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
January 5, 2008
Date of report (Date of earliest event reported)
L-1 IDENTITY SOLUTIONS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 001-33002 02-08087887
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(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
177 BROAD STREET, STAMFORD, CONNECTICUT 06901
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(Address of principal executive offices) (Zip Code)
(203) 504 - 1100
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(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 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 5, 2008, L-1 Identity Solutions, Inc. (the "Company") and its
wholly owned subsidiaries L-1 Identity Solutions Operating Company and 6897525
Canada Inc. entered into an Arrangement Agreement (the "Agreement") with
Bioscrypt Inc. ("Bioscrypt"), a corporation incorporated under the Canada
Business Corporations Act (the "CBCA"), to acquire all outstanding shares of
Bioscrypt in a stock-for-stock transaction valued at approximately C$44.0
million. The acquisition will be structured as an arrangement under the CBCA
(the "Arrangement") with Bioscrypt surviving as an indirect wholly owned
subsidiary of the Company.
Bioscrypt is a provider of access control solutions headquartered in
Ontario Canada. Bioscrypt has over 400 global customers and an installed base of
over 260,000 access control units. Significant customers include Kronos,
Honeywell, Lenel and ADI, among others. In addition, Bioscrypt's VeriSoft
software application is now included on more than 20 million HP computers and
its 3D facial recognition, acquired as part of the A 4 Vision acquisition, is
used by the largest casino in the world to provide access control for over
12,000 employees. In the Company's January 7 press release, Mr. LaPenta,
Chairman and Chief Executive Officer of the Company, stated that "Bioscrypt is
the market leader among biometric physical access providers and its substantial
sales channel is a valuable asset through which L-1 can extend the reach of its
solutions." "Bioscrypt is well-positioned within the government and
transportation markets. It also has a strong presence within the corporate
enterprise market where we see great potential as corporations begin to embark
on large-scale identity management deployments globally."
Subject to the terms and conditions of the Agreement, the Company will
purchase each outstanding Bioscrypt share for consideration equal to a
fractional share of Company common stock, par value $0.001 per share ("Common
Stock"), with a value of C$0.55 per share based on the average closing price of
the Common Stock on the New York Stock Exchange (the "NYSE") for the 20 trading
days ending five trading days prior to the closing date of the Arrangement (the
"Exchange Ratio"). The Exchange Ratio is subject to a maximum and minimum value
based on the trading price of the Common Stock on the NYSE for a specified
period prior to the announcement of the Agreement. Under the Agreement, the
maximum number of Company shares that can be issued is 2.6 million shares. In
addition, pursuant to the Arrangement, the Company will assume outstanding
Bioscrypt stock options that are not exercised prior to the effective time of
the Arrangement, with adjustment to such options to give effect to the Exchange
Ratio.
Consummation of the Arrangement is subject to customary closing
conditions, including approval by the holders of at least two-thirds of
Bioscrypt's outstanding common shares, options and warrants, each voting as a
separate class, the approval of the Ontario Superior Court, and other regulatory
approvals. The Agreement contains certain termination rights for both the
Company and Bioscrypt, and further provides that, upon termination of the
Agreement under specified circumstances, Bioscrypt must pay the Company a
termination fee and a reimbursement fee with respect to the Company's
out-of-pocket costs and expenses.
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The Agreement also contains customary representations, warranties and
covenants made by the parties to each other. Bioscrypt's covenants include that
(i) Bioscrypt will conduct its business in the ordinary course consistent with
past practice during the period between the execution of the Agreement and the
closing date, (ii) Bioscrypt will not engage in certain kinds of transactions
during such period, and (iii) Bioscrypt will not solicit proposals or enter into
negotiations relating to or concerning alternative business combination
transactions unless certain conditions are satisfied. The Company represents
that it will issue its Common Stock pursuant to the Arrangement in reliance upon
the exemption from registration under the Securities Act of 1933, as amended
(the "Securities Act") provided by Section 3(a)(10) thereof, and that shares
issuable upon exercise of Bioscrypt stock options following consummation of the
Arrangement will be registered on Form S-8 under the Securities Act.
A copy of the Agreement is filed with this report as Exhibit 2.1 and is
incorporated by reference into this report. We encourage you to read the
Agreement for a more complete understanding of the Arrangement.
The Board of Directors of each of the Company and Bioscrypt has adopted
and approved the Agreement. The Arrangement will be submitted to Bioscrypt
security holders for approval at a special meeting expected to be held in
February 2008. The Board of Directors of Bioscrypt has unanimously recommended
that Bioscrypt security holders vote in favor of the Arrangement.
Irrevocable support agreements in favor of the Arrangement have been
signed by directors, officers and other shareholders of Bioscrypt, representing
approximately 21% of the outstanding shares of Bioscrypt. Similar agreements
have been signed by the holders of more than 73% of all of Bioscrypt issued and
outstanding warrants and 70% of all outstanding stock options. The foregoing
updates certain information contained in the Company's January 7, 2008 press
release, which reported that support agreements had been signed by holders of
approximately 25% of Bioscrypt's outstanding shares and 87% of Bioscrypt's
issued and outstanding warrants, based on information that had been provided by
Bioscrypt at that time.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
As described in Item 1.01, pursuant to the Agreement, the Company has
agreed to issue shares of its Common Stock in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 3(a)(10)
thereof. Section 3(a)(10) of the Securities Act exempts securities issued in
exchange for one more outstanding securities from the general requirement of
registration where the terms and conditions of the issuance and exchange of such
securities have been approved, after a hearing upon the fairness of the terms
and conditions at which all persons to whom the securities will be issued have
the right to appear, by any court expressly authorized by law to grant such
approval. Bioscrypt will submit the Arrangement to the Ontario Superior Court
pursuant to the CBCA and will apply for an interim order permitting notice to
all persons to which the Common Stock will be issued, and, following the
requisite approval by Bioscrypt security holders and a hearing at which such
persons will have the right to appear, a final order of the Ontario Superior
Court will be sought as to the fairness of the Arrangement. Such final order is
a condition to the consummation of the Arrangement and the issuance of the
Common Stock.
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ITEM 8.01 OTHER INFORMATION.
On January 7, 2008, the Company agreed to purchase 362,000 shares of
Common Stock for $17.00 per share in a privately arranged transaction. The
Company may purchase up to an additional 338,000 shares of Common Stock at or
below then-current market prices on or prior to January 31, 2008.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No. Description
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2.1 Arrangement Agreement, dated as of January 5, 2008, among
L-1 Identity Solutions, Inc., L-1 Identity Solutions
Operating Company, 6897525 Canada Inc. and Bioscrypt Inc.
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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.
L-1 IDENTITY SOLUTIONS, INC.
By: /s/ James A. DePalma
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Name: James A. DePalma
Title: Executive Vice President,
Chief Financial Officer & Treasurer
Date: January 10, 2008
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Arrangement Agreement, dated as of January 5, 2008, among
L-1 Identity Solutions, Inc., L-1 Identity Solutions
Operating Company, 6897525 Canada Inc. and Bioscrypt Inc.
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