SC 13D/A 1 a2087751zsc13da.txt SC 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* ---- DSI TOYS, INC. -------------------------------------------------------- (Name of Issuer) Common Stock, Par Value $.01 Per Share -------------------------------------------------------- (Title of Class of Securities) 232968 10 7 -------------------------------------------------------- (CUSIP Number) Walter S. Reiling and Susan Reiling 15 Woodcrest Drive Morristown, New Jersey 07960 (973) 898-1930 -------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 5, 2002 -------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. CUSIP No. 232968 10 7 ----------- ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS MVII, LLC 77-0509866 ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / ------------------------------------------------------------------------------- (3) SEC Use Only ------------------------------------------------------------------------------- (4) SOURCE OF FUNDS N/A ------------------------------------------------------------------------------- (5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION CALIFORNIA ------------------------------------------------------------------------------- Number of (7) SOLE VOTING POWER Shares 5,994,238 -------------------------------------------------- BENEFICIALLY (8) SHARED VOTING POWER 1,271,330(1) OWNED BY -------------------------------------------------- (9) SOLE DISPOSITIVE POWER EACH 5,994,238 REPORTING -------------------------------------------------- (10) SHARED DISPOSITIVE POWER PERSON WITH 0 -------------------------------------------------- ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,265,568(1) ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.6% ------------------------------------------------------------------------------- (14) Type of Reporting Person* OO ------------------------------------------------------------------------------- (1) Includes 725,122 shares of Common Stock owned by certain shareholders of the Company that are subject to the Primary Voting Agreement (as defined herein) with MVII, including stock options held by certain shareholders to purchase an aggregate of 6,000 shares of Common Stock at $8.00 per share and 20,000 shares of Common Stock at $3.125 per share exercisable at any time. CUSIP No. 232968 10 7 ----------- ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS WALTER S. REILING AND SUSAN REILING ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / ------------------------------------------------------------------------------- (3) SEC Use Only ------------------------------------------------------------------------------- (4) SOURCE OF FUNDS N/A ------------------------------------------------------------------------------- (5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION USA ------------------------------------------------------------------------------- Number of (7) SOLE VOTING POWER Shares 0 -------------------------------------------------- BENEFICIALLY (8) SHARED VOTING POWER 546,208(1) OWNED BY -------------------------------------------------- (9) SOLE DISPOSITIVE POWER EACH 546,208(1) REPORTING -------------------------------------------------- (10) SHARED DISPOSITIVE POWER PERSON WITH 0 -------------------------------------------------- ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 546,208(1) ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.0% ------------------------------------------------------------------------------- (14) Type of Reporting Person* IN ------------------------------------------------------------------------------- (1) Includes stock options to purchase 10,000 shares of Common Stock at $3.49 per share exercisable at any time. This Amendment No. 1 (this "Amendment") amends and supplements the Statement on Schedule 13D relating to the common stock, par value $.01 per share (the "Common Stock"), of DSI Toys, Inc. a Texas corporation (the "Company"), previously filed jointly on January 18, 2000 by MVII, LLC ("MVII") and Walter S. Reiling and Susan Reiling (collectively, "Reiling"). MVII and Reiling are collectively referred to herein as the "Reporting Persons" with respect to the ownership of the Common Stock of the Company. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Item 3 is hereby amended as follows: MVII used company funds in connection with the issuance and exercise of the Investment Warrant (as defined herein) described in Item 5 below. Reiling used personal funds to finance the Market Acquisition (as defined herein) described in Item 5 below. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is hereby amended as follows: On January 7, 2000, the Company acquired all of the issued and outstanding shares of common stock of Meritus Industries, Inc., a New Jersey corporation ("Meritus"), pursuant to a merger in which Meritus merged with and into the Company (the "Merger"). Under the terms of the Merger, Reiling received 503,226 shares of Common Stock at the closing of the Merger. In addition, up to 96,774 shares of Common Stock were payable on a deferred basis by the Company to Reiling upon satisfaction of certain post-closing conditions pursuant to the terms and conditions of a Closing and Holdback Agreement between the Company, Meritus, Meritus Industries, Ltd. ("Industries"), and Reiling (the "Holdback Agreement"). Of the possible 96,774 shares of Common Stock payable to Reiling pursuant to the Holdback Agreement, 29,982 shares were actually paid by the Company to Reiling on February 10, 2000 (the "Holdback Shares"). Such 29,982 Holdback Shares are subject to the terms and conditions of that certain Shareholders' and Voting Agreement dated January 7, 2000 by and among the Company, MVII and Reiling (the "Reiling Voting Agreement"), pursuant to which MVII has the shared power to vote all of the shares of Common Stock owned by Reiling. On March 19, 2001, the Company issued to MVII an Investment Warrant (herein so called) to acquire 1.8 million shares of Common Stock at a purchase price of $2.7 million. The Investment Warrant was exercisable in whole on in part for a ten-year period beginning June 3, 2002, and was subject to certain anti-dilution provisions. Proceeds from the sale of the Investment Warrant were used by the Company for working capital. On January 31, 2002, at the request of NASDAQ and with the agreement of MVII, the Company issued an amended and restated Investment Warrant which did not contain any anti-dilution provisions. On August 21, 2002, MVII exercised the Investment Warrant in its entirety and received 1.8 million shares of Common Stock in exchange therefor. On February 28, 2002, Reiling acquired 3,000 shares of Common Stock on the open market at $.61 per share (the "Market Acquisition"). Accordingly, at the conclusion of the above transactions, MVII has the sole power to vote and the sole power to dispose of 5,994,238 shares of Common Stock which it holds of record. Under the terms of that certain Shareholders' and Voting Agreement dated April 15, 1999, but effective as of June 1, 1999, by and among the Company, MVII and certain shareholders of the Company (the "Primary Voting Agreement"), MVII has the shared power to vote 725,122 shares of Common Stock (including options held by certain shareholders of the Company to purchase an aggregate of 6,000 shares of Common Stock at $8.00 per share and 20,000 shares of Common Stock at $3.125 per share exercisable at any time (the "Shareholder Options)), and under the terms of the Reiling Voting Agreement, MVII has the shared power to vote 546,208 shares of Common Stock (including options held by Reiling to purchase an aggregate of 10,000 shares of Common Stock at $3.49 per share exercisable at any time (the "Reiling Options"). Therefore, MVII beneficially owns 7,265,568 shares of Common Stock by virtue of its record ownership, the Primary Voting Agreement (including the Shareholder Options) and the Reiling Voting Agreement (including the Reiling Options), representing, in the aggregate, 66.6% of the outstanding Common Stock of the Company. Reiling beneficially owns 546,208 shares of Common Stock, including the Reiling Options, representing 5.0% of the outstanding Common Stock of the Company. Reiling has the shared power to vote and the sole power to dispose of all such 546,208 shares of Common Stock. As a group, the Reporting Persons are the beneficial owners of an aggregate of 6,540,446 shares of Common Stock, and such beneficial ownership constitutes 60.0% of the total outstanding Common Stock of the Company. Without giving effect to the Reiling Options and the shares underlying the Reiling Options, the ownership interest of the Reporting Persons represents, in the aggregate, 60.0% of the outstanding Common Stock of the Company. MVII additionally is the beneficial owner of 725,122 shares of Common Stock as a result of the Primary Voting Agreement, to which the other Reporting Person is not a party. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following exhibits are filed with this Amendment: Exhibit 1. Primary Voting Agreement dated April 15, 1999, among the Company, MVII and certain shareholders of the Company (incorporated by reference to Exhibit 1 contained in the Statement on Schedule 13D filed by the parties to the Primary Voting Agreement on June 10, 1999). Exhibit 2. Agreement and Plan of Merger dated as of October 7, 1999 by and among Meritus, Industries, Reiling, and the Company (incorporated by reference to Exhibit 10.45 contained in the Company's Quarterly Report on Form 10-Q filed December 15, 1999). Exhibit 3. Closing and Holdback Agreement dated January 7, 2000 by and among Registrant, Meritus, Industries and Reiling (incorporated by reference to Exhibit 2 contained in the Statement on Schedule 13D filed by the parties to the Reiling Voting Agreement on January 18, 2000). Exhibit 4. Reiling Voting Agreement dated January 7, 2000, among the Company, MVII and Reiling (incorporated by reference to Exhibit 3 contained in the Statement on Schedule 13D filed by the parties to the Reiling Voting Agreement on January 18, 2000). Exhibit 5. Amended and Restated Investment Warrant dated January 31, 2002, between the Company and MVII (incorporated by reference to Exhibit 4.8 contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. MVII, LLC Dated: August 21, 2002 By: /s/ E. Thomas Martin ------------------------------- E. Thomas Martin, Manager After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Dated: August 21, 2002 /s/ Walter S. Reiling ---------------------------------- Walter S. Reiling After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Dated: August 21, 2002 /s/ Susan Reiling ---------------------------------- Susan Reiling EXHIBIT INDEX

DSI TOYS INC SC 13D/A