-----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, WD6GIXgBLmI7ZN+aTwmUosrYgFzkuUltBo6c9q0KHYNA4tKnZZtqRDp/0flk4zTG 5ug33aGEtRYAP3Zf8Lud3w== 0001021408-01-505592.txt : 20010821 0001021408-01-505592.hdr.sgml : 20010821 ACCESSION NUMBER: 0001021408-01-505592 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010727 ITEM INFORMATION: Other events ITEM INFORMATION: Resignations of registrant's directors FILED AS OF DATE: 20010820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAFLINK CORP CENTRAL INDEX KEY: 0000847555 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 954346070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20270 FILM NUMBER: 1718369 BUSINESS ADDRESS: STREET 1: 18650 N E 67TH COURT STREET 2: SUITE 210 CITY: REDMOND STATE: WA ZIP: 98052 BUSINESS PHONE: 8136360099 MAIL ADDRESS: STREET 1: 18650 N E 67TH COURT SUITE 210 CITY: REDMOND STATE: WA ZIP: 98052 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL REGISTRY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: TOPSEARCH INC DATE OF NAME CHANGE: 19920401 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): JULY 27, 2001 SAFLINK CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE 0-2027 95-4346070 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 11911 N.E. 1ST STREET, SUITE B-304, BELLEVUE, WA 98005-3032 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (425) 278-1100 ITEM 1. CHANGE IN CONTROL OF REGISTRANT Not applicable ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Not applicable. ITEM 3. BANKRUPTCY OR RECEIVERSHIP Not applicable. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM 5. OTHER EVENTS On July 27, 2001, SAFLINK Corporation (the "Company") entered into a modification agreement (the "Modification Agreement") with certain purchasers of the Series E Preferred Stock (the "Preferred Stock") and Series A and B Warrants (the "Warrants") in order to amend certain terms of the Securities Purchase Agreement and the Registration Rights Agreement relating to the Preferred Stock and Warrants which were purchased on June 5, 2001 for an aggregate purchase price of $8.0 million (the "Financing"). Under the Modification Agreement, the parties agreed to amend, among other things, certain terms of the Certificate of Designation, Preferences and Rights of the Series E Preferred Stock ("Certificate of Designation"), subject to stockholder approval. In particular, the Company entered into the Modification Agreement to extend certain dates by which the Company had committed to meet obligations with respect to the purchasers and to eliminate those features of the Preferred Stock and Warrants that would prevent the proceeds from the Financing to be treated as equity for financial accounting purposes. These revisions, among other things, narrow the existing penalties for the Company in the event the Company fails to register the common stock underlying the Preferred Stock and Warrants, extend the deadline by which the Company must register this common stock, and limit the existing rights of the holders of the Preferred Stock and certain holders of the Warrants by allowing a cash or stock penalty to be paid only in the event of certain types of acquisitions. Certain provisions of the Modification Agreement became effective immediately upon execution by two-thirds of the purchasers of the Preferred Stock; other provisions, including any amendments to the Certificate of Designation, will only become effective upon receipt of stockholder approval at the Company's next stockholder meeting of the Financing, the reverse stock split, and the amendment to the Certificate of Designation. The foregoing description does not purport to be complete and is qualified in its entirety by reference to the copy of the Modification Agreement, dated July 27, 2001, which is attached hereto as Exhibit 10.1 to this Form 8-K and is incorporated by reference herein. On August 8, 2001, the Company was notified that effective with the open of business on August 9, 2001, the Company's common stock would be delisted from the Nasdaq SmallCap Stock Market. The Nasdaq Listing Qualifications Panel informed the Company that these securities were delisted for the Company's failure to meet the minimum bid price and net tangible asset/shareholder equity requirements of the Nasdaq Marketplace Rules. The Company is considering an appeal of this determination. As of August 9, 2001, the Company's common stock is traded in the over the counter market. A copy of the press release dated August 15, 2001 issued by the Company in connection with the Nasdaq Stock Market notification is attached as Exhibit 99.1 to this Form 8-K. ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS On August 2, 2001, Hector Alcalde delivered a letter to the Chairman of the Board (the "Chairman") resigning from the Board of Directors. The resignation was effective upon receipt and acceptance thereof, on behalf of the Board, by the Chairman of the Board. Mr. Alcalde's resignation was not the result of any disagreement with the Company relating to the Company's operations, policies or practices. 3 ITEM 6. FINANCIAL STATEMENTS AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) Exhibits The exhibits listed on the Exhibit Index on page 6 are filed as part of this Report. ITEM 7. CHANGE IN FISCAL YEAR Not applicable. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SAFLINK Corporation Date: August 17, 2001 By: /s/ Glenn L. Argenbright -------------------------------------- Glenn L. Argenbright President and Chief Executive Officer 5 EXHIBIT INDEX EXHIBIT NUMBER - ------- 10.1 Form of Modification Agreement, dated July 27, 2001, among SAFLINK Corporation and certain purchasers named therein. 99.1 Press Release dated August 15, 2001 6 EX-10.1 3 dex101.txt FORM OF MODIFICATION AGREEMENT MODIFICATION AGREEMENT This Modification Agreement (the "Agreement") is made and entered into as of the ___ day of July __, 2001, by and between SAFLINK Corporation, a Delaware corporation (the "Company") and each of the purchasers listed on Schedule I hereto ("Purchaser") with regard to the following: WITNESSETH: WHEREAS, the parties entered into the Securities Purchase Agreement ("Securities Purchase Agreement") and the Registration Rights Agreement ("Registration Rights Agreement") for purposes of setting forth the terms and conditions relating to the issuance and sale of Series E Preferred Stock and Series A Warrants and Series B Warrants; WHEREAS, all capitalized terms used herein and not defined herein shall have the meanings set forth in the Securities Purchase Agreement or the Registration Rights Agreement, as applicable; WHEREAS, the parties wish to modify the Securities Purchase Agreement, the Registration Rights Agreement and the Series A and B Warrants in the manner set forth herein; NOW, THEREFORE, the parties agree as follows: ARTICLE I SECURITIES PURCHASE AGREEMENT 1.1 Section 3.4 of the Securities Purchase Agreement is hereby amended to read in its entirety as follows: Issuance of Shares. The Conversion Shares and Warrant Shares are duly authorized and reserved for issuance, and, upon conversion of the Preferred Stock and the exercise of the Warrant in accordance with their respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances and will not be subject to preemptive rights or other similar rights of stockholders of the Company, other than (i) restrictions on transferability as may be applicable under federal and state securities laws; (ii) restrictive stock legends contemplated by the Investment Agreements; or (iii) those created by Purchaser. The Preferred Stock and the Warrant are duly authorized and are validly issued, fully paid and non-assessable, and free from all taxes, liens claims and encumbrances and are not and will not be subject to preemptive rights or other similar rights of stockholders of the Company, other than (i) restrictions on transferability as may be applicable under federal and state securities laws; (ii) restrictive stock legends contemplated by the Investment Agreements; or (iii) those created by Purchaser. The board of directors of the Company has unanimously approved the issuance of the Preferred Stock and the Warrant pursuant to the terms hereof and of the Conversion Shares and Warrant Shares issuable upon conversion of the Preferred Stock and the exercise of the Warrant pursuant to the terms thereof (without giving effect to any limitations on conversion or exercise contained therein, including for purposes of Nasdaq Rule 4350 (the "Nasdaq Authorization")), has unanimously recommended to the stockholders of the Company the approval of the Nasdaq Authorization and will seek Stockholder Approval (as defined in Section 4.12) at the Company's next stockholder meeting, which shall be no later than October 31, 2001. No further authorization or approval (other than the Stockholder Approval) is required under the rules of Nasdaq with respect to the transactions contemplated by this Agreement, including, without limitation, the issuance of the Conversion Shares and the Warrant Shares and the inclusion thereof on Nasdaq. 1.2 Section 4.8 of the Securities Purchase Agreement shall, subject to and effective only upon authorization by the required vote prescribed by the National Association of Securities Dealers, Inc. ("NASD") and the Delaware General Corporation Law, as applicable, of the Financing, the Reverse Stock Split, and the Amendment to the Certificate of Designation as each such proposal is described in Section 1.3 of this Modification Agreement, be amended to read in its entirety as follows: Listing. For so long as a Purchaser owns any of the Securities, the Company shall use its best efforts to continue the listing of its Common Stock on the Nasdaq SmallCap Market, the Nasdaq National Market, the New York Stock Exchange or the American Stock Exchange, secure and maintain listing and trading of the Conversion Shares and Warrant Shares on such exchange, and comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of such exchange. 1.3 Section 4.12 of the Securities Purchase Agreement is hereby amended to read in its entirety as follows: Share Authorization. The Company covenants and agrees that it shall (i) solicit by proxy Stockholder Approval (as defined below) and (ii) use its best efforts to obtain Stockholder Approval at its next stockholder meeting which shall be held no later than October 31, 2001 (the "Stockholder Approval Date"). For purposes hereof, "Stockholder Approval" means (a) authorization by the required vote under Nasdaq Rule 4350 of the stockholders of the Company of the issuance of shares of Common Stock upon conversion of shares of Preferred Stock pursuant to the terms of the Certificate of Designation and the exercise of the Warrant pursuant to the terms thereof in the aggregate in excess of 19.99% of the outstanding shares of Common Stock (the "Financing"), (b) if necessary and to the extent effected by stockholder vote, the elimination of any prohibitions under the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Company or any of its securities on the Company's ability to issue shares of Common Stock in excess of the Cap Amount (as defined in the Certificate of Designation) and for all other applicable purposes, (c) authorization by the required vote under the Delaware General Corporation Law to approve the Reverse Stock Split (as defined below) and (d) authorization by the required vote under Delaware General Corporation 2 Law to amend the Certificate of Designation in the form of Exhibit A (the "Amended Certificate"). In addition, the Company shall, unless otherwise consented to by holders of a majority of the Series E Preferred Stock, have a definitive proxy statement mailed to each stockholder of the Company at least ten (10) days prior to the Stockholder Approval Date. 1.4 Section 4.15 of the Securities Purchase Agreement is hereby amended to read in its entirety as follows: Reverse Stock Split. The Company covenants and agrees that it will use its best efforts to obtain by September 30, 2001 stockholder approval to conduct a reverse stock split, the ratio of which will be determined by the Company in its sole discretion, provided that such ratio shall be not less than 1:7 and not more than 1:10 (the "Reverse Stock Split"). 1.5 Section 4.16 of the Securities Purchase Agreement is hereby amended to read in its entirety as follows: Conversion of Jotter Note. The Company covenants and agrees that it will use its best efforts to obtain by October 31, 2001 stockholder approval for the conversion of the $1.7 million promissory note issued to Jotter Technologies, Inc. ("Jotter") as partial consideration in the asset purchase transaction between the Company and Jotter ("Jotter Asset Purchase") into shares of Common Stock at $1.00 per share, and the Company shall, in any event, provide evidence satisfactory to the Purchaser of such conversion. ARTICLE II REGISTRATION RIGHTS AGREEMENT 2.1 Section 2.1 of the Registration Rights Agreement is hereby amended to read in its entirety as follows: Mandatory Registration. The Company shall prepare and file with the SEC a Registration Statement (i) on a Form S-3, in the event a Form S-3 Registration Statement is available to the Company, on or prior to the tenth (10/th/) business day after the Closing (as defined in the Securities Purchase Agreement); or (ii) on such form of Registration Statement as is then available to effect a registration of all of the Registrable Securities, in the event a Form S-3 Registration Statement is no longer available to the Company, on or prior to the sixtieth (60th) business day after the date of the Closing (as defined in the Securities Purchase Agreement) (in each case, the "Filing Date"). The Registrable Securities included in the Registration Statement shall be allocated to each Purchaser as set forth in Section 12.9 hereof. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to (and subject to the approval of (which approval shall not be unreasonably withheld or denied)) the Initial Purchaser and its counsel prior to its filing or other submission. 3 2.2 Section 2.3 of the Registration Rights Agreement shall, subject to and effective only upon authorization by the required vote prescribed by the NASD and the Delaware General Corporation Law, as applicable, of the Financing, the Reverse Stock Split, and the Amended Certificate as each such proposal is described in Section 1.3 of this Modification Agreement, be amended to read in its entirety as follows: Registration Deadline; Registration Failure. (a) The Company shall cause the Registration Statement required to be filed pursuant to Section 2.1 hereof to become effective as soon as practicable following the date of Stockholder Approval (as defined in the Securities Purchase Agreement), if such Stockholder Approval is received, or if such Stockholder Approval is not received, following the date of the next stockholders' meeting, but shall cause such Registration Statement (i) in the event a Form S-3 Registration Statement is available to the Company, to become effective in no event later than the sixtieth (60th) day following the Closing, or (ii) in the event a Form S-3 Registration Statement is no longer available to the Company, to become effective in no event later than December 31, 2001, (in each case, the "Registration Deadline"). If the Registration Statement is not effective as required by this Section 2.3, the Company shall thereafter use its best efforts to cause such Registration Statement to become effective. If the Registration Statement covering the Registrable Securities required to be filed by the Company pursuant to Section 2.1 hereof is not declared effective by the SEC on or before the Registration Deadline (a "Registration Failure"), the Conversion Price in respect of any shares of Series E Preferred Stock held by any affected holder, shall be reduced by 20% and for each month thereafter during the period beginning on and including the date of such Registration Failure through and including the date on which such Registration Failure is cured, the Conversion Price shall be reduced by 1.5% (pro rated for days less than one month). 2.3 Section 3.17 of the Registration Rights Agreement is hereby amended to read in its entirety as follows: Except for the holders listed in Schedule 3.17 hereto, from and after the date of this Agreement, the Company shall not, and shall not agree to, allow the holder of any securities of the Company (other than Registrable Securities) to include any of their securities in any Registration Statement or any amendment or supplement thereto under Section 3.1 or 3.2 hereof without the consent of the holders of a majority of the Registrable Securities hereunder. 2.4 Schedule 3.17 to the Registration Rights Agreement is hereby amended to read in its entirety as set forth on Exhibit B hereto. 4 ARTICLE III SERIES A AND SERIES B WARRANTS 3.1 Subject to and effective only upon authorization by the required vote prescribed by the NASD and the Delaware General Corporation Law, as applicable, of the Financing, the Reverse Stock Split and the Amended Certificate, as each such proposal is described in Section 1.3 of this Modification Agreement, the Company shall amend the Series A Warrants and Series B Warrants issued to each Purchaser in the forms of Exhibits C and D, respectively (the "Amended Warrants"). Each Purchaser shall deliver their respective Series A Warrants and Series B Warrants to the Company in substitution of their respective Amended Warrants. The Company shall deliver the Amended Warrants to the respective Purchasers upon receipt of the Series A Warrants and Series B Warrants from each warrant holder. ARTICLE IV MISCELLANEOUS 4.1 Effect. Except as otherwise set forth in this Amendment, the Agreement shall become effective upon execution of this Agreement by holders of two-thirds of the outstanding Preferred Stock. Except as otherwise set forth in this Agreement, the Securities Purchase Agreement, the Registration Rights Agreement and the Series A and B Warrants shall remain in full force and effect in accordance with their terms. 4.2 Approval of Palo Alto Investors. Each of the Purchasers listed on Schedule I hereto hereby agrees, subject to approval by the Company's common stockholders of the Financing, the Reverse Stock Split and the Amended Certificate, to vote at the next meeting of stockholders following the execution of this Agreement in favor of adopting the Amended Certificate. 4.3 Governing Law. This agreement shall be governed by, construed under and enforced in accordance with the laws of the State of Delaware without regard to any conflict of law principles thereof. 4.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 4.5 Costs. The Company shall pay reasonable legal fees and expenses incurred by counsel to Palo Alto Investors in connection with the negotiation and execution of this Modification Agreement, the Amended Certificate and the Amended Warrants. 5 IN WITNESS WHEREOF, the parties have caused this Modification Agreement to be executed as of the day and year first above written. SAFLINK CORPORATION By: ----------------------------------- Glenn Argenbright Chief Executive Officer PURCHASER: By: ----------------------------------- Title: ------------------------------- 6 List of Schedules and Exhibits Schedule I List of Purchasers Exhibit A Amended Certificate of Designation Exhibit B Schedule 3.17 Exhibit C Series A Warrant (as amended) Exhibit D Series B Warrant (as amended) 7 EX-99.1 4 dex991.txt PRESS RELEASE DATED AUGUST 15, 2001 FOR IMMEDIATE RELEASE SAFLINK CONTACT: Glenn Argenbright Chief Executive Officer SAFLINK Corporation 425-278-1100 gargenbright@saflink.com SAFLINK ANNOUNCES NASDAQ DETERMINATION AND RESUMES TRADING SAFLINK Corporation announced today that, in a letter dated August 8, 2001, the Company was notified that effective with the open of business on August 9, 2001, the Company's common stock would be delisted from the Nasdaq SmallCap Stock Market. The Nasdaq Listing Qualifications Panel informed the Company that the decision was based upon the Company's failure to meet the minimum bid price and net tangible asset/shareholder equity requirements of the Nasdaq Marketplace Rules. The Company is considering an appeal of this determination. The shares, which last traded on May 31, 2001, began trading on August 9, 2001, in the over the counter market under the ticker symbol (ESAF). The stock is presently being quoted on the Pink Sheets inter-dealer quotation service. A market maker has an application pending to quote the security on the OTC Bulletin Board (OTCBB). SAFLINK Corporation, based in Bellevue, Washington, brings "Forget your Password(TM)" solutions to workstations and enterprise networks through biometrics. The company provides cost-effective multi-biometric software solutions to verify individual identity, to protect business and personal information, and to replace passwords and PINs in order to safeguard and simplify access to electronic systems and enable new online services for customers. Further information is available through the company's web site at www.saflink.com. NOTE: SECURE AUTHENTICATION FACILITY, SAF, and Forget Your Password are trademarks of SAFLINK Corporation. All other brands and products referenced herein are acknowledged to be trademarks or registered trademarks of their respective holders. This release contains information about management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of a variety of factors including, but not limited to, risks and uncertainties associated with the Company's ability to sell its products, conserve its working capital, raise financing, and support its strategic partners, and to appeal Nasdaq's determination, as well as other factors that are discussed in the Company's Annual Report on Form 10-K and other documents periodically filed with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----