HWSY Hawk Systems Inc (CE)

---

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Definitive Proxy Statement Pursuant to Section 14(a) of the Securities

 Exchange Act of 1934 (Amendment No. )

Filed by Registrant		ü
Filed by Party other than Registrant
Check the appropriate box:
	Preliminary Proxy Statement							Confidential, for Use of the Commission
								Only (as permitted by Rule 14a-6(e)(2))
ü	Definitive Proxy Statement							Definitive Additional Materials
	Soliciting Materials Pursuant to §240.14a-12

HAWK SYSTEMS, INC.

(Name of Registrant as Specified In Its Charter)

 

Not Applicable

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
ü	No fee required.
	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies: __________________________________
	(2)	Aggregate number of securities to which transaction applies: __________________________________
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): _____________
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid: ______________________________________________________________________
	Fee paid previously with preliminary materials.
	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
	for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount previously paid: _____________________________________________________________
	(2)	Form, Schedule or Registration Statement No.: ____________________________________________
	(3)	Filing Party: _______________________________________________________________________
	(4)	Date Filed: ________________________________________________________________________

---

---

 

HAWK SYSTEMS, INC.

 

2385 NW Executive Center Drive, Suite 100

Boca Raton, FL 33431

(561) 962-2885

 

——————————————

 

NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON FEBRUARY 14, 2011

 

——————————————

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON FEBRUARY 14, 2011:

THE PROXY STATEMENT AND ANNUAL REPORT TO STOCKHOLDERS ARE AVAILABLE AT

 

 https://www.iproxydirect.com/HWSY

——————————————

 

To our Stockholders:

 

The 2011 Annual Meeting of Stockholders of Hawk Systems, Inc. (the “Company”) will be held at  the Boca Raton Marriott, 5150 Town Center Circle, Boca Raton, Florida 33486  on Monday, February 14, 2011, beginning at 9:00 A.M., local time, for the following purposes:

 

1.

To elect our directors to hold office for a term of one year until our 2012 annual meeting of stockholders; and

2.

To transact such other business as may properly come before the Annual Meeting and any adjournment(s) thereof.

Stockholders of record as of the close of business on December 27, 2010 are entitled to vote their shares by proxy or at the meeting or any postponement or adjournment thereof.  This proxy statement is first being mailed on or about December 29, 2010 to all stockholders of record as of December 27, 2010.

	By Order of the Board of Directors,
	/s/ David Coriaty
	David Coriaty
	Director

Boca Raton, Florida

December 29, 2010

 

YOUR VOTE IS IMPORTANT

 

IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED RETURN ENVELOPE OR VOTE OVER THE INTERNET FOLLOWING THE INSTRUCTIONS ON THE PROXY AS SOON AS POSSIBLE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. STOCKHOLDERS WHO EXECUTE A PROXY CARD OR VOTE OVER THE INTERNET MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.

 

 

HAWK SYSTEMS, INC.

TABLE OF CONTENTS

 

 

 

2011 ANNUAL MEETING OF STOCKHOLDERS

OF

HAWK SYSTEMS, INC.

 

2385 NW Executive Center Drive, Suite 100

Boca Raton, FL 33431(561) 962-2885

 

——————————————

PROXY STATEMENT

——————————————

This proxy statement contains information related to our 20101 annual meeting of stockholders to be held on Monday, February 14, 2011, beginning at 9:00 A.M., local time, at the Boca Raton Marriott, 5150 Town Center Circle, Boca Raton, Florida 33486, and at any adjournments or postponements thereof. The Company expects to provide notice and electronic delivery of this proxy statement and the enclosed proxy to stockholders on or about December 29, 2010, in connection with the solicitation of proxies by the board of directors of the Company.

 

ABOUT THE MEETING

 

What is the purpose of the Annual Meeting?

 

At the annual meeting, stockholders will vote (i) to elect directors to hold office for a term of one year until our 2012 annual meeting of stockholders; and (ii) any other matters that properly come before the meeting.

 

 

Only stockholders of record at the close of business on the record date, December 27, 2010, are entitled to receive notice of the annual meeting and to vote the shares of our Common Stock they held on that date at the meeting or any postponement or adjournment of the meeting. Each outstanding share of Common Stock entitles its holder to cast one vote on each matter to be voted upon.

 

 

All stockholders as of the record date, or their duly appointed proxies, may attend. Please note that if you hold shares in “street name” (that is, through a broker or other nominee), you will need to bring evidence of your share ownership, such as a copy of a brokerage statement, reflecting your stock ownership as of the record date and valid picture identification.

 

 

The presence at the meeting, in person or by proxy, of the holders of a majority of the votes entitled to be cast at the meeting will constitute a quorum, permitting the meeting to conduct its business. As of the record date, December 27, 2010, 90,868,950 shares of our Common Stock, held by approximately 327 stockholders of record, were issued and outstanding. The number of stockholders is solely based upon the count our transfer agent provided us as of that date. This number does not include: (i) any beneficial owners of Common Stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries, or (ii) broker-dealers or other participants who hold or clear shares directly or indirectly through the Depository Trust Company, or its nominee, Cede & Co.

 

If less than a majority of outstanding shares entitled to vote are represented at the meeting, then the holders of a majority of the shares of the capital stock of the Company who are present at the meeting, in person or by proxy, may adjourn the meeting from time to time until holders of a quorum of the shares of the capital stock shall attend.  At any such  adjourned meeting at which a quorum is  present, any business may be transacted which might have been transacted at the meeting as originally scheduled.

 

What is the Notice of Electronic Availability of Proxy Statement?

 

As permitted by Securities and Exchange Commission rules, we are making this proxy statement and our annual report available to our stockholders electronically via the Internet. On or about December 29, 2010, we expect to be mailing to our stockholders a Notice of Electronic Availability of Proxy Statement (“Notice”) containing instructions on how to access this proxy statement and our annual report and vote online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review all of the important information contained in the proxy statement and annual report. The Notice also instructs you on how you may submit your proxy over the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained on the Notice.

 

  How do I vote?

 

Stockholders can vote in person at the annual meeting or by proxy. There are two ways to vote by proxy:

 

●

By Internet — You can vote over the Internet at www.iproxydirect.com/HWSY by following the instructions on the Notice or proxy card; or

●

By Mail — If you received your proxy materials by mail, you can vote by mail by signing, dating and mailing the enclosed proxy card.

 

 

Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. (EDT) on February 13, 2011. If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Internet voting will also be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the annual meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the annual meeting in order to vote.

 

If you vote by proxy, the individuals named on the proxy card will vote your shares in the manner you indicate. You may specify whether your shares should be voted for all of the nominees for director or withheld for the nominees for director.

 

 

Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of our board of directors. The board recommends a vote:

 

●

for the election of the director nominees.

Can I change my vote after I return my proxy card?

 

Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised by: (1) delivering to us a signed proxy card with a date later than your previously delivered proxy, (2) voting in person at the annual meeting, (3) granting a subsequent proxy through the Internet, or (4) sending a written revocation to us. Your most current proxy card or Internet proxy is the one that is counted. The powers of the proxy holders will be suspended if you attend the meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy.

 

 

Proposal 1 for Election of Directors . The affirmative vote of a plurality of the votes cast, either in person or by proxy, at the meeting by the holders of Common Stock (one vote per share) is required for the election of directors. A properly executed proxy marked “ VOTE WITHHELD ” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum. Stockholders do not have the right to cumulate their votes for directors.

 

Other Items . For any other business brought before the annual meeting, provided that a quorum is present, the affirmative vote of a majority of the votes cast, either in person or by proxy, at the annual meeting by the holders of Common Stock (one vote per share) is required for approval. A properly executed proxy marked “ ABSTAIN ” with respect to any such matter will not be voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstention will have no effect on the outcome of the item.

 

The board of directors does not know of any other matters that may be brought before the annual meeting nor does it foresee or have reason to believe that proxy holders will have to vote for substitute or alternate nominees for election to the board of directors. In the event that any other matter should come before the annual meeting or any nominee is not available for election, the persons named in the enclosed proxy will have discretionary authority to vote all proxies not marked to the contrary with respect to such matters in accordance with their discretion.

 

If you hold your shares in “street name” through a broker or other nominee, your broker or nominee may not be permitted to exercise voting discretion with respect to some or all of the matters to be acted upon. Thus, if you do not give your broker or nominee specific instructions, your shares may not be voted on those matters and will not be counted in determining the number of shares necessary for approval. Shares represented by such “broker non-votes” will, however, be counted in determining whether there is a quorum.

 

 

We will pay the cost of preparing, assembling and mailing the Notice, and for those who request a printed copy of the proxy materials, the notice of meeting, proxy statement and enclosed proxy card. In addition to the use of mail, our employees and agents may solicit proxies personally and by telephone. Our employees and agents will receive no compensation for soliciting proxies other than their regular salaries. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies. We may reimburse such persons for their expenses incurred in connection with these activities.

 

The Company expects to provide the Notice and electronic delivery of this proxy statement and the enclosed proxy, to stockholders on or about December 29, 2010. We will mail a printed copy of our proxy statement, annual report and form of proxy, free of charge, to any stockholders who request a paper copy of the proxy materials. You should review the proxy statement information in conjunction with our 2009 Annual Report on Form 10-K (the “2009 Annual Report”). Our corporate headquarters are located at 2385 NW Executive Center Drive, Suite 100, Boca Raton, FL 33431, and our telephone number is (561) 962-2885. A list of stockholders entitled to vote at the annual meeting will be available at our corporate offices, during normal business hours, for a period of ten days prior to the meeting and at the meeting itself for examination by any stockholder.

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following tables set forth certain information with respect to the beneficial ownership of our Common Stock as of December 27, 2010, for: each person known by us to beneficially own more than 5% of our Common Stock; each of our named executive officers; our directors and director nominees; and all of our executive officers and directors as a group.

 

As used in the tables, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). The percentage shown is based on 90,868,950 shares of Common Stock issued and outstanding as of December 27, 2010. In computing the number and percentage of shares beneficially owned by a person, shares of Common Stock subject to options and/or warrants currently exercisable, or exercisable within 60 days, are counted as outstanding, but these shares are not counted as outstanding for computing the percentage ownership of any other person.

 

Title of Class	Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership	Percent of Class  (2)
Security Ownership of Management:
Common Stock	Douglas Scott	0	0.0%
Common Stock	David Coriaty	12,297,510	13.5%
Common Stock	Antonio De Risi	6,000,000	6.6%
Common Stock	Edward Sebastiano	4,462,283	4.9%
Common Stock	Mark Spanakos	8,000,000	8.8%
Common Stock	James Liantonio	2,000,000	2.2%
	Officer & Directors as a Group (6 persons)	32,759,793	36.1%
Security Ownership of Director Nominees:
Common Stock	Todd Newberry	0	0.0%
Common Stock	Edward Dingler	0	0.0%
Security Ownership of Certain Beneficial Owners:
Common Stock	Michael Diamant (3)	10,893,519	11.0%
Common Stock	The Tucker Family Spendthrift Trust (4)	7,076,505	7.8%
Common Stock	Joseph A. Infante (5)	6,100,000	6.7%

———————

(1)

Unless otherwise noted, the principal address of each of the directors and officers listed above is c/o Hawk Systems, Inc., 2385 NW Executive Center Drive, Suite 100, Boca Raton, FL 33431.

 

(2)

Assuming 90,868,950 shares of Common Stock issued and outstanding as of December 27, 2010. With respect to any securities not outstanding which are subject to such options, warrants, rights or conversion privileges, such shares are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person but are not deemed to be outstanding for the purpose of computing the percentage of the class by any other person.

(3)	The stockholder’s address is 11182 Seagrass Circle, Boca Raton, FL 33498.  The amount disclosed includes an option to purchase 8,000,000 shares of the Company’s Common Stock at an exercise price of $0.36 per share, exercisable for a period of five (5) years from May 12, 2010.

(4)

As reported on Schedule 13D filed with the SEC on March 3, 2010 by the reporting person and after giving effect to the 1-for-6 reverse split.  The stockholder’s address is 7359 Ballantrae Ct., Boca Raton, FL 33496. This amount includes 6,416,500 shares of Common Stock which were received upon conversion of 64,165 shares of Series B Preferred Stock subsequent to the filing of the Schedule 13D. The Company cannot confirm whether the stockholder has disposed of any of these securities due to the fact that no subsequent Schedule 13D has been filed with the SEC.  Leonard Tucker and Michelle Tucker are co-Trustees of The Tucker Family Spendthrift Trust (the “Trust”) and may be deemed to have beneficial ownership of the securities owned by the Trust.

(5)	The stockholder’s address is 105 Narcissus Avenue, Suite 503, West Palm Beach, FL 33401.

 

 

 

On February 19, 2009, pursuant to the terms of an Agreement and Plan of Merger (the “Merger Agreement”) between the Company (formerly known as Explorations Group, Inc.), Hawk Acquisition Corp., a wholly-owned Florida subsidiary of the Company (“Hawk Acquisition”) and Hawk Biometric Technologies, Inc., a Florida corporation (“Hawk Biometric”), Hawk Acquisition merged with Hawk Biometric (“Merger”). Pursuant to the Merger, Hawk Biometric was the surviving entity and became a wholly-owned subsidiary of the Company.  As consideration for the Merger, each issued and outstanding share of Hawk Biometric Class A and Class B common stock was converted into .02 shares of the Company’s Series B Preferred Stock.  Each share of Series B Preferred Stock was convertible into one hundred (100) shares of the Company’s Common Stock at any time, at the option of the holder, and automatically converted into Common Stock on April 8, 2010, which was the day following the completion of the Company’s 1 for 6 reverse split of its issued and outstanding Common Stock.  The conversion ratio of the Series B Preferred Stock was not subject to adjustment upon the occurrence of the reverse split.  Accordingly, on April 8, 2010,  the 587,347 shares of Series B Preferred Stock issued in the Merger and outstanding on that date automatically converted into 58,734,700 shares of Common Stock.

 

PROPOSAL 1 – ELECTION OF DIRECTOR S

Our board of directors is responsible for managing our business and affairs. Our current bylaws provide that  our board of directors must consist of not less than one director and that the board has the authority, from time to time, to increase  the number of directors  or to decrease it to not less than one member, provided that no decrease in the number of directors will deprive a serving director of the right to serve throughout the term of his or her election.  The board of directors presently has six members, of which two are nominees for the board of directors for 2011.  The remaining four board members will serve until the 2011 annual meeting when their successors are duly elected.

 

Director Nominees.

 

The board has nominated Messrs. Douglas Scott, James Liantonio, Todd Newberry and Edward Dingler to be elected as directors at the 2011 annual meeting. The board proposes that each of the directors serve for a one-year term to expire at the 2012 annual meeting.  The other current members of the board of directors, Messrs. David Coriaty, Antonio De Risi, Edward Sebastiano and Mark Spanakos will no longer be on the board of directors once their successors are duly elected.

 

Unless otherwise instructed, the proxy holders will vote the proxies received by them for the director nominees named in this proxy statement. If Messrs. Scott, Liantonio, Newberry or Dingler are unable or unwilling to serve as a director at the time of the annual meeting, the proxies will be voted for such other nominee as shall be designated by the current board of directors to fill any vacancy or to otherwise appoint a replacement nominee. The nominees have consented to being named in the proxy statement and to serve if elected. We have no reason to believe that the nominees will be unable or unwilling to serve if elected as directors.

 

Directors

 

The business experience for the past 5 years, unless otherwise indicated, of each member of the board of directors and director nominees are set forth below. There are no family relationships among any of our directors. There are no other nominees for director known to us at this time.

Name		Age		Present Term Expires		Position
Douglas G. Scott		47		2011		Interim Chief Executive Officer, Director and Director Nominee
David Coriaty		41		2011		Director
Antonio De Risi		43		2011		Director
Edward Sebastiano		53		2011		Director
Mark Spanakos		51		2011		Director
James Liantonio		53		2011		Director and Director Nominee
Todd Newberry		44		-		Director Nominee
Edward Dingler		28		-		Director Nominee

Director Nominees

 

Douglas G. Scott .  Mr. Scott has served as the Company’s interim chief executive officer since August 2010 and as a member of the board of directors since May 2010.  Mr. Scott has over 20 years experience in the tactical and civilian telecommunications industry after serving as a Cryptologist/Linguist and Airborne Intercept Operator in the United States Navy. Since November 2009, Mr. Scott has served as president and director of Freedom Renewable Energy Corp., a company that is in the business of renewable energy technology marketing, sales, distribution, implementation, operation and maintenance.  Mr. Scott also served as chief executive officer of Global Waste to Energy, Ltd. and president of Americas Waste to Energy, Inc. prior to their merger with Freedom Renewable Energy Corp. in February 2010.  Prior to that, from May 2007 to July 2008, Mr. Scott served as a director of international sales and strategic partnerships for Fulcrum Technologies, Inc., an asset infrastructure life cycle management company, where he was responsible for the management and expansion of multinational accounts requiring Sarbanes Oxley 404 third party validation of network assets.  From January 2006 to April 2007, Mr. Scott served as chief executive officer of Rauch Allied, LLC, a company that provides technology consulting, training and advisory services to friendly governments in counter terrorism operations, border security, prison system upgrades, tactical network/signals monitoring, tracking and denial of service to special operations teams supporting capture of specific targets. Mr. Scott currently serves as a board adviser to Rauch.  From May 2005 to January 2006, Mr. Scott served as a consulting account director for the Telefónica LATAM Account at Actix, Inc., a company that provides automated network performance engineering and network status management systems to mobile network operators.  From May 2004 to March 2006, Mr. Scott served as vice president global business development at Infiniroute Networks, Inc., a global Voice-Over-Internet-Protocol (VOIP) tiering portal for Tier 1 and Tier 2 operators, where Mr. Scott directed VOIP related global business development strategy and managed the global sales of the company’s Managed VOIP Platform (MVP) including the related suite of software products and services. Mr. Scott graduated magna cum laude from the University of North Carolina in 1995, where he earned a Bachelor of Arts in Spanish/International Relations. Mr. Scott is also certified in Advanced Hebrew Language, Radio Frequency and Cryptology Training, Technical Computer and Satellite Systems Training from the Naval Technical Training Command.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Scott should serve as a member of the board of directors included his extensive military background and experience.

 

 

James Liantonio .  Mr. Liantonio has served as a member of the board of directors since September 2010.  Liantonio has 25 years of experience in the automotive service industry.  Mr. Liantonio is currently the chief operating officer of FIST Enterprises, LLC, the Company’s exclusive distributor.  From 2009 to 2010, Mr. Liantonio served as fixed operations director at the automotive dealership, Maroone Chevrolet in Ft. Lauderdale/Delray Beach, Florida, where he was responsible for directing service and parts operations, as well as the hiring of staff.  He would work with service associates in order to improve the dealership’s Consumer Satisfaction Index (“CSI”) and overall profitability and implemented policies and procedures to maintain and increase the owner base as loyal return clients.  Prior to that, from 2005 to 2009, Mr. Liantonio served as fixed operations director at the automotive dealership, Maroone Cadillac in West Palm Beach, Florida, where he was responsible for directing service and parts operations and was involved in increasing the dealership’s CSI to number 1 in the region and maintained its CSI in the top 10 in the Florida zone.  Prior to that, from 2001 to 2005, Mr. Liantonio served as fixed operations director at the automotive dealership, Coral Cadillac/Hummer in Pompano Beach, Florida where he was responsible for directing service and parts operations and was involved in increasing the dealership’s CSI to above zone levels and improving gross profit by among other things, decreasing expenses by modeling the departments and matching staff to the model.  Prior to that, from 1987 to 2001, Mr. Liantonio served initially as service manager and was subsequently promoted to fixed operations director at the automotive dealership Bayview Cadillac in Ft Lauderdale, Florida.  From 1985 to 1987, Mr. Liantonio served as a service advisor at the automotive dealership Towne Cadillac in Union City, New Jersey.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Liantonio should serve as a member of the board of directors included his extensive automotive industry experience.

 

Todd Newberry .  Mr. Newberry has 25 years experience in designing, engineering, and manufacturing electronic devices that serve the security, law enforcement, and military sectors. As president of Newberry Information Systems, Inc. and a founding partner of Securestar Technologies, Inc. from August 1998 through July 2005, he managed the development and deployment of digital closed circuit television recording and transmission systems, tracking systems utilizing GPS Receivers mated to satellite transceivers, UHF and VHF RF transceivers, cellular transceivers, and tracking via active RFID deployment. Access and asset control projects utilizing biometric recognition and multifactor authentication were also successfully completed. During his tenure with the City of Mansfield, Ohio from March 1991 to the present, he has served as technical services director where he has designed and implemented multiple data and voice networks and enterprise applications in a mission critical environment. Mr. Newberry has also served as the president of Newberry Consulting Services since January 2006, a company that works with a wide variety of clients providing custom solutions for their security needs, where he was responsible for the design, manufacture, installation, and maintenance of security electronics. Mr. Newberry has also served as vice president of The Public Data Management Company since July 2009, a company which provides IT services to small and medium sized municipal entities that do not have a full time IT staff, where he was responsible for sales and engineering.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Newberry should serve as a member of the board of directors included his extensive security, including biometric security, industry experience.

 

Edward Dingler .  Since January 1992, Mr. Dingler has been with the PGB divison of ICAP Securities USA, LLC, a FINRA registered broker-dealer, which handles the brokering of repurchase agreements, which are instruments that trade U.S. government securities in a secondary market. Mr. Dingler currently holds the position of Vice President, overseeing the daily operations of the trading desk. He was also on the team responsible for developing the electronic platforms used in today's trading. The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Dingler should serve as a member of the board of directors included his financial industry experience.

 

Other Directors

 

The terms of the following current directors will expire upon the election of the director nominees at our 2011 annual meeting:

 

David Coriaty .  Mr. Coriaty has been a member of the board of directors of the Company since February 2009.  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 business ventures including internet start-ups and a sports representation agency that works with well-known NFL and MLB athletes.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Coriaty should serve as a member of the board of directors included his knowledge as founder of the Company and co-inventor of the Company’s technology.

 

Antonio DeRisi .  Mr. DeRisi has been a member of the board of directors of the Company since February 2009.  Mr. DeRisi has more than 20 years retail experience managing multiple retail locations in and around Montreal, Canada. Mr. DeRisi is currently the president of the Chamber of Commerce for the City of St. Leonard in Montreal, Canada.  He owns a distribution center that distributes all types of products, including food and non-food items, to retail stores and distributors throughout Canada.  Mr. DeRisi holds the Canadian equivalent of a bachelor of science in business administration from Dawson College located in Montreal, Canada.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. DeRisi should serve as a member of the board of directors included his knowledge of the Company and his previous business management and distribution experience.

 

 

Edward Sebastiano .  Mr. Sebastiano has been a member of the board of directors of the Company since February 2009.  Mr. Sebastiano has more than 25 years of experience in the financial markets.  Since November 2007, he has been the president of, and a partner in, EPTrading Inc., a commodities trading company in New York City. Prior to that from January 2005, Mr. Sebastiano was the president and owner of Esco Commodities, also a commodities trading company in New York City. He is also the founder of GFA, a public relations and management company.  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Sebastiano should serve as a member of the board of directors included his knowledge of the company and his financial industry experience.

 

Mark Spanakos .  Mr. Spanakos has been a member of the board of directors of the Company since February 2009.  Mr. Spanakos has experience in the financial markets and owns a seat on the New York Mercantile Exchange (NYMEX).  The particular experience, qualifications, attributes or skills that led the board to conclude that Mr. Spanakos should serve as a member of the board of directors included his financial industry experience.

 

Family Relationships

 

There are no family relationships between or among the directors, director nominees and executive officer of the Company.

 

Involvement in Legal Proceedings

 

To the best of the Company's knowledge, during the past ten years, none of the proceedings described in Item 401(f) of Regulation S-K occurred with respect to a present director or executive officer of the Company except that Mr. David Coriaty and Mr. Todd Newberry each filed for personal bankruptcy which was discharged in May 2004 and  November 2005, respectively.

 

Other Legal Proceedings

 

On or about July 13, 2010, Mark Spanakos, a member of the board of directors of the Company, filed suit against the Company, its subsidiary Hawk Biometric, and the following other members of the board of directors, Messrs. David Coriaty, Edward Sebastiano, Antonio DeRisi, as well as the Company’s former chief executive officer, Michael Diamant (collectively, the “Defendants”), in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, Case No. 502010CA017971XXXMB.  The complaint alleges breach of fiduciary duty, breach of duty of loyalty, corporate waste, fraud, conspiracy to commit fraud, and violation of Florida RICO.  The complaint is unclear as to the factual basis alleged to underlie the proceeding except for general allegations that the Defendants have engaged in improper conduct, including but not limited to allegations relating to false representations, solicitation of investor funds based on misrepresentation, waste of funds unrelated to business, waste of corporate assets, diverting corporate opportunities and other general allegations.  Mr. Spanakos seeks an unspecified amount of compensatory, actual, general damages and prejudgment interest, treble damages, and injunctive and equitable relief including a permanent and continuing injunction against future violations, a requirement that Messrs. Coriaty, Sebastiano, DeRisi and Diamant divest themselves of any interest in the Company and Hawk Biometric, and imposition of reasonable restrictions upon defendants from their future involvement in investments and related businesses.  On August 18, 2010, counsel for Hawk Biometric filed a motion to dismiss arguing that the complaint was fatally defective on a number of counts, lack of standing, lack of specificity, and failure to state a cause of action, among others.  As of November 15, 2010, all named defendants had responded to the complaint and were awaiting the court’s decision on the motion to dismiss. We believe that Mr. Spanakos’ allegations are without merit and intend to vigorously defend against the lawsuit.

 

 

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT AS DIRECTORS.