As Filed with the Securities and Exchange Commission July 3,2001
Registration No. 333-62912
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Post-Effective Amendment No. 1
to
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
View Systems, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Florida
(State or Other Jurisdiction of Incorporation or Organization)
59-2928366
(I.R.S. Employer Identification No.)
925 West Kenyon Avenue, Suite 15, Englewood, Colorado 801106
(Address of Principal Executive Offices) (Zip Code)
View Systems Consulting Agreements (240,000 shares)
View Systems Employment Agreements (114,000 shares)
(Full Title of the Plan)
Gunther Than
President and Chief Executive Officer
925 West Kenyon Avenue, Suite 15
Englewood, Colorado 80110
(Name and Address of Agent for Service)
(303) 783-9153
Telephone Number, Including Area Code, of Agent For Service
================================================================================
Calculation of Registration Fee
================================================================================================================
Proposed Maximum
Offering Proposed Amount of
Title of Securities Amount To Be Price Per Share2 Maximum Registration
To Be Registered Registered1 Offering Price Fee3
Common Stock, 354,000 shares $.545 $192,930 $48.23
Par Value, .001
================================================================================================================
1 In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plans described herein.
2 Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 (c) based on the average of the high and low prices
reported on the OTCBB on June 12, 2001, which was $.545.
3 Fee Previously paid.
EXPLANATORY NOTE
This registration statement is being filed as a post-effective
amendment to Registration Statement on Form S-8 (Registration No. 333-62912)
filed with the Securities and Exchange Commission on July 3, 2001.
This registration statement registers reoffers and resales of shares of
common stock, issued under the employment agreement of Gunther Than, President
and Chief Executive Officer of View Systems, Inc., which may constitute "control
securities" under General Instruction C to Form S-8. These control securities
may be re-offered and resold on a continuous or delayed basis in the future
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act").
This registration statement contains two parts. The first part contains
a "reoffer prospectus" prepared in accordance with Part I of Form S-3 (in
accordance with Instruction C of Form S-8). The second part contains information
required in the registration statement pursuant to Part II of Form S-8.
REOFFER PROSPECTUS
VIEW SYSTEMS, INC.
90,000 Shares of Common Stock
under an Employment Agreement
of View Systems, Inc.
The shares we are registering are currently held by Gunther Than, our
President and Chief Executive Officer, pursuant to his employment agreement. We
will pay the expenses of registering his shares.
Our common stock is quoted on the Nasdaq Over-The-Counter Bulletin
Board under the symbol "VYST." The last reported sale price of the common stock
on the Nasdaq Over-The-Counter-Bulletin-Board on June 12, 2001 was $0.52 per
share.
You should carefully consider the "Risk Factors" section beginning on
page 2 of this Reoffer Prospectus.
Neither the Securities and Exchange Commission or any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this Reoffer Prospectus is July 3, 2001.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY 1
ABOUT VIEW SYSTEMS, INC. 1
THE OFFERING 2
RISK FACTORS 2
CAUTIONARY NOTE
CONCERNING FORWARD LOOKING STATEMENTS 11
PROCEEDS FROM SALE OF THE SHARES 12
SELLING STOCKHOLDER 12
HOW THE SHARES MAY BE DISTRIBUTED 13
LEGAL OPINION 14
EXPERTS 14
WHERE YOU CAN FIND MORE INFORMATION 14
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 14
INDEMNIFICATION OF DIRECTORS AND OFFICERS 16
PROSPECTUS SUMMARY
This is only a summary and does not contain all of the information that
may be important to you. You should read the more detailed information contained
in this prospectus and all other information, including the financial
information and statements with notes, referred to in this prospectus as
discussed in the "Where You Can Find More Information" section of this
prospectus. The principal executive office of View Systems, Inc. is located at
925 West Kenyon Avenue, Suite 15, Englewood, Colorado 801106. Our telephone
number is (303) 783-9153.
ABOUT VIEW SYSTEMS, INC.
We incorporated in Florida in January, 1989 but did not become active
until September, 1998 when Gunther Than joined us as our president and we began
development of our product line. In May, 1999, we acquired Eastern Tech
Manufacturing Corp ("ETMC"), a contract manufacturer of electronic hardware and
assemblies which business we have continued to date on a limited basis and whose
facilities we use to manufacture our products. In March, 1999, we made our first
sales of our security and surveillance products. The potential market for
security and surveillance products and services throughout the world is huge and
has been enhanced by digital technology.
We develop, produce and market digital security and surveillance
systems utilizing video based cameras and microphones which are marketed under
the trade name SecureView. Our security systems record video images digitally
and permit their viewing remotely over the customer's existing closed circuit
television (CCTV) systems together with audio output over ordinary telephone
lines. We store the video output on computer hard disks rather than VCR tapes
which significantly improves access to stored data. In addition, our systems are
programmable and are capable of being customized to satisfy each customer's
special requirements, be it coverage which is continuous or when events are
detected. Our digital systems also employ digital video data compression which
saves space and time for transmissions.
In addition to SecureView, our products include the following:
o ViewStorage which is a competitively priced
programmable VCR replacement device that records
video output digitally for use with existing CCTV
systems and which will not degrade as tapes do.
o PlateView which is a license plate recognition system
that uses optical character recognition technology to
provide an additional means of identifying
individuals in a surveillance area for commercial or
law enforcement use.
o CareView which is a system for monitoring loved ones
such as children at a day care center or at home with
a baby sitter or adult relatives at a nursing home or
hospice.
o WebView which is a low-priced retail product that
allows a user to capture and view remotely camera
output from a limited number of cameras via a
connection to a server which in turn is connected to
the world-wide web for use by a customer desiring a
low cost way to monitor remote assets such as a home
or boat.
We currently market our products principally to commercial users for
monitoring facilities for the protection of employees, customers and assets
which leads to the curtailment of crime and loss prevention. We also market our
products to residential users and law enforcement agencies. We currently
distribute our products through a network of twenty value-added domestic and
international resellers which we intend to significantly expand.
THE OFFERING
The selling stockholder may offer and sell up to 90,000 shares of our
common stock under this Reoffer Prospectus. We will not receive any of the
proceeds from the sale of these shares of common stock. See "Proceeds from the
Sale of Shares" and "Selling Stockholder."
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors before investing in our
common stock.
Risks Relating to Our Business
We have a limited operating history with our products and we may experience
difficulties in development, assembly and production of our products.
We may not be able to successfully develop all of our products because
of their complex engineering, assemble them because of our lack of experience or
profitably make them because of our inability to buy components at discounted
prices.
It will be difficult for our engineers to develop WebView, CareView and
ViewStorage so they can be marketed and provide enhancements and upgrades that
we anticipate will be needed for PlateView and SecureView (see "Description of
Business - Our Products"). New products and enhancements and upgrades for our
existing products require the design of complex electronic circuitry and the
development of long and complex software code instruction sets to power our
computer hardware. Our engineers may discover that they can not economically
design the new products we have conceived in our business plan or make
enhancements and upgrades to our products in response to problems discovered
from field installations, technological advances in competing products or
components, or new functionality required by the marketplace. In that event, we
may be forced to abandon products that are currently in our business plan,
either because they are no longer feasible or would not be profitable to
manufacture and sell.
To produce our products, we must successfully convert our subsidiary
ETMC's manufacturing capacity to production of our products. When we bought it,
ETMC was in the business of electronic component assembly, typically assembly of
cables, computer circuits and wire harnesses. Production of our products
requires that we implement new manufacturing processes that assure the quality
required by our industry. Because it is difficult to develop, implement and
maintain these required types of manufacturing processes, there is no assurance
that we will be able to do that.
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To profitably produce our products, we must obtain components assembled
into our products at prices that are discounted by our suppliers because of
large quantity orders and there is no assurance we will be able to do that. We
do not have sufficient sales of our products to justify large quantity component
orders and there is no assurance that we will achieve these sales.
We have experienced development stage losses.
We commenced operations in September 1998. Although our company was
incorporated in 1989, we remained a shell company until the fall of 1998. We had
operating losses of $3,670,896 for the year ended December 31, 1999, and
$1,833,005 for the year ended December 31, 2000, and we expect these losses to
continue for the foreseeable future.
Sales of our products have been limited since we commenced operations.
As a result of the expenses we have incurred for research and development,
marketing, and hiring and retaining key personnel, our expenses have greatly
exceeded our revenues. For the foreseeable future, we expect these losses to
continue.
Most of our revenues to date have been produced from sales of contract
electronic assembly services. However, we can not achieve profitability with
this service revenue. Our profitability is dependent on our ability to increase
sales of our security and surveillance products. In order to increase such
sales, we will need to significantly increase our spending on items such as:
o development of enhancements and upgrades to our existing
SecureView line of products;
o research for new products; o marketing and business
development expenses; and
o employment related expenses for the hiring and retention of
key personnel.
If these expenses do not help us generate increased sales of our
security and surveillance products, we will not become profitable and we will be
forced to reevaluate our business plan.
Our capital is limited and we will need additional financing to implement our
business plan and continue operations.
We require substantial working capital to fund our business. We expect
that additional funds will be necessary for our company to implement our
business plan. We have developed a business plan to grow our company that
assumes that we will have additional capital available to us. Our business model
encompasses:
o the engagement of additional marketing and sales personnel;
o product development;
o software development; and
o the acquisition of laboratory and testing equipment.
Our ability to continue operations will depend on our positive cash flow, if
any, from future operations and on our ability to raise additional funds through
equity or debt financing. We
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anticipate that we will require approximately $3,000,000 for the remainder of
fiscal year 2001 to implement fully our business plan and growth strategy.
We will seek to obtain additional funds through sales of equity and/or
debt, or other external financing in order to fund our current operations and to
achieve our business plan. If we are unable to obtain financing in the amounts
desired and on acceptable terms, or at all, we may be required to reduce
significantly the scope of our presently anticipated expenditures, which could
have a material adverse effect on our growth prospects and the market price of
our common stock. If we raise additional funds by issuing equity securities, our
stockholders will be further diluted.
The successful operation of our business depends upon the supply of hardware and
software from third parties.
Our operations depend on a number of third parties for hardware and
software components. We have limited control over these third parties. We
assemble our systems by combining commercially available hardware and software
together with our proprietary software. We license software components that are
integrated into our proprietary software and installed on our systems. We have
license agreements for compression software components, facial recognition and
database search software components and optical character recognition software
components. Any breaches of these agreements by such third parties, or any
errors, failures, interruptions, or delays experienced in connection with these
third party technologies could negatively impact our relationship with users and
adversely affect our brand and our business, and could expose us to liabilities
to third parties.
Our services and reputation may be adversely affected by product defects or
inadequate performance.
We believe that we offer state-of-the art products that are reliable
and competitively priced. In the event that our products do not perform to
specifications or are defective in any way, our reputation may be materially
adversely affected and we may suffer a loss of business and a corresponding loss
in revenues.
We may face risks associated with potential acquisitions, investments, strategic
partnerships or other ventures, including whether such transactions can be
located, completed and the other party integrated with our business on favorable
terms.
As part of our long-term growth strategy, we may seek to acquire or
make investments in complementary businesses, technologies, services or products
or enter into strategic relationships with parties who can provide access to
those assets, if appropriate opportunities arise. From time to time, we may
enter into discussions and negotiations with companies regarding our acquiring,
investing in, or partnering with their businesses, products, services or
technologies. We may not identify suitable acquisition, investment or strategic
partnership candidates, or if we do identify suitable candidates, we may not
complete those transactions on commercially acceptable terms or at all.
Acquisitions often involve a number of special risks, including the following:
o we may experience difficulty integrating acquired operations,
products, services and personnel;
o the acquisition may disrupt our ongoing business;
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o we may not be able to successfully incorporate acquired
technology and rights into our service offerings and maintain
uniform standards, controls, procedures, and policies;
o we may not be able to retain the key personnel of the acquired
company;
o the businesses we acquire may fail to achieve the revenues and
earnings we anticipated; and
o we may ultimately be liable for contingent and other
liabilities, not previously disclosed to us, of the companies
that we acquire.
We may not successfully overcome problems encountered in connection
with potential future acquisitions. In addition, an acquisition could materially
adversely affect our operating results by:
o diluting your ownership interest;
o causing us to incur additional debt; and
o forcing us to amortize expenses related to goodwill and other
intangible assets.
Any of these factors could have a material adverse effect on our
business. These difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses. Furthermore, we may incur
indebtedness or issue equity securities to pay for any future acquisitions.
There are certain provisions of our Articles of Incorporation and Bylaws that
could have anti-takeover effects.
Certain provisions of our Articles of Incorporation, as amended, and
our bylaws could make more difficult our acquisition by means of a tender offer,
a proxy contest or otherwise and the removal of our incumbent officers and
directors. Our Articles of Incorporation and bylaws do not provide for
cumulative voting in the election of directors. Our bylaws permit the board of
directors to implement staggered terms for board members.
Our Articles of Incorporation exempt us from the Florida statutes
governing control-share acquisitions. Generally, under the statute, a person
intending to acquire 20% or more of our shares must give us notice of such
intent and request approval of the acquisition by our board of directors. If the
board of directors fails to approve the acquisition then such persons may
request a meeting of the stockholders at which stockholders will be given an
opportunity to vote on whether such shares will be accorded full voting rights.
Refusal by the stockholders to accord full voting rights would result in the
proposed acquirer obtaining shares that could not be voted on any matters to
come before the stockholders. Certain acquisitions are exempt from the effects
of the statute, such as mergers, business combinations or other acquisitions
that have been approved by the board of directors, as well as acquisitions of
shares issued by us in our original offering or in subsequent offerings approved
by the board.
Our success is dependent upon the protection of our intellectual property.
Certain features of our products and documentation are proprietary and
we rely on a combination of contract, copyright, trademark and trade secret laws
and other measures to protect our proprietary information. Our technology could
fall into our competitors' hands. We rely on keeping our technology secret from
our competitors. We do not have any patents for our product designs or
innovations. Further, we have not applied for copyright protection for our
computer
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schematic designs or software source code. At the same time, we have
entered into and expect to enter into business arrangements where we share our
proprietary technology with business partners and employees. These arrangements
are necessary to develop and sell our products. We require that these parties
sign agreements that they will keep our proprietary technology confidential.
There can be no assurance that these parties will honor their contractual
commitments.
As part of our confidentiality procedures, we generally enter into
confidentiality and invention assignment agreements with our employees and
consultants and mutual non-disclosure agreements with our manufacturing
representatives, dealers and systems integrators. We also limit access to and
distribution of our software, documentation and other proprietary information.
We cannot offer assurances that the steps we have taken will prevent
misappropriation of our technology or that agreements entered into for that
purpose will be enforceable. Notwithstanding the precautions we have taken, it
might be possible for a third party to copy or otherwise obtain and use our
proprietary information without authorization.
We may have to chose other trade identifiers for our products,
resulting in a loss of investment in these trade identifiers. We have not yet
applied for federal trademark protection for the trademarks associated with our
products, such as SecureView, CareView, WebView and ViewStorage. We may not be
able to register these trademarks with the US Patent and Trademark Office or we
may be forced to abandon these trademarks because other persons have established
proprietary rights in them.
We also rely on a variety of technologies that we license from third
parties. We cannot make any assurances that these third-party technology
licenses will continue to be available to the company on commercially reasonable
terms. Our inability to maintain or obtain upgrades to any of these technology
licenses could result in delays in completing our proprietary technology
enhancements and new developments until equivalent technology could be
identified, licensed or developed and integrated. Any such delays would
materially adversely affect our business, results of operations and financial
condition.
Intellectual property infringement claims would harm our business.
Although we do not believe that we are infringing the intellectual
property rights of others, claims of infringement are becoming increasingly
common as the software industry develops and legal protections, including
patents, are applied to software products. Litigation may be necessary to
protect our proprietary technology, and third parties may assert infringement
claims against us with respect to their proprietary rights. Any future claims or
litigation can be time-consuming and expensive regardless of their merit.
Infringement claims against us can cause product release delays, require us to
redesign our products or require us to enter into royalty or license agreements,
which agreements may not be available on terms acceptable to us or at all. In
the future, we may also need to file lawsuits to enforce our intellectual
property rights, to protect our trade secrets, or to determine the validity and
scope of the proprietary rights of others. Such litigation, whether successful
or unsuccessful, could result in substantial costs and diversion of resources,
which could have a material adverse effect on our business, results of
operations and financial condition.
Gunther Than's services are critical to the success of our company and if he
were to leave View Systems, it would have a detrimental effect on our company.
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We believe that the management and other experience of Gunther Than,
our President and Chief Executive Officer, is critical to our success and the
loss of his services would have a detrimental impact on our business. Although
Mr. Than has signed an employment agreement with us, this agreement may be
terminated by Mr. Than on not less than 60 days notice, subject to a one year
covenant not to materially compete with us. Our success will also depend on our
ability to hire and retain other qualified management, including trained and
competent research and technical, marketing and sales personnel.
We may not be able to keep up with market demands for product design and
development.
The market for our products is characterized by ongoing technological
development and evolving industry standards. Our success will depend upon our
ability to enhance our current products and to introduce new products that
address technological and market developments and satisfy the increasingly
sophisticated needs of customers. For instance, we initially released our
SecureView-4 into the market in July 1999. We cannot offer any assurances that
we will be successful in developing, marketing and selling sufficient volumes of
our SecureView-4 or developing and marketing on a timely basis any other fully
functional product enhancements or new products that respond to the
technological advances by others. There also can be no assurance that our new
products will gain satisfactory market acceptance.
We may be subject to product liability claims.
If an intrusion or other event that our products are designed to detect
occurs in a setting where our products have been installed, we may be subject to
a claim that an error or omission on our part contributed to the damages
resulting from such event, which damages could be substantial. Such a claim
could be made whether or not our product performed properly under the
circumstances. We carry product liability insurance which management believes is
adequate; however, a product liability judgment or settlement in excess of
available insurance proceeds could have a material adverse effect on our
financial condition and results of operations and any adverse claim or
settlement could have an adverse effect on the availability and cost to us of
product liability insurance.
Our failure to expand into international markets could harm our business.
In order to compete in our industry, we intend to continue to expand
our operations outside of the United States and enter additional international
markets, primarily through the establishment of additional reseller
arrangements. We expect to commit additional time and development resources to
customizing our products and services for selected international markets and to
developing international sales and support channels. We cannot assure that such
efforts will be successful.
We face certain difficulties and risks inherent in doing business
internationally, including, but not limited to:
o costs of customizing products and services for international
markets;
o dependence on independent resellers;
o multiple and conflicting regulations;
o exchange controls;
o longer payment cycles;
o unexpected changes in regulatory requirements;
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o import and export restrictions and tariffs;
o difficulties in staffing and managing international
operations;
o greater difficulty or delay in accounts receivable collection;
o potentially adverse tax consequences;
o the burden of complying with a variety of laws outside the
United States;
o the impact of possible recessionary environments in economies
outside the United States; and
o political and economic instability.
Our successful expansion into certain countries will require additional
modification of our products, particularly national language support. Our
current export sales are denominated in United States dollars and we currently
expect to continue this practice as we expand internationally. To the extent
that international sales continue to be denominated in U.S. dollars, an increase
in the value of the United States dollar relative to other currencies could make
our products and services more expensive and, therefore, potentially less
competitive in international markets. To the extent that future international
sales are denominated in foreign currency, our operating results will be subject
to risks associated with foreign currency fluctuation. We would consider
entering into forward exchange contracts or otherwise engaging in hedging
activities. To date, as all export sales are denominated in U.S. dollars, we
have not entered into any such contracts or engaged in any such activities. As
we increase our international sales, seasonal fluctuations resulting from lower
sales that typically occur during the summer months in Europe and other parts of
the world may affect our total revenues.
Risks Relating to Our Industry
Because we are subject to intense competition, primarily from larger more
established companies, we may not have the financial resources to increase our
market share.
The market for video surveillance and identification products is very
competitive and subject to rapid technological advances and the frequent
introduction of new and enhanced products. The industry in which we operate has
become even more competitive over the last several years as security issues and
concerns have become a primary consideration worldwide. With respect to close
circuit television (CCTV) system components and access control systems, there
are numerous companies that market directly or through distributors such
equipment to both retail and non-retail customers. We compete in marketing our
systems and products principally on the basis of product performance, multiple
technologies, service and price.
To compete successfully, we must continue to design, develop,
manufacture and sell new and enhanced products that will respond to customer
requirements and allow us to capture market share from our competitors. We
expect the intensity of competition to continue to put pressure on our
engineering research and development departments as existing competitors enhance
and expand their products. Any failure of our engineering department to keep
pace with technological advances could adversely affect our ability to capture
market share. Increased competition also may result in price reductions or
reduced gross margins as more companies compete with one another by lowering
prices. We must be able to keep our production costs low relative to our
competition.
Many of our competitors have advantages including established
positions, brand name recognition, greater assets, personnel, sales and
financial resources and established distribution networks. These larger more
established competitors include Polaroid Corporation, Loronix
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Information Systems, Sensormatic Corporation and NICE Systems, Ltd. The
distribution networks of these larger more established competitors gives them an
advantage in achieving higher sales volumes. If they can achieve higher sales
volumes, they can spread their costs over larger numbers of units, thereby
reducing their per unit production costs and increasing their profitability.
Competitors with greater financial resources may be able to offer lower
prices or other incentives that we cannot match or offer. Some of our
competitors produce a more comprehensive product line that may give them an
advantage in selling products competitive to ours. We cannot be certain that we
will be able to compete successfully against existing or other competition in
the future.
Our inability to keep up with technological changes in our industry and identify
emerging markets may render our products obsolete.
The industry in which we operate is characterized by unpredictable and
rapid technological changes and evolving industry standards. We will be
substantially dependent on our ability to identify emerging markets and develop
products that satisfy such markets. We cannot assure that we will be able to
accurately identify emerging markets or that any products we have or will
develop will not be rendered obsolete as a result of technological developments.
We believe that competition in our business will intensify as technological
advances in the field are made and become more widely known. Many companies with
substantially greater resources than ours are engaged in the development of
products similar to those we sell. Commercial availability of such products
could render our products obsolete, which would have a material adverse effect
on our company.
We may be subject to increased government regulation.
We are not subject to government regulation in the manufacture and sale
of our products or in the components in our products. However, our resellers and
end users will be subject to numerous federal, state, local and foreign
regulations that stem from proposed activities in surveillance. Security and
surveillance systems, including cameras, raise privacy issues. Our products
involve both video and audio. The regulations regarding the recordation and
storage of this data are uncertain and evolving. For example, under the Federal
wiretapping statute, the audio portion of our surveillance systems may not
record people's conversations without their consent. Further, there are state
and federal laws associated with recording video in non-public places. Shipments
of our products internationally may be regulated as to certain countries that
raise national security concerns. All of these regulations may be amended in
response to new scientific evidence or political or economic considerations. Any
significant change in regulations could adversely affect demand for our products
in regulated markets.
Risks Relating to our Common Stock and the Offering
Our stock price has been and may continue to be very volatile.
The market price of the shares of our common stock has been, and is
likely to be, highly volatile and could be subject to wide fluctuations in
response to factors such as:
o actual or anticipated variations in our results of operations;
o announcements of new products or technological innovations by
us or our competitors; and
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o general conditions in the digital imaging and computer
industries.
Further, the stock markets have experienced extreme price and volume
fluctuations that have particularly affected the market prices of equity
securities of many technology companies and that often have been unrelated or
disproportionate to the operating performance of such companies. These broad
market fluctuations may significantly and negatively affect the market price of
our common stock.
We have issued options and warrants that could have a dilutive effect on our
stockholders.
We have issued numerous options and warrants to acquire our common
stock that, upon exercise, could have a dilutive effect on our stockholders. As
of May 31 2001, we had issued options to purchase 107,692 shares of our common
stock, exercisable at prices ranging from $.01 to $2.07 per share, with a
weighted average exercise price of approximately $1.56 per share and warrants to
purchase 465,000 shares of our common stock, exercisable at prices ranging from
$.50 to $2.25 per share with a weighted average exercise price of approximately
$.675 per share. The increase in the outstanding shares of our common stock as a
result of the exercise of the options and warrants could result in a significant
decrease in the percentage ownership of our common stock by the purchasers of
our common stock.
Since we are subject to the penny stock rules, we are subject to extensive
government regulation, which makes it more difficult and expensive to raise
necessary capital and could impact the market for the shares.
Our common stock is subject to the "penny stock" rules. As long as the
price of our shares remains below $5.00 and we are unable to obtain a listing of
our stock on the NASDAQ System or other national stock exchange, we will be
subject to the "penny stock" rules. In general, the penny stock rules impose
requirements on securities brokers 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 incomes exceeding $200,000 or $300,000
together with their spouse), which tend to reduce the level of trading activity
in a stock. Among other things, these rules require that securities brokers:
o make a special suitability determination before recommending a
penny stock;
o deliver a risk disclosure document prior to purchase;
o 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; and
o provide customers with monthly statements containing recent
price information.
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell our common stock and may affect the ability to sell our common stock in
the secondary market.
In addition, we may decide to register additional shares of common
stock under the Securities Act after the closing of this offering for use by us
as consideration for future acquisitions. If we so decide, upon registration and
issuance, these shares generally will be freely tradable, unless the resale
thereof is contractually restricted or unless the holders thereof are subject to
the restrictions on resale provided under the Securities Act.
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Future sales of our common stock in the public market may depress our stock and
could limit our ability to raise capital.
The introduction of the shares offered under this prospectus into the
public market could depress the market price for our shares. In addition, we
have approximately 5,213,000 shares that are not registered, but could be sold
in limited amounts and with certain restrictions in the public market pursuant
to Rule 144 under the Securities Act. If the stockholders holding these shares
sell them in the public market, it could depress the price of our stock. Such
sales, or even the potential for such sales, could also effect our ability to
raise capital through the sale of equity securities.
The market for our company's securities is limited and may not provide adequate
liquidity.
Our common stock is currently traded on the Over-The-Counter Bulletin
Board (the "OTCBB"). As of May 31, 2001, there were 16 active market makers of
our common stock. In order to trade shares of our common stock, you must use one
of these 16 market makers, unless you trade your shares in a private
transaction. The average daily trading volume, as reported by the OTCBB over the
past 12 months commencing May 1, 2000 was 65,067 shares. However, in the 120
days prior to May 31, 2001, the actual trading volume ranged from a low of 5,700
shares of common stock to a high of 911,600 shares of common stock. This low
trading volume means there is limited liquidity in our shares of common stock
which result in a limited trading market for our common stock. In addition, the
price of our common stock as traded on the OTCBB is extremely volatile. During
the 120 days prior to May 31, 2001, the price difference between the daily low
and high price of our common stock as traded on the OTCBB ranged from a low of
$.47 per share to a high of $.78 per share. The variance in our share price
occurring on a daily basis makes it extremely difficult to forecast with any
certainty the stock price at which you may might be able to buy or sell your
shares of our common stock.
CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements under the federal
securities laws. We caution you to be aware of the speculative nature of
"forward-looking statements". We intend to identify forward-looking statements
in this prospectus using words such as "believes," "intends," "expects," "may,"
"will," "should," "plan," "projected," "contemplates," "anticipates," or similar
statements. These statements are based on our good faith beliefs as well as
assumptions we made using information currently available to us. Because these
statements reflect our current views concerning future events, these statements
involve known and unknown risks, uncertainties and assumptions that could cause
actual future results to differ significantly from the results discussed in the
forward-looking statements. Some, but not all, of the factors that may cause
these differences include those discussed in the Risk Factors section of this
prospectus. You should not place undue reliance on these forward- looking
statements, which apply only as of the date of this prospectus. In making these
cautionary statements, we are not committed to addressing or updating each
factor in future filings or communications regarding our business or results, or
addressing how any of these factors may have caused results to differ from
discussions or information contained in previous filings or communications.
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PROCEEDS FROM SALE OF THE SHARES
All of the shares of common stock in this Reoffer Prospectus are being
offered by the selling stockholder. We will not receive any proceeds from the
sale of the shares of common stock.
SELLING STOCKHOLDER
The shares offered under our Reoffer Prospectus are being registered
for reoffers and resales by the selling stockholder, Gunther Than who has
acquired his shares of our common stock under his employment agreement. The
selling stockholder may resell all, a portion, or none of his shares of our
common stock. There is no assurance that the selling stockholder will sell any
or all of his shares of our common stock offered by him.
The following table sets forth certain information concerning the
selling stockholder as of the date of this Reoffer Prospectus, and as adjusted
to reflect the sale by the selling stockholder of the shares of our common stock
offered, assuming sale of all of the shares offered:
Number of Shares
----------------
Name Beneficially Owned Prior Registered by Beneficially Owned After
to Offering(1) the Prospectus(2) Offering
Number Percent Number Percent(3)
-------------------------------------------------------------------------------------------------------------------------------
Gunther Than 2,348,914 15.7% 90,000 2,258,914 15.1%
- Notes on next page
(1) Represents shares beneficially owned by the named individual, including
shares that such person has the right to acquire within 60 days of the date of
this Reoffer Prospectus. The selling stockholder referred to above has sole
voting and sole investment power.
(2) Does not constitute a commitment to sell any or all of the stated number of
shares of common stock. The number of shares of common stock offered shall be
determined from time to time by the selling stockholder in her sole discretion.
(3) Based upon 14,871,620 Shares outstanding as of June 18, 2001.
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HOW THE SHARES MAY BE DISTRIBUTED
The selling stockholder may sell shares of our common stock in various
ways and at various prices. Some of the methods by which the selling stockholder
may sell his shares of common stock include:
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o privately negotiated transactions;
o block trades in which the broker or dealer will attempt to
sell the shares of common stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
o purchases by a broker or dealer as principal and resale by
that broker or dealer for the selling stockholder's account
under this Reoffer Prospectus;
o sales under Rule 144 rather than by using this Reoffer
Prospectus;
o a combination of any of these methods of sale; and
o any other legally permitted method.
The applicable sales price may be affected by the type of transaction.
The selling stockholder may also pledge his shares of common stock as
collateral for a margin loan under his customer agreements with her broker. If
there is a default by the selling stockholder, the brokers may offer and sell
the pledged shares of common stock.
Brokers or dealers may receive commissions or discounts from the
selling stockholder (or, if the broker-dealer acts as agent for the purchaser of
the shares of common stock, from that purchaser) in amounts to be negotiated.
These commissions are not expected to exceed those customary in the types of
transactions involved.
We cannot estimate at the present time the amount of commissions or
discounts, if any, that will be paid by the selling stockholder in connection
with sales of the shares of common stock.
Any broker-dealers or agents that participate with the selling
stockholders in sales of the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, in
connection with such sales. In that event, any commissions received by
broker-dealers or agents and any profit on the resale of the shares of common
stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
Under the securities laws of certain states, the shares of common stock
may be sold in those states only through registered or licensed broker-dealers.
In addition, the shares of common stock may not be sold unless they have been
registered or qualified for sale in the
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relevant state or unless the shares of common stock qualify for an exemption
from registration or qualification.
We have agreed to pay all fees and expenses incident to the
registration of the shares of common stock.
The selling stockholder is subject to the applicable requirements of
Regulation M promulgated under the Securities Exchange Act of 1934, in
connection with sales of the shares of common stock.
LEGAL OPINION
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, Baltimore,
Maryland has advised us with respect to the validity of the securities being
offered in this prospectus. Gordon, Feinblatt, Rothman, Hoffberger & Hollander,
LLC serves as our counsel.
EXPERTS
The financial statements included in our annual report on Form 10-KSB
incorporated by reference in this Reoffer Prospectus have been audited by
Stegman & Company LLP, independent public accountants, to the extent and for the
periods set forth in their report incorporated in this prospectus by reference,
and are incorporated herein in reliance upon that report given upon the
authority of Stegman & Company LLP as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Exchange Act and
file reports, proxy statements and other information with the SEC. You may read
and copy any report that we file at the public reference facilities maintained
by the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our Securities and Exchange Commission filings are also available from
the Securities and Exchange Commission's website located at HTTP://WWW.SEC.GOV.
Our main office is located at 925 West Kenyon Avenue, Suite 15,
Englewood, Colorado 80110.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") by View Systems, Inc. (the "Company")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are, as of their respective dates, hereby incorporated by reference in this
Registration Statement:
(i) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2000 filed pursuant to Section 13(a) or 15(d) of the Exchange
Act;
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(ii) All other reports of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Company's documents referred to in Paragraph (i) above; and
(iii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2 Registration Numbers 333-94411 and
333-55394 filed with the Commission.
All other documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment which
indicates that all of the Company's shares of Common Stock, par value $.001 per
share (the "Shares"), offered hereby have been sold or that all Shares then
remaining unsold have been deregistered shall be deemed to be incorporated by
reference in and made a part of this Registration Statement from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in a document subsequently filed modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
We have filed with the Securities and Exchange Commission a
registration statement on Form S-8 under the Securities Act of 1933, as amended,
Registration Number 333-62912 filed on June 13, 2001, with respect to the common
stock covered by this Reoffer Prospectus. This Reoffer Prospectus, which is a
part of the registration statement, does not contain all the information set
forth in, or annexed as exhibits to, the registration statement, as permitted by
the SEC's rules and regulations. For further information with respect to us and
the common stock offered under this Reoffer Prospectus, please refer to the
registration statement, including the exhibits, copies of which may be obtained
from the locations described above. Statements concerning any document filed as
an exhibit are not necessarily complete and, in each instance, we refer you to
the copy of the document filed as an exhibit to the registration statement.
You can obtain any of the documents incorporated by reference in this
document through us or the SEC through the SEC's web page at the address
disclosed above. Documents incorporated by reference are available from us
without charge (other than exhibits to such documents). You can obtain documents
incorporated by reference in this prospectus by requesting them in writing or by
telephone. Written requests should be directed to:
View Systems, Inc.
925 West Kenyon Avenue, Suite 15
Englewood, Colorado 80110
Attention: Corporate Secretary
Telephone requests may be directed to the Corporate Secretary of View
Systems, Inc. at (303) 783-9153.
We have not authorized anyone to give any information or to make any
representation that is not contained in this prospectus, or in any of the
materials we have incorporated into this prospectus and if any information or
representation is given or made, you should not rely upon it as having been
authorized. If you are in a
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jurisdiction where offers to sell, or solicitations of offers to purchase, the
securities to which this prospectus relates is unlawful, or if you are a person
to whom it is unlawful to make an offer or solicitation, then the offer
presented in this prospectus does not extend to you. Neither delivery of this
prospectus nor any sale of securities to which this prospectus relates will,
under any circumstances, imply or create any implication that there has been no
change in the affairs or condition of us since the date of this prospectus or
that the information contained herein is correct as of any time subsequent to
the date of this prospectus.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Florida corporations are authorized to indemnify against liability any
person who is a party to any legal proceeding because such person is a director
or officer of the corporation. The officer or director must act in good faith
and in a manner reasonably believed to be in the best interests of the
corporation and, with respect to any criminal action or proceeding, have no
reasonable cause to believe the conduct was unlawful. Florida law does not allow
indemnification for an act or omission that involves intentional misconduct or a
knowing violation of a law. In the case of an action by or on behalf of a
corporation, indemnification may not be made if the person seeking
indemnification is found liable, unless the court in which such action was
brought determines such person is fairly and reasonably entitled to
indemnification. Indemnification is required if a director or officer has been
successful on the merits.
The indemnification authorized under Florida law is not exclusive and
is in addition to any other rights granted to officers and directors. A
corporation may purchase and maintain insurance or furnish similar protection on
behalf of any officer or director. Our articles of incorporation provide for the
indemnification of directors and executive officers to the maximum extent
permitted by Florida law.
As indemnification for liabilities arising under the Securities Act may
be permitted our directors, or officers or persons controlling us, we have been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and Exchange
Commission (the "Commission") by View Systems, Inc. (the "Company") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act") are, as of
their respective dates, hereby incorporated by reference in this Registration
Statement:
(i) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2000 filed pursuant to Section 13(a) or 15(d) of the Exchange
Act;
(ii) All other reports of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Company's documents referred to in Paragraph (i) above; and
(iii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2 Registration Numbers 333-94411 and
333-55394 filed with the Commission.
All other documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the filing of a post-effective amendment which
indicates that all of the Company's shares of Common Stock, par value $.001 per
share (the "Shares"), offered hereby have been sold or that all Shares then
remaining unsold have been deregistered shall be deemed to be incorporated by
reference in and made a part of this Registration Statement from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in a document subsequently filed modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Florida corporations are authorized to indemnify against liability any person
who is a party to any legal proceeding because such person is a director or
officer of the corporation. The officer or director must act in good faith and
in a manner reasonably believed to be in the best interests of the corporation
and, with respect to any criminal action or proceeding, have no reasonable cause
to believe the conduct was unlawful. Florida law does not allow indemnification
for an act or omission that involves intentional misconduct or a knowing
violation of a law. In the case of an action by or on behalf of a corporation,
indemnification may not be made if the person seeking indemnification is found
liable, unless the court in which such action was brought determines such person
is fairly and reasonably entitled to indemnification. Indemnification is
required if a director or officer has been successful on the merits.
The indemnification authorized under Florida law is not exclusive and is in
addition to any other rights granted to officers and directors. A corporation
may purchase and maintain insurance or furnish similar protection on behalf of
any officer or director. The Company's articles of incorporation provide for the
indemnification of directors and executive officers to the maximum extent
permitted by Florida law.
As indemnification for liabilities arising under the Securities Act may be
permitted the Company's directors, or officers or persons controlling the
Company, we have been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibits.
---------
Copies of the following documents are included as exhibits to this registration
statement pursuant to Item 601 of Regulation S-K.
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SEC
Exhibit
No. Description
3.01 Articles of Incorporation*
3.02 Bylaws*
4.01 Specimen certificate for Common Stock*
5.01 Legal opinion, including consent of Gordon, Feinblatt, Rothman,
Hoffberger & Hollander, LLC, regarding legality of Common Stock to be
issued pursuant to the Employment Agreements of Gunther Than.**
23.01 Consent of Stegman & Company, LLP, independent certified public
accountants.**
99.01 Employment Agreement between Registrant and Gunther Than.*
-----------------------------------
*Incorporated by reference
** Filed hereith
ITEM 9. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, 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
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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.
-20-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Baltimore, State of Maryland, on this 3rd day of
July, 2001.
VIEW SYSTEMS, INC.
By: /s/ Gunther Than
---------------------------------
Gunther Than, President and
Chief Executive Officer
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