** Current Status Update – 1/8/2008 **
On Monday, January 7, 2008, Saflink distributed 100% of its FLO Corporation shares of common stock to all record holders as of December 24, 2007, which included CEDE & Co., a central securities certificate depository for the Depository Trust Company (DTC) for shareholders who owned their Saflink common stock in “street name,” which means that the shares are held in custody by a bank or broker.
For shareholders who held their shares in “street name,” we have been informed that the DTC is currently processing the broker allocation, which includes the calculation of fractional shares, and which may take several business days before the FLO common shares are reflected in an individual shareholder's brokerage or bank custodian account.
For registered shareholders (which is the minority of Saflink shareholders and usually individuals that hold physical Saflink stock certificates), Computershare Limited, FLO’s transfer agent, expects to deliver book entry statements to the registered shareholder in the next 5-10 days, along with instructions on how to certificate or electronically transfer your FLO common shares. For any questions on this process, please contact Computershare Limited, toll-free in the U.S. and Canada at 1-800-962-4284 and outside the U.S. and Canada at 1-303-262-0781.
Please see below for more detailed answers to frequently asked questions or you may contact our investor relations firm at (847) 945-2222 or via email at investors@saflink.com.
What will I receive as a result of the spin-off?
Saflink will distribute 0.0111684 of a share of FLO common stock for each share of Saflink common stock outstanding as of December 24, 2007, which is the record date for the distribution. The distribution ratio is based on the number of FLO shares owned by Saflink divided by the Saflink shares outstanding on that date.
Nasdaq set the ex-dividend date at December 28, 2007. The ex-dividend date is the date on or after which shares of Saflink’s common stock began to trade without the right to receive the FLO Corporation shares. Those Saflink stockholders who bought shares on or after the ex-dividend date would not be entitled to the distribution of FLO shares.
What do I have to do to participate in the distribution?
If, immediately prior to the ex-dividend date, you held shares of Saflink common stock that were outstanding as of December 24, 2007, you do not need to do anything to receive your shares of FLO common stock. You will receive 0.0111684 shares of FLO common stock for each share of Saflink common stock outstanding as of the record date and held by you immediately prior to the ex-dividend date.
What is the record date for the Distribution, and when will the Distribution occur?
The record date was December 24, 2007, and ownership was determined as of 5:00 p.m. Eastern Time on that date. However, prior to the December 28, 2007 ex-dividend date, a sale of Saflink shares included a sale of the related right to the distribution of FLO shares. Shares of FLO common stock are expected to be distributed on or about January 7, 2008. We refer to this date as the distribution date.
For stockholders who hold their Saflink common stock in an account with a bank or brokerage firm, the FLO common stock being distributed will be registered in the “street name” of your bank or broker, who in turn will electronically credit your account with the shares of FLO common stock that you are entitled to receive in the distribution. We anticipate that this may take several days after the distribution date. We encourage you to contact your bank or broker if you have any questions regarding the mechanics of having your shares of FLO common stock credited to your account.
What do I need to do to receive my FLO shares?
Saflink stockholders need not take any action, make any payment or surrender any existing shares of Saflink’s common stock to participate in the spin-off.
Will I receive a stock certificate for FLO shares distributed as a result of the spin-off?
Registered holders of Saflink common stock who are entitled to receive the distribution will receive a book entry account statement reflecting their ownership of FLO common stock. If you would like to receive physical certificates evidencing your FLO shares, please contact FLO’s transfer agent, Computershare Limited, toll-free in the U.S. and Canada at 1-800-962-4284 and outside the U.S. and Canada at 1-303-262-0781.
What if I hold my shares through a broker, bank or other nominee?
Saflink stockholders who hold their shares through a broker, bank or other nominee will have their brokerage account credited with FLO common stock. If this applies to you, that bank or brokerage firm is the registered holder that holds the shares on your behalf. For stockholders who hold their Saflink common stock in an account with a bank or brokerage firm, the FLO common stock being distributed will be registered in the “street name” of your bank or broker, who in turn will electronically credit your account with the shares of FLO common stock that you are entitled to receive in the distribution. We anticipate that this may take several days after the distribution date. We encourage you to contact your bank or broker if you have any questions regarding the mechanics of having your shares of FLO common stock credited to your account.
What if I have stock certificates reflecting my shares of Saflink common stock? Should I send them to the transfer agent or to Saflink?
No, you should not send your stock certificates to the transfer agent or to Saflink. You should retain your Saflink stock certificates. No certificates representing your shares of FLO common stock will be mailed to you. FLO common stock will be issued as uncertificated shares registered in book-entry form through the direct registration system.
If I sold my shares of Saflink common stock before the Distribution Date, was I still entitled to receive FLO shares in the Distribution?
Prior to the December 28, 2007 ex-dividend date, a sale of Saflink shares included a sale of the related right to the distribution of FLO shares. You are encouraged to consult with your financial advisor regarding the specific implications of selling your Saflink common stock prior to or on the distribution date or ex-dividend date.
When and where will FLO common stock be quoted?
A market maker has filed a Form 211 with The Financial Industry Regulatory Authority (FINRA) and is awaiting approval. Once the Form 211 is approved by FINRA, FLO common stock will be assigned a ticker symbol and trades of FLO common stock will be able to be quoted on the OTC Bulletin Board. This may take several days after the distribution date. FLO has been assigned a CUSIP number for its common stock, which is 339721-102.
Where can I find more information about FLO Corporation?
FLO Corporation is required to file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy this information at the following location of the SEC:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also obtain copies of this information my mail at prescribed rates from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549.
The SEC also maintains a website that contains reports, proxy statements and other information regarding companies who file information electronically with the SEC, including FLO Corporation. The address of the SEC website is www.sec.gov.
How will the spin-off affect the number of shares of Saflink I currently hold?
The number of shares of Saflink held by a stockholder was unchanged by the spin-off.
How were fractional shares treated in the spin-off?
Fractional shares of FLO common stock were not distributed. If you were entitled to receive a fractional share of FLO common stock in the spin-off, you received or will receive a taxable cash payment in lieu of the fractional share.
What are the tax consequences of the Distribution to Saflink stockholders?
We believe the distribution of FLO Corporation common stock and cash instead of fractional shares will be a taxable distribution, treated first as a dividend to the extent of our 2008 earnings and profits, then as a return of capital to the extent of the stockholder’s adjusted tax basis in the Saflink common stock, and thereafter as capital gain. We will provide sufficient information to our stockholders to inform stockholders of the value of the FLO Corporation common stock distributed and the amount, if any, of dividend income. You should consult your own tax advisor regarding the particular consequences of the Distribution to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws. See “Federal Income Tax Considerations” on page 7 of the information statement that we mailed to stockholders as of the record date and that we filed with the SEC as an exhibit to a current report on Form 8-K on January 3, 2007.
Were any regulatory or Internal Revenue Service (IRS) approvals required, in the U.S. or elsewhere, to complete the spin-off?
No governmental approvals were required to complete the transaction.
As a result of the spin-off, how do I calculate the tax basis of my Saflink and FLO stock?
Because the distribution of FLO common stock is a taxable distribution, your U.S. federal income tax basis in the FLO common stock that you receive should be its fair market value on the distribution date. We will provide you with information regarding the fair market value of the FLO common stock distributed. You should reduce the U.S. federal income tax basis of your Saflink common stock by such amount of the distribution which is treated as a return of capital, as described above. Saflink recommends that you consult with your tax advisor with respect to the applicability and consequences of federal, state, local and foreign tax laws in your particular situation.
Is the FLO spin-off tax free for foreign stockholders?
Certain non-U.S. jurisdictions may choose to subject this type of corporate reorganization to taxation. You should consult your own tax advisor regarding the particular consequences of the spin-off to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws.