UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2001.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________.
Commission File Number 000-21559
VIISAGE TECHNOLOGY, INC.
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3320515
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 Porter Road, Littleton, MA 01460
------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (978) 952-2200
-------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 13, 2001
----------------------------- --------------------------------
Common stock, $.001 par value 16,816,260
VIISAGE TECHNOLOGY, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2001
----------------------------------------------------
INDEX
-----
Page
----
Facing Sheet............................................................ 1
Index................................................................... 2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets as of September 30, 2001 and
December 31, 2000........................................... 3
Statements of Income for the three months and nine months
ended September 30, 2001 and October 1, 2000................ 4
Statements of Cash Flows for the nine months
ended September 30, 2001 and October 1, 2000................ 5
Notes to Financial Statements............................... 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 9
Item 3 - Quantitative and Qualitative Disclosure about Market
Risk....................................................... 11
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings.......................................... 12
Item 2 - Changes in Securities...................................... 12
Item 3 - Defaults by the Company on its Senior Securities........... 13
Item 4 - Submission of Matters to a Vote of Security Holders........ 13
Item 5 - Other Information.......................................... 13
Item 6 - Exhibits and Reports on Form 8-K........................... 13
SIGNATURES.............................................................. 14
2
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
VIISAGE TECHNOLOGY, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 30, *DECEMBER 31,
2001 2000
-------------------- ----------------------
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents $ - $ -
Accounts receivable 4,544 3,305
Costs and estimated earnings in excess of billings 26,424 26,338
Other current assets 481 601
-------------------- ----------------------
Total current assets 31,449 30,244
Property and equipment, net 14,781 14,605
Other assets 320 424
-------------------- ----------------------
$ 46,550 $ 45,273
==================== ======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 8,860 $ 10,331
Convertible subordinated debt - 1,000
Current portion of project financing 3,671 3,688
-------------------- ----------------------
Total current liabilities 12,531 15,019
Long-term debt 1,612 2,515
Project financing 9,597 7,011
-------------------- ----------------------
23,740 24,545
Shareholders' equity 22,810 20,728
-------------------- ----------------------
$ 46,550 $ 45,273
==================== ======================
* Derived from audited financial statements
The accompanying notes are an integral part of these financial statements.
3
VIISAGE TECHNOLOGY, INC.
STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------------- -------------------------------------
SEPT. 30, OCT. 1, SEPT. 30, OCT. 1,
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
Revenues $ 6,116 $ 8,280 $19,355 $19,766
Project costs 4,233 6,679 14,202 15,009
---------------- ---------------- ---------------- ----------------
Project margin 1,883 1,601 5,153 4,757
---------------- ---------------- ---------------- ----------------
Operating Expenses:
Sales and marketing 174 186 393 540
Research and development 568 226 1,433 487
General and administrative 620 601 1,777 1,848
---------------- ---------------- ---------------- ----------------
Total operating expenses 1,362 1,013 3,603 2,875
---------------- ---------------- ---------------- ----------------
Operating income 521 588 1,550 1,882
Interest expense 331 383 922 1,295
---------------- ---------------- ---------------- ----------------
Income before income taxes 190 205 628 587
Provision for income taxes - - - -
---------------- ---------------- ---------------- ----------------
Net income 190 205 628 587
Preferred stock dividends - 32 - 210
---------------- ---------------- ---------------- ----------------
Net income applicable to common
shareholders $ 190 $ 173 $ 628 $ 377
================ ================ ================ ================
Basic net income per share $ 0.01 $ 0.02 $ 0.04 $ 0.04
================ ================ ================ ================
Basic shares 16,545 10,959 16,164 10,262
================ ================ ================ ================
Diluted net income per share $ 0.01 $ 0.01 $ 0.04 $ 0.03
================ ================ ================ ================
Diluted shares 17,139 13,871 16,629 13,902
================ ================ ================ ================
The accompanying notes are an integral part of these financial statements.
4
VIISAGE TECHNOLOGY, INC.
STATEMENTS OF CASH FLOW
(IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
----------------------------------------------------------
SEPT. 30, OCT. 1,
2001 2000
--------------------- ---------------------
Cash Flows from Operating Activities:
Net income $ 628 $ 587
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 3,868 3,428
Directors fees paid in common stock 216 84
Change in operating assets and liabilities:
Accounts receivable (1,239) 524
Costs and estimated earnings in excess of billings (86) (5,608)
Other current assets 174 109
Accounts payable and accrued expenses (1,338) 3,077
-------- --------
Net cash provided by (used for) operating
activities 2,223 2,201
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (4,044) (62)
Decrease in other assets 104 183
-------- --------
Net cash provided by (used for) investing activities (3,940) 121
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Project financing 5,569 -
Principal payments on long-term borrowings (903) (3,838)
Principal payments under project financing (3,000) (3,015)
Net proceeds from issuance of common stock 51 4,090
-------- --------
Net cash provided by (used for) financing activities 1,717 (2,763)
-------- --------
Net increase (decrease) in cash and cash equivalents - (441)
Cash and cash equivalents, beginning of period - 441
-------- --------
Cash and cash equivalents, end of period $ - $ -
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for interest $ 882 $ 1,204
======== ========
Cash paid during the period for income taxes $ - $ -
======== ========
NON CASH ACTIVITIES:
Directors fees paid in common stock $ 270 $ 84
======== ========
Conversion of preferred stock accrued dividends to
common stock $ 65 $ -
======== ========
Conversion of convertible debt and accrued interest to
common stock $ 1,068 $ 1,579
======== ========
The accompanying notes are an integral part of these financial statements.
5
VIISAGE TECHNOLOGY, INC.
NOTES TO FINENCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Viisage Technology, Inc. (Viisage or the Company) is a leader in the emerging
field of biometrics technology and in providing digital identification systems
and solutions. The Company focuses on identification solutions that improve
personal convenience and security, deter fraud, and reduce identification
program costs. Viisage combines its systems integration and software design
capabilities with its proprietary software and hardware products and other
industry standard products to create complete customized solutions. These
turnkey solutions integrate image and data capture, create relational databases,
incorporate multiple biometrics and improve customers' ability to move and
manage information. Applications can include driver's licenses, voter
registration, national identification cards, law enforcement, social services,
access control and PC network and Internet access security. Viisage's primary
customers have been government agencies with particular penetration in
Departments of Motor Vehicles. The Company has captured approximately 30% of the
domestic driver's license market. Viisage products annually produce more than 20
million identification documents at more than 1,500 locations in 14 states. The
Company has also provided services under subcontracts for projects in Jamaica,
the Philippines and for the U.S. Immigration and Naturalization Service.
Originally developed at MIT, face-recognition technology is widely recognized as
the most convenient, non-intrusive and cost-effective biometric available.
Viisage's patented face-recognition technology is focused on five major product
application areas.
FACEEXPLORER(TM), Viisage's technology for image retrieval and analysis, is
recognized for its leadership technology performance in real-time and large-
database applications. FACEEXPLORER is deployed in the world's largest face-
recognition application with a database of more than 9 million enrolled images
and growing by 15,000 new images per day. The product family of face-recognition
applications also includes: FACENET(TM) for Internet and e-commerce security;
FACEPIN(TM) for point-of-sale transactions verification; FACEPASS(TM) used for
physical access control and keyless entry and FACEFINDER(TM) for surveillance
and identification.
The Company is engaged in one business, the development and implementation of
digital identification systems and solutions. The Company has an integrated
business model: identification solutions through system integration systems and
biometric software. Previously the Company reported two business segments,
however the Company's current mission is to design, develop and deliver
integrated identification solutions. Substantially all of the Company's revenues
have been derived within the United States.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial data as of September 30, 2001 and December 31, 2000,
and for the three and nine month periods ended September 30, 2001 and October 1,
2000, have been prepared by the Company, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The December 31, 2000 balance sheet was
derived from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. These financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
6
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows as of September 30, 2001 and for the three
and nine month periods ended September 30, 2001 and October 1, 2000, have been
made. The results of operations for the period ended September 30, 2001 are not
necessarily indicative of the operating results for the full year.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
These assumptions affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Computation of Net Income per Share
The basic net income per share calculation is computed based on the weighted
average number of shares of common stock outstanding during the period. The
impact of approximately 2,042,000 shares of common stock consisting of certain
outstanding options, the conversion of convertible subordinated debt, the
conversion of convertible preferred stock, and stock warrants were not reflected
in the September 30, 2001 dilutive net income per share calculation. The impact
of approximately 1,937,000 shares of common stock consisting of certain
outstanding options, the conversion of convertible subordinated debt, the
conversion of convertible preferred stock, and stock warrants were not reflected
in the October 1, 2000 dilutive net income per share calculation.
3. INCOME TAXES
No provision for income taxes has been made in the three month and nine month
periods in fiscal 2001 and 2000 due to the available net operating loss carry
forwards due to the uncertainty surrounding the realization of the Company's net
deferred tax asset which has a full valuation allowance.
4. RELATED PARTY TRANSACTIONS AND SHAREHOLDERS' EQUITY
Currently, Lau Technologies (Lau) owns approximately 40% of the Company's common
stock. Readers are referred to the "Notes to Financial Statements" section of
the Company's 2000 Annual Report to Shareholders for further discussion.
The Company has two non-exclusive license agreements with Lau, whereby Lau acts
as a distributor of the Company's "Facial Recognition" Technology for certain
European Markets, U.S. Airports and other end users that are Federal Agencies.
Lau will pay the Company royalties, as defined, under these agreements. Through
September 30, 2001, no royalties have been earned.
The Company has also obtained from Lau, an exclusive (except for limited fields
reserved by Lau), perpetual, worldwide license to use the U.S. patent 5,432,864
purchased by Lau from Daozeng Lu and Simon Lu, and all improvements thereto,
which relates to a system for automatically verifying the identity of an
individual using identification parameters that are carried on an escort memory
such as an identification or credit card. This license requires royalty
payments to Lau for each unit sold or licensed by Viisage. The agreement also
requires the issuance of 50,000 shares of Viisage common stock to Lau following
the royalty commencement date. No royalty amount has been incurred to date and
therefore the royalty commencement date has not been established.
7
The Company refinanced with a commercial leasing organization, the remaining
$2.4 million of outstanding project lease financing with Lau, in September 2001.
Readers are referred to the "Notes to Financial Statements" section of the
Company's 2000 Annual Report to Shareholders for further discussion.
In January 2001, Lau converted its $1,000,000 subordinated note and accrued
interest into 847,354 shares of common stock.
In January 2001, 370 shares of the series A preferred stock and accrued
dividends were converted into 655,565 shares of common stock.
In January 2001, 650 shares of the series B preferred stock and accrued
dividends were converted into 796,593 shares of common stock.
In January and February of 2001, Strong River Investments, Inc. received
1,106,203 shares of common stock from the December 2000 cashless exercise of its
third adjustable warrant.
In February 2001, Strong River Investments, Inc. exercised its third adjustable
warrant for 1,586,305 shares and has received 1,481,305 shares of common stock
from the company through a cashless exercise.
In June 2001, Strong River Investments, Inc. received 105,000 shares of common
stock from the February 2001 cashless exercise of its third adjustable warrant.
In October 2001, Cardinal Capital received 28,125 shares of common stock from
the exercise of its common stock purchase warrants.
In October 2001, Citizens Financial Group, Inc. received 20,579 shares of common
stock from a cashless exercise of its common stock purchase warrants.
In October 2001, J. P. Turner & Company received 10,000 shares of common stock
from a partial exercise of its common stock purchase warrants.
In November 2001, the Shaar Fund received 50,000 shares of common stock from the
exercise of its common stock purchase warrant.
5. BUSINESS SEGMENTS
The Company is engaged in one business, the development and implementation of
digital identification systems and solutions. The Company has an integrated
business model: identification solutions through system integration systems and
biometric software. Previously the Company reported two business segments,
however the Company's current mission is to design, develop and deliver
integrated identification solutions. Substantially all of the Company's revenues
have been derived within the United States.
8
VIISAGE TECHNOLOGY, INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and accompanying notes contained in the Company's 2000
Annual Report and Form 10-K.
The following discussion and analysis contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed in the
section below entitled "Certain Factors That May Affect Future Results." The
cautionary statements made herein should be read as being applicable to all
related forward-looking statements in this Form 10-Q.
RESULTS OF OPERATIONS
Revenues are derived principally from multi-year contracts for systems
implementation, card production and related services. Revenues for the third
quarter of 2001 were approximately $6,116,000, compared to approximately
$8,280,000 for the third quarter of 2000. Revenues for the first nine months of
2001 were approximately $19,355,000 compared to approximately $19,766,000 for
the same period in 2000. The 26.1% decrease in revenue between the two three
month periods and the 2.1% decrease between the two nine month periods was
primarily a result of customer delays in the states of Pennsylvania and
Maryland.
Gross margins increased to 30.8% in the third quarter of 2001 from 19.3% in the
third quarter of 2000. Gross margins increased to 26.6% for the first nine
months of 2001 compared to 24.1% for the same period in 2000. The increase in
gross margins between the two three month periods and the two nine month periods
is due principally to the impact of lower margin contracts ending and being
replaced with higher margin business.
Sales and marketing expenses decreased approximately $12,000 in the third
quarter of 2001 from the third quarter of 2000 and decreased approximately
$147,000 for the first nine months of 2001 from the first nine months of 2000.
This represents an increase to 2.8% from 2.2% of revenue for the quarter to
quarter period and a decrease to 2.0% from 2.7% for the first nine months of
each fiscal year. The decrease is due principally to the Company's continuing
efforts to increase its distribution and marketing capabilities for its facial
recognition solutions by adding and certifying new system integrators and
reseller partners. This allows the Company to control its costs while
increasing its marketing capabilities.
Research and development expenses increased approximately $342,000 in the third
quarter of 2001 from the third quarter of 2000 and increased approximately
$946,000 in the first nine months of 2001 from the first nine months of 2000.
This represents an increase to 9.3% from 2.7% of revenue for the quarter to
quarter period and 7.4% from 2.5% for the first nine months of each fiscal year.
The increase is due principally to the Company's continued investment in
biometrics. Research and development costs do not include amounts for specific
projects that are allocated to project costs, and do not reflect the benefits to
Viisage under license arrangements from the research and development efforts of
Lau Technologies and the Massachusetts Institute of Technology for projects that
are not directly related to the Company.
General and administrative expenses increased by approximately $19,000 in the
third quarter of 2001 from the third quarter of 2000 and decreased approximately
$71,000 in the first nine months of 2001 from the first nine months of 2000.
This represents an increase to 10.1% from 7.3 % of revenue for the quarter to
quarter periods and a decrease to 9.2% from 9.3% for the first nine months of
each fiscal year. The decrease in expenses for the nine month periods is due
principally to the Company's continuing efforts to control its costs while
growing the business.
9
Interest expense decreased approximately $52,000 in the third quarter of 2001
from the third quarter of 2000 and decreased approximately $373,000 in the first
nine months of 2001 from the first nine months of 2000. This represents an
increase to 5.4% from 4.6% of revenue for the quarter to quarter period and a
decrease to 4.8% from 6.6% for the first nine months of each fiscal year. The
decrease in interest expense for the three and nine month periods ended
September 2001 was a direct result of the company's refinancing of two project
leases as well as the reduction on the prime rate and its impact on the
company's operating line of credit.
No provision for income taxes has been made in the three month and nine month
periods in fiscal 2001 and 2000 due to the available net operating loss carry
forwards. The Company did not record a tax benefit for the remaining net
operating loss carry forwards due to the uncertainty of when such benefit will
be realized.
The company may require additional working capital to further develop its core
businesses, to finance acquisitions, and to pursue other corporate purposes that
may be identified in the future by the Board of Directors. The Company believes
that there are attractive acquisition opportunities in both the identification
systems and biometric sectors, and that additional working capital is likely to
be required to meet the increased market demand anticipated for the Company's
facial recognition technology. However, there can be no assurance that we will
be successful in any acquisition opportunity or in securing additional financing
on terms acceptable to the Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $4.0 million operating line of credit. This revolver, is a
sweep account, which is set up to maintain the lowest possible balance on the
revolver by maintaining a zero balance of cash at all times. The line of credit
contains various financial covenants and is collaterized by substantially all of
the Company's assets. At the end of the third quarter 2001, $1.6 million of the
$4.0 million credit line had been utilized.
Accounts receivable increased approximately 37.5% from December 31, 2000 to
September 30, 2001 due to the timing of billings.
Costs and estimated earnings in excess of billings remained approximately the
same from December 31, 2000 to September 30, 2001, and reflect the unbilled
accumulation of costs on contracts in progress.
Historically, the Company has not made substantial capital expenditures for
facilities, office and computer equipment and has satisfied its needs in these
areas principally through leasing.
The Company also has system project lease financing arrangements with several
commercial leasing organizations. Pursuant to certain of these arrangements,
the lessor purchases certain of the Company's digital identification systems and
leases them back to the Company for deployment with identified and contracted
customers approved by the lessor. In other arrangements the Company retains
title to the equipment financed. In either case, the lessor has an assignment of
the Company's rights under the related customer contracts, including rights to
use the software and technology underlying the related systems. Under these
arrangements, the lessor bears the credit risk associated with payments by the
Company's customers, but the Company bears performance and appropriation risk
and is generally required to repurchase a system in the event of a termination
by a customer for any reason except credit default. Under the leases the Company
is required to maintain certain financial ratios and minimum levels of tangible
capital funds, as defined in the lease agreements. These project lease
arrangements are accounted for as capital leases. At September 30, 2001, the
Company had approximately $13.3 million outstanding under the lease financing
arrangements. The Company refinanced with a commercial leasing organization,
the remaining $2.4 million of outstanding project lease financing with Lau, in
September 2001.
The Company believes that it will continue to meet its debt covenants. However,
this expectation is dependent in part on achieving business forecasts. If the
Company does not meet such covenants, the bank and/or the lessor could require
immediate repayment of outstanding amounts.
10
The Company believes that if it meets its business forecast for 2001, cash flows
from available borrowings, project leasing, operations and capital raising will
be sufficient to meet its working capital and capital expenditure needs for the
foreseeable future.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
MARKET RISK
Except for the Company's revolving credit facility, which has a variable
interest rate, the Company has no material exposure to market risk that could
affect its future results of operations and financial condition.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company operates in an environment that involves a number of risks, some of
which are beyond the Company's control. Forward-looking statements in this
document and those made from time to time by the Company through its senior
management are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements concerning
future plans or results are necessarily only estimates and actual results could
differ materially from expectations. Certain factors that could that could
cause or contribute to such differences include among other things:
o potential fluctuations in quarterly results;
o the size and timing of award and performance on contracts;
o dependence on large contracts and a limited number of customers;
o lengthy sales and implementation cycles;
o changes in management estimates inherent in accounting for contracts;
o availability and cost of key components;
o market acceptance of new or enhanced products and services;
proprietary technology and changing technology;
o competitive conditions;
o system performance;
o management of growth;
o dependence on key personnel;
o general economic and political conditions and other factors affecting
spending by customers.
Any of these factors could have a material adverse impact on the Company's
operations and financial results. The Company cautions the reader that this list
of risk factors may not be complete. The Company undertakes no obligation to
update these forward-looking statements to reflect any future events or
circumstances.
11
VIISAGE TECHNOLOGY, INC.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES
The following transactions occurred prior to the filing of this Form 10-Q with
respect to the Company's capital stock. Each of the transactions described below
involved the conversion of the Company's outstanding securities into shares of
the Company's common stock. Each transaction was exempt from the registration
requirements of the Securities Act of 1933 under Section 4(2) or section 3(a)(9)
of the Securities Act.
In January 2001, Lau converted its $1,000,000 subordinated note and accrued
interest into 847,354 shares of common stock.
In January 2001, 370 shares of the series A preferred stock and accrued
dividends were converted into 655,565 shares of common stock.
In January 2001, 650 shares of the series B preferred stock and accrued
dividends were converted into 796,593 shares of common stock.
In January and February of 2001, Strong River Investments, Inc. received
1,106,203 shares of common stock from the December 2000 cashless exercise of its
third adjustable warrant.
In February 2001, Strong River Investments, Inc. exercised its third and final
adjustable warrant for 1,586,305 shares and has received 1,481,305 shares of
common stock from the company through a cashless exercise.
In June 2001, Strong River Investments, Inc. received 105,000 shares of common
stock from the February 2001 cashless exercise of its third adjustable warrant.
In October 2001, Cardinal Capital received 28,125 shares of common stock from
the exercise of its common stock purchase warrants.
In October 2001, Citizens Financial Group, Inc. received 20,579 shares of common
stock from a cashless exercise of its common stock purchase warrants.
In October 2001, J. P. Turner & Company received 10,000 shares of common stock
from a partial exercise of its common stock purchase warrants.
In November 2001, the Shaar Fund received 50,000 shares of common stock from the
exercise of its common stock purchase warrant.
12
ITEM 3 - DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT
NO. NOTE DESCRIPTION
--- ---- -----------
10.36 (k) Employment agreement dated as of November 3, 2001 between the
Registrant and Thomas J. Colatosti.
13
VIISAGE TECHNOLOGY, INC.
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.
VIISAGE TECHNOLOGY, INC.
Date: November 13, 2001 By: /s/ Thomas J. Colatosti
----------------------------
Thomas J. Colatosti
President and Chief Executive Officer
By: /s/ Sean F. Mack
----------------------------
Sean F. Mack
Vice President, Controller and Treasurer
14