AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 11, 1997

REGISTRATION NO. 333-20577
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

TRITON SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MISSISSIPPI 3578 64-0628980
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)

------------------------
522 EAST RAILROAD STREET
LONG BEACH, MS 39560
(601) 868-1317
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ERNEST L. BURDETTE
PRESIDENT
TRITON SYSTEMS, INC.
522 EAST RAILROAD STREET
LONG BEACH, MS 39560
(601) 868-1317

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:

MICHAEL J. RICCIO, JR., ESQUIRE JOHN A. BURGESS, ESQUIRE
THOMAS M. CAMP, ESQUIRE BRENT B. SILER, ESQUIRE
HUTCHINS, WHEELER & DITTMAR HALE AND DORR LLP
A PROFESSIONAL CORPORATION 60 STATE STREET
101 FEDERAL STREET BOSTON, MASSACHUSETTS 02109
BOSTON, MASSACHUSETTS 02110 (617) 526-6000
(617) 951-6600

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ] _____________

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration number of the earlier effective registration statement for the
same offering. [ ] _____________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

==========================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE(3)
- ----------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per
share............................... 3,360,000 $9.00 $30,240,000 $9,164
==========================================================================================================

(1) Includes 360,000 shares which the Underwriters have the option to purchase
from the Company solely to cover over-allotments, if any. See
"Underwriting."

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(3) Previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws

of any such State.

SUBJECT TO COMPLETION, DATED APRIL 11, 1997

3,000,000 SHARES

[TRITON SYSTEMS LOGO]
COMMON STOCK

All of the 3,000,000 shares of Common Stock offered hereby are being sold
by Triton Systems, Inc. ("Triton" or the "Company"). Of the 3,000,000 shares of
Common Stock offered hereby, 2,400,000 shares are being offered by the
Underwriters at the Price to Public (the "Underwritten Offering") and an
aggregate of up to 600,000 shares are being offered by the Company at the Price
to Public less the Underwriting Discount to Summit Ventures IV, L.P. ("Summit
Ventures IV") and Summit Investors III, L.P. ("Summit Investors"), each an
existing stockholder of the Company, and certain limited partners of Summit
Ventures IV (the "Concurrent Offering"). Any shares not purchased in the
Concurrent Offering will be added to the shares offered by the Underwriters. The
closing of the Concurrent Offering is contingent upon the closing of the
Underwritten Offering, and vice versa. Prior to this offering, there has been no
public market for the Common Stock of the Company. It is currently estimated
that the Price to Public will be $9.00 per share. See "Underwriting" for a
discussion of factors to be considered in determining the initial public
offering price. The Common Stock has been approved for quotation on the Nasdaq
National Market under the symbol "TRTN."

SEE "RISK FACTORS" COMMENCING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

=====================================================================================================
Price to Underwriting Proceeds to
Public Discount(1) Company(2)

- -----------------------------------------------------------------------------------------------------
Per Share............................................ $ $ $
Total(3)(4).......................................... $ $ $
=====================================================================================================

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.

(2) Before deducting expenses payable by the Company estimated at $600,000.

(3) Does not include an aggregate of 600,000 shares to be offered by the Company
in the Concurrent Offering to certain parties at $ per share (the Price
to Public less the Underwriting Discount), resulting in additional Proceeds
to Company of $ .

(4) The Company has granted to the Underwriters a 30-day option to purchase up
to 360,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise this option in full,
the Price to Public will total $ , the Underwriting Discount will
total $ and the Proceeds to Company will total $ . See
"Underwriting."

The shares of Common Stock offered in the Underwritten Offering are offered
by the several Underwriters named herein, subject to receipt and acceptance by
them and subject to their right to reject any order in whole or in part. It is
expected that delivery of the certificates representing such shares will be made
against payment therefor at the office of Montgomery Securities on or
about , 1997.

---------------------

MONTGOMERY SECURITIES

SMITH BARNEY INC.

THE ROBINSON-HUMPHREY COMPANY, INC.

, 1997
3

[Graphics]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK
OFFERED HEREBY, INCLUDING THE ENTRY OF STABILIZING BIDS, SYNDICATE COVERING
TRANSACTIONS OR THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and the Financial Statements and Notes thereto appearing
elsewhere in this Prospectus. Except as otherwise noted, all information in this
Prospectus assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting." All share and per share data in this Prospectus have been
adjusted to give effect to a 1.65-for-1 stock split in the form of a stock
dividend effected on January 27, 1997, and gives effect to the conversion of the
Company's Non-Voting Common Stock into Common Stock, which will occur
automatically upon the closing of the offering.
THE COMPANY

The Company is a leading manufacturer and marketer of automated teller
machines ("ATMs") in the United States. The Company designs, manufactures,
markets and sells primarily focused-function ATMs (also known as cash
dispensers), which are intended to operate profitably at significantly lower
transaction volumes than conventional ATMs. Conventional ATMs typically dispense
cash, accept deposits, transfer funds between accounts and provide account
balances. Focused-function ATMs, such as those manufactured by the Company,
perform all of these functions, other than accepting deposits. Focused-function
ATMs are suitable for locations such as convenience stores, hotels, casinos,
grocery stores, fast food restaurants, department stores, gas stations, malls,
campuses and entertainment complexes, including movie theaters, amusement parks
and race tracks ("off-premise locations"), in addition to bank and credit union
branches ("on-premise locations"). According to The Nilson Report, the Company
shipped the third largest number of ATMs in the United States in 1996, with its
shipments accounting for 16% of all ATMs shipped in the United States in that
year, which represents a 1996 market share in the United States of 16%, based on
units shipped. The Company also designs, manufactures, markets and sells other
financial hardware products such as scrip terminals (countertop ATMs that
provide a voucher redeemable for cash), ATM demonstration machines and card
activators. The Company continues to position itself to capitalize on emerging
opportunities in the transaction and payment processing industry.

According to The Nilson Report, focused-function ATMs represented
approximately 61% of total 1996 ATM shipments in the United States. The Company
estimates, based on industry sources, that unit sales of focused-function ATMs
in the United States grew by 67% from 1995 to 1996, while unit sales of
conventional ATMs grew by 14% over the same period. The Company believes that
the two primary reasons for the faster growth of focused-function ATMs are (i)
increased deployment of ATMs in off-premise locations and (ii) the attractive
economics of owning and operating a focused-function ATM.

The number of ATMs deployed at off-premise locations in the United States
has increased from 18,380 in 1991 to 38,039 in 1995, for a compound annual
growth rate of 19.9%, as compared to the increase of ATMs installed at
on-premise locations from 65,165 to 84,667 over the same period, for a compound
annual growth rate of 6.8%. Factors contributing to the increased deployment of
ATMs in off-premise locations include consumer demand for cash at these
locations and the competitive advantage an ATM can give a retailer through
increased customer traffic and incremental revenues. According to Convenience
Store Decisions 1995 Sales Trend Handbook, the typical ATM customer will spend
20%-25% more than a non-ATM customer in a convenience store. The Company
estimates that the potential market for focused-function ATMs includes over
700,000 off-premise locations in the United States.

Economic factors that make focused-function ATMs attractive to own and
operate include (i) retail prices and monthly operating costs which the Company
estimates are 35%-70% lower than those of conventional ATMs and (ii) incremental
revenues available from surcharge fees. Due to these attractive economics, the
Company believes that the number of ATM transactions necessary to break even
with a focused-function ATM is less than half that required for a conventional
ATM.

Triton's net sales increased to $41.0 million in 1996 from $21.0 million in
1995 and $3.2 million in 1994. Income from operations increased to $14.4 million
in 1996 from $7.4 million in 1995 and $371,000 in 1994. At

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January 27, 1997, the Company had outstanding indebtedness under its existing
bank credit facility of $29.8 million. The Company intends to use the net
proceeds of this offering, together with a portion of the Company's existing
cash, to repay indebtedness under its existing bank credit facility. After this
offering, the maximum amount the Company will be permitted to borrow under this
facility will be $30.0 million and the Company may make borrowings thereunder in
the future to fund its working capital requirements.

The Company's strategy is to strengthen its leadership position as a
supplier of focused-function ATMs, to expand its presence in the ATM and related
product markets by leveraging its core competency in the focused-function ATM
market, and to exploit new opportunities in the transaction and payment
processing industry as they develop. Key elements of this strategy are to: (i)
build upon the Company's existing distribution channels to penetrate new
domestic geographic markets; (ii) penetrate the domestic bank and credit union
ATM market; (iii) develop a presence in the international ATM market; (iv)
continue to upgrade the functionality of its products and develop new products
that capitalize on emerging opportunities; (v) continue to emphasize the
Company's cost-effective operations; and (vi) maintain short delivery schedules
and a high level of customer service.

The Company currently offers five models of focused-function ATMs targeted
at locations with lower ATM transaction volumes. The Company's operations
emphasize cost-effectiveness principally by outsourcing the manufacture of many
components used in its products, utilizing an established distribution network
instead of maintaining a large direct sales force, and locating the
manufacturing facility in an area where operating and labor costs are typically
lower than in many other regions of the United States.

On July 25, 1996, the Company completed a recapitalization (the
"Recapitalization"), pursuant to which the Company repurchased an aggregate of
approximately 55% of its then outstanding shares of Common Stock from its
founders and certain other stockholders (collectively, the "Original
Stockholders") and entered into a series of related financing transactions. See
"Certain Transactions."

The Company was incorporated in Mississippi in August 1979. The Company's
principal executive offices are located at 522 East Railroad Street, Long Beach,
Mississippi, and its telephone number is (601) 868-1317.

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk, including:
dependence on a single, recently introduced product line; potential fluctuations
in operating results; effects of potential limitations on surcharging by ATM
owners; dependence on key suppliers; competition; dependence upon principal
distributors; reliance on third-party distribution channels for product sales
and service; management of expanding operations; technological change and new
products; reliance on centralized manufacturing; exposure to natural disasters;
risks associated with international expansion; dependence on proprietary
technology; reliance on third-party licenses; dependence on key personnel and
employees; warranty claims; product liability; need for additional capital;
control by existing stockholders; benefits of offering to certain stockholders;
shares eligible for future sale; no prior trading market for the Common Stock;
potential volatility of stock price; certain anti-takeover provisions; and
dilution. See "Risk Factors."

THE OFFERING

Common Stock offered in the Underwritten Offering... 2,400,000 shares
Common Stock offered in the Concurrent Offering..... 600,000 shares(1)
Common Stock to be outstanding after the offering... 15,408,288 shares(2)
Use of proceeds..................................... To repay bank indebtedness
Proposed Nasdaq National Market symbol.............. TRTN

- ---------------

(1) Represents shares to be offered directly by the Company in the Concurrent
Offering. Any shares not purchased in the Concurrent Offering will be added
to the shares offered by the Underwriters in the Underwritten Offering. The
closing of the Concurrent Offering is contingent upon the closing of the
Underwritten Offering, and vice versa. Summit Ventures IV and Summit
Investors have expressed a desire to purchase up to 300,000 of the shares
being offered in the Concurrent Offering, and certain limited partners of
Summit Ventures IV have expressed a desire to purchase up to 300,000 of the
shares being offered in the Concurrent Offering. In addition, such persons
have expressed a desire to purchase up to 200,000 shares of Common Stock in
the Underwritten Offering. To the extent such persons purchase shares in the
Underwritten Offering, the number of shares available to the general public
will be reduced. See "Principal Stockholders" and "Underwriting."

(2) Excludes: (i) 433,655 shares of Common Stock issuable upon exercise of stock
options outstanding as of February 28, 1997, with a weighted average
exercise price of $2.99 per share, of which options to purchase 263,706
shares of Common Stock were then exercisable, and (ii) 32,109 shares of
Common Stock which are reserved for issuance under a warrant issued by the
Company to an affiliate of its senior lender. An additional 1,358,052 shares
of Common Stock have been reserved for issuance under the Company's stock
plans. See "Management -- Stock Plans" and "Description of Capital
Stock -- Bank Warrant."

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SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEAR ENDED DECEMBER 31,
------------------------------
1994 1995 1996
------ ------- -------

STATEMENT OF OPERATIONS DATA
Net sales...................................................... $3,236 $21,008 $40,968
Gross profit................................................... 1,288 11,761 19,618
Income from operations......................................... 371 7,418 14,382
Net income applicable to common stockholders(1)................ 233 4,714 10,582
Net income applicable to common stockholders -- per common
share........................................................ $ 0.02 $ 0.37
Pro forma net income applicable to common stockholders(2)...... 8,217
Pro forma net income applicable to common stockholders -- per
common share(2).............................................. $ 0.65
Weighted average shares outstanding(3)......................... 12,731 12,731 12,731

DECEMBER 31, 1996
------------------------------------
PRO FORMA
PRO AS
ACTUAL FORMA(4) ADJUSTED(4)(5)
-------- -------- --------------

BALANCE SHEET DATA
Working capital............................................. $ 9,340 $ 8,813 $ 3,505
Total assets................................................ 13,676 13,149 7,841
Revolving credit facility................................... 8,000 29,818 --
Mandatorily redeemable preferred stock...................... 22,094 -- --
Total stockholders' equity (deficit)........................ (19,819) (20,070) 4,440

- ---------------

(2) Gives effect to: (i) additional interest expense (net of taxes), as if the
additional $21.8 million borrowed under the Company's existing senior credit
facility on January 24, 1997 to fund in part the redemption of the Company's
Series A Preferred Stock and Series B Preferred Stock (the "Redeemable
Preferred Stock") had been incurred on July 25, 1996, the date of the
Recapitalization; (ii) the elimination of the accretion of $965,000 of
dividends and redemption value on the Redeemable Preferred Stock to reflect
such redemption; and (iii) additional income tax expense of $2.85 million,
as if the Company had been subject to federal and state income taxes during
the period January 1, 1996 through July 25, 1996.

(3) See Notes 1 and 13 to Financial Statements for an explanation of the
determination of the number of shares used in computing per share amounts.

(4) Gives effect to the following transactions as if they had occurred on
December 31, 1996: (i) the redemption of the Redeemable Preferred Stock;
(ii) the related incurrence of an additional $21.8 million of borrowings
under the Company's existing senior credit facility; and (iii) the
recognition of a non-recurring non-cash charge of $251,000 associated with
the unamortized portion of the excess of the face amount of the Series A
Preferred Stock over the fair market value of the Series A Preferred Stock
as determined by a third-party appraisal.

(5) As adjusted to give effect to the sale by the Company of the 3,000,000
shares of Common Stock offered by it hereby and the application of the
estimated net proceeds therefrom. See "Use of Proceeds."

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RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of the Common Stock offered by this Prospectus. This Prospectus contains
forward-looking statements which involve risks and uncertainties. The Company's
actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

DEPENDENCE ON SINGLE, RECENTLY INTRODUCED PRODUCT LINE

Substantially all of the Company's revenues are derived, and are expected
to continue to be derived, from sales of the Company's focused-function ATMs, a
product line which was first introduced by the Company in 1994. There can be no
assurance that the Company's ATM products will achieve widespread and lasting
market acceptance. Because of this product concentration, a decline in demand
for these products, or an increase in competition, could have a material adverse
effect on the Company's business, results of operations and financial condition.
The Company's future financial performance will depend in part on the successful
development, introduction and customer acceptance of new ATM products and other
products. There can be no assurance that the Company will be successful in
designing, manufacturing, marketing and selling any new products. Accordingly,
the Company's future success will continue to depend in large part on the sale
of its focused-function ATMs. See "Business -- Products."

POTENTIAL FLUCTUATIONS IN OPERATING RESULTS

The Company's recent growth in revenues and profits should not be
considered indicative of future results. There can be no assurance that any of
the Company's business strategies will be successful or that the Company will be
able to sustain growth on a quarterly or annual basis. The Company's quarterly
and annual operating results may vary significantly from period to period
depending on factors such as the volume and timing of orders received during the
period, the timing of new product introductions by the Company and its
competitors, the impact of price competition on the Company's selling prices,
the availability and pricing of components for the Company's products, changes
in product or distribution channel mix, changes in operating expenses, changes
in the Company's strategy, personnel changes and general economic factors. Many
of these factors are beyond the Company's control. The volume and timing of
orders received during a particular period is difficult to forecast. Customers
generally order the Company's products on an as-needed basis, and accordingly
the Company has historically operated with a relatively small backlog. In
addition, a significant portion of the Company's sales are derived from a
limited number of distributors, the loss of one or more of which could have a
materially adverse effect on the Company's business, results of operations and
financial condition. Notwithstanding the difficulty in forecasting future sales
and the relatively small level of backlog at any given time, the Company
generally must plan production, order components and undertake its development,
sales and marketing activities and other commitments months in advance.
Accordingly, any shortfall in sales in a given period may adversely impact the
Company's results of operations due to an inability to adjust expenses or
inventory during the period to match the level of sales for the period. Due to
the foregoing factors, it is likely that in some future period the Company's
sales or operating results will be below the expectations of securities analysts
and investors. In such event, the trading price of the Company's Common Stock in
the public markets could be materially adversely affected. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

EFFECTS OF POTENTIAL LIMITATIONS ON SURCHARGING BY ATM OWNERS

The growth in the market and in the Company's sales of ATMs has been due,
in part, to the ability of ATM owners to charge consumers a surcharge fee for
the use of the ATM, which has resulted from the recent elimination by the Cirrus
and Plus national ATM networks of their policies against the imposition of
surcharges on ATM transactions. ATM owners are subject to federal and state
regulations governing consumers' rights with respect to ATM transactions.
Certain states have enacted legislation limiting or eliminating surcharging, and
similar legislation has been introduced in several other states and in Congress.

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There can be no assurance that such legislation will not be enacted in the
future or that existing regulations or consumer protection laws will not be
expanded to apply to fees charged in connection with ATM transactions. In
addition, there can be no assurance that one or more of the national ATM
networks will not reinstate their former policies prohibiting surcharging. The
adoption of any such regulations, legislation or industry policies limiting or
prohibiting ATM surcharges could decrease demand for the Company's products,
which would have a material adverse effect on the Company's business, results of
operations and financial condition.

DEPENDENCE ON KEY SUPPLIERS

The Company outsources the manufacture of most of its components as part of
its low-cost manufacturing strategy. Component level parts, both mechanical and
electronic, and some complete subsystems are purchased through outside vendors.
Certain parts are custom-manufactured by these outside vendors according to the
Company's specifications. Several important components used in the Company's
focused-function ATM, including the single cassette and multi-cassette cash
dispensing subassemblies, the display screens and key pads, the business hour
service cabinets and the safe-type cabinets, are obtained from single suppliers.
The Company's principal suppliers are DeLaRue Systems, Ltd., Turnbull Metal
Products, Inc. and Sterling Electronics Corp. The Company has identified
alternative suppliers for its single cassette cash dispenser, display screen and
both styles of cabinets, and is currently in the process of identifying
potential alternative suppliers of multi-cassette cash dispensing subassemblies
and key pads. Certain of the alternative suppliers identified by the Company
currently supply other components to the Company. In the event the Company is
required to obtain components from the alternative suppliers it has identified,
there can be no assurance that the unit costs currently paid by the Company for
these components would not increase. Moreover, the inability of the Company to
obtain sufficient quantities of, or the failure of suppliers to deliver, the
cash dispensing subassemblies, key pads, display screens or cabinets used in its
focused-function ATMs would require the Company to change the design of the
products in order to use an alternative component, which could increase the cost
or delay the shipment of the Company's focused-function ATMs, which in turn
would have a material adverse effect on the Company's business, results of
operations and financial condition. There can be no assurance that alternative
sources of supply would be available on reasonably acceptable terms, on a timely
basis, or at all. The Company does not maintain any written agreements with any
of its component suppliers and the Company purchases its components on a
purchase order basis. Accordingly, the Company has no guaranteed supply
arrangements with any of its suppliers and there can be no assurance that these
suppliers will continue to meet the Company's requirements. Because the purchase
of key components involves long lead times, in the event of unanticipated
increases in demand for the Company's products, the Company could be unable to
manufacture certain products in a quantity sufficient to meet demand. Any
inability to obtain adequate deliveries of any of the components or any other
circumstance that would require the Company to seek alternative sources of
supply could affect the Company's ability to ship its products on a timely basis
or result in increased component costs, each of which could have a material
adverse effect on the Company's business, results of operations and financial
condition. In order to attempt to mitigate the risk of component shortages, the
Company maintains a limited inventory of components for which the Company is
dependent upon sole or limited source suppliers. There can be no assurance,
however, that these inventories will be sufficient, and any deficiency could
have a material adverse effect on the Company's business, results of operations
and financial condition. See "Business -- Suppliers."

COMPETITION

The markets for the Company's products are characterized by intense
competition. The Company has a number of direct competitors for ATMs, the most
significant of which are Diebold Incorporated (including Interbold, a joint
venture between Diebold Incorporated and IBM), NCR Corporation, Fujitsu
Corporation and the Tidel Division of American Medical Technologies, Inc. Many
of the Company's current competitors have longer operating histories, are
substantially larger, and have substantially greater financial, technical,
manufacturing, marketing and other resources than the Company. As a result of
their greater resources, many of such competitors are better positioned than the
Company to withstand significant price competition or downturns in the economy.
A number of these competitors also have substantially greater name recognition
and a significantly larger installed base of products than the Company, which
could provide leverage to such

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companies in their competition with the Company. Many competitors also offer
products with more functionality and features than those offered by the Company.
The Company expects competition to increase and anticipates that new competitors
may enter the ATM market, particularly the focused-function ATM segment. Such
increased competition may result in price reductions, reduced gross margins and
loss of market share, any of which could materially adversely affect the
Company's business, results of operations and financial condition. See
"Business -- Competition."

DEPENDENCE UPON PRINCIPAL DISTRIBUTORS

A significant portion of the Company's net sales has been derived from a
limited number of distributors. For the year ended December 31, 1996, two of the
Company's distributors, Access Cash International and Card Capture Services,
accounted for approximately 22% and 19%, respectively, of the Company's net
sales. In addition, the Company's five largest distributors, in the aggregate,
accounted for approximately 62% of the Company's net sales in 1996. The Company
expects that it will continue to be dependent upon a limited number of
distributors for a significant portion of its net sales in future periods. None
of the Company's distributors are contractually obligated to purchase additional
products from the Company or is prohibited from distributing competitive
products. As a result of this distributor concentration, the Company's business,
results of operations and financial condition could be materially adversely
affected by the failure of anticipated orders from key distributors to
materialize or by deferrals or cancellations of orders by these distributors. In
addition, there can be no assurance that sales from distributors that have
accounted for significant sales in past periods, individually or as a group,
will continue or, if continued, will reach or exceed historical levels in any
future period. The Company has recently received a communication from a third
party distributor of the Company's ATMs seeking damages and other remedies as a
result of the alleged malfunctioning of two ATM terminals operated by the
distributor which resulted in the improper dispensation of cash. See
"Business -- Distribution, Sales and Marketing" and "Business -- Legal
Proceedings."

RELIANCE ON THIRD-PARTY DISTRIBUTION CHANNELS FOR PRODUCT SALES AND SERVICE

The Company markets and sells its products primarily through third-party
distributors, none of which are under the direct control of the Company. The
Company has a limited domestic sales and marketing organization, and is
therefore dependent on the sales efforts of its distributors. The Company also
relies primarily on distributors to provide service and support to end users of
the ATMs manufactured by the Company. A reduction in the sales efforts by the
Company's current distributors or a termination of their relationships with the
Company could have a material adverse effect on the Company's business, results
of operations and financial condition. There can be no assurance that the
Company will be able to retain its current distributors or expand its
distribution channels by entering into arrangements with new distributors. There
also can be no assurance that the Company's current distributors will continue
to provide an adequate level of service and support for the Company's products,
or that the Company could find alternative providers of service and support on a
cost-effective basis. See "Business -- Distribution, Sales and Marketing" and
"Business -- Product Service and Support."

MANAGEMENT OF EXPANDING OPERATIONS

Future growth in the Company's business could place a significant strain on
the Company's limited personnel, management, financial controls and other
resources. The Company's ability to manage any future expansion effectively will
require it to attract, train, motivate and manage new employees successfully, to
integrate new management and employees into its overall operations and to
continue to improve its operational, financial and management systems and
controls and facilities. The Company's executive officers and key employees
(other than Mr. Bandrowski) have no experience in the management or operation of
a public company. The Company's failure to manage any expansion effectively,
including any failure to integrate new management controls, systems and
procedures, could have a material adverse effect on the Company's business,
results of operations and financial condition. The Company is currently in the
process of acquiring a new management information system to handle the Company's
financial, accounting and production planning and control functions. No
assurance can be given that the implementation of this system will not result in
disruptions to the Company's business, such as the loss of data while converting
systems, errors in planning

8
10

production requirements, delays in the Company's ability to timely effect
periodic closings of its accounting records and other similar problems. Any such
disruptions or any failure to successfully implement this new management
information system in a timely manner could have a material adverse effect on
the Company's business, results of operations and financial condition.

TECHNOLOGICAL CHANGE AND NEW PRODUCTS

The Company's future growth will depend, in part, upon its ability to
continue to manufacture, market and sell ATMs with cost-effective
characteristics, develop and penetrate new market segments and enter and develop
new markets. To achieve its objectives for continued growth, the Company must
design and introduce new products with enhanced features, develop close
relationships with the leading market participants and establish new
distribution channels in each new market or market segment. The Company is
currently beta testing a new focused-function ATM model, targeted at banks and
credit unions, that conforms with the industry standard communications protocol
used by most banks and credit unions to communicate with their ATMs. There can
be no assurance that the Company will be successful in the development of this
product, or that, if developed, it will gain acceptance in the bank and credit
union segment of the ATM market. Some of the transactions currently initiated
through ATMs could be accomplished in the future using emerging payment
technologies, such as point-of-sale and smart-cards, which the Company does not
currently support. There can be no assurance that the Company can develop
products supporting these technologies or that, if developed, such products will
gain market acceptance. The failure of the Company to successfully offer
products supporting these emerging technologies could have a material adverse
effect on the Company's business, results of operations and financial condition.
See "Business -- Product Development."

RELIANCE ON CENTRALIZED MANUFACTURING; EXPOSURE TO NATURAL DISASTERS

All of the Company's manufacturing occurs at its headquarters facility in
Long Beach, Mississippi. The Company's manufacturing operations utilize certain
equipment which, if damaged or otherwise rendered inoperable, would result in
the disruption of the Company's manufacturing operations. Although the Company
maintains business interruption insurance and flood insurance, any extended
interruption of the operations at the Company's headquarters facility would have
a material adverse effect on the Company's business, results of operations and
financial condition. There can be no assurance that such insurance will continue
to be available on reasonable terms or at all. The Company's headquarters are
also exposed to risks associated with the occurrence of natural disasters, such
as hurricanes, floods and heavy rains. There can be no assurance that the
Company's facilities will not be damaged by the occurrence of such a natural
disaster. If such a natural disaster occurs, the Company's business, results of
operations and financial condition could be materially adversely affected. See
"Business -- Manufacturing."

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

As part of its growth strategy, the Company is seeking opportunities to
expand its products into international markets and intends to focus its efforts
initially on Canada, Mexico, Brazil and Columbia. In marketing its products
internationally, however, the Company will face new competitors, some of whom
may have established strong presence in the local market. In addition, the
ability of the Company to market its products in foreign countries will be
dependent on the Company's ability to establish distribution relationships with
distributors in those countries, to adapt its products to operate in foreign
languages and to provide the functionality desired by end users in those
countries. To date, the Company has limited experience in marketing and
distributing its products internationally and has not derived any sales of
focused-function ATMs from international operations. There can be no assurance
that the Company will be successful in marketing or distributing its products
internationally. There also can be no assurance that the Company will be
successful in adapting its products to different languages and functionality
needs. In order for the Company to expand into certain foreign markets,
including member countries of the European Union, the Company will be required
to obtain certification under ISO 9000, the recognized international quality
standard. The Company does not currently have ISO 9000 certification and the
Company will need to expend time and financial resources in order to obtain such
certification. The Company estimates that obtaining the ISO 9000 certification
could take approximately 18 to 24 months. There can be no assurance that the
Company will be

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able to obtain such certification. In addition to the uncertainty as to the
Company's ability to establish an international presence, there are certain
difficulties and risks inherent in doing business on an international level,
such as compliance with regulatory requirements and changes in these
requirements, export restrictions, tariffs and other trade barriers, limited
protection of intellectual property rights, difficulties in staffing and
managing international operations, longer payment cycles, problems in collecting
accounts receivable, political instability, fluctuations in currency exchange
rates and potentially adverse tax consequences. There can be no assurance that
one or more of these factors will not have a material adverse effect on any
international operations established by the Company, and consequently, on the
Company's business, results of operations and financial condition.

DEPENDENCE ON PROPRIETARY TECHNOLOGY; RELIANCE ON THIRD PARTY LICENSES

The Company does not own any issued patent, and relies primarily on
trademark, copyright and trade secret law to protect its intellectual property
in the United States and abroad. These laws afford only limited protection and
there can be no assurances that the steps taken by the Company will prevent
misappropriation of its technology. There can be no assurance that any trademark
or copyright owned by the Company, or any patent, trademark or copyright
obtained by the Company in the future, will not be invalidated, circumvented or
challenged or that the rights granted thereunder will provide competitive
advantages to the Company. In addition, the laws of some foreign countries do
not protect the Company's proprietary rights as fully as do the laws of the
United States. Thus, effective intellectual property protection may be
unavailable or limited in certain foreign countries. There can be no assurance
that competitors will not independently develop technologies that are similar or
superior to the Company's technology, duplicate the Company's technology or
design around any technology of the Company. Moreover, litigation may be
necessary in the future to enforce the Company's intellectual property rights,
to determine the validity and scope of the proprietary rights of others or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of management time and resources and
could have a material adverse effect on the Company's business, results of
operations and financial condition. See "Business -- Intellectual Property."

DEPENDENCE ON KEY PERSONNEL AND EMPLOYEES

The Company is highly dependent on the continued service of, and on its
ability to attract and retain, qualified technical, marketing, sales and
managerial personnel, including the Company's executive officers and key
employees identified in this Prospectus. The competition for such personnel is
intense, and the loss of any such persons, as well as the failure to recruit
additional key technical and sales personnel in a timely manner, could have a
material adverse effect on the Company's business, results of operations and
financial condition. There can be no assurance that the Company will be able to
continue to attract and retain the qualified personnel necessary for the
development of its business. None of the Company's employees are parties to a
collective bargaining agreement, and the Company is not aware of any union
organizational activities with respect to its employees. There can be no
assurance, however, that current conditions will continue with respect to the
prevailing wage scales and labor conditions in the area from which the Company
draws its labor pool or that efforts will not be made to unionize the Company's
work force. Because of the Company's emphasis on cost-effectiveness, an increase
in labor costs could have a material adverse effect on the Company's business,
results of operations and financial condition. See "Business -- Employees."

WARRANTY CLAIMS; PRODUCT LIABILITY

The Company provides a limited warranty on each of its products covering
manufacturing defects and premature failure. While the Company believes that its
reserves for warranty claims are adequate, there can be no assurance that the
Company will not experience increased warranty claims. An increase in warranty
claims could have a material adverse effect on the Company's business, results
of operations and financial condition. For example, in the first quarter of
1996, product and warranty claims adversely affected the Company's gross
margins. The Company's products may contain undetected defects which could
result in the improper dispensation of cash or other items. Although the Company
has experienced only a limited number of claims of this nature to date, there
can be no assurance that such defects will not occur in the future and that
losses will not be suffered as a consequence. In addition, there can be no
assurance that the Company will not be

10
12

held liable for any losses incurred by end users as a result of criminal
activity which the Company's products were intended, but unable, to prevent, or
for any damages suffered by end users as a result of malfunctioning or damaged
components. See "Management's Discussion and Analysis of Results of Operations
and Financial Condition" and "Business -- Product Service and Support."

NEED FOR ADDITIONAL CAPITAL

The Company believes that in order to remain competitive it may require
additional financial resources over the next several years for working capital,
expansion of facilities and acquisition of complementary businesses, products
and technologies. There can be no assurance that the Company will be able to
obtain additional financing as needed on acceptable terms or at all. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Liquidity and Capital Resources."

CONTROL BY EXISTING STOCKHOLDERS

Following this offering, Summit Ventures IV, Summit Investors and Summit
Subordinated Debt Fund, L.P. ("Summit Debt Fund" and, together with Summit
Ventures IV and Summit Investors, the "Summit Entities") and the Company's
executive officers, in the aggregate, will beneficially own approximately 79.7%
of the Company's outstanding Common Stock (81.6% if Summit Ventures IV and
Summit Investors were to purchase 300,000 shares in the Concurrent Offering). As
a result, these stockholders, if acting together, would be able to exert
substantial influence over the Company and to control matters requiring approval
by the stockholders of the Company, including the election of directors, the
approval of amendments to the Company's Articles of Incorporation, and the
approval of a merger, consolidation or sale of substantially all of the
Company's assets. The voting power of these stockholders could have the effect
of delaying or preventing a change in control of the Company. See "Principal
Stockholders."

BENEFITS OF OFFERING TO CERTAIN STOCKHOLDERS

The existing stockholders of the Company will benefit from the creation of
a public market for the Common Stock held by them after the closing of the
offering. In connection with the Recapitalization, (i) the Summit Entities
acquired shares of Series A Preferred Stock for an aggregate of $11.4 million in
cash, shares of Common Stock for an aggregate of $100,000 in cash and
subordinated debentures for an aggregate of $5.5 million in cash, and (ii) the
Company repurchased an aggregate of approximately 55% of the then outstanding
shares of Common Stock from the Original Stockholders for an aggregate
consideration of $16.7 million in cash and $6.0 million in subordinated
promissory notes. Immediately prior to the Recapitalization, the Company made a
dividend distribution to the Original Stockholders in the form of shares of
Series B Preferred Stock with an aggregate redemption value of $10.0 million. On
September 26, 1996, the subordinated debentures and subordinated promissory
notes issued to the Original Stockholders and the Summit Entities in the
aggregate amount of $11.7 million (including accrued interest of $206,000) were
repaid in full with the proceeds of borrowing under a credit facility provided
by The First National Bank of Boston. In January 1997, this facility was amended
to increase the credit line from $15.0 million to $30.0 million, with the
proceeds used to redeem all of the outstanding Series A Preferred Stock for an
aggregate redemption price of $12.0 million (including accrued dividends of
$580,000), and all of the outstanding Series B Preferred Stock for an aggregate
redemption price of $10.5 million (including accrued dividends of $508,000). The
net proceeds of the shares offered by the Company in this offering, together
with a portion of the Company's existing cash, will be used to repay amounts
outstanding under the Company's credit facility. Following the closing of this
offering, the Summit Entities will hold shares of Common Stock having an
aggregate value equal to $61.8 million ($64.5 million if Summit Ventures IV and
Summit Investors were to purchase 300,000 shares in the Concurrent Offering) and
the Original Stockholders will hold shares of Common Stock having an aggregate
value equal to $49.9 million, based on an assumed public offering price of $9.00
per share. See "Use of Proceeds," "Certain Transactions" and "Principal
Stockholders."

11
13

SHARES ELIGIBLE FOR FUTURE SALE

Sale of substantial amounts of shares in the public market or the prospect
of such sales could adversely affect the market price of the Company's Common
Stock. Upon completion of this offering, the Company will have outstanding
15,408,288 shares of Common Stock. All shares of Common Stock held by current
stockholders are subject to lock-up agreements under which the holders of such
shares have agreed not to sell or otherwise dispose of any of their shares for a
period of 180 days after the date of this Prospectus without the prior written
consent of Montgomery Securities. Of these shares, 132,292 would otherwise be
eligible for sale in the public market immediately after this offering pursuant
to Rule 144(k) under the Securities Act, and 5,411,997 would otherwise be
eligible for resale commencing 90 days after the effective date of this offering
pursuant to Rule 144 under the Securities Act. The remaining 6,863,999 shares
held by existing stockholders would otherwise become eligible for sale under
Rule 144 commencing on July 26, 1997. Montgomery Securities may, in its sole
discretion, and at any time without notice, release all or any portion of the
securities subject to these lock-up agreements. In addition, the Company intends
to file a registration statement under the Securities Act, upon the
effectiveness of this offering or shortly thereafter, covering the sale of
shares of Common Stock reserved for issuance under the Company's 1996 Stock
Option Plan and 1997 Employee Stock Purchase Plan. As of February 28, 1997,
there were options outstanding to purchase a total of 433,655 shares of the
Company's Common Stock, of which 362,706 shares are subject to 180-day lock-up
agreements. An additional 1,358,052 shares are reserved for future option
grants. The Summit Entities and the executive officers, who hold an aggregate of
12,275,996 shares of Common Stock, will be entitled to registration rights with
respect to their shares of Common Stock after the offering. In addition, an
affiliate of the Company's senior lender is entitled to registration rights with
respect to the shares subject to a warrant to purchase 32,109 shares of Common
Stock at the initial public offering price per share, which warrant is currently
exercisable. See "Shares Eligible for Future Sale" and "Underwriting."

NO PRIOR TRADING MARKET FOR COMMON STOCK; POTENTIAL VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will develop
or be sustained after the offering. The initial public offering price will be
determined through negotiations between the Company and the Representatives of
the Underwriters based on several factors and may not be indicative of the
market price of the Common Stock after the offering. The market price of the
shares of Common Stock may be highly volatile and may be significantly affected
by factors such as actual or anticipated fluctuations in the Company's operating
results, change in estimates or recommendations by securities analysts,
announcements of technical innovations, new products or new contracts by the
Company or its competitors, general market conditions and other factors, certain
of which could be unrelated to, or outside the control of, the Company. The
stock market has from time to time experienced significant price and volume
fluctuations that have often been unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely affect the
market price of the Common Stock.

CERTAIN ANTI-TAKEOVER PROVISIONS

Certain provisions of Mississippi law may make a change in control of the
Company more difficult to effect, even if a change in control were in the
interest of stockholders. Further, certain provisions of the Company's Articles
of Incorporation and By-laws, including provisions that provide that members of
the Board of Directors may be removed by stockholders only for cause, may have
the effect of delaying or preventing a change in control of the Company, which
could adversely affect the market price of the Company's Common Stock. See
"Description of Capital Stock." In addition, effective upon the closing of the
offering, the Company's Board of Directors will have the authority, without
further stockholder approval, to issue up to 5,000,000 shares of Preferred Stock
in one or more series and to determine the price, rights, preferences and
privileges of those shares. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of shares of
Preferred Stock could have the effect of making it more difficult for a third
party to

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14

acquire a majority of the outstanding voting stock of the Company. See
"Description of Capital Stock -- Preferred Stock."

DILUTION

Purchasers in this offering will suffer an immediate and substantial
dilution, in the amount of $8.72 per share, in the pro forma net tangible book
value of the Common Stock from the initial public offering price. Additional
dilution is likely to occur upon exercise of outstanding stock options and
warrants. See "Dilution."

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USE OF PROCEEDS

The net proceeds to the Company from the sale of the 3,000,000 shares of
Common Stock offered by it hereby are estimated to be $24.5 million, assuming an
initial public offering price of $9.00 per share and after deducting the
estimated underwriting discount and offering expenses.

The Company intends to use the net proceeds of this offering, together with
a portion of its existing cash, to repay indebtedness under its bank credit
facility with The First National Bank of Boston (the "Bank Credit Facility"),
which had an outstanding balance of $29.8 million at January 27, 1997. The Bank
Credit Facility bears interest at a floating rate, which was at an effective
interest rate of 7.25% as of December 31, 1996, and matures on September 26,
2001. The Bank Credit Facility was established in September 1996, and amended in
January 1997 to increase the maximum borrowing amount thereunder from $15.0
million to $30.0 million. The proceeds of the Bank Credit Facility were used as
follows: (i) an aggregate of $11.7 million was used in September 1996 to repay
subordinated notes issued to certain of the Summit Entities and the Original
Stockholders in the Recapitalization (including accrued interest of $206,000);
(ii) an aggregate of approximately $12.0 million was used in January 1997 to
redeem all of the outstanding shares of Series A Preferred Stock held by certain
of the Summit Entities (including accrued dividends of $580,000); and (iii) an
aggregate of $10.5 million was used in January 1997 to redeem all of the
outstanding shares of Series B Preferred Stock held by the Original Stockholders
(including accrued dividends of $508,000). To the extent the initial public
offering price is less than $9.00 per share and the Underwriters do not exercise
their over-allotment option in full, the Company would not be able to repay all
amounts outstanding under its bank credit facility in connection with the
closing of this offering. In such event, the Company would incur additional
interest expense on such borrowings.

Any remaining net proceeds would be used for working capital and general
corporate purposes, which may include expansion of the Company's facilities and
the acquisition of complementary businesses, products and technologies. The
Company has no present agreement or commitment with respect to any acquisition,
nor are any negotiations regarding any acquisition currently ongoing. Pending
such uses, the Company would invest any remaining net proceeds of this offering
in investment-grade, short-term, interest-bearing securities.

DIVIDEND POLICY

Subsequent to this offering, the Company anticipates that it will retain
all available funds for use in the operation and expansion of its business and
does not anticipate paying any cash dividends on its Common Stock in the
foreseeable future. From January 1, 1996 until July 25, 1996, the Company was a
Subchapter S corporation for federal and state income tax purposes. As a result,
during such period it was the Company's policy to distribute substantially all
of its earnings to its stockholders. Cash dividends of $3.5 million were
declared and paid during 1996. In connection with the redemption of the
Redeemable Preferred Stock in January 1997, the Company paid an aggregate of
$1.1 million of accrued dividends thereon. Under the terms of the Bank Credit
Facility, no dividends may be paid on the Company's Common Stock.

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CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1996 on an actual, pro forma and as-adjusted basis. This table
should be read in conjunction with the Financial Statements and Notes thereto
included elsewhere in this Prospectus.

DECEMBER 31, 1996
-----------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED(1)(2)
-------- ------------ -----------------
(IN THOUSANDS)

Long-term debt -- revolving line of credit......... $ 8,000 $ 29,818 $--
Mandatorily redeemable Series A Preferred Stock,
$.01 par value; 114,000 shares authorized, issued
and outstanding with a redemption value of $100
per share, plus accrued dividends, actual; none
authorized, issued or outstanding, pro forma and
pro forma as adjusted............................ 11,652 -- --
Mandatorily redeemable Series B Preferred Stock,
$.01 par value; 100,000 shares authorized, issued
and outstanding with a redemption value of $100
per share, plus accrued dividends, actual; none
authorized, issued or outstanding, pro forma and
pro forma as adjusted............................ 10,442 -- --
Stockholders' equity (deficit):
Preferred Stock, $.01 par value; 5,000,000 shares
authorized, none issued or outstanding,
actual, pro forma or pro forma as
adjusted(3)................................... -- -- --
Common Stock, $.01 par value; 40,000,000 shares
authorized; 12,408,288 issued and outstanding,
actual and pro forma; and 15,408,288 shares
issued and outstanding, pro forma as
adjusted(3)(4)................................ 124 124 154
Additional paid in capital....................... 303 303 24,783
Distributions in excess of basis................. (23,177) (23,177) (23,177)
Retained earnings................................ 2,931 2,680 2,680
-------- -------- --------
Total stockholders' equity (deficit)........ (19,819) (20,070) 4,440
-------- -------- --------
Total capitalization..................... $ 10,275 $ 9,748 $ 4,440
======== ======== ========

- ---------------

(1) Gives effect to the redemption of all outstanding shares of Redeemable
Preferred Stock as if such transaction had occurred on December 31, 1996 and
the related incurrence of an additional $21.8 million of borrowings under
the Bank Credit Facility, and the recognition of a non-recurring non-cash
charge of $251,000 associated with the unamortized portion of the excess of
the face amount of the Series A Preferred Stock over the fair market value
of the Series A Preferred Stock as determined by a third-party appraisal.

(2) Adjusted to give effect to the sale of 3,000,000 shares of Common Stock
offered by the Company hereby and the application of the estimated net
proceeds therefrom. See "Use of Proceeds."

(3) On January 27, 1997, the Company's Articles of Incorporation were amended to
increase the number of authorized shares of Common Stock from 10,000,000 to
40,000,000 and to set the number of authorized shares of undesignated
Preferred Stock at 5,000,000. See "Description of Capital Stock."

(4) Excludes: (i) 433,655 shares of Common Stock issuable upon exercise of stock
options outstanding as of February 28, 1997 with a weighted average exercise
price of $2.99 per share, of which options to purchase 263,706 shares of
Common Stock were then exercisable, and (ii) 32,109 shares of Common Stock
which are reserved for issuance under a warrant issued by the Company to an
affiliate of its senior lender. An additional 1,358,052 shares of Common
Stock have been reserved for issuance under the Company's stock plans. See
"Management -- Stock Plans" and "Description of Capital Stock -- Bank
Warrant."

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DILUTION

At December 31, 1996, the deficit in pro forma net tangible book value of
the Company was ($20,126,591), or ($1.62) per share. Pro forma net tangible book
value per share is equal to the Company's total tangible assets (before the
offering) less total liabilities divided by the total number of shares of Common
Stock outstanding on a pro forma basis, giving effect to the redemption of all
outstanding shares of Redeemable Preferred Stock as of December 31, 1996 and the
related incurrence of an additional $21.8 million of borrowings under the Bank
Credit Facility. After giving effect to the sale of the 3,000,000 shares of
Common Stock offered by the Company hereby and the application of the estimated
net proceeds therefrom, the pro forma net tangible book value of the Company at
December 31, 1996 would have been $4,383,409, or $0.28 per share. This
represents an immediate increase in the pro forma net tangible book value of
$1.90 per share to existing stockholders and an immediate dilution of $8.72 per
share to purchasers in this offering. The following table illustrates this per
share dilution:

Assumed initial public offering price in the Underwritten
Offering.......................................................... $9.00
Deficit in pro forma net tangible book value per share before the
offering....................................................... $(1.62)
Increase in pro forma net tangible book value per share
attributable to new investors.................................. 1.90
------
Pro forma net tangible book value per share after the offering...... 0.28
------
Pro forma net tangible book value dilution per share to new
investors......................................................... $8.72
======

The following table summarizes, as of December 31, 1996, the number of
shares of Common Stock purchased from the Company, the total cash consideration
paid to the Company and the average price per share paid by existing
stockholders and by new investors in the offering based on the assumed initial
public offering price but before deducting the estimated underwriting discount
and offering expenses.

SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------

Existing
stockholders(1)(2)....... 12,708,288 82.5% $ 2,621,138 9.8% $0.21
New investors(2)(3)........ 2,700,000 17.5 24,111,000 90.2 $8.93
---------- ----- ---------- ------
Total............ 15,408,288 100.0% $26,732,138 100.0%
========== ===== ========== ======

- ---------------

(1) Includes 300,000 shares of Common Stock being offered by the Company in the
Concurrent Offering at a price of $8.37 per share (the assumed initial
public offering price less the underwriting discount) which certain existing
stockholders have indicated a desire to purchase.

(2) Assuming full exercise of the Underwriters' over-allotment option, existing
stockholders would hold 80.6% of the total number of shares of Common Stock
outstanding, and the number of shares held by new stockholders would be
increased to 3,060,000 shares, or 19.4% of the total number of shares of
Common Stock to be outstanding after this offering.

(3) Includes 300,000 shares of Common Stock being offered by the Company in the
Concurrent Offering at a price of $8.37 per share (the assumed initial
public offering price less the underwriting discount) which certain limited
partners of Summit Ventures IV have indicated a desire to purchase.

The foregoing tables assume no exercise of the Underwriters' over-allotment
option or of options to purchase an aggregate of 433,655 shares of Common Stock
that were outstanding at February 28, 1997, with a weighted average exercise
price of $2.99 per share, or the warrant to purchase 32,109 shares outstanding
at February 28, 1997, at an exercise price equal to the initial public offering
price per share. To the extent that the Underwriters' over-allotment option,
other options or the warrant are exercised in the future, there will be further
dilution to new investors. See "Management -- Stock Plans."

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SELECTED FINANCIAL DATA

The selected financial data set forth below should be read in conjunction
with the Financial Statements and Notes thereto included elsewhere in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." The selected statement of operations data for the years
ended December 31, 1994, 1995 and 1996 and the selected balance sheet data at
December 31, 1995 and 1996, have been derived from the Company's financial
statements, which have been audited by Deloitte and Touche LLP and are included
elsewhere in this Prospectus. The selected balance sheet data at December 31,
1994 has been derived from the Company's financial statements, which have been
audited by Deloitte and Touche LLP but are not included in this Prospectus. The
selected financial data for the years ended December 31, 1992 and 1993 have been
derived from the Company's unaudited financial statements, which, in the opinion
of the Company's management, have been prepared on the same basis as the audited
financial statements. Historical results are not necessarily indicative of
results to be expected in the future.

YEAR ENDED DECEMBER 31,
--------------------------------------------
1992 1993 1994 1995 1996
------ ------ ------ ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Net sales........................................... $ 955 $2,630 $3,236 $21,008 $40,968
Cost of sales....................................... 737 1,619 1,948 9,247 21,350
------ ------ ------ ------- -------
Gross profit...................................... 218 1,011 1,288 11,761 19,618
Operating expenses.................................. 315 671 917 4,343 5,236
------ ------ ------ ------- -------
Income (loss) from operations..................... (97) 340 371 7,418 14,382
Interest income (expense), net...................... 6 (1) 7 111 (185)
------ ------ ------ ------- -------
Income before income taxes........................ (91) 339 378 7,529 14,197
Income taxes (credit)............................... (30) 125 145 2,815 2,650
------ ------ ------ ------- -------
Net income (loss)................................. (61) 214 233 4,714 11,547
Accretion of preferred stock dividends
and redemption value.............................. -- -- -- -- 965
------ ------ ------ ------- -------
Net income (loss) applicable to common
stockholders................................... $ (61) $ 214 $ 233 $ 4,714 $10,582
====== ====== ====== ======= =======
Net income applicable to common
stockholders -- per common share............... $(0.00) $ 0.02 $ 0.02 $ 0.37
====== ====== ====== =======
Pro Forma Information:
Historical net income applicable to common
stockholders................................... $10,582
Adjustment to reflect income tax expense(1)....... (2,850)
Adjustment for assumed replacement of preferred
stock with debt(2)............................. 485
-------
Pro forma net income applicable to common
stockholders(1)(2)............................. $ 8,217
=======
Pro forma net income applicable to common
stockholders -- per common share............... $ 0.65
=======
Weighted average shares outstanding(3).............. 12,731 12,731 12,731 12,731 12,731
====== ====== ====== ======= =======

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DECEMBER 31,
--------------------------------------------------------------------
1996
------------------------------------
PRO FORMA
PRO AS
1992 1993 1994 1995 ACTUAL FORMA(4) ADJUSTED(4)(5)
---- ---- ------ ------ -------- -------- --------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital................ $208 $446 $ 661 $5,294 $ 9,340 $ 8,813 $ 3,505
Total assets................... 386 886 1,324 9,273 13,676 13,149 7,841
Long-term revolving credit
facility.................... -- -- -- -- 8,000 29,818 --
Mandatorily redeemable
preferred stock............. -- -- -- -- 22,094 -- --
Total stockholders' equity
(deficit)................... 283 497 730 5,444 (19,819) (20,070) 4,440

- ---------------

(1) From January 1, 1996 through July 25, 1996, the Company elected to be taxed
as a Subchapter S corporation for federal (and certain state) income tax
purposes and, accordingly, the Company was not subject to corporate income
taxes for that period. Gives effect to additional income tax expense of
$2.85 million, as if the Company had been subject to federal and state
income taxes during the period January 1, 1996 through July 25, 1996.

(2) Gives effect to (i) additional interest expense (net of taxes), as if the
additional $21.8 million borrowed under the Bank Credit Facility on January
24, 1997 to fund in part the redemption of the Redeemable Preferred Stock
had been incurred on July 25, 1996, the date of the Recapitalization, and
(ii) the elimination of the accretion of $965,000 of dividends and
redemption value on the Redeemable Preferred Stock.

(3) See Notes 1 and 13 to Financial Statements for an explanation of the
determination of the number of shares used in computing per share amounts.

(4) Gives effect to the following transactions as if they had occurred on
December 31, 1996: (i) the redemption of the Redeemable Preferred Stock;
(ii) the related incurrence of an additional $21.8 million of borrowings
under the Bank Credit Facility; and (iii) the recognition of a
non-recurring non-cash charge of $251,000 associated with the unamortized
portion of the excess of the face amount of the Series A Preferred Stock
over the fair market value of the Series A Preferred Stock as determined by
a third-party appraisal.

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20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this Prospectus contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that could cause or contribute to such a difference include,
but are not limited to, those discussed in "Risk Factors."

OVERVIEW

Triton is a leading manufacturer and marketer of ATMs in the United States.
The Company designs, manufactures, markets and sells primarily focused-function
ATMs (also known as cash dispensers), which are intended to operate profitably
at significantly lower transaction volumes than conventional ATMs. The Company
also designs, manufactures, markets and sells other financial hardware products
such as scrip terminals (countertop ATMs that provide a voucher redeemable for
cash), ATM demonstration machines and card encoding devices. The Company
continues to position itself to capitalize on emerging opportunities in the
transaction and payment processing industry.

The Company was founded in 1979 by Ernest L. Burdette, Robert E. Sandoz and
Frank J. Wilem, Jr. to provide programming services on a contract basis. In
1985, the Company introduced its first product line to the banking industry,
which consisted of a portable ATM demonstration unit, the ATMjr Demonstrator. In
1992, the Company began producing miniATM Scrip Terminals suitable for use in
retail locations where customers obtain a voucher, or scrip, from the machine,
which may be redeemed for cash at the point of sale. In the fourth quarter of
1994, the Company introduced its focused-function ATM product line, which has
become the primary source of the Company's revenues and revenue growth. Since
introducing its first focused-function ATM, the Company has added a number of
new models with enhanced features, including a multi-cassette ATM, a rear-access
ATM and a heavy duty safe style ATM.

The Company's net sales increased to $41.0 million in 1996 from $21.0
million in 1995 and $3.2 million in 1994, principally due to strong sales of
focused-function ATMs, which accounted for 96% of net sales in 1996, compared to
89% and 19%, respectively, in 1995 and 1994. The Company recognizes that sales
growth and profit margins may come under pressure as competition in the
focused-function ATM market segment increases. See "Risk Factors -- Dependence
on Single, Recently Introduced Product Line" and
" -- Competition."

The Company's gross margin is affected by a number of factors, including
product mix, product pricing, and manufacturing and component costs. The
Company's gross margins were lower in 1996 compared to 1995 and, in light of
competitive pricing pressures, the Company anticipates that gross margins may
decline in the future. The Company seeks to mitigate the effects of declining
prices by focusing on reducing costs, primarily manufacturing and component
costs. See "Risk Factors -- Potential Fluctuations in Operating Results" and
"-- Competition."

The Company recognizes its revenues when products are shipped to customers.
The Company's cost of sales consists primarily of costs associated with
components, outsourced manufacture of certain subassemblies, and in-house labor
associated with assembly, testing, shipping and quality assurance. The Company's
operating expenses include personnel and other costs relating to engineering
support, sales, marketing, research and development, finance, human resources
and general administration functions.

The Company's operations emphasize cost-effectiveness principally by
outsourcing the manufacture of many components used in its products, selling its
products through a network of independent distributors, and operating its
manufacturing facility in a geographic area where operating and labor costs are
typically lower than many other regions of the United States.

On July 25, 1996, the Company completed the Recapitalization, pursuant to
which the Company repurchased an aggregate of approximately 55% of its then
outstanding shares of Common Stock from the Original Stockholders for total
consideration of $16.7 million in cash and $6.0 million in subordinated

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21

promissory notes. Immediately prior to the Recapitalization, the Company
distributed to the Original Stockholders, in the form of a dividend, shares of
Series B Preferred Stock with an aggregate redemption value of $10.0 million. In
order to finance the Recapitalization, the Company sold to the Summit Entities
(i) 114,000 shares of Series A Preferred Stock for an aggregate of $11.4
million, and (ii) $5.5 million in principal amount of subordinated debentures.
After the foregoing transactions, the Company issued and sold an aggregate of
6,863,999 shares of Common Stock to the Summit Entities for an aggregate of
$100,000. The entire $11.5 million outstanding under the subordinated debentures
and subordinated promissory notes issued to the Summit Entities and the Original
Stockholders (plus accrued interest of $206,000) was repaid on September 26,
1996 from borrowings under the Bank Credit Facility. All outstanding shares of
Series A Preferred Stock and Series B Preferred Stock were redeemed on January
24, 1997, for an aggregate of $21.4 million plus accrued dividends of $1.1
million with additional borrowings under the Bank Credit Facility of $21.8
million and available cash of $670,000. The Company intends to apply the net
proceeds from this offering, together with a portion of its existing cash, to
repay indebtedness under the Bank Credit Facility. See "Use of Proceeds" and
"Certain Transactions."

In connection with the redemption of the Series A Preferred Stock in
January 1997, the Company will be required to recognize a non-recurring non-cash
charge of approximately $251,000 during the first quarter of 1997, attributable
to the unamortized portion of the excess of the face amount of the Series A
Preferred Stock over the fair market value of the Series A Preferred Stock, as
determined by a third party appraisal.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of
net sales represented by each line item in the Company's statements of
operations:

YEAR ENDED DECEMBER 31,
-------------------------
1994 1995 1996
----- ----- -----

Net sales......................................................... 100.0% 100.0% 100.0%
Cost of sales..................................................... 60.2 44.0 52.1
----- ----- -----
Gross profit.................................................... 39.8 56.0 47.9
Operating expenses................................................ 28.3 20.7 12.8
----- ----- -----
Income from operations.......................................... 11.5 35.3 35.1
Interest income (expense), net.................................... 0.2 0.5 (0.4)
----- ----- -----
Income before income taxes...................................... 11.7 35.8 34.7
Income taxes...................................................... 4.5 13.4 6.5
----- ----- -----
Net income...................................................... 7.2 22.4 28.2
Accretion of preferred stock dividends and redemption value....... -- -- 2.4
----- ----- -----
Net income applicable to common stockholders.................... 7.2% 22.4% 25.8%
===== ===== =====

COMPARISON OF 1996, 1995 AND 1994 RESULTS OF OPERATIONS

NET SALES

Net sales increased to $41.0 million in 1996 from $21.0 million in 1995 and
$3.2 million in 1994. The increase in net sales over the three year period was
primarily due to unit sales growth of focused-function ATMs to 5,582 units in
1996 from 2,921 units in 1995 and 75 units in 1994, resulting primarily from the
growth of the focused-function segment of the ATM market. In 1996, this increase
in unit sales was offset in part by a decline in the price of the Company's ATMs
due to competitive pricing pressure.

GROSS PROFIT

Gross profit increased to $19.6 million in 1996 from $11.8 million in 1995
and $1.3 million in 1994, reflecting the year-to-year growth in the Company's
sales of focused-function ATMs. Gross margin declined to 47.9% in 1996 from
56.0% in 1995, primarily due to lower product prices in response to competitive
pressures relating to the Company's focused-function ATMs, higher warranty
reserves as a result of the extension of the Company's parts warranty from three
to 12 months in the first quarter of 1996, and product warranty claims in the
first quarter of 1996 relating to the Company's ATM units shipped in 1995. The
decline

20
22

in gross margin in 1996 was offset in part by reduced manufacturing costs
primarily due to modifications of product designs to reduce component costs.
Gross margin increased to 56.0% in 1995 from 39.8% in 1994, primarily due to a
shift in product mix from mostly ATM demonstrators and ATM scrip terminals in
1994 to mostly focused-function ATMs in 1995. The Company seeks to mitigate the
effects of declining prices by focusing on reducing costs, primarily
manufacturing and component costs.

INCOME FROM OPERATIONS

Operating expenses increased to $5.2 million in 1996 from $4.3 million in
1995 and $917,000 in 1994, primarily due to increases in support personnel and
expansion of overhead costs associated with increased sales. Operating expenses
in 1996 also increased due to an increase in the allowance for bad debts from
$100,000 in 1995 to $1,030,000 in 1996, primarily due to the potential increased
credit risk associated with the Company's expanding customer base. Operating
expenses in the fourth quarter of 1995 included one-time year-end bonuses
aggregating $1.9 million. Operating expenses as a percentage of net sales
decreased to 12.8% in 1996 from 20.7% in 1995 and 28.3% in 1994, primarily due
to economies of scale resulting from the Company's higher unit sales of
focused-function ATMs. The Company does not anticipate that operating expenses
as a percentage of net sales will decrease at the same rate in future periods.

INTEREST INCOME (EXPENSE)

The Company had net interest expense in 1996 of $185,000, compared with net
interest income of $110,000 and $7,000 in 1995 and 1994, respectively. The net
interest expense in 1996 was due to the indebtedness incurred pursuant to the
Recapitalization and borrowings under the Bank Credit Facility.

INCOME TAXES

The Company's effective tax rates were 18.7%, 37.4% and 38.4% for 1996,
1995 and 1994 respectively. The lower effective tax rate for 1996 was due to the
Company's election to be taxed as a Subchapter S corporation during the period
January 1996 to July 1996. Accordingly, during such period, there was no
provision for current federal or state income taxes on the Company's income
except for $75,000 of income taxes relating to unrealized gains on certain
inventory items resulting from the termination of the Company's status as a
Subchapter S corporation in connection with the Recapitalization. The Company's
election to be taxed as a Subchapter S corporation was terminated upon
consummation of the Recapitalization on July 25, 1996, and earnings for the
remainder of 1996 were subject to tax at an effective rate of 37.5%. Excluding
the effect of being a Subchapter S corporation during part of 1996, the
Company's effective tax rate would have been 38.7%.

NET INCOME APPLICABLE TO COMMON STOCKHOLDERS

Net income applicable to common stockholders increased to $10.6 million in
1996 from $4.7 million in 1995 and $233,000 in 1994, primarily due to higher net
sales and lower operating expenses as a percentage of net sales. From January 1,
1996 through July 25, 1996, the Company elected to be taxed as a Subchapter S
corporation for federal and certain state income tax purposes and, consequently,
the Company was not subject to corporate income taxes for that period. If the
Company had been subject to federal or state income taxes for all of 1996, the
Company's net income applicable to common stockholders would have been $7.7
million.

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23

SELECTED QUARTERLY OPERATING RESULTS

The following tables set forth certain unaudited quarterly financial data
for each of the eight quarters ending with the quarter ended December 31, 1996,
and such data expressed as a percentage of net sales. In the opinion of the
Company's management, this unaudited information has been prepared on the same
basis as the audited financial statements and includes all adjustments,
consisting only of normal recurring adjustments, necessary to present fairly the
results of operations in the quarterly periods indicated below. The operating
results for any quarter are not necessarily indicative of results for any
subsequent quarter.

THREE MONTHS ENDED
---------------------------------------------------------------------------------------
MAR. 31 JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30 DEC. 31,
1995 1995 1995 1995 1996 1996 1996 1996
-------- -------- --------- -------- -------- -------- --------- --------
(IN THOUSANDS)

Net sales............................... $2,429 $4,533 $7,253 $6,793 $8,424 $9,672 $11,529 $11,343
Cost of sales........................... 999 1,935 3,146 3,167 4,624 5,135 5,900 5,691
------ ------ ------ ------ ------ ------ ------- -------
Gross profit.......................... 1,430 2,598 4,107 3,626 3,800 4,537 5,629 5,652
Operating expenses...................... 400 660 671 2,612 700 785 1,941 1,810
------ ------ ------ ------ ------ ------ ------- -------
Income from operations................ 1,030 1,938 3,436 1,014 3,100 3,752 3,688 3,842
Interest income (expense), net.......... 3 13 35 59 22 23 (80) (150)
------ ------ ------ ------ ------ ------ ------- -------
Income before income taxes............ 1,033 1,951 3,471 1,073 3,122 3,775 3,608 3,692
Income taxes(1)......................... 386 730 1,298 401 72 88 1,110 1,380
------ ------ ------ ------ ------ ------ ------- -------
Net income............................ 647 1,221 2,173 672 3,050 3,687 2,498 2,312
Accretion of preferred stock dividends
and redemption value.................. -- -- -- -- -- -- 420 545
------ ------ ------ ------ ------ ------ ------- -------
Net income applicable to common
stockholders........................ $ 647 $1,221 $2,173 $ 672 $3,050 $3,687 $ 2,078 $ 1,767
====== ====== ====== ====== ====== ====== ======= =======

(AS A PERCENTAGE OF NET SALES)

Net sales............................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........................... 41.1 42.7 43.4 46.6 54.9 53.1 51.2 50.2
----- ----- ----- ----- ----- ----- ----- -----
Gross profit.......................... 58.9 57.3 56.6 53.4 45.1 46.9 48.8 49.8
Operating expenses...................... 16.5 14.5 9.3 38.5 8.3 8.1 16.8 16.0
----- ----- ----- ----- ----- ----- ----- -----
Income from operations................ 42.4 42.8 47.3 14.9 36.8 38.8 32.0 33.9
Interest income (expense), net.......... 0.1 0.2 0.6 0.9 0.3 0.2 (0.7) (1.3)
----- ----- ----- ----- ----- ----- ----- -----
Income before income taxes............ 42.5 43.0 47.9 15.8 37.1 39.0 31.3 32.6
Income taxes(1)......................... 15.8 16.1 17.9 5.9 0.9 0.9 9.6 12.2
----- ----- ----- ----- ----- ----- ----- -----
Net income............................ 26.7 26.9 30.0 9.9 36.2 38.1 21.7 20.4
Accretion of preferred stock dividends
and redemption value.................. -- -- -- -- -- -- 3.7 4.8
----- ----- ----- ----- ----- ----- ----- -----
Net income applicable to common
stockholders........................ 26.7% 26.9% 30.0% 9.9% 36.2% 38.1% 18.0% 15.6%
===== ===== ===== ===== ===== ===== ===== =====

- ---------------

(1) The Company was taxed as a Subchapter S corporation for all or a portion of
the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996. If
the Company had been subject to corporate income taxes for all of these
periods, an additional tax of $1.2 million, $1.4 million and $0.3 million,
would have been accrued for the quarters ending March 31, 1996, June 30,
1996 and September 30, 1996, respectively, which would have resulted in
additional income taxes as a percentage of net sales of 14.6%, 15.4% and
12.2%, respectively.

Due to industry seasonality, demand for the Company's products has
historically been weakest during the first quarter and strongest in the second
half of the year, particularly during the third quarter. The Company believes
that this seasonal fluctuation in demand is primarily attributable to the
emphasis by the Company's distributors during the second half of the year on
achieving their internal sales targets before the end of the calendar year, and
to decreased ordering activity during the year-end holiday season leading to
lower order fulfillment during the first quarter.

The Company's operating expenses in the fourth quarter of 1995 included
one-time year-end bonuses aggregating $1.9 million. The Company's quarterly
operating results may vary significantly from period to period depending on
factors such as the volume and timing of orders received during the period, the
timing of new product introductions by the Company and its competitors, the
impact of price competition on the Company's selling prices, the availability
and pricing of components for the Company's products, changes in product or
distribution channel mix, changes in operating expenses, changes in the
Company's strategy,

22
24

personnel changes and general economic factors. Many of these factors are beyond
the Company's control. The volume and timing of orders received during a quarter
is difficult to forecast. Customers generally order on an as-needed basis, and
accordingly the Company has historically operated with a relatively small
backlog. In addition, a significant portion of the Company's sales are derived
from a limited number of distributors, the loss of one or more of which could
have a materially adverse effect on the Company's business, results of
operations and financial condition. Notwithstanding the difficulty in
forecasting future sales and the relatively small level of backlog at any given
time, the Company generally must plan production, order components and undertake
its development, sales and marketing activities and other commitments months in
advance. Accordingly, any shortfall in sales in a given quarter may adversely
impact the Company's results of operations due to an inability to adjust
expenses or inventory during the quarter to match the level of sales for the
quarter.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations primarily through cash flows from
operating activities. The Company's operating activities generated cash of $9.6
million in 1996, $2.1 million in 1995 and $403,000 in 1994. During 1996, net
changes in operating assets and liabilities used $1.4 million of cash as the
decrease in accounts receivable of $176,000, the increase in accounts payable of
$1.3 million and the increase in accrued expenses of $715,000 was offset by the
growth in inventory of $1.2 million and the decrease of income taxes payable of
$2.4 million.

Investing activities used $847,000 of cash in 1996, which included $631,000
of cash used to acquire the Company's manufacturing facility and telephone
system in Long Beach, Mississippi, from a related party. Financing activities
used $6.7 million of cash in 1996, consisting primarily of financings and
payments made in connection with the Recapitalization. See "Certain
Transactions."

At December 31, 1996, the Company had $4.5 million of cash and cash
equivalents and $8.0 million in outstanding borrowings under the Bank Credit
Facility. On January 24, 1997, the Company increased its availability under the
Bank Credit Facility from $15.0 million to $30.0 million and borrowed an
additional $21.8 million in order to provide a portion of the funds used to
redeem all outstanding shares of the Redeemable Preferred Stock. The Bank Credit
Facility is secured by substantially all of the Company's assets. The Company
intends to use the net proceeds from this offering, together with a portion of
its existing cash, to repay amounts outstanding under the Bank Credit Facility.
After this offering, the maximum amount the Company will be permitted to borrow
under the Bank Credit Facility will be $30.0 million. The maximum borrowing
amount automatically decreases annually by $2.0 million on each September 26,
commencing September 26, 1997, until this facility expires on September 26,
2001. The maximum borrowing amount also is subject to reduction based upon a
specified percentage of the Company's excess cash flow (as defined) for each
year. Under the Bank Credit Facility, the Company is required to comply with
certain restrictive covenants, including (i) maintaining minimum net income of
at least $1.00 per quarter, (ii) maintaining a total debt service coverage ratio
of not less than 1.75 to 1.0, and (iii) maintaining a leverage ratio of not more
than 3.0 to 1.0. The Bank Credit Facility prohibits the Company from incurring
any additional indebtedness other than indebtedness incurred for the purchase of
equipment and other property of up to $500,000 in the aggregate and indebtedness
which is subordinated in right of payment to the Bank Credit Facility on terms
acceptable to the Bank. The Bank Credit Facility also restricts the Company's
ability to further pledge its assets as security for the payment of indebtedness
other than indebtedness incurred for the purchase of equipment and other
property and limits the Company's capital expenditures to $700,000 per year. The
interest rate for the Bank Credit Facility is the bank's adjusted base rate or
an adjusted LIBOR. At December 31, 1996, the Company's borrowings were at an
effective interest rate of 7.25%.

The Company is currently in the process of acquiring a new management
information system and expanding its facilities by approximately 9,000 square
feet. The Company does not currently have an estimated cost for the management
information system. The Company estimates that the expansion of its facilities
will cost approximately $525,000, exclusive of furniture and fixtures. The
Company intends to fund these payments through cash flow from operations,
existing cash balances and available borrowings under the Bank Credit Facility.

23
25

The Company believes that cash flow from operations, existing cash balances
and available borrowings under the Bank Credit Facility, will be sufficient to
meet its working capital requirements for at least the next 12 months.
Thereafter, the Company may need to raise additional funds for working capital,
expansion of facilities and acquisitions of complementary businesses, products
and technologies. There can be no assurance that the Company will obtain
additional financing as needed on acceptable terms or at all. The Company
intends to invest any remaining cash in excess of current operating requirements
in short-term, investment-grade securities.

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26

BUSINESS

OVERVIEW

Triton Systems, Inc. is a leading manufacturer and marketer of automated
teller machines ("ATMs") in the United States. The Company designs,
manufactures, markets and sells primarily focused-function ATMs, which are
intended to operate profitably at significantly lower transaction volumes than
conventional ATMs. Focused-function ATMs are suitable for locations such as
convenience stores, hotels, casinos, grocery stores, fast food restaurants,
department stores, gas stations, malls, campuses and entertainment complexes,
including movie theaters, amusement parks and race tracks ("off-premise
locations"), in addition to bank and credit union branches ("on-premise
locations"). According to The Nilson Report, the Company shipped the third
largest number of ATMs in the United States in 1996, with its shipments
accounting for 16% of all ATMs shipped in the United States in that year, which
represented a 1996 market share in the United States of 16%, based on units
shipped. The Company also designs, manufactures, markets and sells other
financial hardware products such as scrip terminals (countertop ATMs that
provide a voucher redeemable for cash), ATM demonstration machines and card
activators. The Company continues to position itself to capitalize on emerging
opportunities in the transaction and payment processing industry.

INDUSTRY BACKGROUND

An ATM is a stand-alone electronic device with which consumers can withdraw
cash and complete other transactions. Conventional ATMs typically dispense cash,
accept deposits, transfer funds between accounts and provide account balances.
Focused-function ATMs (also known as cash dispensers), such as those
manufactured by the Company, perform all of these functions other than accepting
deposits. According to The Forrester Report, ATMs in an On-line World, dated
January 1996, approximately 80%-90% of all transactions initiated through an ATM
were cash withdrawals.

According to industry sources, ATM shipments in the United States increased
from 8,527 in 1991 to 34,307 in 1996, for a compound annual growth rate of 37%.
From 1991 to 1995, the number of installed ATMs in the United States grew from
83,545 to 122,706, for a compound annual growth rate of 10%. Due in part to
increasing consumer acceptance of ATMs as well as an increased number of
deployed ATMs, the total number of ATM transactions has grown substantially,
from an average of 534.9 million transactions per month in 1991 to an average of
807.4 million transactions per month in 1995, for a compound annual growth rate
of 11%. Worldwide, the number of ATMs shipped in 1995 was 117,658, and the
number of ATMs installed at the end of 1995 was 618,296.

The Company estimates, based on industry sources, that unit sales of
focused-function ATMs grew by 67% from 1995 to 1996, while unit sales of
conventional ATMs grew by 14% over the same period. The Company believes that
the two primary reasons for the faster growth of focused-function ATMs are (i)
increased deployment of ATMs in off-premise locations and (ii) the attractive
economics of owning and operating a focused-function ATM. The Company believes
that factors contributing to the increased deployment of ATMs in off-premise
locations include consumer demand for cash at these locations and the
competitive advantage an ATM can give a retailer through increased customer
traffic and incremental revenues. The Company believes the factors contributing
to the attractive economics of owning and operating a focused-function ATM
include (i) lower retail prices and monthly operating costs compared to
conventional ATMs and (ii) incremental revenues available from surcharge fees.

The first primary reason for the increase in the number of focused-function
ATMs is the growing number of ATM installations in off-premise locations. From
1991 to 1995, the number of ATMs installed in off-premise locations has
increased from 18,380 to 38,039, for a compound annual growth rate of 19.9%, as
compared to the increase of ATMs installed in on-premise locations from 65,165
to 84,667, for a compound annual growth rate of 6.8%. The following chart,
prepared by the Company based on industry data, shows the number of ATMs
installed in off-premise and on-premise locations in the United States at the
end of each of years 1991 through 1995.

25
27

[Graphic Inserts here]

The Company estimates that the potential market for focused-function ATMs
includes over 700,000 off-premise locations in the United States, including
convenience stores, hotels, casinos, grocery stores, fast food restaurants,
department stores, gas stations, malls, campuses and entertainment complexes.
This potential market also includes suburban office parks and downtown office
towers.

Owners of off-premise ATMs, including retailers, investor groups,
independent sales organizations ("ISOs") and third party transaction processors,
in addition to banks and credit unions, have placed focused-function ATMs at
off-premise locations to capitalize on consumer demand for cash at these sites.
From a retailer's perspective, an ATM offers a competitive advantage by
increasing customer traffic and generating incremental revenues. According to
Convenience Store Decisions 1995 Sales Trend Handbook, the typical ATM customer
will spend 20%-25% more than a non-ATM customer in a convenience store. The
Company also believes that some retailers consider installing ATMs in their
stores as a competitive response to installation of ATMs by competitors in
nearby locations.

The second primary reason for the increase in the number of
focused-function ATMs is the attractive economics of owning and operating a
focused-function ATM. The Company estimates that focused-function ATMs have
retail prices and monthly operating costs that are 35%-70% lower than those of
conventional ATMs. The Company believes that the lower monthly operating costs
for focused-function ATMs are primarily due to (i) the use of dial-up
communications rather than the typical use of leased telephone lines by
conventional ATMs and (ii) lower servicing costs principally due to the absence
of a deposit function and the associated daily servicing requirements.

Owning and operating an ATM has become even more attractive with recent
changes in network association rules eliminating barriers to surcharging by the
ATM owner. In the traditional transaction at a bank-owned ATM, when a bank
customer uses another bank's ATM, the customer's bank will pay an interchange
fee (typically $.50) to the bank sponsoring the ATM and the customer's bank may
pass that cost on to the consumer by charging a usage fee. When parties other
than the sponsoring bank are involved, such as a third party processor, an ISO
or a retailer, such additional parties typically share the interchange fee with
the sponsoring bank. Historically, these additional parties have derived their
ATM revenues only from the interchange fee. In recent years, however, ATM owners
have begun to charge consumers a transaction fee or "surcharge" for using the
ATM. In a typical arrangement, a surcharge ranging from $.50 to $3.00 is charged
to a bank customer and is shared among the parties involved in the transaction,
providing them an additional revenue stream.

The ability to surcharge consumers has enabled the profitable placement of
ATMs in low traffic locations. According to The Forrester Report, a conventional
bank-owned ATM requires approximately 5,230 transactions per month to break even
without surcharging and approximately 2,580 transactions per month to break

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even with a $.50 surcharge. The Company estimates that an off-premise
focused-function ATM requires 785-800 transactions per month to break even
without surcharging, and 350-375 transactions per month to break even with a
$.50 surcharge.

As a result of the increased deployment of ATMs in off-premise locations
and the attractive economics of owning and operating a focused-function ATM,
this segment has become an important part of the total market for ATMs.
According to The Nilson Report, focused-function ATMs represented approximately
61% of total 1996 ATM shipments in the United States.

ATMs are typically sold to banks and credit unions by ATM manufacturers
through their in-house direct sales forces. Sales of ATMs for installation in
off-premise locations are typically made through distributors who frequently
offer to merchants a turnkey package including the ATM, transaction processing,
bank sponsorship, maintenance, service and cash replenishment, if required. From
a manufacturer's perspective, the use of distributors represents a
cost-effective alternative to selling directly. The Company believes that
establishing a distribution network can serve as a significant barrier to entry
for potential new ATM manufacturers.

In the United States, ATM transactions are processed either directly by the
bank or credit union that owns and operates the ATM, or by third party
processors that act as intermediaries for these transactions. The Company
believes that third party processors are less prevalent in foreign markets where
banks process most ATM transactions.

Banks and credit unions typically communicate with their ATMs by means of
an industry standard communications protocol. Accordingly, ATMs shipped to bank
and credit union locations generally must use this communications protocol.
Third party processors typically use their own communications protocol to
receive and send information to corresponding ATMs. Each ATM must contain
communications software that is compatible with the protocol being used by the
processor. Conforming an ATM's communications software so it is compatible with
the protocol of a third party processor requires a significant collaborative
effort on the part of both the ATM manufacturer and the third party processor.
The Company believes that establishing this collaborative relationship can serve
as a significant barrier to entry for potential new ATM manufacturers.

The growth in consumer use of ATMs and the attractive economics of placing
ATMs in off-premise locations have created a demand for focused-function ATMs.
Consequently, an opportunity exists for ATM manufacturers to address the growing
demand for focused-function ATMs and related products by offering cost-effective
ATMs with functionality directed at the most common transaction needs of
consumers.

STRATEGY

The key elements in implementing the Company's strategy are as follows:

Leverage Distribution Channels to Penetrate New Domestic Geographic
Markets. The Company's products are currently sold primarily through
distributors, which enables the Company to leverage its sales and marketing
resources. The Company has strong distributor relationships in most regions of
the United States and is expanding its distribution channels to penetrate new
markets, such as the Northeast, through the expanded use of its existing
distributors, an increased emphasis on sales to high volume distributors, and
the addition of new distributors.

Penetrate Domestic Bank and Credit Union Customer Base. The Company
intends to penetrate the bank and credit union market by providing an economical
way for banks and credit unions to give their customers access to on-premise and
off-premise ATMs. The Company intends to use its distributors, rather than an
in-house direct sales force, to cost-effectively penetrate this market. The
Company also intends to hire

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dedicated marketing personnel to assist distributor sales efforts, and to
capitalize on the relationships previously developed by the Company with certain
banks and credit unions through the sale of its ATM demonstrators and card
activators. In order to offer a targeted product for this market, the Company
has been field testing on a trial basis with a limited number of installations a
new focused-function ATM model that conforms with the industry standard
communications protocol used by most banks and credit unions to communicate with
their ATMs.

Develop International Presence. The Company intends to promote its ATMs
internationally by developing new distributor relationships in foreign markets
and, in some cases, by building upon distributor relationships previously
established for its ATM demonstrators and card activators. The Company intends
to focus its initial international marketing efforts on Canada, Mexico, Brazil
and Columbia. For each country the Company intends to enter, the Company plans
to appoint one or more distributors with whom the Company will work to develop a
tailored marketing and product strategy. Since transaction processors in many
foreign markets use the bank and credit union industry standard communications
protocol, the Company believes that the new ATM model currently being beta
tested by the Company for use with this protocol will improve the Company's
ability to penetrate foreign markets.

Continue to Upgrade Functionality and Develop New Products to Capitalize on
Market Opportunities. The Company intends to continue to offer products to meet
emerging needs in the marketplace. The Company seeks to identify markets with
established demand and target these markets by delivering products with a
superior combination of price and functionality. The Company's engineering staff
works with the Company's distributors and end-users to incorporate customer
driven enhancements to the Company's products. For example, the Company recently
introduced Triton Connect, a software product which enables the transaction
processor, using cost-effective dial-up communications, to upload electronic
journal information, to download advertisement screens, couponing messages and
other terminal parameters, and to monitor the ATM for service-related problems
and cash replenishment needs. This software provides a level of monitoring that
is comparable to the monitoring available for conventional ATMs that use more
expensive leased telephone lines. The Company also recently introduced a
multi-cassette ATM suitable for dispensing multiple denominations of bills and
other items such as tickets, stamps, telephone cards and coupons.

Continue to Emphasize Cost-Effective Operations. The Company intends to
continue to emphasize cost-effective operations principally by (i) outsourcing
the manufacture of many components used in its products at prices the Company
believes to be lower than what it would cost the Company to manufacture such
components, (ii) utilizing an established network of distributors to distribute
the Company's products instead of maintaining a large direct sales force, and
(iii) locating its manufacturing facility in an area where operating and labor
costs are typically lower than in many other regions of the United States. The
Company intends to continue evaluating the relative economic benefits of
outsourcing its components.

Maintain Short Delivery Schedules and High Level of Customer Service. The
Company seeks to differentiate itself through its short delivery schedules and
the high level of its customer service and support. The Company is generally
able to provide short delivery schedules due to its streamlined manufacturing
operations. The Company is adding more technical support staff and expanding its
maintenance organization to provide more extensive service to its distributors
and end users. In addition, the Company strives to minimize downtime for its
ATMs through its quality assurance program and the service provided by its
network of distributors and third party maintenance organizations. The Company
believes that down time will be further reduced for ATMs equipped with the
Company's recently introduced software product, Triton Connect, through periodic
automatic remote monitoring for service-related problems.

PRODUCTS

The Company's product strategy is to leverage its technological expertise
in the ATM industry to create economical, highly durable equipment targeted at
the focused-function segment of the ATM market. The Company continues to monitor
opportunities to improve the functionality of its existing ATM product line and
to develop product extensions and new products through the integration of new
technologies and industry standards.

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FOCUSED-FUNCTION ATMS ("MINIATM" PRODUCT LINE)

Since the introduction of the focused-function product line in 1994, the
Company has shipped over 8,000 focused-function ATMs in the United States. The
Company's focused-function ATMs are targeted primarily at lower ATM transaction
volume locations such as convenience stores, hotels, casinos, grocery stores,
fast food restaurants, department stores, gas stations, malls, campuses and
entertainment complexes. Many of these locations have either a low daily ATM
transaction volume or periodic levels of high ATM activity followed by relative
long periods of inactivity.

The miniATM Cash Dispenser Model 9500 was the initial offering in the
Triton focused-function ATM product line, and is the basic model, with a single
cassette and front service entry. Set forth below is a chart summarizing certain
features of the miniATM Cash Dispenser Model 9500, and a typical conventional
ATM.

TRITON FOCUSED-FUNCTION
ATM (MODEL 9500) TYPICAL CONVENTIONAL ATM
----------------------------- -----------------------------

Size.......................... 18" wide, 22" deep and 51" 31" wide, 37" deep and 56"
high high

Weight........................ 300 lbs 1500 lbs

Price Range................... $9,000 - $10,000 $20,000 - $30,000

Monthly Operating Costs....... $300 - $500 per month $1,000 - $1,200 per month

Communications Technology..... Dial-up Leased line

Key Functionality............. Dispenses cash Dispenses cash
Makes balance inquiries Makes balance inquiries
Transfers between accounts Transfers between accounts
Accepts deposits
Display Screen................ Monochrome (color under Monochrome; color optional
development)

UL Certification.............. Yes Yes

In addition to the miniATM Cash Dispenser Model 9500, the Company currently
offers four other models of focused-function ATM, with prices of up to $15,000.
The principal features of these other four models are set forth below:

- The miniATM Cash Dispenser Model 9501 is a rear-access unit. The unit is
designed so that it can be mounted through an interior wall to enable cash
servicing to be performed from the rear of the machine. This is primarily
a security feature for merchants concerned about exposure during the cash
loading process.

- The miniATM Cash Dispenser Model 9520 has a thicker ( 1/2-inch) steel
door and a thicker ( 1/2-inch) steel cabinet, weighs approximately 750
pounds and is rated for use as a safe in unattended locations. It features
an electronic combination lock and an optional alarm package. The lock and
alarm features are optional on the Model 9500 and 9501.

- The Company recently has begun shipping the miniATM Cash Dispenser Model
9515, which is a multi-cassette ATM suitable for dispensing multiple
denominations of cash and other items such as tickets, stamps, telephone
cards and coupons. The Company's existing Model 9500 can be easily
upgraded to a Model 9515 without moving the machine from its installed
location, by replacing the dispensing mechanism.

- The Company recently has introduced the miniATM Cash Dispenser Model
9535, which combines the security features of the Model 9520 with the
multi-cassette feature used in the Model 9515.

In addition, the Company recently introduced Triton Connect, a software
product which enables the transaction processor, using cost-effective dial-up
communications, to upload electronic journal information, to download
advertisement screens, couponing messages and other terminal parameters, and to
monitor the

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ATM for service-related problems and cash replenishment needs. This software
provides a level of monitoring that is comparable to the monitoring available
for conventional ATMs that use more expensive leased telephone lines.

Models 9500, 9501 and 9515 are intended for locations which will be staffed
24-hours per day or in which the cassette will be removed at night and placed in
a safe. Because of their intended applications, Models 9500, 9501 and 9515 have
been certified and are listed with Underwriters Laboratories under UL-291
Business Hour Service. Models 9520 and 9535 have been certified to the more
rigorous UL-291 Level 1, 24-Hour Safe status because of their intended use in
unattended locations. The UL certification establishes that, for a certain class
of tools and a given length of time, the product will withstand attack attempts.

The Company provides a limited warranty on each of its products covering
manufacturing defects and premature failure, which generally covers parts for
its focused-function ATMs, and parts and labor for its ATMjr Demonstrator,
ATMjr+CAS and miniATM scrip models. The Company also offers for purchase
extended warranties on all of its products.

OTHER PRODUCTS

The Company's initial product line was introduced to the banking industry
in 1985 and consisted of a portable ATM demonstrator unit called the ATMjr
Demonstrator, which enables banks, credit unions, and other financial
institutions to demonstrate to a customer the use of an ATM. The ATMjr+CAS, a
demonstrator which is equipped with a card activation system, enables customer
service representatives to issue ATM cards and activate or change a customer's
personal identification number.

In 1992, the Company recognized that many retailers could profit by having
a small, inexpensive ATM installed in their business locations. By leveraging
its development resources in ATM demonstration machines, the Company introduced
the miniATM Scrip Terminal. The miniATM Scrip Terminal allows customers to use
their ATM cards to obtain cash in a manner similar to a regular bank ATM.
However, instead of cash the miniATM Scrip Terminal issues a voucher, or scrip,
that may be redeemed for cash at the point of sale, dramatically reducing
operating costs since no cash replenishment is required. In addition, due to its
simpler design, the retail price of a miniATM Scrip Terminal is approximately
85% lower than that of a conventional ATM. The unit also can be programmed to
issue other voucher materials, such as coupons, travel tickets and tickets to
sporting events and theaters.

PRODUCT DEVELOPMENT

The Company recognizes that continuous product development and innovation
are essential to its long-term success. The Company has been successful in
introducing products that quickly capture a significant market share. The
Company believes that its market-driven product development efforts have
contributed to the success of its product introductions. The Company relies on
information provided by customers and distributors to understand market needs in
detail. The Company's engineering expertise has enabled it to bring new products
to market quickly and to reduce manufacturing costs over time. During 1994, 1995
and 1996, the Company's research and development expenses were $102,000,
$221,000 and $355,000, respectively.

The Company's product development efforts emphasize products with focused
functionality and attractive cost characteristics which leverage the Company's
core strengths of low-cost design and efficient use of technology. The Company
believes that continued strengthening of its electronics and software
engineering development group is a key to broadening the Company's product
offerings.

The Company's product development efforts have resulted in the recent
introduction of the miniATM Model 9515, a multi-cassette ATM suitable for
dispensing multiple denominations of cash and other items such as stamps,
telephone cards and coupons; the miniATM Model 9535, a UL certified 24-Hour Safe
version of the Model 9515; and Triton Connect, an ATM monitoring software
application which enables the transaction processor, using cost-effective
dial-up communications, to upload electronic journal information, to download
advertisement screens, couponing messages and other terminal parameters, and to
monitor the ATM for service-related problems and cash replenishment needs.

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In addition to these products, the Company is currently field testing on a
trial basis with a limited group of customers a new focused-function ATM model
equipped with a "black box" that conforms with the widely used industry standard
communications protocol. This model is intended to enable an ATM to be driven
directly by banks and certain large third party processors that communicate with
the same industry standard protocol typically used by banks. With this new
model, the Company can now target the bank and credit union market, where the
Company expects that its focused-function ATMs will be an attractive low-cost
alternative to conventional ATMs. In addition, transaction processors in many
foreign countries also use this standard communications protocol. Consequently,
the version of the Company's focused-function ATM with this communications
protocol should assist the Company's marketing efforts in foreign markets.

The Company has several new products in development, including new
applications for its scrip terminals. The Company continues to monitor
developments in consumer needs and technological advances with specific focus on
emerging opportunities in the transaction and payment processing industry such
as electronic benefits transfers, acceptance of stored value cards, and use of
"smart card" applications.

DISTRIBUTION, SALES AND MARKETING

DISTRIBUTION AND SALES ORGANIZATION

The Company's focused-function ATM product line and scrip terminals are
sold in the United States through a network of approximately 30 distributors,
which includes ISOs and third party processors. Many of these distributors have
sub-distributors, and the Company believes that as many as 50 total distributors
offer the Company's products inclusive of these relationships. The Company's
distributors sell to end users such as convenience stores, hotels, casinos,
grocery stores, fast food restaurants, department stores, gas stations, malls,
campuses and entertainment complexes. The Company regularly evaluates its
distributors and frequently receives inquiries from potential new distributors.
The Company's distributors include national distributors such as Access Cash
International and Card Capture Services, which accounted for approximately 22%
and 19%, respectively, of the Company's net sales in 1996, regional distributors
such as ATM International and North American Cash Systems, and third party
processors such as Lynk Systems and Affiliated Computer Services. The Company's
distributors typically offer a turnkey package to retailers including the sale
and installation of the ATM, transaction processing, bank sponsorship,
maintenance service and cash replenishment if required. Although the Company
typically does not sign exclusive agreements with its distributors, the Company
believes that most of its distributors do not offer competing focused-function
ATMs.

The sales efforts of the Company's distributors are supplemented by the
Company's in-house sales force. This includes account managers and customer
service specialists, who service distributors, and account executives whose
efforts are targeted at specific markets, such as hotels, banks and credit
unions. The account executives build sales in their respective markets by
assisting distributors.

The ATMjr Demonstrator and ATMjr+CAS products are sold domestically by the
Company's direct sales force and in international markets predominantly by
distributors with some sales generated by the Company's direct sales force.

END USERS

Off-premise locations represent substantially all of the Company's end user
installed base for focused-function ATMs, and include convenience stores,
hotels, casinos, grocery stores, fast food restaurants, department stores, gas
stations, malls, campuses and entertainment complexes. With the introduction of
a focused-function ATM that conforms with the industry standard communications
protocol used by most banks and credit unions to communicate with their ATMs,
the Company intends to expand its customer base to include more domestic banks
and credit unions, as well as more foreign locations.

End users of the Company's ATMjr Demonstrator product line include
primarily banks and credit unions throughout the United States and several
foreign countries, including Australia, Canada, Chile, Egypt, Guatemala,
Indonesia, Philippines, South Africa and the West Indies.

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MARKETING SUPPORT

Triton promotes its products and supports the sales efforts of its
distributors and internal sales force by advertising in trade publications,
preparing brochures for use by its distributors, exhibiting products at trade
conferences, providing customer leads to its distributors, conducting targeted
direct mail campaigns, conducting sales and product training seminars for its
distributors, and formulating co-op advertising with selected distributors. The
Company's trade conference exhibitions are targeted primarily toward the
convenience store, banking, hospitality, and gaming industries. Triton routinely
exhibits at large industry trade shows, such as the Retail Delivery Systems
Conference for the banking industry and the National Association of Convenience
Stores show.

INTERNATIONAL MARKETING

The Company intends to model its approach to distribution, sales and
marketing in foreign markets on the distributor-based approach used successfully
by the Company in the United States. The Company also intends to build upon its
established relationship with distributors selling the ATMjr Demonstrator
product line in foreign markets to develop its presence in the international
focused-function ATM market. The Company intends to target its initial
international marketing efforts on Canada, Mexico, Brazil and Columbia. The
Company believes that its newly developed focused-function ATM model, which
conforms with the industry standard communications protocol generally used by
banks and credit unions, will improve the Company's ability to penetrate foreign
markets once it becomes commercially available, because many transaction
processors in foreign market use this communications protocol.

PRODUCT SERVICE AND SUPPORT

SERVICE

The Company relies primarily on distributors to support and maintain its
products. The distributors typically enter into maintenance agreements with the
ATM owner to provide after-sale service and support. The Company also utilizes,
to a lesser extent, the services of a national third party maintenance
organization to provide customer service and support. The third party
maintenance organization is used in situations where the distributor does not
have the capability or the desire to provide maintenance support.

Recognizing the importance of after-sale support, the Company is adding
more technical support staff and expanding its maintenance organization to
provide more extensive service to its distributors and end users. In addition,
the Company strives to minimize downtime for its ATMs through its quality
assurance program and the service provided by its network of distributors and
third party maintenance organizations. The Company examines and adjusts its
customer support procedures in response to customer suggestions and feedback in
an effort to improve this critical support function. The Company maintains an
in-house technical support group for all products, consisting of telephone
technical support personnel, electronic technicians for in-house repairs, and a
technical support group leader. This group provides telephone support to
distributors and end-users of the equipment via a toll-free 800 number.

In the case of focused-function ATMs, repairs are typically performed in
the field by a distributor or a third party maintenance organization using
replacement parts sent by the Company. In the case of the ATMjr Demonstrator,
ATMjr+CAS, and miniATM Scrip Terminal, a depot maintenance system is used to
repair units at the Company's headquarters when the units cannot be repaired in
the field by the end user.

SERVICE TRAINING AND SUPPORT

The Company provides regular service training courses to its distributors
and third party maintenance organizations. The training course is typically held
at the Company's facility on a monthly basis and provides detailed instruction
on all aspects of focused-function ATM troubleshooting, repair, installation and
setup, and the procedures for obtaining support and replacement parts from the
Company. Attendees who successfully complete the training course receive a
certification from the Company establishing their qualifications. Arrangements
can be made to conduct special training classes at the distributor's or
end-user's site.

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MANUFACTURING

The Company's manufacturing strategy is to produce low-cost, highly
reliable ATMs. Triton's outsourcing strategy, combined with the Company's access
to lower-priced labor and its emphasis on quality control, has helped the
Company to achieve this goal. The Company's manufacturing operations consist
primarily of assembly, software loading, testing, burn-in and quality control.
All manufacturing activities are performed at the Company's facility in Long
Beach, Mississippi, where operating and labor costs are typically lower than in
many other regions of the United States. Most of the components of the Company's
products are outsourced to suppliers at prices that the Company believes to be
lower than what it would cost the Company to manufacture such components.

Triton's manufacturing operations are grouped into several functional areas
including (i) electronic/electrical assembly, such as printed circuit boards,
cable and wiring harnesses, control panels and switches, (ii)
mechanical/electronic sub-assembly integration and (iii) final integration,
software program loading, testing and product burn-in. The Company has adopted
quality assurance procedures that include standard design practices, component
selection procedures, vendor control procedures and comprehensive reliability
testing and analysis to ensure the reliability of its products. Quality control
is performed on completed assemblies in each functional area of its assembly and
at the final integration phase of the manufacturing process.

Current demand for the Company's products is being met with a single shift
in the Company's existing plant. The Company believes that growth in demand for
its products in the foreseeable future can be met with additional shifts and
limited plant expansion. The Company is currently exploring replacement and
expansion alternatives for its existing facility in anticipation of its long
term capacity needs.

SUPPLIERS

The Company does not maintain any written agreements with any of its
component suppliers and the Company purchases its components on a purchase order
basis. Accordingly, the Company has no guaranteed supply arrangements with any
of its suppliers and there can be no assurance that these suppliers will
continue to meet the Company's requirements. Because the purchase of key
components involves long lead times, in the event of unanticipated increases in
demand for the Company's products, the Company could be unable to manufacture
certain products in a quantity sufficient to meet demand. Any inability to
obtain adequate deliveries of any of the components or any other circumstance
that would require the Company to seek alternative sources of supply could
affect the Company's ability to ship its products on a timely basis or result in
increased component costs, each of which could have a material adverse effect on
the Company's business,

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results of operations and financial condition. In order to attempt to mitigate
the risk of component shortages, the Company maintains a limited inventory of
components for which the Company is dependent upon sole or limited source
suppliers. There can be no assurance, however, that these inventories will be
sufficient, and any deficiency could have a material adverse effect on the
Company's business, results of operations and financial condition.

COMPETITION

The markets for the Company's products are characterized by intense
competition. The Company has a number of direct competitors for ATMs, the most
significant of which are Diebold Incorporated (including Interbold, a joint
venture between Diebold Incorporated and IBM), NCR Corporation, Fujitsu
Corporation and the Tidel Division of American Medical Technologies, Inc. The
Company believes that the principal competitive factors in its markets are
price, features and functionality, reliability, strength of distribution
channels and processor relationships, length of delivery cycles, service and
support. The Company believes that it competes favorably with respect to these
factors.

Many of the Company's competitors have longer operating histories, are
substantially larger, and have substantially greater financial, technical,
manufacturing, marketing and other resources than the Company. As a result of
their greater resources, many of such competitors are better positioned than the
Company to withstand significant price competition or downturns in the economy.
A number of these competitors also have substantially greater name recognition
and a significantly larger installed base of products than the Company, which
could provide leverage to such companies in their competition with the Company.
Many competitors also offer products with more functionality and features than
those offered by the Company. The Company expects competition to increase, and
anticipates that new competitors may enter the ATM market, particularly the
focused-function segment. Such increased competition may result in price
reductions, reduced gross margins and loss of market share, any of which could
materially adversely affect the Company's business, results of operations and
financial condition. There can be no assurance that the Company will be able to
continue to compete effectively, and any failure to do so would have a material
adverse effect upon the Company's business, results of operations and financial
condition.

INTELLECTUAL PROPERTY

The Company does not own any issued patent, and relies primarily on
trademark, copyright and trade secret law to protect its intellectual property
in the United States and abroad. These laws afford only limited protection, and
there can be no assurance that the steps taken by the Company will prevent
misappropriation of its technology. There can be no assurance that any trademark
or copyright owned by the Company, or any patent, trademark or copyright
obtained by the Company in the future, will not be invalidated, circumvented or
challenged or that the rights granted thereunder will provide competitive
advantages to the Company. In addition, the laws of some foreign countries do
not protect the Company's proprietary rights as fully as do the laws of the
United States. Thus, effective intellectual property protection may be
unavailable or limited in certain foreign countries. There can be no assurance
that the Company's means of protecting its proprietary rights in the United
States or abroad will be adequate or that competitors will not independently
develop technologies that are similar or superior to the Company's technology,
duplicate the Company's technology or design around any patent of the Company.
Moreover, litigation may be necessary in the future to enforce the Company's
intellectual property rights, to determine the validity and scope of the
proprietary rights of others, or to defend against claims of infringement or
invalidity. Such litigation could result in substantial costs and diversion of
management's time and resources and could have a material adverse effect on the
Company's business, results of operations and financial condition.

EMPLOYEES

As of December 31, 1996, the Company had 91 full-time employees. None of
the Company's employees is represented by a labor union. The Company has not
experienced any work stoppages and considers its relations with its employees to
be good. The Company's future success will depend, in part, upon its ability to
attract and retain qualified personnel. The Company has an employee dedicated to
hiring additional employees

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and has supplemented these efforts by retaining third party employee search
firms and placing advertisements in local and regional newspapers. The Company
seeks to attract new employees by offering competitive compensation packages,
including salary, bonus, stock options and employee benefits. Competition for
qualified personnel in the Company's industry is intense, and there can be no
assurance that the Company will be successful in retaining its key employees or
that it will be able to attract skilled personnel necessary for the development
of its business.

FACILITIES

The Company's headquarters are located in a 19,000 square foot facility in
Long Beach, Mississippi, which is owned by the Company. This facility
accommodates corporate administration, engineering, marketing, sales, customer
service and support and manufacturing, including assembly, testing, packaging
and shipping of products. The Company is currently expanding its facility by
approximately 9,000 square feet in order to provide additional space for its
administrative offices. The Company believes that, with additional shifts and
limited plant expansion, this facility will be adequate for its needs for the
foreseeable future. The Company is currently exploring replacement alternatives
for its existing facility in anticipation of its long term capacity needs.

LEGAL PROCEEDINGS

From time to time, the Company has been involved in litigation relating to
claims arising out of its operations in the ordinary course. The Company is not
a party to any litigation that in the judgment of management is likely to have a
material adverse effect on the Company or its business. The Company has recently
received a communication from a third party distributor of the Company's ATMs
seeking damages and other remedies as a result of the alleged malfunctioning of
two ATM terminals operated by the distributor which resulted in the improper
dispensation of cash. Based on the information currently available to the
Company and the nature of such distributor's claim, the Company does not believe
that this matter will have a material adverse effect on the Company or its
business, although there can be no assurances to this effect.

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MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The executive officers, directors and key employees of the Company, and
their ages as of February 28, 1997, are as follows:

NAME AGE POSITION
---- --- --------

Ernest L. Burdette........................ 51 Chief Executive Officer, President and
Director
Robert E. Sandoz.......................... 46 Vice President and Director

Frank J. Wilem, Jr........................ 46 Vice President and Director

Jeffrey A. Bandrowski..................... 54 Chief Financial Officer

Thomas A. Cooper.......................... 60 Director

Charles A. Emling, III.................... 44 Director

Kevin P. Mohan............................ 33 Director

Joseph F. Trustey......................... 34 Director

William D. Jackson........................ 42 Manager of Engineering

Mary E. Dressel........................... 44 Manager of Marketing and Sales

Ernest L. Burdette, a co-founder of the Company, has served as Chief
Executive Officer, President and director of the Company since August 1979.
Prior to founding the Company, Dr. Burdette was employed as Engineering Manager
and Systems Engineer at Computer Sciences Corporation, a technical services
provider to the government, and held faculty positions at Auburn University and
Georgia University. Dr. Burdette earned a B.A. in Physics from
Birmingham-Southern College, and an M.S. and a Ph.D. in Physics from Auburn
University.

Robert E. Sandoz, a co-founder of the Company, has served as Vice President
of the Company since 1991, and as Treasurer and director of the Company since
August 1979. Prior to founding the Company, Mr. Sandoz served as manager of
Engineering Applications Software at Computer Sciences Corporation. Mr. Sandoz
earned a B.S. in Computer Science from the University of Southwestern Louisiana.

Frank J. Wilem, Jr., a co-founder of the Company, has served as Vice
President and director of the Company since August 1979. Prior to founding the
Company, Mr. Wilem was Engineering Manager at Computer Sciences Corporation. Mr.
Wilem earned a B.S. in Electrical Engineering from Texas A & M University and an
M.S. in Ocean Engineering from the University of Miami.

Jeffrey A. Bandrowski has served as Chief Financial Officer of the Company
since October 1996. From February 1996 to October 1996, Mr. Bandrowski served as
Assistant Treasurer of Sequoia Systems, Inc., a computer manufacturer, and from
September 1987 to June 1995, served as Chief Financial Officer, Vice President
and General Manager of Kevlin Corporation, a manufacturer of microwave systems
and process control systems. Mr. Bandrowski earned a B.S. in Chemistry from The
College of the Holy Cross and an M.B.A. from Seton Hall University.

Thomas A. Cooper, a director of the Company since January 1997, has served
as Chairman and Principal of T.A.C. Associates since August 1996. Mr. Cooper
served as Chairman, President and Chief Executive Officer of Chase Federal Bank
from August 1993 to August 1996, and as Chairman and Chief Executive Officer of
TAC Bancshares from 1991 to August 1996. Prior to 1991, Mr. Cooper served as
Chief Executive Officer of Goldome Savings Bank, FSB and President of Bank of
America. Mr. Cooper is a director of RenaissanceRe Holdings Ltd. Mr. Cooper
earned a B.A. from Haverford College and a B.A. from Drew University.

Charles A. Emling, III, a director of the Company since October 1996, was
President and Chief Executive Officer of A+ Network, Inc., a paging company,
from 1988 to November 1996. From 1988 to 1995, Mr. Emling served as President of
Florida Network USA., a paging company. Mr. Emling earned a B.S. in Business
Administration and an M.B.A. from the University of Southwestern Louisiana.

Kevin P. Mohan, a director of the Company since July 1996, has been
employed by Summit Partners since 1994 and currently serves as principal. From
1991 to 1994, Mr. Mohan served as Engagement Manager at McKinsey & Company,
Inc., a management consulting firm. Mr. Mohan is a director of Intelligroup,
Inc.

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and several privately held companies. Mr. Mohan holds an A.B. in Economics from
Harvard College, an M.B.A. from Harvard University Graduate School of Business
Administration and a J.D. from Harvard Law School.

Joseph F. Trustey, a director of the Company since July 1996, has been
employed by Summit Partners since June 1992 and currently serves as general
partner. From June 1990 to June 1992, Mr. Trustey was a strategy consultant with
Bain & Co., Inc., a management consulting firm. Mr. Trustey is a director of
Home Health Corporation of America, Inc., Suburban Ostomy Supply Company, Inc.
and several privately held companies. Mr. Trustey earned a B.S. in Chemical
Engineering from the University of Notre Dame and an M.B.A. from Harvard
University Graduate School of Business Administration.

William D. Jackson has served as Manager of Engineering of the Company
since 1993. Prior to joining the Company in 1982 as an Electronics Engineer, Mr.
Jackson served as Electronics Engineer and Component Engineer at Computer
Sciences Corporation. Mr. Jackson earned a B.S. in Biomedical Engineering from
the University of Tennessee and an M.B.A. from the University of Southern
Mississippi.

Mary E. Dressel has served as Manager of Marketing and Sales of the Company
since 1989. Ms. Dressel joined the Company in 1988 as a Market Analyst. Prior to
joining the Company, Ms. Dressel was a principal in a marketing communications
company from 1986 to 1987 and a Territory Manager for Revlon Inc. from 1983 to
1986. Ms. Dressel earned a B.A. from the University of Southwestern Louisiana
and an M.Ed. and an M.B.A. from the University of Southern Mississippi.

Messrs. Burdette, Sandoz, Wilem, Mohan and Trustey were nominated and
elected as directors of the Company in accordance with a Shareholders'
Agreement, which will terminate upon the closing of this offering. See "Certain
Transactions."

All directors hold office until the next annual meeting of stockholders of
the Company and until their successors have been duly elected and qualified.
Executive officers of the Company are elected by the Board of Directors on an
annual basis and serve until their successors have been duly elected and
qualified. There are no family relationships among any of the executive officers
or directors of the Company.

COMMITTEES OF THE BOARD

The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company, and administers the Company's stock plans. The
members of the Compensation Committee currently are Messrs. Trustey, Mohan and
Cooper. The Board of Directors also has an Audit Committee, which reviews the
results and scope of the audit and other services provided by the Company's
independent accountants. The members of the Audit Committee currently are
Messrs. Cooper, Emling and Trustey.

BOARD COMPENSATION

Directors currently receive no cash compensation for serving on the Board
of Directors, although directors are reimbursed for all reasonable expenses
incurred by them in attending Board and Committee meetings. In connection with
their election to the Board of Directors of the Company, Messrs. Emling and
Cooper were each granted options to purchase 33,000 shares of Common Stock under
the Company's 1996 Stock Option Plan at exercise prices of $4.97 and $9.00 per
share, respectively. The options vest in five equal annual installments,
commencing on the first anniversary of the date of grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors was established in
July 1996, and currently consists of Messrs. Trustey, Mohan and Cooper. None of
these individuals were at any time an officer or employee of the Company. Prior
to July 1996, the functions of the Compensation Committee were performed by the
Board of Directors as a whole. For information regarding certain transactions
between the Company and members of the Board of Directors and the Compensation
Committee, see "Certain Transactions."

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EXECUTIVE COMPENSATION

The following table provides certain summary information concerning
compensation earned in the year ended December 31, 1996 by the Company's
President and Chief Executive and by the Company's other executive officers in
office at December 31, 1996 who earned in excess of $100,000 during 1996
(collectively, the "Named Executive Officers"). No stock options were granted
to, or exercised by, the Named Executive Officers during 1996. None of the Named
Executive Officers held any stock options at the end of 1996.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
----------------------- ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION
- --------------------------------------------------- -------- -------- ---------------

Ernest L. Burdette,................................ $224,280 $100,000 $22,500(1)
Chief Executive Officer, President and Director
Robert E. Sandoz,.................................. $224,280 $100,000 $22,500(1)
Vice President
Frank J. Wilem, Jr.,............................... $224,280 $100,000 $22,500(1)
Vice President

- ---------------
(1) Represents contributions by the Company on behalf of the Named Executive
Officer to the Company's Simplified Employee Pension Plan, which has been
replaced by its 401(k) Plan.

EMPLOYMENT AGREEMENTS

On July 25, 1996, the Company entered into three year employment agreements
with each of Messrs. Burdette, Sandoz and Wilem. These agreements were amended
on December 31, 1996. Mr. Burdette's agreement provides for his employment as
President and Chief Executive Officer of the Company at an annual base salary of
$125,000. Mr. Sandoz' agreement provides for his employment as Vice President of
Operations of the Company at an annual base salary of $125,000. Mr. Wilem's
agreement provides for his employment as Vice President of Corporate Development
of the Company at an annual base salary of $125,000. Each of the foregoing
agreements provides for annual salary increases in such amounts, if any, as
determined by the Compensation Committee of the Board of Directors. In addition,
Messrs. Burdette, Sandoz and Wilem are eligible to receive annual bonuses upon
the achievement by the Company of certain financial targets established by the
Compensation Committee, and, upon termination of employment by the Company
without cause, are entitled to receive severance pay for the lesser of twelve
months and the remaining balance of the term of the agreements, along with any
accrued bonuses.

STOCK PLANS

1996 Stock Option Plan. The Company has a 1996 Stock Option Plan (the
"1996 Plan"). A maximum of 1,541,707 shares of Common Stock are reserved for
issuance pursuant to the 1996 Plan upon exercise of options. Under the 1996
Plan, incentive stock options may be granted to employees and officers of the
Company and non-qualified stock options may be granted to consultants,
directors, employees and officers of the Company. As of February 28, 1997,
options to purchase 433,655 shares of Common Stock were outstanding under the
1996 Plan, of which options to purchase 263,706 shares were then exercisable.

The 1996 Plan is administered by the Compensation Committee of the Board of
Directors, subject to the supervision and control of the entire Board. Subject
to the provisions of the 1996 Plan, the Compensation Committee has the authority
to select optionees and determine the terms of the options granted, including
(i) the number of shares subject to each option, (ii) when the option becomes
exercisable, (iii) the exercise price of the option (which in the case of an
incentive stock option cannot be less than the fair market value of the Common
Stock on the date of grant, or less than 110% of fair market value in the case
of employees or officers holding 10% or more of the voting stock of the
Company), (iv) the duration of the option, and (v) the time, manner and form of
payment upon exercise of an option.

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An option is not transferrable by the optionee except by will, by the laws
of descent and distribution or pursuant to a qualified domestic relations order.
Options are exercisable only while the optionee remains in the employ of the
Company or for a short period of time thereafter. If an optionee becomes
permanently disabled or dies while in the employ of the Company, the option is
exercisable prior to the last day of the sixth or twelfth month, respectively,
following the date of termination of employment. If the optionee leaves the
employ of the Company for any other reason, the option is exercisable for only
thirty days following the date of termination of employment. Options which are
exercisable following termination of employment are exercisable only to the
extent that the optionee was entitled to exercise such options on the date of
such termination.

1997 Employee Stock Purchase Plan. The 1997 Employee Stock Purchase Plan
(the "1997 Purchase Plan") for employees of the Company was adopted by the Board
of Directors and approved by the stockholders of the Company in January 1997.
The 1997 Purchase Plan authorizes the issuance of a maximum of 250,000 shares of
Common Stock pursuant to the exercise of nontransferable options granted to
participating employees. No shares have been granted under the 1997 Purchase
Plan.

The 1997 Purchase Plan is administered by the Compensation Committee of the
Board of Directors. All employees of the Company whose customary employment is
20 hours or more per week and have been employed by the Company for at least six
months are eligible to participate in the 1997 Purchase Plan. Employees who own
5% or more of the Company's stock and directors who are not employees of the
Company may not participate in the 1997 Purchase Plan. To participate in the
1997 Purchase Plan, an employee must authorize the Company in writing to deduct
an amount (not less than 1% nor more than 10% of a participant's base
compensation) from his or her pay during the six-month periods commencing on
July 1, 1997, and on each January 1 and July 1 thereafter (each a "Purchase
Period"). On the first day of each Purchase Period, the Company grants to each
participating employee an option to purchase up to 500 shares of Common Stock.
The exercise price for the option for each Purchase Period is the lesser of 85%
of the fair market value of the Common Stock on the first or last business day
of the Purchase Period. The fair market value will be the closing price of the
Common Stock as quoted on the Nasdaq National Market. If an employee is not a
participant on the last day of the Purchase Period, such employee is not
entitled to exercise his or her option, and the amount of his or her accumulated
payroll deduction will be refunded to the employee. An employee's rights under
the 1997 Purchase Plan terminate upon his or her voluntary withdrawal from the
Plan at any time or upon termination of employment.

Common Stock for the 1997 Purchase Plan will be made available either from
authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Company, including shares repurchased in the open market.

401(K) PLAN

The Company has a defined contribution plan (the "401(k) Plan") pursuant to
which employees at least 21 years of age who have completed at least six months
of service are eligible to participate. Participants in the 401(k) Plan may not
contribute more than the greater of a specified statutory amount or 15% of their
pre-tax total compensation. The 401(k) Plan permits, but does not require,
additional contributions to the 401(k) Plan by the Company. Eligible employees
are 100% vested in their own contributions.

LIMITATION OF LIABILITY; INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Articles of Incorporation provide that a director shall not be liable
to the Company or its stockholders for monetary damages for any action taken as
a director, except for (i) the amount of a financial benefit received by a
director to which he is not entitled, (ii) an intentional infliction of harm on
the Company or its stockholders, (iii) a violation of Section 79-4-8.33 of the
Mississippi Business Corporation Act relating to unlawful distributions, or (iv)
an intentional violation of criminal law.

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The Company's Articles of Incorporation and By-laws provide for
indemnification of the officers and directors of the Company to the fullest
extent permitted by Mississippi law, including some instances in which
indemnification is otherwise discretionary under Mississippi law. The Articles
of Incorporation and By-laws provide that the Company shall indemnify, and upon
request shall advance expenses to, in the manner and to the full extent
permitted by law, any officer or director who was or is a party to, or is
threatened to be made a party to, any threatened, pending or completed action,
suit or proceeding; provided, however, the Company shall not indemnify an
officer or director if a judgment or final adjudication adverse to the officer
or director establishes his liability for (i) the amount of a financial benefit
received by a director to which he is not entitled, (ii) an intentional
infliction of harm on the Company or its stockholders, (iii) a violation of
Section 79-4-8.33 of the Mississippi Business Corporation Act relating to
unlawful distributions, or (iv) an intentional violation of criminal law. The
Company believes that these provisions are essential to attracting and retaining
qualified persons as officers and directors.

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CERTAIN TRANSACTIONS

Summit Financing and Recapitalization. The Company completed the
Recapitalization on July 25, 1996 to provide liquidity to Ernest L. Burdette,
Robert E. Sandoz, Frank J. Wilem, Jr. (the "Founders"), William D. Jackson and
Mary E. Dressel (collectively with the Founders, the "Original Stockholders").
Pursuant to the Recapitalization, the Company repurchased an aggregate of
approximately 55% of the outstanding Common Stock from the Original Stockholders
for a total consideration of $22.7 million, which was allocated to the Original
Stockholders in the following amounts: Mr. Burdette ($7.4 million), Mr. Sandoz
($7.4 million), Mr. Wilem ($7.4 million), Mr. Jackson ($493,000), and Ms.
Dressel ($49,000). Of such amount, $16.7 million was paid in cash and $6.0
million was paid through the issuance of 8% Subordinated Promissory Notes due
2001 of the Company (the "Original Stockholder Notes"). Each of the Original
Stockholders received a pro rata portion of the cash and Original Stockholder
Notes in proportion to their ownership of the Company's Common Stock.
Immediately prior to the consummation of the Recapitalization, the Company made
a dividend distribution to the Original Stockholders in the form of an aggregate
of 100,000 shares of Series B Preferred Stock, which also was allocated among
the Original Stockholders in proportion to their ownership of the Company's
Common Stock.

In order to finance the Recapitalization, the Company (i) issued and sold
an aggregate of 114,000 shares of Series A Preferred Stock to Summit Investors
and Summit Ventures IV for an aggregate purchase price of $11.4 million, and
(ii) issued and sold an aggregate of $5.5 million in principal amount of 12%
Subordinated Debentures due 2001 of the Company (the "Subordinated Debentures")
to Summit Investors and Summit Debt Fund for an aggregate purchase price of $5.5
million. After the foregoing transactions, the Company issued and sold an
aggregate of 6,863,999 shares of Common Stock to the Summit Entities for an
aggregate purchase price of $100,000.

The Original Stockholder Notes and Subordinated Debentures were repaid in
full, for an aggregate of approximately $11.7 million (including accrued
interest of $206,000) on September 26, 1996 with the proceeds of the Bank Credit
Facility provided by The First National Bank of Boston. The proceeds from the
repayment of the Original Stockholder Notes were allocated to the Original
Stockholders in the following amounts: Mr. Burdette ($1,979,610), Mr. Sandoz
($1,979,610), Mr. Wilem ($1,979,610), Mr. Jackson ($131,974), and Ms. Dressel
($13,196). The proceeds from the repayment of the Subordinated Debentures were
allocated to the Summit Entities in the following amounts: Summit Investors
($108,175), and Summit Debt Fund ($5,505,492). In January 1997, the Bank Credit
Facility was amended to increase the credit line by $15.0 million to $30.0
million, with the proceeds used to redeem all of the outstanding Series A
Preferred Stock for an aggregate redemption price of $12.0 million (including
accrued dividends of $580,000) and all of the outstanding Series B Preferred
Stock for an aggregate redemption price of $10.5 million (including accrued
dividends of $508,000). The proceeds from the redemption of the Series A
Preferred Stock were allocated to the Summit Entities in the following amounts:
Summit Investors ($598,975), and Summit Ventures IV ($11,380,525). The proceeds
from the redemption of the Series B Preferred Stock were allocated to the
Original Stockholders in the following amounts: Mr. Burdette ($3,419,201), Mr.
Sandoz ($3,419,201), Mr. Wilem ($3,419,201), Mr. Jackson ($227,926), and Ms.
Dressel ($22,803).

In connection with the Recapitalization, the Company entered into a
Shareholders' Agreement dated July 25, 1996 (the "Shareholders' Agreement") with
the Summit Entities and the Original Stockholders, and a Registration Rights
Agreement dated July 25, 1996 (the "Registration Rights Agreement") with the
Summit Entities and the Founders. The Shareholders' Agreement provides for,
among other things, restrictions on transfer of shares, rights of first refusal,
rights of participation in sales, take along rights and election of directors.
The Shareholders' Agreement will terminate upon consummation of this offering,
except that the right of the Summit Entities to participate in sales of Common
Stock by the Original Stockholders will continue until the tenth anniversary of
the Recapitalization. Pursuant to the Registration Rights Agreement, holders of
at least 25% of the shares of Common Stock held by the Summit Entities may
require the Company to effect the registration of shares of Common Stock held by
such parties for sale to the public on any two occasions, subject to certain
conditions and limitations. In addition, under the terms of the Registration
Rights Agreement, if the Company proposes to register any of its securities
under the Securities Act of 1933, as amended (the "Securities Act"), whether for
its own account or otherwise, the parties to the

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Registration Rights Agreement are entitled to receive notice of such
registration and to include their shares therein, subject to certain conditions
and limitations. The Company has agreed to pay the fees, costs and expenses of
any registration effected on behalf of the parties to the Registration Rights
Agreement (other than underwriting discounts and commissions.) All rights to
register Common Stock in connection with this offering have been waived by the
parties to the Registration Rights Agreement. See "Shares Eligible for Future
Sale -- Registration Rights."

In connection with the Recapitalization, Messrs. Burdette, Sandoz and Wilem
made certain representations and warranties to the Summit Entities with respect
to the business, operations and financial condition of the Company, and agreed
to indemnify the Company and the Summit Entities for losses incurred as a result
of a breach of such representations and warranties; provided that the aggregate
liability of such individuals shall not exceed $6.6 million for claims arising
prior to April 30, 1997, and $3.3 million for claims arising after such date.
Such indemnification obligations will expire thirty days after the delivery of
financial statements for the Company's fiscal year ended December 31, 1997 to
the Summit Entities; provided that such obligations will continue with respect
to certain matters, including certain tax matters, until expiration of the
applicable statute of limitations.

Headquarters Lease and Purchase. Prior to December 31, 1996, the Company's
headquarters facility at 522 East Railroad Street, Long Beach, Mississippi was
leased to the Company by Ernest L. Burdette, Robert E. Sandoz and Frank J.
Wilem, doing business as Calypso Properties. Under the lease dated February 1,
1995, the Company paid an annual minimum rent ranging from $6,666 to $13,332 per
month. The Company believes that the terms of the lease were no less favorable
to it than could have been obtained from an unaffiliated party. From October 30,
1995 through February 14, 1996, the Company made loans to Calypso Properties in
the aggregate principal amount of $176,000, at an annual rate of interest of
9.75%, the proceeds of which were used for improvements to the Company's
headquarters. The loans were repaid in full in July 1996.

On December 31, 1996, the Company purchased the land and buildings for
$587,000, an amount agreed upon by the disinterested members of the Board of
Directors after review of independent appraisals. The original cost to Calypso
Properties of the land, building and improvements was $611,471. On December 31,
1996, the Company also purchased its telephone system, which previously had been
leased from Calypso Properties for $3,000 per month, from Calypso Properties for
$44,257, its book value.

Other. The Company and the Founders entered into employment agreements in
July 1996, which were amended in December 1996. See "Management -- Employment
Agreements." The Company also paid one-time year-end bonuses aggregating $1.9
million to the Founders in the fourth quarter of 1995. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations." From
January 1, 1996 until July 25, 1996, the Company was a Subchapter S corporation
for federal and state income tax purposes and paid out substantially all of its
earnings to its stockholders during such period. See "Dividend Policy."

The Company has adopted a policy pursuant to which all future transactions
between the Company and its officers, directors and affiliates will be on terms
no less favorable to the Company than could be obtained from unrelated third
parties and will be approved by a majority of the disinterested members of the
Company's Board of Directors.

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of February 28, 1997, as adjusted to
reflect the sale of the shares offered hereby, by (i) each person who is known
by the Company to own beneficially more than 5% of the outstanding shares of
Common Stock, (ii) each director and Named Executive Officer, and (iii) all
directors and executive officers of the Company as a group. Unless otherwise
indicated below, to the knowledge of the Company, all persons listed below have
sole voting and investment power with respect to their shares of Common Stock,
except to the extent authority is shared by spouses under applicable law. This
table assumes no exercise of the Underwriters' over-allotment option.

PERCENT OF SHARES
BENEFICIALLY OWNED(1)
----------------------
SHARES BENEFICIALLY PRIOR TO AFTER
NAME AND ADDRESS OWNED (1) OFFERING OFFERING
- ----------------------------------------------------------- ------------------- -------- -----------

Summit Partners(2)(3)...................................... 6,863,999 55.3% 44.6%
600 Atlantic Avenue
Boston, MA 02110
Ernest L. Burdette(4)...................................... 1,803,999 14.5 11.7
522 East Railroad Street
Long Beach, MS 39560
Robert E. Sandoz........................................... 1,803,999 14.5 11.7
522 East Railroad Street
Long Beach, MS 39560
Frank J. Wilem, Jr......................................... 1,803,999 14.5 11.7
522 East Railroad Street
Long Beach, MS 39560
Thomas A. Cooper........................................... -- -- --
Charles A. Emling, III..................................... -- -- --
Kevin P. Mohan(5).......................................... 6,863,999 55.3 44.6
Joseph F. Trustey(6)....................................... 6,863,999 55.3 44.6
All executive officers and directors
as a group(eight persons)(7)............................. 12,275,996 98.9% 79.7%

- ---------------

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options held by that person that are
currently exercisable, or become exercisable within 60 days following
February 28, 1997, are deemed outstanding. However, such shares are not
deemed outstanding for purposes of computing the percentage ownership of
any other person. No options are presently exercisable within 60 days after
February 28, 1997. The number of shares of Common Stock deemed outstanding
after this offering includes an additional 3,000,000 shares of Common Stock
that are being offered for sale by the Company in this offering.

(2) Shares owned beneficially prior to the offering consist of 6,142,153,
403,922 and 317,924 shares held by Summit Ventures IV, Summit Debt Fund and
Summit Investors, respectively. Summit Partners SD, L.P. is the General
Partner of Summit Debt Fund, and Summit Partners IV, L.P. is the General
Partner of Summit Ventures IV. Stamps, Woodsum & Co., III is the General
Partner of Summit Partners SD, L.P. and Stamps, Woodsum & Co. IV is the
General Partner of Summit Partners IV, L.P. Joseph F. Trustey, a director
of the Company, is a General Partner of Stamps, Woodsum & Co. III, Stamps,
Woodsum & Co. IV and Summit Investors. See Notes (5) and (6).

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(3) Summit Ventures IV and Summit Investors have expressed a desire to purchase
up to 300,000 shares of Common Stock in the Concurrent Offering. In the
event Summit Ventures IV and Summit Investors purchase all such shares,
they would beneficially own an aggregate of 6,760,077 shares, or 43.9% of
the shares outstanding after this offering. See "Underwriting."

(4) Includes 100,000 shares held by Burdette Limited Partnership, of which Mr.
Burdette is the general partner.

(5) Includes shares described in Note (2) above. Mr. Mohan, a director of the
Company, is a principal of affiliates of Summit Partners. Mr. Mohan
exercises shared investment and voting power with respect to such shares,
but disclaims beneficial ownership of such shares.

(6) Includes shares described in Note (2) above. Mr. Trustey, a director of the
Company, is a general partner of affiliates of Summit Partners. Mr. Trustey
exercises shared investment and voting power with respect to such shares,
but disclaims beneficial ownership of such shares.

(7) If Summit Ventures IV and Summit Investors purchase an aggregate of 300,000
shares in the Concurrent Offering, all directors and executive officers as
a group will own 12,575,996 shares, or 81.6% of the shares outstanding
after this offering. See Note (3) above.

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DESCRIPTION OF CAPITAL STOCK

Effective upon the closing of this offering, the authorized capital stock
of the Company will consist of 40,000,000 shares of Common Stock, $.01 par value
per share, and 5,000,000 shares of Preferred Stock, $.01 par value per share
(the "Preferred Stock"). As of February 28, 1997, there were outstanding
12,408,288 shares of Common Stock (owned of record by eight holders) and no
shares of Preferred Stock. As of such date, there were outstanding options to
purchase an aggregate of 433,655 shares of Common Stock and warrants to purchase
an aggregate of 32,109 shares of Common Stock.

The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Company's Restated Articles of
Incorporation as amended and restated (the "Articles of Incorporation"), which
are included as an exhibit to the Registration Statement, and by the provisions
of applicable law.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the stockholders. There are no cumulative voting rights. Holders
of Common Stock are entitled to receive ratable dividends when, as and if
declared by the Board of Directors out of funds legally available therefor,
subject to any preferential dividend rights of any then outstanding Preferred
Stock. Upon the liquidation, dissolution or winding up of the Company, holders
of Common Stock are entitled to share ratably in the assets of the Company
available for distribution to its stockholders, subject to the preferential
rights of any then outstanding Preferred Stock. The shares of Common Stock
outstanding upon the effective date of this Prospectus are, and the shares
offered by the Company hereby will be, when issued and paid for, fully paid and
nonassessable. Holders of Common Stock have no preemptive, subscription,
redemption or conversion rights. The rights, preferences and privileges of
holders of Common Stock are subject to, and may be adversely affected by, the
rights of holders of shares of any Preferred Stock that the Company may
designate in the future.

PREFERRED STOCK

After the closing of this offering, the Company's Board of Directors will
have the authority, without further stockholder approval, to issue up to
5,000,000 shares of Preferred Stock in one or more series and to fix the
relative rights, preferences, privileges, qualifications, limitations and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series. The issuance of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of delaying, deferring or preventing a change in
control of the Company, may discourage bids for the Company's Common Stock at a
premium over the market price of the Common Stock and may adversely affect the
market price, and the voting and other rights of the holders of, the Common
Stock. No shares of Preferred Stock will be outstanding immediately following
the closing of this offering. The Company has no present plans to issue any
shares of Preferred Stock.

BANK WARRANT

The Company issued a warrant (the "Bank Warrant") to an affiliate of The
First National Bank of Boston (the "Bank") in connection with the January 1997
increase in the Bank Credit Facility. The exercise price of the Bank Warrant is
equal to the initial public offering price of Common Stock offered hereby. The
Bank Warrant expires January 24, 2007, and is presently exercisable with respect
to 32,109 shares of Common Stock.

CERTAIN ARTICLES OF INCORPORATION, BY-LAW AND STATUTORY PROVISIONS AFFECTING
STOCKHOLDERS

Articles of Incorporation and By-laws. The Company's Articles of
Incorporation provide that stockholders may remove a director only for cause.
Advance notice of stockholder nominations and any other matter to be brought
before a meeting of stockholders will be required to be given in writing to the
Secretary of the

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Company within the time periods specified in the Company's By-laws. The Articles
of Incorporation provide that special meetings of stockholders of the Company
may be called only by the Board of Directors, the Chairman of the Board of
Directors, the Chief Executive Officer, the President or the holders of 50% or
more of the outstanding shares. The By-laws provide that no action required or
permitted to be taken at any annual or special meeting of the stockholders of
the Company may be taken without a meeting, unless the unanimous consent of
stockholders entitled to vote thereon is obtained.

Mississippi Anti-Takeover Statutes The Mississippi Shareholder Protection
Act (the "Protection Act"), which will be applicable after this offering at such
time as the Company has 500 or more beneficial owners of its stock, requires
that a business combination be approved by the affirmative vote of at least (a)
80% of the votes entitled to be cast by outstanding shares of voting stock of
the corporation and (b) two-thirds ( 2/3) of the votes entitled to be cast by
holders of voting stock not held by an interested stockholder who is a party to
the business combination, except that the provisions of the Protection Act shall
not apply if the business combination is approved by at least 80% of the
Company's directors or if the aggregate amount of any offer meets certain fair
price criteria.

"Business combination" is defined in the Protection Act generally as:

(i) Any merger, consolidation, share exchange or similar transaction
with any interested stockholder or other corporation which is an affiliate
of an interested stockholder, (ii) any sale, lease, transfer or other
disposition in a transaction with any interested stockholder of assets
having an aggregate market value of 20% or more of the total market value
of the outstanding stock of the corporation or of its assets; (iii) the
issuance or transfer by the corporation, or any subsidiary, of any
securities of the corporation or any subsidiary which have an aggregate
market value of 5% or more of the total market value of the outstanding
stock of the corporation to any interested stockholder or any affiliate of
any interested stockholder; (iv) the adoption of any plan or proposal for
the liquidation, dissolution of or similar transaction involving the
corporation in which anything other than cash will be received by an
interested stockholder; or (v) any reclassification or recapitalization of
securities or any merger, consolidation or share exchange of the
corporation with any of its subsidiaries which increases by 5% or more the
proportionate share of the total number of outstanding shares or class of
equity securities held by any interested stockholder or affiliate thereof.

"Interested stockholder" means any person or associated group of persons
acting in concert (other than the corporation and/or any subsidiaries) that (i)
is the beneficial owner of 20% or more of the voting power of the outstanding
voting stock of the corporation, or (ii) is an affiliate of the corporation and
at any time within the two-year period immediately prior to the date in question
was the beneficial owner of 20% or more of the voting power of the then
outstanding voting stock of the corporation.

Following the closing of this offering, the Company will be subject to the
Mississippi Control Share Act (the "Control Act"). The Control Act, subject to
certain exceptions, reduces the voting power of "control shares" having voting
power of one-fifth or more of all voting power of the corporation to zero unless
the shareholders of the corporation approve a resolution granting the shares the
same voting rights as they had before they became control shares.

"Control shares" means issued and outstanding shares of a corporation that,
except for the Control Act, would have voting power when added to all other
shares of the issuing corporation owned of record or beneficially by an
acquiring person that would entitle the acquiring person to exercise more than
one-fifth of the voting power of the corporation in the election of directors.

Directors' Liability. The Articles of Incorporation of the Company provide
that no director shall be liable to the Company or its stockholders for monetary
damages for any action taken as a director, except for (i) the amount of a
financial benefit received by a director to which he is not entitled, (ii) an
intentional infliction of harm on the Company or its stockholders, (iii) a
violation of Section 79-4-8.33 of the Mississippi Business Corporation Act
relating to unlawful distribution, or (iv) an intentional violation of criminal
law. The effect of this provision is to eliminate the rights of the Company and
its stockholders (through stockholders' derivative suits on behalf of the
Company) to recover monetary damages against a director for breach of the

46
48

fiduciary duty of care other than as described in clauses (i) through (iv)
above. The limitations summarized above, however, do not affect the ability of
the Company or its stockholders to seek non-monetary based remedies, such as an
injunction or rescission against a director for breach of his fiduciary duty,
nor would such limitations limit liability under the federal securities laws.
The Company's Articles of Incorporation and By-laws provide that the Company
shall, to the full extent permitted by Mississippi law, as amended from time to
time, indemnify and advance expenses to each of its currently acting and former
directors, officers, employees and agents arising in connection with their
acting in such capacities, including some instances in which indemnification is
otherwise discretionary under Mississippi law.

The provisions of the Protection Act and the Control Act, the provisions of
the Company's By-laws and Articles of Incorporation relating to the removal of
directors and the taking of actions at stockholder meetings, and the authority
of the Board of Directors to issue Preferred Stock, all as described above, may
have certain anti-takeover effects. Such provisions, individually or in
combination, may discourage other persons from or make it more difficult for
other persons to make a tender offer or acquisitions of substantial amounts of
the Company's Common Stock or from launching other takeover attempts that a
stockholder might consider in such stockholder's best interest, including those
attempts that might result in the payment of a premium over the market price for
the Common Stock held by such stockholder.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is The First National
Bank of Boston.

47
49

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Common
Stock of the Company, and no predictions can be made as to the effect, if any,
that future sales of shares, or the availability of shares for future sale, will
have on the prevailing market prices for the Common Stock. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices for the Common Stock and could impair
the Company's future ability to obtain capital through an offering of equity
securities.

Upon completion of this offering, the Company will have 15,408,288 shares
of Common Stock outstanding (assuming no exercise of outstanding options and
warrants). Of these shares, the 3,000,000 shares sold in this offering will be
freely tradeable without restriction or further registration under the
Securities Act of 1933, as amended (the "Securities Act"), except that any
shares purchased by "affiliates" of the Company, as that term is defined in Rule
144 ("Rule 144") under the Securities Act ("Affiliates"), may generally only be
sold in compliance with the limitations of Rule 144 described below. The
remaining shares of Common Stock outstanding upon completion of this offering
will be "restricted securities" as that term is defined in Rule 144 under the
Securities Act ("Restricted Shares"). Restricted Shares may be sold in the
public market only if registered or if they qualify for an exemption from
registration under Rule 144 or Rule 701 promulgated under the Securities Act,
which are summarized below. Sales of the Restricted Shares in the public market,
or the availability of such shares for sale, could adversely affect the market
price of the Common Stock.

Of the Restricted Shares, up to 132,292 shares, all of which are subject to
lock-up agreements as described below, may be eligible for sale in the public
market immediately after this offering pursuant to Rule 144(k) under the
Securities Act. An additional 5,411,997 Restricted Shares, all of which are
subject to lock-up agreements as described below, will be eligible for resale
under Rule 144 commencing 90 days after the effective date of this offering. The
remaining 6,863,999 Restricted Shares, all of which are subject to lock-up
agreements as described below, will be eligible for resale under Rule 144
commencing on July 26, 1997.

The holders of all shares of Common Stock outstanding prior to the offering
have entered into contractual "lock-up" agreements providing that they will not
offer, sell or otherwise dispose of the shares of Common Stock of the Company,
options or warrants to acquire shares of Common Stock or any securities
exercisable for or convertible into the Company's Common Stock owned by them for
a period of 180 days after the date of this Prospectus, without the prior
written consent of Montgomery Securities. See "Underwriting."

In general, under Rule 144 as currently in effect, beginning 90 days after
the effective date of this offering, a person (or persons whose shares are
aggregated) who has beneficially owned Restricted Shares for at least two years
(including the holding period of any prior owner except an Affiliate) would be
entitled to sell within any three-month period a number of shares that does not
exceed the greater of (i) one percent of the number of shares of Common Stock
then outstanding (which will equal approximately 154,083 shares immediately
after this offering); or (ii) the average weekly trading volume of the Common
Stock during the four calendar weeks preceding the filing of a Form 144 with
respect to such sale. Sales under Rule 144 are also subject to certain manner of
sale provisions and notice requirements and to the availability of current
public information about the Company. Under Rule 144(k), a person who is not
deemed to have been an Affiliate of the Company at any time during the 90 days
preceding a sale, and who has beneficially owned the shares proposed to be sold
for at least three years (including the holding period of any prior owner except
an Affiliate), is entitled to sell such shares without complying with the manner
of sale, public information, volume limitation or notice provision of Rule 144.

In addition, the Securities and Exchange Commission has approved an
amendment to Rule 144, effective April 29, 1997, which reduces by one year the
holding periods before shares subject to Rules 144 and 144(k) become eligible
for sale in the public market. Accordingly, all Restricted Shares will be
eligible for resale under Rule 144 following the expiration of the lock-up
period.

As of February 28, 1997, options to purchase a total of 433,655 shares of
Common Stock were outstanding. Of the total shares issuable pursuant to such
options, 362,706 (including all options that are currently exercisable) are
subject to lock-up agreements. An additional 1,358,052 shares of Common Stock

48
50

are available for future grants under the Company's stock option and employee
stock purchase plans. See "Management -- Stock Plans."

In general, under Rule 701, as currently in effect, beginning 90 days after
the effective date of this offering, certain shares issued upon exercise of
options granted by the Company prior to the date of this Prospectus will also be
eligible for sale in the public market. Any employee, officer or director of or
consultant to the Company who purchased his or her shares pursuant to a written
compensatory plan or contract may be entitled to rely on the resale provisions
of Rule 701. Rule 701 permits Affiliates to sell their Rule 701 shares under
Rule 144 without complying with the holding period requirements of Rule 144.
Rule 701 further provides that non-Affiliates may sell such shares in reliance
on Rule 144 without having to comply with the public information, volume
limitation or notice provisions of Rule 144. In both cases, a holder of Rule 701
shares is required to wait until 90 days after the date of this Prospectus
before selling such shares.

The Company intends to file one or more registration statements on Form S-8
under the Securities Act to register all shares of Common Stock subject to
outstanding stock options and Common Stock issuable pursuant to the Company's
stock option and employee stock purchase plans that do not qualify for an
exemption under Rule 701 from the registration requirements of the Securities
Act. The Company expects to file these registration statements upon the
effectiveness of this offering or shortly thereafter, and such registration
statements are expected to become effective upon filing. Shares covered by these
registration statements will thereupon be eligible for sale in the public
markets, subject to the lock-up agreements, to the extent applicable.

REGISTRATION RIGHTS

Upon the completion of this offering, certain stockholders and the holder
of the Bank Warrant (the "Rightsholders") will be entitled to require the
Company to register under the Securities Act up to a total 12,275,996 shares of
outstanding Common Stock (the "Registrable Shares") under the terms of a
Registration Rights Agreement among the Company and the Rightsholders (the
"Registration Agreement") and the terms of the Bank Warrant. The Registration
Agreement and the Bank Warrant provide that in the event the Company proposes to
register any of its securities under the Securities Act at any time or times,
the Rightsholders, subject to certain exceptions, shall be entitled to include
Registrable Shares in such registration. However, the managing underwriter of
any such offering may exclude for marketing reasons some or all of such
Registrable Shares from such registration. Certain Rightsholders who currently
hold an aggregate of 6,863,999 shares of Common Stock have, subject to certain
conditions and limitations, additional rights to require the Company to prepare
and file a registration statement under the Securities Act with respect to their
Registrable Shares if Rightsholders holding at least 25% of the Registrable
Shares held by all such Rightsholders so request. The Company is generally
required to bear the expenses of all such registrations, except underwriting
discounts and commissions.

49
51

UNDERWRITING

The Underwriters named below, represented by Montgomery Securities, Smith
Barney Inc. and The Robinson-Humphrey Company, Inc. (the "Representatives"),
have severally agreed, subject to the terms and conditions set forth in the
Underwriting Agreement, to purchase from the Company the number of shares of
Common Stock indicated below opposite their respective names at the initial
public offering price less the underwriting discount set forth on the cover page
of this Prospectus. The Underwriting Agreement provides that the obligations of
the Underwriters are subject to certain conditions precedent and that the
Underwriters are committed to purchase all of such shares if they purchase any.

NUMBER OF
UNDERWRITER SHARES
-------------------------------------------------------------------------- ---------

Montgomery Securities.....................................................
Smith Barney Inc. ........................................................
The Robinson-Humphrey Company, Inc. ......................................

---------
Total........................................................... 2,400,000
=========

The Representatives have advised the Company that the Underwriters propose
initially to offer the Common Stock to the public on the terms set forth on the
cover page of this Prospectus. The Underwriters may allow to selected dealers a
concession of not more than $ per share; and the Underwriters may allow, and
such dealers may reallow, a concession of not more than $ per share to
certain other dealers. After the initial public offering, the offering price and
other selling terms may be changed by the Representatives. The Common Stock is
offered subject to receipt and acceptance by the Underwriters, and to certain
other conditions, including the right to reject orders in whole or in part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 360,000 additional shares of Common Stock to cover over-allotments, if any,
at the same price per share as the initial 2,400,000 shares to be purchased by
the Underwriters. To the extent that the Underwriters exercise this option, each
of the Underwriters will be committed, subject to certain conditions, to
purchase such additional shares in approximately the same proportion as set
forth in the above table. The Underwriters may purchase such shares only to
cover over-allotments made in connection with this offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters and their controlling persons against certain liabilities,
including civil liabilities under the Securities Act, or will contribute to
payments the Underwriters may be required to make in respect thereof.

The Company anticipates that Summit Ventures IV, Summit Investors, and
certain limited partners of Summit Ventures IV will be offered the opportunity
to purchase an aggregate of up to an additional 600,000 shares of Common Stock
in the Concurrent Offering at a price of $ per share (the price to public
less the underwriting discount). The terms of any such sale will be otherwise on
the same terms as sales to other investors in this offering. Any purchase of
shares of Common Stock by Summit Ventures IV and Summit Investors will be for
investment purposes and not with a view to distributing such shares to the
public. No assurance can be given that any shares will be sold in the Concurrent
Offering. Any shares not sold in the Concurrent Offering will be offered by the
Underwriters to the general public on the same terms and

50
52

conditions as the other shares offered hereby in the Underwritten Offering. The
closing of the Concurrent Offering is contingent upon the closing of the
Underwritten Offering, and vice versa. Summit Ventures IV and Summit Investors
have expressed a desire to purchase up to 300,000 of the shares being offered in
the Concurrent Offering, and certain limited partners of Summit Ventures IV have
expressed a desire to purchase up to 300,000 of the shares being offered in the
Concurrent Offering. In addition, such persons have expressed a desire to
purchase up to 200,000 shares of Common Stock in the Underwritten Offering. To
the extent such persons purchase shares in the Underwritten Offering, the number
of shares available to the general public will be reduced. See "Principal
Stockholders."

All holders of Common Stock, including each director, officer and Summit
Entity, who will together hold 12,408,288 shares of Common Stock following the
closing of this offering (12,708,288 shares assuming Summit Ventures IV and
Summit Investors purchase 300,000 shares in the Concurrent Offering), have
agreed, subject to certain limited exceptions, not to sell, or offer to sell, or
otherwise dispose of, directly or indirectly, any shares of Common Stock
currently held by them, any right to acquire any shares of Common Stock or any
securities exercisable for or convertible into any shares of Common Stock for a
period of 180 days after the date of this Prospectus without the prior written
consent of Montgomery Securities. Montgomery Securities may, in its sole
discretion and at any time without notice, release all or any portion of the
securities subject to these lock-up agreements. In addition, the Company has
agreed, subject to certain exceptions, that for a period of 180 days after the
date of this Prospectus it will not, without the prior written consent of
Montgomery Securities, issue, offer, sell, grant options to purchase or
otherwise dispose of any equity securities or securities convertible into or
exchangeable for equity securities except for shares of Common Stock offered
hereby, shares issuable upon exercise of the Bank Warrant, options granted or
shares issued pursuant to new or outstanding options under the 1996 Plan or the
1997 Purchase Plan and shares issued in connection with acquisitions so long as
the recipients thereof agree to a similar lock-up provision. See
"Management -- Stock Plans."

Certain persons participating in this offering may engage in transactions,
including stabilizing bids, syndicate covering transactions or the imposition of
penalty bids, which may involve the purchase of Common Stock of the Company on
the Nasdaq National Market or otherwise. Such transactions may stabilize or
maintain the market price of the Common Stock at a level above that which might
otherwise prevail in the open market and, if commenced, may be discontinued at
any time.

The Representatives have informed the Company that the Underwriters do not
expect to make sales of Common Stock offered by this Prospectus to accounts over
which they exercise discretionary authority in excess of 5% of this offering.

Prior to this offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price will be determined
through negotiations between the Company and the Representatives. Among the
factors to be considered in such negotiations will be the history of, and
prospects for, the Company and the industry in which it competes, an assessment
of the Company's management, the Company's past and present operations and
financial performance, its past and present earnings and the trend of such
earnings, the prospects for future earnings of the Company, the present state of
the Company's development, the general condition of the securities markets at
the time of the offering and the market prices of publicly traded common stocks
of comparable companies in recent periods.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Hutchins, Wheeler & Dittmar, A Professional Corporation,
Boston, Massachusetts. Certain legal matters in connection with the offering
will be passed upon for the Underwriters by Hale and Dorr LLP, Boston,
Massachusetts. With respect to certain matters of Mississippi law, Hutchins,
Wheeler & Dittmar will rely on the opinion of Brunini, Grantham, Grower & Hewes,
PLLC, Jackson, Mississippi.

51
53

EXPERTS

The financial statements included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and are included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement on Form S-1
under the Securities Act (the "Registration Statement") with respect to the
Common Stock offered hereby. This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement and the exhibits and schedules filed
therewith. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge or copied at
prescribed rates at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549,
and at the Commission's Regional Offices located at The Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of such material may
be obtained at prescribed rates by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
or accessed on the Commission's World Wide Web site at (http://www.sec.gov).

The Company intends to distribute to its stockholders annual reports
containing financial statements audited by its independent accountants and
quarterly reports for the first three quarters of each fiscal year containing
unaudited financial information.
---------------------

ATMjr Demonstrator, ATMjr+CAS, miniATM, Triton Connect, and Triton are
trademarks of Triton Systems, Inc. All other trademarks and trade names referred
to in this Prospectus are the property of their respective owners.

52
54

INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report.......................................................... F-2
Financial Statements:
Balance Sheets as of December 31, 1995 and 1996.................................. F-3
Statements of Operations for the years ended December 31, 1994, 1995 and 1996.... F-4
Statements of Stockholders' Equity (Deficit) for the years ended December 31,
1994, 1995 and 1996............................................................. F-5
Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996.... F-6
Notes to Financial Statements......................................................... F-7

F-1
55

INDEPENDENT AUDITORS' REPORT

Board of Directors
Triton Systems, Inc.
Long Beach, Mississippi

We have audited the accompanying balance sheets of Triton Systems, Inc. as
of December 31, 1995 and 1996 and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in the
period ended December 31, 1996. 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 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, such financial statements present fairly, in all material
respects, the financial position of Triton Systems, Inc. as of December 31, 1995
and 1996, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

New Orleans, Louisiana
January 24, 1997

F-2
56

TRITON SYSTEMS, INC.

BALANCE SHEETS

DECEMBER 31,
----------------------------------------
PRO FORMA
1995 1996 1996
---------- ------------ ------------
(NOTE 13)

ASSETS
Current Assets:
Cash........................................................... $2,502,931 $ 4,518,783 $ 3,991,783
Accounts receivable, net of $100,000 (1995) and $1,030,000
(1996) allowance for bad debts............................... 4,648,130 4,472,146 4,472,146
Inventory...................................................... 1,888,344 3,044,939 3,044,939
Prepaid expenses and other current assets...................... 3,798 4,559 4,559
Deferred income taxes.......................................... 80,000 700,000 700,000
---------- ------------ ------------
Total current assets......................................... 9,123,203 12,740,427 12,213,427
---------- ------------ ------------
Property and Equipment:
Equipment...................................................... 289,811 434,890 434,890
Building and improvements...................................... 39,824 685,426 685,426
---------- ------------ ------------
329,635 1,120,316 1,120,316
Less accumulated depreciation.................................. 179,625 241,425 241,425
---------- ------------ ------------
Property and equipment, net.................................. 150,010 878,891 878,891
---------- ------------ ------------
Other Assets..................................................... -- 56,250 56,250
---------- ------------ ------------
Total Assets..................................................... $9,273,213 $ 13,675,568 $ 13,148,568
========== ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable............................................... $ 768,814 $ 2,071,802 $ 2,071,802
Income taxes payable........................................... 2,682,935 236,855 236,855
Accrued expenses............................................... 377,615 1,092,252 1,092,252
---------- ------------ ------------
Total current liabilities.................................... 3,829,364 3,400,909 3,400,909
---------- ------------ ------------
Long-Term Debt -- revolving line of credit....................... -- 8,000,000 29,818,000
Mandatorily Redeemable Preferred Stock:
Mandatorily redeemable Series A preferred stock, $.01 par
value; 114,000 shares authorized, issued and outstanding in
1996 with a redemption value of $100 per share ($11,400,000),
plus accrued dividends; none outstanding in 1995 and pro
forma........................................................ -- 11,652,000 --
Mandatorily redeemable Series B preferred stock, $.01 par
value; 100,000 shares authorized, issued and outstanding in
1996 with a redemption value of $100 per share ($10,000,000),
plus accrued dividends; none outstanding in 1995 and pro
forma........................................................ -- 10,442,000 --
---------- ------------ ------------
Total mandatorily redeemable preferred stock................. -- 22,094,000 --
---------- ------------ ------------
Commitments (Notes 1 and 11)
Stockholders' Equity (Deficit):
Preferred stock $.01 par value, 5,000,000 shares authorized,
none issued.................................................. -- -- --
Common stock $.01 par value; 40,000,000 shares authorized;
12,408,288 shares issued in 1995 and 1996.................... 124,083 124,083 124,083
Common stock $.01 par value (non-voting), 1,000,000 shares
authorized, none issued...................................... -- -- --
Additional paid in capital..................................... -- 302,360 302,360
Distributions in excess of basis............................... (23,176,784) (23,176,784)
Retained earnings.............................................. 5,319,766 2,931,000 2,680,000
---------- ------------ ------------
Total stockholders' equity (deficit)......................... 5,443,849 (19,819,341) (20,070,341)
---------- ------------ ------------
Total Liabilities and Stockholders' Equity (Deficit)............. $9,273,213 $ 13,675,568 $ 13,148,568
========== ============ ============

See notes to financial statements.

F-3
57

TRITON SYSTEMS, INC.

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31,
------------------------------------------
1994 1995 1996
---------- ----------- -----------

Net sales............................................ $3,236,058 $21,007,965 $40,967,899
Cost of sales........................................ 1,948,479 9,246,818 21,350,001
---------- ----------- -----------
Gross profit.................................... 1,287,579 11,761,147 19,617,898
Operating expenses................................... 916,603 4,342,767 5,235,474
---------- ----------- -----------
Income from operations.......................... 370,976 7,418,380 14,382,424
Interest income (expense), net....................... 7,330 110,309 (185,432)
---------- ----------- -----------
Income before income taxes...................... 378,306 7,528,689 14,196,992
Income taxes......................................... 145,000 2,815,000 2,650,000
---------- ----------- -----------
Net income...................................... 233,306 4,713,689 11,546,992
Accretion of preferred stock dividends and
redemption value................................... -- -- 965,000
---------- ----------- -----------
Net income applicable to common stockholders.... $ 233,306 $ 4,713,689 $10,581,992
========== =========== ===========
Net income applicable to common
stockholders -- per common share.............. $ 0.02 $ 0.37
========== ===========
Pro Forma Information (unaudited):
Historical net income applicable to common
stockholders.................................... $10,581,992
Adjustment to reflect income tax expense........... (2,850,000)
Adjustment for assumed replacement of preferred
stock with debt................................. 485,000
-----------
Pro forma net income applicable to common
stockholders.................................... $ 8,216,992
===========
Pro forma net income applicable to common
stockholders -- per common share................ $ 0.65
===========
Weighted average shares outstanding.................. 12,731,018 12,731,018 12,731,018
========== =========== ===========

See notes to financial statements.

F-4
58

TRITON SYSTEMS, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK ADDITIONAL DISTRIBUTIONS
--------------------- PAID-IN IN EXCESS RETAINED
SHARES AMOUNT CAPITAL OF BASIS EARNINGS TOTAL
---------- -------- ---------- ------------- ------------ ------------

Balance, January 1, 1994.............. 12,408,288 $124,083 $ -- $ -- $ 372,771 $ 496,854
Net income.......................... 233,306 233,306
---------- -------- -------- ------------ ------------ ------------
Balance, December 31, 1994............ 12,408,288 124,083 -- -- 606,077 730,160
Net income.......................... 4,713,689 4,713,689
---------- -------- -------- ------------ ------------ ------------
Balance, December 31, 1995............ 12,408,288 124,083 -- -- 5,319,766 5,443,849
Net income -- January 1, 1996 to
July 25, 1996..................... 7,650,992 7,650,992
Distribution in the form of
mandatorily redeemable preferred
stock............................. (10,000,000) (10,000,000)
Subchapter S distributions.......... (3,500,000) (3,500,000)
Recapitalization and distributions
to stockholders................... (6,863,999) (68,640) (13,176,784) (9,470,758) (22,716,182)
Issuance of common stock.............. 6,863,999 68,640 302,360 371,000
Net income -- July 26, 1996 to
December 31, 1996................. 3,896,000 3,896,000
Accretion of redemption value on
mandatorily redeemable Series A
preferred stock................... (20,000) (20,000)
Accretion of dividends on
mandatorily redeemable Series A
and B preferred stock............. (945,000) (945,000)
---------- -------- -------- ------------ ------------ ------------
Balance, December 31, 1996............ 12,408,288 $124,083 $302,360 $ (23,176,784) $ 2,931,000 $(19,819,341)
========== ======== ======== ============ ============ ============

See notes to financial statements.

F-5
59

TRITON SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,
-----------------------------------
1994 1995 1996
-------- ---------- -----------

Cash Flows from Operating Activities:
Net income............................................... $233,306 $4,713,689 $11,546,992
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for bad debts............................... -- 100,000 930,000
Depreciation and amortization......................... 31,937 50,798 61,800
Deferred income taxes................................. -- (20,000) (620,000)
Changes in operating assets and liabilities:
Accounts receivable................................. 17,916 (4,387,900) (754,016)
Inventory........................................... (57,537) (1,553,794) (1,156,595)
Prepaid expenses and other current assets........... (24,348) 22,511 (761)
Accounts payable.................................... 174,132 491,768 1,302,988
Income taxes payable................................ (20,708) 2,657,286 (2,446,080)
Accrued expenses.................................... 47,885 25,913 714,637
-------- ---------- -----------
Net cash provided by operating activities........ 402,583 2,100,271 9,578,965
-------- ---------- -----------
Cash Flows from Investing Activities:
Acquisition of property and equipment.................... (55,560) (136,050) (790,681)
Other.................................................... (56,250)
-------- ---------- -----------
Net cash used in investing activities............ (55,560) (136,050) (846,931)
-------- ---------- -----------
Cash Flows from Financing Activities:
Proceeds from revolving line of credit................... 11,700,000
Repayment of revolving line of credit.................... (3,700,000)
Proceeds from issuance of Common Stock................... 371,000
Proceeds from issuance of mandatorily redeemable Series A
preferred stock....................................... 11,129,000
Proceeds from issuance of 12% subordinated debentures.... 5,500,000
Repayment of 12% subordinated debentures................. (5,500,000)
Repayment of 8% subordinated promissory notes............ (6,000,000)
Distributions to the original stockholders as dividends
and redemption consideration.......................... (20,216,182)
-------- ---------- -----------
Net cash used in financing activities............ -- -- (6,716,182)
-------- ---------- -----------
Net Increase in Cash....................................... 347,023 1,964,221 2,015,852
Cash, Beginning of Year.................................... 191,687 538,710 2,502,931
-------- ---------- -----------
Cash, End of Year.......................................... $538,710 $2,502,931 $ 4,518,783
======== ========== ===========
Supplemental Cash Flow Information:
Income taxes paid........................................ $171,588 $ 150,000 $ 5,724,000
======== ========== ===========
Interest paid............................................ $ 5,811 $ 3,749 $ 347,233
======== ========== ===========
Noncash Financing Activities:
Issuance of 8% subordinated promissory notes to original
stockholders in connection with the Recapitalization
(Note 1).............................................. $ -- $ -- $ 6,000,000
======== ========== ===========
Issuance of mandatorily redeemable Series B preferred
stock to original stockholders (Note 1)............... $ -- $ -- $10,000,000
======== ========== ===========
Accretion of preferred stock dividends and redemption
value................................................. $ -- $ -- $ 965,000
======== ========== ===========

See notes to financial statements.

F-6
60

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation -- The Company was founded in 1979 and designs and
manufactures automated teller machines ("ATMs") and other financial hardware
products, such as scrip terminals and ATM demonstration machines.

Recapitalization -- On July 25, 1996, the Company effected a
recapitalization (the "Recapitalization") pursuant to which the Company
repurchased an aggregate of approximately 55% of the outstanding Common Stock
from its founders and certain other stockholders (the "Original Stockholders")
for a total consideration of $22.7 million. Of this amount, $16.7 million was
paid in cash and $6.0 million was paid through the issuance of 8% Subordinated
Promissory Notes of the Company due in 2001 (the "Stockholder Notes").
Immediately prior to the consummation of the Recapitalization, the Company made
a dividend distribution to the Original Stockholders in the form of an aggregate
of 100,000 shares of Series B preferred stock.

In order to finance the Recapitalization, the Company issued and sold (1)
an aggregate of 114,000 shares of Series A preferred stock with a redemption
value of $11.4 million for an aggregate purchase price of $11.4 million, and (2)
$5.5 million of 12% Subordinated Debentures of the Company due 2001 (the
"Subordinated Debentures") for an aggregate purchase price of $5.5 million.
After the foregoing transactions, the Company issued and sold an aggregate of
6,863,999 shares of Common Stock for an aggregate purchase price of $100,000.

On September 26, 1996, the Stockholder Notes and Subordinated Debentures
were repaid from the proceeds of a revolving line of credit provided by The
First National Bank of Boston. See Note 12 regarding the subsequent redemption
of the Series A and Series B preferred stock on January 24, 1997.

The transaction has been accounted for as a recapitalization, and
accordingly, no change in the accounting basis of the Company's assets have been
made in the accompanying financial statements. The amount of cash paid and
securities issued to the stockholders exceeded the Company's net assets on the
date of the transaction and has been recorded in the stockholders' equity
section as distributions in excess of basis.

Cash and Cash Equivalents -- All highly liquid investments with an original
maturity of three months or less from the date of purchase and money market
funds are considered cash equivalents.

Use of 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 the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Accounts Receivable -- Accounts receivable are reduced by any necessary
allowance for doubtful accounts. The allowance is determined by management based
on an evaluation of individual accounts and historical chargeoffs.

Financial Instruments -- The fair value of the Company's financial
instruments approximate their carrying amount.

Inventory -- Parts and supplies are carried at the lower of cost (FIFO) or
market. The cost of work in process and finished goods is based on accumulated
direct costs and allocated overhead.

Property and Equipment -- Property and equipment is stated at cost.
Depreciation and amortization are provided over the estimated useful lives of
the various properties using accelerated methods. The headquarters building is
being depreciated over a 25 year useful life. Furniture, fixtures, and equipment
are depreciated over useful lives varying from three to seven years. Automobiles
are depreciated over a five year useful life. Upon

F-7
61

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

disposal, the assets and related accumulated depreciation are removed from the
Company's accounts, and the resulting gains and losses are reflected in the
statements of operations.

Revenue Recognition -- Revenue is recognized upon shipment of the product
to the customer. The Company does not grant rights of return.

Warranties -- The Company's products are covered by a one-year parts-only
warranty. During 1996, the Company increased its warranty coverage from three
months to one year. Estimated future costs of repair, replacement, or customer
accommodations are reflected in the accompanying financial statements. Such
warranty reserves amounted to $35,000 and $585,000 at December 31, 1995 and 1996
and are included in accrued expenses.

Research and Development -- Research and development expenditures are
charged to operations as incurred. Costs incurred in 1994, 1995 and 1996 were
approximately $102,000, $221,000 and $355,000, respectively.

Income Taxes -- The provision for income taxes includes federal and state
taxes currently payable and deferred taxes arising from temporary differences
between income for financial statement purposes and income tax purposes.

Concentration of Credit Risk -- The Company sells its products to a limited
number of distributors and performs ongoing credit evaluations of these
distributors. The Company does not require collateral for its receivables and
maintains an allowance for potential credit losses. At December 31, 1996, three
customers accounted for approximately 22%, 16% and 11%, respectively, of
accounts receivable.

Certain components necessary for the manufacture of the Company's products
are obtained from a sole supplier or a limited number of suppliers.

Net Income Applicable to Common Stockholders Per Share -- Net income
applicable to common stockholders per share is computed using the weighted
average number of common and dilutive common equivalent shares outstanding
during the period. Dilutive common equivalent shares consist of stock options
(using the Treasury stock method for all periods presented) as if converted for
all years presented.

In accordance with Securities and Exchange Commission Staff Accounting
Bulletin No. 83, all options to purchase shares of common stock granted by the
Company during the twelve-month period prior to the filing of a proposed initial
public offering are included in the calculation as if they were outstanding for
all periods.

Recent Pronouncements -- The Financial Accounting Standards Board has
issued Statement No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" which is required to be adopted in
1997 and 1998. The Company does not expect the adoption of this standard to have
a material impact on the Company's financial condition or results of operations.

Reclassifications -- Certain reclassifications have been made to the 1994
and 1995 financial statements to conform to the classifications used in 1996.

2. ALLOWANCE FOR BAD DEBTS

Following is a summary of the allowance for bad debts (in thousands):

YEAR ENDED DECEMBER 31,
-----------------------------------
1994 1995 1996
------- ---- ------

Balance at beginning of year...................... $ -- $ -- $ 100
Provision for bad debts........................... -- 100 930
------- ---- -------
Balance at end of year............................ $ -- $100 $1,030
======= ==== =======

F-8
62

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. INVENTORY

Following is a summary of inventory at December 31, 1995 and 1996 (in
thousands):

1995 1996
------ ------

Parts and supplies................................................. $1,503 $2,381
Work in process.................................................... 141 137
Finished goods..................................................... 244 527
------ ------
$1,888 $3,045
====== ======

4. LONG-TERM DEBT

Long-term debt consists of a revolving line of credit due on September 26,
2001. The line has an adjustable interest rate. At December 31, 1996, the
effective interest rate thereon was 7.25%. The agreement provides for annual
reductions of $1,000,000 in the available line beginning in September 1997.
Based on the balance of the line at December 31, 1996, no payments would be
required in 1997. In connection with the revolving line of credit, the Company
has entered into a pledge and security agreement with the lender under which
substantially all assets of the Company were pledged to secure the revolving
credit line.

The revolving line of credit contains certain covenants that prohibit the
Company from incurring certain indebtedness, restricts investments, and
prohibits cash dividends. In addition, the Company is required to maintain
required quarterly net income, meet minimum debt service coverages, maintain
certain leverage ratios and limit the amount of capital expenditures in any one
year. The Company was in compliance with all covenants of the line at December
31, 1996. The revolving line of credit was amended in January 1997 (see Note
12). The amendment requires an annual $2.0 million reduction in the maximum
available borrowing amount beginning in September 1997. Interest expense
amounted to $6,000, $4,000 and $350,000 for 1994, 1995 and 1996, respectively.

5. MANDATORILY REDEEMABLE PREFERRED STOCK

The Company authorized and issued 114,000 shares of Series A preferred
stock at a price of $100 per share in order to finance the Recapitalization. The
Company authorized and issued 100,000 shares of Series B preferred stock as a
stock dividend to stockholders immediately prior to the Recapitalization. Both
the Series A and Series B preferred stock have a face value of $100. Dividends
accrue at 10% annually and are cumulative whether or not declared and paid.
Neither the Series A nor Series B preferred stockholders have any conversion
rights or voting rights. The Company has recorded the Series A preferred stock
at its estimated fair value on the issue date (as determined by a third-party
independent appraisal) which resulted in an original issue discount of $271,000.
The discount is being accreted over the life of the Series A preferred stock.
The rights and preferences of the Series A and B preferred stock are as follows:

Liquidation Rights -- The Series A and B preferred stock have certain
liquidation preferences over the common stock in the event of liquidation,
dissolution or winding up of the Company. The liquidation preferences
entitle the preferred stockholders to receive $100 per share in addition to
any accrued and unpaid dividends. The Series A preferred stockholders have
preferences over the Series B stockholders in determining the order of
liquidation payout. The preferred stock does not participate in the
distribution of assets remaining after the preference has been paid.

Dividend Rights -- The preferred stockholders are entitled to receive
dividends in preference to the common stockholders at an annual rate of ten
percent (10%) of the purchase price of $100 per share, compounded annually.
As long as any preferred shares are outstanding, the Company cannot declare
or pay any dividend or make any distribution to any common stock. The
carrying amounts of both Series A

F-9
63

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

and Series B preferred stock have been increased by amounts representing
dividends accrued but not paid but which will be payable under the dividend
rights of the respective series of preferred stock. The increases have been
effected by a charge against retained earnings.

Redemption Rights -- The Company may redeem all or any of the shares
of the Series A preferred stock at any time. On July 31, 2002, the Company
must redeem all of the shares of Series A preferred stock outstanding. The
Company may also redeem all or any shares of the Series B preferred stock
at any time but only if all shares of Series A preferred stock has been
redeemed.

The Company is required to redeem all of the shares of the Series A and
Series B preferred stock in the event of a public offering of the Company's
common stock or a merger or sale of the Company. However, the Series A stock
must be redeemed prior to the Series B. The redemption price of the Series A and
Series B preferred stock is $100 per share plus any accrued and unpaid
dividends.

See Note 12 regarding the subsequent redemption of the Series A and Series
B preferred stock on January 24, 1997.

6. PENSION PLAN AND 401(K) PLAN

The Company had a simplified employee pension plan (SEP). Contributions
were made to the plan at the discretion of the Company's Board of Directors and
amounted to approximately $120,000 in 1995 and $100,000 in 1994. In 1996 the
Company discontinued the SEP and instituted a 401(k) plan. The Company's
contribution to the 401(k) plan each year is at the discretion of the Board of
Directors and amounted to $264,000 in 1996 and was included in accrued expenses
at December 31, 1996.

7. INCOME TAXES

Income taxes were as follows (in thousands):

YEAR ENDED DECEMBER 31,
--------------------------
1994 1995 1996
---- ------ ------

Current
Federal.................................................. $125 $2,455 $2,830
State.................................................... 20 380 440
----- ------ ------
145 2,835 3,270
----- ------ ------

Deferred
Federal.................................................. -- (17) (538)
State.................................................... -- (3) (82)
----- ------ ------
-- (20) (620)
----- ------ ------
Total tax expense................................ $145 $2,815 $2,650
===== ====== ======

F-10
64

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company's effective tax rate differs from the statutory federal tax
rate as follows:

YEAR ENDED DECEMBER 31,
-----------------------
1994 1995 1996
---- ---- -----

Income taxes at statutory rate................................ 34.0% 34.0% 34.0%
Income taxed to stockholders.................................. -- -- (18.4)
State income taxes............................................ 3.5 3.3 1.7
Non-deductible items.......................................... 0.6 0.1 1.4
Other items -- net............................................ 0.3 -- --
---- ---- -----
Effective tax rate.................................. 38.4% 37.4% 18.7%
==== ==== =====

The components of the Company's deferred tax assets were as follows (in
thousands):

DECEMBER 31,
-------------
1995 1996
---- ----

Allowance for bad debts............................................... $ 38 $385
Inventory............................................................. 10 60
Compensated absences.................................................. 44 35
Warranty reserves..................................................... 12 220
Other -- net.......................................................... (24) --
---- ----
Total deferred tax assets................................... $ 80 $700
==== ====

From January 1, 1996 through July 25, 1996, the Company elected to be taxed
as a Subchapter S corporation for federal and state income tax purposes.
Therefore, taxable income during this period was taxed directly to the
stockholders.

8. STOCK OPTION PLAN

The Company has reserved up to 1,541,707 shares of its $.01 par value
Common Stock and Non-Voting Common Stock for issuance under the 1996 Stock
Option Plan. Incentive stock options and non-qualified stock options may be
granted under the terms of the Plan. Options are exercisable only while the
optionee remains in the employ of the Company or for a short period of time
thereafter. All options granted as of December 31, 1996 were non-qualified stock
options and were exercisable for Non-Voting Common Stock. No incentive stock
options have been granted. Options granted in 1996 were vested immediately as to
263,706 shares, vest one-third each year over 3 years as to 103,949 shares and
vest one-fifth each year over 5 years as to 33,000 shares. All options expire no
later than 10 years from the date of grant.

Transactions in the plan are as follows:

OPTIONS OUTSTANDING
SHARES ------------------------------
AVAILABLE SHARES UNDER PRICE
FOR GRANT OPTION PER SHARE
--------- ------------ -------------

Authorized................................... 1,541,707 -- --
Granted...................................... 400,655 400,655 $1.21 - $4.97
Exercised.................................... -- -- --
------- ------- -------------
Balance at December 31, 1996....... 1,141,052 400,655 $1.21 - $4.97
======= ======= =============

Options to purchase 263,706 shares were exercisable at December 31, 1996.

F-11
65

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company is applying APB opinion No. 25 and related interpretations in
accounting for the Plan. All shares granted in 1996 were at or above the
estimated fair market value on the date of grant, as determined by the Board of
Directors of the Company and confirmed by an independent third party appraisal.
Accordingly, no compensation expense has been recognized. If the Company
determined compensation cost based on the fair value at the date of grant,
consistent with the requirements of Financial Accounting Standards Board
Statement No. 123 "Accounting for Stock Based Compensation," the effect on the
Company's net income and net income applicable to common stockholders would not
have been material and, accordingly, the pro forma effects of such costs have
not been presented. In computing these pro forma amounts the Company has assumed
a risk-free interest rate equal to approximately 6 1/2%, expected life of
approximately 3 years, no volatility and no dividends. The effects of applying
SFAS No. 123 in this disclosure are not indicative of future amounts.

9. SIGNIFICANT CUSTOMERS

For the year ended December 31, 1994, one customer accounted for 27% of the
Company's net sales. For the year ended December 31, 1995, one customer
accounted for 12% of the Company's net sales. For the year ended December 31,
1996, two customers accounted for 22% and 19%, respectively, of the Company's
net sales. In addition, the Company's five largest customers, in the aggregate,
accounted for approximately 62% of the Company's net sales in 1996.

10. RELATED PARTY TRANSACTIONS

Prior to December 30, 1996, the Company leased its headquarters and
manufacturing facility and telephone system from three major officers and
stockholders. Under the lease, dated February 1, 1995, the Company paid rent
ranging from $9,666 to $16,332 per month. On December 30, 1996, the Company
purchased the land, building and telephone system from the officers and
stockholders for an aggregate of $631,257, an amount agreed upon by the
disinterested members of the Board of Directors after review of independent
appraisals. From October 30, 1995 through February 14, 1996, the Company made
loans to an entity owned by the three stockholders in the aggregate principal of
$176,000, at an annual interest rate of 9.75%, the proceeds of which were used
for improvements to the Company headquarters. The loans were repaid in full in
July 1996.

11. COMMITMENTS

On July 25, 1996, the Company entered into certain employment agreements
for a three year period. These employment agreements, as amended, require
aggregate minimum payment of $375,000 annually. Such agreements provide for
annual salary increases and bonuses as determined by the Board of Directors.

12. SUBSEQUENT EVENTS

1997 Stock Purchase Plan -- On January 23, 1997, the Board of Directors
adopted the 1997 Employee Stock Purchase Plan and authorized the issuance of up
to 250,000 shares of common stock under this plan to participating employees. On
the first day of each purchase period, participating employees will be granted
an option to purchase up to 500 shares of common stock. The exercise price for
the option for each purchase period is the lesser of 85% of the fair market
value of the common stock on the first or last business day of the purchase
period.

Stock Splits -- On January 23, 1997, the Company's Board of Directors
approved a 1.65 for 1 stock split to be effected on January 27, 1997. All share
and per share data in the accompanying financial statements have been
retroactively restated to reflect the stock split.

F-12
66

TRITON SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Stock Offering -- On January 23, 1997, the Company's Board of Directors
authorized management of the Company to file a Registration Statement with the
Securities and Exchange Commission relating to the initial public offering of
shares of common stock. The Board has also directed that the net proceeds to the
Company from the offering be used to retire the revolving credit line.

Redemption of Mandatorily Redeemable Series A and B Preferred Stock -- On
January 24, 1997, the Company redeemed all of the outstanding shares of Series A
preferred stock for an aggregate redemption price of $11,400,000 (plus accrued
dividends of $580,000), and all outstanding shares of Series B preferred stock
for an aggregate redemption price of $10,000,000 (plus accrued dividends of
$508,000). The redemption was financed in part through $21,818,000 in additional
borrowings under the Company's revolving line of credit, the availability under
which was increased from $15.0 to $30.0 million pursuant to an amendment to the
revolving credit facility. In connection with the increase in availability under
the revolving line of credit, the Company issued a warrant to purchase 32,109
shares of common stock at an exercise price equal to the initial public offering
price per share to an affiliate of the Bank. The warrant expires in January 2007
and is presently exercisable. The amendment to the revolving line of credit
provides for annual reductions of $2.0 million in the available line beginning
in September 1997.

Amendment to Articles -- On January 27, 1997, the Company's Articles of
Incorporation were amended to increase the number of authorized shares of common
stock, par value $.01 per share, from 10,000,000 to 40,000,000 and to set the
number of authorized shares of undesignated preferred stock, par value $.01 per
share, at 5,000,000.

13. UNAUDITED PRO FORMA INFORMATION

Pro Forma Balance Sheet Information -- The pro forma balance sheet
information is adjusted for the pro forma effect of the redemption of all
mandatorily redeemable preferred stock at its required redemption price at
December 31, 1996 of approximately $22,345,000 and its replacement with
long-term debt funded by a $21,818,000 increase in the Company's revolving line
of credit and a deemed use of $527,000 in cash.

Pro Forma Net Income Applicable to Common Stockholders -- The pro forma
adjustments reflect what the effect on historical net income applicable to
common stockholders would have been if the Company had not elected to be taxed
as a Subchapter S corporation during the period from January 1, 1996 through
July 25, 1996. The adjustments include a provision for federal and state income
taxes at an effective rate of 38.7% as if the Company was subject to such taxes
during such period. In connection with the Recapitalization on July 25, 1996,
the Company terminated its status as a Subchapter S corporation. The 1996
historical net income applicable to common stockholders is also adjusted by (i)
the additional interest expense (net of tax) as if the additional $21,818,000
borrowed to fund in part the redemption of the mandatorily redeemable preferred
stock had been incurred on July 25, 1996 and (ii) the elimination of accretion
of dividends and redemption value on the mandatorily redeemable preferred stock
to reflect such redemption. Pro forma net income applicable to common
stockholders per share is based on the weighted average number of common and
dilutive common equivalent shares (common stock options) outstanding.

* * * * * *

F-13
67

APPENDIX

PAGE 26:

[Graphic omitted: line chart showing the number of ATMs installed at
on-premise and off-premise locations over the 1991-1995 period and the
corresponding compound annual growth rates of 19.9% for off-premise ATMs and
6.8% for on-premise ATMs. Source: The Forrester Report, Forrester Research,
Inc.]

INSIDE FRONT COVER:

[Graphic omitted: photograph showing Triton Systems Model 9500 Cash
Dispenser - located in a shopping mall.]

[Graphic omitted: photograph showing Triton Systems Model 9500 Cash
Dispenser - located in a convenience store.]

INSIDE BACK COVER:

[Graphic omitted: photograph showing miniATM Scrip Terminal]

[Graphic omitted: photograph showing Model 9500 Single Cassette miniATM]

[Graphic omitted: photograph showing ATMjr. + CAS]

[Graphic omitted: photograph showing Model 9515 Multiple Cassette miniATM]

======================================================

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or the Underwriters. This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, any securities other than the
shares of Common Stock to which it relates or an offer to, or a solicitation of,
any person in any jurisdiction in which such offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company or that the information contained herein is
correct as of any time subsequent to the date hereof.

------------------------------

TABLE OF CONTENTS

------------------------------

Page
----

Prospectus Summary.................... 3
Risk Factors.......................... 6
Use of Proceeds....................... 14
Dividend Policy....................... 14
Capitalization........................ 15
Dilution.............................. 16
Selected Financial Data............... 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 25
Management............................ 36
Certain Transactions.................. 41
Principal Stockholders................ 43
Description of Capital Stock.......... 45
Shares Eligible for Future Sale....... 48
Underwriting.......................... 50
Legal Matters......................... 51
Experts............................... 52
Additional Information................ 52
Index to Financial Statements......... F-1

------------------------------

Until , 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
======================================================

======================================================

3,000,000 SHARES

[TRITON SYSTEMS LOGO]

COMMON STOCK

------------------------------

PROSPECTUS

------------------------------
MONTGOMERY SECURITIES

SMITH BARNEY INC.

THE ROBINSON-HUMPHREY
COMPANY, INC.

, 1997

======================================================
69

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth various expenses in connection with the sale
and distribution of the securities being registered hereby, other than
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee, the NASD filing fee
and the Nasdaq National Market listing fee:

AMOUNT
--------

Registration fee under the Securities Act................................. $ 19,028
NASD filing fee........................................................... 6,779
Nasdaq National Market listing fee........................................ 50,000
Legal fees and expenses................................................... 275,000
Accounting fees and expenses.............................................. 75,000
Blue Sky fees and expenses................................................ 15,000
Printing, engraving and mailing expenses.................................. 85,000
Transfer agent fees and expenses.......................................... 5,000
Miscellaneous............................................................. 69,193
--------
Total........................................................... $600,000
========

All the above expenses will be paid by the Company.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Articles of Incorporation and By-laws provide for
indemnification of the officers and directors of the Company to the fullest
extent permitted by Mississippi law, including some instances with respect to
directors where indemnification is otherwise discretionary under Mississippi
law. The Articles of Incorporation and By-laws provide that the Company shall
indemnify, and upon request shall advance expenses to, in the manner and to the
full extent permitted by law, any officer or director who was or is a party to,
or is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding; provided, however, the Company shall not indemnify
an officer or director if a judgment or final adjudication adverse to the
officer or director establishes his liability for (i) the amount of financial
benefit received by a director to which he is not entitled, (ii) an intentional
infliction of harm on the Company or its stockholders, (iii) a violation of
Section 79-4-8.33 of the Mississippi Business Corporation Act relating to
unlawful distributions, or (iv) an intentional violation of criminal law.
Reference is made to the Company's Articles of Incorporation and By-laws filed
as Exhibits 3.2 and 3.4 hereto.

The Company intends to purchase insurance with respect to, among other
things, the liabilities that may arise under the statutory provisions referred
to above. The directors and officers of the Company also are insured against
certain liabilities, including certain liabilities arising under the Securities
Act of 1933, which might be incurred by them in such capacities and against
which they are not indemnified by the Company.

Reference is hereby made to Section 11 of the Underwriting Agreement filed
as Exhibit 1.1 hereto, which provides for indemnification of the Company, its
directors, officers and controlling persons.

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ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since January 1, 1994, the Company has issued the following securities
(giving effect to the 1.65:1 stock split effected in the form of a stock
dividend on January 27, 1997), none of which have been registered under the
Securities Act of 1933, as amended (the "Act"):

(a) On July 25, 1996, the Company issued and sold an aggregate of $5.5
million in principal amount of 12% Subordinated Debentures due 2001 of the
Company to Summit Investors III, L.P. and Summit Subordinated Debt Fund,
L.P. in a private venture capital financing.

(b) On July 25, 1996, the Company issued an aggregate of 114,000
shares of Series A Preferred Stock for aggregate consideration of
$11,400,000 in a private venture capital financing, at a price of $100 per
share, to Summit Ventures IV, L.P. and Summit Investors III, L.P.

(c) On July 25, 1996, the Company issued 6,863,999 shares of Common
Stock for aggregate consideration of $100,000 in a private venture capital
financing, to Summit Ventures IV, L.P., Summit Investors III, L.P. and
Summit Subordinated Debt Fund, L.P.

(d) Between July 25, 1996 and January 23, 1997, the Company granted
options to purchase an aggregate of 433,655 shares of Non-Voting Common
Stock to employees and directors under the Company's 1996 Stock Option
Plan.

No underwriters were involved in any of the foregoing transactions. Such
sales of stock and grants of options were made in reliance upon an exemption
from the registration provisions of the Act set forth in Section 4(2) thereof
relative to sales by an issuer not involving a public offering or the rules and
regulations thereunder, or, in the case of certain options to purchase Common
Stock, Rule 701 of the Act. All of the foregoing securities are deemed
restricted securities for purposes of the Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits. The following is a list of exhibits filed as part of the
Registration Statement.

EXHIBIT NO. TITLE
- ----------- -----

II-2
71

EXHIBIT NO. TITLE
- ----------- ----------------------------------------------------------------------------------

*10.8 Collateral Assignment and Security Agreement in Respect of Stock Purchase and
Redemption Agreement between the Company and The First National Bank of Boston,
dated September 26, 1996
*10.9 Triton Systems, Inc. 1996 Stock Option Plan
*10.10 Triton Systems, Inc. 1997 Employee Stock Purchase Plan
*10.11 Employment Agreement with Ernest L. Burdette, dated July 25, 1996
*10.12 Employment Agreement with Frank J. Wilem, Jr., dated July 25, 1996
*10.13 Employment Agreement with Robert E. Sandoz, dated July 25, 1996
*10.14 Purchase and Sale Agreement, among the Company, Ernest L. Burdette, Frank J.
Wilem, Jr. and Robert E. Sandoz, dated December 31, 1996
*10.15 Amendment to Employment Agreement with Ernest L. Burdette, dated December 31, 1996
*10.16 Amendment to Employment Agreement with Frank J. Wilem, Jr., dated December 31,
1996
*10.17 Amendment to Employment Agreement with Robert E. Sandoz, dated December 31, 1996
*10.18 First Amendment to Credit Agreement, dated January 24, 1997, by and between the
Company and The First National Bank of Boston
*10.19 First Amendment to Promissory Note, dated as of January 24, 1997, by and between
the Company and The First National Bank of Boston
*10.20 First Amendment to Security Documents, dated January 24, 1997, by and between the
Company and The First National Bank of Boston
*10.21 Warrant to Purchase Common Stock of Triton Systems, Inc., dated as of January 24,
1997
*10.22 Co-Sale Agreement, dated as of January 24, 1997 by and among the Company, Summit
Ventures IV, L.P., Summit Investors III, L.P. and Summit Subordinated Debt Fund,
L.P. and F.S.C. Corp.
10.23 Second Amendment to Credit Agreement, dated as of April 9, 1997, by and between
the Company and The First National Bank of Boston
10.24 First Amendment to Warrant to Purchase Common Stock of Triton Systems, Inc., dated
as of April 9, 1997
*11.1 Statement re computation of per share earnings
*21.1 Subsidiaries
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation (included in
Exhibit 5.1)
*24.1 Power of Attorney
*27.1 Financial Data Schedule

- ------------------------
* Previously filed

(b) Financial Statement Schedules. Financial statement schedules have not
been filed with this Registration Statement since either they are not applicable
or the required information has been included in the Company's financial
statements.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

II-3
72

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Articles of Incorporation, as amended, and Bylaws of
the Registrant and the laws of the State of Mississippi, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
73

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston,
Commonwealth of Massachusetts on the 10th day of April, 1997.

TRITON SYSTEMS, INC.

/S/ ERNEST L. BURDETTE

By: ................................
ERNEST L. BURDETTE
PRESIDENT AND CHIEF EXECUTIVE
OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ ---------------

/S/ ERNEST L. BURDETTE President, Chief Executive April 10, 1997
........................................ Officer and Director
ERNEST L. BURDETTE (principal executive officer)

/S/ JEFFREY A. BANDROWSKI Vice President-Chief Financial April 10, 1997
........................................ Officer (principal accounting
JEFFREY A. BANDROWSKI and financial officer)

* Director April 10, 1997
........................................
ROBERT E. SANDOZ

* Director April 10, 1997
........................................
FRANK J. WILEM, JR.

* Director April 10, 1997
........................................
JOSEPH F. TRUSTEY

* Director April 10, 1997
........................................
KEVIN P. MOHAN

* Director April 10, 1997
........................................
CHARLES A. EMLING, III

* Director April 10, 1997
........................................
THOMAS A. COOPER

By: /S/ JEFFREY A. BANDROWSKI
............................... ......
JEFFREY A. BANDROWSKI
AS ATTORNEY-IN-FACT

II-5
74

EXHIBIT INDEX

EXHIBIT NO. TITLE
- ----------- -----------------------------------------------------------------------

*1.1 Form of Underwriting Agreement
*3.1 Restated Articles of Incorporation of the Company
*3.2 Form of Restated Articles of Incorporation of the Company, to be
effective upon the closing of the offering
*3.3 By-Laws of the Company
*3.4 Form of By-Laws of the Company, to be effective upon the closing of the
offering
*4.1 Specimen stock certificate representing the shares of Common Stock
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation, as
to the legality of the securities being registered
*10.1 Stock Purchase and Redemption Agreement, dated July 25, 1996
*10.2 Redemption Agreement among the Company and the Shareholders, dated July
25, 1996
*10.3 Shareholders' Agreement among the Company and the Shareholders, dated
July 25, 1996
*10.4 Registration Rights Agreement among the Company and the Shareholders,
dated July 25, 1996
*10.5 Credit Agreement between the Company and The First National Bank of
Boston, dated September 26, 1996
*10.6 Revolving Credit Note to The First National Bank of Boston, dated
September 26, 1996
*10.7 Pledge and Security Agreement between the Company and The First
National Bank of Boston, dated September 26, 1996
*10.8 Collateral Assignment and Security Agreement in Respect of Stock
Purchase and Redemption Agreement between the Company and The First
National Bank of Boston, dated September 26, 1996
*10.9 Triton Systems, Inc. 1996 Stock Option Plan
*10.10 Triton Systems, Inc. 1997 Employee Stock Purchase Plan
*10.11 Employment Agreement with Ernest L. Burdette, dated July 25, 1996
*10.12 Employment Agreement with Frank J. Wilem, Jr., dated July 25, 1996
*10.13 Employment Agreement with Robert E. Sandoz, dated July 25, 1996
*10.14 Purchase and Sale Agreement, among the Company, Ernest L. Burdette,
Frank J. Wilem, Jr. and Robert E. Sandoz, dated December 31, 1996
*10.15 Amendment to Employment Agreement with Ernest L. Burdette, dated
December 31, 1996
*10.16 Amendment to Employment Agreement with Frank J. Wilem, Jr., dated
December 31, 1996
*10.17 Amendment to Employment Agreement with Robert E. Sandoz, dated December
31, 1996
*10.18 First Amendment to Credit Agreement, dated January 24, 1997, by and
between the Company and The First National Bank of Boston
*10.19 First Amendment to Promissory Note, dated as of January 24, 1997, by
and between the Company and The First National Bank of Boston

EXHIBIT NO. TITLE
- ----------- -----------------------------------------------------------------------

*10.20 First Amendment to Security Documents, dated January 24, 1997, by and
between the Company and The First National Bank of Boston
*10.21 Warrant to Purchase Common Stock of Triton Systems, Inc., dated as of
January 24, 1997
*10.22 Co-Sale Agreement, dated as of January 24, 1997 by and among the
Company, Summit Ventures IV, L.P., Summit Investors III, L.P. and
Summit Subordinated Debt Fund, L.P. and F.S.C. Corp.
10.23 Second Amendment to Credit Agreement, dated as of April 9, 1997, by and
between the Company and The First National Bank of Boston
10.24 First Amendment to Warrant to Purchase Common Stock of Triton Systems,
Inc., dated as of April 9, 1997
*11.1 Statement re computation of per share earnings
*21.1 Subsidiaries
23.1 Consent of Deloitte & Touche LLP
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1)
*24.1 Power of Attorney
*27.1 Financial Data Schedule

- ------------------------

* Previously filed