UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Amendment No. 2
To
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 28, 1999
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)
(914) 592-5930
(Registrant's telephone number, including area code)
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<PAGE>
Item 1. Changes in Control of Registrant
As previously reported, on April 28, 1999, in a share exchange with The
Trinity Group, Inc. ("Trinity"), a privately held Delaware Corporation, the
Registrant 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 Registrant consisting of 10,571,607 shares of common stock and
93,654 shares of series A 2% Voting Convertible Redeemable Preferred stock of
the Registrant.
SES Acquisition Corp. is the sole stockholder of Sequential Electronic
System, Inc., which designs and manufactures 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 share exchange transaction is accounted for as a reverse
acquisition, with SES Acquisition Corp. being the surviving company for
accounting purposes. In accounting for the reverse acquisition, the equity of
SES Acquisition Corp., as the surviving company, and Fingermatrix, as the
acquired company, has been recapitalized and the financial statements reflect
the results of operations of the Company and SES Acquisition Corp. from the date
of the reverse acquisition forward. The financial statements prior to the date
of the reverse merger reflect the financial position and results of operations
of SES Acquisition Corp.
This report amends the Registrant's report on Form 8-K, initially filed
on May 13, 1999 to provide the pro forma combined financial statements of the
Registrant and Sequential Electronic Systems, Inc., S-Tech, Inc.
and FMX, Inc.
Item 7. Financial Statements and Exhibits.
F-1 Pro Forma Combined Financial Statements of the Registrant and
Sequential Electronic Systems, Inc., S-Tech, Inc. and FMX, Inc.
2
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
/S/______________ Chief Executive Officer and Director November 4, 1999
Lewis S. Schiller (Principal Executive and Accounting Officer)
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<PAGE>
Fingermatrix, Inc.
Pro Forma Condensed Combined Financial Statements
Unaudited
The following pro forma condensed combined balance sheet as of March
31, 1999 and the condensed combined statement of operations for the three months
ended March 31, 1999 and the year ended December 31, 1998 give affect to
Fingermatrix, Inc.'s ("Fingermatrix" or the "Company") reverse acquisition with
SES Acquisition Corp.
("SESA").
The pro forma financial information is based on the historical
financial statements of Fingermatrix and SESA's subsidiaries Sequential
Electronic Systems , Inc. ("SES"), S-Tech, Inc. ("S-Tech") and FMX, Inc. ("FMX")
as of March 31, 1999 and for the three months ended March 31, 1999 and the year
ended December 31, 1998, giving effect to the reverse acquisition and the
assumptions and adjustments in the accompanying notes to the pro forma financial
statements.
The pro forma balance sheet gives effect to the reverse acquisition as
if it occurred on the balance sheet date. The pro forma statement of operations
for the three months ended March 31, 1999 and the year ended December 31, 1998
give effect to the reverse acquisition as if it had occurred at the beginning of
the respective periods.
The pro forma combined financial statements have been prepared by the
Company's management based upon the historical financial statements of
Fingermatrix and SESA's subsidiaries. These pro forma financial statements may
not be indicative of what would have occurred if the reverse acquisition had
actually occurred on the indicated dates and they may not be indicative of
future results of operations.
F-1
<PAGE>
Fingermatrix, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 1999
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
----------------------------------------------------- --------------------- Pro Forma
Fingermatrix SES S-Tech FMX Debit Credit Combined
------------ --- ------ --- ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents -- $ 45,163 $ 28,243 -- -- -- $ 73,406
Inventories, net -- 1,632,625 637,694 -- -- -- 2,270,319
Accounts receivable, net -- 249,306 41,433 -- -- -- 290,739
Other current assets -- 32,580 3,151 $ 8,348 -- -- 44,079
---------- -------- ------ ----------
Total current assets -- 1,959,674 710,521 8,348 -- -- 2,678,543
---------- -------- ------ ----------
Furniture, fixtures and
equipment, net $ 90,000 30,993 22,254 -- -- -- 143,247
-------- ---------- -------- ------- ----------
Other assets:
Patents, net 97,833 -- -- -- -- -- 97,833
Other assets -- 27,921 18,168 -- -- -- 46,089
-------- ---------- -------- ------- ----------
Total other assets 97,833 27,921 18,168 -- -- -- 143,922
-------- ---------- -------- ------- ----------
Total assets $ 187,833 $ 2,018,588 $ 750,943 $ 8,348 -- -- $ 2,965,712
======== ========== ======== ======= ==========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-2
<PAGE>
Fingermatrix, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 1999
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
----------------------------------------------------- ----------------------- Pro Forma
Fingermatrix SES S-Tech FMX Debit Credit Combined
------------ --- ------ --- ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Liabilities and shareholders'
equity:
Liabilities:
Loan payable, related party -- $ 361,110 $ 260,533 -- -- $ 621,643
Current debt $ 425,000 448,543 -- $ 425,000 A -- 448,543
Accounts payable trade 274,166 146,049 155,513 116,734 A -- 458,994
Accrued expenses 108,803 175,694 132,585 $ 5,687 113,063 A -- 309,706
Capitalized lease obligations -- 20,965 -- -- -- -- 20,965
----------- ---------- --------- ------- -------- ----------
Current liabilities 807,969 1,152,361 548,631 5,687 654,797 -- 1,859,851
----------- ---------- --------- ------- -------- ----------
Shareholders' equity (deficit):
Preferred stock, at par -- -- -- -- -- $ 63 A 1,000
937 B
Additional paid-in capital,
preferred stock -- -- -- -- -- 1,084,202 A 1,084,202
Common stock, at par 94,294 1,000 1,500 100 2,600 B 105,706 B 200,000
Additional paid-in-capital,
common stock 61,993,172 3,690,000 4,176,881 900 62,912,958 B -- 6,947,995
Accumulated deficit (62,707,602) (2,824,773) (3,976,069) 1,661 429,468 A 62,808,915 B (7,127,336)
---------- ---------- --------- ------- ---------- ---------- ---------
Total shareholders' equity
(deficit) (620,136) 866,227 202,312 2,661 63,345,026 63,999,823 1,105,861
---------- ---------- --------- ------- ---------- ---------- ---------
Total liabilities and
shareholders' equity
(deficit) $ 187,833 $ 2,018,588 $ 750,943 $ 8,348 $63,999,823 $63,999,823 $2,965,712
=========== ========== ========= ======= ========== ========== =========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-3
<PAGE>
Fingermatrix, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
for the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
----------------------------------------------------- --------------------- Pro Forma
Fingermatrix SES S-Tech FMX Debit Credit Combined
------------ --- ------ --- ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales -- $ 468,233 $ 76,926 -- -- -- $ 545,159
Cost of sales -- 284,939 115,158 -- -- -- 400,097
--------- --------- ----------
Gross profit -- 183,294 (38,232) -- -- -- 145,062
--------- --------- ----------
Costs and expenses:
Compensation expense from
issuance of stock -- -- -- -- $ 429,468 A -- 429,468
Selling, general and
administrative expense -- 290,757 71,523 -- -- -- 362,280
Interest and financing fees $ 10,531 39,587 -- -- -- -- 50,118
Depreciation and amortization 3,552 4,880 11,496 -- -- -- 19,928
--------- --------- --------- --------- ----------
Total costs and expenses 14,083 335,224 83,019 -- 429,468 -- 861,794
--------- --------- --------- --------- ----------
Loss before extraordinary item (14,083) (151,930) (121,251) (429,468) -- (716,732)
Extraordinary gain on debt
forgiveness 115,396 -- -- -- -- -- 115,396
--------- --------- --------- --------- ----------
Net income (loss) $ 101,313 $ (151,930) $ (121,251) -- $ (429,468) -- $ (601,336)
========= ========= ========= ========= ==========
Basic and diluted earnings
(loss) per common share:
Loss before extraordinary item $ (0.00) $ (0.04)
Extraordinary gain on debt
forgiveness $ 0.01 $ 0.01
--------- ----------
Net income (loss) $ 0.01 $ (0.03)
========= ==========
Weighted average number of
common shares 9,429,400 20,000,000
========= ==========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-4
<PAGE>
Fingermatrix, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
for the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Historical Pro Forma Adjustments
----------------------------------------------------- --------------------- Pro Forma
Fingermatrix SES S-Tech FMX Debit Credit Combined
------------ --- ------ --- ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales -- $ 2,184,487 $ 586,814 -- -- -- $ 2,771,301
Cost of sales -- 1,712,898 663,607 -- -- -- 2,376,505
---------- ---------- ----------
Gross profit -- 471,589 (76,793) -- -- -- 394,796
---------- ---------- ----------
Costs and expenses:
Compensation expense from
issuance of stock -- -- -- -- $ 429,468 A -- 429,468
Selling, general and
administrative expense $ 160,000 688,477 264,040 $ 1,216 -- -- 1,113,733
Interest and financing fees 50,000 134,400 5,367 -- -- -- 189,767
Depreciation and amortization -- 26,790 45,491 -- -- -- 72,281
--------- ---------- ---------- ------ -------- ----------
Total costs and expenses 210,000 849,667 314,898 1,216 429,468 1,805,249
--------- ---------- ---------- ------ -------- ----------
Net loss $ (210,000) $ (378,078) $ (391,691) $(1,216) $(429,468) $(1,410,453)
========= ========== ========== ====== ======== ==========
Basic and diluted loss per common
share $ (0.02) $ (0.07)
========= ==========
Weighted average number of common
shares 9,429,400 20,000,000
========= ==========
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
F-5
<PAGE>
Fingermatrix, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note A - Extinguishment of Subordinated Debt
As a part of the reverse acquisition, certain creditors of the Company
accepted 6,346 shares of the Series A Preferred Stock in exchange for their
aggregate debt, which had a book value of approximately $654,797. The 6,346
Series A Preferred shares have an aggregate par value of $63 and are convertible
into 4,714,443 common shares of the Company and using the Black-Scholes option
valuation formula, the value of such shares was determined to be approximately
$1,084,202, resulting in $429,468 of compensation expense from issuance of the
stock. The pro forma adjustments related to the debt extinguishment are as
follows:
Valuation of the preferred stock:
Preferred, par value (6,346 shares at $0.01 par value) $ 63
Additional paid-in capital, preferred stock 1,084,202 $1,084,265
---------
Obligations extinguished at book value:
Current debt 425,000
Accounts payable, trade 116,734
Accrued expenses 113,063 654,797
--------- -------
Compensation Expense $ 429,468
=========
Note B - Recapitalization of Equity
As a part of the reverse acquisition, the Company acquired all of the
issued and outstanding shares, common and preferred, of SESA 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 of the Company.
In accounting for the reverse acquisition, the equity of SESA, as the
surviving company, and Fingermatrix, as the acquired company, is recapitalized
whereby, the beginning period balance in the accumulated deficit account
reflects the beginning accumulated deficit of SESA and the preferred and common
capital accounts reflect that of the Company. The pro forma adjustments related
to the share exchange are as follows:
F-6
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Fingermatrix, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
<TABLE>
<CAPTION>
<S> <C> <C>
Share exchange:
Issuance of the Company's stock:
Preferred stock (93,654 at $0.01 par value) $ 937
Common stock (10,571,607 shares at $0.01 par value) 105,706
Elimination of SESA capital accounts:
Common, par values (2,600)
Recapitalize Fingermatrix's prior accumulated deficit:
Fingermatrix historical accumulated deficit $ (62,707,602)
Less net income for the three months ended March 31, 1999
(101,313) 62,808,915
-------------- -----------
Recapitalization to additional paid-in capital, common $ 62,912,958
===========
</TABLE>
F-7
