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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): MARCH 26, 1996
Commission File Number: 1-9641
IDENTIX INCORPORATED
--------------------
(Exact name of registrant as specified in its charter)
California 94-2842496
- --------------------------------------------- --------------------------------
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
510 North Pastoria Avenue, Sunnyvale, California 94086
- ------------------------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 408-739-2000
<PAGE> 2
IDENTIX INCORPORATED
INDEX
Item 7 Financial Statements and Exhibits
(a) The following financial statements are filed with this
report:
(1) The Bio Recognition Systems Pty Limited, the
predecessor entity to Fingerscan Pty Limited,
financial statements for the fiscal years ended June
30, 1995, 1994, 1993, including the signed report of
Price Waterhouse Chartered Accountants.
(2) The Fingerscan Pty Limited unaudited balance sheet as
of December 31, 1995 and statement of operations and
statement of cash flows for the six months ended
December 31, 1995 and the Bio Recognition Pty Limited
unaudited statement of operations and statement of
cash flows for the six months ended December 31,
1994.
(b) The following unaudited pro forma combined financial
statements are filed with this report:
Unaudited pro forma combined balance sheet of Identix
Incorporated and Fingerscan Pty Limited as of
December 31, 1995, and unaudited pro forma combined
statement of operations for the six month period
ended December 31, 1995; and unaudited pro forma
combined statement of operations of Identix
Incorporated and Bio Recognition Systems Pty Limited
for the year ended June 30, 1995.
(c) The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
(7.1) The Bio Recognition Systems Pty Limited
audited balance sheets as of June 30, 1995,
1994 and 1993 and statements of operations and
statements of cash flows for the fiscal years
ended June 30, 1995, 1994 and 1993, including
the signed report of Price Waterhouse
Chartered Accountants. The Fingerscan Pty
Limited unaudited balance sheet, statement of
operations and statement of cash flows for the
six month period ended December 31, 1995. The
Bio Recognition Systems Pty Limited unaudited
statement of operations and statement of cash
flows for the six month period ended December
31, 1994.
(7.2) Unaudited pro forma combined balance sheet of
Identix Incorporated and Fingerscan Pty
Limited as of December 31, 1995, and unaudited
pro forma combined statements of operations
for the six month period ended December 31,
1995; and unaudited pro forma combined
statement of operations of Identix
Incorporated and Bio Recognition Systems Pty
Limited for the year ended June 30, 1995.
(23.1) Consent of Price Waterhouse, Independent
Accountants
</TABLE>
2
<PAGE> 3
IDENTIX INCORPORATED
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.
IDENTIX INCORPORATED
June 7, 1996
BY: /s/James P. Scullion
-----------------------------------
James P. Scullion
Chief Financial Officer
Vice President of Finance
3
<PAGE> 4
IDENTIX INCORPORATED
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit
Number Index
- ------ -----
<S> <C>
7.1 The Bio Recognition Systems Pty Limited audited balance
sheets as of June 30, 1995, 1994 and 1993 and statements
of operations and statements of cash flows for the fiscal
years ended June 30, 1995, 1994 and 1993, including the
signed report of Price Waterhouse Chartered Accountants.
The Fingerscan Pty Limited unaudited balance sheet,
statement of operations and statement of cash flows for
the six month period ended December 31, 1995. The Bio
Recognition Systems Pty Limited unaudited statement of
operations and statement of cash flows for the six month
period ended December 31, 1994.
7.2 Unaudited pro forma combined balance sheet of Identix
Incorporated and Fingerscan Pty Limited as of December 31,
1995, and unaudited pro forma combined statements of
operations for the six month period ended December 31,
1995; and unaudited pro forma combined statement of
operations of Identix Incorporated and Bio Recognition
Systems Pty Limited for the year ended June 30, 1995.
23.1 Consent of Price Waterhouse, Independent Accountants
</TABLE>
4
<PAGE> 1
IDENTIX INCORPORATED
EXHIBIT 7.1
5
<PAGE> 2
IDENTIX INCORPORATED
INDEX TO EXHIBIT 7.1
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Bio Recognition Systems Pty Limited Audited Financial
Statements For The Year Ended June 30, 1995 ............................. 8
Bio Recognition Systems Pty Limited Audited Financial
Statements For The Year Ended June 30, 1994 ............................. 20
Bio Recognition Systems Pty Limited Audited Financial
Statements For The Year Ended June 30, 1993 ............................. 32
Fingerscan Pty Limited Unaudited Financial Statements
For The Six Month Period Ended December 31, 1995 ........................ 44
Bio Recognition Systems Pty Limited Unaudited Financial
Statements For The Six Month Period Ended December 31, 1994 ............. 51
Report of Independent Accountants for the Fiscal Years Ended June 30, 1995,
1994 and 1993 ........................................................... 55
</TABLE>
6
<PAGE> 3
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
CHANGE IN LEGAL ENTITY
On August 14, 1995, Bio Recognition Systems Pty Limited ("BRS") sold its rights
to its technology to Fingerscan Pty Limited in which a company owned by two
directors of BRS have a 51% shareholding. From that date, all trading associated
with BRS's technology was under taken by Fingerscan Pty Limited.
7
<PAGE> 4
BIO RECOGNITION SYSTEMS PTY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1995
8
<PAGE> 5
BIO RECOGNITION SYSTEMS PTY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
NOTE 1995 1994
USD USD
<S> <C> <C> <C>
OPERATING REVENUE 2 3,170,413 1,084,810
========= =========
Operating profit 3 840,906 197,968
Income tax attributable to operating profit 4 276,622 48,445
--------- ---------
OPERATING PROFIT AFTER INCOME TAX 564,284 149,523
--------- ---------
PROFIT ON ABNORMAL ITEMS AFTER INCOME TAX 3 561,643 -
--------- ---------
OPERATING PROFIT AND ABNORMAL ITEMS AFTER TAX 1,125,926 149,523
Retained profits at the beginning of the financial year 168,767 19,244
--------- ---------
Total available for appropriation 1,294,693 168,767
--------- ---------
Retained profits at the end of the financial year 1,294,693 168,767
========= =========
</TABLE>
The accompanying notes form an integral part of these financial statements.
9
<PAGE> 6
BIO RECOGNITION SYSTEMS PTY LIMITED
BALANCE SHEET
AS OF JUNE 30, 1995
<TABLE>
<CAPTION>
NOTE 1995 1994
USD USD
<S> <C> <C> <C>
CURRENT ASSETS
Cash 781,794 195,876
Receivables 5 1,031,777 211,391
Inventories 6 44,671 24,345
--------- -------
TOTAL CURRENT ASSETS 1,858,242 431,612
--------- -------
NON CURRENT ASSETS
Property, plant and equipment 7 34,253 26,315
Other 8 - 185
--------- -------
TOTAL NON-CURRENT ASSETS 34,253 26,500
--------- -------
TOTAL ASSETS 1,892,495 458,112
--------- -------
CURRENT LIABILITIES
Creditors and borrowings 9 158,917 225,515
Provisions 10 470,643 52,975
--------- -------
TOTAL CURRENT LIABILITIES 629,560 278,490
--------- -------
NON-CURRENT LIABILITIES
Creditors and borrowings 9 - 2,292
Other 11 2,085 3,253
--------- -------
TOTAL NON-CURRENT LIABILITIES 2,085 5,545
--------- -------
TOTAL LIABILITIES 631,645 284,035
--------- -------
NET ASSETS 1,260,850 174,077
========= =======
SHAREHOLDERS EQUITY
Share capital 12 127 127
Retained profits 1,294,693 168,767
Foreign currency translation reserve (33,970) 5,183
--------- -------
TOTAL SHAREHOLDERS' EQUITY 1,260,850 174,077
========= =======
</TABLE>
The accompanying notes form an integral part of these financial statements.
10
<PAGE> 7
BIO RECOGNITION SYSTEMS PTY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
NOTE 1995 1994
USD USD
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors 3,184,260 880,433
Payment to trade creditors, other suppliers
and creditors and employees (2,430,226) (695,458)
Interest received 32,875 3,392
Interest paid (332) (941)
Income tax paid (127,063) (5,628)
---------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 15 659,514 181,798
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (33,459) (8,479)
Proceeds from sale of property, plant and equipment 5,269 22,825
Advances to associates (11,395) -
---------- --------
NET CASH FLOWS FROM INVESTING ACTIVITIES (39,585) 14,346
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of borrowings (9,808) (17,688)
---------- --------
Net cash flows from financing activities (9,808) (17,688)
========== ========
Net increase in cash held 610,121 178,456
Cash at the beginning of the financial year 195,876 26,135
Effect of exchange rate changes on cash (24,203) (8,715)
---------- --------
CASH AT THE END OF THE FINANCIAL YEAR 15 781,794 195,876
========== ========
</TABLE>
The accompanying notes form an integral part of these financial statements.
11
<PAGE> 8
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial
statements of the Company, Bio Recognition Systems Pty Limited, are stated
to assist in a general understanding of these financial statements. These
policies have been consistently applied except as otherwise indicated.
A) BASIS OF ACCOUNTING
These accounts are a special purpose financial report which has been
prepared for the sole purpose of complying with filing requirements with
the US Securities and exchange commission and must not be used for any
other purpose.
The accounts have been prepared on the basis of historical costs and
except where stated do not take into account current valuations of
non-current assets.
The accounts have been prepared in accordance with applicable accounting
standards.
B) FOREIGN CURRENCY
Transactions denominated in a foreign currency are converted at the
average exchange rate during the year. Foreign currency receivables and
payables at balance date are translated at exchange rates at balance date.
Exchange gains and losses are brought to account in determining the profit
or loss for the year.
C) DEPRECIATION AND AMORTISATION OF PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are depreciated over their estimated useful
lives using the straight line method.
D) LEASED ASSETS
Assets acquired under finance leases are included as property, plant and
equipment in the balance sheet. Finance leases effectively transfer from
the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property. Where assets are acquired
by means of finance leases, the present value of the minimum lease
payments is recognised as an asset at the beginning of the lease term and
amortised on a straight line basis over the expected useful life of the
leased asset. A corresponding liability is also established and each lease
payment is allocated between the liability and finance charge.
Other leases under which all the risks and benefits of ownership are
effectively retained by the lessor are classified as operating leases.
Operating lease payments are charged to expense over the period of
expected benefit.
12
<PAGE> 9
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
E) EXPENDITURE CARRIED FORWARD
Research and development costs are charged to expense except where
deferred to the extent that such costs are expected by the directors to be
recoverable beyond any reasonable doubt. Deferred costs are amortised on a
straight line basis from the commencement of the commercial production of
the product to which they relate over the period of their expected benefit
but not exceeding five years.
F) RECEIVABLES
Trade accounts receivable are carried at amounts due. A provision is
raised for any doubtful debts based on a review of all outstanding amounts
at balance date. Bad debts are written off during the period in which they
are identified.
G) EMPLOYEE ENTITLEMENTS
Liabilities for employees' entitlements to wages and salaries, annual
leave, sick leave and other current employee entitlements are accrued at
nominal amounts calculated on the basis of current wage and salary rates.
H) SERVICE WARRANTIES
No provision is made for service warranty liabilities as any warranty
costs are reclaimable from suppliers.
I) INCOME TAX
Income tax has been brought to account using the liability method of tax
effect accounting.
J) OPERATING REVENUE
Sales revenue represents revenue earned from the sale of the company's
products and services, net of returns, trade allowances and duties and
taxes paid.
Grant revenue is accounted for on a cash received basis and represents
revenue received from Government subsidies relating to research and
development.
K) CASH FLOWS
For the purpose of the statements of cash flows, cash includes cash on
hand and deposits held at call with banks and deposits held at call with
non-bank entities.
13
<PAGE> 10
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
2. OPERATING REVENUE
Sales revenue 2,967,453 959,017
Other revenue
Interest revenue 32,875 3,392
Grants received 163,503 121,543
Sundry 6,582 858
--------- ---------
3,170,413 1,084,810
========= =========
3. OPERATING PROFIT
(i) Operating profit before income tax has been determined after:
CREDITING
Net gain on foreign currency transactions 1,860 -
CHARGING AS AN EXPENSE
Depreciation 12,746 8,966
Amortisation on finance leases 720 1,581
Net loss on foreign currency transaction - 1,230
Development costs 8,576 114,353
Interest and charges attributable to other persons 4,053 1,741
Superannuation contributions 14,996 4,989
Accounting services 10,582 4,895
Loss on sale of non-current assets 7,945 -
Loss on transfer of non-current assets - 4,849
Finance charges relating to finance leases 332 770
========= =========
(ii) Abnormal item included in operating profit before income tax
Sale of intellectual property 838,273 -
Income tax attributable thereto 276,630 -
--------- ---------
561,643 -
========= =========
</TABLE>
14
<PAGE> 11
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
4. INCOME TAX
The amount of income tax attributable to the financial year differs from
the amount prima facie payable on the operating profit on the abnormal
item, the differences are reconciled as follows:
PRIMA FACIE INCOME TAX ON THE OPERATING AND ABNORMAL
PROFIT AT 33% (1994 AT 33%) 277,499 65,329
Tax effect of permanent differences which
INCREASE TAX PAYABLE
Sundry items 584 960
REDUCE TAX PAYABLE
Research and development expense - 17,720
Unrealised exchange gain 1,461 -
Other - 124
--------- -------
Income tax attributable to operating profit 276,622 48,445
========= =======
5. RECEIVABLES
Trade debtors 137,022 184,061
Other debtors 860,323 4,293
Loans to related parties 34,432 23,037
--------- -------
1,031,777 211,391
========= =======
6. INVENTORIES
Finished goods at cost 44,671 24,345
========= =======
</TABLE>
15
<PAGE> 12
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
7. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
ACCUMULATED WRITTEN DOWN
COST DEPRECIATION VALUE
1995 1994 1995 1994 1995 1994
USD USD USD USD USD USD
<S> <C> <C> <C> <C> <C> <C>
Office equipment 27,978 13,791 9,110 4,911 18,868 8,880
Furniture and fittings 3,334 3,116 1,513 916 1,821 2,200
Plant and equipment
under finance lease 8,720 4,360 8,720 3,936 - 424
Development equipment 29,032 24,854 15,468 10,043 13,564 14,811
------ ------ ------ ------ ------ ------
69,064 46,121 34,811 19,806 34,253 26,315
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
8. OTHER ASSET
Future Income Tax Benefit - 185
======= =======
9. CREDITORS AND BORROWINGS
CURRENT
Trade creditors 45,045 -
Other creditors and accruals 97,494 224,139
Lease liabilities - 1,376
Unearned income 16,378 -
------- -------
158,917 225,515
======= =======
NON-CURRENT
Lease liabilities - 2,292
======= =======
10. PROVISIONS
Income tax 470,643 52,975
======= =======
</TABLE>
16
<PAGE> 13
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
11. OTHER LIABILITIES
Deferred tax 2,085 3,253
====== ======
12. SHAREHOLDERS' EQUITY
Authorised capital
100,000 ordinary shares of A$1 each 74,560 74,560
====== ======
Issued capital
170 ordinary shares of A$1 each fully paid 127 127
====== ======
13. LEASE COMMITMENTS
Finance lease commitments contracted for at balance date:
Payable not later than one year - 1,917
Payable later than one year, not later than two years - 2,592
------ ------
Total minimum lease payments - 4,509
Deduct future finance changes - 841
------ ------
Lease liability - 3,668
====== ======
Current liability - 1,376
Non-current liability - 2,292
------ ------
- 3,668
====== ======
</TABLE>
17
<PAGE> 14
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
14. RELATED PARTY INFORMATION
DIRECTORS
The following directors each held office as a director for the year ended
30 June 1995.
John Parselle
Helen Parselle
Michael Milne Home
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
DIRECTORS' REMUNERATION
Income received or due and receivable by directors from the company 159,369 118,102
======= =======
</TABLE>
The number of directors included in these figures are shown below in their
relevant income bands:
<TABLE>
<CAPTION>
Income of NUMBER NUMBER
<S> <C> <C>
$20,000 to $29,999 1 1
$40,000 to $49,999 - 2
$60,000 to $69,999 2 -
------ ------
3 3
====== ======
</TABLE>
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
DIRECTORS' SUPERANNUATION
Annual contributions to superannuation funds on behalf of directors 6,141 3,555
====== ======
OTHER TRANSACTIONS WITH DIRECTORS AND DIRECTOR-RELATED ENTITIES
DURING THE YEAR THE COMPANY:
Paid motor vehicle lease payments on behalf of a director 9,398 5,790
Paid salaries to children of directors 6,329 2,754
====== ======
Loan amount to a company owned by 2 directors at interest free terms
Amount advanced during the year 31,373 -
Loan amount to John and Helen Parselle at interest free terms
Amount advanced during the year - 23,037
====== ======
</TABLE>
18
<PAGE> 15
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1995
<TABLE>
<CAPTION>
1995 1994
USD USD
<S> <C> <C>
Transferred asset to director at a loss to the company, which
was subsequently reimbursed - 4,849
======= ========
15. CASH FLOW INFORMATION
RECONCILIATION OF CASH
Cash at bank 781,794 195,876
======= ========
RECONCILIATION OF NET CASH FLOWS FROM OPERATING
ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX
Operating profit after income tax 564,284 149,523
Depreciation and amortisation 10,923 10,547
Loss on sale of property, plant and equipment 7,945 -
Loss on transfer of property, plant and equipment - 4,849
Increase in income tax payable 150,541 44,321
Decrease in Deferred Tax Liability (1,168) (1,727)
Decrease in Future Income Tax Benefit 185 223
Changes in assets and liabilities
(Increase)/decrease in trade debtors 45,528 (199,337)
Increase in inventories (20,326) (12,128)
Increase/(decrease) in creditors and accruals (98,398) 185,527
------- --------
Net inflows from operating activities 659,514 181,798
======= ========
16. EARNINGS PER SHARE
Basic earnings per share 6,623 880
Weighted average number of ordinary shares
on issued used in the calculation of basic
earnings per share 170 170
</TABLE>
19
<PAGE> 16
BIO RECOGNITION SYSTEMS PTY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1994
20
<PAGE> 17
BIO RECOGNITION SYSTEMS PTY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
NOTE 1994 1993
USD USD
<S> <C> <C> <C>
OPERATING REVENUE 2 1,084,810 530,931
========= =======
Operating profit 3 197,968 59,129
Income tax attributable to operating profit 4 48,445 22,306
--------- -------
OPERATING PROFIT AFTER INCOME TAX 149,523 36,823
--------- -------
Retained profits/(losses) at the beginning of the financial year 19,244 (17,579)
--------- -------
Total available for appropriation 168,767 19,244
--------- -------
Retained profits/(losses) at the end of the financial year 168,767 19,244
========= =======
</TABLE>
The accompanying notes form an integral part of these financial statements.
21
<PAGE> 18
BIO RECOGNITION SYSTEMS PTY LIMITED
BALANCE SHEET
AS OF JUNE 30, 1994
<TABLE>
<CAPTION>
NOTE 1994 1993
USD USD
<S> <C> <C> <C>
CURRENT ASSETS
Cash 195,876 26,135
Receivables 5 211,391 12,054
Inventories 6 24,345 12,217
------- ------
TOTAL CURRENT ASSETS 431,612 50,406
------- ------
NON CURRENT ASSETS
Property, plant and equipment 7 26,315 41,175
Other 8 185 408
------- ------
TOTAL NON-CURRENT ASSETS 26,500 41,583
------- ------
TOTAL ASSETS 458,112 91,989
------- ------
CURRENT LIABILITIES
Creditors and borrowings 9 225,515 48,871
Provisions 10 52,975 8,654
------- ------
TOTAL CURRENT LIABILITIES 278,490 57,525
------- ------
NON-CURRENT LIABILITIES
Creditors and borrowings 9 2,292 10,589
Other 11 3,253 4,980
------- ------
TOTAL NON-CURRENT LIABILITIES 5,545 15,569
------- ------
TOTAL LIABILITIES 284,035 73,094
------- ------
NET ASSETS 174,077 18,895
======= ======
SHAREHOLDERS EQUITY
Share capital 12 127 127
Retained profits 168,767 19,244
Foreign currency translation reserve 5,183 (476)
------- ------
TOTAL SHAREHOLDERS' EQUITY 174,077 18,895
======= ======
</TABLE>
The accompanying notes form an integral part of these financial statements.
22
<PAGE> 19
BIO RECOGNITION SYSTEMS PTY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
NOTE 1994 1993
USD USD
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors 880,433 593,671
Payment to trade creditors, other suppliers (695,458) (574,027)
and creditors and employees
Interest received 3,392 597
Payment for interest and cost of finance (941) (3,743)
Income tax paid (5,628) -
-------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 15 181,798 16,498
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (8,479) (53,135)
Proceeds from sale of plant, property and equipment 22,825 -
-------- --------
NET CASH FLOWS FROM INVESTING ACTIVITIES 14,346 (53,135)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of borrowings (17,688) (30,438)
Proceeds from borrowings - 15,101
-------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES (17,688) (15,337)
-------- --------
Net increase/(decrease) in cash held 178,456 (51,974)
Cash at the beginning of the financial year 26,135 80,207
Effect of exchange rate changes on cash (8,715) (2,098)
-------- --------
CASH AT THE END OF THE FINANCIAL YEAR 15 195,876 26,135
======== ========
</TABLE>
The accompanying notes form an integral part of these financial statements.
23
<PAGE> 20
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial
statements of the company, Bio Recognition Systems Pty Limited, are
stated to assist in a general understanding of these financial
statements. These policies have been consistently applied except as
otherwise indicated.
A) BASIS OF ACCOUNTING
These accounts are a special purpose financial report which has been
prepared for the sole purpose of complying with Form 20F filing
requirements with the US Securities and Exchange commission and must
not be used for any other purpose. The accounts have been prepared on
the basis of historical costs and except where stated do not take into
account current valuations of non-current assets.
The accounts have been prepared in accordance with applicable
accounting standards.
B) FOREIGN CURRENCY
Transactions denominated in a foreign currency are converted at the
exchange rate at the date of the transaction. Foreign currency
receivables and payables at balance date are translated at exchange
rates at balance date. Exchange gains and losses are brought to account
in determining the profit or loss for the year.
C) DEPRECIATION AND AMORTISATION OF PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are depreciated over their estimated
useful lives using the straight line method.
D) LEASED ASSETS
Assets acquired under finance leases are included as property, plant
and equipment in the balance sheet. Finance leases effectively transfer
from the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property. Where assets are
acquired by means of finance leases, the present value of the minimum
lease payments is recognised as an asset at the beginning of the lease
term and amortised on a straight line basis over the expected useful
life of the leased asset. A corresponding liability is also established
and each lease payment is allocated between the liability and finance
charge.
Other leases under which all the risks and benefits of ownership are
effectively retained by the lessor are classified as operating leases.
Operating lease payments are charged to expense over the period of
expected benefit.
24
<PAGE> 21
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
E) EXPENDITURE CARRIED FORWARD
Research and development costs are charged to expense as incurred
except to the extent that such costs are expected by the directors to
be recoverable beyond any reasonable doubt. Deferred costs are
amortised on a straight line basis from the commencement of the
commercial production of the product to which they relate over the
period of their expected benefit but not exceeding five years.
F) RECEIVABLES
Trade accounts receivable are carried at amounts due. A provision is
raised for any doubtful debts based on a review of all outstanding
amounts at balance date. Bad debts are written off during the period in
which they are identified.
G) EMPLOYEE ENTITLEMENT
Liabilities for employees' entitlements to wages and salaries, annual
leave, sick leave and other current employee entitlements are accrued
at nominal amounts calculated on the basis of current wage and salary
rates.
H) SERVICE WARRANTIES
No provision is made for service warranty liabilities as any warranty
costs are reclaimable from suppliers.
I) INCOME TAX
Income tax has been brought to account using the liability method of
tax effect accounting.
J) OPERATING REVENUE
Sales revenue represents revenue earned from the sale of the company's
products and services, net of returns, trade allowances and duties and
taxes paid.
Grant revenue is accounted for on a cash received basis and represents
revenue received from Government subsidies relating to research and
development.
K) CASH FLOWS
For the purpose of the statements of cash flows, cash includes cash on
hand and deposits held at call with banks and deposits held at call
with non-bank entities.
25
<PAGE> 22
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
2. OPERATING REVENUE
Sales revenue 959,017 475,292
Other revenue
Interest revenue 3,392 597
Grants received 121,543 52,120
Sundry 858 2,922
--------- -------
1,084,810 530,931
========= =======
3. OPERATING PROFIT
OPERATING PROFIT BEFORE INCOME TAX HAS BEEN DETERMINED AFTER:
CREDITING
Net gain on foreign currency transactions - 2,135
CHARGING AS AN EXPENSE
Depreciation 8,966 3,678
Amortisation on finance leases 1,581 5,136
Net loss on foreign currency transaction 1,230 -
Development costs 114,353 12,926
Interest and charges attributable to other persons 1,741 2,010
Superannuation contributions 4,989 1,994
Accounting services 4,895 4,519
Loss on transfer of non-current assets 4,849 -
Finance charges relating to finance leases 770 3,417
========= =======
</TABLE>
26
<PAGE> 23
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
4. INCOME TAX
The amount of income tax attributable to the financial year differs from
the amount prima facie payable on the operating profit and loss on
extraordinary items the differences are reconciled as follows:
PRIMA FACIE INCOME TAX ON THE OPERATING AND ABNORMAL
PROFIT AT 33% (1993 - 39%) 65,329 23,060
Tax effect of permanent differences which
INCREASE TAX PAYABLE
Sundry 960 248
REDUCE TAX PAYABLE
Research and development expense 17,720 -
Miscellaneous non-allowable 124 1,002
------- ------
Income tax attributable to:
Operating profit 48,445 22,306
======= ======
5. RECEIVABLES
Trade debtors 184,061 10,221
Other debtors 4,293 1,833
Loans to related parties 23,037 -
------- ------
211,391 12,054
======= ======
6. INVENTORIES
Finished goods at cost 24,345 12,217
======= ======
</TABLE>
27
<PAGE> 24
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
7. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
ACCUMULATED WRITTEN DOWN
COST DEPRECIATION VALUE
1994 1993 1994 1993 1994 1993
USD USD USD USD USD USD
<S> <C> <C> <C> <C> <C> <C>
Office equipment 13,791 10,869 4,911 3,014 8,880 7,855
Furniture and fittings 3,116 1,342 916 206 2,200 1,136
Plant and equipment
under finance lease 4,360 27,186 3,936 13,970 424 13,216
Development equipment 24,854 21,072 10,043 2,104 14,811 18,968
------ ------ ------ ------ ------ ------
46,121 60,469 19,806 19,294 26,315 41,175
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
8. OTHER ASSETS
Future Income Tax Benefit 185 408
======= ======
9. CREDITORS AND BORROWINGS
CURRENT
Bank overdraft - 887
Other creditors and accruals 224,139 37,725
Lease liabilities - current 1,376 4,512
Other loans - unsecured - 5,747
------- ------
225,515 48,871
======= ======
NON CURRENT
Lease liabilities 2,292 10,589
======= ======
10. PROVISIONS
Income tax 52,975 8,654
======= ======
</TABLE>
28
<PAGE> 25
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
11. OTHER LIABILITIES
Deferred Tax 3,253 4,980
====== ======
SHAREHOLDERS' EQUITY
Authorised capital
100,000 ordinary shares of A$1 each 74,560 74,560
====== ======
Issued capital
170 ordinary shares of A$1 each fully paid 127 127
====== ======
13. LEASE COMMITMENTS
Finance lease commitments contracted for at balance date:
Payable not later than one year 1,917 6,972
Payable later than one year, not later than two years 2,592 11,834
------ ------
Total minimum lease payments 4,509 17,918
Deduct: future finance changes 841 2,817
------ ------
Lease liability 3,668 15,101
====== ======
Current liability 1,376 4,512
Non-current liability 2,292 10,589
------ ------
3,668 15,101
====== ======
</TABLE>
29
<PAGE> 26
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
14. RELATED PARTY INFORMATION
DIRECTORS
The directors named below each held office as a director for the year
ended 30 June 1994.
John Parselle
Helen Parselle
Michael Milne Home
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
DIRECTORS' REMUNERATION
Income received or due and receivable by directors from the
company 118,102 32,803
======= =======
</TABLE>
The number of directors included in these figures are shown below
in their relevant income bands:
<TABLE>
<CAPTION>
Income of NUMBER NUMBER
<S> <C> <C>
$10,000 to $19,999 - 2
$20,000 to $29,999 1 -
$40,000 to $49,999 2 -
------- -------
3 2
======= =======
</TABLE>
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
DIRECTORS' SUPERANNUATION
Annual contributions to superannuation funds on behalf of directors 3,555 1,128
====== =====
OTHER TRANSACTIONS WITH DIRECTORS AND DIRECTOR RELATED ENTITIES
DURING THE YEAR THE COMPANY:
Paid motor vehicle lease payments on behalf of a director 5,790 5,616
Paid salaries to children of directors 2,754 -
Loan amount to John and Helen Parselle at interest free terms
Amount advanced during the year 23,037 5,750
====== =====
Transferred asset director at a loss to the company, which was
subsequently reimbursed 4,849 -
====== =====
</TABLE>
30
<PAGE> 27
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
15. CASH FLOW INFORMATION
RECONCILIATION OF CASH
Cash at bank 195,876 26,135
======== ========
RECONCILIATION OF NET CASH FLOWS FROM OPERATING
ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX
Operating profit after income tax 149,523 36,823
Depreciation and amortisation 10,547 17,650
Loss on transfer of property, plant and equipment 4,849 -
Increase in income tax payable 44,321 8,654
Decrease in Deferred Tax Liability (1,727) 4,980
Decrease in Future Income Tax Benefit 223 8,571
Changes in assets and liabilities
(Increase)/decrease in trade debtors (199,337) 63,337
Increase in Inventories (12,128) 1,338
Increase/(decrease) in creditors and accruals 185,527 (124,855)
-------- --------
Net inflows from operating activities 181,798 16,498
======== ========
</TABLE>
<TABLE>
<CAPTION>
1994 1993
USD USD
<S> <C> <C>
16. EARNINGS PER SHARE
Basic earnings per share 880 217
--- ---
Weighted average number of ordinary shares
on issue used in the calculation of basic
earnings per share 170 170
</TABLE>
31
<PAGE> 28
BIO RECOGNITION SYSTEMS PTY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1993
32
<PAGE> 29
BIO RECOGNITION SYSTEMS PTY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 1993
<TABLE>
<CAPTION>
NOTE 1993 1992
USD USD
<S> <C> <C> <C>
OPERATING REVENUE 2 530,931 587,767
======= =======
Operating profit/(loss) 3 59,129 (22,502)
Income tax (expense)\benefit attributable to operating profit 4 (22,306) 8,270
------- -------
OPERATING PROFIT/(LOSS) AFTER INCOME TAX 36,823 (14,232)
------- -------
Retained profits/(losses) at the beginning of the financial year (17,579) (3,347)
------- -------
Total available for appropriation 19,244 (17,579)
------- -------
Retained profits/(losses) at the end of the financial year 19,244 (17,579)
======= =======
</TABLE>
The accompanying notes form an integral part of these financial statements.
33
<PAGE> 30
BIO RECOGNITION SYSTEMS PTY LIMITED
BALANCE SHEET
AS OF JUNE 30, 1993
<TABLE>
<CAPTION>
NOTE 1993 1992
USD USD
<S> <C> <C> <C>
CURRENT ASSETS
Cash 26,135 80,207
Receivables 5 12,054 75,392
Inventories 6 12,217 13,555
------ -------
TOTAL CURRENT ASSETS 50,406 169,154
------ -------
NON CURRENT ASSETS
Property, plant and equipment 7 41,175 5,690
Other 8 408 8,979
------ -------
TOTAL NON-CURRENT ASSETS 41,583 14,669
------ -------
TOTAL ASSETS 91,989 183,823
------ -------
CURRENT LIABILITIES
Creditors and borrowings 9 48,871 201,700
Provisions 10 8,654 -
------ -------
TOTAL CURRENT LIABILITIES 57,525 201,700
------ -------
NON-CURRENT LIABILITIES
Creditors and borrowings 9 10,589 -
Other 11 4,980 -
------ -------
TOTAL NON-CURRENT LIABILITIES 15,569 -
------ -------
TOTAL LIABILITIES 73,094 201,700
------ -------
NET ASSETS 18,895 17,877
====== =======
SHAREHOLDERS EQUITY
Share capital 12 127 127
Retained profits (accumulated losses) 19,244 (17,579)
Foreign translation reserve (476) (425)
------ -------
TOTAL SHAREHOLDERS' EQUITY 18,895 (17,877)
====== =======
</TABLE>
The accompanying notes form an integral part of these financial statements.
34
<PAGE> 31
BIO RECOGNITION SYSTEMS PTY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1993
<TABLE>
<CAPTION>
NOTE 1993
USD
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors 593,671
Payment to trade creditors, other suppliers (574,027)
and creditors and employees
Interest received 597
Payment for interest and cost of finance (3,743)
--------
NET CASH FLOWS FROM OPERATING ACTIVITIES 15 16,498
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (53,135)
--------
NET CASH FLOWS FROM INVESTING ACTIVITIES (53,135)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings (30,438)
Proceeds from borrowings 15,101
--------
NET CASH FLOWS FROM FINANCING ACTIVITIES (15,337)
Net increase/(decrease) in cash held (51,974)
Cash at the beginning of the financial year 80,207
Effect of exchange rate changes on cash (2,098)
--------
CASH AT THE END OF THE FINANCIAL YEAR 15 26,135
========
</TABLE>
Comparative cash flows for the year ended 30 June 1992 have not been represented
on the basis that it is impractical to prepare such a statement.
The accompanying notes form an integral part of these financial statements.
35
<PAGE> 32
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial
statements of the Company, Bio Recognition Systems Pty Limited, are stated
to assist in a general understanding of these financial statements. These
policies have been consistently applied except as otherwise indicated.
A) BASIS OF ACCOUNTING
These accounts are a special purpose financial report which has been
prepared for the sole purpose of complying with filing requirements with
the US Securities and Exchange commission and must not be used for any
other purpose.
The accounts have been prepared on the basis of historical costs and
except where stated do not take into account current valuations of
non-current assets.
The accounts have been prepared in accordance with applicable accounting
standards.
B) FOREIGN CURRENCY
Transactions denominated in a foreign currency are converted at the
average exchange rate during the year. Foreign currency receivables and
payables at balance date are translated at exchange rates at balance date.
Exchange gains and losses are brought to account in determining the profit
or loss for the year.
C) DEPRECIATION AND AMORTISATION OF PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are depreciated over their estimated useful
lives using the straight line method.
D) LEASED ASSETS
Assets acquired under finance leases are included as property, plant and
equipment in the balance sheet. Finance leases effectively transfer from
the lessor to the lessee substantially all the risks and benefits
incidental to ownership of the leased property. Where assets are acquired
by means of finance leases, the present value of the minimum lease
payments is recognised as an asset at the beginning of the lease term and
amortised on a straight line basis over the expected useful life of the
leased asset. A corresponding liability is also established and each lease
payment is allocated between the liability and finance charge.
Other leases under which all the risks and benefits of ownership are
effectively retained by the lessor are classified as operating leases.
Operating lease payments are charged to expense over the period of
expected benefit.
36
<PAGE> 33
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
E) EXPENDITURE CARRIED FORWARD
Research and development costs are charged to expense except where
deferred to the extent that such costs are expected by the directors to be
recoverable beyond any reasonable doubt. Deferred costs are amortised on a
straight line basis from the commencement of the commercial production of
the product to which they relate over the period of their expected benefit
but not exceeding five years.
F) RECEIVABLES
Trade accounts receivable are carried at amounts due. A provision is
raised for any doubtful debts based on a review of all outstanding amounts
at balance date. Bad debts are written off during the period in which they
are identified.
G) EMPLOYEE ENTITLEMENTS
Liabilities for employees' entitlements to wages and salaries, annual
leave, sick leave and other current employee entitlements are accrued at
nominal amounts calculated on the basis of current wage and salary rates.
H) SERVICE WARRANTIES
No provision is made for service warranty liabilities as any warranty
costs are reclaimable from suppliers.
I) INCOME TAX
Income tax has been brought to account using the liability method of tax
effect accounting.
J) OPERATING REVENUE
Sales revenue represents revenue earned from the sale of the company's
products and services, net of returns, trade allowances and duties and
taxes paid.
Grant revenue is accounted for on a cash received basis and represents
revenue received from Government relating to research and development.
K) CASH FLOWS
For the purpose of the statements of cash flows, cash includes cash on
hand and deposits held at call with banks and deposits held at call with
non bank entities.
37
<PAGE> 34
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
<TABLE>
<CAPTION>
1993 1992
USD USD
<S> <C> <C>
2. OPERATING REVENUE
Sales revenue 475,292 587,577
Other revenue
Interest revenue 597 190
Grants received 52,120 -
Sundry 2,922 -
------- -------
530,931 587,767
======= =======
3. OPERATING PROFIT
OPERATING PROFIT BEFORE INCOME TAX HAS BEEN DETERMINED AFTER:
CREDITING
Net gain on foreign currency transactions 2,135 2,922
CHARGING AS AN EXPENSE
Depreciation 3,678 1,478
Amortisation on finance leases 5,136 -
Development costs 12,926 -
Interest and charges attributable to other persons 2,010 3,724
Superannuation contributions 1,994 -
Accounting services 4,519 1,676
Finance charges relating to finance leases 3,417 6,063
======= =======
</TABLE>
38
<PAGE> 35
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
<TABLE>
<CAPTION>
1993 1992
USD USD
<S> <C> <C>
4. INCOME TAX
The amount of income tax attributable to the financial year differs from
the amount prima facie payable on the operating profit on the abnormal
item, the differences are reconciled as follows:
PRIMA FACIE INCOME TAX ON THE OPERATING AND ABNORMAL
PROFIT (AT 39%) 23,060 8,775
Tax effect of permanent differences which
INCREASE TAX PAYABLE
Sundry 248 -
REDUCE TAX PAYABLE
Miscellaneous non-allowable 1,002 505
------ ------
Income tax attributable to operating profit 22,306 8,270
====== ======
5. RECEIVABLES
Trade debtors 10,221 56,494
Other debtors 1,833 18,898
------ ------
12,054 75,392
====== ======
INVENTORIES
Finished goods at cost 12,217 13,555
====== ======
</TABLE>
39
<PAGE> 36
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
7. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
ACCUMULATED WRITTEN DOWN
COST DEPRECIATION VALUE
1993 1992 1993 1992 1993 1992
USD USD USD USD USD USD
<S> <C> <C> <C> <C> <C> <C>
Office equipment 10,869 7,062 3,014 1,578 7,855 5,485
Furniture and fittings 1,342 270 206 65 1,136 205
Plant and equipment
under finance lease 27,186 - 13,970 - 13,216 -
Development equipment 21,072 - 2,104 - 18,968 -
------ ----- ------ ----- ------ -----
60,469 7,332 19,294 1,643 41,175 5,690
====== ===== ====== ===== ====== =====
</TABLE>
<TABLE>
<CAPTION>
1993 1992
USD USD
<S> <C> <C>
8. OTHER ASSETS
Future Income Tax Benefit 408 8,979
====== =======
9. CREDITORS AND BORROWINGS
CURRENT
Bank overdraft 887 25,363
Creditors and accruals 37,725 138,104
Lease liabilities 4,512 -
Other loans - unsecured 5,747 9,076
Other loans - secured - 29,157
------ -------
48,871 201,700
====== =======
NON-CURRENT
Lease liabilities 10,589 -
====== =======
10. PROVISIONS
Income tax 8,654 -
====== =======
</TABLE>
40
<PAGE> 37
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
<TABLE>
<CAPTION>
1993 1992
USD USD
<S> <C> <C>
11. OTHER LIABILITIES
Deferred Tax 4,980 -
====== ======
12. SHAREHOLDERS' EQUITY
Authorised capital
100,000 ordinary shares of A$1 each 74,560 74,560
====== ======
Issued capital
170 ordinary shares of A$1 each fully paid 127 127
====== ======
13. LEASE COMMITMENTS
Finance lease commitments contracted for at balance date:
Payable not later than one year 6,972 -
Payable later than one year, not later than two years 11,834 -
Payable later than two years, not later than five years - -
------ ------
Total minimum lease payments 17,918 -
Deduct future finance changes 2,817 -
------ ------
Lease liability 15,101 -
====== ======
Current liability 4,512 -
Non-current liability 10,589 -
------ ------
15,101 -
====== ======
</TABLE>
41
<PAGE> 38
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
14. RELATED PARTY INFORMATION
DIRECTORS
The following directors each held office as a director for the year ended
30 June 1993.
John Parselle
Helen Parselle
Michael Milne Home
<TABLE>
<CAPTION>
1993
USD
<S> <C>
DIRECTORS' REMUNERATION
Income received or due and receivable by directors from the company 32,803
======
</TABLE>
The number of directors included in these figures are shown below in their
relevant income bands:
<TABLE>
<CAPTION>
Income of NUMBER
<S> <C>
$10,000 to $19,999 2
======
</TABLE>
<TABLE>
<CAPTION>
1993
USD
<S> <C>
DIRECTORS' SUPERANNUATION
Payments to superannuation funds
Annual contributions to superannuation funds on behalf of directors 1,128
=====
OTHER TRANSACTIONS WITH DIRECTORS AND DIRECTOR-RELATED ENTITIES
During the year the company:
Paid motor vehicle lease payments on behalf of a director 5,616
=====
Loan amount to Helen and John Parselle at interest free terms
Amount advanced during the year 5,750
=====
</TABLE>
42
<PAGE> 39
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1993
<TABLE>
<CAPTION>
1993
USD
<S> <C>
15. CASH FLOW INFORMATION
RECONCILIATION OF CASH
Cash at bank 26,135
========
RECONCILIATION OF NET CASH FLOWS FROM OPERATING
ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX
Operating profit after income tax 36,823
Depreciation and amortisation 17,650
Increase in income tax payable 8,654
Decrease in Deferred Tax Liability 4,980
Decrease in Future Income Tax Benefit 8,571
Changes in assets and liabilities
(Increase)/decrease in trade debtors 63,337
Increase in Inventories 1,338
Increase/(decrease) in creditors and accruals (124,855)
--------
Net inflows from operating activities 16,498
========
</TABLE>
<TABLE>
<CAPTION>
1993 1992
USD USD
<S> <C> <C>
16. EARNINGS PER SHARE
Basic earnings per share 217 (84)
Weighted average number of ordinary shares
on issued used in the calculation of basic
earnings per share 170 170
</TABLE>
43
<PAGE> 40
FINGERSCAN PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED
DECEMBER 31, 1995
44
<PAGE> 41
FINGERSCAN PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
DECEMBER 31, 1995
USD
<S> <C>
OPERATING REVENUE 1,128,683
=========
Operating profit 145,355
Income tax attributable to operating profit 45,865
---------
OPERATING PROFIT AFTER INCOME TAX 99,490
---------
Retained profits at the beginning of the financial period 1,294,693
---------
Total available for appropriation 1,394,183
---------
Dividends paid 1,295,675
---------
Retained profits at the end of the financial period 98,508
=========
</TABLE>
The accompanying notes form an integral part of these financial statements.
45
<PAGE> 42
FINGERSCAN PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
BALANCE SHEET
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
NOTE USD
<S> <C> <C>
CURRENT ASSETS
Cash 115,788
Receivables 2 325,651
Inventories 3 54,772
---------
TOTAL CURRENT ASSETS 496,211
---------
NON CURRENT ASSETS
Property, plant and equipment 4 19,905
Intangible asset 5 890,400
Other 6 27,052
---------
TOTAL NON-CURRENT ASSETS 937,357
---------
TOTAL ASSETS 1,433,568
---------
CURRENT LIABILITIES
Creditors and borrowings 7 311,448
Provisions 8 3,270
---------
TOTAL CURRENT LIABILITIES 314,718
---------
NON-CURRENT LIABILITIES
Other -
---------
TOTAL NON-CURRENT LIABILITIES -
---------
TOTAL LIABILITIES 314,718
---------
NET ASSETS 1,118,850
=========
SHAREHOLDERS EQUITY
Share capital 9 71
Share premium reserve 1,068,115
Retained profits 5,696
Foreign currency translation reserve 44,968
---------
TOTAL SHAREHOLDERS' EQUITY 1,118,850
=========
</TABLE>
The accompanying notes form an integral part of the balance sheet.
46
<PAGE> 43
FINGERSCAN PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
STATEMENT CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
NOTE 1995
USD
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors 939,565
Payment to trade creditors, other suppliers and creditors and employees (903,384)
Interest received 22,014
Income tax paid (45,800)
----------
NET CASH FLOWS FROM OPERATING ACTIVITIES 10 12,395
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (25,378)
Payment for monies placed for deposit (26,507)
----------
NET CASH FLOWS FROM INVESTING ACTIVITIES (51,885)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue 1,110,188
Dividends paid (1,295,606)
----------
NET CASH FLOWS FROM FINANCING ACTIVITIES (185,418)
----------
NET (DECREASE) IN CASH HELD (224,908)
CASH AT THE BEGINNING OF THE FINANCIAL YEAR 781,794
Effect of exchange rate changes on cash 31,539
----------
CASH AT THE END OF THE FINANCIAL YEAR 10 588,425
==========
CASH RETAINED BY BIO RECOGNITION SYSTEMS PTY LIMITED 1 472,637
==========
CASH RETAINED BY FINGERSCAN PTY LIMITED 1 115,788
==========
</TABLE>
47
<PAGE> 44
FINGERSCAN PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
FINGERSCAN PTY LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of accounting
These accounts are a special purpose financial report which has been prepared
for the sole purpose of complying with filing requirements with the US
Securities and Exchange commission and must not be used for any other purpose.
On 14 August 1995, Bio Recognition Systems Pty Limited (BRS) sold its rights to
its Bio Recognition technology to Fingerscan Pty Limited in which a company
owned by 2 directors of BRS have a 51% shareholding. From that date, all trading
associated with the Bio Recognition technology was undertaken by Fingerscan.
To fully reflect the underlying trading performance associated with the Bio
Recognition technology, for the six month period to 31 December 1995, and for
comparability with prior years, the Profit and Loss Account and Statement of
Cash Flows have been prepared as if Bio Recognition Systems Pty Limited had
continued to trade after 14 August 1995. Accordingly, the trading results of
Fingerscan from 14 August 1995 to 31 December 1995 are incorporated in these
accounts.
The principal accounting policies adopted in preparing the financial statements
are stated to assist in a general understanding of these financial statements.
These policies have been consistently applied except as otherwise indicated.
b) Foreign currency
Transactions denominated in a foreign currency are converted at the average
exchange rate during the year. Foreign currency receivables and payables at
balance date are translated at exchange rates at balance date. Exchange gains
and losses are brought to account in determining the profit or loss for the
year.
c) Depreciation and amortisation of property, plant and equipment
Property, plant and equipment are depreciated over their estimated useful lives
using the straight line method.
Profits and losses on disposal of property, plant and equipment are taken into
account in determining the profit for the year.
d) Receivable
Trade accounts receivable are carried at amounts due. A provision is raised for
any doubtful debts based on a review of all outstanding amounts at balance date.
Bad debts are written off during the period in which they are identified.
e) Employee entitlements
Liabilities for employees' entitlements to wages and salaries, annual leave,
sick leave and other current employee entitlements are accrued at nominal
amounts calculated on the basis of current wage and salary rates.
f) Service warranties
No provision is made for service warranty liabilities as any warranty costs are
reclaimable from suppliers.
g) Provisions
Income tax has been brought to account using the liability method of tax effect
accounting.
48
<PAGE> 45
FINGERSCAN PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
31 DECEMBER 1995
USD
<S> <C>
2. RECEIVABLES
Trade debtors 275,606
Other debtors 48,516
Other prepayments 1,529
-------
325,651
=======
3. INVENTORIES
Finished goods at cost 54,772
=======
</TABLE>
4. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
ACCUMULATED WRITTEN DOWN
COST DEPRECIATION VALUE
31 DEC 1995 31 DEC 1995 31 DEC 1995
USD USD USD
<S> <C> <C> <C>
Office equipment 11,787 461 11,326
Furniture and fittings 9,505 926 8,579
------ ----- ------
21,292 1,387 19,905
====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
31 DECEMBER
1995
USD
<S> <C>
5. INTANGIBLE ASSETS
Intellectual property 890,400
=======
6. OTHER ASSETS
Rental security deposit 27,052
=======
</TABLE>
49
<PAGE> 46
FINGERSCAN PTY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
31 DECEMBER 1995
USD
<S> <C>
7. CREDITORS AND BORROWINGS
CURRENT
Trade creditors 264,838
Other creditors and accruals 24,174
Unearned income 22,436
--------
311,448
========
8. PROVISIONS
Income tax 3,270
========
9. SHAREHOLDERS' EQUITY
Authorised capital
100,000 ordinary shares of A$1 each
- Fingerscan Pty Limited 71,210
========
Issued capital
100 ordinary shares of A$1 each fully paid
- Fingerscan Pty Limited 71
========
10. CASH FLOW INFORMATION
RECONCILIATION OF CASH
Cash at bank 585,425
========
RECONCILIATION OF NET CASH FLOWS FROM OPERATING
ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX
Operating profit after income tax 99,490
Depreciation and amortisation 7,778
Increase in income tax payable 65
Changes in assets and liabilities
(Increase) in trade debtors (140,071)
(Increase) in other debtors (71,848)
(Increase) in prepayments (1,498)
Increase in loan assets (10,310)
(Increase) in inventories (7,601)
Increase in trade and other creditors 213,505
(Decrease) in other creditors (60,391)
(Decrease) in unearned income (16,724)
--------
Net inflows/(outflows) from operating activities 12,395
========
</TABLE>
50
<PAGE> 47
BIO RECOGNITION SYSTEMS PTY LIMITED
UNAUDITED STATEMENT OF OPERATIONS AND STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED
DECEMBER 31, 1994
51
<PAGE> 48
BIO RECOGNITION SYSTEMS PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTH PERIOD ENDED
DECEMBER 31, 1994
<TABLE>
<CAPTION>
DECEMBER 31, 1994
USD
<S> <C>
OPERATING REVENUE 1,630,002
=========
Operating profit 503,219
Income tax attributable to operating profit 166,793
---------
OPERATING PROFIT AFTER INCOME TAX 336,426
---------
Retained profits at the beginning of the financial period 19,244
---------
Total available for appropriation 355,670
---------
Retained profits at the end of the financial period 355,670
=========
</TABLE>
The accompanying notes form an integral part of these financial statements.
52
<PAGE> 49
BIO RECOGNITION SYSTEMS PTY LIMITED
UNAUDITED FINANCIAL STATEMENTS
STATEMENT OF CASH FLOW
FOR THE SIX MONTH PERIOD ENDED
DECEMBER 31, 1994
<TABLE>
<CAPTION>
NOTE 1994
USD
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from trade and other debtors 1,636,856
Payment to trade creditors, other suppliers and creditors and employees (1,418,005)
Interest received 14,262
Income tax paid (6,953)
----------
NET CASH FLOWS FROM OPERATING ACTIVITIES 1 226,160
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (9,815)
NET CASH FLOWS FROM INVESTING ACTIVITIES (9,815)
----------
NET INCREASE IN CASH HELD 216,345
CASH AT THE BEGINNING OF THE FINANCIAL YEAR 195,876
Effect of exchange rate changes on cash 21,781
----------
CASH AT THE END OF THE FINANCIAL YEAR 1 434,002
==========
</TABLE>
53
<PAGE> 50
BIO RECOGNITION SYSTEMS PTY LIMITED
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED
DECEMBER 31, 1994
<TABLE>
<CAPTION>
1994
1. CASH FLOW INFORMATION USD
<S> <C>
RECONCILIATION OF CASH
Cash at bank 434,002
========
RECONCILIATION OF NET CASH FLOWS FROM OPERATING
ACTIVITIES TO OPERATING PROFIT AFTER INCOME TAX
Operating profit after income tax 336,426
Depreciation and amortisation 6,803
Increase in income tax payable 159,824
Changes in assets and liabilities
(Increase) in trade and other debtors (125,003)
(Increase) in inventories (10,870)
(Decrease) in trade and other creditors (677)
--------
Net inflows from operating activities 226,160
========
</TABLE>
54
<PAGE> 51
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF IDENTIX INC
FOR THE PURPOSES OF FILINGS WITH THE US SECURITIES AND EXCHANGE COMMISSION BY
IDENTIX INC
We have audited the financial statements of Bio Recognition Systems Pty Limited
as at June 30 1995, June 30 1994 and June 30 1993 and for each of the three
fiscal years in the period ended June 30 1995, all expressed in United States
dollars. These financial statements are for the sole purpose of filings with the
US Securities and Exchange Commission by Identix Inc. Our responsibility is to
express an opinion on these financial statements based on our review.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
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, the financial statements audited by us present fairly, in all
material respects, the financial position of Bio Recognition Systems Pty Limited
at June 30 1995, June 30 1994, and June 30 1993 and the results of its
operations and cash flows for each of the three fiscal years in the period ended
June 30 1995, in conformity with accounting principles generally accepted in
Australia.
Accounting principles generally accepted in Australia vary in certain
significant respects from accounting principles generally accepted in the United
States. However, the application of the latter would not have had a material
impact upon the determination of net profit expressed in United States dollars
for each of the three years in the period ended June 30 1995 and the
determination of shareholders' equity and financial position also expressed in
United States dollars at June 30 1995, June 30 1994 and June 30 1993.
PRICE WATERHOUSE
BY: /s/Price Waterhouse
Sydney, Australia
March 25, 1996
55
<PAGE> 1
IDENTIX INCORPORATED
EXHIBIT 7.2
56
<PAGE> 2
INDEX TO EXHIBIT 7.2
UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
<TABLE>
<S> <C>
Headnote and Explanation..................................................... 58
Pro Forma Combined Balance Sheet As Of December 31, 1995..................... 59
Pro Forma Combined Statement of Operations For The Six Month
Period Ended December 31, 1995............................................. 60
Pro Forma Combined Statement of Operations For The Year
Ended June 30, 1995........................................................ 61
Notes to Unaudited Pro Forma Combined Financial Statements................... 62
</TABLE>
57
<PAGE> 3
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma balance sheet as of December 31, 1995 and
unaudited pro forma combined statements of operations for the six month period
ended December 31, 1995 and the year ended June 30, 1995 have been prepared from
the historical financial statements of Identix Incorporated ("Identix"),
Fingerscan Pty Limited ("Fingerscan") and Bio Recognition Systems Pty Limited
("BRS"), the predecessor entity to Fingerscan.
The pro forma combined financial statements give effect for the acquisition of
Fingerscan accounted for under the purchase method of accounting and for the pro
forma adjustments described in the accompanying notes to the pro forma financial
information.
The pro forma combined financial statements for the respective periods should be
read in conjunction with the notes accompanying the pro forma combined financial
statements and the historical financial statements of Identix, Fingerscan and
BRS. The pro forma combined financial statements of operations do not purport to
represent the results of operations that actually would have occurred had the
acquisition been consummated at the beginning of the representative periods
presented, nor are the pro forma combined balance sheet and results of
operations as of and for the six months ended December 31, 1995, necessarily
indicative of the financial position and operating results as of and for the
year ended June 30, 1996, or for any future date or period.
The financial information of Fingerscan and BRS included in these pro forma
combined financial statements have been derived from the historical information
of Fingerscan and BRS prepared in accordance with Australian Generally
Accepted Accounting Principles ("GAAP") and stated in United States dollars.
Australian GAAP and United States GAAP differ in certain significant respects.
However, the application of the latter would not have had a material impact
upon the determination of net profit expressed in United States dollars for the
pro forma combined balance sheet as of December 31, 1995 and the results of
operations for the six month period ended December 31, 1995 and for the year
ended June 30, 1995. Certain reclassifications have been made to Fingerscan's
and BRS' financial statements included in these pro forma financial statements
to conform to Identix's presentation.
58
<PAGE> 4
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
----------------
PRO FORMA COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, 1995
-----------------------------------------------------------------------
Pro Forma
Indentix Fingerscan ---------------------------------
Incorporated Pty Limited Adjustments Combined
-------------- ------------ ------------ ----------
ASSETS
Current Assets:
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 6,463,000 $ 116,000 $ - $ 6,579,000
Accounts receivable 11,354,000 326,000 (132,000) 11,548,000
Inventories 3,234,000 55,000 (68,000) 3,221,000
Prepaid expenses and other assets 282,000 - - 282,000
-------------- ------------ ----------- -------------
Total current assets 21,333,000 497,000 (200,000) 21,630,000
Property and equipment, net 1,737,000 20,000 1,757,000
Intangible and other assets 2,015,000 917,000 (387,000) 2,545,000
-------------- ------------ ----------- -------------
Total assets $ 25,085,000 $ 1,434,000 $ (587,000) $ 25,932,000
============== ============ ============ =============
LIABILITIES AND SHAREHOLDERS" EQUITY
Current liabilities:
Notes payable to banks $ 2,647,000 $ - $ - $ 2,647,000
Accounts payable 2,705,000 265,000 (132,000) 2,838,000
Accrued compensation 868,000 - - 868,000
Other accrued liabilities 517,000 50,000 - 567,000
Current portion of long-term note 106,000 - - 106,000
Deferred maintenance revenue 307,000 - - 307,000
-------------- ------------ ----------- -------------
Total current liabilities 7,150,000 315,000 (132,000) 7,333,000
Deferred maintenance revenue 330,000 - - 330,000
ong-term debt, less current portion 180,000 - - 180,000
Other long-term liabilities 89,000 - - 89,000
-------------- ------------ ----------- -------------
Total liabilities 7,749,000 315,000 (132,000) 7,932,000
-------------- ------------ ----------- -------------
Shareholders' equity:
Common stock
Identix 43,986,000 - 5,459,000 49,445,000
Fingerscan - 1,068,000 (1,068,000) -
Accumulated deficit/retained earnings
Identix (26,650,000) - (4,795,000) (31,445,000)
Fingerscan - 6,000 (6,000)
Cumulative translation adjustment - 45,000 (45,000)
-------------- ------------ ----------- -------------
-
Total shareholders' equity 17,336,000 1,119,000 (455,000) 18,000,000
-------------- ------------ ----------- -------------
Total liabilities and shareholders'
equity $ 25,085,000 $ 1,434,000 $ (587,000) $ 25,932,000
============== ============ ============ =============
</TABLE>
See accompanying notes to pro forma combined financial information.
59
<PAGE> 5
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
----------------
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended December 31, 1995
----------------------------------------------------------------------------
Pro Forma
Identix Fingerscan ----------------------------
Incorporated Pty Limited Adjustments Combined
------------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Revenues:
Net Product Sales $ 6,726,000 $1,044,000 $ (149,000) $ 7,621,000
Services 9,627,000 -- -- 9,627,000
------------ ---------- ----------- ------------
Total Revenues 16,353,000 1,044,000 (149,000) 17,248,000
Costs and expenses:
Costs of products sales 3,844,000 455,000 (77,000) 4,222,000
Costs of services provided 7,938,000 -- -- 7,938,000
Research, development and engineering 688,000 128,000 -- 816,000
Marketing and sales 1,636,000 301,000 -- 1,937,000
General and administrative 1,777,000 100,000 -- 1,877,000
Write-off of acquired in-process
research and development -- -- 4,723,000 4,723,000
------------ --------- ----------- ------------
Total costs and expenses 15,883,000 984,000 4,646,000 21,513,000
------------ --------- ----------- ------------
Income (loss) from operations 470,000 60,000 (4,795,000) 4,265,000
Other income (expense) 43,000 85,000 -- 128,000
------------ --------- ----------- ------------
Income before income taxes 513,000 145,000 (4,795,000) (4,137,000)
Income taxes -- (46,000) -- (46,000)
------------ --------- ----------- ------------
Net income (loss) $ 513,000 $ 99,000 $(4,795,000) $ (4,183,000)
============ ========= =========== ============
Net loss per common share $ (0.18)
Average common shares outstanding 23,598,000
</TABLE>
See accompanying notes to pro forma combined financial information.
60
<PAGE> 6
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
----------------
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended June 30, 1995
-------------------------------------------------------------------------------
Pro Forma
Identix Fingerscan ------------------------------------------
Incorporated Pty Limited Adjustments Combined
-------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Revenues:
Net Product Sales $ 9,025,000 $ 2,967,000 $ (278,000) $ 11,714,000
Services 17,989,000 - - 17,989,000
------------- ------------ --------------- -------------
Total Revenues 27,014,000 2,967,000 (278,000) 29,703,000
------------- ------------ --------------- -------------
Costs and expenses:
Costs of products sales 5,445,000 1,697,000 (145,000) 6,997,000
Costs of services provided 15,493,000 - - 15,493,000
Research, development and engineering 1,582,000 190,000 - 1,772,000
Marketing and sales 2,465,000 300,000 - 2,765,000
General and administrative 2,677,000 142,000 - 2,819,000
Write-off acquired in-process technology - - 4,723,000 4,723,000
------------- ------------ --------------- -------------
Total costs and expenses 27,662,000 2,329,000 4,578,000 34,569,000
------------- ------------ ------------- -------------
Income (loss) from operations (648,000) 638,000 (4,856,000) (4,866,000)
Other income (expense) (203,000) 1,041,000 - 838,000
-------------- ------------ ------------------ ---------------
Income (loss) before provision for
income taxes and income tax benefit (851,000) 1,679,000 (4,856,000) (4,028,000)
Provision for income taxes - (553,000) - (553,000)
Income tax benefit 136,000 - - 136,000
------------- ------------ --------------- -------------
Net income (loss) $ (715,000) $ 1,126,000 $ (4,856,000) $ (4,445,000)
============= ============ ============= =============
Net loss per common share $ (0.22)
Average common shares outstanding 20,040,000
</TABLE>
See accompanying notes to pro forma combined financial information.
61
<PAGE> 7
IDENTIX INCORPORATED AND FINGERSCAN PTY LIMITED
----------------
NOTES TO PRO FORMA COMBINED BALANCE SHEETS
(UNAUDITED)
1. PRO FORMA ADJUSTMENTS
The pro forma combined financial statements have been prepared to reflect
the acquisition of Fingerscan by Identix for an aggregate price of
$5,459,000. Identix issued 668,976 shares of the Company's common stock
reflecting a discount for certain restrictions related to the resale of
the common stock used to purchase Fingerscan. The excess of the purchase
price over the fair market value of the net tangible assets acquired
aggregated approximately $5,280,000, of which $4,723,000 was allocated
to in-process research and development based on an independent appraisal
and $557,000 was allocated to other intangibles including acquired
technology. The pro forma combined financial statements include a
write-off of the in-process research and development of $4,723,000
acquired in connection with the acquisition. The net loss per share is
based on the average number of shares of common stock of Identix
outstanding during the period plus the common shares issued by Identix
to acquire Fingerscan.
2. INTERCOMPANY TRANSACTIONS
For all periods presented, intercompany transactions have been eliminated
in the pro forma combined financial statements.
3. ACQUISITION EXPENSES
The unaudited pro forma combined statements of operations do not include
direct expenses related to the acquisition, which were recorded when the
acquisition was complete.
4. INTANGIBLE ASSETS
Intangible assets were adjusted to reflect their fair values as of the
date of acquisition.
62
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statement on Form S-3 (No. 33-57154,
33-58718, 33-75812, 33-86648, 33-94722 and 333-04885) and in the Registration
Statements on Form S-8 (No. 33-4544, 33-53836, 33-74204 and 333-04055) of
Identix Incorporated of our report dated March 25, 1996 relating to the
financial statements of Bio Recognition Systems Pty Limited which appears in
the Current Report on Form 8-K/A of Identix Incorporated dated June 7, 1996.
/s/ Price Waterhouse
Price Waterhouse
Sydney, Australia
June 7, 1996
63
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