UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT
OF 1934 [Fee Required] For the fiscal year ended September 30, 1997.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE
ACT OF 1934 [No Fee Required] For the transition period from ______________ to
_____________.
Commission file Number 0-9940
FINGERMATRIX, INC.
(Exact name of registrant as specified in its charter)
New York 13-2854686
(State or other jurisdiction of
incorporation or organization) (IRS Employer Identification Number)
249 Saw Mill River Road, Elmsford, New York 10523
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 592-5930
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class Outstanding shares as of June 30, 1999
- ------------------- --------------------------------------
Common Stock, par value 0.01 per share 20,000,000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ___
Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as a specified date within the past 60 days.
As of July 2, 1999, the aggregate market value of the common equity
held by non-affiliates approximated $3.6 million.
DOCUMENTS INCORPORATED BY REFERENCE
None
Purpose of Amendment
Part II, Item 5., " Market for Registrant's Common Equity and Related
Stockholder Matters" in order to include the correct ticker symbol which is
FINX.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Common Stock:
Since April 19, 1995, the date that the Company's securities were
distributed pursuant to the Second Amended Plan of Reorganization dated as of
March 10, 1995, the Company's common stock has been traded on the
Over-the-Counter ("OTC") Bulletin Board under the symbol FINX. As such, the
following table sets forth the reported high and low bid prices of the common
stock for the quarters ended December 31, 1995 through September 30, 1997. Such
OTC bid quotations reflect interdealer prices, without retail mark-up, markdown
or commission and may not necessarily represent actual transactions.
Quarter Ending High Bid Low Bid
- -------------- -------- -------
December 31, 1996 $3.000 $1.625
March 31, 1997 $2.125 $1.3125
June 30, 1997 $2.875 $1.3125
September 30, 1997 $1.375 $0.3125
December 31, 1995 $2.500 $1.375
March 30, 1996 $1.690 $1.440
June 30, 1996 $4.680 $1.810
September 30, 1996 $4.310 $2.500
On July 2, 1999 the low and high bid price per share for the Company's
common stock was $0.18 and $0.20, respectively.
As of July 2, 1999, there were approximately 6,802 holders of record of
the Company's common stock.
No cash dividends have been paid to the holders of the Common Stock
during the years ended December 31, 1997, 1996 and 1995.
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B-Warrants:
On January 14, 1997 the B-Warrants, which had been listed on the
National Association of Securities Dealers Automated Quotation Systems
Electronic Bulletin Board since September 30, 1996, expired and as such there
are no B-Warrants available for sale to the public or for sale by the public.
The following are the low and high bid prices for the B-Warrants for the
quarters ended September 30, 1996, December 31, 1996 and for the period from
December 31, 1996 through January 14, 1997.
Quarter Ending High Bid Low Bid
- -------------- -------- -------
September 30, 1996 $0.50 $0.48
December 31, 1996 $0.680 $0.12
December 31, 1996 through January 14, 1997
$0.12 $0.12
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Fiscal Year Ended September 30,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Selected Statements of Operations Data
Revenues $ 28,636 $ 24,538 $ 3,277 $ 29,764 $ 44,655
=========== =========== ========== =========== ==========
Loss Before Extraordinary Item ($2,348,898) ($2,597,937) ($1,772,429) ($2,604,658) ($3,671,988)
Extraordinary Gain on Debt
Extinguishment -- -- $1,781,128 -- --
------------ ----------- ---------- ---------- ----------
Net Income (Loss) ($2,348,898) ($2,597,937) $ 8,699 ($2,604,658) ($3,671,988)
=========== ========== ========= ========== ==========
Loss per Common Share:
Loss Before Extraordinary Item ($0.26) ($0.42) ($0.93) ($2.41) ($3.32)
Extraordinary Gain on Debt
Extinguishment -- -- $0.93 -- --
---- ---- ---- ---- ----
Net Income (Loss) per Common Share ($0.26) ($0.42) -- ($2.41) ($3.32)
====== ======= ====== ======= =======
Weighted Average Number of Common
Shares 9,075,433 5,843,633 1,907,431 1,227,222 1,214,526
========= ========= ========= ========= =========
Selected Balance Sheet Data
Working Capital (Deficiency) ($ 676,139) $ 8,109 ($ 770,388) ($4,128,894) ($2,136,596)
========== ========= ========== ========== ==========
Total Assets $ 347,131 $ 961,964 $1,275,296 $ 199,751 $ 211,072
========= ========= ========= ========== ==========
Total Liabilities $ 814,125 $ 632,589 $2,431,304 $4,166,080 $2,168,543
========= ========= ========= ========= ==========
Shareholders' Equity (Deficit) ($ 466,994) $ 329,375 ($1,156,008) ($3,966,329) ($1,957,471)
========= ========= ========= ========= ==========
</TABLE>
All share and per share information has been retroactively adjusted to
reflect 0.7 for 1 stock split affected April 1995.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in conjunction
with the Financial Statements of the Company and notes thereto annexed hereto.
Liquidity and Capital Resources
Reference is made to "Management's Discussion and Analysis of Financial
Condition and Results of Operation-Liquidity and Capital Resources" of the 1996
Form 10-K, Part II, Item 7, as to Registrant's lack of revenues and dependence
upon the sale of its securities to fund the operations of the Registrant. Such
dependence continued throughout the fiscal year ended September 30, 1997 as the
Registrant had minimal revenues. Due to the lack of any meaningful revenue
stream and a working capital shortage, in early 1998, the Company suspended its
operations and concentrated its efforts on raising working capital. In the
interim, the landlord seized all furniture, fixtures, inventory and equipment at
the Company's premises. The Company has not conducted any business operations
since October 15, 1997, other than to search for investment capital, a source of
debt financing, an entity to purchase the Company or a merger or joint venture
partner. Such efforts were unsuccessful.
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On April 28, 1999, in a share exchange with The Trinity Group, Inc.
("Trinity"), a privately held Delaware corporation, the Company acquired all of
the issued and outstanding shares, common and preferred, of SES Acquisition
Corp. in exchange for 85% of the equity and voting power of the Company
consisting of 10,571,607 shares of Common Stock and 93,654 shares of Series A 2%
Voting Convertible Redeemable Preferred Stock (the "Series A Preferred Stock")
of the Company. Pursuant to the terms of, the Agreement and Plan of
Reorganization, the current shareholders of the Company wi1l retain 10% of the
ownership of the Company consisting of 9,428,393 shares of the Common Stock of
the Company and certain creditors of the Company will receive 6,346 shares of
the Series A Preferred Stock in exchange for their debt of $648,365, in the
aggregate. Such shares, on conversion, will equal 5% of the equity and voting
power of the company.
The Agreement and Plan or Reorganization requires that SES Acquisition
corp. and its subsidiaries have a minimum combined net worth of not less than
$1,500,000.
SES Acquisition Corp. is the sole stockholder of Sequentia1 Electronic
Systems, Inc. which designs and manufacturers electro-optical products and
S-Tech, Inc. which designs and manufactures specialized vending machines and a
variety of avionics equipment. It also owns a 50.1% interest in FMX, Inc. which
is developing electronic fingerprint identification technology. The operations
of the Company subsequent to the stock exchange will be that of SES Acquisition
Corp.
During the 1997 year, the company was successful in obtaining through
private placements, working capital aggregating $1,200,721, as well as proceeds
of $348,808 from the exercise of stock warrants. However, no significant sales
orders were received during the current year. During the same period, cash used
in operating activities amounted to $1,911,615. As the Company had a beginning
cash balance of $404,986, by year end only $34,566 of cash reserves were left.
On October 15, 1997, the Company suspended its operations, pending its April 28,
1999 reorganization discussed above.
Results of Operations
During the thirty-six month period from October 1. 1994 to September
30, 1997, the Registrant's revenues from sales aggregated to approximately
$56,500 (inclusive of interest revenues) as contrasted to the cost and expenses
of operations during this thirty-six month period aggregating approximately
$6,775,700. Of these costs and expenses, research and development during this
thirty-six month period aggregated approximately $3,338,600; selling, general
and administrative expenses totaled approximately $3,092,300, and interest and
amortization of debt cost aggregated approximately $152,700, for a total of
$6,583,600. Included in the $3,092,300 were the bankruptcy administration costs
of approximately $260,000, which cost should be non-recurring.
The following is an analysis of the results of operations for the last
three fiscal years ended September 30, 1997, 1996 and 1995.
For the Year Ended September 30, 1997
During this annual period, the Registrant had commercial sales
aggregating $24,308, principally for test orders. However, as discussed above,
the Registrant was unable to overcome its working capital shortage and make a
sustained sales effort that might have resulted in additional revenues. Research
and development costs were $1.2 million versus $1.3 million in the prior year.
These costs were necessitated by the continuing effort to refine the operation
of the Chek/One, Chek/Ten, and Booking Station versions of its products.
Selling, general and administrative expenses decreased $275,000 from $1,203,000
to $928,000, due to the down-sizing of the Company and resolution of prior
issues requiring $120,000 of professional fees in prior years. Interest costs
also decreased, as old obligations were substantially reduced in the current
year. Due to the suspension of operations, in 1997 a charge of $191,983 was
recorded to reflect a write-down of inventory and property and equipment to
their estimated market values.
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For the Year Ended September 30, 1996
During this annual period, the Registrant had no sales revenue. The
prior fiscal year, as noted below, had revenues of $268. Research and
development costs were $1,358,059 as compared to the prior fiscal year of
$751,437. These increased research and development costs were attributable to
refining the operation of the Chek/One, attempting to achieve F.B.I. standards
for the Chek/Ten, and manufacturing proto-types for the Chek/One, Chek/Ten and
the Booking Station for "beta testing" by prospective customers. Selling,
general and administrative costs for this fiscal year were $1,203,020 as
contrasted to $701,246 in the prior fiscal year. The approximate $502,000
increase in these costs were in part attributable to having five additional full
time employees plus five other employees who had worked for only part of the
prior fiscal year. In addition, approximately $120,000 was paid in accounting
and legal fees to enable the Registrant to update the disclosure and financial
statements required under the S12 of the Securities Exchange Act for the three
prior fiscal years and a four month stub period. The debt expense on the moneys
owed to SIS Capital Corp. pursuant to the Second Amended Plan of Reorganization
of $61,396 as compared to $62,985 in the prior year.
For the Year Ended September 30, 1995
During the period, the Registrant had only $268 in sales revenues.
Research and development was $751,437 as compared to the prior fiscal period of
$760,549. The research and development costs were expended on development of the
LPS-12 (now the Chek/One), the LPS-14 (now the Chek/Ten), and the Booking
Station. Selling and general administration costs were $701,246 as compared to
$788,329 for the year ended September 30, 1994.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk.
Not applicable
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data begin on page F-1 of
this Form 10-K.
Item 9. Changes and Disagreements with Accountants on Accounting
and Financial Disclosure
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FINGERMATRIX, INC.
Date: August 3, 1999 /S/________________________________
Lewis S. Schiller
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following personal on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature Title Date
- --------- ---- ----
/S/________________ Chief Executive Officer and August 3, 1999
Lewis S. Schiller Chairman of the Board
(Principal Executive and
Accounting Officer)
/S/________________ President August 3, 1999
Fred Zivitofosky
/S/________________ Secretary and Vice-President August 3, 1999
Grazyna B. Wnuk
/S/________________ Director August 3, 1999
Gerald Kay
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