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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 0-01494
LANVISION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1455414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Financial Way, Suite 400
Cincinnati, Ohio 45242-5859
(Address of principal executive offices) (Zip Code)
(513) 794-7100
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
( Title of Class )
(continued)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. X
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The aggregate market value of the voting stock held by nonaffiliates of the
registrant, computed using the closing price as reported by The Nasdaq Stock
Market for the Registrant's Common Stock on April 21, 1997, was $17,202,125.00.
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, as of April 21, 1997: 8,861,500
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders for the year ended
January 31, 1997, are incorporated by reference into Part II of this Form 10-K
to the extent stated herein. Except with respect to information specifically
incorporated by reference in this Form 10-K, the Annual Report is not deemed to
be filed as a part hereof.
Portions of the Registrant's Definitive Proxy Statement for the Annual Meeting
of Stockholders to be held on May 27, 1997, are incorporated by reference into
Part III of this Form 10-K to the extent stated herein. Except with respect to
information specifically incorporated by reference in this Form 10-K, the
Definitive Proxy Statement is not deemed to be filed as a part hereof.
This report consists of 95 pages and the Exhibit Index appears on page 27.
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FORWARD-LOOKING STATEMENTS
In addition to historical information contained herein, this Annual Report on
Form 10-K contains forward-looking statements. The forward-looking statements
contained herein are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those discussed in the sections entitled "Item 1. Business" and
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations." Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis only as of the
date hereof. The Registrant undertakes no obligation to publicly revise these
forward-looking statements, to reflect events or circumstances that arise after
the date hereof. Readers should carefully review the risk factors described in
other documents the Company files from time to time with the Securities and
Exchange Commission, including the Quarterly Reports on Form 10-Q and any
Current Reports on Form 8-K.
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PART I
ITEM 1. BUSINESS
General
LanVision Systems, Inc. ("LanVision"(TM) or the "Company") is a leading
provider of healthcare information access systems that enable hospitals and
integrated healthcare networks to capture, manage, store, retrieve and process
vast amounts of clinical and financial patient information. The Company's
systems deliver on-line enterprise-wide access to fully-updated patient
information which historically was maintained on a variety of media, including
paper, magnetic disk, optical disk, x-ray film, video, audio and microfilm.
LanVision's systems, which incorporate data management, document imaging and
workflow technologies, consolidate patient information into a single repository
and provide fast and efficient access to patient information from universal
workstations located throughout the enterprise, including the point of patient
care. The systems are specifically designed to meet the needs of physicians and
other medical and administrative personnel and can accommodate multiple users
requiring simultaneous access to patient information, thereby eliminating file
contention. By providing access to all forms of patient information, the Company
believes that its healthcare information access systems are essential components
of the computer-based patient record ("CPR").
On February 8, 1996, the Company was reorganized when LanVision Systems, Inc.
was incorporated in the State of Delaware as a holding company with LanVision,
Inc. as a wholly-owned operating subsidiary incorporated in 1989 in the State of
Ohio. The result of the reorganization is that the stockholders of LanVision,
Inc. became the owners of all the outstanding shares of LanVision Systems,
Inc.'s common and preferred stock, and LanVision
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Systems, Inc. became the owner of all of the outstanding shares of LanVision,
Inc.'s common and preferred stock.
On April 18, 1996, the Registrant issued 2,912,500 Shares of Common Stock in an
initial public offering. The net proceeds to the Company, after expenses, was
$34,304,782.
Industry Background
Over the last ten years, healthcare expenditures have doubled to approximately
$1.0 trillion, and currently represent approximately 14% of the U.S. Gross
Domestic Product. In response to these dramatic increases, the healthcare
industry is undergoing significant change as competition and cost-containment
measures imposed by governmental and private payors have created substantial
pressures on healthcare providers to control healthcare costs while providing
quality patient care. At the same time, the healthcare delivery system is
experiencing a shift from a highly fragmented group of non-allied healthcare
providers to integrated healthcare networks which combine all of the services,
products and equipment necessary to address the needs of healthcare customers.
As a result, healthcare providers are seeking to cut costs, increase
productivity and enhance the quality of patient care through improved access to
information throughout the entire hospital or integrated healthcare network.
Today, the majority of the patient record is paper-based in most hospitals. The
inefficiencies of a paper-based record increase the cost of patient care.
According to The Computer-Based Patient Record published in 1991 by The
Institute of Medicine, physicians cannot gain access to medical records up to
30% of the time during patient visits, and users cannot simultaneously access
the record when only a single copy of the paper-based patient record is
available. In the Company's experience in installing its systems, a typical 500
bed hospital can produce 20,000 to 25,000 pages of new patient information each
day even with computerized admission, billing, laboratory and radiology systems,
and individual physician document retrieval requests can be as high as 100 per
physician per day. The volume of medical images in the patient record is
expanding as well. In addition to classic images such as x-rays and CAT scans,
new image forms such as digitized slides, videos and photographs proliferate.
Thus, the ability to store and retrieve images of voluminous paper records and
medical images on a timely basis is a critical feature of a complete CPR.
In order to simultaneously reduce costs and enhance the level of patient care,
hospitals and other healthcare providers are demanding comprehensive,
cost-effective information systems that deliver rapid access to fully updated
and complete patient information. Traditional healthcare information systems are
inadequate because (i) they do not capture large amounts of the patient record
which are paper-based and stored in various sites throughout the enterprise;
(ii) computerized patient data is generated using a variety of disparate systems
which cannot share information; and (iii) multimedia medical information such as
x-rays, CAT scans, MRI's, video and audio information are frequently
inaccessible at the point of patient care. Accordingly, hospitals and other
healthcare providers have begun to increase their healthcare information systems
expenditures. In a hospital survey jointly conducted by Hewlett-Packard and the
Healthcare Information and Management Systems Society in February 1997, 35% of
those
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surveyed expected their healthcare information system budgets to increase by
over 30% per year and 19% expected their budgets to increase by over 50% per
year. In addition, 20% of the institutions plan to focus on clinical data
repositories and 19% on electronic medical records. The Kennedy Group, a
healthcare consulting firm, projected in an April, 1995, study that healthcare
information technology expenditures will double or triple over five years,
resulting in a total market size of $18 to $20 billion by the year 2000.
Document imaging and workflow technologies are essential elements of a CPR
because they allow for the storage of unstructured data (i.e., patient record
elements other than data or text, such as photographs, images of the document,
video, x-ray images) and they enable digitized x-rays, CAT scans, MRI's, video
and audio information to be accessed and delivered to the caregiver at the point
of patient care. The Company's management believes the demand for the Company's
healthcare information access systems, which can supply imaging capabilities to
the CPR, will increase in future years.
The LanVision Solution
LanVision's healthcare information access systems provide solutions for the
patient information access needs of hospitals and integrated healthcare
networks. LanVision's systems enable medical and administrative personnel to
rapidly and efficiently capture, manage, store, retrieve and process vast
amounts of clinical and financial patient information.
LanVision's systems (i) capture and store electronic data from disparate
hospital information systems through real-time, computerized interfaces; (ii)
facilitate the storage of digitized multimedia data and medical images such as
x-rays, CAT scans, MRI's, video and audio information; (iii) provide
applications for efficiently scanning and automatically indexing paper-based
records; (iv) allow storage of a patient's lifetime medical record on low cost
optical disks which also provides rapid access to high volumes of data
enterprise-wide; (v) provide workflow automation to facilitate the reengineering
of business processes; and (vi) incorporate physician-oriented interfaces that
allow the user to easily locate and retrieve patient information in the hospital
or clinical setting, including the point of patient care.
LanVision's healthcare information access systems provide financial,
administrative, and clinical benefits to the healthcare provider and facilitate
more effective patient care. These benefits include:
improved access to patient information by various search criteria to assist in
making informed clinical and financial decisions;
reduced costs for administrative personnel due to increased workflow efficiency,
as data can be routed within an organization to all users who need to process
that information simultaneously or in sequence as required;
increased productivity through the elimination of file contention by providing
multiple users simultaneous access to patient medical records;
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reduced costs and improved care through the reduction of unnecessary testing and
admissions;
improved cash flow through accelerated collections and reduction of "technical
denials" (which occur when a third-party payor refuses payment because of the
provider's inability to substantiate billing claims due to loss of portions or
all of the patient record);
expedited treatment decisions, improved predictability of patient outcomes and
fewer redundant tests as a result of timely access to complete information;
fewer medical record errors by minimizing misfiled, lost and improperly
completed records; and
increased security of patient information through improved controls on access to
confidential data and the creation of audit trails that identify the persons who
accessed or even tried to access such information.
The LanVision Strategy
The Company's objective is to continue to be a leading provider of healthcare
information access systems. Important elements of the Company's business
strategy include:
Expand Sales, Marketing and Distribution Channels. In fiscal 1996, LanVision
increased its sales and marketing personnel from eight to thirty and increased
its advertising and other marketing activities. The planned expansion was
designed to increase the Company's direct and indirect sales capabilities and
expand LanVision's overall presence in the market place. The Company intends to
continue to expand its direct sales operation especially in geographic areas the
company is currently not present. However, the overall expansion will be at a
slower pace than in 1996 and will be monitored along with the Company's
assessment of market share growth opportunities. During 1996 and through April
15, 1997, the Company established strategic marketing relationships with Lanier
Worldwide, Inc., 3M Health Information Systems, Daou Systems, Inc. and Crowe,
Chizek and Company LLP. The Company intends to increase the number of
third-party marketing reseller/referral arrangements, and increase LanVision's
pre-sales support to these partners.
Develop New Software Applications and Increase the Functionality of Existing
Applications. During 1996, the Company released new versions of
ChartVision(R) with increased functionality along with MultiView(TM), an
advanced ChartVision viewer providing users with a longitudinal view of patient
data with multiple document display, intuitive screen flows and familiar folder
and tab functionality. Also, in 1996, the Company continued development of
On-Line Chart Completion(TM), an advanced application that automates the
identification and processing of deficiencies in patient charts. Currently,
On-Line Chart Completion is installed at two beta sites. Additionally, in 1996,
the Company began development of Correspondence, an application that helps
healthcare organizations quickly and efficiently complete and invoice requests
for patient information from various external sources. Correspondence is
scheduled to be released in the first half of fiscal 1997. The Company also
continued development of OmniVision(TM), a suite of
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image-enabling and workflow applications that allows physicians, clinicians and
other users to access information, such as document and medical images that were
previously unavailable through their existing applications. OmniVision has been
ordered by several customers and will be delivered in the first half of 1997.
Also, in 1996, the Company began developing version 2.0 of AccountVision(R).
AccountVision 2.0 will have increased functionality and be more conducive to
broad scale sales distribution. Finally, during 1996, the Company began
development of WebView(TM), a product that will allow hospitals and integrated
delivery networks to take advantage of the World Wide Web whereby users can
immediately and simultaneously access healthcare information across the Internet
with complete security and audit trail. LanVision intends to continue to expand
its product development efforts and increase the functionality of existing
applications along with the development of new applications using document
imaging and workflow technologies.
Image-Enable Clinical Data Repositories and Other Applications Software. Today,
health information is often stored on numerous dissimilar host-based and
departmental systems that are spread throughout the enterprise and are not
integrated. Additionally, these current systems do not address the data stored
on paper or the increasing volume of medical images such as x-rays, CAT scans,
digitized slides, exploratory scopes, photographs, audio, etc. LanVision
believes the efficiencies and productivity of hospitals and integrated delivery
networks can be greatly enhanced by seamlessly integrating their historical
information systems with document imaging and workflow applications. Physicians,
clinicians and other healthcare users then have access to the complete patient
record, including the structured data, such as a lab result, and the related
unstructured data, such as an x-ray or a doctor's hand written note. Currently,
LanVision is working with several vendors to image-enable their clinical data
repository systems and other applications. LanVision is marketing image-enabling
through its product OmniVision, which is scheduled for delivery in the first
half of 1997. LanVision intends to continue to aggressively market its unique
image-enabling solutions to end users and other third-party software application
providers.
Market New Entry Level System. Historically, LanVision has focused on large
hospitals, where the initial investment by customers in LanVision's systems may
exceed $1,000,000. A study conducted in 1994 by the Rheinner Group, a consulting
firm, indicated that over 60% of the document imaging market opportunities were
in hospitals and clinics planning to invest less than $500,000. To address the
needs of this market segment, LanVision introduced 1stVision(TM), a
pre-configured departmental ChartVision system that can be purchased for less
than $500,000 and subsequently be expanded enterprise-wide.
Maintain Technological Leadership. LanVision's systems use advanced
client/server architecture and service some of the nation's leading healthcare
providers. The Company has achieved technological leadership by designing its
applications software to operate on multiple hardware platforms, operating
systems, imaging engines, workflow engines and database management systems. In
addition, ChartVision was designed with application program interfaces to enable
third-party software applications to easily access ChartVision features and
functionality. The Company intends to maintain technological leadership by
continuing to apply advances in
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computer software and hardware technology to the development, implementation and
support of its systems.
Systems and Services
LanVision's systems employ an open architecture which supports a variety of
operating systems, including Microsoft Windows, Windows 95, Windows NT and UNIX.
The Company's systems can be configured with various hardware platforms,
including INTEL-compatible personal computers, IBM RS/6000, Hewlett-Packard
9000, Sun Sparc 1000 and NCR 3000 computers. The Company's systems include a
graphical user interface designed specifically by the Company for physicians and
other medical and administrative personnel in hospitals and integrated
healthcare networks. The Company's systems operate on multiple imaging
platforms, including those of FileNet, Kofax, and Optika. The Company's
healthcare information access systems incorporate advanced features which allow
customers to restrict direct access to confidential patient information, secure
patient data from unauthorized indirect access and have audit trail features.
Currently, the Company markets, installs and services ChartVision and
AccountVision. Additionally, the Company has recently installed On-Line Chart
Completion, at two beta sites and On-Line Chart Completion has been ordered by
other customers but not yet delivered. Also, the Company is image-enabling
certain clinical data repositories for customers that will incorporate
OmniVision. Additionally, the Company has various new products and add-on
modules under development. A brief description of the Company's products,
including products in development, follows:
ChartVision, originally developed in 1991, is a highly-evolved electronic
patient record application, that is designed to provide health information when
and where it is needed. This software replaces the physical paper medical record
with optical imaging technology. In addition, it has the ability to image-enable
third-party applications as well as accept data from other hospital information
systems. Health information traditionally stored on magnetic tape, optical disk,
x-ray film, video, audio and microfilm is consolidated into a single point of
access with ChartVision.
AccountVision is a patient financial services application based on document
imaging and workflow technology. It streamlines all areas of patient financial
services by reducing or eliminating the paper being gathered, assembled, and
manually routed through the department. AccountVision stores documents on
optical and magnetic disk for easy inquiry and retrieval processing. This allows
AccountVision to bring billing attachments and documentation to patient
financial service representatives when and where they need it. AccountVision
allows automated management of the volumes of information being transmitted
electronically, including data from a healthcare facility's registration,
billing, managed care systems, etc. AccountVision, Version 1.0, incorporates
software originally developed by Memorial Sloan-Kettering Cancer Center, a 565
bed hospital located in New York City, and the Company licenses the exclusive
marketing rights and source code to this application. (Memorial Sloan-Kettering
continues to use the original software.) The installation of AccountVision 1.0
includes the customization of software code to meet the customer's specific
needs. AccountVision 1.0 has been installed and is in production at Stanford
University Medical Center. AccountVision 2.0 is currently being developed by
LanVision. AccountVision 2.0 will have increased functionality and modularity,
which will
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typically reduce the need for customization. Additionally, AccountVision 2.0
will have a common database with ChartVision. AccountVision 2.0 is expected to
be completed in the second half of 1997.
On-Line Chart Completion is an add-on module to ChartVision and is in its final
development stages. It is currently installed at two beta sites. On-Line Chart
Completion provides healthcare facilities with automated management of chart
deficiencies. Through the integration of medical records workflow processing and
imaging technology, On-Line Chart Completion enables the deficiency analyst to
identify, assign, review and reassign medical record deficiencies. The clinician
can sign documents, annotate and highlight, view the entire record while
dictating, attach notes and comments and complete assigned deficiencies.
Management can track and report on deficiency progress throughout the
enterprise. On-Line Chart Completion also provides standard Joint Commission on
the Accreditations of Healthcare Organizations reports and customer defined
reports. Cases can be updated at any time and simultaneous access to the
documents eliminates file contention. The automated, flexible workflow processes
were designed to be intuitive to the end users, analysts and clinicians. This
makes it easy for clinicians to finish their on-line "paper work." Because it is
flexible and easy to use, On-Line Chart Completion helps customers increase
efficiency immediately. As a result, hospitals and integrated delivery networks
can quickly improve cash flow through faster billing, reduced denials and
optimized coding.
Correspondence is currently being developed and will be an add-on module to
ChartVision and AccountVision. Correspondence is expected to be completed in the
first half of 1997. Correspondence was developed to help hospitals and
integrated delivery networks quickly and efficiently complete requests for
information from various sources. It is an automated, flexible workflow
processing and management reporting system. It provides on-line access to all
pertinent information. The implementation of a workflow system offers an
opportunity to streamline and re-design existing core operational processes. The
correspondence analyst's work queue accepts incoming requests that are faxed,
scanned (mail), manually created (phone call) or delivered through an interface
from another system within the enterprise. Once a request is received by the
Correspondence system, it automatically initiates the workflow process and moves
the users through the pre-defined steps necessary to fulfill the request. The
actual request document can also be routed as an attachment and is then
available as needed. Requests are tracked and the current status can be viewed
on-line. The Correspondence system has a flexible invoice processing option that
can be built into the workflow process, and it produces standard productivity,
revenue and summary reports. Ad hoc reports may also be generated.
OmniVision is also in its final development stages and is expected to be
completed in the first half of 1997. OmniVision is a suite of image-enabling and
workflow applications that provides physicians, clinicians and other healthcare
users with immediate, simultaneous access to any patient information including
multimedia and paper-based information, through their existing applications.
OmniVision delivers unstructured data and workflow automation to any third-party
application while creating a complete historical repository. As a result,
OmniVision allows hospitals and integrated delivery systems to consolidate all
health information, whether text, document and
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medical images, sound, or video into one easily accessible repository. This
provides a significant advantage to healthcare organizations that currently rely
on manual processes or multiple non-integrated applications to access the
complete patient record.
OmniVision allows any application across the entire enterprise to be
image-enabled, from the host healthcare information system, to human resources,
materials management, patient billing, as well as clinical data repositories
("CDR"), computer-based patient record systems, and others. And when the CDR is
image-enabled, users can access any piece of information on the same workstation
and from the same screen display, including the point of patient care. This
means that users can view traditional electronic data and images simultaneously
on the same screen without signing in and out of multiple applications.
LanVision is currently working with various customers to image-enable their
existing information systems using OmniVision including: the "Oacis" clinical
data repository system at Stanford University Medical Center; the "PHAMIS"
clinical data repository at Grant/Riverside Methodist Hospital and U.S. Health
Corporation; and the "AutoCyte" pathology system at the University of Pittsburgh
Medical Center. The Company is also in the process of image-enabling the 3M
Healthcare Enterprise Management system, a CPR system and the MasterChart CPR
system, currently being distributed by Lanier Healthcare Systems.
The Company views the seamless integration of its products with third-party
clinical data repository software systems and other applications systems as a
key element of the Company's business strategy. To the degree that the Company
is successful in image-enabling these applications, the Company believes that it
will be able to offer its image-enabling systems to other healthcare providers
using systems such as Oacis, PHAMIS, etc.
WebView development began in the second half of fiscal 1996. WebView will
provide seamless, easy access to any health information via the Internet. With
WebView, Hospitals and integrated delivery networks will be able to take
advantage of the World Wide Web for truly enterprise-wide access. Regardless of
where they are located, healthcare users will be able to immediately and
simultaneously access any healthcare information across the Internet with
complete security and audit trail. Using popular Internet browsers, WebView will
allow authorized users to query LanVision systems, retrieving, displaying,
navigating and printing documents in accordance with appropriate security
permissions restrictions. WebView will allow healthcare organizations to
establish a private, secure intranet (a private network that utilizes Internet
protocols and technology) and scale to the Internet as appropriate. Development
of WebView is expected to be completed in late fiscal 1997.
The Company continues to focus its research and development efforts to develop
new application software and increase the functionality of existing
applications. The Company's research and development efforts are influenced
significantly by customer requirements and desires. During fiscal 1996, the
Company's product development staff grew from five to nineteen people. The
company intends to continue to expand its product development staff in fiscal
1997.
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Professional Services provided by LanVision complements its systems by offering
high quality professional services which the Company believes are critical to
attracting new customers and maintaining existing customer satisfaction. These
services include implementation and training, project management and custom
software development. The implementation and training services include equipment
and software installation, system integration and comprehensive training. The
project management services include needs and cost/benefit analysis, hardware
and software configuration and business process re-engineering. The custom
software development services include interface development, software
development and modification services.
Existing Customers
The Company's customers include healthcare providers located throughout the
United States. LanVision has implemented or is in the process of implementing
one or more of its systems in the following institutions: Albert Einstein Health
Network, Philadelphia, PA; Beth Israel Medical Center, New York, NY; Phillips
Ambulatory Care Center, New York, NY; Cox Health Systems, Springfield, MO;
Holzer Medical Center, Gallipolis, OH; ProMedica Health Systems, Toledo, OH; St.
Alexius Medical Center, Bismarck, ND; Stanford University Medical Center, Palo
Alto, CA; St. Francis Hospital and Medical Center, Hartford, CT; Summa Health
System: Akron City Hospital, Akron, OH; and St. Thomas Medical Center, Akron,
OH; University Hospital, Cincinnati, OH; University of Pittsburgh Medical
Center, Pittsburgh, PA; U.S. Health Corporation: Grant/Riverside Methodist
Hospital, Columbus, OH.
In fiscal year 1996, the University of Pittsburgh Medical Center, Beth Israel
Medical Center and University Hospital, Cincinnati, OH, accounted for 21%, 17%
and 11%, respectively, of the Company's total revenues. In fiscal year 1995,
Beth Israel Medical Center, Albert Einstein Health Network and University
Hospital, Cincinnati, OH, accounted for 35%, 19% and 16%, respectively, of the
Company's total revenues. In fiscal year 1994, Beth Israel Medical Center,
University Hospital, Cincinnati, OH and Summa Health System accounted for 37%,
35% and 19%, respectively, of the Company's total revenues. The small number of
customers and the extended sales cycle have contributed to variability in
quarterly and annual operating results. The Company expects that as its customer
base continues to increase, the actions of any one customer will have less of an
effect on its quarterly and annual operating results.
Signed Agreements - Backlog
LanVision enters into master agreements with its customers to specify the scope
of the system to be installed and services to be provided by LanVision, the
agreed upon aggregate price and the timetable for implementation. The master
agreement typically provides that the Company will deliver the system in phases
pursuant to the customer's purchase orders, thereby allowing the customer
flexibility in the timing of its receipt of systems and to make adjustments that
may arise based upon changes in technology or changes in customer needs. The
master agreement also allows the customer to request additional components as
the installation progresses, which additions are then separately negotiated as
to price and terms. Historically, customers have ultimately purchased systems
and services in addition to those originally contemplated by the master
agreement, although there can be no assurance that this trend will continue in
the future.
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At January 31, 1997 and January 31, 1996, the Company's customers had entered
into master agreements for systems and services (excluding maintenance) which
had not yet been delivered, installed and accepted which, if fully performed,
would generate sales of approximately $6,600,000 and $10,400,000, respectively.
Such master agreements as of January 31, 1997 relate to ten customers and are
currently expected to be performed over the next two to three years. Of the
backlog at January 31, 1997, the Company has received purchase orders for
approximately $3,200,000 of systems and services (excluding maintenance), of
which $2,200,000 is currently anticipated to be delivered in fiscal year 1997.
The Company's master agreements also generally provide for an initial
maintenance period and give the customer the right to subscribe for maintenance
services on a monthly, quarterly or annual basis. Maintenance revenues for
fiscal years 1996 and 1995 and 1994 were approximately $1,186,000, $906,000 and
$593,000, respectively.
The commencement of revenue recognition varies depending on the size and
complexity of the system and the implementation schedule requested by the
customer. In addition, shipments to customers may be postponed due to delays in
the Company's development schedule. Therefore, LanVision is unable to accurately
predict the revenue it expects to achieve in any particular period. The
Company's master agreements generally provide that the customer may terminate
its agreement upon a material breach by the Company, may delay certain aspects
of the installation and may terminate the agreement, at the customer's
discretion, without penalty and without regard to the Company's performance. To
date, no customer has terminated a master agreement, although customers have
delayed installations from the original scheduled installation date and have
modified the original system configuration. There can be no assurance that a
customer will not cancel all or any portion of a master agreement in the future.
A termination or installation delay of one or more phases of an agreement, or
the failure of the Company to procure additional agreements, could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Royalties
AccountVision, Version 1.01, incorporates software originally developed by
Memorial Sloan-Kettering Cancer Center in New York. In 1994, Memorial
Sloan-Kettering granted to LanVision the exclusive marketing rights to this
software. Memorial Sloan-Kettering also granted to LanVision a non-exclusive,
unlimited copy license to re-use and reengineer this software. The Company's
agreement with Memorial Sloan-Kettering provides that the Company will pay a
specified royalty to Memorial Sloan-Kettering each time the Company provides
AccountVision, Version 1.0, to another customer. The initial term of the
agreement expires in October 1997 and is automatically renewable for one year
periods thereafter. Memorial Sloan-Kettering may terminate the agreement prior
to expiration if the Company fails to meet stated minimum licensing and sales
representative quotas. To date, AccountVision 1.0 has only been installed at
Stanford University Medical Center. Currently, LanVision is developing
AccountVision 2.0. AccountVision 2.0 will have increased functionality,
modularity and a common database with ChartVision. AccountVision 2.0 is expected
to be complete in the second half of 1997. LanVision retains ownership of all
revisions, enhancements and upgrades to the original form of AccountVision
developed by LanVision.
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The Company has agreed with several other customers that with regard to specific
customized software and, in one instance, certain derivatives thereof, the
Company will pay a specified royalty to the original customer each time the
Company provides the same software to another customer. As of the date hereof,
the Company has paid no royalties under these agreements.
Sales and Marketing
At January 31, 1996, the Company's sales and marketing force consisted of eight
people, including a regional marketing manager in New York, serving the
northeast United States region; a regional marketing manager in Chicago, serving
the Great Lakes region; and a six-person marketing and sales support team.
During fiscal 1996, the Company expanded its sales and marketing force by
twenty-two people, net. At January 31, 1997, the direct sales force consisted of
nine commissioned sales personnel and seventeen personnel in pre-sales support
and marketing. During 1996, the Company terminated a sales agent in San Diego,
previously serving the Western United States, and this region is now being
served by the Company's direct sales force and the Company's other third-party
resellers. LanVision intends to continue to expand its direct sales force,
especially in areas where the Company does not currently have a geographic
presence. However, the expansion in 1997 will be at a slower pace and will be
monitored along with the Company's assessment of market growth opportunities.
During 1996, the Company placed increased emphasis on indirect distribution
channels. LanVision hired a director of indirect sales channels and transferred
three people from the direct sales group to support the indirect sales
operation.
In March 1996, as an initial step in the Company's strategy to expand its sales,
marketing and distribution channels, the Company entered into a marketing
agreement with Lanier Worldwide, Inc. ("Lanier"), a wholly-owned subsidiary of
Harris Corporation. LanVision granted to Lanier the non-exclusive right to
market and distribute ChartVision, AccountVision, On-Line Chart Completion and
related applications throughout North America until June 30, 1997 and for
one-year renewal periods thereafter as may be agreed by both parties. Lanier is
obligated to market ChartVision as its exclusive applications software for
medical records except to those Lanier customers currently using certain Lanier
products and except as agreed by both parties. Lanier has the right to terminate
the agreement if LanVision markets a CPR product which directly competes with
Lanier's CPR product and LanVision has the right to terminate the agreement if
Lanier markets a product which directly competes with ChartVision, AccountVision
or On-Line Chart Completion. The contractual terms of the agreement are designed
to operate as an incentive for Lanier to focus on small- to medium-sized
hospitals by providing Lanier with a larger discount for software licensed to
small- to medium-sized hospitals. LanVision will have the first opportunity to
provide installation and maintenance services to customers that have 400 or
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more licensed beds and Lanier will have such first opportunity with regard to
customers that have less than 400 licensed beds.
In April 1997, LanVision and Lanier agreed in principle to a new three year
reseller agreement. Under the proposed agreement, Lanier will market LanVision's
complete line of document imaging applications including ChartVision,
AccountVision, OmniVision, On-Line Chart Completion, Correspondence and WebView.
Lanier has agreed to partner exclusively with LanVision in these application
areas. The new agreement will encompass Lanier's entire 125 member healthcare
sales organization. In addition, Lanier will establish a dedicated team of
specialists that will focus on document imaging and workflow applications.
LanVision has agreed to dedicate a team of pre-sales support personnel to assist
the Lanier sales effort. Lanier will have the right to sub-license LanVision's
proprietary and third-party software in exchange for royalty payments. Royalty
terms for the relicensing of LanVision's systems are the same for large or small
hospitals. Lanier has the option to purchase hardware and professional services
from LanVision.
Both companies intend to pursue joint product integration and marketing
opportunities. One planned project will include the integration of LanVision's
document imaging and On-Line Chart Completion technologies with Lanier's
dictation, medical transcription, data repositories, and digital
copiers/printers. Lanier intends to market this integrated solution as DOCument
Imaging/ES to selected providers of healthcare information and clinical systems
in addition to healthcare enterprises.
In March 1997, LanVision entered into a marketing agreement with 3M Health
Information Systems to integrate OmniVision, LanVision's image-enabling software
application, with the 3M Healthcare Enterprise Management System, a computer
based patient record system. Under the terms of the agreement, 3M Health
Information Systems will receive a commission on LanVision products installed as
a result of qualified leads from 3M Health Information Systems.
Also, in March 1997, LanVision formed a cooperative marketing and professional
services agreement with Crowe, Chizek and Company LLP aimed at the healthcare
industry. In this agreement, Crowe Chizek will recommend LanVision technology in
imaging and workflow opportunities, while LanVision will recommend the services
of Crowe, Chizek in accounts payable opportunities. Crowe Chizek is the 10th
largest consulting and Certified Public Accounting firm in the United States.
In April 1997, LanVision formed a cooperating marketing agreement with Daou
Systems, Inc. ("Daou"), a leader in designing, planning, implementing and
managing computer networks used in the healthcare industry. Under the terms of
the agreement, LanVision and Daou will each promote customer awareness of the
benefits of each other's products. LanVision and Daou have each agreed to pay
the other party a commission on products installed as a result of qualified
leads from the other party.
LanVision intends to continue to expand alternative channels of distribution and
increase LanVision's support of these third-party distributors.
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Throughout 1996, the Company experienced extended sales cycles which adversely
affected revenues. It is common for sales cycles to take from six to eighteen
months. The sales cycle consists of several steps, which include initial contact
and lead qualification, response to requests for proposals, analysis of business
requirements, site visits, preparation of final bid and agreement negotiations.
Members of the Company's product development, client services and client support
departments assist the Company's direct sales force in making presentations to,
and preparing comprehensive proposals for potential customers. To support the
Company's sales efforts, the Company conducts a variety of programs intended to
market and position its product line and services. These programs include trade
journal advertising, public relations activities and trade show participation.
Competition
The healthcare information access systems market historically has been dominated
by several companies. The industry is currently undergoing consolidation and
realignment as companies position themselves to compete more effectively.
Strategic alliances between vendors of healthcare information access systems and
vendors of other healthcare systems are increasing. Barriers to entry to this
market include technological and application sophistication, the ability to
offer a proven product, a well-established customer base and distribution
channels, brand recognition, the ability to operate on a variety of operating
systems and hardware platforms, the ability to integrate with pre-existing
systems and capital for sustained development and marketing activities. The
Company believes that these barriers together represent a moderate to high level
barrier to entry. Foreign competition has not been a significant factor in the
market to date.
The Company's competitors include healthcare information systems vendors which
are larger and more established and have substantially more resources than the
Company. In addition, information and document management companies serving
other industries may enter the healthcare information systems market. Suppliers
and companies with which LanVision may establish strategic alliances may also
compete with LanVision. Such companies and vendors may either individually, or
by forming alliances excluding LanVision, place bids for large agreements in
competition with LanVision. A decision on the part of any of these competitors
to focus additional resources in the image-enabling and other markets addressed
by LanVision could have a material adverse effect on LanVision.
LanVision believes that the principal competitive factors in its market are
customer recommendations and references, company reputation, system reliability,
system features (including ease of use), technological advancements, customer
service and support, the effectiveness of marketing and sales efforts, price and
company size. In addition, LanVision believes that the speed with which
companies in its market can anticipate the evolving healthcare industry
structure and identify unmet needs are important competitive factors. There can
be no assurance that the Company will be able to compete successfully in the
future against existing or potential competitors.
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Employees
As of March 31, 1997, LanVision had 101 full-time employees. None of the
Company's employees are represented by a labor union or subject to a collective
bargaining agreement. LanVision has never experienced a work stoppage and
believes that its employee relations are good.
ITEM 2. PROPERTIES
The Company's principle administrative and sales offices are located at One
Financial Way, Suite 400, Cincinnati, Ohio 45242-5859. The offices consist of
approximately 23,000 square feet of space under a lease which expires in August,
2001. The rental expense for these offices approximates $422,000 annually.
The Company also leases office space for a portion of its software engineering
and research and development operations at 5481 Creek Road, Cincinnati, Ohio
45242-4001. The offices consist of approximately 10,000 square feet of space
under a lease which expires in April, 2000. The rental expense for these offices
approximates $75,000 annually.
The Company also leases office space for a portion of its software engineering
and research and development operations at 5970 Fairview Road, Suite 700,
Charlotte, North Carolina 28210-3167. The offices consist of approximately 3,800
square feet of space under a lease which expires in September, 1999. The rental
expense for theses offices approximates $62,000 annually.
The Company believes that its facilities are adequate for its current needs and
that suitable additional or substitute space will be available as needed to
accommodate expansion of the Company's operations.
ITEM 3. LEGAL PROCEEDINGS
The Company may be subject to various legal proceedings and claims, either
asserted or unasserted, which arise in the ordinary course of business. While
the outcome of these claims can not be predicted with certainty, management is
not aware of any of legal maters that will have a material adverse effect on the
Company's consolidated results of operations or consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions held by the Executive Officers of the Company on
April 23, 1997 are:
Elected to
Name Age Position(1) Present Position(2)
---- --- ----------- -------------------
J. Brian Patsy 46 Chairman of the Board, President, Treasurer, Chief
Executive Officer(3)
and Director 1989
Eric S. Lombardo 44 Executive Vice President, Secretary
and Director 1989
Robert F. Golden 42 Chief Technology Officer 1996
Alan J. Hartman 44 General Counsel 1996
Thomas E. Perazzo 43 Chief Financial Officer 1996
<FN>
(1) All current officers of the Company hold office until their successors are elected and
qualified or until any removal or resignation. Officers of the Company are elected by
the Board of Directors and serve at the discretion of the Board. For purposes
of the descriptions of the background of the Company's Executive Officers, the
term "Company" refers to both LanVision Systems, Inc. and its predecessor
LanVision, Inc. before the reorganization. See Item 1, "Business-General."
(2) Represents date of election to Registrant or its predecessor before the reorganization.
See (1) above.
(3) Since April 8, 1997, Mr. Brian Patsy is also performing the function of
Vice President, Sales and Marketing until the current vacancy is filled.
J. Brian Patsy, is a co-founder of the Company and has served as the
President, Treasurer and a Director since the Company's inception in October,
1989. Mr. Patsy was appointed Chairman of the Board and Chief Executive Officer
in March, 1996. Mr. Patsy has over 25 years of experience in the information
technology industry. From 1986 to 1989, Mr. Patsy served as Branch Manager and
District Marketing Manager for Wang Laboratories, Cincinnati, Ohio. Prior to
1986, Mr. Patsy served twelve years in numerous engineering, sales, sales
marketing and executive management positions with AT&T, Ameritech and Ohio Bell
Telephone Company.
Eric S. Lombardo, is a co-founder of the Company, has served as a
Director since the Company's inception and as Executive Vice President and
Secretary of the Company since May, 1990. Mr. Lombardo has over 23 years of
experience in the information technology industry. From 1983 to 1989, Mr.
Lombardo served as Major Account Executive for Wang Laboratories. In 1979, Mr.
Lombardo established and managed the Cincinnati, Ohio office of Triad Systems, a
17
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wholesale distribution software company. Prior to 1979, Mr. Lombardo was
employed by NCR Corporation in various capacities.
Robert F. Golden, joined the Company in February, 1996 as Chief
Technology Officer. From February, 1995 until he joined the Company, Mr. Golden
served as a consultant to the Company, responsible for new product development.
From 1992 to 1994, Mr. Golden served as Vice President and General Manager of
Charm Bioengineering, Inc., a biotechnology immunoassay manufacturer. From 1984
to 1992, Mr. Golden served as President of Tekscan, Inc., a marketer and
manufacturer of proprietary biotechnology and industrial sensor and imaging
systems for the medical, automotive and computer industries.
Alan J. Hartman, joined the Company in June, 1996 as General Counsel.
From 1983 until he joined the Company, Mr. Hartman served in various capacities,
including General Counsel, of Cincom Systems, Inc., an international software
development and marketing company.
Thomas E. Perazzo, joined the Company in January, 1996 as Chief
Financial Officer. From 1993 until he joined the Company, Mr. Perazzo served as
the Chief Financial Officer of Cincom Systems, Inc., an international software
development and marketing company. From 1992 through 1993, Mr. Perazzo served as
Vice President & Controller of Cincom Systems, Inc. Prior to 1992, Mr. Perazzo
was a partner of KPMG Peat Marwick LLP, in Cincinnati, Ohio. Mr. Perazzo is a
Certified Public Accountant.
All Executive Officers currently have employment agreements with the Company
that generally provide annual salaries, discretionary bonuses, stock incentive
provisions and severance arrangements.
There are no family relationships between any Director or Executive Officers and
any other Director or Executive Officers of the Registrant.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock trades on The Nasdaq Stock Market's National Market
under the symbol LANV. The table below sets forth the high and low sales prices
for LanVision Systems, Inc. Common Stock for each of the quarters indicated
since the Company's initial public offering on April 18, 1996, as reported by
The Nasdaq Stock Market, Inc.
High Low
---- ---
1st Quarter (April 18, 1996 through April 30, 1996) $ 18.75 $ 14.50
2nd Quarter (May 1, 1996 through July 31, 1996) 18.75 8.50
3rd Quarter (August 1, 1996 through October 31, 1996) 14.50 7.75
4th Quarter (November 1, 1996 through January 31, 1997) 9.00 6.25
The market price of the Company's Common Stock has fluctuated significantly
since the initial public offering in April, 1996. The market price of the Common
Stock could be subject to significant fluctuations based on factors such as
announcements of new products or customers by the Company or its competitors,
quarterly fluctuations in the Company's financial results or other competitors'
financial results, changes in analysts' estimates of the Company's financial
performance, general conditions in the healthcare imaging industry as well as
conditions in the financial markets. In addition, the stock market in general
has experienced extreme price and volume fluctuations which have particularly
affected the market price of many high technology companies and which have been
often unrelated to the operating performance of a specific company. Many
technology companies, including the Company, have recently experienced wide
fluctuations in the market price of their equity securities. There can be no
assurance that the market price of the Common Stock will not decline, or
otherwise continue to experience significant fluctuations in the future.
According to the transfer agent records, the Company has 106 stockholders of
record as of April 21, 1997. Because many of such shares are held by brokers and
other institutions on behalf of stockholders, the Company is unable to determine
with complete accuracy the total number of stockholders represented by these
record holders. The Company estimates that it has approximately 3,200
stockholders.
The Company has not paid any cash dividends on its Common Stock since its
inception and does not intend to pay any cash dividends in the foreseeable
future.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth consolidated financial data with respect to the
Company for each of the five years in the period ended January 31, 1997. The
information set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and related notes incorporated herein by
reference elsewhere in this Annual Report on Form 10-K report.
Fiscal Year(1)
------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in thousands, except per share data)
Total revenues $ 10,310 $ 5,019 $ 2,412 $ 3,250 $ 1,136
Total operating expenses 16,271 5,324 3,105 3,138 999
Operating income (loss) (5,961) (306) (693) 112 137
Net income (loss) (4,669) (326) (572) 73 94
Net income (loss) per share of
common stock (.56) (.05) (.09) .01 .01
Total assets 33,300 3,046 1,518 769 533
Convertible redeemable
preferred stock - 850 850 - -
Total stockholders' equity (deficit) 29,921 (646) (319) 253 255
Weighted average shares outstanding 8,284 6,190 6,190 6,223 6,685
Cash dividends declared - - - - -
<FN>
(1) All references to a fiscal year refer to the fiscal year of the Company commencing February 1 of that
calendar year and ending on January 31 of the following year.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information regarding Management's Discussion and Analysis of the Company's
Financial Condition and Results of Operations as required by Item 303 of
Regulation S-K is incorporated herein by reference from pages 7 through 10 of
the Company's 1996 Annual Report to Stockholders appearing under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Financial Statements are incorporated herein by reference from
pages 11 through 21 of the Company's 1996 Annual Report to Stockholders. The
supplementary quarterly financial information regarding the Company as required
by Item 302 of Regulation S-K is incorporated herein by reference from page 21
of the Company's 1996 Annual Report to Stockholders appearing under the caption
"Quarterly Results of Operations (Unaudited)".
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
No change in the Company's auditors has taken place within the twenty-four
months prior to, or in any period subsequent to the Company's January 31, 1997
Financial Statements.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding Directors required by Items 401 and 405 of Regulation
S-K is incorporated herein by reference from the Company's Definitive Proxy
Statement for its Annual Stockholder's Meeting to be held on May 27, 1997 from
the information appearing under the caption "Election of Directors" and "Stock
Ownership by Certain Beneficial Owners and Management." Certain information
regarding the Company's Executive Officers is set forth in Part I, Item 4 of
this Form 10-K under the caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information regarding Executive Compensation required by Item 402 of
Regulation S-K is incorporated herein by reference from the Company's Definitive
Proxy Statement for its Annual Stockholder's Meeting to be held on May 27, 1997
from the information appearing under the caption "Executive Compensation",
except that the information required by Item 402 (k) and (l) of Regulation S-K
which appears within such caption under the subheading "Compensation Committee
Report" and the caption "Stock Performance Graph" and set forth in the Company's
Definitive Proxy Statement for its Annual Stockholder's Meeting to be held on
May 27, 1997 is specifically not incorporated herein by reference into this Form
10-K or into any other filing by the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information regarding Security Ownership of the Company's Common Stock by
certain beneficial owners and management required by Item 403 of Regulation S-K
is incorporated herein by reference from the Company's Definitive Proxy
Statement for its Annual Stockholder's Meeting to be held on May 27, 1997 from
the information appearing under the caption "Stock Ownership by Certain
Beneficial Owners and Management."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information regarding certain relationships and related transactions
required by Item 404 of Regulation S-K is incorporated herein by reference from
the Company's Definitive Proxy Statement for its Annual Stockholder's Meeting to
be held on May 27, 1997 from the information appearing under the caption
"Certain Relationships and related Transactions."
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS
The following Consolidated Financial Statements of the Company included in the
Company's 1996 Annual Report to Stockholders are incorporated herein by
reference from pages 11 through 21 of the Annual Report. Reference is also made
to Item 8 of this Form 10-K.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors
Consolidated Balance Sheets at January 31, 1997 and 1996
Consolidated Statements of Operations for the three years ended January 31, 1997
Consolidated Statements of Cash Flows for the three years ended January 31, 1997
Consolidated Statements of Changes in Convertible Redeemable Preferred Stock and
Stockholders' Equity (Deficit) for the three years ended January 31, 1997
Notes to Financial Statements
FINANCIAL STATEMENT SCHEDULE
The following Financial Statement Schedule of LanVision Systems, Inc. is
included in this Item 14.
Schedule Description
-------- -----------
II Valuation and Qualifying Accounts and Reserves
All other schedules have been omitted because the information either has been
shown in the Consolidated Financial Statements or Notes thereto, or is not
applicable or required under the instructions.
The Report of Independent Auditors on the Financial Statement Schedule of
LanVision Systems, Inc. is included in Exhibit 23.1 of this Form 10-K.
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EXHIBITS
Exhibit No. Description of Exhibit
----------- ----------------------
3.1 Certificate of Incorporation of LanVision Systems, Inc.
3.2 Bylaws of LanVision Systems, Inc.
3.3 Certificate of the Designations, Powers, Preferences and Rights of the Convertible Preferred Stock (Par
Value $.01 Per Share) of LanVision Systems, Inc.
4.1 Specimen Common Stock Certificate of LanVision Systems, Inc.
4.2 Specimen Preferred Stock Certificate of LanVision Systems, Inc.
10.1 # LanVision Systems, Inc. 1996 Employee Stock Option Plan
10.2(a) # LanVision Systems, Inc. 1996 Non-Employee Directors Stock Option Plan
10.2(b) # First Amendment to LanVision Systems, Inc. 1996 Non-Employee Directors
Stock Option Plan
10.3 # LanVision Systems, Inc. 1996 Employee Stock Purchase Plan
10.4 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and J. Brian Patsy effective January
1, 1996
10.5 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Eric S. Lombardo effective
January 1, 1996
10.6 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Robert F. Golden effective
February 1, 1996
10.7 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Thomas E. Perazzo effective
January 30, 1996
10.8 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and
Alan J. Hartman, effective June 1, 1996
10.9 # Stock Purchase and Shareholder Agreement among LanVision, Inc., Blue Chip Capital Fund Limited
Partnership, J. Brian Patsy and Eric s. Lombardo dated December 1, 1994
10.10 # Amendment No. 1 to Stock Purchase and Shareholder Agreement among Blue Chip Capital Fund Limited
Partnership, LanVision, Inc., J. Brian Patsy, Eric S. Lombardo
and LanVision Systems, Inc. dated February 8, 1996
10.11 Consent by Blue Chip Capital Fund Limited Partnership dated February 8, 1996
10.12(a) Lease for office space between Duke Realty Limited Partnership and LanVision, Inc. dated May 7, 1996
10.12(b) First amendment to office lease with Duke Realty Limited Partnership, dated July 12, 1996
10.12(c) Second amendment to office lease with Duke Realty Limited Partnership, dated February 25, 1997
23
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10.13 Lease for office space between Green Realty Corporation and LanVision, Inc., dated
April 7, 1997
10.14(a) Lease for office space between Fairview Plaza Associates Limited Partnership and
LanVision, Inc., dated February 26, 1996
10.14(b) First amendment to lease between Fairview Plaza
Associates Limited Partnership, Lessor and LanVision,
Inc., Lessee, dated August 12, 1996
10.15 Marketing Agreement between Lanier Worldwide, Inc. and LanVision, Inc.
effective March 1, 1996
10.16 Form of Indemnification Agreement for all directors and officers
11.1 Statement Regarding Computation of Per Share Earnings
13.1 Annual Report to Stockholders
21.1 Subsidiaries of the Registrant
23.1 Consent of Independent Auditors
27.1 Financial Data Schedule
<FN>
# Management Contracts and Compensatory Arrangements
REPORTS ON FORM 8-K
During the fourth quarter of fiscal 1996, the Company filed no reports on Form
8-K.
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SIGNATURES
Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LANVISION SYSTEMS, INC.
DATE: April 23, 1997 By: /s/ J. BRIAN PATSY
--------------------------- -------------------------------------
J. Brian Patsy
Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
/s/ J. Brian Patsy Chief Executive Officer April 23, 1997
- - -------------------------------- and Director
J. Brian Patsy
/s/ Eric S. Lombardo Director April 23, 1997
- - --------------------------------
Eric S. Lombardo
/s/ George E. Castrucci Director April 23, 1997
- - --------------------------------
George E. Castrucci
/s/ Z. David Patterson Director April 23, 1997
- - --------------------------------
Z. David Patterson
/s/ Thomas E. Perazzo Chief Financial Officer April 23, 1997
- - -------------------------------- and Chief Accounting Officer
Thomas E. Perazzo
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Schedule II Valuation and Qualifying Accounts and Reserves
LanVision Systems, Inc.
for the three years ended January 31, 1997
Additions
----------------------------
(in thousands) Balance at Charged to Charged to
Beginning costs Other Balance at
Description of Period and Expenses Accounts Deductions End of Period
----------- --------- ------------ -------- ---------- ---------------
Year ended January 31, 1997:
Allowance for doubtful accounts $ 75 $ 130 $ - $ - $ 205
Warranty reserve 75 95 - 6 164
Year ended January 31, 1996:
Allowance for doubtful accounts 75 - - - 75
Warranty reserve 75 - - - 75
Year ended January 31, 1995:
Allowance for doubtful accounts 75 - - - 75
Warranty reserve - 75 - - 75
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INDEX TO EXHIBITS
EXHIBITS
Sequential
Exhibit No. Description of Exhibit Page No.
----------- ---------------------- --------
3.1 Certificate of Incorporation of LanVision Systems, Inc. *(1)
3.2 Bylaws of LanVision Systems, Inc. *(1)
3.3 Certificate of the Designations, Powers, Preferences and Rights of the Convertible
Preferred Stock (Par Value $.01 Per Share) of LanVision Systems, Inc. *(1)
4.1 Specimen Common Stock Certificate of LanVision Systems, Inc. *(1)
4.2 Specimen Preferred Stock Certificate of LanVision Systems, Inc. *(1)
10.1 # LanVision Systems, Inc. 1996 Employee Stock Option Plan *(1)
10.2(a) # LanVision Systems, Inc. 1996 Non-Employee Directors Stock Option Plan *(1)
10.2(b) # First Amendment to LanVision Systems, Inc. 1996 Non-Employee Directors
Stock Option Plan *(2)
10.3 # LanVision Systems, Inc. 1996 Employee Stock Purchase Plan *(1)
10.4 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and J. Brian Patsy
effective January 1, 1996 *(1)
10.5 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Eric S. Lombardo
effective January 1, 1996 *(1)
10.6 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Robert F. Golden
effective February 1, 1996 *(1)
10.7 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Thomas E. Perazzo
effective January 30, 1996 *(1)
10.8 # Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and Alan J. Hartman,
effective June 1, 1996 Page 29
10.9 # Stock Purchase and Shareholder Agreement among LanVision, Inc.,
Blue Chip Capital Fund Limited Partnership, J. Brian Patsy and
Eric s. Lombardo dated December 1, 1994 *(1)
10.10 # Amendment No. 1 to Stock Purchase and Shareholder Agreement among Blue Chip Capital Fund
Limited Partnership, LanVision, Inc., J. Brian Patsy, Eric S. Lombardo and LanVision
Systems, Inc. dated February 8, 1996 *(1)
10.11 Consent by Blue Chip Capital Fund Limited Partnership dated
February 8, 1996 *(1)
10.12(a) Lease for office space between Duke Realty Limited Partnership and LanVision, Inc. dated
May 7, 1996 *(3)
10.12(b) First amendment to office lease with Duke Realty Limited Partnership,
dated July 12, 1996 *(4)
10.12(c) Second amendment to office lease with Duke Realty Limited Partnership, dated February 25, Page 39
1997
27
28
10.13 Lease for office space between Green Realty Corporation and LanVision, Inc., dated April
7, 1997 Page 45
10.14(a) Lease for office space between Fairview Plaza Associates Limited Partnership and
LanVision, Inc., dated February 26, 1996 *(1)
10.14(b) First amendment to lease between Fairview Plaza Associates Limited Partnership, Lessor and
LanVision, Inc., Lessee, dated August 12, 1996 Page 61
10.15 Marketing Agreement between Lanier Worldwide, Inc. and LanVision, Inc.
effective March 1, 1996 *(1)
10.16 Form of Indemnification Agreement for all directors and officers *(1)
11.1 Statement Regarding Computation of Per Share Earnings Page 64
13.1 Annual Report to Stockholders Page 65
21.1 Subsidiaries of the Registrant Page 93
23.1 Consent of Independent Auditors Page 93
27.1 Financial Data Schedule Page 94
<FN>
- - ----------
* Incorporated by reference from document indicated below.
# Management Contracts and Compensatory Arrangements.
(1) Previously filed with the Commission, and incorporated herein by reference
from, the Registrant's Registration Statement on Form S-1, File Number
333-01494, as filed with the Commission on April 15, 1996.
(2) Previously filed with the Commission and incorporated herein by reference
from Exhibit 4.1(b) of, the Registrant's Registration Statement on Form
S-8, file number 333-20765, as filed with the Commission on January 31,
1997.
(3) Previously filed with the Commission as Exhibit 10 of the Registrant's
Form 10-Q for the quarter ended April 30, 1996, as filed with the
Commission on June 12, 1996.
(4) Previously filed with the Commission as Exhibit 10 of the Registrant's
Form 10-Q for the quarter ended July 31, 1996, as filed with the
Commission on September 4, 1996.
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