8-K

UNITED STATES

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

October 11, 2006

Date of report (date of earliest event reported)

SAFLINK CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-20270	95-4346070
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

12413 Willows Road NE, Suite 300

Kirkland, Washington 98034

(Address of principal executive offices)(Zip code)

(425) 278-1100

(Registrant’s telephone number, including area code)

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):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

Item 2.05 Costs Associated with Exit or Disposal Activities.

On October 19, 2006, Saflink Corporation’s board of directors approved several restructuring moves that are expected to dramatically reduce operating expenses, improve operational focus, and greater leverage our core technology assets. We announced that we are reducing our workforce by over 50%, with the majority of our remaining workforce to be dedicated to our Registered Traveler initiative. In addition, we plan to focus our business development resources on the sale of our software and hardware authentication products through existing and new distribution partners. We also plan to aggressively pursue the licensing of our award winning authentication technology, either through patent enforcement or business development efforts. All restructuring activities are expected to be completed in the fourth quarter of 2006. We are currently unable to estimate the amount of restructuring and additional charges, if any, we will incur in connection with the restructuring activities.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On October 11, 2006, Saflink Corporation received written notification from Nasdaq stating that we were not in compliance with the Nasdaq audit committee requirements as set forth in Marketplace Rule 4350. We disclosed in our September 29, 2006, Form 8-K that director Steven M. Oyer agreed to serve as our interim Chief Executive Officer following the reassignment of our President and Chief Executive Officer Glenn L. Argenbright. Mr. Oyer was serving as the chairman of our audit committee. Due to this event, we are no longer in compliance with Marketplace Rule 4350. However, we will be provided a cure period in order to regain compliance as follows:

• until the earlier of our next annual shareholders’ meeting or September 28, 2007; or

• if the next annual shareholders’ meeting is held before March 27, 2007, then we must evidence compliance no later than March 27, 2007.

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

Effective October 13, 2006, Kris Shah has resigned as a member of our board of directors and will no longer serve as a director. In addition, Mr. Shah will no longer serve as president of our wholly-owned subsidiary, Litronic, Inc. Mr. Shah did not inform the board of directors that his resignation as a director is due to any disagreement with us on any matter relating to the our operations, policies, practices, or otherwise.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press release, dated October 19, 2006, announcing restructuring activities of Saflink Corporation
99.2	Press release, dated October 19, 2006, announcing Nasdaq letter

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
Dated: October 19, 2006	By:	/s/ Jon C. Engman
		Name: Jon C. Engman
		Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release, dated October 19, 2006, announcing restructuring activities of Saflink Corporation
99.2	Press release, dated October 19, 2006, announcing Nasdaq letter

EX-99.1

Exhibit 99.1

Saflink Announces Corporate Restructuring

Company Reduces Headcount to Improve Cash Flow and Operational Focus

KIRKLAND, WA – (October 19, 2006) Saflink^® Corporation (NASDAQ:SFLK), a leading provider of solutions that verify identity, secure access and increase productivity, announced several restructuring moves that are expected to dramatically reduce operating expenses, improve operational focus, and greater leverage its core technology assets. Saflink announced that it is reducing its workforce by over 50 percent, with the majority of its remaining workforce to be dedicated to Saflink’s Registered Traveler initiative.

In addition, management plans to focus its business development resources on the sale of its software and hardware authentication products through existing and new distribution partners. Saflink management believes that it has garnered strong relationships with companies that have mature, national product distribution infrastructure, and that Saflink’s sales activities will be more cost effective through indirect channels in the coming months. Saflink also plans to aggressively pursue the licensing of its award-winning authentication technology, either through patent enforcement or business development efforts.

Steve Oyer, Saflink’s interim Chief Executive Officer commented, “We are taking these steps in order to dramatically improve our operating cash flow and, at the same time, are re-focusing our efforts on the most near-term revenue opportunities – most notably, the Registered Traveler initiative.” Mr. Oyer continued, “We have also mobilized our sales leadership to aggressively market our developed technology and products in a much more cost effective way. We will continue to look for ways to improve our financial metrics and operational efficiency in the coming weeks.”

Saflink also announced that Kris Shah, the president of Saflink’s subsidiary, Litronic, has resigned from the Saflink board. In addition, Mr. Shah will be leaving the company, effective October 20, 2006. Mr. Oyer commented, “We appreciate the long and dedicated service that Kris has provided Litronic and Saflink, and we wish him well.”

About Saflink

Saflink Corporation offers biometric security and smart card solutions that protect intellectual property, secure information and eliminate passwords. Saflink identity assurance management solutions allow administrators to verify the identity of users and control their access to computer networks, facilities and applications. Winner of seven awards in 2005, Saflink and its solutions have been recognized by organizations such as Frost & Sullivan and Software Magazine’s Software 500. For more information, please visit http://www.SAFlink.com or call 800-762-9595.

NOTE: “Saflink” is a registered trademark trademark of Saflink Corporation.

This press release contains forward-looking statements, including statements about the search for a permanent Chief Executive Officer and Chief Financial Officer, Mr. Engman’s transition period, and the effect that a change in leadership may have on us and our Registered Traveler program. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words “predict,” “believe,” “expect,” “intend,” “anticipate,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could affect our actual results include, but are not limited to, the risk that our restructuring actions will not have the desired effect, the risk that if we do not generate significant revenue from our participation in large government security initiatives or increase the level of our participation in these initiatives, our business performance and future prospects may suffer. In addition, if third parties, on whom we partly depend for our product marketing and distribution, do not promote our products, our ability to generate revenue may be limited and our business and financial condition could suffer. Other factors include, but are not limited to, risks and uncertainties associated with our financial condition, our ability to sell our products, our ability to compete with competitors and the growth of the security market, and those included in our annual report on Form 10-K, as well as other documents we periodically file with the Securities and Exchange Commission.

###

Saflink PRESS CONTACT:

Sterling Communications

Katie James

(206) 388-5758

kjames@sterlingpr.com

Saflink INVESTOR RELATIONS CONTACT:

Investor Awareness, Inc.

Tony Schor

(847) 945-2222

tony@investorawareness.com

EX-99.2

Exhibit 99.2

Appointment of Interim CEO Creates Audit Committee Opening

Saflink Receives Letter from Nasdaq Regarding Audit Committee Requirement

KIRKLAND, WA – (October 19, 2006) Saflink^® Corporation (NASDAQ:SFLK) a leading provider of solutions for secure access, identity assurance and productivity announced today that as a result of the appointment of Steve Oyer, who has been serving as chairman of the audit committee, to the role of interim Chief Executive Officer, Saflink no longer is in compliance with Nasdaq’s audit committee requirements as set forth in Marketplace Rule 4350. Mr. Oyer’s new role negated his “independent” status, which is a requirement for serving on the audit committee.

Saflink received a letter from Nasdaq, dated October 11, 2006, confirming that Saflink was out of compliance with Rule 4350, but will be provided with a cure period to regain compliance through the appointment of a qualified candidate, from the current board or external candidates, no later than March 27, 2007.

Jon Engman, Saflink’s CFO commented, “The notice does not change Saflink’s filing or listing status at this time. We are confident that Saflink will be able to comply with Marketplace Rule 4350 during the cure period provided by Nasdaq.”

About Saflink

Saflink Corporation offers biometric security and smart card solutions that protect intellectual property, secure information and eliminate passwords. Saflink identity assurance management solutions allow administrators to verify the identity of users and control their access to computer networks, facilities and applications. Winner of seven awards in 2005, Saflink and its solutions have been recognized by organizations such as Frost & Sullivan and Software Magazine’s Software 500. For more information, please visit http://www.SAFlink.com or call 800-762-9595.

NOTE: “Saflink” is a registered trademark of Saflink Corporation. “Nasdaq” is a registered trademark of The NASDAQ Stock Market, Inc.

This release contains information about management’s view of Saflink’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. For example, Saflink’s expected ability to regain compliance with the Nasdaq audit committee composition requirement. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors and are subject to certain assumptions, risks, uncertainties and changes in circumstances. If Saflink is unable to regain compliance with the Nasdaq audit committee composition requirement its stock will be delisted from the Nasdaq Capital Market. Other risks and uncertainties include, but are not limited to, risks and uncertainties associated with Saflink’s financial condition, its ability to sell its products, its ability to compete with competitors and the growth of the security market, and those described

in its most recent Quarterly Report on Form 10-Q and its most recent Annual Report on Form 10-K, as well as other documents periodically filed with the Securities and Exchange Commission.

Saflink PRESS CONTACT:

Sterling Communications

Katie James

(206) 388-5758

kjames@sterlingpr.com

Saflink INVESTOR RELATIONS CONTACT:

Investor Awareness, Inc.

Tony Schor

(847) 945-2222

tony@investorawareness.com