-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EGBzTFmddX8AuCdo74Z4Zrfi0Tr+GJxo04ZiAXUECF17aUrAA39hW976Tsxg0FGp ZBHta5sfWsexcKI3fEEHlg== 0001144204-09-011072.txt : 20090226 0001144204-09-011072.hdr.sgml : 20090226 20090226162553 ACCESSION NUMBER: 0001144204-09-011072 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090219 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090226 DATE AS OF CHANGE: 20090226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXPLORATIONS GROUP INC CENTRAL INDEX KEY: 0001175445 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 651089222 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-49864 FILM NUMBER: 09638115 BUSINESS ADDRESS: STREET 1: 2500 NORTH MILITARY TRAIL STREET 2: SUITE 225 D CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5619982032 MAIL ADDRESS: STREET 1: 2500 NORTH MILITARY TRAIL STREET 2: SUITE 225 D CITY: BOCA RATON STATE: FL ZIP: 33431 8-K 1 v141407_8k.htm
Securities and Exchange Commission
Washington, D. C. 20549


FORM 8-K


CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


  Date of Report: February 19, 2009


EXPLORATIONS GROUP, INC.
(Name of Registrant as specified in its charter)


Delaware
000-49864
65-1089222
(State or other jurisdiction
of incorporation or
organization)
(Commission File No.)
(IRS Employer
Identification No.)


777 South Flagler Drive
Suite 800-West Tower
West Palm Beach, FL 33401
(561) 515-6113
(Address and telephone number of principal executive offices)

34 Fifteenth Street
Brooklyn, NY 11215
 (Previous address of principal executive offices)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
Item 2.01
Completion of Acquisition or Disposition of Assets

On February 19, 2009, pursuant to the terms of an Agreement and Plan of Merger dated February 19, 2009 by and between the Registrant (the “Company”), Hawk Acquisition Corp., a newly formed, wholly-owned Florida subsidiary of the Company (“Hawk Acquisition”) and Hawk Biometric Technologies, Inc., a Florida corporation (the “Merger Agreement”), Hawk Acquisition merged with Hawk Biometric Technologies, Inc. (“Hawk Biometric”). Pursuant to the merger, Hawk Biometric was the surviving entity and became a wholly-owned subsidiary of the Company.

Pursuant to the terms of the Merger Agreement, as consideration for the merger, the former stockholders of Hawk Biometric received .02 shares of the Company’s Series B Preferred Stock for each share of Hawk Biometric Class A and Class B common stock they held for a total of 599,288 shares of the Company’s Series B Preferred Stock.  Pursuant to the Amended and Restated Certificate of Designation of the Company’s Series B Preferred Stock, each share of Series B Preferred Stock is convertible into one hundred (100) shares of the Company’s common stock at any time, at the option of the holder and will automatically be converted in common stock on the day following the completion of the Company’s 6-for-1 reverse split of its common stock (the “Reverse Common Stock Split”).  The conversion rate of the Series B Preferred Stock is not subject to adjustment upon the occurrence of the Reverse Common Stock Split.  Shares of Series B Preferred Stock have the right to vote on all matters on an as-converted basis.  Upon the completion of the Reverse Common Stock Split, the Series B Preferred Stock issued as consideration under the Merger Agreement will automatically convert into 59,928,800 shares of the Company’s common stock.

Description of Hawk Biometric’s Business

Overview

Hawk Biometric Technology, Inc. (“Hawk Biometric”) was incorporated in the State of Florida on October 25, 2007.  Immediately upon its inception, Hawk Biometric acquired patented technology from Hawk Biometrics of Canada, Inc. covering the use of fingerprint technology to permit the operation of a vehicle only by an authorized driver, as well as, other related patent pending technologies.   Since inception, Hawk Biometrics has been a developer of innovative fingerprint authentication technology that offers high degrees of security, convenience, and ease of use in applications such as automobile locks and identity theft protection. This technology can also be used in banking, healthcare, hotel/casino operations, employee time clock and attendance, stadium security, sporting and gaming applications where identity management is required.

Biometric Technology Background

As the level of security breaches and transaction fraud increases, the need for highly secure identification and personal verification technologies is becoming apparent.  One leading solution to providing highly secure identification and personal verification solutions are the extensive array of existing biometric technologies.  Biometrics are automated methods of recognizing a person based on a physiological or behavioral characteristic.  Among the unique features measurable by various biometric technologies and used for unique identification purposes are face, fingerprints, hand geometry, handwriting, iris, retinal, vein and voice.
 
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Considerably more accurate than current methods of personal identification (such as the utilization of passwords or PINs), biometric technologies are become more convenient and considerably less expensive.  The accuracy of biometrics is inherent in their design, since biometric identification technologies link particular biological characteristics to a particular individual utilizing unique biological characteristics such as fingerprints and retinal patterns.  This is as compared to most currently used identification techniques which are not permanently and inherently associated with an individual, for example, a password can be stolen or guessed by someone other than the authorized user.   In addition, biometric identification technologies are more convenient (nothing to carry or remember), more accurate (it provides for positive authentication) and can provide audit trails.

Utilized alone or integrated with other technologies such as smart cards, encryption keys and digital signatures, biometric identification technologies can be and are being utilized in authentication applications include workstation, network and domain access, single sign-on, application logon, data protection, remote access to resources, transaction security and Web security.

Vehicle Security Industry Background

The motorized vehicle security industry within the United States is currently in excess of $5 billion annually, and growing quickly as statistics relating to heavy equipment and recreational vehicle theft continue to climb.  Comprised of automobiles, commercial vehicles, heavy construction equipment and recreational vehicles, the increased focus on security has risen in each segment of the industry.  In 2005, the Federal Bureau of Investigation reported that over 1.2 million vehicles were reported stolen, costing United States consumers over $8.6 billion per annum.  The report goes on to state that in the United States one vehicle is stolen every 25.5 seconds and that a majority of these vehicles are stripped down for their components and sold in the black market.  In industry segments where theft deterrent devises were relatively non-existent five years ago, the National Insurance Crime Bureau reported that in 2005 over $430 million in Mmotorcycles and over $1 billion of heavy construction equipment was lost as a result of theft.   With annual losses in excess of $10 billion per year, consumers and insurance providers are demanding more with regards to motorized vehicle security. According to the Freedonia Report on Automotive Security 2006, “Growth (in security) will be driven by the increased focus on vehicle-related security, as well as by innovative new vehicle tracking and monitoring capabilities that can be useful to various groups, including parents of adolescent drivers, vehicle owners, heavy equipment operators and insurance companies.”
 
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With over 17 million new vehicles sold within the United States each year, the automotive security industry represents a $2.65 billion portion of the motorized vehicle security marketplace, Industry experts anticipate that as the cost of automobiles continue to climb the automotive security Industry will more than double over the next 10 years.  Additive to the new vehicle sales segment of the security market, the aftermarket security segment has also grown to approximately $600 million as consumers search out a more comprehensive solution. Aftermarket security sales are projected to grow at a steady pace between now and 2015.

NORTH AMERICA - ELECTRONIC SECURITY SYSTEM AFTERMARKET   
(million dollars)
Item
1995
2000
2005
2010
2015
Total Auto Electronic Security Equipment Sales
$1,800
$2,300
$2,650
$3,200
$3,700
% aftermarket
18.6%
19.1%
21.1%
20.6%
21.2%
Electronic Security Systems Aftermarket
$335
$440
$560
$660
$785
Remote/Wireless
$180
$250
$320
$370
$430
Vehicle Recovery
$60
$100
$155
$210
$280
Local
$95
$90
$85
$80
$75
% security
8.8%
8.5%
7.8%
6.7%
6.1%
Automotive Electronics Aftermarket
$3,800
$5,150
$7,150
$9,900
12900
Freedonia Report on Automotive Aftermarket in North America 2006

This growth is driven primarily by the consumers desire to enhance their already robust security systems, provided by the car manufacturers, by adding additional levels of security technology and tracking systems rounding out their security concerns.  In saying this, growth within the vehicle security marketplace has a tendency to be additive in nature and tends not to cannibalize existing products.  The National Insurance Crime Bureau recognizes that consumers tend to adopt a layered approach to security and recommends a consumer take four basic steps to protect their vehicle:

• Installing a visible or audible warning device;

• Installing an immobilizing device that prevents the vehicle from being driven by the use of a cut-off switch,

• A smart key or other lockout system; and

• Installing a vehicle tracking device.
 
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The Freedonia Automotive Aftermarket of North America Report 2006 goes on to state the following:

Most of these (the National Insurance Crime Bureau) suggestions will drive demand for automotive electronic security systems. OEM-installed systems such as telematics may be supplanted somewhat by typically cheaper tracking systems. GMs ON-STAR system, for example, provides vehicle tracking and other anti-theft capabilities as part of its service, but the annual cost of the bundled service is typically much higher than that for stand-alone systems.  Leading suppliers of electronic automotive anti-theft devices and related products include Bosch, Delphi, Lo-Jack, Motorola, Siemens, TRW and Valeo.

Hawk Biometric’s Patent Portfolio and Technologies

Hawk Biometrics US patent issued in 2005 and valid through at least the year 2020, encompasses the use of any biometric fingerprint technology in the operation of any vehicle and includes any motorized vehicles including trucks, construction equipment, recreational vehicles, airplanes and  watercraft.  This broad patent serves as a “gatekeeper” and provides Hawk Biometric with the exclusive right to use or license any biometric fingerprint technology in the operation of any vehicle function.  The patent will be exploited by Hawk Biometric through a combination of non-exclusive patent licensing and the development, production and marketing of a suite of products for both the fleet and consumer automotive aftermarket, such as construction equipment, watercraft and aircraft.  In addition, Hawk Biometric has two additional patents pending and intends on filing an additional five patent applications, all related to its biometric technology covering areas such as banking and ATM applications, biomedical lockers, retail speed payment products and other applications of its technologies.

Unlike a traditional FBI or police fingerprint image, where the external surface of the fingers ridges is captured in its entirety, Hawk Biometrics biometric sensor actually reads down five epidural layers thus making the actual surface print incidental to the technologies accuracy.  For security reasons, a person’s actual fingerprint image is never recorded or stored within Hawk Biometric’s devices, rather the scanner translates the image of the print into a 444 byte statistical template.  By selecting a variety of specific data points within the image to build the template the scanner has created an accuracy rating of 99.92 %.  If someone were to download that template, there is insufficient data to recreate the complete fingerprint image, but there is enough data to provide certainty that the person’s approved template is statistically the authenticated user.

The two major convenience factors in utilizing fingerprint scanning authentication in motor vehicle operations is the lack of additional traditional “keys” that must be carried and the freedom and cost savings of not having to rely on third parties to replace key sets; the owner of the vehicle is in charge of the security system and they do not need to pay for lost or extra keys, every system can store multiple users and adding a new user takes less than a few minutes.
 
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Patent Licensing

Hawk Biometric’s US “gateway” patent, which is valid through at least the year 2020 broadly covers the use of fingerprint technology to limit the operation of any kind of vehicle.  Hawk Biometric will seek to license the patent, on a non-exclusive basis, to other manufacturers especially those developing security products for vehicles other than automobiles and trucks.  Typical industry patent licensing fees range from 7% to 15% of a product’s retail price.

Products

Hawk Biometric has developed a suite of products utilizing its patented technology to address the automotive security market.  In order to best utilize the company’s resources, Hawk Biometric outsources the development and manufacturing of products to established contract manufacturers.

PASS™

Hawk Biometric’s signature product, known as “PASS™”, is a fingerprint-based validation product for vehicles which incorporates Hawk Biometric’s patented technology.  The PASS system integrates fingerprint scanning technology into a vehicle’s operating system to control operation of the vehicle to only drivers who have been authorized (enrolled) into the system.  The PASS system is designed to integrate directly into a variety of manufacturer’s vehicles.  When an unauthorized user attempts to start a vehicle equipped with PASS, it will appear to them that the vehicle is dead.  For users who are enrolled, once the PASS system authenticates the driver, the vehicle operate normally.

The PASS system has been designed to be easily integrated with a variety of manufacturers and applications.  In most cases the device will be mounted near the traditional ignition system and it will work in concert with a standard key.  Attempting to start the vehicle without receiving the authentication from the device will appear as though the car is dead.  Once the system delivers an authentication the vehicle operation will begin immediately.

Future design concepts for PASS will be to integrate the technology into the “Start” buttons that are becoming more common in many of today’s models.  Currently, Mercedes, BMW, Toyota and Nissan have introduced a “Start” button that is mounted into the dash.  Hawk plans to integrate a biometric fingerprint scanner, into “Start” button which will eliminate the need for a car owner to carry an RFID fob, which is easily lost, forgotten or misplaced.

PASS takes advantage of the dramatically superior security features offered by biometrics together with the convenience of never losing your “key”.  The encrypted algorithm that is created by the fingerprint scan provides an unduplicated level of impenetrable security that resides literally in the hands of the car’s owner.  This system does not rely on manufactured chip sets, key blanks or even access pins.  If an owner wishes to add a new user to the vehicles memory, simply add their scan to the system and that user’s unique key is as secure as every other user.
 
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The owner of a PASS-equipped vehicle has an added benefit of controlling access to motorized vehicles in an environment where a vehicle’s keys are easily accessible to employees, such as in a warehouse environment where only trained personnel are allowed to use a forklift.  Installation of PASS would require any user seeking to operate the forklift to verify that they are approved by scanning their finger.

HawkEye™

The HawkEye™ system combines Hawk Biometric’s PASS system with GPS-based tracking features, to allow vehicle owners to remotely monitor, track, geo-fence and speed check the vehicle, or even remotely disable the vehicle via either a computer or cell phone.  Hawkeye provides increased security and functionality by adding an automatic vehicle Locator (AVL) system with PASS.  AVL allows the owner of vehicle to monitor its whereabouts at all times. For example, the owner of a fleet of delivery vehicles can be notified when a particular vehicle has changed location and can track its current location via a Web site. Other functions of Hawkeye include geo-fencing, a function currently being used by auto rental companies trying to keep track of vehicles crossing state or international borders.  Parents also have begun using geo-fencing to allow them to set parameters for where their teenager can drive their car. Among its other features Hawkeye can also notify a parent or a fleet vehicle owner, if a car exceedsa given speed; if the airbag deploys or if there is a system diagnostic warning such as a flat tire.

Hawk Watch 2000™

Hawk Watch 2000™ is our time clock application which uses our proprietary fingerprint technology to assure the identification of employees who punch in and out.  Using biometrics prevents employees from so-called “buddy punching” (i.e. punching the car of other employees who are not present) and provide an accurate record of employee workplace access.

Physical Access RFID/Biometric solutions (In Development)

Hawk Biometric's Physical Access RFID/Biometric solutions are designed to track all individuals within an office, workplace or building.  Our system combines state of the art RFID badges with our own  biometrics products to identify and authenticate each individual who enters a customer’s workplace or building and then standard RFID technologies to track their movements, and record and time stamp their locations.
 
Touch and Go™ (In Development)

Hawk Biometric's Touch and Go™ product is a speed payment system for retailers that allow customers to pay for purchases with a system that combines a frequent customer card with an embedded RFID chip and thumbprint reader to authenticate the customer.  Once a customer has completed their shopping, they scan their card and touch the thumbprint scanner. The purchases will then be credited to the customer's payment of choice when they enrolled.  Because the user of the system is biometrically authenticated, the risk of identify theft is virtually eliminated as well as the potential of credit card chargebacks arising from customers who claim that they did not purchase the items.
 
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Product Distribution and Marketing

Hawk Biometric’s suite of products and technology present opportunities to pursue multiple marketing channels simultaneously. Hawk Biometric’s PASS and Hawkeye products will be sold through aftermarket retail locations targeted in selected markets based on regional demographics and sales of high-end vehicles.  In addition, Hawk Biometric will seek to market  PASS and Hawkeye, directly and through resellers, to fleet owners of commercial vehicles.

In addition to sales in the retail aftermarket, Hawk Biometric is seeking OEM arrangements in the automotive market with other manufacturers of automotive security equipment to either integrate the PASS system into their products or to license Hawk Biometric’s technology.

In non-automotive markets, Hawk Biometric will pursue OEM distribution channels which include categories such as heavy machinery, farm equipment, fleet trucks, golf carts, airplanes, helicopters and watercraft. Hawk Biometric will go directly to the manufacturers to sell the PASS and Hawkeye systems as an upgrade or aftermarket feature.

Contract Manufacturing

In order to leverage Hawk Biometric’s resources, all manufacturing is outsourced to well established custom manufacturing facilities.  Currently, Hawk Biometric utilizes the technical expertise and manufacturing facilities of Florida Micro Electronics (“FME”). FME maintains a 35,000 sq. ft. manufacturing facility in West Palm Beach, Florida which ISO 9001 and TS 16949 registered, and provide customers with the capability to design and manufacture product for the automotive, telecom, industrial, medical and high reliability military and aerospace markets.

Competition

While Hawk Biometric offers unique solutions in the vehicle security market by integrating its patented driver authorization process, there are other competitors in the vehicle security market, which includes well known brands such as Lo-Jack and Directed Electronics.  In addition, there are numerous smaller competitors which provide small fleet management solutions targeted at small commercial fleet operators of 20 or fewer vehicles.
  
Intellectual Property

Hawk Biometric currently holds one US patent on its biometric technology for the use of a fingerprint to prevent operation of a vehicle by unauthorized users, has filed two additional patent applications and has identified five additional technologies for which it intends on filing patents.  Hawk Biometric continues to monitor the marketplace and employ attorneys to enforce their rights under this patent.
 
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GOVERNMENTAL REGULATION

Hawk Biometric is subject to the laws and regulations which apply to all businesses in general. The cost of compliance with all such regulations is minimal. Hawk Biometric is not subject to any specific regulations as a result of our business and did not spend any material amounts on compliance with environmental laws.

EMPLOYEES

As stated above, Hawk Biometric outsources the design and manufacturing of its products to contract manufacturers.  This allows Hawk Biometric to maintain just a small full time staff to handle administrative functions.  As of December 31, 2008, Hawk Biometric had two (2) full time employees.  Hawk Biometric believes that its future success will depend in part on our ability to attract, integrate, retain and motivate highly qualified sales and managerial personnel, and upon the continued service of our senior management. The competition for qualified personnel in our industry and graphical location is intense, and there can be no assurance that we will be successful in attracting, integrating, retaining and motivating a sufficient number of qualified personnel to conduct our business in the future. From time to time, we also employ independent contractors to support our marketing and sales organization. We have never had a work stoppage, and no employees are represented under collective bargaining agreements. We consider our relations with our employees to be good.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this registration statement.

The matters discussed in this registration statement contain forward-looking statements that involve risks and uncertainties.  Our actual results could differ materially from those discussed herein.  Factors that could cause or contribute to such differences are discussed in this section and elsewhere in this registration statement.

Operating Expenses

Our operating expenses are comprised primarily of salaries, consulting fees and general and administrative expenses.

Sales, general and administrative (“SGA”) expenses are composed principally of salaries of administrative personnel, fees for professional services and facilities expenses. These expenses were $279,169 for the period from October 27, 2007 through September 30, 2008.
 
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Operating Loss

Operating loss is calculated as our net revenues less all of our operating expenses.  Our operating loss for the period from October 27, 2007 through September 30, 2008 was $279,169.
 
Liquidity and Capital Resources
 

Our capital requirements are dependent on several factors and are primarily related to our product development expenses. At September 30, 2008, we had cash assets of $230,731.  We believe that our current cash and cash equivalents along with cash to be generated by operations will be sufficient to meet our anticipated cash for the next 12 months.  If we are unable to sell our products or license our technology over the next 12 months, our cash generated from operations will likely not be sufficient to fund operations. If cash generated from operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities or obtain a credit facility.  The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. The incurrence of indebtedness would result in an increase in our fixed obligations and could result in borrowing covenants that would restrict our operations. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If financing is not available when required or is not available on acceptable terms, we may be unable to continue to grow our business. In addition, we may be unable to take advantage of business opportunities or respond to competitive pressures. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

Risks and Uncertainty

The preceding statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" which are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties that could render them materially different, including, but not limited to, the risk that new products and product upgrades may not be available on a timely basis, the risk that such products and upgrades may not achieve market acceptance, the risk that competitors will develop similar products and reach the market first, and the risk that the Company would not be able to fund its working capital needs from cash flow.

DESCRIPTION OF PROPERTIES

Our executive offices, comprising approximately 950 square feet, are located at 777 South Flagler Dr., Suite 800, West Tower, West Palm Beach, Florida, 33401. These facilities are leased pursuant to a lease expiring in November, 2010.  The monthly rent is $4500.00.  Our leased space is currently adequate for our needs. We maintain substantially all of our computer systems at our offices.
 
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Our operations are dependent in part on our ability to protect our computer systems against physical damage from fire, floods, earthquakes, power loss, telecommunications failures, break-ins or other similar events. Furthermore, despite our implementation of network security measures, our computers are also vulnerable to computer viruses, break-ins and similar disruptive problems. The occurrence of any of these events could result in interruptions, delays or cessations of business which could have a material adverse effect on our business, results

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 20, 2009, the ownership of the Companys common stock and Series B Preferred stock by (i) each of our directors and executive officers; (ii) all of our executive officers and directors as a group; and (iii) all persons known by us to beneficially own more than 5% of our common stock.  Unless otherwise indicated in the footnotes to the table, (1) the following individuals have sole voting and sole investment control with respect to the shares they beneficially own and (2) the address of each beneficial owner listed below is c/o the Company, 777 South Flagler Dr., Suite 800, West Tower, West Palm Beach, Florida, 33401.

Name and Address
of Beneficial Owner
 
Shares of
Common Stock (1)
   
Percentage Ownership
of Shares of
Common Stock (2)
   
Shares of Series B
Preferred Stock (3)
   
Voting Power
of  Shares of
Preferred Stock (3)(4)
 
                         
Executive Officers and Directors
                       
                         
David Coriaty
    0       0       160,000       17.8 %
                                 
Tony De Risi
    0       0       80,000       8.9 %
                                 
Edward Sebastiano
    0       0       80,000       8.9 %
                                 
Mark Spanakos
    0       0       80,000       8.9 %
                                 
All Executive Officers and Directors as a group (4 persons)
    0       0       400,000       44.5 %
                                 
5% Stockholders
                               
CLR Associates, Inc.
    0       0       60,000       6.7 %
                                 
All Executive Officers, Directors and 5% Stockholders as a group (five  persons)
    0       0 %     460,000       51.2 %
 
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(1)  Calculated pursuant to Rule 13d-3(d) of the Exchange Act. Under Rule 13d-3(d), shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.

(2)  Based upon 30,000,000 shares of Common Stock issued and outstanding as of February 20, 2009.

(3)  Based upon 599,288 shares of Series B Preferred Stock issued and outstanding as of February 20, 2009.  Shares of Series B Preferred Stock can be converted, at any time, into 100 shares of common stock and are entitled to vote in all matters on an as-converted basis. Since each shares of Series B Preferred Stock can be voted on an as-converted basis, the effective voting power of each individual listed is shown.

(4)  Shares of Series B Preferred Stock are not subject to the Company’s announced 1-for-6 reverse common stock split which has no yet been effectuated.  Immediately upon the effectuation of the anticipated 1-for 6 reverse stock split, each shares of Series B Preferred stock then issued and outstanding will be automatically converted into 100 shares of common stock.  On a post-reverse 1-for 6 stock split basis, assuming that no additional shares of common stock have been issued and assuming no prior conversions of shares of Series B Preferred Stock into common stock, the voting power shown for each individual will increase by approximately 17.6%.

EXECUTIVE COMPENSATION

Hawk Biometrics executive officer did not receive any cash or stock compensation during the fiscal years ending December 31, 2007 and December 31, 2008.

The following table sets forth certain information concerning options granted to the named executives during 2008.

OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 2008

There where no option grants during 2008.

AGGREGATE OPTION EXERCISES IN 2008 AND YEAR END OPTION VALUES

There were no option exercises during 2008 and there were no options outstanding as of December 31, 2008.
 
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EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

Hawk Biometric currently has no written employment agreement with our executive officer nor do we have any termination of employment or any change of control arrangements with our officer.  We do not carry any key-man or other life insurance on either of our officers.

EMPLOYEE BENEFIT PLANS

Hawk Biometric maintains standard health insurance for its employees.

LEGAL PROCEEDINGS

To the best of our knowledge, there are presently no legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject and, to the best of its knowledge, no such actions against Hawk Biometric are contemplated or threatened.

Item 3.02
Unregistered Sales of Equity Securities

On February 20, 2009, the Company issued 599,288 newly issued shares of the Company’s Series B Preferred Stock to approximately 180 parties as consideration for the merger between the Company’s Hawk Acquisition Corp. and Hawk Biometric Technologies, Inc.  This transaction was not registered under the Act in reliance on the exemption from registration in Section 4(2) of the Act, as a transaction not involving any public offering.  These securities were issued as restricted securities and the certificates were stamped with restrictive legends to prevent any resale without registration under the Act or in compliance with an exemption.

Item 5.01
Change in Control of Registrant

On February 20, 2009, the Company issued 599,288 newly issued shares of the Company’s Series B Preferred Stock in connection with the Company’s acquisition of Hawk Biometric Technologies.  Each share of Series B Preferred Stock is convertible, at any time, into 100 shares of the Company’s common stock and will be converted automatically upon the completion of the Company’s anticipated 1-for-6 reverse stock split of the Company’s common stock.  Shares of Series B Preferred Stock are not subject to such reverse stock split. Each share of Series B Preferred Stock can be voted on all matters along with the Company’s common stock on an as-converted basis.
 
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As a result of the foregoing, the former stockholders of Hawk Biometric Technologies, as a group, currently own approximately 66.6% of the issued and outstanding stock of the Company, on an as converted basis.  After the completion of the anticipated 1-for-6 reverse stock split of the Company’s common stock, the former stockholders of Hawk Biometric Technologies, as a group, will own approximately 92.3% of the issued and outstanding stock of the Company, assuming that no additional shares of common stock have been issued and assuming no prior conversions of shares of Series B Preferred Stock into common stock.

Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On February 20, 2009, Eric Brown, resigned as a director of the Company and as Chief Executive Officer and President of the Company effective February 23, 2009.

On February 20, 2009, David Coriaty, Mark Spanakos, Edward Sebastiano and Tony DeRisi were appointed to the Board of Directors of the Company in accordance with the written consent of majority of directors dated February 20, 2009. In addition, on February 20, 2009, David Coriaty was appointed President and Chief Executive Officer of the Company, effective February 24, 2009.  Mr. Coriaty has had no prior relationship with the Company and was not a party to any transaction with the Company other than being a stockholder of Hawk Biometric Technologies.

The following table sets forth the names and positions of our new directors and executive officers:

NAME
AGE
 
POSITION
       
David Coriaty
39
 
President, CEO, Director
       
Tony DeRisi
41
 
Director
       
Edward Sebastiano
51
 
Director
       
Mark Spanakos
49
 
Director

The following sets forth biographical information concerning our directors and executive officers for at least the past five years:

David Coriaty (President, CEO, Director).  Mr. Coriaty is one of the founders of Hawk Biometrics and one of the inventors of Hawk Biometrics’ patented technology.  Mr. Coriaty has launched multiple successful business ventures including internet start-ups and a sports representation agency that works with well known NFL and MLB athletes.

Mark Spanakos (Director).  Mr. Spanakos  has more than 20 years experience in the financial markets.  He owns a seat on the New York Mercantile Exchange (NYMEX).
 
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           Edward Sebastiano (Director).  Mr. Sebastiano has more than 25 years of experience in the financial markets.  He is is the owner of The Esco group, a commodities trading company in New York City. He is also the founder of GFA, a public relations and management company the stars, which inclide Tico Torres (Bon Jovi) and Anquan Boldin (Arizona Cardinals).

Tony DeRisi (Director).  Mr. DeRisi  has than twenty years retail experience managing multiple facilities in and around Montreal, Canada. Mr. DeRisi will utilize his extensive experience to open distribution channels for Hawk Biometrics’ product lines.

Item 9.01 
Financial Statements

Attached as Exhibit 99 are the Independent Auditor’s Report and audited financial statements of Hawk Biometric for the period from October 25, 2007 to September 30, 2008.


SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: February 25, 2009

 
  Explorations Group, Inc.
   
  /s/ David Coriaty
  By: David Coriaty, President
 
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EX-10 2 v141407_ex-10.htm
 
Exhibit 10

AGREEMENT AND PLAN OF MERGER



This Agreement and Plan of Merger (hereinafter the "Agreement") is entered into as of this 19th day of February, 2009, by and among Explorations Group, Inc., a Delaware corporation ("Explorations"), Hawk Acquisition Corp. (“MergerSub”), a Florida corporation, and Hawk Biometric Technologies, Inc., a Florida corporation ("Hawk Biometric").

RECITALS:

WHEREAS, the respective Boards of Directors of Explorations, Hawk Biometric and MergerSub have each approved the merger of Hawk Biometric with and into MergerSub (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement, whereby each issued and outstanding share of Class A common stock, no par value and Class B common stock, no par value, of Hawk Biometric (collectively, the Hawk Biometric Class A common stock and Class B common stock shall be referred to herein as the "Hawk Biometric Common Stock"), will be converted into the right to receive two one-hundredths (.02) of a share of Explorations Convertible Series B Preferred stock, par value $.01 per share ("Series B Preferred Stock").

WHEREAS, the respective Boards of Directors of Explorations, Hawk Biometric and MergerSub have each determined that the Merger and the other transactions contemplated hereby are consistent with, and in furtherance of, their respective business strategies and goals and are in the best interests of their respective stockholders;

WHEREAS, Explorations, Hawk Biometric and MergerSub intend that the merger of Hawk Biometric with and into MergerSub will quality as a tax-free reorganization pursuant to Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and

NOW THEREFORE, for the mutual consideration set out herein and other good and valuable consideration, the legal sufficiency of which is hereby acknowledged, the parties agree as follows:
 
 
 

 
 
ARTICLE I
MERGER

1.           The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Chapter 607 of the Florida Statutes (the “Florida Law”), Hawk Biometric shall be merged with and into MergerSub at the Effective Time (as defined in Section 4), and in connection therewith:

(a)           except to the extent provided or permitted by the Florida Law, MergerSub shall merge with and into Hawk Biometric, the separate existence of MergerSub shall cease and terminate, and Hawk Biometric shall continue as the surviving corporation and as a wholly-owned subsidiary of Explorations (Hawk Biometric as the surviving corporation after the Merger is hereinafter sometimes referred to as the “Surviving Corporation”);

(b)           all of the rights, privileges, immunities, powers, franchises and authority (both public and private) of Hawk Biometric and MergerSub shall vest in the Surviving Corporation;

(c)           all of the assets and property of Hawk Biometric and MergerSub of every kind, nature and description (real, personal and mixed and both tangible and intangible) and every interest therein, wheresoever located, including, without limitation, all debts or other obligations belonging or due to Hawk Biometric or MergerSub, all claims and all causes of action, shall be, and be deemed to be, vested, absolutely and unconditionally, in the Surviving Corporation; and

(d)           all debts and obligations of Hawk Biometric or MergerSub, all rights of creditors of Hawk Biometric or MergerSub and all liens or security interests encumbering any of the property of Hawk Biometric or MergerSub shall be vested in the Surviving Corporation and shall remain in full force and effect without modification or impairment and shall be, and be deemed to be, enforceable against the Surviving Corporation and its assets and properties with the same full force and effect as if such debts, obligations, liens or security interests had been originally incurred or created by the Surviving Corporation in its own name and for its own behalf.  Without limiting the generality of the foregoing, Surviving Corporation specifically assumes all continuing obligations which Hawk Biometric or MergerSub would otherwise have to indemnify its officers and directors, to the fullest extent currently provided in the Surviving Corporations Certificate of Incorporation, By-Laws and pursuant to the Florida Law, with respect to any and all claims arising out of actions taken or omitted by such officers and directors prior to the Effective Time.

2.           Instruments of Conveyance.  Without limiting the generality of the provisions of Section 1 hereof and/or the succession provisions of applicable law, the officers and directors of Hawk Biometric last in office shall (to the extent they, or any of them, possess and/or may exercise the power to do so) execute, deliver and/or record such deeds and/or other instruments of transfer and/or conveyance, and take or cause to be taken, such other and further actions, as the case may be, as shall be reasonably requested by MergerSub or its legal counsel, to vest, perfect, confirm, implement the transfer of, or establish in the name, on behalf or for the account or the benefit of, title to, and/or possession of, any or all of the assets, property, property interests, rights, privileges, immunities, powers and franchises owned and/or exercisable by Hawk Biometric (or in which Hawk Biometric had an interest and/or the power to exercise immediately prior to the Effective Time) and which was vested, or intended to be vested, in MergerSub pursuant to the provisions of this Agreement and the Merger.
 
 
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3.           Closing.  The closing of the Merger (the "Closing") will take place at 10:00 a.m. on a date to be specified by the parties (the "Closing Date"), which shall be no later than the second business day after satisfaction or waiver of the conditions set forth in Articles 4 and 5, unless another time or date is agreed to by the parties hereto. The Closing will be held at such location as is agreed to by the parties hereto.

4.           Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the parties shall cause the Merger to be consummated by filing a certificate of merger or other appropriate documents (in any such case, the "Certificate of Merger") executed in accordance with the relevant provisions of the Florida Law and shall make all other filings or recordings required under the Florida Law. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of Florida, or at such subsequent date or time as the parties shall agree and specify in the Certificate of Merger (the time the Merger becomes effective being hereinafter referred to as the "Effective Time").

5.           Certificate of Incorporation and By-laws of the Surviving Corporation.   The Certificate of Incorporation of Hawk Biometric, as amended and in effect prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation (the "Surviving Certificate of Incorporation"). The By-laws of Hawk Biometric, in effect prior to the Effective Time, shall be the By-laws of the Surviving Corporation (the "Surviving By-laws").

6.           Boards, Committees and Officers.  Prior to the Effective Time, Explorations shall adopt resolutions in form and substance reasonably acceptable to Hawk Biometric, establishing, among other things that, the Board of Directors and Officers of Explorations and Hawk Biometric from and after the Effective Time shall be comprised solely of the nominees of Hawk Biometric.

ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES

1.           Exchange of Shares.  As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Hawk Biometric Common Stock:

(a)           Conversion of Capital Stock.  Each issued and outstanding share of Hawk Biometric Common Stock shall be converted into the right to receive two-one hundredths (.02) of a validly issued, fully paid and nonassessable share of Series B Preferred Stock (the “Merger Consideration”).

(b)           All outstanding shares of Hawk Biometric common stock shall be deemed, after the Effective Time, to be owned by Explorations.  The holders of such certificates previously evidencing shares of Hawk Biometric Common Stock outstanding immediately prior to the Closing Date shall cease to have any rights with respect to such shares of Hawk Biometric Common Stock except as otherwise provided herein or by law.
 
 
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(c)           Any shares of Hawk Biometric Common Stock held in the treasury of Hawk Biometric immediately prior to the Closing Date shall automatically be canceled and extinguished without any conversion thereof and no payment shall be made with respect thereto.

(d)           Delivery of Certificates. Explorations shall deliver to the Hawk Biometric Shareholders, stock certificates representing the Merger Consideration.  At the Closing, Hawk Biometric will use its best efforts to cause the Hawk Biometric Stockholders to surrender for cancellation certificates representing the Hawk Biometric Common Stock against delivery of certificates representing the Explorations Shares. In the event that any Hawk Biometric Shareholder's certificates have been lost, stolen or destroyed, such Hawk Biometric shareholder will be entitled to receive the Merger Consideration only after providing an affidavit of loss and indemnity bond, in form reasonably satisfactory to Explorations.

2.           No Fractional Securities.  Notwithstanding any other provision of this Agreement, no certificates or scrip for shares of capital stock representing less than one share of Series B Preferred Stock shall be issued upon the surrender for exchange of Hawk Biometric certificates.

3.           Tax Treatment. The Merger is intended to constitute a reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code, and the parties shall not report the transaction on any tax return in a manner or take any action inconsistent therewith.

4.           Restricted Stock.  The shares of the Series B Preferred Stock to be issued to the Hawk Biometric shareholders shall be deemed to be “restricted securities” as defined by Rule 144(a)(3) under the Securities Act of 1933, as amended (the “Securities Act).  The certificates evidencing such shares shall bear the following restrictive legend:

The shares evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold or otherwise transferred unless registered under the Securities Act or there is an opinion from counsel to the company that such sale or other transfer may be made pursuant to an exemption from the registration requirement of the Securities Act.”

5.           Other Events Occurring at Closing.  At Closing, the following shall be accomplished:

(a)           The resignation of the existing Explorations officers and directors and appointment of new officers and directors as directed by Hawk Biometric;
 
 
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ARTICLE III
REPRESENTATIONS AND WARRANTIES

 1.           Representations of Hawk Biometric. Hawk Biometric hereby represents and warrants as follows, which warranties and representations shall also be true as of the Closing Date and Effective Time:

(a)           Immediately prior to the  Closing, the outstanding capitalization of Hawk Biometric shall consist of no more than 30,000,000 shares of Hawk Biometric Common Stock. The Hawk Biometric Stockholders listed on the attached Exhibit "A" are the sole record and beneficial owners of the issued and outstanding common stock of Hawk Biometric. The shares Hawk Biometric Common Stock are free from claims, liens, or other encumbrances, and at the Closing Date said Hawk Biometric Stockholder will have good title and the unqualified right to transfer and dispose of such shares Hawk Biometric Common Stock.

(b)           Hawk Biometric has no outstanding or authorized capital stock, warrants, options or convertible securities except as set forth on Exhibit “A”.

(c)           The Hawk Biometric audited financial statements for the period from its inception through September 30, 2008 (the “Hawk Biometric Audited Financial Statements”) are true and accurate, in accordance with the books and records of Hawk Biometric, and present fairly in all material respects the financial position and results of operations of Hawk Biometric as of the times and for the periods referred to therein, in each case in accordance with generally accepted accounting principles under current United States accounting rules and regulations, consistently applied (“GAAP).  All of the financial books and records of Hawk Biometric have been made available to Explorations, and such books and records completely and fairly record in all material respects Hawk Biometrics financial affairs, which would normally be recorded in financial books and records. There are no material liabilities or obligations, either fixed or contingent, not disclosed in the Hawk Biometric Audited Financial Statements or in any exhibit thereto or notes thereto other than liabilities, contracts or obligations incurred in the ordinary course of business; and no such liabilities, contracts or obligations in the ordinary course of business constitute liens or other liabilities which materially alter the financial condition of Hawk Biometric as reflected in the Hawk Biometric Audited Financial Statements. Hawk Biometric has good title to all assets shown on the Hawk Biometric Audited Financial Statements subject only to dispositions and other transactions in the ordinary course of business, the disclosures set forth therein and liens and encumbrances of record.

(d)           Since the date of the Hawk Biometric Audited Financial Statements, there have not been any material adverse changes in the financial position of Hawk Biometric except changes arising in the ordinary course of business, which changes will in no event materially and adversely affect the financial position of Hawk Biometric.
 
 
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(e)           Hawk Biometric is not a party to any material pending litigation or, to its best knowledge, any governmental investigation or proceeding, not reflected in the Hawk Biometric Financial Statements, and to its best knowledge, no material litigation, claims, assessments or any governmental proceedings are threatened against Hawk Biometric.

(f)           Hawk Biometric is in good standing in its jurisdiction of incorporation, and is in good standing and duly qualified to do business in each jurisdiction where required to be so qualified except where the failure to so qualify would have no material negative impact on Hawk Biometric.

(g)           Hawk Biometric has (or, by the Closing Date, will have) filed all material tax, governmental and/or related forms and reports (or extensions thereof) due or required to be filed and has (or will have) paid or made adequate provisions for all taxes or assessments which have become due as of the Closing Date.

(h)           Hawk Biometric has not materially breached any material agreement to which it is a party. Hawk Biometric has previously given Explorations copies or access thereto of all material contracts, commitments and/or agreements to which Hawk Biometric is a party including all relationships or dealings with related parties or affiliates.

(i)           Hawk Biometric has no subsidiaries.

(j)           Hawk Biometric has made all material corporate financial records, minute books, and other corporate documents and records available for review to present management of Explorations prior to the Closing Date, during reasonable business hours and on reasonable notice.

(k)           The execution of this Agreement does not materially violate or breach any material agreement or contract to which Hawk Biometric is a party and has been duly authorized by all appropriate and necessary corporate action under other applicable law and Hawk Biometric, to the extent required, has obtained all necessary approvals or consents required by any agreement to which Hawk Biometric is a party.

(l)           All disclosure information provided by Hawk Biometric which is to be set forth in disclosure documents of Explorations or otherwise delivered to Explorations by Hawk Biometric for use in connection with the transaction described herein is true, complete and accurate in all material respects.

2.           Representations of Explorations. Explorations hereby represents and warrants as follows, each of which representations and warranties shall continue to be true as of the Closing Date and Effective Time:

(a)  As of the Closing Date, the Series B Preferred Stock, to be issued and delivered to the Hawk Biometric Stockholders hereunder will, when so issued and delivered, constitute, duly authorized, validly and legally issued shares of Series B Preferred Stock, fully-paid and non-assessable.  Each share of Series B Preferred Stock shall be convertible into one hundred (100) shares of Explorations common stock, par value $0.01, at any time after the completion of a 1-for-6 reverse stock split being conducted by Explorations.  The Certificate of Designation for the Series B Preferred Stock as attached hereto as Exhibit “B”, has been duly filed with the Secretary of State of the State of Delaware.
 
 
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(b)           Explorations has the corporate power and authority to enter into this Agreement and to perform its respective obligations hereunder.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action, including the board of directors of Explorations.  The execution and performance of this Agreement will not constitute a material breach of any agreement, indenture, mortgage, license or other instrument or document to which Explorations is a party or by which its assets and properties are bound, and will not violate any judgment, decree, order, writ, rule, statute, or regulation applicable to Explorations or its properties.  The execution and performance of this Agreement will not violate or conflict with any provision of the Certificate of Incorporation or by-laws of Explorations.

(c)           Explorations has delivered to Hawk Biometric a true and complete copy of Form 10-Q for the period ending September 30, 2008 (the " Explorations Financial Statements").  The Explorations Financial Statements are complete, accurate and fairly present the financial condition of Explorations as of the dates thereof and the results of its operations for the periods then ended.  There are no liabilities or obligations either fixed or contingent not reflected therein.  The Explorations Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present the financial position of Explorations as of the dates thereof and the results of its operations and changes in financial position for the periods then ended.

(d)           Since September 30, 2008, there have not been any material adverse changes in the financial condition of Explorations.

(e)           Explorations is not a party to or the subject of any pending litigation, claims, decrees, orders, stipulations or governmental investigation or proceeding not reflected in the Explorations Financial Statements or otherwise disclosed herein, and there are no lawsuits, claims, assessments, investigations, or similar matters, against or affecting Explorations, its management or its properties. Explorations has complied in all material respects with all laws, statutes, ordinances, regulations, rules, decrees or orders applicable to it.

(f)           Explorations is duly organized, validly existing and in good standing under the laws of the State of Delaware; has the corporate power to own its property and to carry on its business as now being conducted and is duly qualified to do business in any jurisdiction where so required except where the failure to so qualify would have no material negative impact on it.

(g)           Explorations has filed all federal, state, county and local income, excise, property and other tax, governmental and/or related returns, forms, or reports, which are due or required to be filed by it prior to the date hereof, except where the failure to do so would have no material adverse impact on Explorations, and has paid or made adequate provision in the Explorations Financial Statements for the payment of all taxes, fees, or assessments which have or may become due pursuant to such returns or pursuant to any assessments received. Explorations is not delinquent or obligated for any tax, penalty, interest, delinquency or charge.
 
 
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Each such tax return or report is correct and complete in all material respects and fully discloses and does not understate the income, taxes, expenses, deductions and credits for the period to which it relates.  Up to and including the Closing Date, no claim has been made against Explorations by any authority in a jurisdiction in which it does not file a return that it is or may be subject to any taxes in that jurisdiction. Explorations has not received notice of any actions, suits, proceedings, investigations or claims pending or threatened against Explorations in respect of any taxes nor are any matters relating to any taxes under discussion with any governmental authority.

(h)           Except as disclosed in Explorations SEC filings, there are no existing options, calls, warrants, preemptive rights or commitments of any character relating to the issued or unissued capital stock or other securities of Explorations, except as contemplated in this Agreement and there exist no liens or other securities interests in any assets of Explorations.

(i)           The corporate financial records, minute books, and other documents and records of Explorations have been made available to Hawk Biometric prior to the Closing, shall be delivered to new management of Explorations at Closing and are correct and accurate in all material respects and reflect all decisions made by the Board of Directors and the shareholders of Explorations.

(j)           Explorations has not breached, nor is there any pending, or to the knowledge of management, any threatened claim that Explorations has breached, any of the terms or conditions of any agreements, contracts or commitments to which it is a party or by which it or its assets are is bound.  The execution and performance hereof will not violate any provisions of applicable law or any agreement to which Explorations is subject. Explorations hereby represents that it has no business operations or material assets and it is not a party to any material contract or commitment other than appointment documents with its transfer agent, and that it has disclosed to Explorations all relationships or dealings with related parties or affiliates.
 
(k)           Explorations common stock is currently approved for quotation on the OTC Bulletin Board under the symbol "EXGI" and there are no stop orders in effect or contemplated with respect thereto and no facts exist which may give rise there. Explorations has filed all reports required to be filed by Explorations pursuant to the Securities Act of 1934, as amended. Explorations has not been informed, and has no reason to believe, that its common stock will be delisted or suspended by FINRA. Explorations has fully complied will all applicable securities laws and regulations and is not in default of any of its obligations thereunder.

(l)           All information regarding Explorations which has been provided to Hawk Biometric or otherwise disclosed in connection with the transactions contemplated herein, is true, complete and accurate in all material respects. Explorations has provided to Hawk Biometric all material information regarding Explorations.
 
 
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(m)           Immediately prior to the  Closing, the outstanding capitalization of Explorations shall consist of no more than 30,000,000 shares of common stock, without giving effect to the Reverse Stock Split. As of Closing, after giving effect to all matters contemplated herein including the Merger Consideration, the outstanding capitalization of Explorations shall consist of no more than 30,000,000 shares of common stock and 600,0000 shares of Series B Preferred Stock, without giving effect to the Reverse Stock Split, all of which shares are or shall be duly issued, fully paid and non-assessable and were or shall be issued in compliance with applicable securities laws.  Immediately upon the effectuation of the Reverse Stock Split, the outstanding capitalization of Explorations shall consist of no more than 5,000,000 shares of common stock and 600,000 of Series B Preferred Stock and upon the conversion of all shares of Series B Preferred Stock into shares of Explorations common stock, the outstanding capitalization of Explorations shall consist of no more than 65,000,000 shares of common stock.

(n)           The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of law or any judgment, decree, order, regulation or rule of any court or other governmental authority applicable to Explorations, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person, except for compliance with applicable securities laws and the filing of all documents necessary to consummate the transaction with any governmental entity, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which Explorations is a party or by which either is bound or to which any of their assets are subject, (d) result in the creation of any material lien or encumbrance upon the assets of Explorations or the funds being delivered in connection herewith, or (e) conflict with or result in a breach of or constitute a default under any provision of the charter documents of Explorations.

(o)           Explorations does not have any agreements of any nature to acquire, directly or indirectly, any shares of capital stock, or other equity or ownership interest in, any person, firm or corporation, or its assets.

(p)           There is no requirement to make any filing, give any notice to or obtain any license, permit, certificate, regulation, authorization, consent or approval of, any governmental or regulatory authorities as a condition to the lawful consummation of the transactions contemplated by this Agreement except for the filings, notifications, consents and approvals described in this Agreement.
 
 
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(q)           Explorations is in compliance in all material respects with applicable Federal, state and local laws, statutes, regulations, orders, directives and decisions rendered by any legislature, department, administrative or regulatory agency (“Environmental Laws”) relating to the protection of the environment, occupational health and safety or the use, storage, disposal, transport, handling, remediation or corrective action of any pollutants, contaminants, chemicals, deleterious substances or industrial, toxic or hazardous wastes or substances (“Hazardous Substances”).

Explorations has not used or permitted to be used, except in compliance in all material respects with all Environmental Laws, its office space, to store, deposit, dispose or of handle any Hazardous Substances.

Explorations has obtained all permits, licenses and other authorizations which are required in connection with the conduct of its business under all applicable Environmental Laws.

Explorations has never received any notice of any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of demand letters, requests for information, notices of violation, investigations or proceedings pending or threatened against Explorations in connection with the conduct of its business relating in any way to any Environmental Laws.

(r)           All disclosure information provided by Explorations which was delivered to Hawk Biometric for use in connection with the transaction described herein is true, complete and accurate in all material respects.

ARTICLE III
CONDITIONS PRECEDENT

1.  Conditions Precedent to the Obligations of Hawk Biometric.  All obligations of Hawk Biometric under this Agreement are subject to the fulfillment, prior to or as of the Closing and/or the Closing Date, as indicated below, of each of the following conditions:

(a)           The representations and warranties by or on behalf of Explorations contained in this Agreement or in any certificate or document delivered pursuant to the provisions hereof shall be true in all material respects at and as of the Effective Time and Closing Date as though such representations and warranties were made at and as of such time.
 
 
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(b)           Explorations shall have performed and complied with all covenants, agreements, and conditions set forth in, and shall have executed and delivered all documents required by this Agreement to be performed or complied with or executed and delivered by it prior to or at the Closing.

(c)           On or before the Closing, the board of directors of Explorations, the board of directors of MergerSub and the shareholders representing a majority interest of the outstanding common stock of MergerSub, shall have approved in accordance with applicable state corporation law and Federal securities laws (i) the execution and delivery of this Agreement and (ii) the consummation of the transactions contemplated herein.

(d)           On or before the Closing Date, Explorations shall have delivered to Hawk Biometric certified copies of resolutions of the board of directors of Explorations approving and authorizing the execution, delivery and performance of this Agreement and authorizing all of the necessary and proper action to enable Explorations to comply with the terms of this Agreement including the election of Hawk Biometric 's nominees to the Board of Directors of Explorations and all matters outlined herein.

(e)           The Merger shall be permitted by applicable law.

(f)           As of the Closing, the existing officers and directors of Explorations shall have resigned in writing from all positions as directors and officers of Explorations effective upon the election and appointment of the Hawk Biometric nominees.

(g)           At the Closing, all instruments and documents delivered to Hawk Biometric and Hawk Biometric Stockholders pursuant to the provisions hereof shall be reasonably satisfactory to legal counsel for Hawk Biometric.

(h)           The shares of Series B Preferred Stock to be issued to the Hawk Biometric Stockholders will be validly issued, nonassessable and fully-paid under Delaware corporation law and will be issued in compliance with all federal, state and applicable corporation and securities laws.

2.  Conditions Precedent to the Obligations of Explorations and MergerSub.  All obligations of Explorations under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions:

(a)           The representations and warranties by Hawk Biometric contained in this Agreement or in any certificate or document delivered pursuant to the provisions hereof shall be true in all material respects at and as of the Closing as though such representations and warranties were made at and as of such time.

(b)           Hawk Biometric shall have performed and complied with, in all material respects, all covenants, agreements, and conditions required by this Agreement to be performed or complied with prior to or at the Closing;
 
 
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3.  Nature and Survival of Representations.  All representations, warranties and covenants made by any party in this Agreement shall survive the Closing and the consummation of the transactions contemplated hereby for one year from the Closing.  All of the parties hereto are executing and carrying out the provisions of this Agreement in reliance solely on the representations, warranties and covenants and agreements contained in this Agreement and not upon any investigation upon which it might have made or any representation, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.

ARTICLE IV
DOCUMENTS DELIVERED AT CLOSING

1.  Documents at Closing.  At the Closing, the following documents shall be delivered:

(a)           Hawk Biometric will deliver, or will cause to be delivered, to Explorations the following:

(i)           a certificate executed by the President and Secretary of Hawk Biometric to the effect that all representations and warranties made by Hawk Biometric under this Agreement are true and correct as of the Closing, the same as though originally given to Explorations on said date;

(ii)           a certificate from the jurisdiction of incorporation of Hawk Biometric dated at or about the Closing to the effect that Hawk Biometric is in good standing under the laws of said jurisdiction;

(iii)           such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement;

(iv)           certified copies of resolutions adopted by the shareholders and directors of Hawk Biometric authorizing this transaction; and

(v)           all other items, the delivery of which is a condition precedent to the obligations of Hawk Biometric as set forth herein.

(b)           Explorations will deliver or cause to be delivered to Hawk Biometric:

(i)           stock certificates representing the Merger Consideration;

(ii)           a certificate of the President of Explorations, to the effect that all representations and warranties of Explorations made under this Agreement are true and correct as of the Closing, the same as though originally given to Hawk Biometric on said date;
 
 
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(iii)           certified copies of resolutions adopted by Explorations board of directors authorizing the Merger and all related matters described herein;

(iv)           certificate from the jurisdiction of incorporation of Explorations dated at or about the Closing Date that Explorations is in good standing under the laws of said state;

(v)           such other instruments and documents as are required to be delivered pursuant to the provisions of this Agreement;

(vi)           resignation of the existing officers and directors of Explorations; and

(vii)           all corporate and financial records of Explorations.

ARTICLE VI
INDEMNIFICATION

           1.  Indemnification.  For a period of one year from the Closing, Explorations agrees to indemnify and hold harmless Hawk Biometric and the Hawk Biometric Shareholders, and Hawk Biometric agrees to indemnify and hold harmless Explorations, at all times after the date of this Agreement against and in respect of any liability, damage or deficiency, all actions, suits, proceedings, demands, assessments, judgments, costs and expenses including attorney's fees incident to any of the foregoing, resulting from any material misrepresentations made by an indemnifying party to an indemnified party, an indemnifying party's breach of covenant or warranty or an indemnifying party's nonfulfillment of any agreement hereunder, or from any material misrepresentation in or omission from any certificate furnished or to be furnished hereunder.

ARTICLE VII
POST CLOSING COVENANTS

1.           Reverse Stock Split.  Explorations shall cause the Reverse Stock Split to be effectuated.

2.           Spin Out of Pre-Closing Assets.  Explorations shall use it best efforts to effectuate a spin out of the Explorations Park Pro, Inc. subsidiary to those Explorations stockholders of record as of the last trading day prior to the Closing, at the expense of Park Pro, Inc.
 
 
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ARTICLE VIII
MISCELLANEOUS

1.           Miscellaneous.

(a)           Public Announcement. Until the Closing, Hawk Biometric shall not make or issue, or cause to be made or issued, any announcement or written statement concerning this Agreement or the transactions contemplated hereby for dissemination to the general public without the prior consent of Explorations except as required by law.

(b)           Further Assurances.  At any time, and from time to time, after the Closing Date, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to any property transferred hereunder or otherwise to carry out the intent and purposes of this Agreement.

(c)           Waiver.  Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party to whom such compliance is owed.

(d)           Amendment.  This Agreement may be amended only in writing as agreed to by all parties hereto.

(e)           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first class registered or certified mail, return receipt requested.

(f)           Headings.  The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(g)           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(h)           Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware.

(i)           Binding Effect.  This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors and assigns.

(j)           Entire Agreement.  This Agreement and the attached Exhibits constitute the entire agreement of the parties covering everything agreed upon or understood in the transaction.  There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof.

(k)           Severability.  If any part of this Agreement is deemed to be unenforceable the balance of the Agreement shall remain in full force and effect.
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.
 
 
  Explorations Group, Inc.
   
  By: /s/ Eric Brown
  Title: President
   
   
  Hawk Acquisition Corp.
   
  By: /s/ Eric Brown
  Title: President
   
   
  Hawk Biometric Technologies, Inc
   
  By: /s/ David Coriaty
  Title: President
 
 
15

 
 
EX-99 3 v141407_ex-99.htm Unassociated Document
 
Exhibit 99

HAWK BIOMETRIC AUDITED FINANCIAL STATEMENTS

Independent Auditor’s Report

 
The Stockholders’
Hawk Biometric Technologies, Inc.
 

We have audited the accompanying balance sheet of Hawk Biometric Technologies, Inc. (a Development Stage Company) as of September 30, 2008, and the related statements of operations, changes in stockholders’ equity and cash flows for the period October 25, 2007 (inception) to September 30, 2008.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hawk Biometric Technologies, Inc. as of September 30, 2008, and the results of their operations and their cash flows for the period then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company is a development stage company and has suffered a net loss for the period ended September 30, 2008, which raises substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
/s/ Liebman Goldberg & Drogin, LLP
Liebman Goldberg & Drogin, LLP
Garden City, New York
January 12, 2009
 

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 2008
 
Assets
 
           
           
Current Assets:
         
Cash and cash equivalents
        $ 230,731  
               
Total assets
        $ 230,731  
               
               
Liabilities and Stockholders' Equity
 
               
               
Current Liabilities:
             
Accrued expenses
        $ 16,000  
               
Total liabilities
        $ 16,000  
               
Stockholders' Equity:
             
               
Common stock @ -0- par value, 40,000,000 shares authorized and 28,861,405 shares issued
  $ -          
                 
Additional paid in capital
    15,493,900          
 
               
Deficit accumulated during development stage
    (15,279,16 )        
                 
Total stockholders' equity
            214,731  
                 
Total liabilities and stockholders' equity
          $ 230,731  
 
See accompanying notes to financial statements.
 
2

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENT OF OPERATIONS
 
For the period October 25, 2007 (inception) to September 30, 2008
 
Revenues
  $ -  
         
         
Expenses:
       
General and administrative
    279,169  
         
         
Net operating loss
    (279,169 )
         
         
Impairment loss
    15,000,000  
         
         
Net loss
  $ (15,279,169 )
 
3

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENT OF STOCKHOLDERS' EQUITY

September 30, 2008 
 
   
Common stock
   
Additional
Paid-in
   
Deficit Accumulated
During Development
 
   
Amount
   
Shares
   
Capital
   
Stage
 
Issuance of shares to Hawk Canada
  $ -       22,551,167     $ -     $ -  
                                 
Subsequent issuance of shares for stock and services
    -       6,310,238       15,493,900       -  
                                 
Deficit accumulated during development stage
    -       -       -       (15,279,169 )
                                 
Balance - September 30, 2008
  $ -       28,861,405     $ 15,493,900     $ (15,279,169 )
 
4

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
STATEMENT OF CASH FLOWS
 
For the Period October 25, 2007 (Inception) to September 30, 2008
 
Cash Flows from Operating Activities:
           
Net loss
        $ (279,169 )
               
Adjustment to Reconcile Net Loss to Net Cash Provided by Operating Activities:
             
Impairment loss
  $ (15,000,000 )        
Issuance of common stock
    15,493,900          
                 
Changes in Assets and Liabilities:
               
Increase in accrued expenses
    16,000          
                 
Net cash provided by operating activities
            509,900  
                 
Net increase in cash and cash equivalents
            230,731  
                 
                 
Cash and cash equivalents - October 25, 2007 (inception)
            -  
                 
Cash and cash equivalents - end of period
          $ 230,731  
 
5

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANICAL STATEMENTS

September 30, 2008


Note 1 – Nature of Business and Summary of Significant Accounting Policies:

Hawk Biometric (the Company) was formed on October 25, 2007 in the state of Florida.  Hawk Biometrics has developed and patented an innovative fingerprint authentication technology that offers unparalleled security, convenience, and ease to use.  Some of its products include Biometric Physical Access, Biometric ATM, Hawk Eye, ElectroPass/GamePass, Tough and Go, Sports Pass, Biomed, and Hawk Watch 2000.  Customers will include auto manufacturers, major hotels, professional sports stadiums, insurance companies, financial institutions, casino’s and energy companies.

Basis of Presentation

The Company is a development stage enterprise since the Company has not generated revenues from the sale of its products and its efforts from its inception on October 25, 2007 through September 30, 2008.  The company has principally been devoted to developing its product as well as raising capital.  Accordingly the financial statements have been prepared in accordance with the provisions of Statement of Financial Accounting Standard (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”.  The Company is reporting a net loss of $(15,279,169) for the period ending September 30, 2008.

Note 2 – Summary of Significant Accounting Policies:

The Company prepares it financial statements in conformity with generally accepted accounting principles.

Revenue Recognition:

The Company currently has not had any revenues, but intends to recognize revenue in the future when earned, there is a fixed and determinable price for its product and collectibility is reasonably assured when title passes.

Cash and Cash Equivalents:

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.  The Company has cash balances in
 
6

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANICAL STATEMENTS

September 30, 2008

Note 2 – Summary of Significant Accounting Policies (Continued):

banks in excess of the maximum amount insured by the FDIC and other international agencies as of September 30, 2008.

Accounting Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent gains and losses at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Critical estimates include management’s judgments associated with revenue recognition, concentration of credit risk, goodwill and income taxes.  Actual results could differ from those estimates.

Long-Lived Assets:

In accordance with SFAS NO. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets in question may not be recoverable.  An impairment would be recorded in circumstances where undiscounted cash flows expected to be generated by an asset are less then the carrying value of that asset.

Income Taxes:

The Company accounts for income taxes under SFAS No. 109, “Accounting for Income Taxes”.  SFAS 109 requires and asset and liability approach for financial reporting for incomes taxes.  Under SFAS 109, deferred taxes are provided for temporary differences between the carrying values of the assets and liabilities for financial reporting and tax purposes at the enacted rates at which these differences are expected to reverse.

Going Concern:

The Company’s financial statements have been presented on a basis that it is a going concern.  The Company has experienced a loss for the year ended September 30, 2008 and the audit reports have an explanatory paragraph stating that Hawk Biometric’s continued existence is in doubt.

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the differences between the financial
 
7

 
HAWK BIOMETRIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANICAL STATEMENTS

September 30, 2008


Note 2 – Summary of Significant Accounting Policies (Continued):

statement carrying amounts and tax basis of assets and liabilities using enacted rates in effect in the years in which the differences are expected to reverse.

Because the Company has an uncertainty regarding it as a going concern, a 100% valuation allowance has been set up for any deferred tax item.

Note 3 – Patents:

In May 2008, the Company issued approximately 23,000,000 shares of its common stock on a one for one basis to the shareholders of Hawk Biometrics of Canada, Inc. in exchange for that Company’s existing patents.   The transaction accounted for on a fair market value basis recognized the patent value at $15,000,000.  Subsequently, it was determined that the patents were impaired in accordance with SFAS # 144, as the expected cash flows to be generated were currently $-0-.

As part of the stock transaction, the Company also received approximately $210,000, which is reflected in paid in capital.

Note 4 – Stockholders' Equity:

During the period ended September 30, 2008, the Company issued 5,200,000 to various parties for consulting services rendered and valued at $80,000.

Note 5 – Subsequent Event:

Subsequent to September 30, 2008, the Company has issued 419,601 shares of its common stock and received $745,300.

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