UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check appropriate box:
[X] Preliminary information statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14c-5(d)(2)).
[ ] Definitive information statement
The Finx Group, Inc.
(Name of Registrant as specified in Its Charter)
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(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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1
THE FINX GROUP, INC.
249 N. Saw Mill River Road
Elmsford, NY 10523
INFORMATION STATEMENT
August 5, 2002
To the Shareholders of The Finx Group, Inc.
This Information Statement is being furnished to the shareholders of
The Finx Group, Inc. , a Delaware corporation, (the "Company") in connection
with an amendment to the Company's articles of incorporation increasing the
authorized number of shares of its Common Stock, par value $0.01 per share, from
50,000,000 shares to 750,000,000 shares, which has been authorized by the
written consent (the "Written Consent") of the holders of a majority of the
voting power of the outstanding shares of the Common Stock, par value $.01 per
share of the Company (the "Common Stock"), the outstanding shares of the Series
A 4% Preferred Stock, par value $.01 per share of the Company (the "Series A
Preferred Stock"), and the outstanding shares of the Series B $8 Voting
Redeemable Convertible Preferred Stock, par value $.01 per share of the Company
(the "Series B Preferred Stock") voting together as one class of stock, in
accordance with the applicable provisions of Delaware General Corporation Law.
On July 1, 2002, the Board of Directors of the Company resolved to
amend the Company's articles of incorporation to increase the authorized number
of shares of its Common Stock, par value $0.01 per share from 50,000,000 shares
to 750,000,000 shares, subject to shareholder approval.
The approximate date on which this Information Statement is first being
sent or given to shareholders of the Company is August 5, 2002. The Company will
bear the costs of the preparation and mailing of this Information Statement.
The Company will bear the costs of the preparation and mailing of this
Information Statement which is estimated to approximate $15,000.
WE ARE NOT ASKING YOU FOR A PROXY OR TO SIGN A WRITTEN CONSENT
AND YOU ARE REQUESTED NOT TO SEND US A PROXY OR CONSENT
2
VOTING SECURITIES AND PRINCIPAL HODLERS
The Board of Directors fixed the close of business on July 1, 2002 as
the record date for mailing this Information Statement for the matters set forth
herein, at which time 49,808,899 shares of Common Stock, 1,000 shares of Series
A Preferred Stock, 20,000 shares of Series B Preferred Stock, convertible into
66,666,667 shares of Common Stock, 60,000 shares of its Series C 2% Convertible
Preferred Stock, convertible into 6,000,000 shares of Common Stock (the "Series
C Preferred Stock"), and 40,000 shares of its Series D 2% Convertible Preferred
Stock, convertible into 4,000,000 shares of Common Stock (the "Series D
Preferred Stock") were issued and outstanding. Each share of Common Stock is
entitled to one vote on each matter submitted to the Company's shareholders.
Each share of Series A Preferred Stock votes with the Common Stock and is
entitled to one vote per share. Each share of Series B Preferred Stock votes
with the Common Stock and is entitled to one vote per share of Common Stock into
which it is convertible. The Series C Preferred Stock and the Series D Preferred
Stock are not entitled to vote with Common Stock. The Trinity Group-I, Inc.,
Lewis S. Schiller and Grazyna B. Wnuk have advised the Company that they have
provided a Written Consent as to all of the shares of Common Stock, Series A
Preferred Stock and Series B Preferred Stock owned by them in favor of the
corporate action described.
Set forth below is a schedule of each class of voting securities of the
Company entitled to vote on the matter set forth herein, the number of
outstanding shares of each such class and number of votes to which each class is
entitled.
Number of votes to
Number of shares which Class is
Class of Security outstanding Entitled
-------------------------------------------------------------- ---------------------------- -----------------------
Common Stock 49,808,889 49,808,889
Series A Preferred Stock(1) 1,000 1,000
Series B Preferred Stock(2) 20,000 66,666,667
All Classes Voting Together 49,929,889 116,576,556
Set forth below is information as of July 1, 2002, based on information
provided to the Company by the individuals and entities named below, as to each
person or entity owning of record or known by the Company to own beneficially,
more than 5% of any class of the Company's voting securities.
Amount and Nature of Percent of
Title of Class Name and address of Beneficial Owner Beneficial Ownership(3) Class(4)
---------------------------------- -------------------------------------- ----------------------- -----------------
Common Stock(5) Lewis S. Schiller 90,869,297 67%
Series A Preferred Stock 21634 Club Villa Terrace 1,000 100%
Series B Preferred Stock Boca Raton, FL 33433 20,000 100%
Common Stock(6) The Trinity Group-I, Inc. 69,489,297 60%
Series A Preferred Stock 21634 Club Villa Terrace 1,000 100%
Series B Preferred Stock Boca Raton, FL 33433 20,000 100%
Common Stock(7) Grazyna B. Wnuk 11,811,081 20%
21634 Club Villa Terrace
Boca Raton, FL 33433
Common Stock(8) Alan Risi 15,049,874 25%
150-38 12th Avenue
Whitestone, NY 11357
3
Set forth below is information as of July 1, 2002, based on information
provided to the Company by the individuals and entities named below, as to each
class of equity securities of the Company beneficially owned by all directors of
the Company, the Company's Chief Executive Officer and the four most highly
compensated executive officers, and the Company's directors and officers as a
group.
Amount and Nature of Percent of
Title of Class Name and address of Beneficial Owner Beneficial Ownership(3) Class(4)
---------------------------------- -------------------------------------- ----------------------- -----------------
Common Stock(5) Lewis S. Schiller 90,869,297 67%
Series A Preferred Stock 21634 Club Villa Terrace 1,000 100%
Series B Preferred Stock Boca Raton, FL 33433 20,000 100%
Common Stock(6) Grazyna B. Wnuk 11,811,081 20%
21634 Club Villa Terrace
Boca Raton, FL 33433
Common Stock Officer and directors as a group 102,705,378 70%
Series A Preferred Stock (2 persons) 1,000 100%
Series B Preferred Stock 20,000 100%
-----------
1 Pursuant to the Amended and Restated Certificate of Incorporation of the
Company, the Series A Preferred Stock votes with the Common Stock and is
entitled to one vote per share.
2 Pursuant to the Amended and Restated Certificate of Incorporation of the
Company, the Series B Preferred Stock votes with the Common Stock and is
entitled to one vote per share of Common Stock into which it is
convertible, as calculated by dividing $2,000,000 by the lowest price that
the Common Stock has traded during the period that the Series B preferred
stock has been outstanding which as of July 1, 2002 was $0.03 [$2,000,000 /
$0.03 = 66,666,667].
3 Unless otherwise indicated, to the Company's knowledge, all persons and
entities listed above have sole voting and investment power with respect to
their voting shares, except to the extent applicable law gives spouses
shared authority.
4 The "Percent of Class" is based on shares of voting stock that a person,
entity or group has the right to acquire within sixty (60) days after July
1, 2002 pursuant to the exercise of outstanding warrants or options are
deemed to be outstanding for the purpose of computing the percentage
ownership of such person, entity or group, but are not deemed outstanding
for the purpose of calculating the percentage owned by any other person,
entity or group.
5 Includes 1,380,000 shares directly owned by Lewis S. Schiller, 20,000,000
shares underlying warrants to purchase shares and 69,489,297 shares
beneficially owned by The Trinity Group-I, Inc., a company wholly-owned by
Lewis S. Schiller.
6 Includes 2,822,630 shares directly owned by The Trinity Group-I, Inc. and
66,666,667 shares from the assumed conversion of the Series B preferred
stock. The Trinity Group-I, Inc. exchanged $2,000,000 of debt for 20,000
shares of Series B preferred stock. The Series B preferred stock is
convertible into such shares as calculated by dividing $2,000,000 by the
lowest price that the Common Stock trades during the period that the Series
B preferred stock is outstanding which was $0.03 as of June 30, 2002
[$2,000,000 / $0.03 = 66,666,667]. Excludes 875,000 shares that were
transferred by The Trinity Group-I, Inc. to be used as collateral by Orion
Telecom Operating Corporation, an unrelated company.
7 Includes 1,811,081 shares directly owned by Grazyna B. Wnuk and 10,000,000
shares underlying a warrant to purchase shares.
8 Includes 5,049,874 shares directly owned by Alan Risi, 6,000,000 shares
underlying the Series C Preferred Stock and 4, 000,000 shares underlying
the Series D Preferred Stock.
4
DILUTION
The following table sets forth information which presents the dilution
of the Common Stock that would occur upon the approval of the increase in
authorization by the shareholders. The information presented assumes (i) the
immediate conversion of the Series B, C and D Preferred Stock; (ii) the
immediate exercise of outstanding warrants to purchase common stock; and (iii)
the immediate grant and exercise of stock options. The information presented
does not include the dilutive effects that would occur upon the conversion and
exercise of the Series E, F, G, H, I and J Preferred Stock, as such shares are
not immediately issuable upon the shareholder approval of the increased
authorization. Information is as of July 1, 2002 and presents separately, based
on information provided to the Company by the individuals and entities named
below, as to each person or entity owning of record or known by the Company to
own beneficially, more than 5% of the Company's Common Stock and all other
Common Stock holders as a group.
Percent of
Percent of Common Stock Common Stock
Common Stock Common Stock Ownership Outstanding
Ownership Outstanding Immediately Immediately
Prior to the Prior to the After to the After the
Increased Increased Increased Increased
Beneficial Owner Authorization Authorization Authorization Authorization
----------------------------------------------------------------------------------------------------------------------
Lewis S. Schiller 4,202,630(1) 10.85% 99,869,297(2) 54.66%
The Trinity Group-I, Inc. 2,822,630 7.29% 69,489,297(3) 38.03%
Grazyna B. Wnuk 1,811,081 4.67% 13,311,081(4) 7.28%
Alan Risi 5,049,874 13.03% 15,049,874(5) 8.24%
Consultant's Stock Options - - 15,750,000(6) 8.62%
All other shareholders as a group 38,745,314 71.45% 38,745,314 21.20%
-----------
1 Includes 1,380,000 shares of Common Stock directly owned by Lewis S.
Schiller, and 2,822,630 shares of Common Stock owned by The Trinity
Group-I, Inc., a company wholly-owned by Lewis S. Schiller.
2 Includes 1,380,000 shares of Common Stock directly owned by Lewis S.
Schiller, 2,822,630 shares of Common Stock owned by The Trinity
Group-I, Inc., assumes the conversion of the Series B Preferred Stock
owned by The Trinity Group, Inc. into 66,666,667 shares of Common
Stock, assumes the exercise of warrants to purchase 20,000,000 shares
of Common Stock, and assumes the exercise of a stock option to purchase
9,000,000 shares of Common Stock..
3 Includes 2,822,630 shares of Common Stock directly owned by The Trinity
Group-I, Inc., and assumes the conversion of the Series B Preferred
Stock owned by The Trinity Group, Inc. into 66,666,667 shares of Common
Stock.
4 Includes 1,811,081 Common Stock shares directly owned by Grazyna B.
Wnuk, assumes the exercise of warrants to purchase 10,000,000 shares of
Common Stock, and assumes the exercise of a stock option to purchase
1,500,000 shares of Common Stock.
5 Includes 5,049,874 shares of Common Stock directly owned by Alan Risi,
assumes the conversion of the Series C Preferred Stock owned by Alan
Risi into 6,000,000 shares of Common Stock, and assumes the conversion
of the Series D Preferred Stock owned by Alan Risi into 4,000,000
shares of Common Stock.
6 Assumes the exercise of stock options to purchase 15,750,000 shares of
Common Stock.
5
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors approved, subject to Shareholders approval, an
amendment to the Company's articles of incorporation to increase the authorized
number of shares of its Common Stock, par value $0.01 per share from 50,000,000
shares to 750,000,000. The Board of Directors approved the increase in
authorized Common shares because, in its opinion, the best interests of the
Company will be served. By written consent, holders of shares having in excess
of 50% of the total voting power of all outstanding voting shares consented in
writing to the adoption of the amendment.
Reasons for Increase in Authorized Shares of Common Stock
The Company requires additional shares of its Common Stock in order to
(i) continue efforts to obtain equity financings from the proposed sale of
convertible preferred stock; (ii) to provide compensation in the form of option
grants to its executive employees and key consultants; (iii) to facilitate the
conversion of its existing convertible preferred stock; (iv) to reserve shares
for outstanding warrants to purchase Common Stock; and (v) provide sufficient
shares for other corporate purposes as such needs may arise. Once the increased
authorization is approved, the Board may issue shares without further
shareholder action. The following describes the Company's currently planned uses
for its Common Stock and the funding that may be received if such equity
issuances occur. It is possible that the Company will have to re-evaluate the
uses of its Common Stock in the near term based on negotiations that may occur
with regards to any potential funding source(s) or any of its key consultants.
The Company does not have any firm funding commitments and has no assurance that
any funding, if obtained, will be in the amounts proposed herein. Furthermore,
the Company has no assurance that if the proposed securities that carry exercise
provisions are issued, that the holders of such securities will exercise such
securities, and to the extent that such securities are not exercised, the
Company would not receive the proposed proceeds from any such exercise.
Proposed Equity Funding
The Company has not obtained any firm commitments for any equity or
debt financing can give no assurance as to when, or if, any such funding will
occur. The Company believes that, when and if it obtains any meaningful funding
from an investor, such potential investor would receive securities representing
a significant ownership in the Company's then outstanding capital stock.
One such potential investor is Orion Technology Holding, Inc., an
unaffiliated third party. The Company has not obtained any firm commitments for
such funding from Orion Technology Holding, Inc. and can give no assurance as to
when, or if, any such funding will occur. On May 16, 2002, the Company entered
into a memorandum of understanding with Orion Technology Holding, Inc. with
respect to Orion Technology Holding, Inc. making a $10,000,000 capital
investment in the Company and a ($5,000,000 loan for the benefit of the Company
in exchange for (i) an equity security(s) representing 33.33% of the Company's
outstanding Common Stock on the date of the investment; (ii) a right to 12% of
the common stock in the subsidiaries of the Company at a price to be determined;
and (iii) the right to appoint two members to the Board of Directors. Pursuant
to the mutual memorandum of understanding, the Company intends, among other
things, to (i) designate and sell to Orion Technology Holding, Inc. 10,000
shares of Series E Convertible Preferred Stock, convertible into 10,000,000
shares of Common Stock, for $1,000,000; (ii) designate and sell to Orion
Technology Holding, Inc. 90,000 shares of Series F Convertible Preferred Stock,
convertible into 90,000,000 shares of Common Stock, for $9,000,000; and (iii)
issue to Orion Technology Holding, Inc. a senior subordinated debenture in the
amount of $5,000,000. In addition, the Company would (i) give Orion Technology
Holding, Inc. an option to purchase 23,300,000 shares of Common Stock for $0.04
per share and an option to purchase 15,500,000 shares of Common Stock for $0.15
per shares. In the event Orion Technology Holding, Inc. exercised all such
options, the aggregate proceeds to the Company would be $3,257,000 Based on the
Company's discussions with Orion Technology Holding, Inc., the earliest date
that any such funding could occur is August 31, 2002, if ever.
6
Convertible Preferred Stock Issued in Exchange for Related Party Debt
On May 7, 2001 The Trinity Group-I, Inc. converted $2 million of
related party debt owed to it by the Company, into 20,000 shares of its Series B
Preferred Stock. The Series B Preferred Stock is convertible into shares of
Common Stock as calculated by dividing $2,000,000 by the lowest price that the
Company's shares of Common Stock have traded during the period that the Series B
Preferred Stock has been outstanding. As of July 1, 2002, the Series B preferred
stock can be converted into 66,666,667 million shares of Common Stock and the
holders of the Series B Preferred stock are entitled to vote alongside of Common
Stockholders on an if converted basis. The Company has been informed by The
Trinity Group-I, Inc. of its intention to convert all of its shares of Series B
Preferred Stock upon the increase in the authorized shares of Common Stock.
Convertible Preferred Stock Issued to Obtain an Exclusive Distribution Agreement
On August 11, 1999, the Company formed Secured Portal Systems, Inc.,
pursuant to which the Company owns a controlling interest in Secured Portal
System's Inc. common stock and all of its preferred stock, which gives the
Company the right to elect a majority of its board of directors. On September
13, 1999, Secured Portals entered into an exclusive distribution agreement with
GIL Security Systems, Inc. GIL Security Systems, Inc. is engaged in the
manufacture and sale of security entrance systems for use as a security device
by a variety of customers at airports, federal buildings, court houses,
embassies, correctional facilities, schools, governmental operations, department
stores and other retail outlets. GIL Security Systems, Inc. is a subsidiary of
Georal International, Ltd. and holds all world-wide rights related to the
intellectual property related to the GIL security systems, including trademarks,
patents and technology, as licensed to it by Alan J. Risi, the controlling owner
of both GIL Security Systems, Inc. and Georal International, Ltd. The exclusive
distribution agreement gives Secured Portal Systems, Inc. distribution rights
for the sale of GIL Security System's, Inc. security entrance systems to certain
categories of customers. The products covered by the exclusive distribution
agreement includes all of GIL Security System's, Inc. products that existed on
September 13, 1999 and all products developed during the term of the exclusive
distribution agreement, including all models of the GIL-2001 security door. The
categories of customers covered by the exclusive distribution agreement include
the United States Treasury Department, the United States Central Intelligence
Agency and all other United States Government intelligence agencies, the United
States National Security Agency, the United States Defense Intelligence Agency,
the United States Department of the Navy, the United States Air Force, the
United States Army, all United States Federal Courts and all United States
Embassies, all department stores and retail stores located in the United States
(including all retail stores located in foreign countries which are part of a
retail store chain which is based in the United States), the Government of
Israel, NCR Corp. and Sun Microsystems, Inc. The exclusive distribution
agreement commenced on September 1, 1999 and had an initial expiration date of
August 31, 2004 which was later extended to August 31, 2009.
As an inducement to obtain the exclusive distribution agreement and in
exchange for 1,000,000 common stock shares of GIL Security Systems, Inc., the
Company's predecessor, Fingermatrix, Inc., issued to Alan J. Risi equity
securities which on July 14, 2000 were exchanged for 1,049,874 shares of the
Company's Common Stock. On February 21, 2002, the exclusive licensing agreement
for the Georal security systems was amended whereby the categories of customers
was expanded to include all financial institutions around the world and whereby
Secured Portal System's Inc. received a right of first refusal to be the
exclusive distributor for sales to any governmental body in the world which is
not currently included in the exclusive licensing agreement as a protected
customer. As consideration for the amendment entered into on February 21, 2002,
the Company issued to Alan Risi 40,000 shares of its Series D Preferred Stock
which are convertible into 4,000,000 shares of the Company's Common Stock. On
May 16, 2002, the exclusive licensing agreement for the Georal security systems
was further amended whereby the exclusive distribution agreement was expanded to
give Secured Portal System's Inc. exclusive world wide sales and marketing
rights, for the term of the agreement extending to all casinos, malls, stadiums,
office buildings and high rises. As consideration for the amendment entered into
on May 16, 2002, the Company issued to Alan Risi 60,000 shares of its Series C
Preferred Stock which are convertible into 6,000,000 shares of the Company's
Common Stock. The designations of the Series C Preferred Stock and the Series D
Preferred Stock provide for the automatic conversion upon an increase of the
number of authorized shares of the Company's Common Stock sufficient to permit
such conversion and no act on the part of holders of the Series C Preferred
Stock and the Series D Preferred Stock will be required to effectuate such
conversion.
7
Stock Options Issuable Pursuant to a Management and Investment Banking Agreement
On April 2, 2002, the Company entered into a Management and Investment
Banking Agreement with vFinance Investments, Inc., and is currently negotiating
an amendment to such agreement. Pursuant to the Management and Investment
Banking Agreement, vFinance Investments Inc. is performing financial advisory
and investment banking services to the Company and in consideration for such
services vFinance Investments, Inc. received a one time payment of $15,000. In
the event that the proposed amendment is consummated, vFinance Investments,
Inc.will receive an option to purchase 7,500,000 shares of Common Stock for
$0.04 per share and an option to purchase 5,000,000 shares of Common Stock for
$0.15 per share. In the event vFinance Investments, Inc. exercised all such
options, the Company would receive aggregate proceeds of $1,050,000.
Stock Purchase Warrants Held by the Company's Executive Officers
On April 16, 2002, the Company issued to Lewis S. Schiller, Chief
Executive Officer a warrant to purchase 10,000,000 million shares of common
stock at $0.043 per share, the fair market value at date of issuance, and
10,000,000 million shares of common stock at $0.001, subsequently adjusted to
$0.043 per share, the fair market value at date of issuance. and issued to
Grazyna B. Wnuk, Vice-President, a warrant to purchase 10,000,000 shares of
common stock at $0.043 per share, the fair market value at date of issuance. The
Company intends to reserve 30,000,000 shares of its common stock for the future
exercise of these warrants. The warrant issued to Lewis S. Schiller and Grazyna
B. Wnuk contain cashless exercise provisions which may result in compensation
expense equal to the amount by which the fair market value of such underlying
shares of common stock exceeds the exercise price of such warrants and will be
calculated for each future reporting period for which the warrants remain
outstanding. In the event that all of such warrants were exercised and the
cashless exercise provision was not utilized, the Company would receive an
aggregate of $1,290,000 in exercise proceeds upon the issuance of 30,000,000
shares of Common Stock. In the event that all of such warrants were exercised
utilizing the cashless exercise provision, no cash proceeds would be received by
the Company and the number of Common Stock shares to be issued would be
calculated as follows [(shares exercised x (fair market value on date of
exercise - exercise price)) / fair market value on date of exercise].
Stock Options to Be Issued to the Company's Executive Officers
The Company intends to grant to Lewis S. Schiller, Chief Executive
Officer, an option to purchase 9,000,000 shares of Common Stock for $0.04 per
share, exercisable upon issuance, an option to purchase 24,000,000 shares of
Common Stock for $0.04 per share and an option to purchase 16,000,000 shares of
Common Stock for $0.15 per share. In the event Lewis S. Schiller exercised all
such options, the Company would receive aggregate proceeds of $3,720,000. The
Company intends to grant to Grazyna B. Wnuk, Vice-President, an option to
purchase 1,500,000 shares of Common Stock for $0.04 per share, exercisable upon
issuance, an option to purchase 1,800,000 shares of Common Stock for $0.04 per
share and an option to purchase 1,200,000 shares of Common Stock for $0.15 per
share. In the event Grazyna B. Wnuk exercised all such options, the Company
would receive aggregate proceeds of $312,000.
Stock Options to Be Issued to Consultants
The Company does not currently have the funds to pay consulting fees to
its key non-employee executives. As an inducement to retain the services of its
key non-employee consultants, the Company intends to issue to them, options to
purchase an aggregate of 15,750,000 shares of Common Stock for $0.04 per share,
exercisable upon issuance. In the event the consultants exercised all such
options, the Company would receive aggregate proceeds of $630,000.
8
Stock Options to Be Issued to Future Employees
The Company recognizes the need to attract qualified employees to
conduct the business operations of the Company. Currently the Company utilizes
its two executive employees and key consultants to conduct its business
operations. The Company believes that, if it obtains funding sufficient to,
among other things, provide appropriate levels of compensation, appropriate
levels of directors and officers liability insurance and appropriate benefit
packages, it will be in a position to search for qualified individuals for
permanent positions within the Company. In anticipation of the hiring of future
officers and employees, the Company intends to attract such individuals by
issuing to them options to purchase an aggregate of 26,600,000 shares of Common
Stock for $0.04 per share and 17,750,000 shares of Common Stock for $0.15 per
share. In the event the future employees exercised all of such options, the
Company would receive aggregate proceeds of $3,726,500.
Summary of Proposed Equity Issuances
The following table presents a pro forma capitalization of the Company
which assumes that all of the previously discussed issuances occur and assumes
that all equity instruments with conversion or exercise provisions have been
converted or exercised.
------------------------------------------------------------------------------------------------
Fully
Diluted
Preferred Common Conversion
Title of Equity Instrument to be Shares Conversion Stock or Exercise
Issued Issued Rate Shares Price
----------------------------------------- ----------- ------------- -------------- -------------
Common Stock outstanding 49,808,890
Series B Preferred Stock 20,000 3,333 66,666,667
Series C Preferred Stock 60,000 100 6,000,000
Series D Preferred Stock 40,000 100 4,000,000
Series E Preferred Stock 10,000 1,000 10,000,000 $0.10
Series F Preferred Stock 90,000 1,000 90,000,000 $0.10
Stock Options 109,450,000 $0.04
Stock Options 55,450,000 $0.15
Warrants held by Lewis S. Schiller 20,000,000 $0.043
Warrants held by Grazyna B. Wnuk 10,000,000 $0.043
----------------------------------------- ----------- ------------- -------------- -------------
Totals 421,375,557
----------------------------------------- ----------- ------------- -------------- -------------
9
MARKET FOR COMMON EQUITY
The Company's Common Stock is traded on the National Association of
Securities Dealers, Inc.'s Over the Counter Bulletin Board ("OTC Bulletin
Board") under the symbol "FXGP". The following table sets forth, for the periods
indicated, the quarterly range of the high and low closing bid prices per share
of our Common Stock as reported by the OTC Bulletin Board Trading and market
services. Such bid quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.
Bid Prices
Current period from High Low
---- ---
July 1, 2002 to
July 19, 2002 $0.12 $0.04
Quarter ended
September 30, 2001 $0.87 $0.26
December 31, 2001 $0.72 $0.38
March 31, 2002 $0.99 $0.08
June 30, 2002 $0.23 $0.03
RIGHTS OF DISSENTING SHAREHOLDERS
Pursuant to Delaware General Corporate Law, any shareholder of the
Company who objects to the amendment of the articles of incorporation will not
have any right to receive from the Company the fair value of his, her or its
shares. Under the Delaware General Corporate Law, any provision of the
certificate of incorporation of The Finx Group may be amended by approval of the
board of directors and the affirmative vote of a majority of the voting power of
the outstanding shares entitled to vote thereon; provided, that any amendment
which affects the rights of the holders of any class or series of capital stock
must be approved by the holders of a majority of the shares of such class or
series.
INCORPORATION BY REFERENCE
The Company hereby incorporates by reference in this Information
Statement, its Annual Report on Form 10-KSB for the year ended December 31, 2001
Copies of the Company's Form 10-KSB for the year ended December 31,
2001, without Exhibits, may be obtained without charge by writing to Lewis S.
Schiller, The Finx Group, Inc., 249 North Saw Mill River Road, Elmsford, NY
10523. Exhibits will be furnished upon request and upon payment of a handling
charge of $.25 per page, which represents the Company's reasonable cost of
furnishing such Exhibits.
By Order of the board of directors
Lewis S. Schiller
Chairman of the Board
July 24, 2002
10