UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-KSB/A
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from ___________ to __________
Commission file number: __________
View Systems, Inc.
-----------------------
(Name of Small Business Issuer in Its Charter)
Florida 59-2928366
--------------------------------------- ----------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No
of Incorporation or Organization)
925 West Kenyon Avenue, Englewood, Colorado 80110
--------------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
(303)783-9153
-----------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value.
--------------------------
(Title of class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to the filing requirements for the past 90 days.
Yes ___X___ No _______
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The Registrant's revenue for the fiscal year ended December 31, 2000 was
$661,789.
As of March 29, 2001, 12,322,620 shares of the registrant's Common Stock were
outstanding and the aggregate market value of such Common Stock held by
non-affiliates was approximately $6,531,000 based on the closing price of $.53
per share on that date.
This 10-KSB/A is being filed by View Systems, Inc. (the "Company") to amend
Paragraph 5 of Note 1 of the Notes to the Financial Statements of the Company.
Index To Financial Statements
View Systems, Inc
Page No.
---------
Independent Auditors' Report F-1
Consolidated Balance Sheet at December 31, 2000 F-2
Consolidated Statements of Operations for the F-3
years ended December 31, 2000 and 1999
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 2000 and 1999 F-4
Consolidated Statements of Cash Flows for the
years ended December 31, 2000 and 1999 F-5
Notes to Consolidated Financial Statements F-7
Index To Financial Statements
Eastern Tech Manufacturing Corp.
Page No.
---------
Independent Auditors' Report G-1
Balance Sheet at June 30, 1998 G-2
Statements of Operations and
Retained Earnings for the years ended
June 30, 1998 and 1997 G-3
Statements of Cash Flows for the
years ended June 30, 1998 and 1997 G-4
Notes to Financial Statements G-5
Balance Sheet at March 31, 1999
(unaudited) G-7
Statements of Operations for the
Nine Months Ended March 31, 1999 and 1998
(unaudited) G-8
Statements of Cash Flow for
the Nine Months Ended March 31, 1999 and
1
1998 (unaudited) G-9
Index To Financial Statements
Xyros Systems, Inc
Page No.
--------
Independent Auditors' Report H-1
Balance Sheet at December 31, 1998 H-2
Statements of Operations and
Accumulated Deficit for the years ended
December 31, 1998 and 1997 H-3
Statements of Cash Flows for the
years ended December 31, 1999 and 1998 H-4
Notes to Financial Statements H-5
2
The Board of Directors and Stockholders
View Systems Inc.
Columbia, Maryland
We have audited the accompanying consolidated balance sheet of View
Systems Inc. and Subsidiaries (the Company) as of December 3l, 2000 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years ended December 3l, 2000 and 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the accompanying consolidated balance sheet as of
December 31, 2000 and the related consolidated statements of operations, changes
in stockholders' equity and cash flows for the years ended December 3l, 2000 and
1999 present fairly, in all material respects, the financial position of the
Company as of December 31, 2000 and the results of its operations and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States.
/S/ Stegman & Company
-----------------------
Stegman & Company
Baltimore, Maryland
March 15, 2001
F-1
VIEW SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ASSETS
CURRENT ASSETS:
Cash $ 265,245
Accounts receivable (net) 155,017
Inventory 95,339
-----------
Total current assets 515,601
-----------
PROPERTY AND EQUIPMENT:
Equipment 323,766
Leasehold improvements 20,261
Software tools 15,071
Vehicles 43,772
-----------
402,870
Less accumulated depreciation 79,814
-----------
Net value of property and equipment 323,056
-----------
OTHER ASSETS:
Goodwill 894,383
Investments 28,000
Due from affiliated entities 105,552
Due from affiliate 20,000
Deposits 832
-----------
Total other assets 1,048,767
-----------
TOTAL ASSETS $1,887,424
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 401,247
Note payable - bank 42,083
Accrued interest 22,000
Notes payable - other 110,000
Due to Stockholder 2,090
Payroll liabilities 31,951
-------
Total current liabilities 609,371
-------
STOCKHOLDERS' EQUITY:
Common stock - par value $.01, 50,000,000 shares
authorized, Issued and outstanding - 11,481,031 shares 11,481
Additional paid-in capital 7,364,502
Accumulated deficit (6,097,930)
----------
Total stockholders' equity 1,278,053
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,887,424
==========
See accompanying notes
F - 2
VIEW SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
---- ----
REVENUE:
Sales of contract assembly services $ 319,376 $ 303,711
Sales of assembled electronic components 342,413 -
-------- -------
Total sales 661,789 303,711
Cost of goods sold 436,310 258,378
----------- -------
GROSS PROFIT ON SALES 225,479 45,333
----------- -------
OPERATING EXPENSES:
Advertising and promotion 20,931 23,256
Amortization 113,135 95,299
Bad debts 14,010 -
Business development expense 133,393 140,000
Contributions 10,347 2,500
Depreciation 44,765 29,856
Dues and subscriptions 2,573 3,379
Employee compensation and benefits 794,166 2,045,531
Impairment loss of goodwill and other intangible assets - 244,155
Insurance 21,088 17,038
Interest 23,338 51,262
Investor relations 392,136 212,086
Miscellaneous expenses 13,692 19,445
Office expenses 94,846 69,989
Professional fees 359,131 317,100
Rent 121,951 74,228
Repairs and maintenance 9,148 10,167
Research and development 132,300 210,143
Taxes (other than income) 5,249 3,201
Telephone 35,807 28,398
Travel 72,851 105,813
Utilities 14,904 13,383
------ -------
Total operating expenses 2,429,761 3,716,229
---------- ----------
NET LOSS FOR THE YEAR $(2,204,282) $(3,670,896)
=========== ===========
LOSS PER SHARE:
Basic $( 0.19) $( 0.63)
============== ===========
Diluted $( 0.19) $( 0.63)
============== ===========
See accompanying notes
F - 3
VIEW SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
Additional Total
Common Paid-In Accumulated Stockholders'
Stock Capital Deficit Equity
------ ---------- ----------- -------------
Balances at January 1, 1999 $ 4,167 $ 406,253 $( 222,752) $ 187,668
Sale of common stock 952 1,425,377 - 1,426,329
Redemption of common stock ( 191) ( 396,590) - ( 396,781)
Issuance of common stock employee
(other compensation) 1,469 2,145,864 - 2,147,333
Issuance of common stock
(Xyros acquisitions) 150 562,350 - 562,500
Issuance of common stock
(ETMC acquisitions) 250 787,250 - 787,500
Issuance of common stock (debt
conversion) 370 403,838 - 404,208
Net loss for the year ended
December 31, 1999 - - (3,670,896) ( 3,670,896)
---------- ---------- ----------- -----------
Balances at December 31, 1999 7,167 5,334,342 (3,893,648) 1,447,861
Sales of common stock 2,843 1,448,097 - 1,450,940
Stock options exercised 88 894 - 982
Issuance of common stock (employee
and other compensation) 1,383 581,169 - 582,552
Net loss for the year ended
December 31, 2000 - - (2,204,282) ( 2,204,282)
--------- ---------- --------- ----------
Balances at December 31, 2000 $ 11,481 $7,364,502 $(6,097,930) $ 1,278,053
======== ========== =========== ============
See accompanying notes
F - 4
VIEW SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,204,282) $( 3,670,896)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 157 ,900 125,155
Improvement loss of goodwill and other intangible assets - 244,155
Employee and other compensation paid through
the issuance of common stock 582,552 2,147,333
Employee compensation related to stock
options granted - 87,420
Interest paid through issuance of common stock - 33,000
Changes in operating assets and liabilities:
Accounts receivable ( 61,739) ( 93,278)
Inventory 45,874 ( 141,213)
Other assets 6,175 ( 6,571)
Accounts payable 227,141 150,333
Accrued interest 11,000 11,000
Payroll taxes payable 12,788 19,163
------------ ----------
Net cash used by operating activities ( 1,222,591) ( 1,094,399)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ( 67,479) ( 50,354)
Funds advanced to affiliated entities ( 14,562) ( 459,180)
Investment in MediaComm Broadcasting Systems, Inc. ( - ) ( 28,000)
------------- -----------
Net cash used in investing activities ( 82,041) ( 537,534)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans provided by stockholders 56,452 132,071
Repayment of note payable-bank ( 27,647) ( 5,270)
Proceeds from sales of stock 1,451,922 1,426,329
----------- -----------
Net cash provided by financing activities 1,480,727 1,553,130
----------- ----------
NET INCREASE( DECREASE) IN CASH 176,095 ( 78,803)
CASH AT BEGINNING OF YEAR 89,150 167,953
----------- -----------
CASH AT END OF YEAR $ 265,245 $ 89,150
=========== ============
See accompanying notes
F - 5
VIEW SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
(Continued)
2000 1999
-------- --------
Schedule of noncash investing and financing transactions:
Common stock issued to effect purchase of
Eastern Tech Manufacturing, Inc. $ - $ 787,500
============ ==========
Debt issued to effect purchase of
Eastern Tech Manufacturing, Inc. $ - $ 148,184
============ ==========
Common stock issued for to effect purchase
of Xyros Systems, Inc. $ - $ 562,500
============ ==========
Common stock issued for conversion of debt $ - $ 404,208
============ ==========
Common stock redeemed in exchange for receivable $ - $ 396,781
============ ==========
Cash paid during the period for:
Interest $ 12,338 $ 45,379
=========== ==========
Income taxes $ - $ -
============ ==========
F - 6
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
View Systems, Inc. (the "Company") designs and develops computer
software and hardware used in conjunction with surveillance capabilities. The
technology utilizes the compression and decompression of digital inputs.
Operations, from formation to June 30, 1999, were devoted primarily to raising
capital, developing the technology, promotion, and administrative function. As
of July 1, 1999 the Company was no longer considered to be in the development
stage.
Basis of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, Real View Systems, Inc. ("Real
View"), Xyros Systems, Inc. ("Xyros") and Eastern Tech Manufacturing, Inc.
("ETMC"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
Use of Estimates
Management uses estimates and assumptions in preparing financial
statements in accordance with accounting principles generally accepted in the
United States. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could differ from the
estimates that were used.
Revenue Recognition
The Company and its subsidiaries recognize revenue and the related cost
of goods sold upon shipment of the product.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the SEC's views in applying
accounting principles generally accepted in the United States to revenue
recognition in financial statements. The Company adopted SAB 101 in the fourth
quarter of 2000. The adoption of SAB 101 had no impact on the Company's
financial position or results of operations.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined by the last-in-first-out method (LIFO).
F - 7
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
Property and Equipment
Property and equipment is recorded at cost and depreciated over their
estimated useful lives, using the straight-line and accelerated depreciation
methods. Upon sale or retirement, the cost and related accumulated depreciation
are eliminated from the respective accounts, and the resulting gain or loss is
included in the results of operations. The useful lives of property and
equipment for purposes or computing depreciation are as follows:
Equipment 5-7 years
Software tools 3 years
Repairs and maintenance charges which do not increase the useful lives
of assets are charged to operations as incurred. Depreciation expense for the
years ended December 31, 2000 and 1999 amounted to $44,765 and $29,856
respectively.
Impairment of Long-Lived Assets
Long-lived assets and identifiable intangibles (including goodwill) to
be held and used are reviewed for Impairment whenever events or changes in
circumstances indicate that the carrying amount should be addressed. Impairment
is measured by comparing the carrying value to the estimated undiscounted future
cash flows expected to result from use of the assets and their eventual
disposition.
Income Taxes
Deferred income taxes are recorded under the asset and liability method
whereby deferred tax assets and liabilities are recognized for the future tax
consequences, measured by enacted tax rates, attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss carryforwards. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period the rate change becomes effective. Valuation allowances are
recorded for deferred tax assets when it is more likely than not that such
deferred tax assets will not be realized.
Research and Development
Research and development costs are expensed as incurred. Equipment and
facilities acquired for research and development activities that have
alternative future uses are capitalized and charged to expense over the
estimated useful lives.
Advertising
Advertising costs are charged to operations as incurred. Advertising
costs for the years ended December 31, 2000 and 1999 were $20,931 and $23,256,
respectively.
Nonmonetary Transactions
Nonmonetary transactions are accounted for in accordance with
Accounting Principles Board Opinion No. 29 Accounting for Nonmonetary
Transactions which requires the transfer or distribution of a nonmonetary asset
or liability to be based, generally, on the fair value of the asset or liability
that is received or surrendered, whichever is more clearly evident.
F - 8
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
Financial Instruments
For most financial instruments, including cash, accounts receivable,
accounts payable and accruals, management believes that the carrying amount
approximates fair value, as the majority of these instruments are short-term in
nature.
Net Loss Per Common Share
Basic net loss per common share ("Basic EPS") is computed by dividing
net loss available to common stockholders by the weighted average number of
common shares outstanding. Diluted net loss per common share ("Diluted EPS") is
computed by dividing net loss available to common stockholders by the weighted
average number of common shares and dilutive potential common share equivalents
then outstanding. Potential common shares consist of shares issuable upon the
exercise of stock options and warrants. The calculation of the net loss per
share available to common stockholders for the years ended December 31, 2000 and
1999 does not include potential shares of common stock equivalents, as their
impact would be antidilutive.
Segment Reporting
The company has determined that it does not have any separately
reportable operating segments for the years ended December 31, 2000 and 1999.
2. FINANCIAL CONDITION AND MANAGEMENT'S PLAN
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
contemplates continuation of the Company as a going-concern. However, the
Company has sustained significant operating losses in the past two years. In
addition, the Company has used substantial amounts of working capital in its
operations. As of December 31, 2000 and for the year then ended, the Company had
an accumulated deficit of $6.1 million and a net loss of $2.2 million. Further,
as of December 31, 2000 current liabilities exceed current assets by $93,770.
There can be no assurance that the Company will be able to generate sufficient
revenues to achieve or sustain profitability in the future.
In view of these matters, realization of a major portion of the assets in
the accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the ability to meet it financing
requirements, and the success of its future operations. Management has
undertaken a vigorous effort to reduce both cost of sales and other operating
expenses. Additionally, management is attempting to raise additional funds
through the exercise of outstanding common stock warrants. Management believes
the actions presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the Company to continue as a
going concern.
3. BUSINESS COMBINATIONS
On February 25, 1999, the Company acquired Xyros Systems Inc. of
Columbia, Maryland, a developer of computer based systems and equipment that
captures video and audio data and transmits and stores it within standard
personal computer systems. Under the terms of the merger agreement, each of the
100 shares of Xyros's common stock was exchanged for 1,500 shares of the
Company's common stock. This acquisition was accounted for as a purchase.
F - 9
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
In May of 1999, the Company completed its acquisition of ETMC, a
computer parts and accessories manufacturer. The business combination was
accounted for as a purchase in which each outstanding share of ETMC common stock
was converted into the right to receive shares of the Company. At closing, the
purchase price (as defined in the agreement and plan of merger) of $935,684 was
paid by the issuance of 250,000 shares of common stock and the assumption of
liabilities for both legal fees and a non-compete clause. The excess cost over
net liabilities acquired of $495,344 was recorded as goodwill.
4. INVENTORY
Inventories at December 31, 2000 consisted of the following:
Work in process 43,835
Raw materials 51,504
----------
$ 95,339
==========
DUE FROM AFFILIATED ENTITY
The Company has advanced non-interest bearing funds of $105,552 as of
December 31, 2000 to a related corporation, View Technologies, Inc. which is
controlled by the Chief Executive Officer of the Company. There are no formal
repayment terms associated with this advance. The two companies enter into
various transactions throughout the year to provide working capital to one
another when necessary.
5. DUE FROM AFFILIATE
The Company has advanced non-interest bearing funds to its Chief
Executive Officer in the amount of $20,000 as of December 31, 2000. There are no
repayment terms associated with this advance.
7. INVESTMENTS
The Company owns approximately 14% of the common stock of a privately
held entity known as MediaComm Broadcasting Systems, Inc., which is a
development stage company formed to generate revenue through internet retail
sales. There is no market for the entity's common shares, and it was
impracticable to estimate fair value of the Company's investment. The investment
is carried on the balance sheet at original cost of $28,000 or $.03 a share.
F - 10
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
8. INTANGIBLE ASSETS
In relation to the business combination with ETMC accounted for under
the purchase method of accounting, the Company recorded goodwill in the amount
of $495,344. This amount was based on the difference between the fair market
value of the Company's stock at the acquisition date and the fair value of
ETMC's net assets. During the fourth quarter of 1999, management conducted a
thorough review of ETMC's operations, including customer base, current
production capacity, and job order backlog. Based on this review, the Company
recognized an impairment loss in the amount of $199,009. The remaining goodwill
is being amortized over a 10 year period, beginning at the acquisition date.
In relation to the business combination with Xyros accounted for under
the purchase method of accounting, the Company recorded goodwill in the amount
$802,069. This amount was based on the difference between the fair market value
of the Company's stock at the acquisition date and the fair market value of
Xyros's net assets and is being amortized on a straight-line basis over a ten
year period.
Software development costs of $47,146 relating to internal costs
associated with a software product that the Company will not market were also
written-off to expense during 1999.
9. NOTE PAYABLE - BANK
One of the Company's subsidiaries has a note payable with a bank having
an outstanding balance of $42,083 as of December 31, 2000. The note bears
interest equivalent to the prime rate plus 2% annum payable monthly and is
personally guaranteed by three stockholders and former officers of the Company.
The Company is obligated to make monthly principal payments of $5,000.
10. NOTE PAYABLE - OTHERS
In connection with the acquisition of Xyros, the Company assumed
liabilities evidenced by notes payable to the stockholders of Xyros. The notes
carry an annual interest rate of 10% with interest paid monthly. The notes were
originally due December 31, 1999, but the Company has renegotiated the terms of
the loan to allow for repayment as cash flow permits.
11. INCOME TAXES
The components of the net deferred tax asset and liability as of
December 31, 2000 are as follows:
Effect of net operating loss carryforward $ 2,090,000
Less valuation allowance $( 2,090,000)
------------
Net deferred tax asset (liability) $ -
============
F - 11
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
12. STOCK-BASED COMPENSATION
During the years ended December 31, 2000 and 1999 the Company granted
restricted stock, incentive stock options, non-qualified stock options, and
warrants to employees, officers, independent consultants and investors.
Restricted Stock Grants
The Company's Board of Directors and stockholders have approved a
restricted share plan under which shares of the Company's common stock will be
granted to employees, officers, and directors at the discretion of the Board of
Directors. During 2000 and 1999 the Company issued the following shares under
this Plan and additional shares at the direction of the Board of Directors:
2000 1999
-------------------------- --------------------------------
Number Expense Number Expense
of Shares Recognized of Shares Recognized
--------- ---------- --------- ----------
Officers and employees 580,000 $ 266,927 1,100,000 $1,755,000
Consultants 803,000 156,125 369,000 392,333
------- ---------- --------- ---------
1,383,000 $ 423,052 1,469,000 $2,147,333
========= ========= ========= ==========
The recognition of expense was based on the fair market value of
the common stock issued on the date of the grant.
Stock Options and Warrants
The Company adopted the 1999 Stock Option Plan during 1999. The
Plan reserves 4,500,000 shares of the Company's unissued common stock for
options. Options, which may be tax qualified and non-qualified, are exercisable
for a period of up to ten years at prices at or above market price as
established on the date of grant.
F - 12
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
A summary of the Company's stock option activity and related
information for the years ended December 31, 2000 and 1999 is as follows:
2000
---------------------------------------------------------
Common Weighted
Stock Average Range of
Options Exercise Price Exercise Prices
------- -------------- ---------------
Outstanding at beginning of year 504,860 $1.56 $0.01-$2.07
Granted - - -
Exercised (87,250) .01 .01
Expired/cancelled (309,920) 2.00 2.00
-------
Outstanding at end of year 107,690 $1.63 $0.01-$2.07
=======
1999
-----------------------------------------------------------
Common Weighted
Stock Average Range of
Options Exercise Price Exercise Price
------- -------------- --------------
Outstanding at beginning of year - $ - $ -
Granted 504,860 l.56 0.01-2.07
Exercised - - -
Expired/cancelled ------- - -
Outstanding at end of year 504,860 $1.56 $0.01-$2.07
=======
All options issued are immediately exercisable.
The Company has issued warrants to purchase the Company's common stock as follows:
2000
--------------------------------------------------------------
Common Weighted
Stock Average Range of
Warrants Exercise Price Exercise Prices
-------- -------------- ---------------
Outstanding at beginning of year 454,000 $2.00 $2.00
Granted 3,200,000 1.85 .50-2.25
Exercised ( 665,000) .50 .50
Expired/cancelled - - -
---------
Outstanding at end of year 2,989,000 $1.97 $1.25-2.25
=========
F - 13
VIEW SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
1999
------------------------------------------------
Common Weighted
Stock Average Range of
Warrants Exercise Price Exercise Prices
-------- -------------- --------------
Outstanding at beginning of year - $ - $ -
Granted 454,000 2.00 2.00
Exercised - - -
Expired/cancelled - - -
-------
Outstanding at end of year 454,000 $2.00 $2.00
=======
During January, 2001 the company cancelled 2,235,000 warrants with an
exercise price of $2.00 per share due to non-performance of the warrant holder.
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123; Accounting for Stock-Based Compensation
(SFAS No. 123), but applies Accounting Principle Board Opinion No. 25 and
related interpretations. The fair value of these equity awards was estimated at
the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions for 1999: risk-free interest rate of 5.97% - 6.09%;
expected volatility of 70.0%; expected option life of 2 years from vesting and
an expected dividend yield of 0.0%. If the Company had elected to recognize cost
based on the fair value at the grant dates consistent with the method prescribed
by SFAS No. 123, net loss and loss share would have been changed to the pro
forma amounts for the year ended December 31, 1999 as follows:
Net income - as reported $ (3,670,896)
Net income - pro forma (3,937,524)
Net income per share - as reported $ (0.63)
Net income per share - pro forma (0.68)
There were no stock options granted during the year ended December 31,
2000.
13. RELATED PARTY TRANSACTIONS
During the year ended December 31, 1999 the Company redeemed 59,860
shares owed by the Chief Executive Officer for $50,000 in cash and the
elimination of $67,719 due to the Chief Executive Officer for a total
consideration for $117,719
During the year ended December 31, 1999 the Company converted a note
payable and related accrued interest to a family member of the Chief Executive
Officer in the amount of $200,000 to 200,000 share of the Company's common
stock.
F - 14
14. CONCENTRATION OF CREDIT RISK
The Company maintains a checking account in a commercial bank. Cash in
this checking account at times exceeded $100,000. The checking account is
insured by the Federal Deposit Insurance Corporation up to $100,000.
F - 15
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Eastern Tech Manufacturing Corporation
We have audited the accompanying balance sheets of Eastern Tech
Manufacturing Corporation as of June 30, 1998 and 1997 and the related
statements of operations and retained earnings, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eastern Tech
Manufacturing Corporation as of June 30, 1998 and 1997, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Davis, Sita & Company
September 8, 2001
G - 1
EASTERN TECH MANUFACTURING CORPORATION
BALANCE SHEET
JUNE 30, 1998 AND 1997
ASSETS
1998 1997
---- ----
CURRENT ASSETS:
--------------
Cash $8,970 $6,538
Accounts receivable 33,138 71,590
Prepaid expenses 1,669 -
----- -
Total current assets 43,777 78,128
------ ------
PROPERTY AND EQUIPMENT:
----------------------
Equipment, at cost 154,935 141,571
Less accumulated depreciation 83,879 81,970
------ ------
Cost less accumulated depreciation 71,056 59,601
------ ------
TOTAL ASSETS $114,833 $137,729
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
-------------------
Accounts payable $48,807 $67,961
Loans from stockholder 42,953 42,953
------ ------
Total current liabilities 91,760 110,914
------ -------
STOCKHOLDER'S EQUITY:
--------------------
Common stock - par value $1.00
500 shares authorized, issued and outstanding 500 500
Retained earnings 22,573 26,315
------ ------
Total stockholder's equity 23,073 26,815
------ ------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $114,833 $137,729
======== ========
See Notes To Financial Statements
G - 2
EASTERN TECH MANUFACTURING CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
1998 1997
---- ----
REVENUE:
Sales of assembled electronic components $820,683 $1,942,563
-------- ----------
COST OF SALES:
-------------
Material 484,961 1,307,755
Labor 175,379 310,205
------- -------
Cost of sales 660,340 1,617,960
------- ---------
Gross profit 160,343 324,603
------- -------
OPERATING EXPENSES:
------------------
Salaries and benefits 43,844 61,480
Rent 43,029 101,015
Taxes (principally payroll) 26,981 42,144
Other operating expenses 25,683 88,895
Insurance 22,639 23,507
Depreciation 1,909 5,758
----- -----
Total operating expenses 164,085 322,799
------- -------
NET INCOME (LOSS) FOR THE YEAR (3,742) 1,804
RETAINED EARNINGS, BEGINNING OF YEAR 26,315 24,511
------ ------
RETAINED EARNINGS, END OF YEAR $22,573 $ 26,315
======= ========
See Notes To Financial Statements
G - 3
EASTERN TECH MANUFACTURING CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
------------------------------------
Net income (loss) $(3,742) $1,804
Adjustments to reconcile net income to net cast
provided by operating activities:
Depreciation 1,909 5,758
Changes in operating assets and liabilities:
Accounts receivable 38,452 -
Prepaid expenses (1,669) -
Accounts payable (19,154) (44,762)
-------- -------
Net cash provided by (used in) operating activities 15,796 (37,200)
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES:
------------------------------------
Purchase of property and equipment (13,364) (31,883)
CASH FLOWS FROM FINANCING ACTIVITIES:
------------------------------------
Funds advanced (to) from stockholders - 40,725
- ------
NET INCREASE (DECREASE) IN CASH 2,432 (28,358)
CASH AT BEGINNING OF PERIOD 6,538 34,896
----- ------
CASH AT END OF PERIOD $8,970 $6,538
====== ======
G - 4
EASTERN TECH MANUFACTURING CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Eastern Tech Manufacturing Corporation (The "Company") is a Maryland corporation
organized in May 1985. The Company is engaged in the business of assembling
electronic components under various short-term, task oriented contracts and
purchase orders.
Method of Accounting
The financial statements of the Company have been prepared on the accrual basis
of accounting. Under this method, certain revenues are recognized when earned,
and certain expense and purchases of assets are recognized when the obligations
if incurred.
Management's Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue and the related cost of goods sold upon shipment
of the product.
Accounts Receivable
Management reflects as accounts receivable only those accounts which it
considers to be collectable. Uncollectable accounts are written off when
collection is in doubt.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed under
accelerated methods with useful lives ranging from 5 to 7 years. Expenditures
for major renewals and betterments which extend the useful lives of property and
equipment are capitalized. Expenditures for maintenance and repairs are charged
to expense as incurred.
Financial Instruments
For most financial instruments, including cash, accounts receivable, accounts
payable and accruals, management believes that the carrying amount approximates
fair value, as the majority of these instruments are short-term in nature.
Income Taxes
The Company is subject to Federal and state corporate income taxes on its net
taxable income. As of June 30, 1998 the Company owed no Federal or state income
taxes.
NOTE 2 - LOANS FROM STOCKHOLDER
At June 30, 1998 and 1997, the Company had borrowed $42,953 from its principal
stockholder. The loans are unsecured and payable on demand. There is no
provision for interest.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company leased its office and manufacturing facility from its principal
stockholder under a month-to-month arrangement. Rent paid to the stockholder
amounted to $43,029 for the year ended June 30, 1998 and $101,015 for the year
ended June 30, 1997.
G - 5
NOTE 4 - SUBSEQUENT EVENT
During May 1999 all of the Company's outstanding common stock was purchased by
View Systems, Inc. for $935,684. The purchase price was paid for with 250,000
shares of View's common stock. The transaction also included the assumption of
various liabilities and legal fees by View as well as a non-compete clause.
G - 5
EASTERN TECH MANUFACTURING CORPORATION
BALANCE SHEET
MARCH 31, 1999
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $9,537
Accounts receivable 35,261
Inventory 30,210
------
Total current assets 75,008
------
PROPERTY AND EQUIPMENT:
Equipment, at cost 154,935
Less accumulated depreciation 86,874
------
Net value of equipment 68,061
------
TOTAL ASSETS $143,069
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $15,076
Loans from stockholder 101,816
Other accrued liabilities 3,350
-----
Total current liabilities 120,242
-------
STOCKHOLDER'S EQUITY
Common Stock - par value $1. 00, 1000 shares authorized,
100 shares issued and outstanding 500
Retained earnings 22,327
------
Total stockholder's equity 22,827
------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $143,069
========
G - 6
EASTERN TECH MANUFACTURING CORPORATION
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
---- ----
(unaudited) (unaudited)
REVENUE:
Sales of assembled electronic components $716,250 $615,512
-------- --------
COST OF SALES:
Material 423,089 363,721
Labor 197,651 131,534
------- -------
Cost of sales 620,740 495,255
------- -------
Gross profit 95,510 120,257
------ -------
OPERATING EXPENSES:
Salaries and benefits 20,977 35,250
Rent 28,000 30,576
Payroll and other taxes 20,236 22,420
Other operating expenses 26,543 34,298
------ ------
Total operating expenses 95,756 122,544
------ -------
NET LOSS (246) (2,287)
RETAINED EARNINGS AT BEGINNING OF PERIOD 22,573 26,315
------ ------
RETAINED EARNINGS AT END OF PERIOD $22,327 $24,028
======= =======
G - 8
EASTERN TECH MANUFACTURING CORPORATION
STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
---- ----
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(246) $(2,287)
Adjustments to reconcile net (loss) income to net cash
Provided by operating activities:
Depreciation 2,995 1,432
Changes in operating assets and liabilities:
Accounts receivable (2,123) 27,067
Inventory (30,210) -
Prepaid expenses 1,669 -
Accounts payable (33,731) (14,365)
Other accrued liabilities 3,350 -
------ -
(58,296) 11,847
-------- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - 10,023
-------- ------
CASH FLOWS FROM FINANCING ACTIVITIES
Funds advanced (to) from stockholder 58,863 -
------ ------
NET INCREASE (DECREASE) IN CASH 567 1,824
CASH AT BEGINNING OF PERIOD 8,970 6,538
----- -----
CASH AT END OF PERIOD $9,537 $8,362
====== ======
G - 9
To the Board of Directors and Stockholders Xyros Systems, Inc.
Columbia, Maryland
We have audited the accompanying balance sheet of Xyros Systems, Inc. as
December 31, 1998 and the related statements of operations and accumulated
deficit and cash flows for the years ended December 31, 1998 and 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Xyros Systems, Inc. as December
31, 1998, and the results of its operations and cash flows for the years ended
December 31, 1998 and 1997 in conformity with generally accepted accounting
principles.
Stegman & Company
Baltimore, Maryland
July 20, 2001
H - 1
XYROS SYSTEMS, INC.
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
CURRENT ASSETS:
Cash $ 1,946
Accounts receivable 13,599
Inventory 4,574
-----
Total current assets 20,119
------
PROPERTY AND EQUIPMENT:
Computer hardware 1,666
Software 2,438
-----
4,104
Less accumulated depreciation (821)
-----
Net value of property and equipment 3,283
-----
TOTAL ASSETS $ 23,402
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 6,298
Note payable - bank 65,000
Notes payable - stockholders 155,000
Other accrued liabilities 2,915
-----------
Total current liabilities 229,213
-----------
STOCKHOLDERS' EQUITY
Common Stock - par value $1.00, 1000 shares authorized,
100 shares issued and outstanding 100
Accumulated deficit (205,911)
---------
Total stockholders' equity (205,811)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 23,402
===========
See accompanying notes
H - 2
XYROS SYSTEMS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
---- ----
REVENUE:
Sales and other income $31,438 $-
Cost of goods sold 20,891 --
------ ----
GROSS PROFIT ON SALES 10,547 --
------ ----
OPERATING EXPENSES:
Advertising and promotion 2,819 --
Depreciation 821 --
Employee compensation and benefits 90,008 --
Insurance 826 --
Interest 9,837 --
Office expenses 16,426 2,147
Professional fees 1,529 9,717
Rent 35,879 --
Research and development expenses 22,077 16,387
Utilities 3,921 --
Travel 2,424 1,640
Total operating expenses 186,567 29,891
------- ------
NET LOSS (176,020) (29,891)
--------- -------
ACCUMULATED DEFICIT AT BEGINNING OF YEAR (29,891) --
ACCUMULATED DEFICIT AT END OF YEAR $(205,911) $(29,891)
========== =========
BASIC NET LOSS PER SHARE $(1,760.20) $(29,891)
=========== =========
See accompanying notes
H - 3
XYROS SYSTEMS, INC.
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(176,020) $(29,891)
Adjustments to reconcile net loss to net cash used by
operating activities - Depreciation 821 --
Changes in operating assets and liabilities:
Accounts receivable (13,599) --
Inventory (4,574) --
Accounts payable 6,289 --
Other accrued liabilities 3,024 --
----- --
Net cash used by operating activities (184,059) (29,891)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,104) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank note payable 65,000 --
Proceeds from stockholder notes payable 125,000 30,000
------- ------
Net cash provided by financing activities 190,000 30,000
------- ------
NET DECREASE IN CASH 1,837 109
CASH AT BEGINNING OF YEAR 109 --
--- -
CASH AT END OF YEAR $1,946 $109
======= =====
See accompanying notes.
H - 4
XYROS SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Xyros Systems, Inc. (the "Company") was incorporated in the State of Maryland on
July 27, 1997. The Company designs and develops products which permit remote
monitoring and storage of video.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could differ from the estimates that were used.
Revenue Recognition
The Company recognizes revenue and the related cost of goods sold upon shipment
of the product.
Inventories
Inventories consist of parts and other materials and are stated at the lower of
cost or market. Cost is determined by the first-in first-out method.
Property and Equipment
Property and equipment is recorded at cost and depreciated over their useful
lives, using the straight- line method. Upon sale or retirement, the cost and
related accumulated depreciation are eliminated from the respective accounts,
and the resulting gain or loss is included in the results of operations. The
useful lives of property and equipment for purposes of computing depreciation is
5 years.
Income Taxes
Deferred income taxes are recorded under the asset and liability method whereby
deferred tax assets and liabilities are recognized for the future tax
consequences, measured by enacted tax rates, attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss carry-forwards. Valuation
allowances are recorded for deferred tax assets when it is more likely than not
that such deferred tax assets will not be realized.
H - 5
2. NOTE PAYABLE - BANK
The Company has a demand note payable with a commercial bank having an
outstanding balance of $65,000 at December 31, 1998. The note bears interest
equivalent to the prime rate plus 2% per annum payable monthly and is personally
guaranteed by the Company's stockholders.
3. NOTES PAYABLE - STOCKHOLDERS
The Company has notes payable with its stockholders in the aggregate amount of
$155,000 as of December 31, 1998. The notes carry an annual interest rate of 10%
with interest payable monthly and are due December 31, 1999.
4. INCOME TAXES
The components of the deferred income taxes as of December 31, 1998 consist of
the following:
Effect of net operating loss carry-forward $ 70,010
Less valuation allowance (70,010)
Net deferred tax asset (liability) $ --
=========
The Company has recorded a valuation allowance in an amount equal to the
deferred tax asset resulting from its net operating loss carry-forward.
H - 6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Form 10-KSB/A to be
signed on its behalf by the undersigned hereunto duly authorized.
VIEW SYSTEMS, INC.
/s/Gunther Than
-------------------------------------
June 21, 2001 Gunther Than,
President and Chief Executive Officer
EXHIBIT INDEX
2.1 View Systems, Inc. Board of Directors Resolutions approving Acquisition
Agreement and Plan of Reorganization With RealView Systems, Inc;
Resolution of stockholders and Board of Directors of Real View Systems,
Inc. approving Acquisition Agreement and Plan of Reorganization With
Real View Systems, Inc. (1)
2.2 View Systems, Inc. Board of Directors Resolutions approving Acquisition
Agreement and Plan of Reorganization With RealView Systems, Inc;
Resolution of stockholders and Board of Directors of Real View Systems,
Inc. approving Acquisition Agreement and Plan of Reorganization With
Real View Systems, Inc. (1) View Systems, Inc. Acquisition Agreement
and Plan of Reorganization with Xyros Systems, Inc. (1)
2.3 View Systems, Inc. Acquisition Agreement and Plan of Reorganization
with ETMC(1)
2.4 Letter of Intent to Form Joint Venture Corporation Between NetServ
Caribbean, Ltd. and View Systems, Inc. (1)
3.1 Articles of Incorporation and all Articles of Amendment of View
Systems, Inc. (1)
3.2 By-Laws of View Systems, Inc. (1)
10.1 Form of Subscription Agreement For 8/8/99 Rule 505 (Amended to Be Rule
506) Offering and Terms of Offering Pages From Private Placement
Memorandum, Dated August 8, 1999, Describing Rights of Subscribers. (1)
10.2 Form of Subscription Agreement For 11/11/99 Rule 506 Offering and Terms
of Offering Pages From Private Placement Memorandum, Dated November 11,
1999, Describing Rights of Subscribers. (1)
10.3 Subscription Agreement Between View Systems, Inc. and Lawrence Seiler
for 170,000 Shares, Granting Registration Rights to 100,000 Shares. (1)
10.4 Lock-Up Agreement With Lawrence Seiler.(1)
10.5 Subscription Agreement Between View Systems, Inc. and Leokadia Than.
(1)
10.6 Form of Subscription Agreement Between View Systems, Inc. and Jim Price
and Tim Rieu. (1)
10.7 Subscription and Investment Representation Agreement between View
Systems, Inc. and Rubin Investment Group, dated February 18, 2000. (2)
10.8 First Common Stock Purchase Warrant between View Systems, Inc. and
Rubin Investment Group, dated February 18, 2000. (2)
10.9 Second Common Stock Purchase Warrant between View Systems, Inc. and
Rubin Investment Group, dated February 18, 2000. (2)
10.10 Registration Rights Agreement between View Systems, Inc. and Rubin
Investment Group, dated February 18, 2000. (2)
10.11 Non-qualified Stock Option Agreement with Richard W. Gray. (6)
10.12 Amendment to First Purchase Common Stock Warrant, Dated February
18,2000, Second Purchase Common Stock Warrant, Dated February 18, 2000,
and Subscription and Investment Agreement, Dated February 18, 2000,
Between View Systems and Rubin Investment Group. (7)
10.13 View Systems, Inc. 2000 Restricted Share Plan (8)
10.14 Second Amendment to First Purchase Common Stock Warrant, Dated February
18, 2000, Second Purchase Common Stock Warrant, Dated February 18,
2000, and Subscription and Investment Agreement, Dated February 18,
2000, Between View Systems and Rubin Investment Group. (9)
10.15 View Systems, Inc. Employment Agreement with Gunther Than. (1)
10.16 View Systems, Inc. Employment Agreement with Andrew L. Jiranek. (1)
10.17 View Systems, Inc. Engagement Agreement with Bruce Lesniak. (1)
10.18 View Systems, Inc. Employment Agreement with David Bruggeman. (1)
10.19 Eastern Tech Mfg. Corp. Employment Agreement with John Curran. (1)
10.20 Lease Agreement Between View Systems, Inc. and Lawrence Seiler. (1)
10.21 Stock Redemption Agreement, dated May 27, 1999, Between View Systems,
Inc. and Gunther Than. (1)
10.22 Stock Redemption Agreement, dated September 30, 1999, Between View
Systems, Inc. and Gunther Than. (1)
10.23 View Systems, Inc. 1999 Restricted Share Plan. (1)
10.24 Restricted Share Agreement with Bruce Lesniak (Lesniak & Associates).
(1)
10.25 Restricted Share Agreement with John Curran. (1)
10.26 Restricted Share Agreement with David Bruggeman. (1)
10.27 Restricted Share Agreement with Gunther Than. (1)
10.28 Restricted Share Agreement with Andrew Jiranek. (1)
10.29 Restricted Share Agreement with Linda Than. (1)
10.30 View Systems, Inc. 1999 Employee Stock Option Plan. (1)
10.31 Non-qualified Stock Option Agreement with Gunther Than. (1)
10.32 Non-qualified Stock Option Agreement with Andrew Jiranek. (1)
10.33 Qualified Stock Option Agreement with Gunther Than. (1)
10.34 Qualified Stock Option Agreement with Andrew Jiranek. (1)
10.35 Promissory Notes from Xyros Systems, Inc. to Ken Weiss. (1)
10.36 Promissory Notes from Xyros Systems, Inc. to Hal Peterson. (1)
10.37 Loan Agreement Between Xyros Systems, Inc. and Columbia Bank. (1)
10.38 Letter From Columbia Bank Extending Term of Loan. (1)
10.39 License and Distribution Agreement with Visionics Corporation. (5)
10.40 License and Distribution Agreement with Lead Technologies, Inc. for
Video OCR Software. (3)
10.41 License and Distribution Agreement with Anasoft Systems for Microsoft
Operating System Software. (3)
10.42 License and Distribution Agreement with Aware, Inc. for Compression
Software. (3)
10.43 Typical Non-Exclusive Reseller Agreement. (5)
10.44 Schedule of Contracted Resellers. (5)
10.45 Agreement between View Systems, Inc. and Magnum Financial Services,
Inc., dated February 27, 2000. (5)
10.46 View Systems, Inc. Employment Agreement with Keith Company. (5)
16.1 Letter From Katz, Abosch, Windesheim, Gershman & Freedman, P.A. to View
Systems, Inc., dated April 11, 2000. (4)
21.1 Subsidiaries of Registrant. (1)
23.1 Consent of Davis, Sita & Company.*
23.2 Consent of Stegman & Company.*
99.1 Consulting Agreement with Columbia Financial Group, LLC Granting
Warrants and Stock and Granting Piggyback Registration Rights. (1)
99.2 Consulting Agreement with Tom Cloutier Granting Warrants and
Registration Rights. (1)
99.3 Consulting Agreement with Guy Parr Granting Warrants and Registration
Rights. (1)
99.4 Form of Stock Certificate. (1)
99.5 Consulting Agreement with Magnum Worldwide Investments, Ltd. (1)
99.6 Consulting Agreement with Mid-West First National, Inc. (10)
99.7 Consulting Agreement with Pacific First National, Corp. (10)
99.8 Consulting Agreement with Columbia Financial Group, LLC (10)
99.9 Consulting Agreement with John Clayton (10)
99.10 Consulting Agreement with Magnum Financial Group, LLC (10)
99.11 Letter to Rubin Investment Group dated March canceling its warrants
(11)
------------------------------------------
(1) Incorporated By Reference from Registrant's Registration Statement on
Form SB-2 Filed With the Commission On January 11, 2000
(2) Incorporated By Reference From Registrant's Report on Form 8K, dated
February 19, 2000.
(3) Incorporated By Reference From Registrant's Report on Form 10KSB, Dated
March 30, 2000.
(4) Incorporated By Reference From Registrant's Report on Form 8K, Dated
April 13, 2000.
(5) Incorporated By Reference From Registrant's Statement on Form SB-2/A,
Dated April 27, 2000.
(6) Incorporated By Reference From Registrant's Form 10 QSB, Dated May
15,2000.
(7) Incorporated by Reference to Registrant's Registration Statement on
Form SB-2/A, dated June 7, 2000.
(8) Incorporated By Reference to Registrant's Definitive Proxy Statement On
Schedule 14A, dated May 3, 2000.
(9) Incorporated by reference to Registrant's Statement on Form SB 2/A,
dated July 20, 2000.
(10) Incorporated by reference to Registrant's Statement on Form SB 2, dated
February 12, 2001.
(11) Incorporated by reference to Registrant's Statement on Form SB 2/A,
dated March 28, 2001.
*attached hereto.