in the
Company held by the then present stockholders. Holders of the Warrants
most likely would exercise the Warrants and purchase the underlying
Common Stock at a time when the Company may be able to obtain capital
by a new offering of securities on terms more favorable than those provided
by such Warrants, in which event the terms on which the Company may
be able to obtain additional capital would be affected adversely.
See "Description of Securities" and "Plan of Distribution."
"Penny Stock" Regulations May Impose Certain Restrictions
on Marketability of Securities
The Commission has adopted regulations which generally define "penny stock"
to be any equity security that has a market price (as defined) less than
$5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exceptions. Since the Company's securities are authorized for
quotation on Nasdaq, such securities are initially exempt from the definition
of "penny stock." If the securities offered hereby are removed from listing
by Nasdaq at any time, the Company's securities may become subject to rules
that impose additional sales practice requirements on broker-dealers who sell
such securities to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a risk
disclosure document mandated by the Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both
the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed
control over the market. Finally, monthly statements must be sent disclosing
recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the ability of
broker-dealers to sell the Company's securities and may affect the ability
of purchasers in this offering to sell the Company's securities in the
secondary market.
PRICE RANGE OF COMMON STOCK AND CLASS A WARRANTS
The Common Stock and Class A Warrants trade on the Nasdaq National Market
System since May 2, 1997 under the trading symbols "MVSI" and "MVSIW",
respectively. Prior to that date, the Common Stock and Class A Warrants
traded on the Nasdaq SmallCap Market. On November 10, 1997, the last
reported bid price of the Common Stock and the last reported bid price
of the Class A Warrants were $7.56 and $3.50, respectively. On November
10, 1997, there were approximately 2,977 shareholders of record of the
Company's Common Stock and approximately 625 holders of the Class A
Warrants. The following table sets forth the range of high and low trading
prices for the Common Stock and Class A Warrants, as reported on Nasdaq,
for the period from August 14, 1995, the date of the Company's initial
public offering of securities, through November 10, 1997. The Class
B Warrants are not publicly traded and on November 10, 1997, there was
one holder of record of the Class B Warrants.
PRICE RANGE OF COMMON STOCK
Fiscal Year 1995 High Low
Fourth Quarter $7.75 $3.50 (1)
Fiscal Year 1996
First Quarter $8.38 $3.88
Second Quarter $7.38 $4.00
Third Quarter $9.75 $6.88
Fourth Quarter $15.63 $8.00
Fiscal Year 1997
First Quarter $10.87 $2.75
Second Quarter $6.06 $2.75
Third Quarter $6.12 $2.65
Fourth Quarter $7.68 $4.06
Fiscal Quarter 1998
First Quarter
through November
10, 1997 $8.06 $6.37
(1) Represents the initial public offering price per share on
August 14, 1995.
PRICE RANGE OF CLASS A WARRANTS
Fiscal Year 1995
Fourth Quarter $3.62 $2.50
Fiscal Year 1996
First Quarter $3.50 $2.00
Second Quarter $4.25 $2.00
Third Quarter $4.94 $2.75
Fourth Quarter $12.12 $4.00
Fiscal Year 1997
First Quarter $7.00 $0.75
Second Quarter $3.12 $0.94
Third Quarter $3.94 $1.37
Fourth Quarter $3.94 $1.68
Fiscal Quarter 1998
First Quarter
through
November 10,
1997 $5.00 $2.68
DIVIDEND POLICY
Holders of the Company's Common Stock are entitled to dividends when,
as and if declared by the Board of Directors out of funds legally
vailable therefor. The Company does not anticipate the declaration
or payment of any dividends in the foreseeable future. The Company
intends to retain earnings, if any, to finance the development and
expansion of its business. Future dividend policy will be subject to the
discretion of the Board of Directors and will be contingent upon future
earnings, if any, the Company's financial condition, capital requirements,
general business conditions and other factors. Therefore, there can be no
assurance that any dividends of any kind will ever be paid by the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the securities
registered hereunder by the Selling Securityholders. If all of the Warrants
are exercised, the Company will receive proceeds of approximately $23,879,000
million (net of expenses estimated at $70,000). However, there can be no
assurance that any or all of the Warrants will be exercised. Assuming the
receipt the maximum amount of proceeds upon exercise of the Warrants, the
Company expects that approximately $5 million of such net proceeds will be
used for management and employee compensation; approximately $3 million will
be used to fund software support and development; approximately $2.5 million
will be applied to marketing and sales; approximately $2 million will be used
to acquire capital equipment; and the remaining balance will be used for
working capital and other general corporate purposes, including stock
repurchases and possible future acquisitions and strategic alliances.
While the Company continually reviews possible acquisitions and strategic
alliances and explores business relationships with companies that have
complementary businesses to the businesses of the Company, it has not
entered into any understanding or agreement with respect to any acquisition
or strategic alliance. Pending application of the net proceeds, the
Company may invest such proceeds in short-term, marketable securities.
The Company is unable to predict the precise period for which this
offering will provide financing, although management believes that the
Company should have sufficient working capital to meet its cash
requirements for the 12 months period following the date of this offering.
Accordingly, the Company may need to seek additional funds through loans
or other financing arrangements during this period of time. No such
arrangements exist or are currently contemplated and there can be no
assurance that they may be obtained in the future should the need arise.
DESCRIPTION OF SECURITIES
Common Stock
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, $.01 par value. As of November 10, 1997, the
Company has 11,661,989 issued and outstanding shares of Common Stock and
approximately 2,977 shareholders of record. Holders of the Common Stock do
not have preemptive rights to purchase additional shares of Common Stock
or other subscription rights. The Common Stock carries no conversion
rights and is not subject to redemption or to any sinking fund provisions.
All shares of Common Stock are entitled to share equally in dividends
from sources legally available therefor when, as and if declared by the
Board of Directors and, upon liquidation or dissolution of the Company,
whether voluntary or involuntary, to share equally in the assets of
the Company available for distribution to stockholders. All outstanding shares
of Common Stock are validly authorized and issued, fully paid and
nonassessable, and all shares to be sold and issued as contemplated hereby,
will be validly authorized and issued, fully paid and nonassessable.
The Board of Directors is authorized to issue additional shares of
Common Stock, not to exceed the amount authorized by the Company's
Certificate of Incorporation, and to issue options and warrants for
the purchase of such shares, on such terms and conditions and for
such consideration as the Board may deem appropriate without stockholder
action. The above description concerning the Common Stock of the Company does
not purport to be complete. Reference is made to the Company's Certificate of
Incorporation and By-laws which are available for inspection upon proper notice
at the Company's offices, as well as to the applicable statutes of the
State of Delaware for a more complete description concerning the rights and
liabilities of stockholders. Each holder of Common Stock is entitled to one
vote per share on all matters on which such stockholders are entitled to vote.
Since the shares of Common Stock do not have cumulative voting rights, the
holders of more than 50 percent of the shares voting for the election of
directors can elect all the directors if they choose to do so and, in such
event, the holders of the remaining shares will not be able to elect any
person to the Board of Directors.
Class A and Class B Warrants
As of November 10, 1997, the Company has 4,937,203 Class A
Warrants outstanding, which were issued in connection with the Company's
initial public offering of securities on August 14, 1995. The Class A
Warrants are currently exercisable. Each Class A Warrant entitles the holder
to purchase one share of Common Stock at $4.00 per share until August
14, 2000. The Class A Warrants are redeemable by the Company for $.05
per Warrant, at any time after August 14, 1997, upon thirty (30) days'
prior written notice, if the average closing price or bid price of the
Common Stock, as reported by the principal exchange on which the
Common Stock is traded, Nasdaq or the National Quotation Bureau,
Incorporated, as the case may be, equals or exceeds $8.00 per share, for any
twenty (20) consecutive trading days within a period of thirty (30) days
ending within ten (10) days prior to the date of the notice of redemption.
Upon thirty (30) days' written notice to all holders of the Class A Warrants,
the Company shall have the right to reduce the exercise price and/or extend
the term of the Class A Warrants. Should all of the Class A Warrants be
exercised, of which there is no assurance, the Company will receive the
proceeds therefrom, aggregating up to approximately $19,748,812.
As of the date of this Prospectus, the Company also has 1,000,000 Class B
Warrants outstanding. The Class B Warrants are identical to the Class A
Warrants, except that the exercise price is $4.20. The Class B Warrants
are not being offered for sale as part of this offering. Should the Class
B Warrants by exercised, of which there is no assurance, the Company will
receive the proceeds therefrom, aggregating up to $4,200,000.
The Warrants can only be exercised when there is a current effective
registration statement covering the shares of Common Stock underlying
the Warrants. If the Company does not or is unable to maintain a current
effective registration statement the Warrant holders will be unable to
exercise the Warrants and the Warrants may become valueless. Moreover, if
the shares of Common Stock underlying the Warrants are not registered or
qualified for sale in the state in which a Warrant holder resides, such holder
might not be permitted to exercise the Warrants.
Warrant certificates may be exchanged for new certificates of different
denominations, and may be exercised or transferred by presenting them at
the offices of the Transfer Agent. Holders of the Warrants may sell the
Warrants if a market exists rather than exercise them. However, there
can be no assurance that a market will develop or continue as to such
Warrants. If the Company is unable to qualify its Common Stock
underlying such Warrants for sale in certain states, holders of the Company's
Warrants in those states will have no choice but to either sell such Warrants
or allow them to expire.
Each Warrant may be exercised by surrendering the Warrant certificate,
with the form of election to purchase on the reverse side of the Warrant
certificate properly completed and executed, together with payment of the
exercise price to the Warrant Agent. The Warrants may be exercised in whole
or from time to time in part. If less than all of the Warrants evidenced
by a Warrant certificate are exercised, a new Warrant certificate will
be issued for the remaining number of Warrants. Upon the exercise of
the Warrants, the shares of Common Stock when issued will be fully paid
and non-assessable.
Holders of the Warrants are protected against dilution of the equity
interest represented by the underlying shares of common stock upon the
occurrence of certain events, including, but not limited to, issuance of
stock dividends. If the Company merges, reorganizes or is acquired in such
a way as to terminate the Warrants, the Warrants may be exercised immediately
prior to such action. In the event of liquidation, dissolution or winding
up of the Company, holders of the Warrants are not entitled to participate
in the Company's assets.
For the life of the Warrants, the holders thereof are given the
opportunity, at nominal cost, to profit from a rise in the market
price of the common stock of the Company. The exercise of the Warrants will
result in the dilution of the then book value of the Common Stock
of the Company held by the public investors and would result in a dilution of
their percentage ownership of the Company. The terms upon which the Company
may obtain additional capital may be adversely affected through the period
that the Warrants remain exercisable. The holders of these Warrants may
be expected to exercise them at a time when the Company would, in all
likelihood, be able to obtain equity capital on terms more favorable than
those provided for by the Warrants.
Because the Warrants being offered hereby may be transferred, it is
possible that the Warrants may be acquired by persons residing in states
where the ompany has not registered, or is not exempt from registration such
that the shares of common stock underlying the Warrants may not be
sold or transferred upon exercise of the Warrants. Warrantholders
residing in those states would have no choice but to attempt to sell their
Warrants or to let them expire unexercised. Also, it is possible that the
Company may be unable, for unforeseen reasons, to cause a registration
statement covering the shares underlying the Warrants to be in effect
when the Warrants are exercisable. In that event, the Warrants may
expire unless extended by the Company as permitted by the Warrant because
a registration statement must be in effect, including audited financial
statements for companies acquired, in order for warrantholders to exercise
their Warrants.
The Company will be able to issue the securities offered hereby,
including shares of its Common Stock upon the exercise of the Warrants
and the Underwriters' Purchase Option only if (i) there is a current
prospectus relating to the securities offered hereby under an effective
registration statement filed with the Commission, and (ii) such Common Stock
is then qualified for sale or exempt therefrom under applicable
state securities laws of the jurisdictions in which the various holders
of Warrants reside.
Although the Company intends to maintain a current registration statement,
there can be no assurance, however, that the Company will be successful
in maintaining a current registration statement. After a registration
statement becomes effective, it may require updating by the filing of a
post-effective amendment. The Company intends to qualify the sale of the
securities in a limited number of states, although certain exemptions under
certain state Blue Sky laws may permit the Warrants to be transferred
to purchasers in states other than those in which the Warrants were initially
qualified. The Company will be prevented, however, from issuing Common Stock
upon exercise of the Warrants in those states where exemptions are unavailable
and the Company has failed to qualify the Common Stock issuable upon exercise
of the Warrants. The Company may decide not to seek, or may not be able to
obtain qualification of the issuance of such Common Stock in all of the states
in which the ultimate purchasers of the Warrants reside. In such case, the
Warrants of those purchasers will expire and have no value if such Warrants
cannot be exercised or sold. Accordingly, the market for the Warrants may
be limited because of the Company's obligation to fulfill both of the
foregoing requirements.
Restricted Shares Eligible for Future Sale
Upon exercise of all of the Warrants in this offering, the Company would
have 16,599,192 shares of Common Stock issued and outstanding. Among these
shares, approximately 7,400,000 shares ("Restricted Shares") of Common Stock
were issued and sold by the Company in private transactions in reliance upon
certain private placement and are considered to be "restricted securities" as
that term is defined in Rule 144 under the Securities Act and may not be
sold in the public market only if registered or if they qualify for an
exemption from registration under Rule 144 (as described below), or otherwise.
As a result of the provisions of Rules 144, 144(k) and 701 under the
Securities Act, under Rule 144, as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned his or her Restricted
Shares for at least one (1) year, including persons who may be deemed
"Affiliates" of the Company, as that term is defined under the Securities
Act, would entitled to sell in broker's transactions within any three month
period a number of shares that does not exceed the greater of one percent of
the then outstanding shares of the Company's common stock, or the average
weekly trading volume in the over-the-counter market in the Company's
common stock during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain provisions relating to the
manner and notice of sale and the availability of current public information
about the Company. Further, under Rule 144(k), if a period of at least two
years has elapsed between the later of the date restricted securities were
acquired from the Company and the date they were acquired from an Affiliate
of the Company, a holder of such restricted securities who is not an Affiliate
of the Company at the time of sale and has not been an Affiliate for at least
three months prior to the sale would be entitled to sell the shares
immediately without regard to the volume and manner of sale limitations
described herein.
In addition, Rule 701 under the Securities Act also permits resales of
shares of Common Stock acquired pursuant to certain compensation plans
and arrangements. Shares issued pursuant to the Company's option plans
and certain other compensation arrangements may be resold in reliance upon
Rule 144, but without compliance with certain of Rule 144's restrictions,
including the holding period requirement.
Pursuant to the terms of the Underwriting Agreement entered into
on the closing of the Company's initial public offering of securities, the
Company's officers, directors and principal stockholders agreed not to sell,
transfer, assign or issue any restricted shares of Common Stock until August
14, 1997 without the prior consent of Stratton Oakmont, Inc., an underwriter
in the Company's initial public offering of securities. The sale of a
significant number of these shares in the public market may adversely affect
prevailing market prices of the Company's securities following this
offering.
No predictions can be made as to the effect, if any, that sales of shares
under Rule 144 or otherwise or the availability of shares for sale will have
on the market, if any, prevailing from time to time. Sales of significant
amounts of the Company's shares of Common Stock pursuant to Rule 144 or
otherwise may adversely affect the market price of the securities offered
hereby.
Indemnification
The Company intends to indemnify its officers and directors to the full
extent permitted by Delaware law. Under Delaware law, a corporation
may indemnify its agents for expenses and amounts paid in third party actions
nd, upon court approval in derivative actions, if the agents acted in good
faith and with reasonable care. A majority vote of the Board of Directors,
approval of the shareholders or court approval is required to effectuate
indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to officers, directors or persons
controlling the Company, the Company has been advised that, in the
opinion of the Commission, such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by an officer, director or
controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication
of such issue.
Transfer Agent and Registrar; Information Agent.
The transfer agent and registrar for the securities of the Company is
American Stock Transfer & Trust Company located at 6201 15th Avenue,
Brooklyn, New York 11219. The Information Agent for the redemption
of the Warrants is D.F. King & Co., Inc., 77 Water Street, New York,
New York 10005 (Telephone Number (800) 755-7250). D.F. King & Co.,
Inc. will receive a fee of $3,500 plus expenses for serving as the
Company's Information Agent in connection with the redemption of
the Warrants.
Reports to Securityholders
The Company intends to furnish to holders of its securities annual
reports containing audited financial statements. The Company may issue other
unaudited interim reports to its securityholders as it deems appropriate.
PLAN OF DISTRIBUTION
The Prospectus relates to the resale, from time to time, of 5,140,000
Class A Warrants and the 5,140,000 shares of Common Stock underlying
the Class A Warrants by certain of the Company's securityholders
("Securityholders"); of 180,000 Units, including 360,000 shares
of Common Stock, $.01 par value, and 360,000 Class A Warrants which
are issuable upon exercise of the 180,000 Units (See "Recent Developments -
"Status of Underwriters' Purchase Option"), by the underwriters and their
assigns; and of the 1,000,000 shares underlying and issuable upon the
exercise of the Class B Warrants by certain Securityholders. The 5,140,000
Class A Warrants and 180,000 Units were issued in connection with the Offering.
Should all of the Warrants be exercised, the Company will receive the proceeds
therefrom, aggregating up to approximately $23,879,000 (after deducting
estimated expenses of $70,000 of this offering). The Company can make no
assurances that any of its securities can be sold or exercised under any
circumstances. See "Risk Factors" and "Description of Securities."
The Class A Warrants and Class B Warrants were exercisable commencing
as of August 14, 1995. Each Class A Warrant entitles the holder to purchase
one share of Common Stock at $4.00 per share until August 14, 2000. The Class
B Warrants entitle the holder to purchase one share of Common Stock at $4.20
per share until August 14, 2000. The Class A Warrants and Class B Warrants
are redeemable by the Company for $.05 per Warrant, at any time after August
14, 1997, upon 30 days prior written notice, if the average closing price or
bid price of the Common Stock, as quoted by Nasdaq, equals or exceeds $8.00
per share, for any 20 consecutive trading days within a period of 30 days
ending within 10 days prior to the date of the notice of redemption.
Upon 30 days prior written notice to all holders of the Class A Warrants, the
Company shall have the right to reduce the exercise price and/or extend the
term of the Class A Warrants or Class B Warrants in compliance with the
requirements of Rule 13e-4, as promulgated under the Exchange Act to the
extent applicable. See "Description of Securities."
In connection with the Offering, the Company agreed under certain
circumstances Stratton Oakmont, Inc., an underwriter in the offering, a
fee of four percent of the exercise price of the Warrants upon the exercise
of such Warrants. However, in September 1996, Stratton Oakmont waived
its rights to receive a fee in connection with the solicitation for the
exercise of the Company's Warrants, should it participate in such solicitation.
The Selling Securityholders, may from time to time offer the securities
through underwriters, dealers or agents who may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Company, and/or the purchasers of the securities for whom they may act as
agent. The Selling Securityholders and any such underwriters who participate
in the distribution of the securities may be deemed to be underwriters,
and any profits on the sale of the securities by them and any discounts,
commissions or concessions received by any such underwriters, dealers or
agents might be deemed to be underwriting discounts and commissions under
the Securities Act. To the extent the selling Securityholders may be
deemed to be underwriters, the Selling Securityholders may be subject
to certain statutory liabilities of the Securities Act, including, but
not limited to, Sections 11, 12 and 17 of the Securities Act and Rule
10b-5 under the Exchange Act.
The securities offered hereby may be sold from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated
prices. The securities may be sold by one or more of the following methods,
without limitation: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the securities as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; (d) an
exchange distribution in accordance with the rules of such exchange; and (e)
face-to-face transactions between sellers and purchasers without a broker-
dealer. At any time a particular offer of the securities is made, a Prospectus
supplement, if required, will be distributed which will set forth the
aggregate amount of securities being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents,
any discounts, commissions and other items constituting compensation from the
Company and the Selling Securityholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers. Such Prospectus supplement
and, if necessary, a post-effective amendment to the registration statement,
of which this Prospectus is a part, will be filed with the Commission to
reflect the disclosure of additional information with respect
to the distribution of the securities. In addition, the securities covered by
this Prospectus may be sold in private transactions or under Rule 144, as
promulgated under the Securities Act, as amended, rather than pursuant
to this Prospectus.
The Company, and certain of its securityholders, and any other persons
participating in such distribution will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including,
without limitation, Regulation M, which may limit the timing or purchases
and sales of any of the securities by the Company and the Selling
Securityholders and any other such person.
The Company has agreed to pay the expenses of this offering, estimated
at $70,000 incidental to the registration, offering and sale of the
securities to the public.
Determination of Public Offering Price
The exercise price of the Class A Warrants has been determined by
negotiations between the Company and Stratton Oakmont, Inc., an underwriter
of the Company's initial public offering of securities on August 14, 1995.
Among the factors considered in the negotiations were an analysis of the
areas of activity in which the Company is engaged, the present state of the
Company's business, the Company's financial condition, the Company's
prospects, an assessment of management, the general condition of the securities
market and the demand for similar securities of comparable companies. The
exercise price of the Class A Warrants does not necessarily bear any
relationship to assets, earnings, book value or other riteria of value
applicable to the Company.
CERTAIN FEDERAL TAX CONSIDERATIONS
The following discussion is a general summary of certain anticipated United
States federal income tax consequences of the exercise or redemption of
Warrants as described herein. This discussion is based on currently existing
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing and proposed U.S Department of Treasury Regulations thereunder
("Regulations") and current administrative rulings and court decisions,
all of which are subject to change. Any such change, which may or may
ot be retroactive, could alter the tax consequences to holders of the
Warrants as described herein. As used herein, the term "United States Holder"
means a beneficial owner of a Warrant that for United States federal income
tax purposes is a citizen or resident alien of the United States, treated
as a domestic corporation or partnership formed under the laws of the United
States or any state thereof, or an estate or trust that is subject to United
States federal income taxation on a net income basis in respect of the
Warrants, and the term "Non-United States Holder" means the beneficial
owner of a Warrant who or that is not a United States Holder.
Holder of Warrants should be aware that this discussion does not deal with
all United States federal income tax considerations that may be relevant
to particular holders in light of their particular circumstances, such
as holders who are dealers in securities, banks, insurance companies or
tax-exempt organizations.
The following discussion does not address the tax consequences of
any of the available alternatives to holders of Warrants under foreign,
state or local tax laws or the tax consequences of transactions,
if any, effectuated prior to or after the consummation of any such alternative
(whether or not such transactions are undertaken in connection with such
alternative). ALL HOLDERS OF WARRANTS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS CONCERNING THE SPECIFIC TAX CONSEQUENCES OF THE ALTERNATIVES
AVAILABLE TO THEM.
Exercise. As a general rule, no gain or loss will be recognized
by a holder upon the exercise of the Warrants into Common Stock
(except to the extent of any cash received in lieu of fractional shares of
Common Stock). A holder's adjusted tax basis in the Common Stock received on
exercise of the Warrants will be equal to the sum of the holder's adjusted
tax basis in the Warrants plus the exercise price paid by the holder upon
exercise of the Warrant(s). The holding period for the Common Stock received
on exercise of the Warrants will include the holding period of the Warrants
exercised (assuming such Warrants are held as a capital asset at the time
of exercise). Holders of the Warrants should consult their tax advisors
on how to determine their respective adjusted tax basis in the Warrants
and adjusted holding periods for the Common Stock, especially if the holder
owns Warrants with different holding periods.
Tax on Non-United States Holders. A Non-United States Holder
will generally not be subject to U.S. income tax on any gain realized
upon the redemption of Warrants unless the gain is effectively connected
with the United State trade or business of the Non-United States Holder.
If the gain is effectively connected with a United States trade or business
of a Non-United States Holder, the gain will be included in with his other
net income effectively connected with a United States trade or business
and will be taxed at the graduated income tax rates generally applicable
to U.S. taxpayers.
Withholding Tax - Non-United States Holder. Since gain of a Non-United
States Holder that is not effectively connected with United States
business of that holder will not be subject to United States Income
Tax, that gain will also not be subject to any withholding tax. If
the gain is effectively connected with a United States trade or business,
it will be subject to withholding tax in the same manner as income of
United States taxpayer.
Tax on United States Holders. The redemption of Warrants will result
in gain or loss to the selling holder in an amount equal to the amount
received on redemption of the Warrants and the United States Holder's adjusted
tax basis in those Warrants.
Provided that the Warrants were held by the United States Holder as a
capital asset, the gain or loss will be a capital gain or loss for United
States income tax purposes. To determine the amount of income tax to be
paid by a United States Holder on the redemption of the Warrants, the
United States Holder will first net his capital losses for the year
against capital gains under ordering rules specified in the Code and
the Regulations. Any capital gains and losses attributable to the redemption
of the Warrants will be included in this netting. To the extent that a
United States holder has, after so netting capital gains and losses,
net capital gains attributable to the redemption of Warrants, the rate of
United States Income Tax for individual taxpayers will generally be 20% if
the Warrants had been held by the United States Holder for more than 12,
but not more than 18, months as of the date of redemption,
and the rate that applies to ordinary income (that is, a
graduated rate up to a maximum of 39.6%) if such Warrant has been held
by such individual for no more than 12 months as of the date of redemption.
Withholding Tax on United States Holders. The redemption of the
Warrants will ordinarily not be subject to backup withholding of United
States federal income taxes. However, the Warrant Agent will be required to
withhold tax at the rate of 31% from redemption proceeds paid to United States
Holders who (i) have failed to furnish their taxpayer identification number
("TIN") to the Warrant Agent; (ii) have, aaccording to the Internal Revenue
Service of the U.S. Department of the Treasury ("IRS"), furnished incorrect
TIN to the Warrant Agent; have, according to the IRS, underreported dividend or
patronage income in the past; or (iv) have failed to satisfy the payee
certification requirements of Section 3406 of the Code.
Each United States Holder who sells the Warrants, or whose Warrants are
redeemed, will be required to provide and certify his or her correct TIN and
to certify that he or she is an exempt recipient. A Non-United States Holder
will generally not be subject to withholding tax at the rate of 30% (or,
if applicable, a lower treaty rate) from redemption proceeds attributable
to market discount of the Warrants.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH HOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX
ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER
(INCLUDING THE APPLICABILITY AND EFFECT OF THE CONSTRUCTIVE OWNERSHIP
RULES AND STATE, LOCAL AND FOREIGN TAX LAWS) OF THE EXERCISE OR REDEMPTION
OF THE WARRANTS.
LEGAL PROCEEDINGS
Neither MVSI, Inc. nor any of its wholly owned subsidiaries is
a party to any material legal proceedings.
LEGAL MATTERS
The validity of the securities being offered hereby will be passed
upon for the Company by Paul W. Richter, General Counsel and Secretary
of MVSI, Inc., 8133 Leesburg Pike, Suite 750, Vienna, Virginia 22182. Mr.
Richter does not beneficially own any shares of Common Stock. The Company
granted Mr. Richter in April, 1997 a qualified stock option to purchase
25,000 shares of Common Stock at an exercise price of $2.94 per share.
EXPERTS
The financial statements of MVSI, Inc. and Subsidiaries
as of September 30, 1996 and each of the years in the two year period
ended September 30, 1996, included in the Annual Report on Form 10-KSB for
the year ended September 30, 1996, which are incorporated by reference
in the Registration Statement and this Prospectus, have been included herein
in reliance on the report dated November 22, 1996, of Grant Thornton LLP,
Independent Certified Public Accountants, and upon the authority of such
firm as experts in accounting and auditing.
No dealer, salesman or other person has been authorized to give
any information or to make any representations not contained in this
Prospectus in connection with the offer made hereby. If given or made, such
information or representation must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer
of any securities other than the securities to which it relates or
an offer to any person in any jurisdiction in which such an offer
would be unlawful. Any material modification of the offering will be
accomplished by means of an amendment to the registration statement.
In addition, the right is reserved by the Company to cancel
any confirmation of sale prior to the release of funds, if, in
the opinion of the Company, completion of such sale would violate federal
or state securities laws or a rule or policy of the National Association of
Securities Dealers, Inc., Washington, D.C. 20006.
5,140,000 Class A Warrants
5,140,000 Shares, Underlying
Class A Warrants
and
180,000 Units, Underwriters' Purchase Option
360,000 Shares, Underlying Underwriters' Purchase Option
360,000 Class A Warrants, Underlying Underwriters' Purchase Option
360,000 Shares, Underlying Class A Warrants
MVSI, INC.
PROSPECTUS
PART TWO
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemization of expenses, payable by the Company from
the net proceeds of this offering, incurred by the Company in connection
with the issuance and distribution of the securities of the Company being
offered hereby. The Company has agreed to pay all of the expenses related to
the registration of the securities by the Selling Securityholders and their
assigns, which are included herein. All expenses are estimated except the
Commission Registration and Filing Fees. See "Use of Proceeds."
Commission Registration and Filing Fee (1) $10,074
Financial Printing... $ 1,500
Transfer Agent Fees.. $ 7,500
Warrant Agent Fees... $ 7,500
Accounting Fees and Expenses $15,000
Legal Fees and Expenses $10,000
Blue Sky Fees and Expenses $10,000
Miscellaneous $ 8,426
TOTAL $70,000
(1) Paid upon initial filing of this Registration Statement and
related Prospectus.
Item 15. Indemnification of Directors and Officers.
As permitted by Delaware law, the Company's Certificate of Incorporation
includes a provision which provides that a director of the Company shall
not be personally liable to the Company or its stockholders for monetary
damages for a breach of fiduciary duty as a director, except (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of the law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware, which prohibits the unlawful
payment of dividends or the unlawful repurchase or redemption of stock, or
(iv) for any transaction from which the director derives an improper personal
benefit. This provision is intended to afford directors protection against,
and to limit their potential liability for monetary damages resulting from,
suits alleging a breach of the duty of care by a director. As a consequence
of this provision, stockholders of the Company will be unable to recover
monetary damages against directors for action taken by them that may
constitute negligence or gross negligence in performance of their duties
unless such conduct falls within one of the foregoing exceptions.
The provision, however, does not alter the applicable standards governing a
director's fiduciary duty and does not eliminate or limit the right of the
Company or any stockholder to obtain an injunction or any other type of
nonmonetary relief in the event of a breach of fiduciary duty. Management
of the Company believes this provision will assist the Company in securing
and retaining qualified persons to serve as directors. The Company is
unaware of any pending or threatened litigation against the Company or its
directors that would result in any liability for which such director
would seek indemnification or similar protection.
Such indemnification provisions are intended to increase the
protection provided directors and, thus, increase the Company's ability to
attract and retain qualified persons to serve as directors. Because directors
liability insurance is only available at considerable cost and with low
dollar limits of coverage and broad policy exclusions, the Company does
not currently maintain a substantial amount of liability insurance for the
benefit of its directors although the Company may attempt to acquire
additional insurance in the future. The Company believes that the
substantial increase in the number of lawsuits being threatened or filed
against corporations and their directors and the general unavailability of
directors liability insurance to provide protection against the increased
risk of personal liability resulting from such lawsuits have combined
to result in a growing reluctance on the part of capable persons to
serve as members of boards of directors of public companies. The Company
also believes that the increased risk of personal liability
without adequate insurance or other indemnity protection for its
directors may result in overcautious and less effective direction and
management of the Company. Although no directors have resigned or have
threatened to resign as a result of the Company's failure to provide
insurance or other indemnity protection from liability, it is uncertain
whether the Company's directors would continue to serve in such capacities if
improved protection from liability were not provided. The provisions
affecting personal liability do not abrogate a director's fiduciary duty
to the Company and its shareholders, but eliminate personal liability for
monetary damages for breach of that duty. The provisions do not, however,
eliminate or limit the liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly
violating a law, for authorizing the illegal payment of a dividend
or repurchase of stock, for obtaining an improper personal benefit,
for breaching a director's duty of loyalty (which is generally described
as the duty not to engage in any transaction which involves a conflict
between the interest of the Company and those of the director) or for
violations of the federal securities laws.
The provisions also limit or indemnify against liability resulting
from grossly negligent decisions including grossly negligent business
decisions relating to attempts to change control of the Company.
The provisions regarding indemnification provide, in essence, that
the Company will indemnify its directors against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with any action, suit or proceeding
arising out of the director's status as a director of the Company, including
actions brought by or on behalf of the Company (shareholder derivative
actions). The provisions do not require a showing of good faith. Moreover, they
do not provide indemnification for liability arising out of willful
misconduct, fraud, or dishonesty, for "short-swing" profits violations
under the federal securities laws, or for the receipt of illegal remuneration.
The provisions also do not provide indemnification for any liability
to the extent such liability is covered by insurance. One purpose of
the provisions is to supplement the coverage provided by such insurance.
However, as mentioned above, the Company does not currently provide such
insurance to its directors, and there is no guarantee that the Company will
provide such insurance to its directors in the near future although the
Company may attempt to obtain such insurance. The provisions diminish the
potential rights of action which might otherwise be available to
shareholders by limiting the liability of officers and directors to
the maximum extent allowable under Delaware law and by affording
indemnification against most damages and settlement amounts paid by
a director of the Company in connection with any shareholders
derivative action. However, the provisions do not have the effect of
limiting the right of a shareholder to enjoin a director from
taking actions in breach of his fiduciary duty, or to cause the Company
to rescind actions already taken, although as a practical matter
courts may be unwilling to grant such equitable remedies in circumstances
in which such actions have already been taken. Also, because the Company
does not presently have a substantial amount of directors liability insurance
and because there is no assurance that the Company will procure such
insurance or that if such insurance is procured it will provide coverage
to the extent directors would be indemnified under the provisions,
the Company may be forced to bear a portion or all of the cost of the
director's claims for indemnification under such provisions. If the
Company is forced to bear the costs for indemnification, the value
of the Company stock may be adversely affected. In the opinion of
the Securities and Exchange Commission, indemnification for liabilities
arising under the Securities Act of 1933 is contrary to public policy
and, therefore, is unenforceable.
Item 16. Exhibits and Financial Statement Schedules.
This following is a list of Exhibits filed herewith by MVSI, Inc. as part
of the Registration Statement and related Prospectus:
1.0 Form of Underwriting Agreement. (incorporated by reference to
Exhibit 1.0 to Amendment No. 5 to Registration Statement on
Form SB-2 (File No. 33-89194), filed with Commission on July 13, 1995)
1.1 Selected Dealers Agreement. (incorporated by reference to
Exhibit 1.1 to Amendment No. 5 to Registration Statement on Form SB-2
(File No. 33-89194), filed with Commission on July 13, 1995)
1.2 Form of Agreement Among Underwriters. (incorporated by reference to
Exhibit 1.2 to Amendment No. 5 to Registration Statement on Form
SB-2 (File No. 33-89194), filed with Commission on July 13, 1995)
3.0 Certificate of Incorporation, filed April 12, 1994. (incorporated by
reference to Exhibit 3.0 to Registration Statement on Form SB-2 (File
No. 33-89194), filed with Commission on February 9, 1995)
3.1 By-laws, as amended. (incorporated by reference to Exhibit 3.1 to
Registration Statement on Form SB-2 (File No. 33-89194), filed with
Commission on February 9, 1995)
4.0 Specimen Copy of Common Stock Certificate. (incorporated by reference
to Exhibit 4.0 to Registration Statement on Form SB-2 (File No.
33-89194), filed with Commission on February 9, 1995)
4.1 Form of Class A Warrant Certificate. (incorporated by reference to
Exhibit 4.1 to Registration Statement on Form SB-2 (File No. 33-89194),
filed with Commission on February 9, 1995)
4.2 Form of Class B Warrant Certificate. (incorporated by reference to
Exhibit 4.2 to Amendment No. 5 to Registration Statement on Form SB-2 (File
No. 33-89194), filed with Commission on July 13, 1995)
4.3 Form of Underwriter's Purchase Option. (incorporated by reference
to Exhibit 4.3 to Amendment No. 5 to Registration Statement on Form SB-2
(File No. 33-89194), filed with Commission on July 13, 1995)
4.4 Form of Warrant Agreement (incorporated by reference to Exhibit 4.4 to
Amendment No. 5 to Registration Statement on Form SB-2 (File No. 33-89194),
filed with Commission on July 13, 1995)
4.4.1 Amendment #1 to Warrant Agreement, dated November 11, 1997
(Filed herewith on page 34 of the Registration Statement)
5.0 Opinion of Paul W. Richter, Esq. For Registrant. (Filed herewith on
page 36 of the Registration Statement)
10.0 Stock Purchase Agreement and Plan of Reorganization, dated November
1, 1994. (incorporated by reference to Exhibit 10 to Registration Statement
on Form SB-2 (File No. 33-89194), filed with Commission on February 9, 1995)
10.1 Employment Agreement, Edward Ratkovich, Maj. Gen., USAF (ret.)
(incorporated by reference to Exhibit 10.1 to Registration Statement
on Form SB-2 (File No. 33-89194), filed with Commission on February 9, 1995)
10.2 Employment Agreement, Louis K. Lukanovich. (incorporated by reference
to Exhibit 10.2 to Registration Statement on Form SB-2 (File No. 33-89194),
filed with Commission on February 9, 1995)
10.3 Employment Agreement, Bojko D. Vodanovic. (incorporated by
reference to Exhibit 10.3 to Registration Statement on Form SB-2
(File No. 33-89194), filed with Commission on February 9, 1995)
10.4 Texas Instruments Incorporated Agreement, dated April 1, 1994.
(incorporated by reference to Exhibit 10.4 to Registration Statement on
Form SB-2 (File No. 33-89194), filed with Commission on February 9, 1995)
10.5 Possehl Hong Kong Precision Machining Ltd. Agreement, dated
April 28, 1994 (incorporated by reference to Exhibit 10.5 to Registration
Statement on Form SB-2 (File No. 33-89194), filed with
Commission on February 9, 1995)
10.6 NJC Technical Letter, dated July 21, 1994. (incorporated by
reference to Exhibit 10.6 to Registration Statement on Form SB-2 (File No.
33-89194), filed with Commission on February 9, 1995)
10.7 NRC License Agreement, dated September 12, 1986 (incorporated
by reference to Exhibit 10.7 to Registration Statement on Form SB-2
(File No. 33-89194), filed with Commission on February 9, 1995)
10.8 MRCO License Agreement, dated February 25, 1994.
(incorporated by reference to Exhibit 10.8 to Registration Statement
on Form SB-2 (File No. 33-89194), filed with Commission on
February 9, 1995)
10.9 United States Patent, Number 5,406,372, dated April 11, 1995.
(incorporated by reference to Exhibit 10.9 to Registration Statement
on Form SB-2 (File No. 33-89194), filed with Commission on February 9, 1995)
10.10 Consent and Waiver, dated June 30, 1995. (incorporated by
reference to Exhibit 10.10 to Amendment No. 5 to Registration Statement
on Form SB-2 (File No. 33-89194), filed with Commission on July 13, 1997)
24.0 Consent of Paul W. Richter, Esq. Is contained on page 38
of the Registration Statement.
24.1 Consent of Grant Thornton LLP is contained on page 39 of
the Registration Statement.
25.0 Power of Attorney appointing Paul W. Richter is contained
on page 38 of the Registration Statement.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 14,
or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which any offers or sales are
being made, a post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any other material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed withor furnished to the Commission by the registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That for the purpose of determining any liability under the
Act each such post-effective amendment may be deemed to be a
new registration statement relating to the securities being offered
therein and the offering of such securities as the time may be deemed
to be initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities, which are being, registered which
remain unsold at the termination of the offering.
(4) That, for the purpose of determining any liability
under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Fairfax, Virginia on November
12, 1997.
MVSI, INC.
By: /S/ EDWARD RATKOVICH
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
as amended, this registration statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
EDWARD RATKOVICH 11/12/97
Edward Ratkovich Chairman of the
Board, President and
Chief Executive Officer
/s/ MARK J. MCKNIGHT
Mark J. McKnight, Chief Financial Officer,
Controller and Assistant
Secretary 11/12/97
/s/ EDWARD P. ROBERTS
Edward P. Roberts Director 11/12/97
/s/ CLIVE G. WHITTENBURY, Director
Clive G. Whittenbury, Ph.D. 11/12/97
/s/ Abbas Fathi
Abbas Fathi Director 11/12/97
/s/ Jeffrey M. Rubin Director 11/12/97
Jeffrey M. Rubin
/s/ James M. Ewan Director 11/12/97
James M. Ewan,
Exhibit 4.4.1
Amendment #1 to the Warrant Agreement
This Amendment Number 1 to the Warrant Agreement, dated November 11, 1997,
("Amendment Number 1") is by and between MVSI, Inc., a Delaware corporation
("Company") and American Stock Transfer & Trust Company, as Warrant Agent
(the "Warrant Agent"). The Company and the Warrant Agent shall hereinafter
also be referred to individually as a "party" and collectively as the
"parties".
RECITALS
WHEREAS, the Company and the Warrant Agent entered into a Warrant
Agreement, dated August 14, 1997, (the "Warrant Agreement") in connection
with the Company's filing of a registration statement on Form SB-2
(File Number 33-89194) (the "Registration Statement") on February 14,
1995 with the Securities and Exchange Commission to register 5,140,000
Class A Warrants, 5,140,000 Shares, Underlying Class A Warrants, 1,000,000
Shares, Underlying Class B Warrants, 180,000 Units, Underwriters' Purchase
Option, 360,000 Shares, Underlying Underwriters' Purchase Option, 360,000
Class A Warrants, Underlying, 360,000 Shares, Underlying Class A Warrants;
and
WHEREAS, the Warrant Agreement contains conflicting language
concerning the deadline for exercising the Class A Warrants and Class B
Warrants (collectively, the "Warrants") in the event of a redemption
under Section 9 of the Warrant Agreement, which conflict consists of
Section 8(c) and Section 8(d) of the Warrant Agreement referring to
5:00 p.m., local New York City time, on the business day immediately
preceding the Redemption Date while Section 1(i) and Section 4 of the
Warrant Agreement provides that the Warrants are exercisable until
5:00 p.m., local New York City time, on the earlier of the August 14,
2000 or the Redemption Date; and
WHEREAS, the Company and Warrant Agent wish to resolve this
conflict in a manner that is most favorable to the holders of the
Warrants and by means of and subject to the terms and conditions of
this Amendment Number 1.
NOW, THEREFORE, the parties hereby agree and covenant, for
the mutual promises set forth herein and for good and valuable consideration,
the sufficiency of which is hereby acknowledged by each party, as follows:
Section 1. Recitals. The above preamble, definitions and recitals are hereby
made a part of this Amendment Number 1.
Section 2. Amendment of Section 8(c)(iv) of the Warrant Agreement.
Section 8(c)(iv) ofthe Warrant Agreement is hereby stricken in its entirety
and replaced with new Section 8(c)(iv) of the Warrant Agreement, which
reads as follows:
"(iv) that the right to exercise the Warrant shall terminate at 5:00 p.m.,
(New York City Time) on the Redemption Date".
Section 3. Amendment of Section 8(d) of the Warrant Agreement. Amendment of
Section 8(d) of the Warrant Agreement is hereby stricken in its entirety and
replaced by new Section 8(d), which reads as follows:
"(d) Any right to exercise a Warrant shall terminate at 5:00 p.m.,
(New York City time) on the Redemption Date. After 5:00 p.m.,
(New York City time), on the Redemption Date,
Holders of the Warrants shall have no further rights except to receive, upon
surrender of the Warrant(s), the Redemption Price."
Section 4. Time. Any and all references in the Warrant Agreement to
"New York Time" shall be stricken in its entirety and replaced with
"(New York City Time)".
Section 5.Incorporation. The Warrant Agreement and this Amendment Number 1
shall be construed and read as a single agreement and instrument. Any
ambiguity or conflict between the Warrant Agreement and this Amendment Number
1 shall be resolved by reference to this Amendment Number 1.
Section 6. Miscellaneous. (a) Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be deemed to be
an original but together shall will constitute one and the same instrument.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(c) Authority. Each party has the requisite legal authority to enter
and perform its respective obligations under this Amendment Number 1.
Each party hereby represents to the other party that the execution of
this Amendment Number 1 does not, to the best of each party's knowledge
and belief, violate any contract, charter or by-law provision, board
resolution, law or court order.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first written above.
MVSI, INC., a Delaware corporation
Signature: __________________/s/________________________
Paul W. Richter, General Counsel and Secretary
Date: November 11, 1997 SEAL
AMERICAN STOCK TRANSFER & TRUST COMPANY, the Warrant Agent
By: __________________/s/__________________________
Name/Title: Herb Lemmer, General Counsel
Date: November 11, 1997
Exhibit 5.0
[Letterhead of MVSI, Inc.]
November 5, 1997
Board of Directors
MVSI, Inc.
8133 Leesburg Pike
Suite 750
Vienna, Virginia 22182
Gentlemen:
Pursuant to your request and in connection with the preparation of a
post-effective amendment to the Registration Statement on Form SB-2
(File No. 33-89194) (the "Registration Statement"), covering the resale,
from time to time, of (a) 5,140,000 Class A Warrants by certain holder
thereof which were acquired in connection with the Company's initial public
offering ("Offering") of securities, which public offering was declared
effective by the Securities and Commission ("Commission") on August 14, 1995;
(b) 360,000 Class A Warrants, by the underwriters, and their assigns, which
comprise the Underwriters' Purchase Option issued to the underwriters in
connection with the Offering, (c) 5,140,000 shares of Common Stock underlying
the Class A Warrants and issuable upon the exercise of the Class A Warrants;
and (d) 1,000,000 shares of Common Stock underlying the Class B Warrants and
issuable upon exercise of the Class B Warrants. The Class A Warrants and
Class B Warrants shall hereinafter also be referred to as the "Warrants".
This opinion is delivered in accordance with the requirements of
Regulation S-B under the Securities Act of 1933, as amended (the "Act").
I have examined and I am familiar with originals or copies, certified or
otherwise identified to our satisfaction, of (a) the Registration Statement
on Form SB-2 (File No. 33-89194) as filed with the Securities and Exchange
Commission on February 9, 1995, (b) all pre-effective amendments thereto,
(c) the Warrant Agreement, dated as of August 14, 1995, between the Company
and American Stock Transfer & Trust Company relating to the Warrants,
(d) post-effective amendment number 1 on Form S-3 to the Registration
Statement, (e) the Company's Certificate of Incorporation, as in effect
at the time of the issuance of the Warrants and as presently in effect,
(f) the Company's by-laws, as in effect at the time of the issuance
of the Warrants and as presently in effect, (g) the form of a specimen
certificate representing the Common Stock, Class A Warrant and Class
B Warrant, (h) the Underwriters' Purchase Option Agreement and all
related forms, (i) resolutions of the Board of Directors of the Company
and (j) such other documents as I have deemed necessary and appropriate
as a basis for the opinions set forth below.
In my examination, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of
all documents submitted or marked as "originals", the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. In making my examination of documents executed by parties
other than the Company, I have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and the execution and delivery by such parties of such documents and
the validity and binding effect thereof. As to any facts material to the
opinions expressed herein which we have not independently established or
verified, I have relied upon statements and representations of officers
and other representatives of the Company and others.
Based on the foregoing, and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, and assuming conformity of the
certificates representing the Common Stock to be issued upon exercise of the
Warrants to the specimens thereof examined by me and that such certificates
will be manually signed by one of the duly authorized officers of the
transfer agent and registrar for the Common Stock appointed by the Company
and registered by such transfer agent and registrar, I am of the opinion that
the Common Stock initially issuable upon the exercise of the Warrants
has been duly authorized, and when issued and delivered against
payment therefor in accordance with the terms of the Warrants and
the Warrant Agreement, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. I also consent
to the reference to me under the caption "Legal Matters" in the
Registration Statement.
Sincerely,
Paul W. Richter
General Counsel and Secretary
Exhibit 24
CONSENT OF COUNSEL
The consent of Paul W. Richter, General Counsel and Secretary, to the use of
his name in this Form S-3 Registration Statement, and related Prospectus, as
amended, of MVSI, Inc. is contained in his opinion filed as Exhibit 5.0
hereto.
Exhibit 24
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports, dated November 22, 1996, accompanying the
consolidated financial statements of MVSI, Inc., and subsidiaries included in
the Annual Report on Form 10-KSB for the year September 30, 1996, which is
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the
aforementioned reports and to use of our name as it appears under the
caption "Experts."
GRANT THORNTON, LLP
Vienna, Virginia
November 10, 1997
EXHIBIT 25
POWER OF ATTORNEY
Each of the undersigned directors of MVSI, Inc., a Delaware corporation (the
"Company"), which proposes to file with the Securities and Exchange Commission
("Commission") a post-effective amendment number two to the registration
statement to Form SB-2 on Form S-3 registration statement (File No. 33-89194)
("Registration Statement") to register the shares of Common Stock,
$.01 par value, underlying the Company's Class A Warrants and Class B
Warrants under the Securities Act of 1933, as amended, hereby appoints
Paul W. Richter for him and in his name to be his lawful attorney-in-fact
with full power to sign and affix his name as such director
of the Company to the Registration Statement and any amendments thereto,
including any post-effective amendments thereto, which said attorney-in-fact
may deem necessary or proper and to file the same, with all exhibits thereto
and other supporting documents, with the Commission, and granting unto
said attorney-in-fact full power and authority to do and perform any and
all acts necessary or incidental to the performance and execution of
the powers herein expressly granted.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his
hand on this 12th day of November 1997.
/s/ Edward Ratkovich
Edward Ratkovich
/s/ Clive Whittenbury
Clive Whittenbury
/s/ E. Paul Roberts
E. Paul Roberts
/s/ Abbas Fathi
Abbas Fathi
/s/ Jeffrey Rubin
Jeffrey Rubin
/s/ James Ewan
James M. Ewan
