As filed with the Securities and Exchange Commission on July 1, 2009
Registration No. 333-159411
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
L-1 IDENTITY SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 02-08087887
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
177 BROAD STREET
STAMFORD, CONNECTICUT 06901
(203) 504-1100
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
MARK S. MOLINA
EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRETARY
L-1 IDENTITY SOLUTIONS, INC.
177 BROAD STREET
STAMFORD, CONNECTICUT 06901
(203) 504-1100
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
MARITA A. MAKINEN, ESQ.
WEIL GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. [ ]
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated Accelerated filer [ ] Non-accelerated Smaller reporting
filer [X] filer [ ] company [ ]
(Do not check if a
smaller reporting
company)
CALCULATION OF REGISTRATION FEE CHART
===============================================================================
Proposed Proposed
Title of each class Amount to maximum maximum
of be offering aggregate Amount of
securities to be registered price offering registration
registered (1) per unit (2) price (2) fee (3)
-------------------------------------------------------------------------------
Common Stock 1,310,992 $7.79 $10,212,627.68 $569.86
===============================================================================
(1) The registration fee for 1,145,337 shares of common stock, par value $0.001
per share of L-1 Identity Solutions, Inc. ("Common Stock"), included in the
1,310,992 shares of Common Stock to be registered herewith, was paid
contemporaneously with the initial filing of Registration Statement No.
333-159411 (the "Registration Statement") on May 21, 2009.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) of the Securities Act of 1933, based on the price of
securities of the same class, based on the average of the high and low
prices of the shares reported on the New York Stock Exchange, which was
$7.79 per share on June 30, 2009.
(3) This amount reflects the registration fee paid contemporaneously herewith
of $20.25 to register an additional 165,655 shares of Common Stock and also
includes the registration fee of $549.62 previously paid with the initial
filing of the Registration Statement on May 21, 2009.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission relating to these securities is effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
SUBJECT TO COMPLETION, DATED JULY 1, 2009
PROSPECTUS
L-1 IDENTITY SOLUTIONS, INC.
1,310,992 SHARES OF COMMON STOCK, PAR VALUE
$0.001 PER SHARE
This prospectus relates solely to 1,310,992 shares of common stock, par
value $0.001 per share (the "Common Stock"), of L-1 Identity Solutions, Inc.
(referred to as the "Company", "we" or "us"), that are held by, and may be
offered for resale to the public by, Mr. Robert V. LaPenta. Mr. LaPenta, our
Chairman and Chief Executive Officer, entered into a securities purchase
agreement, dated as of June 29, 2008 (the "LaPenta Agreement"), with the Company
pursuant to which he purchased 750,000 shares of Common Stock and 15,107 shares
of non-voting Series A Convertible Preferred Stock of the Company (the "Series A
Preferred Stock") on August 5, 2008 in a private placement transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act") pursuant to Regulation D. The Series A Preferred Stock
was convertible into shares of Common Stock at a conversion price of $13.19 per
share, subject to stockholder approval pursuant to the listed company rules of
the New York Stock Exchange, Inc. Such stockholder approval was obtained at our
annual meeting held on May 6, 2009, and the shares of Series A Preferred Stock
held by Mr. LaPenta were converted into 1,145,337 shares of Common Stock on May
11, 2009. In addition, on July 1, 2009, we issued 165,655 shares of Common Stock
to Mr. LaPenta upon the conversion of 2,185 shares of Series A Preferred Stock
issued to Mr. LaPenta in satisfaction of a contractual price protection right
under the LaPenta Agreement. We have filed the registration statement of which
this prospectus is a part to comply with our registration obligations in
connection with the August 2008 private placement. This prospectus may be used
by Mr. LaPenta to resell the 1,310,992 shares of Common Stock acquired by him
upon conversion of the Series A Preferred Stock.
Mr. LaPenta may offer the shares from time to time as he may determine
through public or private transactions or through other means described in the
section entitled "Plan of Distribution" beginning on page 18. The prices at
which Mr. LaPenta may sell the shares may be determined by the prevailing market
price for the shares at the time of sale, may be different than such prevailing
market prices or may be determined through privately negotiated transactions
with third parties.
In addition to the shares of Common Stock that may be offered for resale
pursuant to this prospectus, we have registered for resale an aggregate of
8,461,872 shares of Common Stock pursuant to other registration statements filed
with the Securities and Exchange Commission prior to the date hereof. To the
best of our knowledge, the following shares of our Common Stock remain available
for resale by the selling stockholders identified in the following registration
statements: 378,400 shares pursuant to Registration Statement No. 333-153701 and
8,083,472 shares pursuant to Registration Statement No. 333-152782.
We will not receive any proceeds from any sale of shares of Common Stock
by Mr. LaPenta pursuant to this prospectus and have agreed to pay all expenses
relating to registering these shares. Mr. LaPenta will pay any brokerage
commissions and/or similar charges incurred for any sale of shares of Common
Stock pursuant to this prospectus.
Our Common Stock is quoted on the New York Stock Exchange under the
symbol "ID." On June 30, 2009, the last quoted sale price of our Common Stock
was $7.74 per share.
INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE
BUYING SHARES OF OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated _______, 2009
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission, or the SEC, using a "shelf"
registration or continuous offering process. Under this shelf process, the
selling stockholder may from time to time sell the shares of our Common Stock
described in this prospectus in one or more offerings.
You should rely only on the information contained or incorporated by
reference in this prospectus. Neither we nor the selling stockholder has
authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. The
selling stockholder is not making an offer to sell these securities in any
jurisdiction where the offer or sale of these securities is not permitted. You
should assume that the information appearing in this prospectus is accurate only
as of the date on the front cover of this prospectus and that any information we
have incorporated by reference is accurate only as of the date of the document
incorporated by reference. Our business, financial condition, results of
operations and prospects may have changed since these dates.
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY..........................................................1
RISK FACTORS................................................................4
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS..........................15
USE OF PROCEEDS............................................................15
DIVIDEND POLICY............................................................15
SELLING STOCKHOLDER........................................................16
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.......................17
DESCRIPTION OF CAPITAL STOCK...............................................17
PLAN OF DISTRIBUTION.......................................................18
LEGAL MATTERS..............................................................20
EXPERTS....................................................................20
WHERE YOU CAN FIND MORE INFORMATION........................................20
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..........................21
PROSPECTUS SUMMARY
This summary highlights key aspects of our business that are described
in more detail in our reports filed with the SEC. This summary does not contain
all of the information that you should consider before investing in our Common
Stock. For a more complete understanding of this offering, you should read this
entire prospectus carefully, including the "Risk Factors", the consolidated
financial statements and the other documents we have filed with the SEC that are
incorporated by reference in this prospectus.
In this prospectus, the terms "Company," "L-1," "we," "our" and "us"
refer to L-1 Identity Solutions, Inc. and its direct and indirect subsidiaries,
unless otherwise indicated or the context otherwise requires.
OUR COMPANY
We are a provider of technology, products, systems and solutions, and
services that protect and secure personal identities and assets. Together our
business delivers the full range of offerings required for solving complex
problems associated with managing identity.
The Company operates in two reportable segments: Identity Solutions and
Services.
o THE IDENTITY SOLUTIONS segment includes Secure Credentialing,
Biometrics, and Enterprise Access solutions marketed to federal
agencies, state and local government agencies, including law
enforcement and departments of corrections, foreign governments
and commercial entities, such as financial, casinos and health
care institutions. Our Identity Solutions revenues include
products and related services, which comprise hardware,
components, consumables and software, as well as maintenance,
consulting and training services integral to sales of hardware
and software. Customers, depending on their specific needs, may
order solutions that include hardware, equipment, consumables,
software products or services or combine hardware products,
consumables, equipment, software products and services to create
an integrated solution.
o THE SERVICES segment provides enrollment services to federal and
state government agencies and commercial enterprises and
financial institutions. We also provide comprehensive
consulting, program management, information analysis, training,
security, technology development and information technology
solutions to the U.S. intelligence community. Depending upon
customer needs, our services can be bundled with identity
solutions, product and services offerings to create an
integrated solution.
Our Identity Solutions and Services Segments are organized into several
core capabilities:
o SECURE CREDENTIALING SOLUTIONS
This offering includes complete solutions for integration and verification of
the entire secure credential lifecycle, from testing through issuance and
inspection. L-1 systems are used to produce the majority of U.S. driver's
licenses and our systems support all types of production systems including over
the counter, central and hybrid models. L-1 credentialing solutions are used in
20 countries for producing the U.S. passport, U.S. Passport Card and Border
Crossing Card, as well as various citizen credentialing programs including voter
registration, passports, National ID and others. More than 100 million secure
credentials are produced annually with L-1 solutions.
o BIOMETRIC SOLUTIONS
Biometric solutions are used to capture, manage and move biometric data for
positive, rapid ID and tracking of persons of interest. L-1's biometric
solutions provide a full range of finger and palm, facial, iris, and multi-modal
biometric technologies that empower the identification of individuals in
large-scale identity management programs. Our biometric solutions include a
multi-modal automated biometric identification and matching system (ABIS). Our
products include finger and palm print scanners, iris-based capture devices
(PIER and HIIDE), integrated multi-biometric (finger, face and iris) devices,
1
automated facial recognition systems both static (digital photo or mug shot) and
dynamic (video) and automated iris recognition systems (AIRS).
o ENTERPRISE ACCESS SOLUTIONS
These solutions include finger and facial (including 3D) biometric-based readers
used to secure buildings and restricted areas. Our enterprise access solutions
are offered through more than 400 global partners today and are used by
commercial enterprises around the world.
o ENROLLMENT SERVICES
These services include background checks and processing of applicant data
required for federal and state licensed programs and jobs in the banking,
finance, insurance, healthcare, child care, legal, real estate, education and
other industries. L-1 operates a network of more than 650 convenient and secure
centers located across 46 U.S. states and in most Canadian provinces. The
centers have enrollment stations, live scan systems and software that are used
for fingerprinting and processing as fingerprints for background checks. More
than 6.5 million people have been printed to date through L-1 enrollment
services, of which more than 1.5 million were printed in 2008.
o GOVERNMENT CONSULTING SERVICES
These services include a specialized set of capabilities that address the most
pressing issues in security facing intelligence agencies today. It includes
McClendon Engineering and Analytical Services that focuses on GEOINT and MASINT
science; SETA, PMO and acquisition; intelligence analysis and operations;
systems engineering and integration and; IT and software development. Advanced
Concepts Information Technology Services offers IT services, program management,
Cyber security services systems engineering, 911 planning and help desk support.
SpecTal Intelligence Services provides intelligence analysis, operations
support, training and information technology/technical development.
Our headquarters are located at 177 Broad Street, Stamford, Connecticut 06901,
and our telephone number at that address is (203) 504-1100. Our Internet website
is http://www.L1id.com. The information contained on our website or that can be
accessed through our website does not constitute part of this prospectus.
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THE OFFERING
The summary below contains basic information about this offering and is
not intended to be complete. It does not contain all the information that is
important to you. For a more complete understanding of our Common Stock, as well
as other concurrent resale offerings of our Common Stock, please refer to the
section of this prospectus entitled "Description of Capital Stock."
------------------------------------------------- -----------------------------------------------
COMMON STOCK OUTSTANDING PRIOR TO THIS
OFFERING, EXCLUDING THE SHARES THAT MAY BE
OFFERED FOR RESALE TO THE PUBLIC BY MR. LAPENTA 88,635,370 shares of our Common Stock.
------------------------------------------------- -----------------------------------------------
COMMON STOCK THAT MAY BE OFFERED FOR RESALE TO
THE PUBLIC BY MR. LAPENTA 1,310,992 shares of our Common Stock.
------------------------------------------------- -----------------------------------------------
COMMON STOCK TO BE OUTSTANDING AFTER THIS
OFFERING(1) 89,946,362 shares of our Common Stock.
------------------------------------------------- -----------------------------------------------
LISTING OF OUR COMMON STOCK Our Common Stock is traded on the New York
Stock Exchange.
------------------------------------------------- -----------------------------------------------
TOTAL PROCEEDS RAISED BY THIS OFFERING We will not receive any proceeds from any
resale of our Common Stock pursuant to this
offering.
------------------------------------------------- -----------------------------------------------
NEW YORK STOCK EXCHANGE SYMBOL "ID."
------------------------------------------------- -----------------------------------------------
RISK FACTORS See "Risk Factors" and the other information
included or incorporated by reference in this
prospectus for a discussion of factors that
should be considered with respect to an
investment in our Common Stock.
------------------------------------------------- -----------------------------------------------
__________________
(1) The number of shares of our Common Stock to be outstanding prior to this
offering is based on the number of shares of our Common Stock outstanding as of
July 1, 2009, and does not include, as of such date, (i) 7,523,327 shares of our
Common Stock reserved for issuance upon exercise of options under various stock
incentive plans; (ii) 124,162 shares of our Common Stock reserved for issuance
upon exercise of our outstanding warrants; or (iii) 5,468,750 shares of our
Common Stock issuable pursuant to the 3.75% Convertible Senior Notes due May 15,
2027.
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RISK FACTORS
You should carefully consider the following factors in addition to the
other information contained in this prospectus and the documents incorporated by
reference in this prospectus before you invest in our common stock. The risks
described below are the material risks of which we are currently aware; however,
they may not be the only material risks that we face. Additional risks and
uncertainties not currently known to us or that we currently view as immaterial
may also impair our business operations. Any of these risks could materially and
adversely affect our business, financial condition, results of operations and
cash flows. In that case, you may lose all or part of your investment.
RISKS RELATING TO OUR BUSINESS
OUR ACQUISITIONS COULD RESULT IN FUTURE IMPAIRMENT CHARGES AND OTHER CHARGES
WHICH COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
At March 31, 2009, we had goodwill, intangible assets and property and
equipment of $890.6 million, $106.4 million and $86.2 million, respectively and
in 2008, we recorded impairment charges aggregating $528.6 million for
impairments of goodwill and long-lived assets, primarily related to our
biometric businesses. Because goodwill represents a residual after the purchase
price is allocated to the fair value of acquired assets and liabilities, it is
difficult to quantify the factors that contribute to the recorded amounts and
subsequent impairments.
Management believes that the following factors have contributed to the
amount recorded:
o technological development capabilities and intellectual capital;
o expected significant growth in revenues and profits from the
expanding market in identity solutions; and
o expected synergies resulting from providing multi modal product
offerings to existing customer base and to new customers of the
combined company.
The recorded amounts at the purchase date for goodwill and other
intangible assets are estimates at a point in time and are based on valuations
and other analyses of fair value that require significant estimates and
assumptions about future events, including but not limited to projections of
revenues, market growth, demand, technological developments, political
developments, government policies, among other factors, which are derived from
information obtained from independent sources, as well as the management of the
acquired businesses and our business plans for the acquired businesses or
intellectual property. If estimates and assumptions used to initially record
goodwill and intangible assets do not materialize, or unanticipated adverse
developments or events occur, including but not limited to adverse regulatory
actions, further deterioration of capital market conditions, and adverse
industry specific and general economic developments, ongoing reviews of the
carrying amounts of such goodwill and intangible assets may result in
impairments which will require us to record a charge in the period in which such
an impairment is identified, and could have a severe negative impact on its
business and financial statements.
Subsequent to March 31, 2009 through May 6, 2009, our stock price has
averaged $6.76 per share compared to $6.24 per share for the 60 days prior to
December 31, 2008. However, during both periods the price has fluctuated
significantly. If our stock price were to decrease and remain at that level for
a sustained period of time, we may be required to assess the carrying amount of
goodwill and long-lived assets of our reporting units before our scheduled
annual impairment test. If at that time the estimated fair values of our
reporting units are less than their respective carrying amounts, we would need
to determine whether our goodwill and long-lived assets would be impaired.
Moreover, if economic conditions continue to deteriorate and capital markets
conditions continue to adversely impact the valuation of enterprises, the
estimated fair values of our reporting units could be adversely impacted, which
could result in future impairments.
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WE HAVE A HISTORY OF OPERATING LOSSES.
We have a history of operating losses. Our business operations began in
1993 and, except for 1996 and 2000, have resulted in pre-tax operating losses in
each year, which in 2006, 2007 and 2008, include significant asset impairments
and merger related expenses, amortization of intangible assets and stock-based
compensation expense. At March 31, 2009, we had an accumulated deficit of
approximately $627.0 million. We will continue to invest in the development of
our secure credential and biometric technologies, as well as government
services.
WE DERIVE OVER 90% OF OUR REVENUE FROM GOVERNMENT CONTRACTS, WHICH ARE OFTEN
NON-STANDARD, INVOLVE COMPETITIVE BIDDING, MAY BE SUBJECT TO CANCELLATION
WITH OR WITHOUT PENALTY AND MAY PRODUCE VOLATILITY IN EARNINGS AND REVENUE.
More than 90% of our business involves providing solutions and services
under contracts with U.S. Federal, state, local and foreign government agencies.
Obtaining contracts from government agencies is challenging and government
contracts often include provisions that are not standard in commercial
transactions. For example, government contracts may:
o include provisions that allow the government agency to unilaterally
terminate the contract without penalty under some circumstances;
o be subject to purchasing decisions of agencies that are subject to
political considerations;
o include bonding requirements;
o be subject to onerous procurement procedures; and
o be subject to cancellation or reduction if government funding
becomes unavailable or is cut back.
Securing government contracts can be a protracted process involving
competitive bidding. In many cases, unsuccessful bidders may challenge contract
awards, which can lead to increased costs, delays and possible loss of the
contract for the winning bidder. Protests, and similar delays, regarding any
future government contracts of a material nature that may be awarded to us could
result in materially adverse revenue volatility, making management of inventory
levels, cash flows and profitability inherently difficult. Outright loss of any
material government contract through the protest process or otherwise, could
have a material adverse effect on our financial results and stock price.
In addition, government contracts may specify performance criteria that
must be satisfied before the customer accepts the products and services.
Collection of accounts receivable may be dependent on meeting customer
requirements, which may be unpredictable, subject to change by the customer, and
not fully understood by us at the time of acceptance of the order, and may
require the incurrence of unexpected costs that may be uncompensated and could
negatively affect profit margins and our liquidity.
OUR GOVERNMENT CONTRACTS ARE SUBJECT TO CONTINUED APPROPRIATIONS BY CONGRESS
AND AVAILABILITY OF FUNDING FOR STATE AND LOCAL PROGRAMS. REDUCED FUNDING
COULD RESULT IN TERMINATED OR DELAYED CONTRACTS AND ADVERSELY AFFECT OUR
ABILITY TO MEET OUR SALES AND EARNINGS GOALS.
For the three months ended March 31, 2009, U.S. Federal Government
agencies, directly or indirectly, accounted for 59% of our consolidated
revenues. For the three months ended March 31, 2008, U.S. Federal Government
agencies, directly or indirectly accounted for 71% of our consolidated revenues.
Future sales under existing and future awards of U.S. government contracts are
conditioned upon the continuing availability of Congressional appropriations,
which could be affected by current or future economic conditions.
Similar to federal government contracts, state and local government agency
contracts may be contingent upon availability of funds provided by federal,
state or local entities. In the current economic environment, many states may
reduce expenditures which may result in cancellation or deferral of projects.
State and local law enforcement and other government agencies are subject to
political, budgetary, purchasing and delivery constraints which may result in
quarterly and annual revenue and operating results that may be irregular and
difficult to predict. Such revenue volatility makes management of inventory
5
levels, cash flows and profitability inherently difficult. In addition, if we
are successful in winning such procurements, there may be unevenness in shipping
schedules, as well as potential delays and changes in the timing of deliveries
and recognition of revenue, or cancellation of such procurements.
WE MAY NOT REALIZE THE FULL AMOUNT OF REVENUES REFLECTED IN OUR BACKLOG,
WHICH COULD HARM OUR OPERATIONS AND SIGNIFICANTLY REDUCE OUR FUTURE REVENUES.
There can be no assurances that our backlog estimates will result in
actual revenues in any particular fiscal period because our clients may modify
or terminate projects and contracts and may decide not to exercise contract
options or the estimate of quantities may not materialize. Our backlog
represents sales value of firm orders for products and services not yet
delivered and, for long term executed contractual arrangements (contracts,
subcontracts, and customer's commitments), the estimated future sales value of
estimated product shipments, transactions processed and services to be provided
over the term of the contractual arrangements, including renewal options
expected to be exercised. For contracts with indefinite quantities backlog
reflects estimated quantities based on current activity levels. Our backlog
includes estimates of revenues that are dependent on future government
appropriation, option exercise by our clients and/or is subject to contract
modification or termination. Due to current economic environment and potential
spending constraints experienced by state and local governments, in particular,
realization of our backlog may be adversely impacted. At December 31, 2008, our
backlog approximated $1.1 billion, of which approximately $520.0 million is
expected to be realized in 2009. Revenues from backlog, together with other
recurring revenues not in backlog approximate $620.0 million or 84% of estimated
2009 revenues. These estimates are based on our experience under such contracts
and similar contracts, and we believe such estimates to be reasonable in the
circumstances. However, we believe that the estimate of revenues reflected in
our backlog for the following twelve months will generally be more reliable than
our estimate for periods thereafter. If we do not realize a substantial amount
of our backlog, our operations could be harmed and our expected future revenues
could be significantly reduced.
OUR QUARTERLY RESULTS ARE DIFFICULT TO PREDICT, AND IF WE MISS QUARTERLY
FINANCIAL EXPECTATIONS, OUR STOCK PRICE COULD DECLINE.
Our quarterly revenue and operating results are difficult to predict and
fluctuate from quarter to quarter. Our operating results in some periods may be
below or above the guidance we provide and may not meet investor expectations.
If this happens, the market price of our common stock could be adversely
impacted. Fluctuations in our future quarterly operating results may be caused
by many factors, including:
o The size and timing of customer orders, which may be received
unevenly throughout a fiscal year;
o The mix of revenues between solutions and services;
o The application of new accounting standard or interpretations;
o Cancellation or modification of contracts or changes in contract
revenue estimates; and
o Contract performance delays.
WE HAVE A LONG SALES CYCLE, WHICH CAN RESULT IN SIGNIFICANT REVENUE
FLUCTUATIONS BETWEEN PERIODS.
The sales cycle for our solutions and services is typically long and
subject to a number of significant risks over which we have little control. As
our operating expenses are based on anticipated revenue levels, fluctuations in
the revenues as a result of the timing of contract awards and the exercise of
options and task orders can cause our operating results to vary significantly
between periods. If revenue falls significantly below anticipated levels, our
business and the market price of our stock would be negatively impacted.
PURCHASING DECISIONS FOR OUR SOLUTIONS AND SERVICES MAY BE SUBJECT TO DELAY
DUE TO MANY FACTORS THAT ARE OUTSIDE OF OUR CONTROL, SUCH AS:
6
o Appropriation of funds by governments;
o Political and economic uncertainties;
o Time required for a prospective customer to recognize the need for
our solutions;
o Customers requirements for customized features and functionalities;
o Turnover of key personnel at existing and prospective customers;
o Customer internal budgeting process; and
o Customer internal procedures for the approval of large contracts.
WE MAY BE UNABLE TO OBTAIN ADDITIONAL CAPITAL REQUIRED TO FINANCE OUR GROWTH
AND OUR ACQUISITION STRATEGY MAY BE ADVERSELY AFFECTED BY THE CURRENT
VOLATILE MARKET CONDITIONS.
Our strategy includes growth of our business through strategic
acquisitions. In addition, the installation of our secure credentialing systems
requires significant capital expenditures. Our need to fund such expenditures
has increased following our acquisition on August 13, 2008 of Digimarc
Corporation ("Digimarc"). During 2008, our expenditures increased to $22.5
million and in the first quarter of 2009 capital expenditures were $12.5
million, as compared to $3.0 million in the first quarter of 2008. At March 31,
2009, we had cash and cash equivalents of $16.9 million and availability under
our line of credit of $119.7 million, subject to continuing compliance with
covenants contained in the agreement. While we believe we have adequate capital
resources to meet current working capital and capital expenditure requirements
and have been successful in the past in obtaining financing for capital
expenditures, and acquisitions, we expect to have increased capital needs as we
continue to expand our business. In addition, our ability to execute on our
acquisition strategy may be adversely affected by the current volatile market
conditions, which may continue over a prolonged period. We may be unsuccessful
in raising additional financing to fund growth or we may have difficulty in
obtaining financing at attractive rates or on terms that are not excessively
dilutive to existing stockholders. Failure to secure additional financing in a
timely manner and on favorable terms could have a material adverse effect on our
growth strategy, financial performance and stock price and could require us to
delay or abandon our expansion plans.
WE ARE SUBJECT TO GOVERNMENT REGULATION, AND OUR FAILURE TO COMPLY WITH
APPLICABLE REGULATIONS COULD SUBJECT US TO PENALTIES THAT MAY RESTRICT OUR
ABILITY TO CONDUCT OUR BUSINESS.
We are affected by and must comply with various government regulations
that impact our operating costs, profit margins and the internal organization
and operation of our business. Our failure to comply with applicable
regulations, rules and approvals could result in the imposition of penalties,
the loss of our government contracts or our disqualification as a U.S.
Government contractor, all of which could adversely affect our business,
financial condition and results of operations. Among the most significant
regulations affecting our business are:
o export control regulations;
o Federal Acquisition Regulation, or the FAR, and agency regulations
supplementing the FAR, which comprehensively regulate the formation
and administration of, and performance under government contracts;
o Truth in Negotiations Act, which requires certification and
disclosure of all cost and pricing data in connection with contract
negotiations;
o Foreign Corrupt Practices Act; and
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o laws, regulations and executive orders restricting the use and
dissemination of information classified for national security
purposes and the exportation of certain products and technical data.
These regulations affect how our customers and we do business and, in some
instances, impose added costs on our business. Any changes in applicable laws
and regulations could restrict our ability to conduct our business. Any failure
by us to comply with applicable laws and regulations could result in contract
termination, price or fee reductions or suspension, debarment or
disqualification from contracting with the federal, state and local governments.
BIOMETRIC TECHNOLOGIES HAVE NOT YET ACHIEVED WIDESPREAD COMMERCIAL ACCEPTANCE
AND OUR STRATEGY OF EXPANDING OUR BIOMETRIC BUSINESS COULD ADVERSELY AFFECT
OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.
Part of our strategy is to enhance our leadership in biometric
technologies. Pursuing this strategy involves risks. For instance, to date,
biometric technologies have not yet gained widespread commercial acceptance.
Although there has been more commercial activity recently, there is no assurance
that this activity will continue or expand. Some of the obstacles to the use of
biometric technologies include a perceived loss of privacy and public
perceptions as to the usefulness of biometric solutions. Whether the market for
biometric technologies and solutions will expand will be dependent upon factors
such as:
o national or international events which may affect the need for or
interest in biometric solutions or services;
o the cost, performance and reliability of the solutions and services
and those of our competitors;
o customers' perception of the benefit of biometric solutions and
services and their satisfaction with the solutions and services;
o public perceptions regarding the confidentiality of private
information;
o proposed or enacted legislation related to privacy of information;
o marketing efforts and publicity regarding these solutions and
services;
o competition from non-biometric technologies that provide more
affordable, but less robust, authentication (such as tokens and
smart cards);
o privacy and legal challenges relating to biometric identifiers
driven by private citizens and advocacy groups; and
o the potential for changes in government policy regarding privacy
issues with a new executive branch administration.
We do not know when, if ever, biometric solutions and services will gain
widespread commercial acceptance. Certain groups have publicly objected to the
use of biometric solutions and services for some applications on civil liberties
grounds and legislation has been proposed to regulate the use of biometric
security solutions. From time to time, biometric technologies have been the
focus of organizations and individuals seeking to curtail or eliminate such
technologies on the grounds that they may be used to diminish personal privacy
rights. If such initiatives result in restrictive legislation, the market for
biometric solutions may be adversely affected. Even if biometric technologies
gain wide market acceptance, our biometric solutions and services may not
adequately address the requirements of the market and may not gain widespread
commercial acceptance.
WE FACE INTENSE COMPETITION, WHICH COULD RESULT IN LOWER REVENUES AND HIGHER
RESEARCH AND DEVELOPMENT EXPENDITURES AND COULD ADVERSELY AFFECT OUR RESULTS
OF OPERATIONS.
8
The events of September 11, 2001 and subsequent regulatory and policy
changes in the U.S. and abroad have heightened interest in the use of biometric
security solutions, and we expect competition in this field, which is already
substantial, to intensify. Competitors are developing and marketing
semiconductor ultrasonic and optically based direct contact fingerprint image
capture devices, or retinal blood vessel, iris pattern, hand geometry, voice or
various types of facial structure solutions. Among these companies are Cognitec
Systems Corporation, CrossMatch Technologies, Imageware Systems, Inc., SAGEM
Morpho Inc., NEC Corporation, Cogent, Inc. and Ultra-Scan Corporation. Our
solutions also compete with non-biometric technologies which may be less costly,
such as certificate authorities and traditional keys, cards, surveillance
systems and passwords. Widespread adoption of one or more of these technologies
or approaches in the markets we target could significantly reduce the potential
market for our systems and solutions. Some of our competitors have significantly
more resources than we have. Our competitors may introduce products that are
more price competitive, have increased performance or functionality or
incorporate technological advances that we have not yet developed or
implemented. To remain competitive, we must continue to develop, market and sell
new and enhanced solutions at competitive prices, which will require significant
research and development expenditures. If we do not develop new and enhanced
solutions or if we are not able to invest adequately in their research and
development activities, our business, financial condition and results of
operations could be severely and negatively impacted.
UNLESS WE KEEP PACE WITH CHANGING TECHNOLOGIES, WE COULD LOSE EXISTING
CUSTOMERS AND FAIL TO WIN NEW CUSTOMERS.
In order to compete effectively in the biometrics market, we must
continually design, develop and market new and enhanced products. Our future
success will depend, in part, upon our ability to address the changing and
sophisticated needs of the marketplace. Frequently, technical development
programs in the biometric industry require assessments to be made of the future
directions of technology and technology markets generally, which are inherently
risky and difficult to predict. We may not be able to accurately predict which
technologies our customers will support. If we fail to choose correctly among
technical directions, or we fail to offer innovative solutions at competitive
prices in a timely manner, customers may forego purchases of our solutions and
purchase those of our competitors.
SECURITY BREACHES IN SYSTEMS THAT WE SELL OR MAINTAIN COULD RESULT IN THE
DISCLOSURE OF SENSITIVE GOVERNMENT INFORMATION OR PRIVATE PERSONAL
INFORMATION THAT COULD RESULT IN THE LOSS OF CUSTOMERS AND NEGATIVE
PUBLICITY.
Many of the systems included in the solutions we sell manage private
personal information and protect information involved in sensitive government
functions. The protective security measures that we use in these systems may not
prevent security breaches, and failure to prevent security breaches may disrupt
our business, damage our reputation, and expose us to litigation and liability.
A party who is able to circumvent protective security measures used in these
systems could misappropriate sensitive or proprietary information or cause
interruptions or otherwise damage our products, services and reputation, and the
property and privacy of our customers. If unintended parties obtain sensitive
data and information, or create bugs or viruses or otherwise sabotage the
functionality of our systems, we may receive negative publicity, incur liability
to our customers or lose the confidence of our customers, any of which may cause
the termination or modification of our contracts. Further, our insurance
coverage may be insufficient to cover losses and liabilities that may result
from such events.
We may be required to expend significant capital and other resources to
protect ourselves against the threat of security breaches or to alleviate
problems caused by the occurrence of any such breaches. In addition, protective
or remedial measures may not be available at a reasonable price or at all, or
may not be entirely effective.
OUR RELIANCE ON EXTERNAL SUPPLIERS AND CONTRACT MANUFACTURERS MAY RESULT IN
DELAYS AND LOSS OF SALES OR CUSTOMERS.
The lead-time for ordering certain of products and materials and for
building many of our products included in our solutions can be many months. As a
result, we must order such products and materials based on forecasted demand. If
demand for our solutions lags significantly behind our forecasts, we may
purchase more products than we can sell, which can result in increased cash
needs and write-downs of obsolete or excess inventory. In addition, if the
delivered product purchases are delayed, we may lose customers and sales.
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We rely on contract manufacturers to produce our hardware products under
short term manufacturing arrangements. Although we believe we can find
alternative sources of manufacturing our hardware, any disruption of contractual
arrangements could result in delaying deliveries or in the loss our sales. We
obtain certain hardware and services, as well as software applications, from a
limited group of suppliers. Our reliance on these suppliers involves risks,
including reduced control over quality and delivery schedules. Any financial
instability of our suppliers could result in our having to find new suppliers.
We may experience delays in manufacturing and deliveries of our products and
services to customers if we lose our sources or if supplies and services
delivered from these sources are delayed, which could result in the loss of
sales or customers.
THE MARKET FOR OUR SOLUTIONS IS STILL DEVELOPING AND IF THE BIOMETRICS
INDUSTRY ADOPTS STANDARDS OR A PLATFORM DIFFERENT FROM OUR PLATFORM, THEN OUR
COMPETITIVE POSITION WOULD BE NEGATIVELY AFFECTED.
The market for identity solutions is still developing. The evolution of
this market may result in the development of different technologies and industry
standards that are not compatible with our current solutions, products or
technologies. Several organizations, such as the International Civil Aviation
Organization, sets standards for travel documents that its member states then
put into effect, and the National Institute for Standards and Testing, which is
part of the U.S. Department of Commerce, set standards for biometrics to be used
in identification and documentation. Although we believe that our biometric
technologies comply with existing standards for finger, face and iris
recognition, these standards may change and any standards adopted could prove
disadvantageous to or incompatible with our business model and current or future
solutions, products and services.
OUR PLAN TO PURSUE SALES IN INTERNATIONAL MARKETS MAY BE LIMITED BY RISKS
RELATED TO CONDITIONS IN SUCH MARKETS.
For the three months ended March 31, 2009, we derived approximately 11% of
our total revenues, from international sales and our strategy is to expand our
international operations. There is a risk that we may not be able to
successfully market, sell and deliver our products in foreign countries.
Risks inherent in marketing, selling and delivering products in foreign
and international markets, each of which could have a severe negative impact on
our financial results and stock price, include those associated with:
o regional economic or political conditions;
o delays in or absolute prohibitions on exporting products resulting
from export restrictions for certain products and technologies;
o loss of, or delays in importing products, services and intellectual
property developed abroad, resulting from unstable or fluctuating
social, political or governmental conditions;
o fluctuations in foreign currencies and the U.S. dollar;
o loss of revenue, property (including intellectual property) and
equipment from expropriation, nationalization, war, insurrection,
terrorism, criminal acts and other political and social risks;
o liabilities resulting from any unauthorized actions of our local
resellers or agents under the Foreign Corrupt Practices Act or local
anti-corruption statutes;
o the overlap of different tax structures;
o risks of increases in taxes and other government fees; and
o involuntary renegotiations of contracts with foreign governments.
We expect that we will have increased exposure to foreign currency
fluctuations. As of March 31, 2009, our accumulated other comprehensive loss
includes foreign currency translation losses of approximately $1.2 million. In
addition, we have significant Japanese Yen denominated transactions with
Japanese suppliers of hardware and consumables for the delivery to customers.
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Fluctuations in foreign currencies, including the Japanese Yen, Canadian Dollar,
and the Euro could result in unexpected fluctuations to our results of
operations, which could be material and adverse.
IF WE DO NOT SUCCESSFULLY EXPAND OUR DIRECT SALES AND SERVICES ORGANIZATIONS
AND PARTNERING ARRANGEMENTS, WE MAY NOT BE ABLE TO INCREASE OUR SALES OR
SUPPORT OUR CUSTOMERS.
We sell substantially all of our services and license substantially all of
our products through our direct business development and sales organization. Our
future success depends on substantially increasing the size and scope of our
direct business development and sales force and partnering arrangements, both
domestically and internationally. We will face intense competition for
personnel, and we cannot guarantee that we will be able to attract, assimilate
or retain additional qualified business development and sales personnel on a
timely basis. Moreover, given the large-scale deployment required by some of our
customers, we will need to hire and retain a number of highly trained customer
service and support personnel. We cannot guarantee that we will be able to
increase the size of our customer service and support organization on a timely
basis to provide the high quality of support required by our customers. The
ability to add additional business development and sales and customer service
personnel could result in customer dissatisfaction and loss of customers.
WE RELY IN PART UPON SYSTEM INTEGRATORS ORIGINAL EQUIPMENT MANUFACTURERS, OR
OEM, AND DISTRIBUTION PARTNERS TO SELL SOME OF OUR SOLUTIONS, TECHNOLOGIES
AND SERVICES, AND WE MAY BE ADVERSELY AFFECTED IF THOSE PARTIES DO NOT
ACTIVELY PROMOTE THEIR PRODUCTS OR PURSUE INSTALLATIONS THAT DO NOT USE OUR
SOLUTIONS, TECHNOLOGIES AND SERVICES.
A portion of our revenue comes from sales to partners including OEMs,
systems integrators, distributors and resellers. Some of these relationships
have not been formalized in a detailed contract, and may be subject to
termination at any time. Even where these relationships are formalized in a
detailed contract, the agreements can often be terminated with little or no
notice and subject to periodic amendment.
We intend to continue to seek strategic relationships to distribute,
license and sell certain of our products. We, however, may not be able to
negotiate acceptable relationships in the future and cannot predict whether
current or future relationships will be successful.
IF OUR SOLUTIONS SYSTEMS AND PRODUCTS ARE NOT TIMELY DELIVERED OR DO NOT
PERFORM AS PROMISED, WE COULD EXPERIENCE INCREASED COSTS, LOWER MARGINS,
LIQUIDATED DAMAGE PAYMENT OBLIGATIONS AND REPUTATIONAL HARM.
We often provide complex systems that are required to operate in difficult
or sensitive circumstances. The development of such complex systems may be
subject to delays or failure to meet performance requirements to customer
specifications. The negative effects of any delay or failure to deliver to meet
performance requirements could be exacerbated if the delay or failure occurs in
systems that provide personal security, secure sensitive computer data,
authorize significant financial transactions or perform other functions where a
security breach could have significant consequences. If a product launch is
delayed or is the subject of an availability shortage because of problems with
our ability to manufacture or assemble the product successfully on a timely
basis, or if a product or service otherwise fails to meet performance criteria,
we may lose revenue opportunities entirely and/or experience delays in revenue
recognition associated with a product or service in addition to incurring higher
operating expenses during the period required to correct the defects.
There is a risk that for unforeseen reasons we may be required to repair
or replace a substantial number of systems in use or to reimburse customers for
systems that fail to work or meet strict performance criteria. From time to
time, in certain critical or complex sale or licensing transactions, we may be
compelled to accept liability provisions that vary from our preferred
contracting model. There is a risk that in certain contracts and circumstances
we may not be successful in adequately minimizing our product and related
liabilities or that the protections we negotiate will not ultimately be deemed
enforceable. We carry product liability insurance, but existing coverage may not
be adequate to cover potential claims. Although we will deploy back-up systems,
the failure of our products to perform as promised could result in increased
costs, lower margins, liquidated damage payment obligations and harm to our
reputation. This could result in contract terminations and have a material
adverse effect on our business and financial results.
11
FAILURE TO MAINTAIN THE PROPRIETARY NATURE OF OUR TECHNOLOGY, INTELLECTUAL
PROPERTY AND MANUFACTURING PROCESSES COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS AND OUR ABILITY TO COMPETE EFFECTIVELY.
We principally rely upon patent, trademark, copyright, trade secret and
contract law to establish and protect our proprietary rights. There is a risk
that claims allowed on any patents or trademarks we hold may not be broad enough
to protect our technology. In addition, our patents or trademarks may be
challenged, invalidated or circumvented and we cannot be certain that the rights
granted there under will provide competitive advantages to us. Moreover, any
current or future issued or licensed patents, or trademarks, or currently
existing or future developed trade secrets or know-how may not afford sufficient
protection against competitors with similar technologies or processes, and the
possibility exists that certain of our already issued patents or trademarks may
infringe upon third party patents or trademarks or be designed around by others.
In addition, there is a risk that others may independently develop proprietary
technologies and processes, which are the same as, substantially equivalent or
superior to ours, or become available in the market at a lower price.
We may be required to expend significant resources to monitor and protect
our intellectual property rights. We may have to litigate to enforce our patents
or trademarks or to determine the scope and validity of other parties'
proprietary rights. Litigation could be very costly and divert management's
attention. An adverse outcome in any litigation may have a severe negative
effect on our financial results and stock price. To determine the priority of
inventions, we may have to participate in interference proceedings declared by
the United States Patent and Trademark Office or oppositions in foreign patent
and trademark offices, which could result in substantial cost and limitations on
the scope or validity of our patents or trademarks.
In addition, foreign laws treat the protection of proprietary rights
differently from laws in the United States and may not protect our proprietary
rights to the same extent as U.S. laws. The failure of foreign laws or judicial
systems to adequately protect our proprietary rights or intellectual property,
including intellectual property developed on our behalf by foreign contractors
or subcontractors may have a material adverse effect on our business,
operations, financial results and stock price.
LEGAL CLAIMS REGARDING INFRINGEMENT BY US OR OUR SUPPLIERS OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS COULD RESULT IN SUBSTANTIAL COSTS, DIVERSION OF
MANAGERIAL RESOURCES AND HARM TO OUR REPUTATION.
Although we believe that our solutions, products and services do not
infringe currently existing and validly issued intellectual property rights of
others, we might not be able to defend successfully against a third-party
infringement claim. A successful infringement claim against us, our customers or
our suppliers could subject us to:
o liability for damages and litigation costs, including attorneys'
fees;
o lawsuits that prevent us from further use of the intellectual
property;
o having to license the intellectual property from a third party,
which could include significant licensing fees;
o having to develop a non-infringing alternative, which could be
costly and delay projects;
o having to indemnify clients with respect to losses they incurred as
a result of the alleged infringement; and
o having to establish alternative sources for products supplied to us
by third parties.
Our failure to prevail against any third party infringement claim could
have a material adverse effect on our business and financial results. Even if we
are not found liable in a claim for intellectual property infringement, such a
claim could result in substantial costs, diversion of resources and management
attention, termination of customer contracts and harm to our reputation.
12
WE ARE DEPENDENT ON A SMALL NUMBER OF INDIVIDUALS, AND IF WE LOSE KEY
PERSONNEL UPON WHOM WE ARE DEPENDENT, OUR BUSINESS WILL BE ADVERSELY
AFFECTED.
Much of our future success depends on the continued service and
availability of our senior management, including our Chairman of the Board,
President and Chief Executive Officer, Robert V. LaPenta, and other members of
our executive team. These individuals have acquired specialized knowledge and
skills with regards to advanced technology identity solutions. The loss of any
of these individuals could severely harm our business. Our business is also
highly dependent on our ability to retain, hire and motivate talented highly
skilled personnel. Experienced personnel in the advanced technology identity
solutions industry are in high demand and competition for their talents is
intense. If we are unable to successfully attract, retain and motivate key
personnel, our business may be severely harmed.
IF WE FAIL TO RECRUIT AND RETAIN SKILLED EMPLOYEES OR EMPLOYEES WITH THE
NECESSARY SECURITY CLEARANCES, WE MIGHT NOT BE ABLE TO PERFORM UNDER OUR
GOVERNMENT SERVICES CONTRACTS OR WIN NEW BUSINESS.
To be competitive, we must have employees who have advanced information
technology and technical services skills and who work well with our customers in
a government or defense-related environment. Often, these employees must have
some of the highest security clearances in the United States. These employees
are in great demand and are likely to remain a limited resource in the
foreseeable future. If we are unable to recruit and retain a sufficient number
of these employees, our ability to maintain and grow our business could be
negatively impacted. In addition, some our government services contracts contain
provisions requiring us to commit to staff a program with certain personnel the
customer considers key to our successful performance under the contract. In the
event we are unable to provide these key personnel or acceptable substitutions,
the customer may terminate the contract, and we may not be able to recover
certain incurred costs.
CERTAIN OF OUR SHAREHOLDERS HAVE SIGNIFICANT RELATIONSHIPS WITH US, WHICH
COULD RESULT IN IT TAKING ACTIONS THAT ARE NOT SUPPORTED BY UNAFFILIATED
SHAREHOLDERS.
In connection with the Aston investment in our Company, Aston became the
largest shareholder of L-1, currently owning approximately 8.6% of our
outstanding common stock. As a result, Aston (together with its affiliate, L-1
Investment Partners LLC) has an influence on matters requiring approval by our
shareholders, including the election of directors and most corporate actions,
such as mergers and acquisitions. In addition, we have significant relationships
with each of L-1 Investment Partners LLC and Aston including:
o Mr. Robert V. LaPenta, the founder and Chief Executive Officer of
L-1 Investments Partners LLC, is Chairman of our board of directors
and Chief Executive Officer and President;
o Mr. James DePalma, Mr. Joseph Paresi and Ms. Doni Fordyce who are
affiliates of L-1 Investment Partners LLC and Aston, serve as the
Executive Vice President and Chief Financial Officer, Executive Vice
President and Chief Marketing and Sales Officer, and Executive Vice
President and of Corporate Communications, respectively;
o We have entered into certain transactions with Aston, L-1 Investment
Partners and Mr. LaPenta, including a sublease of office space from
L-1 Investment Partners, an agreement in principle to purchase a
portfolio company of Aston at fair market value, and a private
placement issuance of securities to Mr. LaPenta in connection with
his participation in our $120 million private placement to fund in
part our acquisition of ID Systems business of Digimarc. See Note 4
to our Consolidated Financial Statements, "Related Party
Transactions" contained in our Current Report on Form 8-K filed on
May 21, 2009, for a more detailed description of these transactions.
The concentration of large percentages of ownership in any single
shareholder, or in any series of single shareholders, may delay or prevent
change in control of the Company. Additionally, the sale of a significant number
of our shares in the open market by single shareholders or otherwise could
adversely affect our stock price.
13
RISKS RELATED TO OUR ACQUISITION STRATEGY
INTEGRATION OF RECENTLY ACQUIRED BUSINESSES MAY BE DIFFICULT TO ACHIEVE AND
WILL CONSUME SIGNIFICANT FINANCIAL AND MANAGERIAL RESOURCES, WHICH MAY
ADVERSELY AFFECT OPERATIONS.
Our operating philosophy is to let acquired businesses operate in
autonomous manner subject to corporate oversight but integrating and
rationalizing duplicative functions to achieve revenue and cost synergies. We
may encounter substantial difficulties, costs and delays in integrating the
operations recently acquired and future acquisitions such as:
o exposure to unknown liabilities of acquired companies or assets;
o higher than anticipated acquisition costs and expenses;
o assumption of ongoing litigation matters that may be highly complex
and involve significant time, cost and expense;
o potential conflicts between business cultures;
o adverse changes in business focus perceived by third-party
constituencies;
o disruption of our ongoing business;
o potential conflicts in distribution, marketing or other important
relationships;
o potential constraints of management resources;
o failure to maximize our financial and strategic position by the
successful incorporation of acquired technology;
o failure to realize the potential of acquired technologies, complete
product development, or properly obtain or secure appropriate
protection of intellectual property rights; and
o loss of key employees and/or the diversion of management's attention
from other ongoing business concerns.
The geographic distance between acquired businesses and their respective
offices and operations increases the risk that the integration will not be
completed successfully or in a timely and cost-effective manner. We may not be
successful in overcoming these risks or any other problems encountered in
connection with the integration of the companies. The simultaneous integration
of these acquisitions may place additional strain on our resources and increase
the risk that our business may be adversely affected by the disruption caused by
the acquisitions. Our strategy contemplates acquiring additional businesses, the
integration of which may consume significant financial and managerial resources,
and could have a severe negative impact on our business, financial condition and
results of operations.
IF WE DO NOT ACHIEVE THE EXPECTED BENEFITS OF THE ACQUISITIONS WE HAVE MADE,
THE PRICE OF OUR COMMON STOCK COULD DECLINE.
We expect that the acquisitions that we consummated in 2006, 2007 and 2008
as well as the acquisitions that we have made previously will enhance our
leadership in the identity solutions industry through the combination of their
respective technologies. However, the combination of such technologies might not
meet the demands of the marketplace. If our technologies fail to meet such
demand, customer acceptance of our biometric products could decline, which would
have an adverse effect on our results of operations and financial condition.
Further, we expect that the additions to our solutions offerings will extend our
reach into our current markets and provide a critical component to our
14
comprehensive offering for new markets in need of identity solutions. However,
there can be no assurance that our current customers or customers in new markets
will be receptive to these additional offerings. Further, we might not be able
to market successfully our products and services to the customers of the
companies we acquired. If our solutions offerings and services fail to meet the
demands of this marketplace, our results of operations and financial condition
could be adversely affected. There is also a risk that we will not achieve the
anticipated benefits of the acquisitions as rapidly as, or to the extent,
anticipated by financial or industry analysts, or that such analysts will not
perceive the same benefits to the acquisitions as we do. If these risks
materialize, our stock price could be adversely affected.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus contains or incorporates forward-looking statements within
the meaning of section 27A of the Securities Act and section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements are management's beliefs and assumptions. In
addition, other written or oral statements that constitute forward-looking
statements are based on current expectations, estimates and projections about
the industry and markets in which we operate and statements may be made by or on
our behalf. Words such as "should," "could," "may," "expect," "anticipate,"
"intend," "plan," "believe," "seek," "estimate," variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult to predict. There are a
number of important factors that could cause our actual results to differ
materially from those indicated by such forward-looking statements.
We describe material risks, uncertainties and assumptions that could
affect our business, including our financial condition and results of
operations, under "Risk Factors" and the documents incorporated by reference in
this prospectus and may update our descriptions of such risks, uncertainties and
assumptions in any prospectus supplement or future filings made by us with the
SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act. We base our
forward-looking statements on our management's beliefs and assumptions based on
information available to our management at the time the statements are made. We
caution you that actual outcomes and results may differ materially from what is
expressed, implied or forecast by our forward-looking statements. Accordingly,
you should be careful about relying on any forward-looking statements. Reference
is made in particular to forward-looking statements regarding growth strategies,
financial results, product development, expected backlog, regulatory approvals,
competitive strengths, intellectual property rights, litigation, mergers and
acquisitions, market acceptance or continued acceptance of our products,
accounting estimates, financing activities, ongoing contractual obligations and
sales efforts. Except as required under the federal securities laws and the
rules and regulations of the SEC, we do not have any intention or obligation to
update publicly any forward-looking statements after the distribution of this
prospectus, whether as a result of new information, future events, changes in
assumptions, or otherwise.
USE OF PROCEEDS
We are registering these shares pursuant to the registration rights
granted to the selling stockholder in connection with the issuance of shares of
our Common Stock to the selling stockholder in a private placement transaction
exempt from the registration requirements of the Securities Act pursuant to
Regulation D. All sales of such Common Stock will be by or for the account of
the selling stockholder. We will not receive any proceeds from the resale by the
selling stockholder of the shares of our Common Stock. The proceeds from the
original issuance and sale of our Common Stock and Series A Preferred Stock to
the selling stockholder were used by the Company to finance in part its
acquisition of Digimarc in August 2008. The selling stockholder will not cover
any of the expenses that are incurred by us in connection with the registration
of our Common Stock, but the selling stockholder will pay any commissions,
discounts and other compensation to any broker-dealers through whom such selling
stockholder sells any of our Common Stock.
DIVIDEND POLICY
We currently intend to retain any future earnings to finance the growth,
development and expansion of our business. Accordingly, we do not intend to
declare or pay any dividends on our Common Stock for the foreseeable future. The
declaration, payment and amount of future dividends, if any, will be at the sole
discretion of our board of directors after taking into account various factors,
including our financial condition, results of operations, cash flow from
15
operations, and expansion plans. In addition, our credit facility prevents us
from paying dividends or making other distributions to our stockholders.
SELLING STOCKHOLDER
The selling stockholder may from time to time offer and sell any or all of
the shares of our Common Stock set forth below pursuant to this prospectus. When
we refer to "selling stockholder" in this prospectus, we mean the person listed
in the table below, and the pledges, donees, permitted transferees, assignees,
successors and others who later come to hold any of the selling stockholder's
interests in shares of our Common Stock other than through a public sale.
The following table sets forth, as of the date of this prospectus, the
name of the selling stockholder for whom we are registering shares for resale to
the public, and the number of shares of our Common Stock that the selling
stockholder may offer pursuant to this prospectus. The shares of our Common
Stock offered by the selling stockholder were issued pursuant to exemptions from
the registration requirements of the Securities Act. The selling stockholder
represented to us that he was an accredited investor and was acquiring our
Common Stock for investment and had no present intention of distributing the
Common Stock. We have agreed to file a registration statement covering the
Common Stock received by the selling stockholder. We filed with the SEC, under
the Securities Act, a registration statement on Form S-3 with respect to the
resale of the Common Stock from time to time by the selling stockholder, and
this prospectus forms a part of that registration statement.
Based on the information provided to us by the selling stockholder and as
of the date the same was provided to us, assuming that the selling stockholder
sells all of the shares of our Common Stock beneficially owned by him that have
been registered by us and does not acquire any additional shares during the
offering, the selling stockholder will not own any shares other than those
appearing in the column entitled "Number of Shares of Common Stock Owned After
the Offering." We cannot advise you as to whether the selling stockholder will
in fact sell any or all of such shares of Common Stock. In addition, the selling
stockholder may have sold, transferred or otherwise disposed of, or may sell,
transfer or otherwise dispose of, at any time and from time to time, the shares
of our Common Stock in transactions exempt from the registration requirements of
the Securities Act after the date on which it provided the information set forth
on the table below.
NUMBER OF
NUMBER OF SHARES OF
SHARES OF COMMON NUMBER OF
COMMON STOCK SHARES OF PERCENTAGE
STOCK OFFERED FOR COMMON OF COMMON
OWNED RESALE STOCK STOCK
PRIOR TO PURSUANT TO OWNED OWNED
THE THE AFTER THE AFTER THE
NAME OF SELLING STOCKHOLDER OFFERING OFFERING OFFERING(1) OFFERING(2)
------------------------------------------ ------------------- ------------------ ----------------- -----------------
Robert V. LaPenta (3) 13,006,850 1,310,992 11,695,858 12.97%
177 Broad Street, 12th floor
Stamford, CT 06901
(1) Assumes that the selling stockholder will resell all of the shares of our
Common Stock offered hereunder.
(2) Applicable percentage of ownership is based on 90,146,494 shares of our
Common Stock outstanding as of July 1, 2009, including securities
exercisable for, or convertible into, shares of Common Stock by the selling
stockholder within 60 days of July 1, 2009 and the 1,310,992 shares of
Common Stock offered for resale pursuant to this registration statement.
(3) Includes 200,132 shares of Common Stock issuable pursuant to stock options
which were exercisable as of July 1, 2009, or which become exercisable
within 60 days of such date and 70,000 shares of unvested restricted Common
Stock. Also includes 7,619,047 shares of common stock held by Aston Capital
Partners L.P. ("Aston"). The ultimate controlling persons of Aston are
Robert V. LaPenta, James A. DePalma, Doni L. Fordyce and Joseph Paresi,
each of whom is an executive officer of the Company, a managing member of
16
L-1 Investment Partners LLC ("L-1 Partners"), the investment manager of
Aston, and a managing member of Aston Capital Partners GP LLC, the general
partner of Aston. Mr. LaPenta is a managing member of L-1 Partners. Mr.
LaPenta disclaims beneficial ownership of the shares held by Aston.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On June 29, 2008, L-1 entered into a securities purchase agreement with
Mr. Robert V. LaPenta, the Chairman and Chief Executive Officer of L-1 (the
"LaPenta Agreement"), pursuant to which L-1 sold to Mr. LaPenta shares of Common
Stock and Series A Preferred Stock for an aggregate price of $25 million.
Pursuant to the terms of the LaPenta Agreement, Mr. LaPenta was provided with an
option, exercisable following the close of business on June 30, 2008, to
purchase shares of Common Stock for either (i) a per share price of $12.9543
(representing a 4% discount to the volume weighted average price of a share of
Common Stock on June 30, 2008, as reported by Bloomberg Financial Markets) or
(ii) a per share price of $13.19, together with a contractual price protection
right to receive additional shares of Common Stock if the volume weighted
average price of a share of Common Stock as reported by Bloomberg Financial
Markets for the 30 consecutive trading days ending on the last trading day prior
to June 30, 2009 is less than $13.19 subject to the 8% cap on the adjustment.
Mr. LaPenta elected option (ii) above. Accordingly, upon consummation of the
transactions contemplated by the LaPenta Agreement, Mr. LaPenta purchased
750,000 shares of Common Stock and 15,107 shares of Series A Preferred Stock.
Mr. LaPenta was also entitled to a contractual price protection right to acquire
up to 2,185 additional shares of Series A Preferred Stock of the Company. We
previously registered for resale the 750,000 shares of Common Stock issued to
Mr. LaPenta pursuant to the LaPenta Agreement in Registration Statement No.
333-152782, filed with the Securities Exchange Commission on August 5, 2008.
Pursuant to the LaPenta Agreement, and as required pursuant to the listed
company rules of the New York Stock Exchange, Inc., we asked for stockholder
approval of the conversion of Mr. LaPenta's Series A Preferred Stock into shares
of common stock at our annual meeting of stockholders held on May 6, 2009. Such
approval was obtained and the shares of Series A Preferred Stock then held by
Mr. LaPenta were converted into 1,145,337 shares of Common Stock at a conversion
price of $13.19 per share on May 11, 2009. In addition, on July 1, 2009, we
issued 165,655 shares of Common Stock to Mr. LaPenta upon conversion of 2,185
shares of Series A Preferred Stock issued to Mr. LaPenta in satisfaction of the
contractual price protection right under the LaPenta Agreement. Accordingly, in
this Registration Statement we are registering 1,310,992 shares of Common Stock
for resale by Mr. LaPenta.
DESCRIPTION OF CAPITAL STOCK
GENERAL
A description of our capital stock, including our Common Stock and
preferred stock, appears in our Current Report on Form 8-K filed on July 1, 2009
and is hereby incorporated by reference. See "Where You Can Find More
Information."
Our authorized capital stock consists of 125,000,000 shares of Common
Stock, par value $0.001 per share and 2,000,000 shares of preferred stock, par
value $0.001 per share, of which 25,000 shares are designated as Series A
Convertible Preferred Stock. As of July 1, 2009, 89,946,362 fully paid,
non-assessable shares of our Common Stock were issued and outstanding, held by
approximately 826 holders of record and 366,815 shares of our Common Stock were
held in treasury. Pursuant to the stockholder approval received on May 6, 2009,
the 15,107 shares of Series A Convertible Preferred Stock held by our Chairman
and Chief Executive Officer, Robert V. LaPenta, were converted into the
1,145,337 shares of Common Stock offered for resale pursuant to this prospectus.
In addition, on July 1, 2009, we issued an additional 165,655 shares of Common
Stock to Mr. LaPenta upon the conversion of 2,185 shares of Series A Preferred
Stock issued to Mr. LaPenta in satisfaction of the contractual price protection
right under the LaPenta Agreement. There are no other shares of preferred stock
issued and outstanding.
As of July 1, 2009, we had an aggregate of (i) 7,523,327 shares of our
Common Stock reserved for issuance upon exercise of options under various stock
incentive plans; (ii) 124,162 shares of our Common Stock reserved for issuance
upon exercise of our outstanding warrants; and (iii) 5,468,750 shares of our
Common Stock issuable pursuant to the 3.75% Convertible Senior Notes due May 15,
2027.
17
PLAN OF DISTRIBUTION
We will not receive any proceeds from sales of any shares of Common Stock
by the selling stockholder. The selling stockholder may sell the shares of
Common Stock from time to time on the New York Stock Exchange or any national
securities exchange or automated interdealer quotation system on which the
shares of Common Stock are listed, in the over-the-counter market, in privately
negotiated transactions or otherwise, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at prices otherwise negotiated. The selling stockholder may
sell the shares of Common Stock by one or more of the following methods,
including, without limitation:
o block trades in which the broker or dealer so engaged will attempt
to sell the shares of Common Stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
o purchases by a broker or dealer as principal and resale by the
broker or dealer for its own account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of any stock
exchange on which the shares of Common Stock are listed;
o ordinary brokerage transactions and transactions in which the broker
solicits purchases;
o privately negotiated transactions;
o short sales;
o through the writing of options on the shares of Common Stock,
whether or not the options are listed on an options exchange;
o through the distribution of the shares of Common Stock by any
selling stockholder to its partners, members or stockholders;
o one or more underwritten offerings on a firm commitment or best
efforts basis; and
o any combination of any of these methods of sale.
o The selling stockholder may also transfer the shares of Common Stock
by gift. We do not know of any arrangements by the selling
stockholder for the sale of any of the shares of Common Stock.
The selling stockholder may engage brokers and dealers, and any brokers or
dealers may arrange for other brokers or dealers to participate in effecting
sales of the shares of Common Stock. These brokers, dealers or underwriters may
act as principals, or as an agent of the selling stockholder. Broker-dealers may
agree with the selling stockholder to sell a specified number of the shares of
Common Stock at a stipulated price per security. If the broker-dealer is unable
to sell shares of Common Stock acting as agent for the selling stockholder, it
may purchase as principal any unsold shares of Common Stock at the stipulated
price. Broker-dealers who acquire shares of Common Stock as principals may
thereafter resell the shares of Common Stock from time to time in transactions
in any stock exchange or automated interdealer quotation system on which the
shares of Common Stock are then listed, at prices and on terms then prevailing
at the time of sale, at prices related to the then-current market price or in
negotiated transactions. Broker-dealers may use block transactions and sales to
and through broker-dealers, including transactions of the nature described
above. The selling stockholder may also sell the shares of Common Stock in
accordance with Rule 144 under the Securities Act, rather than pursuant to this
prospectus, regardless of whether the shares of Common Stock are covered by this
prospectus.
The number of the selling stockholder's shares of Common Stock offered
under this prospectus will decrease as and when it takes such actions. The plan
of distribution for the selling stockholder's shares of Common Stock will
18
otherwise remain unchanged. In addition, the selling stockholder may, from time
to time, sell the shares of Common Stock short, and, in those instances, this
prospectus may be delivered in connection with the short sales and the shares of
Common Stock offered under this prospectus may be used to cover short sales.
To the extent required under the Securities Act, the aggregate amount of
selling stockholder's shares of Common Stock being offered and the terms of the
offering, the names of any agents, brokers, dealers or underwriters and any
applicable commission with respect to a particular offer will be set forth in an
accompanying prospectus supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the shares of Common Stock may receive
compensation in the form of underwriting discounts, concessions, commissions or
fees from the selling stockholder and purchasers of selling stockholder's shares
of Common Stock, for who they may act (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The selling stockholder and any underwriters, brokers, dealers or agents
that participate in the distribution of the shares of Common Stock may be deemed
to be "underwriters" within the meaning of the Securities Act, and any
discounts, concessions, commissions or fees received by them and any profit on
the resale of the shares of Common Stock sold by them may be deemed to be
underwriting discounts and commissions.
The selling stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the shares of
Common Stock in the course of hedging the positions they assume with the selling
stockholder, including, without limitation, in connection with distributions of
the shares of Common Stock by those broker-dealers. The selling stockholder may
enter into option or other transactions with broker-dealers that involve the
delivery of the shares of Common Stock offered hereby to the broker-dealers, who
may then resell or otherwise transfer those shares of Common Stock. The selling
stockholder may also loan or pledge the shares of Common Stock offered hereby to
a broker-dealer and the broker-dealer may sell the shares of Common Stock
offered hereby so loaned or upon a default may sell or otherwise transfer the
pledged shares of Common Stock offered hereby.
The selling stockholder and other persons participating in the sale or
distribution of the shares of Common Stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including Regulation M. This regulation may limit the timing of purchases and
sales of any of the shares of Common Stock by the selling stockholder and any
other person. The anti-manipulation rules under the Securities Exchange Act may
apply to sales of shares of Common Stock in the market and to the activities of
the selling stockholder and their affiliates. Furthermore, Regulation M may
restrict the ability of any person engaged in the distribution of the shares of
Common Stock to engage in market-making activities with respect to the
particular shares of Common Stock being distributed for a period of up to five
business days before the distribution. These restrictions may affect the
marketability of the shares of Common Stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
Common Stock.
Pursuant to the registration rights granted to the selling stockholder in
connection with financing of the acquisition of Digimarc, we and the selling
stockholder will be indemnified by the other against certain liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection with these liabilities.
Because the selling stockholder may be deemed to be an "underwriter"
within the meaning of the Securities Act, it will be subject to the prospectus
delivery requirements of the Securities Act, including Rule 172 thereunder.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the selling stockholder.
The shares of Common Stock offered hereby were issued upon conversion of
shares of Series A Preferred Stock originally issued to the selling stockholder
pursuant to an exemption from the registration requirements of the Securities
Act. We agreed to register the shares of Common Stock under the Securities Act
and to keep the registration statement of which this prospectus is a part
effective until the earlier of (i) the date on which the selling stockholder
have sold all of the shares of Common Stock or such shares of Common Stock are
transferred or (ii) the first anniversary of the effective date of the
registration statement. We have agreed to pay substantially all of the expenses
incidental to the registration, offering and sale of our Common Stock to the
public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.
19
Our Common Stock is quoted on the New York Stock Exchange under the symbol
"ID." There can be no assurance that the selling stockholder will sell any or
all of the shares of Common Stock pursuant to this prospectus. In addition, the
shares of Common Stock covered by this registration statement that qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this registration statement.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us
by Weil, Gotshal & Manges LLP, New York, New York.
EXPERTS
The consolidated financial statements of L-1 Identity Solutions, Inc. and
subsidiaries ("L-1") as of and for each of the three years in the period ended
December 31, 2008 incorporated by reference from L-1's current report on Form
8-K filed May 21, 2009, and the effectiveness of L-1's internal control over
financial reporting incorporated by reference from L-1's annual report on Form
10-K filed on February 27, 2009, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports, which
are incorporated by reference in this prospectus (which reports (1) express an
unqualified opinion on the consolidated financial statements and (2) express an
unqualified opinion on the effectiveness of internal control over financial
reporting). Such consolidated financial statements have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The financial statements of Digimarc incorporated by reference in this
prospectus from our Current Report on Form 8-K/A, dated October 1, 2008, have
been so incorporated by reference in reliance upon the report of Grant Thornton
LLP, independent registered public accountants, upon the authority of said firm
as experts in accounting and auditing.
The consolidated financial statements of Bioscrypt Inc. ("Bioscrypt") and
subsidiaries incorporated by reference in this prospectus by reference from
L-1's Current Report on Form 8-K/A, dated May 9, 2008, have been audited by
Deloitte & Touche LLP, Independent Registered Chartered Accountants, as stated
in their report (which report expresses an unqualified opinion and includes a
separate report titled Comments by Independent Registered Chartered Accountants
on Canada-United States of America Reporting Differences referring to changes in
accounting principles that have a material effect on the comparability of the
financial statements, and to conditions and events that cast doubt on
Bioscrypt's ability to continue as a going concern), which is incorporated by
reference in this prospectus. Such consolidated financial statements have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy materials with the SEC at the
SEC's public reference room, located at 100 F Street, N.E., Washington, D.C.
20549.
Please call the SEC at 1-800-SEC-0330 for further information on the
operation of its public reference room. Our SEC filings are also available to
the public on the SEC's Internet site at http://www.sec.gov. Our SEC filings can
also be found on our website at http://l1id.com.
In addition, you may obtain a copy of our SEC filings at no cost by
writing or telephoning us at:
L-1 Identity Solutions, Inc.
177 Broad Street, 12th Floor
Stamford, CT 06901
Attn: Investor Relations
(203) 504-1100
20
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" in this prospectus certain
of the information we file with the SEC. This means we can disclose important
information to you by referring you to another document that has been filed
separately with the SEC. The information incorporated by reference is considered
to be part of this prospectus, and will modify and supersede the information
included in this prospectus to the extent that the information included as
incorporated by reference modifies or supersedes the existing information. Any
statement so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus. We incorporate by reference
the documents listed below and any future filings made by us with the Securities
and Exchange Commission pursuant to Sections 13, 14, or 15(d) of the Securities
Exchange Act of 1934.
The following documents filed by us with the SEC are hereby incorporated
by reference:
o Current Report on Form 8-K filed on May 21, 2009, containing audited
consolidated financial statements as of December 31, 2008 and 2007
and for each of the three years in the period ended December 31,
2008, which give effect to the retrospective application of the
relevant provisions of FSP APB 14-1 and SFAS No. 141(R);
o Annual Report on Form 10-K for the fiscal year ended December 31,
2008;
o Quarterly Report on Form 10-Q for the period ended March 31, 2009;
o Current Report on Form 8-K filed on February 11, 2009 (excluding
Item 2.02 thereof), Form 8-K/A Amendment No. 2 filed on March 3,
2009, Form 8-K/A Amendment No. 1 filed on October 1, 2008, and Form
8-K/A Amendment No. 1 filed on May 9, 2008;
o Definitive Proxy Statement on Schedule 14A and Definitive Additional
Materials on Schedule 14A, each dated March 18, 2009 and relating to
our annual meeting of stockholders held on May 6, 2009; and
o The description of our capital stock contained in the Current Report
on Form 8-K filed on July 1, 2009.
Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual document.
You may obtain a copy of any document summarized in this prospectus and any or
all of the information that has been incorporated by reference in this
prospectus at no cost by writing to or telephoning us at the address and
telephone number given above. Each statement regarding a contract, agreement or
other document is qualified in its entirety by reference to the actual document.
You may read and copy all materials that we have filed with the SEC at the
SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. Additionally, all reports and documents that we have
filed with the SEC can be obtained from the SEC's Internet Site at
http://www.sec.gov, or by visiting the "Investor Relations" section of our
website at http://l1id.com.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14.....OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table below itemizes the expenses payable by L-1 Identity Solutions,
Inc. (the "Registrant") in connection with the registration and issuance of the
securities being registered hereunder. The Registrant will bear all expenses of
this offering. All amounts shown are estimates, except for the Securities and
Exchange Commission registration fee.
-----------------------------------------------------------------------------
Securities Act Registration Fee $ 569.86
-----------------------------------------------------------------------------
Legal Fees and Expenses $ 60,000
-----------------------------------------------------------------------------
Printing Expenses $ 25,000
-----------------------------------------------------------------------------
Accounting Fees and Expenses $ 25,000
-----------------------------------------------------------------------------
Miscellaneous $ 0
-----------------------------------------------------------------------------
Total $ 110,569.86
-----------------------------------------------------------------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees and agents against expenses (including attorneys'
fees) and other liabilities actually and reasonably incurred by them as a result
of any suit (other than a suit brought by or in the right of the corporation)
brought against them in their capacity as such, if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. Section 145 of the General Corporation Law of the State of Delaware
also provides that directors, officers, employees and agents may also be
indemnified against expenses (including attorneys' fees) incurred by them in
connection with a suit brought by or in the right of the corporation if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made, unless otherwise determined by the court, if such person was
adjudged liable to the corporation.
The General Corporation Law of the State of Delaware also provides that
the indemnification described above shall not be deemed exclusive of other
indemnification that may be granted by a corporation pursuant to its by-laws,
disinterested directors' vote, stockholders' vote, agreement or otherwise.
The General Corporation Law of the State of Delaware also provides
corporations with the power to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation in a similar capacity for
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him or her in any such capacity, or
arising out of his or her status, whether or not the corporation would have the
power to indemnify him or her against such liability as described above.
Article IX of the Registrant's certificate of incorporation and Article 5
of the Registrant's by-laws provide for mandatory indemnification of the
Registrant's directors and officers, and permissible indemnification of its
employees and other agents, to the maximum extent permitted by the General
Corporation Law of the State of Delaware. The Registrant has also entered into
indemnification agreements with its directors and officers that require the
Registrant, among other things, to indemnify these individuals against certain
liabilities that may arise by reason of their status or service as directors or
officers to the fullest extent not prohibited by law.
Pursuant to the terms and conditions of certain agreements with Mr.
LaPenta, which are described in the Registrant's Current Report on form 8-K,
filed with the SEC on July 3, 2008 (the "LaPenta Agreement"), Mr. LaPenta is
entitled to indemnification for breaches of representations and warranties or
covenants of the Registrant and against any claims relating to the transactions
contemplated by the LaPenta Agreement and the merger of the Registrant with
Digimarc.
22
The above discussion of the General Corporation Law of the State of
Delaware and the Registrant's certificate of incorporation, by-laws and
indemnification agreements is not intended to be exhaustive and is qualified in
its entirety by such statutes, certificate of incorporation, by-laws and
indemnification agreements.
The Registrant maintains liability insurance for the benefit of its
directors and officers.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The Following Exhibits are being furnished herewith or incorporated by
reference herein:
EXHIBIT
NUMBER DESCRIPTION
---------- ---------------------------------------------------------------------
2.1 Agreement and Plan of Merger, dated as of November 15, 2005, by and
among Viisage Technology, Inc., Integrated Biometric Technology,
Inc., Integrated Biometric Technology LLC, and the stockholders
named therein (filed as Exhibit 2.1 to our Current Report on Form
8-K filed on November 18, 2005). ***
2.2 Agreement and Plan of Reorganization, dated as of January 11, 2006,
by and among Viisage Technology, Inc., VIDS Acquisition Corp. and
Identix Incorporated (filed as Exhibit 2.1 to our Current Report on
Form 8-K filed on January 13, 2006). ***
2.3 Agreement and Plan of Merger, dated as of February 5, 2006, by and
among Viisage Technology, Inc., SecuriMetrics, Inc. and VS Able
Acquisition Corp. (filed as Exhibit 2.1 to our Current Report on
Form 8-K filed on February 6, 2006). ***
2.4 Agreement and Plan of Merger, dated as of July 14, 2006, by and
among Viisage Technology, Inc., Iris Acquisition I Corp., Iridian
Technologies, Inc., Perseus 2000 L.L.C., as stockholder
representative, and other parties named therein (filed as Exhibit
2.1 to our Current Report on Form 8-K filed on July 18, 2006). ***
2.5 Arrangement Agreement, dated as of November 15, 2006 (the
"Arrangement Agreement"), among L-I Identity Solutions, Inc.,
6653375 Canada Inc. and ComnetiX Inc. (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on November 16, 2006). ***
2.5(a) Amendment No. 1 to the Arrangement Agreement, dated January 9, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
January 11, 2007). ***
2.5(b) Amendment No. 2 to the Arrangement Agreement, dated January 25, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
January 29, 2007). ***
2.5(c) Amendment No. 3 to the Arrangement Agreement, dated February 7, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
February 13, 2007). ***
2.6 Agreement and Plan of Reorganization, dated May 16, 2007, by and
among L-1 Identity Solutions, Inc., L-1 Identity Solutions Operating
Company and L-1 Merger Co. (filed as Exhibit 2.1 to our Current
Report on Form 8-K filed on May 16, 2007). ***
2.7 Agreement and Plan of Merger, dated as of June 18, 2007, by and among
McClendon LLC, the selling stockholders, L-1 Identity Solutions,
Inc., L-1 Identity Solutions Operating Company and Patty Hardt, as
the selling stockholders' representative (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on June 20, 2007). ***
2.8 Arrangement Agreement, dated as of January 5, 2008, by and among L-1
Identity Solutions, Inc., L-1 Identity Solutions Operating Company,
6897525 Canada Inc. and Bioscrypt Inc. (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on January 10, 2008). ***
2.9 Amended and Restated Agreement and Plan of Merger, dated as of June
29, 2008, by and among L-1 Identity Solutions, Inc., Dolomite
Acquisition Co. and Digimarc Corporation (filed as Exhibit 2.1 to
our Current Report on Form 8-K filed on July 3, 2008). ***
2.9(a) Amendment No. 1 to the Amended and Restated Agreement and Plan of
Merger, dated July 17, 2008, by and among L-1 Identity Solutions,
Inc., Dolomite Acquisition Co. and Digimarc Corporation (filed as
Exhibit 2.1 to our Current Report on Form 8-K filed on July 17,
2008). ***
3.1 Amended and Restated Certificate of Incorporation as filed with the
Secretary of State of the State of Delaware on May 16, 2007 (filed
as Exhibit 3.1 to our Current Report on Form 8-K filed on May 16,
2007). ***
23
3.2 Amended and Restated By-Laws (filed as Exhibit 3.2 to our Current
Report on Form 8-K filed on November 5, 2007). ***
4.1 Specimen Certificates for Common Stock (filed as Exhibit 4.1 to our
Registration Statement on Form 8-A filed on August 29, 2006). ***
4.2 Indenture relating to Convertible Senior Notes due 2027, dated as May
17, 2007, by and between L-1 Identity Solutions, Inc. and The Bank of
New York, as trustee (including the form of 3.75% Convertible Senior
Notes due 2027) (filed as Exhibit 4.1 to our Current Report on Form
8-K filed on May 23, 2007). ***
4.3 Warrant, dated as of March 9, 2004, issued by Identix Incorporated
in favor of Delean Vision Worldwide, Inc. (filed as Exhibit 4.2 to
the Registration Statement on Form S-3 filed by Identix Incorporated
on March 25, 2004). ***
4.4 Certificate of Designations for L-1 Identity Solutions, Inc. Series A
Convertible Preferred Stock (filed as Exhibit 4.11 to our
Registration Statement on Form S-3ASR filed on August 5, 2008).***
5.1 Opinion of Weil, Gotshal & Manges LLP**
10.1 Securities Purchase Agreement, dated as of June 29, 2008, by and
between Mr. Robert V. LaPenta and L-1 Identity Solutions, Inc.
(filed as Exhibit 10.1 to Amendment No. 3 to Schedule 13D filed by
Aston Capital Partners, L.P. on July 3, 2008).***
10.2 Registration Rights Agreement, dated as of June 29, 2008, by and
between Mr. Robert V. LaPenta and L-1 Identity Solutions, Inc.
(filed as Exhibit 10.2 to Amendment No. 3 to Schedule 13D filed by
Aston Capital Partners, L.P. on July 3, 2008).***
23.1 Consent of Deloitte & Touche LLP, Independent Registered Public
Accounting Firm. **
23.2 Consent of Deloitte & Touche LLP, Independent Registered Chartered
Accountants, Licensed Public Accountants.**
23.3 Consent of Grant Thornton LLP, Independent Registered Public
Accounting Firm. **
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1)**
24 Power of Attorney (included herewith on the signature page).**
* To be filed by amendment.
** Filed herewith.
*** Incorporated by reference.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to
24
the Commission by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as
part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A (ss.230.430A of this chapter), shall be deemed to be part
of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than for the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the town of Stamford, Connecticut, on this 1st day of July, 2009.
L-1 IDENTITY SOLUTIONS, INC.
/s/ Vincent A. D'Angelo
-------------------------------------------
By: Vincent A. D'Angelo
Title: Senior Vice President, Finance
and Chief Accounting Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Robert V. LaPenta, James A.
DePalma and Vincent A. D'Angelo, and each of them acting individually, as his
attorney-in-fact, each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration statement on
Form S-3 (including any post-effective amendments), and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or any substitute, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert V. LaPenta
-------------------------------
Robert V. LaPenta Chairman, President and July 1, 2009
Chief Executive Officer
(Principal Executive Officer)
/s/ James A. DePalma
-------------------------------
James A. DePalma Executive Vice President, July 1, 2009
Chief Financial Officer and Treasurer
(Principal Financial Officer)
/s/ Vincent A. D'Angelo
-------------------------------
Vincent A. D'Angelo Senior Vice President, Finance and July 1, 2009
Chief Accounting Officer
(Principal Accounting Officer)
/s/ B.G. Beck
-------------------------------
B.G. Beck Director July 1, 2009
/s/ Milton E. Cooper
-------------------------------
Milton E. Cooper Director July 1, 2009
/s/ Robert S. Gelbard
-------------------------------
Robert S. Gelbard Director July 1, 2009
/s/ Malcolm J. Gudis
-------------------------------
Malcolm J. Gudis Director July 1, 2009
/s/ John E. Lawler
-------------------------------
John E. Lawler Director July 1, 2009
/s/ Admiral James M. Loy
-------------------------------
Admiral James M. Loy Director July 1, 2009
-------------------------------
Harriet Mouchly-Weiss Director _______, 2009
/s/ Peter Nessen
-------------------------------
Peter Nessen Director July 1, 2009
/s/ B. Boykin Rose
-------------------------------
B. Boykin Rose Director July 1, 2009
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
---------- ---------------------------------------------------------------------
2.1 Agreement and Plan of Merger, dated as of November 15, 2005, by and
among Viisage Technology, Inc., Integrated Biometric Technology,
Inc., Integrated Biometric Technology LLC, and the stockholders
named therein (filed as Exhibit 2.1 to our Current Report on Form
8-K filed on November 18, 2005). ***
2.2 Agreement and Plan of Reorganization, dated as of January 11, 2006,
by and among Viisage Technology, Inc., VIDS Acquisition Corp. and
Identix Incorporated (filed as Exhibit 2.1 to our Current Report on
Form 8-K filed on January 13, 2006). ***
2.3 Agreement and Plan of Merger, dated as of February 5, 2006, by and
among Viisage Technology, Inc., SecuriMetrics, Inc. and VS Able
Acquisition Corp. (filed as Exhibit 2.1 to our Current Report on
Form 8-K filed on February 6, 2006). ***
2.4 Agreement and Plan of Merger, dated as of July 14, 2006, by and
among Viisage Technology, Inc., Iris Acquisition I Corp., Iridian
Technologies, Inc., Perseus 2000 L.L.C., as stockholder
representative, and other parties named therein (filed as Exhibit
2.1 to our Current Report on Form 8-K filed on July 18, 2006). ***
2.5 Arrangement Agreement, dated as of November 15, 2006 (the
"Arrangement Agreement"), among L-I Identity Solutions, Inc.,
6653375 Canada Inc. and ComnetiX Inc. (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on November 16, 2006). ***
2.5(a) Amendment No. 1 to the Arrangement Agreement, dated January 9, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
January 11, 2007). ***
2.5(b) Amendment No. 2 to the Arrangement Agreement, dated January 25, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
January 29, 2007). ***
2.5(c) Amendment No. 3 to the Arrangement Agreement, dated February 7, 2007
(filed as Exhibit 2.1 to our Current Report on Form 8-K filed on
February 13, 2007). ***
2.6 Agreement and Plan of Reorganization, dated May 16, 2007, by and
among L-1 Identity Solutions, Inc., L-1 Identity Solutions Operating
Company and L-1 Merger Co. (filed as Exhibit 2.1 to our Current
Report on Form 8-K filed on May 16, 2007). ***
2.7 Agreement and Plan of Merger, dated as of June 18, 2007, by and among
McClendon LLC, the selling stockholders, L-1 Identity Solutions,
Inc., L-1 Identity Solutions Operating Company and Patty Hardt, as
the selling stockholders' representative (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on June 20, 2007). ***
2.8 Arrangement Agreement, dated as of January 5, 2008, by and among L-1
Identity Solutions, Inc., L-1 Identity Solutions Operating Company,
6897525 Canada Inc. and Bioscrypt Inc. (filed as Exhibit 2.1 to our
Current Report on Form 8-K filed on January 10, 2008). ***
2.9 Amended and Restated Agreement and Plan of Merger, dated as of June
29, 2008, by and among L-1 Identity Solutions, Inc., Dolomite
Acquisition Co. and Digimarc Corporation (filed as Exhibit 2.1 to
our Current Report on Form 8-K filed on July 3, 2008). ***
2.9(a) Amendment No. 1 to the Amended and Restated Agreement and Plan of
Merger, dated July 17, 2008, by and among L-1 Identity Solutions,
Inc., Dolomite Acquisition Co. and Digimarc Corporation (filed as
Exhibit 2.1 to our Current Report on Form 8-K filed on July 17,
2008). ***
3.1 Amended and Restated Certificate of Incorporation as filed with the
Secretary of State of the State of Delaware on May 16, 2007 (filed
as Exhibit 3.1 to our Current Report on Form 8-K filed on May 16,
2007). ***
3.2 Amended and Restated By-Laws (filed as Exhibit 3.2 to our Current
Report on Form 8-K filed on November 5, 2007). ***
4.1 Specimen Certificates for Common Stock (filed as Exhibit 4.1 to our
Registration Statement on Form 8-A filed on August 29, 2006). ***
4.2 Indenture relating to Convertible Senior Notes due 2027, dated as May
17, 2007, by and between L-1 Identity Solutions, Inc. and The Bank of
New York, as trustee (including the form of 3.75% Convertible Senior
Notes due 2027) (filed as Exhibit 4.1 to our Current Report on Form
8-K filed on May 23, 2007). ***
4.3 Warrant, dated as of March 9, 2004, issued by Identix Incorporated
in favor of Delean Vision Worldwide, Inc. (filed as Exhibit 4.2 to
the Registration Statement on Form S-3 filed by Identix Incorporated
on March 25, 2004). ***
4.4 Certificate of Designations for L-1 Identity Solutions, Inc. Series A
Convertible Preferred Stock (filed as Exhibit 4.11 to our
Registration Statement on Form S-3ASR filed on August 5, 2008).***
5.1 Opinion of Weil, Gotshal & Manges LLP**
10.1 Securities Purchase Agreement, dated as of June 29, 2008, by and
between Mr. Robert V. LaPenta and L-1 Identity Solutions, Inc.
(filed as Exhibit 10.1 to Amendment No. 3 to Schedule 13D filed by
Aston Capital Partners, L.P. on July 3, 2008).***
10.2 Registration Rights Agreement, dated as of June 29, 2008, by and
between Mr. Robert V. LaPenta and L-1 Identity Solutions, Inc.
(filed as Exhibit 10.2 to Amendment No. 3 to Schedule 13D filed by
Aston Capital Partners, L.P. on July 3, 2008).***
23.1 Consent of Deloitte & Touche LLP, Independent Registered Public
Accounting Firm. **
23.2 Consent of Deloitte & Touche LLP, Independent Registered Chartered
Accountants, Licensed Public Accountants.**
23.3 Consent of Grant Thornton LLP, Independent Registered Public
Accounting Firm. **
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1)**
24 Power of Attorney (included herewith on the signature page).**
* To be filed by amendment.
** Filed herewith.
*** Incorporated by reference.