Exhibit 99.1

LOGO

SAFLINK CORPORATION

12413 Willows Road NE, Suite 300

Kirkland, Washington 98034

January 2, 2008

Dear Saflink stockholder:

On December 14, 2007, the Board of Directors of Saflink Corporation (“Saflink”) approved the spin-off of Saflink’s ownership interest in FLO Corporation (“FLO”). We believe that the spin-off will enhance FLO’s ability to focus effectively on its core business opportunity, which is the growth in the Registered Traveler program. It will also enhance FLO’s access to capital by allowing the financial community to focus on and value FLO’s business separately from our business. As a result, we believe the spin-off will build long-term stockholder value.

As a result of the spin-off, each Saflink stockholder will receive 0.0111684 of a share of FLO common stock for each share of Saflink common stock held as of 5:00 p.m. Eastern Time on December 24, 2007, the record date, subject to adjustment to reflect settlement of any outstanding option or warrant exercises as of such date. Saflink will distribute the FLO shares on January 7, 2008. Saflink will not distribute fractional shares of FLO common stock. You will receive a cash payment in lieu of any fractional shares.

If you sell your shares of Saflink common stock prior to or on the distribution date, you may also be selling your right to receive shares of FLO common stock. You are encouraged to consult with your financial advisor regarding the specific implications of selling your shares of Saflink common stock prior to or on the distribution date.

Following the spin-off, Saflink common stock will continue to be quoted on the OTCBB under the symbol “SFLK.OB.” You need not take any action to receive your shares of FLO common stock. You do not need to pay any consideration for or surrender or exchange your shares of Saflink common stock.

The attached information statement provides you with important information concerning the distribution of these shares, including (i) the U.S. federal income tax treatment of FLO shares you will receive; (ii) how we determined the number of shares you will receive; (iii) how fractional shares will be treated; and (iv) a brief description of the background and business of FLO.

We appreciate your continued interest and support.

Sincerely,

LOGO

Steven M. Oyer

Chief Executive Officer

LOGO

SAFLINK CORPORATION

INFORMATION STATEMENT

Spin-off of Saflink Corporation’s Interest in FLO Corporation

Through the Distribution of

FLO Corporation Common Stock

January 2, 2008

WE ARE NOT ASKING YOU FOR A PROXY

AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

We are sending you this Information Statement because we are spinning off our interest in FLO Corporation (“FLO”). In this distribution (“Distribution”), holders of Saflink Corporation (“Saflink”) common stock will receive 0.0111684 of a share of FLO common stock for each outstanding share of Saflink common stock they own as of 5:00 p.m. Eastern Time on December 24, 2007, the record date (the “Record Date”), subject to adjustment to reflect settlement of any outstanding option or warrant exercises as of the Record Date. The Distribution will be payable on January 7, 2008 (the “Distribution Date”), subject to satisfaction or waiver of the conditions described below.

If you sell your shares of Saflink common stock prior to or on the Distribution Date, you may also be selling your right to receive shares of FLO common stock. 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.

For a discussion of the tax consequences of the Distribution to you, see “U.S. Federal Income Tax Consequences” beginning on page 7. You are urged to consult your own tax advisor to determine the particular tax consequences of the Distribution to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws.

No vote of Saflink stockholders is required in connection with the Distribution. Therefore, you are not required to take any action. We are sending you this Information Statement, which contains information about the terms of the Distribution and FLO, for your information only.

Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved the FLO common stock to be issued to you pursuant to this Distribution or determined if this Information Statement is accurate or adequate. Any representation to the contrary is a criminal offense.

This information statement is first being mailed to stockholders on or about January 2, 2008.

TABLE OF CONTENTS


		Page
QUESTIONS AND ANSWERS REGARDING THE SPIN-OFF OF FLO CORPORATION		1

INFORMATION ABOUT THE DISTRIBUTION		3

The Distribution		3

Conditions to the Distribution		3

Purpose of the Distribution		3

The Number of Shares You Will Receive		4

Trading Prior to or on the Distribution Date		4

Transferability of Shares You Receive		4

When and How You Will Receive the Dividend		4

Warrants		5

No Appraisal Rights		5

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		6

INTEREST OF CERTAIN PERSONS		7

FEDERAL INCOME TAX CONSIDERATIONS		7

INFORMATION ABOUT FLO		11

Overview of FLO		11

Background of the Separation of FLO from Saflink		11

FLO Transfer Agent and Registrar		11

WHERE YOU CAN FIND ADDITIONAL INFORMATION		12

ANNEX A—FLO CORPORATION REGISTRATION STATEMENT ON
FORM 10-SB		A-1

-i-

QUESTIONS AND ANSWERS REGARDING THE SPIN-OFF OF FLO CORPORATION

1. I own Saflink shares. 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 the Record Date for the Distribution, subject to adjustment as provided herein. The distribution ratio is based on the number of FLO shares owned by Saflink divided by the Saflink shares outstanding on that date.

2. What do I need to do to receive my FLO shares?

No action is required by Saflink’s stockholders to receive their FLO common stock. The Distribution of FLO’s outstanding shares owned by Saflink will be made on the Distribution Date.

3. What is the Record Date for the Distribution, and when will the Distribution occur?

The Record Date is December 24, 2007, and ownership is determined as of 5:00 p.m. Eastern Time on that date. Shares of FLO common stock will be distributed on January 7, 2008. We refer to this date as the Distribution Date.

4. What do I have to do to participate in the Distribution?

You will receive 0.0111684 of a share of FLO common stock for each share of Saflink common stock held as of the Record Date, subject to adjustment as provided herein. You may also participate in the Distribution if you purchase Saflink common stock in the “regular way” market and retain your Saflink shares through the Distribution Date.

5. If I sell my shares of Saflink common stock before the Distribution Date, will I still be entitled to receive FLO shares in the Distribution?

6. 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 will be unchanged. On the Distribution Date, Saflink’s stockholders will receive 0.0111684 of a share of FLO common stock for each share of Saflink common stock that they own, subject to adjustment as provided herein. The market value of each Saflink share, however, may decrease to reflect the spin-off and, hence, the loss of the value of the FLO stock.

7. 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.

8. When will I receive my FLO shares? 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. See “FLO Transfer Agent and Registrar,” on page 11.

9. 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. For additional information, those stockholders should contact their broker or bank directly.

10. 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.

Additional frequently asked questions and other information are available at www.saflink.com.

INFORMATION ABOUT THE DISTRIBUTION

The Distribution

On December 14, 2007, our Board of Directors approved the Distribution of our interest in FLO. To effect the Distribution, our Board of Directors declared a dividend on Saflink common stock consisting of shares of FLO common stock owned by us. On the Distribution Date, we will distribute all of the shares of FLO common stock that we own to our stockholders as a dividend. These shares represent approximately 23% of the total voting power of FLO’s issued and outstanding capital stock as of the Record Date.

On the Distribution Date, holders of Saflink common stock will be entitled to receive 0.0111684 of a share of FLO common stock as a dividend on each outstanding share of Saflink common stock they own as of 5:00 p.m. Eastern Time on the Record Date, subject to adjustment to reflect settlement of any outstanding option or warrant exercises as of the Record Date.

You will not be required to pay any cash or other consideration for the shares of FLO common stock that will be distributed to you or to surrender or exchange your shares of Saflink common stock to receive the dividend of FLO common stock. The Distribution will not affect the number of shares of Saflink common stock that you hold.

Conditions to the Distribution

We expect that the Distribution will be effective on January 7, 2008, provided that, among other things:

•

no order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution will be in effect and no other event outside our control will have occurred or failed to occur that prevents the consummation of the Distribution; and

•

all government approvals and material consents necessary to consummate the Distribution have been received and are in full force and effect.

The consummation of the Distribution will be subject to the satisfaction, or waiver by us in our sole and absolute discretion, of the conditions set forth above. Our determination regarding the satisfaction or waiver of any of such conditions will be conclusive.

Purpose of the Distribution

After careful consideration, we believe that the separation of FLO and Saflink will benefit each of their businesses. The Distribution will allow Saflink and FLO to achieve the following benefits:

•

enhance FLO’s ability to focus effectively on its core business opportunity, which is the growth of the Registered Traveler program;

•

enhance FLO’s access to capital by allowing the financial community to focus on and value FLO’s business separately from Saflink’s business;

•

allow management of Saflink and FLO to focus more effectively on their respective businesses and improve FLO’s ability to recruit and retain management and independent directors; and

•

permit Saflink and FLO to target their respective stockholder bases more effectively and improve capital allocation within each company.

The Number of Shares You Will Receive

For each share of Saflink common stock of which you are the holder of record at 5:00 p.m. Eastern Time on December 24, 2007, the Record Date, you will receive that number of shares of FLO common stock equal to the quotient obtained by dividing the total number of shares of FLO common stock to be distributed in the Distribution by the total number of shares of Saflink common stock outstanding at 5:00 p.m. Eastern Time on the Record Date. Based on the number of Saflink shares outstanding at such time, you will receive 0.0111684 of a share of FLO common stock for each share of Saflink common stock of which you were the holder of record at 5:00 p.m. Eastern Time on the Record Date, subject to adjustment to reflect settlement of any outstanding option or warrant exercises as of the Record Date. The distributed shares of FLO common stock will be fully paid and non-assessable and have no preemptive rights.

Trading Prior to or on the Distribution Date

If you sell your shares of Saflink common stock prior to or on the Distribution Date, you may also be selling your right to receive shares of FLO common stock that would have been distributed to you pursuant to the Distribution. You are encouraged to consult with your financial advisor regarding the specific implications of selling Saflink common stock prior to or on the Distribution Date.

Transferability of Shares You Receive

The shares of FLO common stock distributed to Saflink stockholders will be freely transferable, except for shares received by persons who may be deemed to be “affiliates” of FLO under the Securities Act of 1933, as amended (the “Securities Act”). Persons who may be deemed to be affiliates after the Distribution generally include individuals or entities that control, are controlled by, or are under common control with FLO, and include its directors, certain of its officers and significant stockholders. FLO affiliates will be permitted to sell their shares of FLO common stock only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by the provisions of Rule 144 thereunder.

When and How You Will Receive the Dividend

We will pay the dividend on the Distribution Date by releasing our shares of FLO common stock for distribution by Computershare Limited, our distribution agent. The distribution agent will cause the shares of FLO common stock to which you are entitled to be registered in your name or in the “street name” of your bank or brokerage firm.

Registered Holders. If you are the registered holder of Saflink common stock and hold your Saflink common stock either in physical form or in book-entry form, the shares of FLO common stock distributed to you will be registered in your name and you will become the holder of record of that number of shares of FLO common stock.

“Street Name” Holders. Many Saflink stockholders have Saflink common stock held in an account with a bank or brokerage firm. 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.

Fractional Shares. Saflink will not distribute any fractional shares of FLO common stock to its stockholders. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole

shares in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales pro rata (based on the fractional share such holder would otherwise be entitled to receive) to each holder who otherwise would have been entitled to receive a fractional share in the Distribution. Saflink will pay all reasonable expenses incurred by the distribution agent in connection with such sale, including brokerage commissions. The distribution agent, in its sole discretion, without any influence by FLO or us, will determine when, how, through which broker-dealer and at what price to sell the whole shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the payment made in lieu of fractional shares.

Warrants

In connection with the Distribution, the exercise price of each warrant to purchase shares of Saflink common stock will be reduced, pursuant to the terms of such warrant, in proportion to the fair market value of the number of shares of FLO common stock distributed on each share of Saflink common stock (as determined by the board of directors of Saflink in good faith). In addition, the number of shares of Saflink common stock for which certain warrants are exercisable shall be conversely increased, pursuant to the terms of such warrants.

No Appraisal Rights

Stockholders do not have dissenters’ rights of appraisal with respect to the Distribution described in this information statement.

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of December 24, 2007, certain information with respect to the beneficial ownership of our common stock by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, (ii) each member of our board of directors, (iii) each executive officer named in the summary compensation table, and (iv) all of our directors and executive officers as a group.


Name of Beneficial Owner (1)	Number of Shares of Common Stock Owned	Number of Shares Underlying Convertible Securities (2)	Total Number of Shares Beneficially Owned (3)	Percent of Common Stock (4)
Richard P. Kiphart (5)	7,616,794	2,237,323	9,854,117	6.1	%
Lincoln D. Faurer	221,067	221,067	442,134	*
Gordon E. Fornell	383,267	383,267	766,534	*
Asa Hutchinson	156,000	146,000	302,000	*
Steven M. Oyer	1,396,080	958,858	2,354,938	1.5	%
Jeffrey T. Dick	435,000	204,457	639,457	*
Trevor Neilson	516,000	494,611	1,010,611	*
Directors and executive officers as a group (7 persons)	10,724,208	4,645,583	15,369,791	9.5	%

*	Less than 1%

(1)	Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table.

(2)	Under the rules of the SEC, a person is deemed to be the beneficial owner of shares that can be acquired by such person within 60 days upon the exercise of options or warrants or upon conversion of securities convertible into common stock.

(3)	Represents the aggregate number of shares beneficially owned by each stockholder.

(4)

Calculated on the basis of 160,552,837 shares of common stock outstanding as of December 24, 2007, provided that any additional shares of common stock that a stockholder has the right to acquire within 60 days after December 24, 2007, are deemed to be outstanding for the purpose of calculating that stockholder’s percentage beneficial ownership.

(5)	Mr. Kiphart’s mailing address is c/o William Blair & Company, L.L.C., 222 West Adams Street, Chicago, IL 60606.

INTEREST OF CERTAIN PERSONS

In reviewing this information statement, our stockholders should be aware that the following officers and directors have an interest in the Distribution that may differ from other officers and directors due to their relationship with FLO.

Steven M. Oyer has served as a member of the board of directors of Saflink since December 2001 and a member of the board of directors of FLO since March 2007. Mr. Oyer is eligible to receive restricted stock for his board service pursuant to the FLO 2007 Equity Incentive Plan. In the distribution Mr. Oyer will receive 15,591 shares of FLO common stock, representing 0.9% of the total voting power of FLO’s issued and outstanding capital stock. Richard P. Kiphart is a member of the board of directors and a substantial stockholder of Saflink. In the Distribution Mr. Kiphart will receive 85,067 shares of FLO common stock, representing 4.7% of the total voting power of FLO’s issued and outstanding capital stock. Glenn L. Argenbright was the Chief Executive Officer of Saflink from December 2000 to September 2006. Since March 2007, Mr. Argenbright has served as FLO’s President, Chief Executive Officer, secretary and a member of the board of directors.

FEDERAL INCOME TAX CONSIDERATIONS

U.S. Federal Income Tax Consequences for United States Stockholders

The following discussion of certain U.S. federal income tax considerations to a “U.S. Holder” (as defined below) of the Spin-Off does not address all U.S. federal income tax matters that may be relevant to particular U.S. Holders in light of their particular circumstances, such as U.S. Holders who are dealers in securities, financial institutions, insurance companies, tax-exempt entities, persons whose functional currency is not the U.S. dollar, persons subject to the alternative minimum tax, persons who acquired their shares in connection with compensatory transactions, and persons that hold Saflink shares as part of a straddle or a hedging or conversion transaction.

The term “U.S. Holder” as used in this discussion means the following persons who own Saflink shares as capital assets:

•

U.S. citizens or residents (as defined for U.S. federal income tax purposes) of the U.S.;

•

corporations (or other entities classified as corporations for U.S. federal income tax purposes) organized under the laws of the U.S. or of any state or the District of Columbia;

•

an estate whose income is subject to U.S. federal income taxation regardless of the source of the income, and

•

a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more “United States persons,” as defined for U.S. federal income tax purposes, have the authority to control all substantial decisions of the trust, or that has elected to be treated as a “United States person” under applicable U.S. Treasury regulations.

Stockholders other than U.S. Holders are referred to in this discussion as Non-U.S. Holders.

An individual may, in certain cases, be treated as a resident of the U.S., rather than a nonresident, among other ways, by virtue of being present in the U.S. on at least 31 days in that calendar year and for an aggregate of at least 183 days during the three-year period ending in that calendar year (counting for such purposes all the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year). Residents are subject to U.S. federal income tax as if they were U.S. citizens.

If a partnership, a pass-through entity treated as a partnership for U.S. federal income tax purposes, or an entity treated as a disregarded entity for U.S. federal income tax purposes holds common stock, the tax treatment

of an owner of such entity will generally depend on the status of the owner and upon the activities of the entity. Accordingly, such entities which hold Saflink common stock and owners in these entities are urged to consult their tax advisors.

This summary is based on the Internal Revenue Code of 1986, as amended, (the “Code”), and other legal authorities, all of which are subject to change, possibly with retroactive effect or subject to different interpretations. This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any stockholder, and no representation with respect to the tax consequences to any particular stockholder is made. No opinion from legal counsel and no ruling from the Internal Revenue Service has been or will be sought as to the U.S. federal income tax consequences of the Spin-Off. The following summary is not binding on the Internal Revenue Service or the courts. The Internal Revenue Service could adopt a contrary position, and that contrary position could be sustained by a court. Each U.S. Holder should consult such holder’s own tax advisors with respect to the U.S. federal income tax considerations of the Spin-Off that are relevant to such holder, having regard to such holder’s particular circumstances.

Receipt of the FLO Corporation Shares and Cash Instead of Fractional Shares

The receipt by a U.S. Holder of shares of FLO Corporation common stock and cash instead of a fractional share of FLO Corporation common stock should not qualify for non-recognition of gain or income to the U.S. Holder under Section 355 of the U.S. Code.

Each U.S. Holder who receives shares of FLO Corporation common stock and cash instead of fractional shares should treat the receipt, to the extent of the sum of the cash received and the fair market value (as of the dividend payment date) of the FLO Corporation shares received:

•

first as a taxable dividend to the extent of Saflink’s current and accumulated earnings and profits;

•

then as a return of capital to the extent of such U.S. Holder’s adjusted tax basis in the U.S. Holder’s Saflink common stock; and

•

thereafter as capital gain.

Such capital gain, if any, will generally be long-term capital gain if the holding period for such Saflink common stock to which the Spin-Off is attributable is more than one year at the time of receipt.

A distribution can be characterized as a dividend based on the distribution being treated as made out of either the corporation’s accumulated earnings and profits or, under the so-called “nimble dividend” rule, out of the earnings and profits of the corporation’s taxable year in which the distribution is made, computed as of the end of the corporation’s taxable year, even if accumulated earnings and profits are a deficit. Saflink believes that it does not currently have any accumulated earnings and profits for U.S. federal income tax purposes, and that it will not have any accumulated earnings and profits as of the dividend payment date in January 2008. A distribution in January 2008 can, however, be treated as a dividend if Saflink has earnings and profits for its 2008 taxable year, computed as of the end of its taxable year on December 31, 2008. Although Saflink does not anticipate 2008 earnings and profits, it will not be known until December 31, 2008 whether Saflink will have any current year earnings and profits supporting characterization of any amounts as ordinary dividend income.

The U.S. Holder should have a tax basis in the FLO Corporation shares of common stock received equal to the fair market value of such shares at the time distributed. The U.S. Holder’s holding period for such FLO Corporation shares of common stock would begin the day after such distribution.

U.S. Information Reporting and Backup Withholding with respect to U.S. Holders

In general, information regarding the amount of any dividends paid to U.S. Holders is reported to the Internal Revenue Service unless an exception applies. In addition, backup U.S. federal income tax withholding

may apply with respect to the amount of the distribution of FLO Corporation shares treated as a dividend paid to a U.S. Holder, unless the U.S. Holder provides a correct taxpayer identification number (which, in the case of an individual, is his or her social security number) and certifies whether such U.S. Holder is subject to backup withholding of U.S. federal income tax by completing a Form W-9 or otherwise establishes a basis for exemption from backup withholding. Some U.S. Holders (including, among others, corporations) are not subject to these backup withholding and reporting requirements. U.S. Holders who fail to provide their correct taxpayer identification numbers and the appropriate certifications or fail to establish an exemption as described above may be subject to a $50 penalty imposed by the Internal Revenue Service. If there is withholding on a payment to a U.S. Holder and the withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service.

U.S. Federal Income Tax Considerations for Non-United States Stockholders

Each Non-U.S. Holder who receives shares FLO Corporation common stock and cash instead of fractional shares will be treated, to the extent of the sum of the cash received and the fair market value of the FLO Corporation shares, as receiving a taxable dividend to the extent of Saflink’s current and accumulated earnings and profits.

The gross amount of any dividend (out of earnings and profits) paid to a Non-U.S. Holder will generally be subject to U.S. withholding tax at a rate of 30% unless the holder is entitled to an exemption from or reduced rate of withholding under an applicable income tax treaty. To receive a reduced treaty rate, prior to the payment of the dividend a Non-U.S. Holder must provide Saflink with a properly completed IRS Form W-8BEN (or successor form) certifying qualification for the reduced rate.

Dividends received by a Non-U.S. Holder that are effectively connected with a U.S. trade or business conducted by the Non-U.S. Holder (or dividends attributable to a Non-U.S. Holder’s permanent establishment in the U.S. if an income tax treaty applies) are exempt from this withholding tax. To obtain this exemption, prior to the payment of a dividend, a Non-U.S. Holder must provide Saflink with a properly completed IRS Form W-8ECI (or successor form) properly certifying this exemption. Effectively connected dividends (or dividends attributable to a permanent establishment), although not subject to withholding tax, are subject to U.S. federal income tax at the same graduated rates applicable to U.S. persons, net of certain deductions and credits. In addition, dividends received by a corporate Non-U.S. Holder that are effectively connected with a U.S. trade or business of the corporate Non-U.S. Holder (or dividends attributable to a corporate Non-U.S. Holder’s permanent establishment in the U.S. if an income tax treaty applies) may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified in an income tax treaty).

A Non-U.S. Holder of common stock that is eligible for a reduced rate of withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts currently withheld if an appropriate claim for refund is timely filed with the IRS.

Backup Withholding and Information Reporting With Respect to Non-U.S. Holders

Generally, Saflink must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder. Pursuant to income tax treaties or other agreements, the IRS may make its reports available to tax authorities in the Non-U.S. holder’s country of residence.

Payments of dividends made to a Non-U.S. Holder may be subject to additional information reporting and backup withholding. Backup withholding will not apply if the Non-U.S. Holder establishes an exemption, for example, by properly certifying its non-U.S. status on an IRS Form W-8BEN (or successor form). Notwithstanding the foregoing, backup withholding may apply if either Saflink or Saflink’s paying agent has actual knowledge, or reason to know, that the holder is a U.S. person.

Backup withholding is not an additional tax. Rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of U.S. federal income tax, a credit or refund may be obtained, provided that the required information is furnished to the IRS in a timely manner.

TO ENSURE COMPLIANCE WITH U.S. TREASURY DEPARTMENT CIRCULAR 230, SAFLINK STOCKHOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX CONSIDERATIONS IN THIS INFORMATION STATEMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY YOU FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER U.S. FEDERAL, STATE OR LOCAL TAX LAWS; (B) SUCH DISCUSSION IS INCLUDED HEREIN IN CONNECTION WITH THE SOLICITATION OF YOUR VOTE IN CONNECTION WITH THE SPIN-OFF AND MATTERS ADDRESSED IN THIS INFORMATION STATEMENT; AND (C) YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

INFORMATION ABOUT FLO

Overview of FLO

FLO offers a comprehensive solution for the Registered Traveler program, which is administered by the U.S. Transportation Security Administration, or TSA. The Registered Traveler program is designed to identify air passengers who pose a minimal security risk and then to provide those passengers with access to faster and simpler processing at airport security checkpoints.

FLO has designed a solution to provide Registered Traveler program enrollment services using enrollment stations, credentialing of TSA-approved registered travelers through the issuance of a proprietary smart card, and registered traveler authentication services at security checkpoints using authentication kiosks. The smart cards FLO expects to issue to registered travelers are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers. As a result, registered travelers who enroll with FLO would be able to use its smart cards at any airport participating in the Registered Traveler program. In addition, FLO expects to add other benefits to its smart card, such as payment functionality for debit, credit and stored-value transactions in collaboration with its consumer credit partners. FLO has not issued any smart cards to date and has not entered into any written agreement to be a Registered Traveler service provider at any airport.

Background of the Separation of FLO from Saflink

FLO Corporation was incorporated in the State of Delaware on March 9, 2007, as a wholly-owned subsidiary of Saflink, to focus solely on providing solutions for the Registered Traveler program. Our board of directors believed that separating the Registered Traveler business from our core technology and intellectual property would enhance FLO’s access to capital by allowing the financial community to focus on and value FLO’s business separately from our business. Saflink was incorporated in the State of Delaware on October 23, 1991.

As of the Record Date, Saflink owns 1,793,118 shares of FLO’s common stock, representing all of FLO’s issued and outstanding common stock and approximately 23% of the total voting power of FLO’s issued and outstanding capital stock.

On December 14, 2007, our Board of Directors decided to spin-off its ownership stake in FLO by distributing its shares of FLO’s common stock to its stockholders on a pro rata basis through the declaration of a special in-kind dividend. On the Distribution Date, we will distribute all of the shares of FLO common stock that we own to our stockholders as a dividend. Following the Distribution, we will no longer own any shares of FLO.

For a more complete description of FLO, you should review FLO’s registration statement on Form 10-SB as filed with the SEC on December 10, 2007, attached here as Annex A.

FLO Transfer Agent and Registrar

Computershare Limited is the transfer agent and registrar for FLO common stock. If you have questions or would like information regarding FLO stock, please contact Computershare 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.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

FLO and Saflink are each subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and accordingly, each company files registration statements, reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”), including financial statements. If you would like more information about FLO, we urge you to read FLO’s reports filed with the SEC.

You may read and obtain copies (at prescribed rates) of FLO’s and our reports at the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain these reports at the SEC’s website at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.

FLO and Saflink maintain websites that offer additional information about each company.

•

Visit FLO’s website at http://www.flocard.com

•

Visit our website at http://www.Saflink.com

Information contained on any website referenced in this Information Statement is not incorporated by reference into this Information Statement.

ANNEX A

As filed with the Securities and Exchange Commission on December 10, 2007

File No. 000-52851

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

FORM 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES

OF SMALL BUSINESS ISSUERS

Under Section 12(b) or (g) of The Securities Exchange Act of 1934

FLO Corporation

(Name of Small Business Issuer in its charter)

Delaware

20-8651669

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


14000 Thunderbolt Place, Building R, Chantilly, Virginia		20151
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: (425) 278-1247

Copies to:


Glenn L. Argenbright		W. Michael Hutchings, Esq.
FLO Corporation		Byron Dailey, Esq.
14000 Thunderbolt Place, Building R		DLA Piper US LLP
Chantilly, Virginia 20151		701 Fifth Avenue, Suite 7000
		Seattle, Washington 98104
		(206) 839-4800

Securities to be registered under Section 12(b) of the Act:

Not Applicable

Securities to be registered under Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of class)

TABLE OF CONTENTS


		Page
INTRODUCTORY NOTE		A-1

PART I		A-2

Item 1.	Description of Business	A-2

Item 2.	Plan of Operation	A-19

Item 3.	Description of Property	A-21

Item 4.	Security Ownership of Certain Beneficial Owners and Management	A-21

Item 5.	Directors and Executive Officers, Promoters and Control Persons	A-24

Item 6.	Executive Compensation	A-27

Item 7.	Certain Relationships and Related Transactions and Director Independence	A-29

Item 8.	Description of Securities	A-31

PART II		A-35

Item 1.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	A-35

Item 2.	Legal Proceedings	A-37

Item 3.	Changes in and Disagreements with Accountants	A-37

Item 4.	Recent Sales of Unregistered Securities	A-37

Item 5.	Indemnification of Directors and Officers	A-38

PART F/S		A-F-1

PART III		A-III-1

Items 1 & 2.	Index to Exhibits and Description of Exhibits	A-III-1

INTRODUCTORY NOTE

Special Note Regarding Forward-Looking Statements

This registration statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will” and similar terms and phrases, including references to assumptions. Such statements are based on current expectations, are inherently uncertain and are subject to changing assumptions.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from historical results or future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the factors described under the subheading “Risk Factors” in Part I, Item 1 of this registration statement.

If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. In addition to other factors that affect our operating results and financial position, neither past financial performance nor our expectations should be considered reliable indicators of future performance. You should not use historical trends to anticipate results or trends in future periods. Any of the factors discussed above could have an adverse impact on our stock price. In addition, failure of sales or income in any quarter to meet the investment community’s expectations, as well as broader market trends, could have an adverse impact on our stock price. We are not obligated to update such forward-looking statements or risk factors to reflect future events or circumstances.

Unless the context suggests otherwise, references in this registration statement to “FLO,” the “Company,” “we,” “us” and “our” refer to FLO Corporation and the Registered Traveler business of Saflink Corporation prior to our acquisition of that business on April 16, 2007. References in this registration statement to “Saflink” refer to Saflink Corporation.

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PART I

Item 1.

Description of Business

Overview

We offer a comprehensive solution for the Registered Traveler program, which is administered by the U.S. Transportation Security Administration, or TSA. The Registered Traveler program is designed to identify air passengers who pose a minimal security risk and then to provide those passengers with access to faster and simpler processing at airport security checkpoints.

We have designed our solution to provide Registered Traveler program enrollment services using enrollment stations, credentialing of TSA-approved registered travelers through the issuance of a proprietary smart card, and registered traveler authentication services at security checkpoints using authentication kiosks. The smart cards we expect to issue to registered travelers are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers. As a result, registered travelers who enroll with us would be able to use our smart cards at any airport participating in the Registered Traveler program. In addition, we expect to add other benefits to our smart card, such as payment functionality for debit, credit and stored-value transactions. We have not issued any smart cards to date and have not entered into any written agreement to be a Registered Traveler service provider at any airport.

Our Company

FLO Corporation was incorporated in the State of Delaware on March 9, 2007, as a wholly-owned subsidiary of Saflink, to focus solely on providing solutions for the Registered Traveler program. In addition, Saflink’s board of directors believed that separating the Registered Traveler business from Saflink’s core technology and intellectual property would enhance our access to capital by allowing the financial community to focus on and value our business separately from Saflink’s business. Saflink was incorporated in the State of Delaware on October 23, 1991.

On April 16, 2007, we acquired all of Saflink’s Registered Traveler assets and certain liabilities related to its Registered Traveler business, in exchange for a promissory note with a principal amount of $6.3 million and accruing interest at 8% per annum. In connection with the asset transfer, we issued approximately $3.5 million of convertible promissory notes accruing interest at 8% per annum in a private placement to accredited investors. The aggregate consideration for the notes consisted of approximately $1.8 million in cash and the assignment to us of approximately $1.7 million of Saflink’s outstanding 8% convertible debentures.

On July 3, 2007, we raised approximately $4.7 million through the private placement of shares of our Series A preferred stock to accredited investors. The aggregate consideration for the preferred stock consisted of approximately $4.5 million in cash, and the assignment to us of $166,667 of Saflink’s outstanding 8% convertible debentures. On August 24, 2007, we raised approximately $4.4 million in cash through the private placement of shares of our Series A preferred stock to accredited investors. On September 13, 2007, we raised approximately $197,000 in cash through the private placement of shares of our Series A preferred stock to accredited investors.

In connection with our Series A preferred stock financings, the convertible promissory notes we issued in April 2007 automatically converted into shares of our Series A preferred stock. We also issued warrants to purchase an aggregate of 5,931,622 shares of our common stock to the purchasers of our Series A preferred stock and to the purchasers of the convertible promissory notes upon the conversion of the notes. In addition, we issued warrants to purchase an aggregate of 1,186,316 shares of our common stock to the placement agents in the financings.

On August 24, 2007, we paid Saflink the remaining principal balance of the $6.3 million promissory note we issued to Saflink in connection with the transfer of the Registered Traveler assets in April 2007. We paid the

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principal amount of the promissory note through a combination of cash and the cancellation of approximately $1.9 million of outstanding Saflink debt that had been assigned to us.

On October 5, 2007, we agreed to purchase certain assets related to the Registered Traveler business of Unisys Corporation, or Unisys, operating under the name “rtGO,” for $8.0 million. The assets we agreed to acquire include enrollment and verification kiosks and related equipment, intellectual property, prepaid memberships, the designation and certification of Unisys’s Registered Traveler technology under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, or SAFETY Act, and certain material contracts used in Unisys’s rtGO Registered Traveler business. We expect to close the transaction during the fourth quarter of 2007, following which we intend to integrate Unisys’s rtGO Registered Traveler solution with our business.

As of December 10, 2007, our authorized capital stock consisted of: (i) 100,000,000 shares of common stock, 1,793,118 of which are issued and outstanding; and (ii) 15,000,000 shares of preferred stock, 2,000 of which have been designated as Series A preferred stock, 1,482.9058 of which are issued and outstanding and are convertible into 5,931,612 shares of common stock.

We maintain our headquarters in Chantilly, Virginia. Our website is http://www.flocard.com. Information on our website is not incorporated into this registration statement and should not be relied upon in determining whether to make an investment in our securities.

Spin-off of FLO Shares by Saflink

Currently, Saflink owns 1,793,118 shares of our common stock, representing all of our issued and outstanding common stock and approximately 23% of the total voting power of our issued and outstanding capital stock. Saflink’s board of directors has decided to spin-off its ownership stake in us by distributing its shares of our common stock to its stockholders on a pro rata basis through the declaration of a special in-kind dividend. We expect that Saflink will conduct the spin-off in accordance with the guidance provided by Staff Legal Bulletin No. 4 issued by the staff of the Division of Corporation Finance of the Securities and Exchange Commission, or SEC.

Saflink stockholders would not receive fractional shares of FLO common stock in the spin-off. Rather than distribute fractional shares, Saflink expects to engage an independent agent to combine the fractions, sell the shares in the open market, and distribute the proceeds to the Saflink stockholders who would have received fractional shares. The independent agent will be entitled, at its sole discretion and without influence by Saflink or FLO, to determine when, how, through which broker-dealer and at what price to make these sales.

We expect Saflink to provide its stockholders an information statement that describes the spin-off in more detail.

As of December 10, 2007, there was no established public trading market for our common stock. We expect that our common stock will be quoted on the OTC Bulletin Board, or OTCBB, following the spin-off. We have been in contact with a market maker and requested that it file a Form 211 with the FINRA OTC Compliance Unit in order to quote our common stock. Approval of the Form 211 is required to initiate quotations on the OTCBB, the “Pink Sheets” or any other comparable quotation medium pursuant to SEC Rule 15c2-11.

Acquisition of rtGO Registered Traveler Solution

Unisys offers a TSA-certified Registered Traveler solution known as “rtGO.” Unisys, a TSA-approved service provider, currently operates the Registered Traveler program at Reno/Tahoe International Airport (RNO). Historically, we have entered into teaming agreements with Unisys in connection with our proposals to various airports for the design and implementation of a Registered Traveler program. Under the teaming agreements, we would act as the prime contractor and Unisys would act as the subcontractor. The airports to which we have

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submitted combined proposals and which have not yet awarded contracts for their Registered Traveler programs include Washington Dulles International Airport (IAD), Ronald Reagan Washington National Airport (DCA), and Oakland International Airport (OAK).

On October 5, 2007, we entered into an asset purchase agreement with Unisys under which we agreed to purchase certain assets related to Unisys’s rtGO Registered Traveler business for $8.0 million. The assets we agreed to acquire include enrollment and verification kiosks and related equipment, intellectual property, prepaid rtGO memberships, the designation and certification of Unisys’s Registered Traveler technology under the SAFETY Act, and certain material contracts used in Unisys’s rtGO Registered Traveler business. In exchange for the assets, we agreed to pay Unisys $8.0 million and to assume certain liabilities related to the assets, including liabilities under assumed contracts and prepaid rtGO memberships.

The asset purchase agreement contains customary representations, warranties, covenants and indemnities. Each party’s obligation to complete the transaction is subject to the satisfaction or waiver of various conditions, including:

•

accuracy of the other party’s representations and warranties in the asset purchase agreement;

•

the other party’s compliance with its obligations under the asset purchase agreement;

•

no order, decree or judgment making the consummation of the transaction illegal;

•

receipt of consent to assignment of certain agreements with third parties;

•

our receipt of certification from the American Association of Airport Executives; and

•

receipt of approval of the U.S. Department of Homeland Security to the transfer to us of the designation and certification of Unisys’s Registered Traveler technology under the SAFETY Act.

We expect to complete the acquisition after all conditions to the acquisition in the asset purchase agreement are satisfied or waived, which we currently expect will be during the fourth quarter of 2007. However, it is possible that factors outside of our control could require us to complete the acquisition at a later time or not to complete it at all. The asset purchase agreement may be terminated prior to closing by written agreement of the parties or prior to December 31, 2007 by a party whose failure to fulfill any obligation under the agreement is not the principal cause of the failure to have closed by such date. There are no liquidated damages or other penalties if the acquisition is not completed. We expect to integrate our solution and the rtGO solution and to assume operation of the Registered Traveler program at Reno/Tahoe International Airport (RNO) following completion of the transaction.

The Registered Traveler Program

The Registered Traveler program is designed to provide expedited security screening for passengers who volunteer to undergo a TSA-conducted security threat assessment in order to confirm that they do not pose or are not suspected of posing a threat to transportation or national security. The TSA is working together with private industry to develop the Registered Traveler program. The Registered Traveler program is market-driven and offered by the private sector with the TSA largely playing a facilitating role. The TSA is responsible for setting program standards, conducting the security threat assessment, physical screening at TSA checkpoints, and certain forms of oversight. The private sector is responsible for passenger enrollment, verification, and related services.

To participate in the Registered Traveler program, passengers will pay a fee, submit to a security threat assessment and provide biographic and biometric information, such as fingerprints and iris scans, to TSA-approved service providers to become a “registered traveler.” Passengers who successfully pass the security threat assessment will be issued cards with an embedded integrated circuit chip, known as a “smart card,” for use at the security checkpoints of airports that participate in the program. We expect that registered travelers will have access to a reserved security lane at participating airports and will have a shorter wait at the security checkpoint.

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In addition to the TSA, the Registered Traveler program consists of “sponsoring entities,” which generally consist of airports and airlines, and “service providers,” which generally consist of product and service vendors. Service providers will provide the sponsoring entities with the necessary systems and processes to support the Registered Traveler program at participating airports. The TSA will perform the initial participant security threat assessment and physical screening at TSA checkpoints. In addition, the TSA will ensure that vendors have met certain Registered Traveler program requirements before they can participate as a Registered Traveler service provider.

In June 2005, the TSA created the Private Sector Known Traveler program at Orlando International Airport (MCO) to test the Registered Traveler concept. The program demonstrated that biometric verification technology can work under airport operational conditions. Following the Orlando pilot, the TSA worked with private industry to roll out an expanded pilot to test interoperability among multiple service providers.

The current phase of the Registered Traveler program, known as the Registered Traveler Interoperability Pilot, or RTIP, introduces interoperability among participating airports/air carriers and functionality across larger populations. Several sponsoring entities are already operating the Registered Traveler program at their respective locations. The TSA expects additional sponsoring entities to begin participating in the RTIP as the sponsoring entities make the necessary business arrangements.

Market Opportunity

According to the U.S. Federal Aviation Administration, as of February 2007 there were 514 commercial service airports operating in the United States. At least 74 of these airports are participating in the Registered Traveler Interoperability Consortium, or RTIC, which is working to establish common technical and business processes required for a national Registered Traveler program.

According to the Travel Industry Association, a travel industry trade group, in 2005 overall U.S. domestic travel generated approximately 2.0 billion trips of more than 50 miles from home, of which approximately 510.0 million trips were for business. Airplanes were the primary mode of transportation for approximately 66.3 million of these business trips. We believe that the Registered Traveler program will be attractive to individual travelers who take more than five business trips each year.

The following sponsoring entities are currently operating a Registered Traveler program at their respective locations:

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Air France (operating out of Terminal 1 at JFK);

•

AirTran Airways (operating out of the Central Terminal at LGA);

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Albany International Airport (ALB);

•

British Airways (operating out of Terminal 7 at JFK);

•

Cincinnati/Northern Kentucky International Airport (CVG);

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Indianapolis International Airport (IND);

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Jacksonville International Airport (JAX);

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Little Rock National Airport (LIT);

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Norman Mineta San Jose International Airport (SJC);

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Orlando International Airport (MCO);

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Reno/Tahoe International Airport (RNO);

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San Francisco International Airport (SFO);

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Virgin Atlantic (operating out of Terminal B at EWR);

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Virgin Atlantic (operating out of Terminal 4 at JFK); and

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Westchester County Airport (HPN).

In addition to the Registered Traveler market, we believe there are a number of other markets into which we may be able to expand our solution, including ferries, rail, subway and other public transportation, as well as cruises, stadiums, events, venues, e-commerce, secure retail and identity-theft prevention.

Our Solution

We offer a comprehensive solution for the Registered Traveler program. We have designed our solution to provide Registered Traveler program enrollment services using enrollment stations, credentialing of TSA-approved registered travelers through the issuance of a proprietary smart card, and registered traveler authentication services at security checkpoints using authentication kiosks. The smart cards we expect to issue to registered travelers are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers. As a result, registered travelers who enroll with us would be able to use our smart cards at any airport participating in the Registered Traveler program.

Unisys currently offers a Registered Traveler solution operating under the name “rtGO.” Following our acquisition of certain assets related to Unisys’s rtGO Registered Traveler business, we expect to integrate the rtGO solution into our solution.

We have formed strategic relationships with several companies with extensive expertise in credentialing, security, access control, travel services, political lobbying, and corporate and consumer marketing. For example, we have entered into teaming agreements with Unisys in connection with our proposals to various airports for the design and implementation of a Registered Traveler program, and we have entered into a software development agreement with International RAM Associates, LLC, or International RAM, for server, authentication and related software. We have also entered into letters of understanding with Johnson Controls Federal Systems, Inc., JPMorgan Chase Bank, N.A. and Smiths Detection Inc. These letters contemplate future agreements that would contain specific obligations of the respective parties and would set forth the financial terms of the relationships. In addition, we have ongoing informal relationships with other companies. We sometimes collectively refer to our strategic partners as the FLO Alliance. We use our strategic relationships in submitting bids to airports for comprehensive Registered Traveler programs.

We believe our solution addresses the requirements of every phase of the Registered Traveler program, including the enrollment and credentialing process and subsequent operational use of the credential in the civil aviation passenger screening environment. As a prior business division of Saflink, we have drawn on Saflink’s expertise and experience implementing biometrically-enabled credentials and security applications in government identity programs to develop our solution. We believe our solution is an innovative and competitive Registered Traveler solution that will enable us to become a leading service provider in the Registered Traveler program.

Our Business Strategy

Our business strategy is to offer our solution to secure contracts from airports and airlines to design, install and operate their Registered Traveler programs. In addition, we plan to utilize our product and service offerings to enroll individual travelers who wish to participate in the Registered Traveler program.

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credit partners. In addition, we believe our solution will enable us to combine our smart card’s security and authentication features with a credit or debit card in the future to address issues such as credit card fraud and secure banking transactions.

We believe our principal source of revenues will be a portion of the annual fees individual travelers enrolling with us will pay to participate in the Registered Traveler program. We anticipate that the annual fee will be approximately $99 to $499 per traveler, depending on the membership tier and associated benefits chosen by the traveler. Unisys currently markets its rtGO Registered Traveler solution to individual travelers for an annual fee of $100 per traveler. We plan to establish a broad enrollment base by marketing our solution to large companies with employees who travel on business.

We believe another source of revenues will be our portion of payments our strategic partners may receive under affiliate agreements with companies interested in marketing into the Registered Traveler channel. We do not have any agreements with these companies yet, but we believe these companies may include those providing car and limousine services, office supplies, printing services, baggage services, private jets, international concierge access, resort services, corporate retreats, and banking and asset management services. We may derive additional revenues from sales of our enrollment stations, authentication kiosks and verification services to airports, as well as usage payments from our competitors for authentication services.

Our Technology, Products and Services

Enrollment Stations

We plan to deploy both fixed and portable enrollment stations as part of our solution. Our enrollment application process is designed to feature a touch-screen user interface that guides the enrollment operator through the process while providing visual feedback to both our enrollment operator and the applicant. To ensure acceptance of enrolled biometric data during the enrollment process, we employ two-stage automated quality assurance testing of the collected fingerprint data. After all data has been collected and the quality assurance thresholds passed, the enrollment application is compressed, digitally signed by the operator and submitted to the facility server for batch submission to the TSA.

Identity Management System

Our Identity Management System, or IDMS, is at the center of our solution architecture. It provides the foundation for managing the life cycle of participants from pre-enrollment through authentication, supports the security mechanisms to safeguard each component of our solution infrastructure, and implements the core functionality required to deploy authentication services across our service points. Our IDMS is a secure online transactional system that we believe is scalable as the Registered Traveler program expands and our participation increases.

Our IDMS is based on the Microsoft SQL*Server database platform. This approach provides an enterprise-class relational database management system capable of supporting the secure management of Registered Traveler program participant data within what we believe are generally accepted performance benchmarks to handle the number and size of data packets associated with biometric and smart card systems. Data security is provided through the intrinsic facilities of the SQL*Server product and through partitioning and encryption of data by the IDMS application infrastructure. IDMS services are designed to be deployed through a secure virtual private network infrastructure to external services such as authentication kiosks at airport facilities, enrollment centers and our strategic partners in the FLO Alliance.

Credential Issuance

Our solution provides for the issuance of a smart card credential that meets all requirements of the RTIC’s Technical Interoperability Specification, which forms the basis of the TSA’s Registered Traveler program

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requirements. The Central Information Management System, or CIMS, is a commercially neutral entity designed to aggregate and store biometric and other identification information, which it will distribute to the entities participating in the Registered Traveler program. The TSA requires that all Registered Traveler service providers belong to the CIMS network. CIMS will be responsible for issuing to us each biometric data payload, which is the identification information carried within the biometric data record. We will combine this biometric data with participant demographic data, security objects, and digital signatures into the card data payload, personalize this data onto the smart card chip, and then mail the smart card to the Registered Traveler participant. Our smart cards are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers at any participating airport.

Kiosks and Facility Infrastructure

We designed our authentication kiosks specifically for use in airport security screening lines. We designed the authentication kiosk to incorporate both iris and fingerprint biometric matching, interfacing to the authentication back-end through secure, Advanced Encryption Standard encrypted spread spectrum frequency-hopping communications. This wireless capability is designed to allow airports to determine the optimal location for authentication services without regard for availability of hardwired communications infrastructure or traditional 802.11 wireless infrastructures. The kiosks are designed to be easily relocated without need for permanent installation to allow for reconfiguration based on traffic demands or other facility specific considerations.

We designed our authentication kiosks to provide the means to reliably authenticate a participant’s identity with respect to their biometrics stored on the card. We believe this authentication capability will meet all reliability, accuracy and time requirements established by the TSA. Additionally, we designed the kiosk to verify the participant’s status against the Card Revocation List routinely supplied by the CIMS to each service provider. These two checks together will determine an individual’s authority to proceed. Our authentication kiosks will only accommodate approved holders of valid interoperable Registered Traveler cards.

Data Management

We designed our solution to deliver access to real-time data from the Registered Traveler security lines to the airport security management team. We expect to make aggregated usage data available for historical reporting. We believe that our data management tools will be useful for airport security management because the flow of passengers in airport security lanes generally is not automated and all information to support decision-making has been gathered manually.

Distribution

To execute our business strategy, our principal distribution and logistics requirements are the delivery of our proprietary smart card to customers and the delivery of our authentication kiosks to airports that agree to use our Registered Traveler solution. We intend to use regular mail and, if necessary, courier services for the delivery of our smart cards. We intend to ship our kiosks to airports, as needed, using rail or truck delivery, depending on factors such as distance and price.

Competition

Our primary current competitors in the Registered Traveler market include Verified Identity Pass, Inc., or Verified Identity, Unisys, and Vigilant Solutions LLC, or Vigilant. Verified Identity offers a Registered Traveler solution operating under the name “Clear,” which it markets to individual travelers for $99.95 per year. Verified Identity currently operates the Registered Traveler programs at nine U.S. airports that sponsor operating Registered Traveler programs. Unisys offers a Registered Traveler solution operating under the name “rtGO,” which it markets to individual travelers for an annual fee of $100 per traveler. Unisys currently operates its rtGO

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program at the Reno/Tahoe International Airport (RNO), and the rtGO smart card can be used at certain other participating airports. In connection with our agreement to acquire Unisys’s rtGO Registered Traveler solution, Unisys has agreed, upon such acquisition, not to compete with us in the U.S. Registered Traveler market through December 2015. In addition, Vigilant offers a Registered Traveler solution operating under the name “Preferred Traveler,” which it markets to individual travelers for $149 per year. Vigilant currently operates the Registered Traveler program at Jacksonville International Airport (JAX). In addition, we may face competition from airlines that offer expedited security lanes for first-class fliers, for elite fliers who travel a minimum number of miles annually, or under other incentive programs.

The TSA requires that Registered Traveler solutions be interoperable among participating airports and air carriers. The smart cards we expect to issue to registered travelers are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers. As a result, registered travelers who enroll with us would be able to use our smart cards at any airport participating in the Registered Traveler program. Similarly, our authentication kiosks will accommodate approved holders of valid interoperable Registered Traveler cards issued by other service providers. As a result, our business faces competition both in proposals to airports for the design and implementation of Registered Traveler programs and in the sale and issuance of smart cards to individual travelers.

Intellectual Property

We rely on unpatented know-how, trade secrets and continuing research and development. We do not currently intend to seek patents for any of our technology, although we may do so in the future as our technology and solutions develop. We have applied for registration of the trademarks “FLO” and “Fast Lane Option” with the U.S. Patent and Trademark Office. We generally accompany our use of our unregistered trademarks with our name to indicate the origin of the products to which they are applied, to distinguish them from the products of competitors and to build goodwill in these trademarks.

From our inception (June 1, 2005) through September 30, 2007, our product development expenses were approximately $2.0 million. Product development expenses consist primarily of salaries, benefits, supplies and materials for software developers and hardware engineers, as well as fees paid for outsourced software development and hardware design. In the next twelve months, we expect our product development expenses to be approximately $1.5 million.

Regulation

The Registered Traveler program is currently subject to oversight by the TSA. Although private industry has been tasked with the responsibility of crafting specifications and guidelines for this program, it is possible that a number of laws and regulations may be adopted with respect to Registered Traveler, covering issues such as user privacy, pricing, and characteristics and quality of products and services. Furthermore, the growth and development of the market for Registered Traveler may prompt calls for more stringent consumer protection laws that may impose additional burdens on those companies conducting business in this space. Any such new legislation or regulation, or the application of laws or regulations from jurisdictions whose laws do not currently apply to our business, could have a material adverse effect on our business, results of operations and financial condition.

The TSA uses certain evaluation criteria to make an initial determination of an interested service provider’s eligibility to participate in the Registered Traveler program. The service provider participation analysis includes a broad range of commercial and federal standards designed to enable the TSA to examine a prospective service provider’s viability and potential transportation security risk. Organizations that do not meet the TSA minimum participation requirements will not be eligible to participate in the Registered Traveler program. Currently, the TSA requires that service providers resubmit an application for participation review a minimum of every five years. We are currently listed on the TSA’s participation list as having met the TSA’s minimum criteria to offer Registered Traveler services to sponsoring entities.

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Airports participating in the Registered Traveler program typically require Registered Traveler solutions to be designated and/or certified under the SAFETY Act, administered by DHS. In order to help promote the creation, deployment and use of anti-terrorism technologies, the SAFETY Act provides two levels of liability protections against claims arising out of, relating to, or resulting from an act of terrorism, where “qualified anti-terrorism technology” has been deployed. First, in a lawsuit against a person who sells technology that has been “designated” by DHS as a qualified anti-terrorism technology, the liability of such person is limited to the amount of liability insurance that the DHS determines the person must maintain. In addition, there is exclusive jurisdiction in federal court, a prohibition on the person’s joint and several liability, a complete bar on punitive damages, and a reduction of a plaintiff’s recovery by the amount of collateral source compensation, such as insurance or government benefits the plaintiff may otherwise receive. Second, if the qualified anti-terrorism technology has received DHS “certification,” then, in addition to the benefits provided under designation, there is a presumption that the “government contractor defense” applies to the lawsuit. The government contractor defense shields certain defendants from liability under the doctrine of sovereign immunity used by the federal government. We have applied for SAFETY Act designation and certification for our solution, but our solution is not currently designated or certified under the SAFETY Act. However, we expect Unisys to transfer its SAFETY Act designation and certification of the rtGO solution to us in connection with our acquisition of the rtGO solution. Such SAFETY Act designation and certification would only apply to the rtGO solution.

Sources and Availability of Materials

The execution of our business strategy will primarily require that we produce our proprietary smart card and authentication kiosks. We have entered into teaming agreements with Unisys that we believe will provide for an adequate inventory of cards, kiosks and other materials and give us access to Unisys’s established supply chain. In addition, we believe that the materials required for such production are currently available in adequate amounts from multiple vendors.

Customers

Upon completion of our acquisition of certain assets related to Unisys’s rtGO Registered Traveler business, we will assume operation of the Registered Traveler program at Reno/Tahoe International Airport (RNO). In addition, we will acquire approximately 500 prepaid rtGO memberships in the transaction, which represents all of rtGO’s prepaid memberships to date.

In February 2007, we entered into a letter of intent with Huntsville International Airport (HSV) under which Huntsville International Airport agreed to work exclusively with us and our strategic partners to develop and implement a Registered Traveler program.

We have also submitted proposals, together with Unisys pursuant to our teaming agreements, to Washington Dulles International Airport (IAD), Ronald Reagan Washington National Airport (DCA), and Oakland International Airport (OAK). We expect that we will continue to work with Unisys to submit proposals in the future.

We believe our principal source of revenues will be a portion of the annual fees individual travelers enrolling with us will pay to participate in the Registered Traveler program. We anticipate that the annual fee will be approximately $99 to $499 per traveler, depending on the membership tier and associated benefits chosen by the traveler. Unisys currently markets its rtGO solution to individual travelers for an annual fee of $100 per traveler. We plan to establish a broad enrollment base by marketing our solution to large companies with employees who travel on business.

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Employees

As of December 10, 2007, we had 11 employees, all of whom were full-time employees. From time to time, we use consultants or contractors for specific assignments. We intend to leverage our relationships with strategic partners and use consultants and employees to meet our staffing needs. We have entered into non-disclosure and non-competition agreements with all of our employees. None of our employees is represented by a labor union and we have never experienced a work stoppage. We believe that our relationship with our employees is good. Unisys has agreed to provide staffing and other transition services following completion of our planned acquisition of the Unisys rtGO solution. As a result, we do not expect to hire additional employees in connection with the rtGO acquisition.

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RISK FACTORS

An investment in FLO Corporation involves a high degree of risk. In evaluating us and our business, prospective investors should carefully consider the following risk factors. This registration statement contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below as well as those discussed elsewhere in this registration statement.

Because FLO Corporation was recently formed, we cannot provide meaningful historical information about the Company which you can use to evaluate our business and potential for future success.

We are a newly-organized entity that, until recently, was a wholly-owned subsidiary of Saflink. FLO Corporation itself has a very limited operating history that commenced only in March 2007, and there is very limited financial information that can be used reliably to evaluate our business and prospects. Although our senior management founded, developed and oversaw the Registered Traveler business of Saflink that we recently acquired, that business has a limited operating history and there is no meaningful historical operating or financial information about us or the Registered Traveler business that you can use to evaluate our business and prospects. You must consider the risks and uncertainties frequently encountered by new or early-stage businesses in rapidly evolving markets. We may incur significant operating losses and generate negative cash flow from operating activities. We may be unable ever to generate an overall profit or to reach profitability on a sustained basis.

We have recurring net losses from operations that raises substantial doubt about our ability to continue as a going concern.

Since our inception through September 30, 2007, we have accumulated net losses of approximately $10.5 million and have continued to accumulate net losses since September 30, 2007. During the period when we operated as a division and wholly-owned subsidiary of Saflink, our operations were financed through contributed capital from Saflink. During the nine months ended September 30, 2007, we financed our operations primarily through the issuance of our convertible promissory notes, which included net cash proceeds of approximately $1.5 million, and through the issuance of our Series A preferred stock, which included net cash proceeds of approximately $8.2 million. Due to our recurring losses from operations, our auditors have found that there is substantial doubt about our ability to continue as a going concern. We may be unable to generate adequate revenues or to continue financing our operations. Investors in us should be capable of facing a complete loss of their investment.

Our business has not generated any revenue or commitments for future revenues to date and we may never be able to generate such revenues.

Saflink’s Registered Traveler business, which we acquired in April 2007 and which is our primary business, never generated revenue and, consequently, incurred net losses and negative cash flows since inception. Saflink’s primary focus in its Registered Traveler business was the development of a solution designed to meet the needs of the Registered Traveler program. Although we have entered into a letter of intent with Huntsville International Airport under which Huntsville International Airport agreed to work exclusively with us and our strategic partners in the FLO Alliance to develop and implement a Registered Traveler program, we have not entered into any written agreement to be a Registered Traveler service provider and our solution has not been implemented in any airport to date. In the nine months ended September 30, 2007, our average monthly negative cash flow from operating and investing activities was approximately $578,000, and we anticipate that such negative cash flows may increase materially as we expand our Registered Traveler business. We may never be able to generate revenues from our Registered Traveler business. If we are not able to generate significant revenues from our Registered Traveler business, or if we incur substantial additional expenses related to our Registered Traveler business before we earn associated revenues, we may not have adequate resources to continue to operate or to compete effectively in the Registered Traveler marketplace.

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We depend on financing by third parties, and if we are not able to obtain the necessary financing for our operations, our business will be significantly harmed and we may need to cease our operations.

We have not generated any revenue from our business, and we do not have a credit line or other borrowing facility to fund our operations. We do not expect that our cash on hand and cash generated from operations will be adequate to sustain our business operations for the next twelve months. We believe that our currently available funds will only be sufficient to meet our anticipated cash needs through December 2007. If we do not generate sufficient revenues to fund our operations, we will need to raise additional funds through the issuance of equity or debt securities or other sources of financing in the future. In addition, on October 5, 2007, we entered into an asset purchase agreement with Unisys under which we agreed to purchase certain assets related to Unisys’s rtGO Registered Traveler business for $8.0 million. Currently, we do not have sufficient funds to complete the rtGO acquisition and we do not have any arrangements in place for any future financings. We intend to pay for the acquisition by releasing $1.2 million currently in escrow, deposited in connection with the acquisition, and paying the remaining $6.8 million in cash from a future financing that may involve the issuance of equity or debt securities. Any additional equity or convertible debt financing may cause immediate and substantial dilution to new or existing stockholders. We may not be able to secure sufficient financing to complete the rtGO acquisition or other additional financing on favorable terms, or at all. We have shares of common stock and preferred stock available for future issuance without stockholder approval. If we are unable to obtain the necessary additional financing, we would not be able to complete the rtGO acquisition and we may be required to reduce the scope of our operations or cease our operations.

If we do not close the rtGO acquisition, or if we are unable to successfully integrate the Unisys rtGO solution in a timely manner, our business and future prospects could be harmed.

On October 5, 2007, we entered into an asset purchase agreement with Unisys under which we agreed to purchase certain assets related to Unisys’s rtGO Registered Traveler business for $8.0 million. We expect to close the transaction during the fourth quarter of 2007. However, we may be unable to close this transaction. Currently, we do not have sufficient funds to complete the rtGO acquisition, do not have any arrangements in place for any future financings, and may not be able to secure sufficient financing on favorable terms, or at all. Our failure to close this transaction could harm our financial condition and future prospects.

In addition, even if we are able to close this transaction, we expect to incur substantial transaction and restructuring charges as we integrate the rtGO solution with our solution, and there may be additional unanticipated costs. The integration of any acquisition involves numerous risks, including, among others, difficulties in assimilating operations and products, diversion of management’s time and attention from other business concerns, potential exposure to unknown or contingent liabilities and possible loss of significant customers or impairment of relationships. We may not achieve the expected benefits of the transaction in the near term, or at all. Our failure to successfully, timely integrate the Unisys rtGO solution with our business could harm our business and future prospects.

If we cannot meet the TSA’s requirements to offer Registered Traveler services to sponsoring entities, our ability to implement our Registered Traveler solution and to continue our business will be significantly harmed.

The TSA has stated that it will ensure that Registered Traveler vendors who provide Registered Traveler services to airports, airlines, and the public have met its program requirements. In turn, airports and airlines may partner for Registered Traveler program operations only with TSA-approved Registered Traveler vendors. As of November 2007, the TSA has stated that six service providers, including us, have met its minimum criteria to offer Registered Traveler services to airports and airlines. However, the Registered Traveler program is an emerging area for which laws and regulations may change, approval as a Registered Traveler service provider is currently subject to application and renewal processes, and the TSA may not recognize us as an approved Registered Traveler service provider. If we are or become ineligible to participate in the Registered Traveler program as a TSA-approved service provider, our business will be severely impacted.

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If Registered Traveler is not accepted by consumers and businesses as a viable retail offering, our ability to continue as a business would be severely jeopardized.

Because we believe our principal source of revenues will be a portion of the annual fees travelers will pay to participate in the Registered Traveler program, our success will depend largely on the expansion of markets for Registered Traveler related products domestically and internationally. The Registered Traveler market is new and unproven and our ability to generate revenues will depend on the size of the market and the market’s acceptance of our products and services. We cannot accurately predict the future growth of this industry or the ultimate size of the Registered Traveler market.

The program may not achieve wide acceptance by airports, airlines and travelers for a number of reasons, including that the Registered Traveler program may not:

•

be seen as providing tangible and widely anticipated benefits to passengers;

•

attract significant numbers of registrants;

•

be seen as generating a pronounced improvement in overall security;

•

overcome vendor interoperability issues;

•

diminish system-wide passenger wait times; or

•

satisfactorily confront and resolve passenger privacy issues.

In addition, the current concerns and frustration of travelers over the increased difficulty of air travel may decline and businesses may not wish to invest in technology like our solution that uses biological identifiers to secure and simplify the security screening process. Because we are targeting the Registered Traveler program to grow our business, a failure to accept or a decline in the use of the Registered Traveler program will severely harm our business.

Our business will depend on our ability to establish and maintain strategic relationships with travel services, technology, and other companies. If we are unable to establish and maintain such relationships, of if current relationships were to weaken, our business could be materially harmed.

Our business will depend on our ability to establish and maintain strategic relationships with credentialing, security, access control, travel services, political lobbying, and corporate and consumer marketing companies. For example, we have entered into teaming agreements with Unisys, a TSA-approved Registered Traveler program service provider, in connection with our proposals to various airports for the design and implementation of a Registered Traveler program. However, many of our other strategic relationships currently consist of non-binding letters of understanding that contemplate future agreements that would contain specific obligations of the respective parties and would set forth the financial terms of the relationships. We may not be able to establish such future agreements on terms that are satisfactory to us or at all, and any arrangements that we enter into may not result in the type of collaborative relationship with the third party that we are seeking. Further, these third parties may not regard their relationship with us as important to their own business operations and may not perform their obligations as agreed. If we are unable to establish and maintain satisfactory strategic relationships, our ability to implement a Registered Traveler solution may be significantly impaired and our financial condition adversely effected.

Our financial results and ability to generate revenues in the future depend on our ability to negotiate arrangements with strategic partners that provide us with an acceptable portion of the annual fees travelers pay to participate in the Registered Traveler program.

We believe our principal source of revenues will be a portion of the annual fees individual travelers enrolling with us will pay to participate in the Registered Traveler program. We have not determined what annual fee participating travelers will be required to pay, but we anticipate that the annual fee will be approximately

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$100 per traveler. The TSA has announced that the fee for its portion of the Registered Traveler program, which covers the cost of the TSA’s security threat assessment, will be $28 per year. Following the deduction of TSA’s portion of the annual fee from our anticipated annual fee, we would receive approximately $72 per traveler. We will pay various strategic partners portions of that fee for services they will provide, including the registration and enrollment of travelers, the issuance of smart cards and related customer service. If we are unable to negotiate arrangements with these strategic partners that provide us with an acceptable portion of the annual fees travelers pay to participate in the Registered Traveler program, our financial results, future prospects and ability to generate revenues could be harmed.

We may not be able to compete successfully in the Registered Traveler market against current and potential competitors.

We face intense competition in both the Registered Traveler and travel services markets. Our current and potential competitors include Verified Identity, Unisys, and Vigilant. Many of our competitors have longer operating histories, greater name recognition and substantially greater financial, technical and marketing resources than we have. For instance, Verified Identity, Unisys and Vigilant currently operate their Registered Traveler programs at U.S. airports. Although we have agreed to acquire certain assets related to Unisys’s Registered Traveler business, we may not be able to compete effectively with these competitors. In addition, as the market evolves there may be smaller competitors that can respond more rapidly to changes in the market. Our competitors may also be able to adapt more quickly to new or emerging technologies and standards or changes in customer requirements or devote greater resources to the promotion and sale of their products. Furthermore, we may face competition from airlines that offer expedited security lanes for first-class fliers, for elite fliers who travel a minimum number of miles annually, or under other incentive programs. If we are unable to compete successfully with existing and potential competitors in the Registered Traveler market, our ability to implement our Registered Traveler solution and our business will suffer.

We have limited product offerings related to the Registered Traveler program. As a result, we may suffer significantly more harm from the effects of competition on our business than we would if we had more product offerings. For example, if intense competition in the Registered Traveler market causes us to reduce the price we charge for our Registered Traveler products or erodes our total sales, the corresponding reduction in revenues we would be able to generate from these products would cause our financial condition to suffer because we lack other product offerings to offset the loss of revenues.

We may not be able to compete successfully with airlines that offer expedited security lanes.

We may face competition from airlines that offer expedited security lanes for first-class fliers, for elite fliers who travel a minimum number of miles annually, or under other incentive programs. For instance, as of November 2007, Northwest Airlines offered express security checkpoint services to its elite WordPerks members at 20 airports. Several other airlines have offered similar programs to their elite fliers. While the Registered Traveler program is intended to identify passengers who pose a minimal security risk and then to provide those passengers with access to faster and simpler processing at airport security checkpoints, many travelers may not perceive a significant benefit to becoming a registered traveler if airlines can expedite them through security lanes quickly. In addition, while we believe the target market for our solution is a broader group of business travelers, airlines may be appeal to such travelers by offering expedited security lanes to a broad group of executive-class, business-class, or certain economy-class fliers. If the Registered Traveler program is unable to distinguish itself from the expedited security lanes that airlines may provide, our business, results of operation and financial condition could be materially harmed.

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If we are unable to keep up with rapid technological change in the biometric technology, smart card, and Registered Traveler markets, we may not be able to compete with our product and service offerings.

Our future success will depend upon our ability to keep pace with the developing Registered Traveler market and to integrate new technology into our Registered Traveler solution and introduce new products and product enhancements to address the changing needs of the marketplace. Various technical problems and resource constraints may impede the development, production, distribution and marketing of our Registered Traveler products and services. More advanced or alternate technology employed by competitors and unavailable to us could give our competitors a significant advantage. It is possible that products and services developed by our competitors will significantly limit the potential market for our Registered Traveler products and services or render our products and services obsolete.

If we lose our current or future license rights to use the biometric, encryption, and scanning technologies of third parties, our ability to compete with products that already include this technology will be substantially impaired and may be entirely precluded.

Third party biometric identification and authentication software, encryption algorithms, and document scanning and processing technologies play a key role in our Registered Traveler business. We anticipate that these technologies will also play a key role in the future development of our enrollment and authentication kiosks. Our rights under any third party agreements may be terminated if we fail to pay required fees, including minimum specified payments, or if we otherwise breach these agreements. If we lose our rights to use these technologies, our business would likely suffer.

Government regulation and legal uncertainties associated with the Registered Traveler program could hurt our business and future prospects.

If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, our business and results of operations could be materially harmed.

Our success depends, in large part, on our ability to protect our intellectual property and other proprietary rights. We rely primarily on trademarks, copyrights, trade secrets and unfair competition laws, as well as license agreements and other contractual provisions, to protect our intellectual property and other proprietary rights. However, our technology is not patented, we do not currently intend to seek patents for any of our technology and in the future we may be unable or may not seek to obtain patent protection for our technology. Moreover, existing U.S. legal standards relating to the validity, enforceability and scope of protection of intellectual property rights offer only limited protection, may not provide us with any competitive advantages and may be challenged by third parties. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property or otherwise gaining access to our technology. Unauthorized third parties may try to copy or reverse engineer our products or portions of our products or otherwise obtain and use our intellectual property. Moreover, many of our employees and Saflink’s employees have access to our trade secrets and other intellectual property. Although we have entered into non-disclosure and non-competition agreements with all of our employees, if one or more of these employees leave us to work for

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one of our competitors, then they might disseminate this proprietary information, which may as a result damage our competitive position. If we fail to protect our intellectual property and other proprietary rights, then our business, results of operations or financial condition could be materially harmed.

We depend heavily on our network infrastructure and its failure could result in unanticipated expenses and prevent users from effectively utilizing our services, which could negatively impact our ability to attract and retain users.

Our success will depend upon the capacity, reliability and security of our network infrastructure. We must continue to expand and adapt our network infrastructure as the number of users and the amount of information at risk increases, and to meet changing customer requirements. The expansion and adaptation of our network infrastructure will require substantial financial, operational and management resources. We may be unable to expand or adapt our infrastructure to meet additional demand or our customers’ changing requirements on a timely basis, at a commercially reasonable cost, or at all. If we fail to expand our network infrastructure on a timely basis or adapt it either to changing customer requirements or to evolving industry standards, our business could be significantly impacted.

In addition, our operations depend on our ability to protect our network infrastructure against damage from fire, earthquakes, floods, mudslides, power loss, telecommunications failures and similar events. Despite our precautions, the occurrence of a natural disaster or other unanticipated problem at our network operations center or co-location centers (sites at which we will locate routers, switches and other computer equipment which make up the backbone of our network infrastructure) could cause interruptions in our services. The failure of our telecommunications providers to provide our required data communications capacity as a result of a natural disaster, of operational disruption or for any other reason could also cause interruptions in our services. Any damage or failure that causes interruptions in our operations could have a material adverse effect on our business, financial condition and results of operations.

Any compromises of the security measures we use to protect the highly sensitive biometric and other information we collect could be catastrophic to our business.

In addition to financial and biographic information, we will collect highly sensitive biometric information, such as fingerprints and iris scans, from participating travelers. We will rely on encryption and authentication technology to provide secure transmission of confidential information, but these security measures may be compromised or the confidential information may be stolen or unintentionally disclosed by us or other parties. The failure to prevent theft or unintended disclosures of confidential information or compromises of our security may disrupt our business, damage our reputation and expose us to litigation and liability. A party that is able to circumvent our security measures could misappropriate sensitive or proprietary information or materials, interrupt our systems, or otherwise damage our reputation or the property of our customers. If unauthorized parties obtain sensitive data and information, or create bugs or viruses or otherwise sabotage the functionality of our systems or products, we may receive negative publicity, incur liability to our customers or suffer termination of client contracts. 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 these breaches. Protective or remedial measures may not be available at a reasonable price or at all, or may not be entirely effective if commenced. We expect to obtain errors and omissions and professional liability insurance in part to address these risks, but we have not yet obtained such coverage and it may be insufficient to cover losses and liabilities that may result from theft or unintended disclosures of confidential information or security breaches. If any such theft or unintended disclosure of confidential information or compromise of our security were to occur, it could have a material adverse effect on our business, results of operations and financial condition.

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We may not be able to find attractive acquisition candidates as part of our growth strategy and, even if we do, we may not be able to integrate acquired companies.

We have entered into an agreement to acquire certain assets related to Unisys’s Registered Traveler business. However, in order to expand our Registered Traveler product offerings, we may need to acquire additional businesses, assets or securities of companies that we believe would provide a strategic fit with our business, such as companies involved in screening, remote check in, offsite baggage handling, and credentialing. We may not be able to identify acquisition targets and, if identified, we may not be able to complete transactions with these targets. Any business we acquire would need to be integrated with our existing operations. In addition, we could incur unknown or contingent liabilities of acquired companies. Difficulties in integrating the operations and personnel of any acquired companies could disrupt our business operations, divert management’s time and attention and impair relationships with and risk the possible loss of key employees and customers of the acquired business. Our failure to identify acquisition targets or to manage the integration of any acquisition could disrupt our business operations and harm our financial condition.

There is currently no established public trading market for our common stock and one may not develop.

As of December 10, 2007, there was no established public trading market for our common stock. In addition, there is a very limited number of public companies with any Registered Traveler operations. Although we have been in contact with a market maker and requested that it file with the FINRA OTC Compliance Unit the forms required in order to initiate quotations of our common stock on the OTCBB following Saflink’s planned spin-off of our shares, there may not be sufficient investor interest in our company for the development of an active trading market following the spin-off on the OTCBB or otherwise. If an active trading market does not develop, you may have difficulty selling any shares that you buy.

A majority of our board of directors is not independent, so the agreements we enter into may not be negotiated on as favorable of terms as they might have been if we had more independent directors.

Our board of directors currently includes Glenn L. Argenbright, Steven M. Oyer, Kevin Mitchell and Paul R. Aaronson. Only Mr. Aaronson is an “independent director” as defined under Rule 4200 of the NASDAQ Stock Market. Under this rule, Mr. Argenbright is not considered independent because he is an executive officer of FLO. Mr. Mitchell is not considered independent because of transactions in property or services between us and Business Travel Coalition, Inc., or BTC, where he serves as an executive officer. Mr. Oyer is not considered independent because of transactions in property or services between us and Saflink, where he serves as an executive officer. Accordingly, any contracts or agreements approved by our board of directors, including contracts or agreements with Saflink or BTC, will not be approved by independent directors. Our directors will generally recuse themselves from considering a transaction that poses a conflict of interest, disclosing to the remaining directors the information creating the conflict, and our remaining directors will consider whether the transaction is in our best interests and, if they so determine, approve the transaction. While we believe that this generally results in transactions with terms that are as favorable to us as those generally available from unaffiliated third parties, it is still possible that interested directors may influence corporate decisions in indirect ways, such as through relationships with other directors. In addition, while we expect to add independent directors in addition to Mr. Aaronson in the future, we cannot guarantee such additions.

Because Saflink controls approximately 23% of the total voting power of our issued and outstanding capital stock, it could significantly influence our affairs, which may impede or preclude other stockholders from being able to influence stockholder votes or corporate actions.

Saflink currently owns 100% of our issued and outstanding common stock and approximately 23% of the total voting power of our issued and outstanding capital stock. As a result, Saflink significantly influences, and until such time as it may distribute its shares of our common stock to its stockholders will continue to significantly influence, the vote on those corporate matters to be decided by our stockholders. Such concentrated

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ownership may decrease the value of our common stock and could significantly influence our affairs, which may impede or preclude other stockholders from influencing stockholder votes.

Item 2.

Plan of Operation

Overview

We provide a comprehensive solution for the Registered Traveler program. Through our solution, we plan to provide Registered Traveler program enrollment services using our enrollment stations, credentialing of TSA-approved registered travelers through the issuance of our proprietary smart card, and registered traveler authentication services at security checkpoints using our authentication kiosks. The smart cards we have developed and plan to issue to registered travelers are both secure and interoperable with other compliant Registered Traveler authentication stations. As a result, registered travelers enrolled with us will be able to use our smart cards issued to them at any airport participating in the Registered Traveler program.

Business Strategy

Our smart card is designed initially to be a stand-alone smart card credential for use at security checkpoints of airports participating in the Registered Traveler program. We expect to add other benefits to our smart card, such as payment functionality for debit, credit and stored-value transactions. In addition, we believe our solution will enable us to combine our smart card’s security and authentication features with a credit or debit card in the future to address issues such as credit card fraud and secure banking transactions.

Cash Requirements

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concierge access, resort services, corporate retreats, and banking and asset management services. We may derive additional revenues from sales of our enrollment stations, authentication kiosks and verification services to airports, as well as usage payments from our competitors for authentication services.

We do not expect that our cash on hand and cash generated from operations will be adequate to sustain our business operations for the next twelve months. In the nine months ended September 30, 2007, our average monthly negative cash flow was approximately $578,000, and we anticipate that such negative cash flows may increase materially as we expand our Registered Traveler business. We have not generated any revenue from our business, and we do not have a credit line or other borrowing facility to fund our operations. We believe that our currently available funds will only be sufficient to meet our anticipated cash needs through December 2007. If we do not generate sufficient revenues to fund our operations, we will need to raise additional funds through the issuance of equity or debt securities or other sources of financing in the future. In addition, on October 5, 2007, we entered into an asset purchase agreement with Unisys under which we agreed to purchase certain assets related to Unisys’s rtGO Registered Traveler business for $8.0 million. Currently, we do not have sufficient funds to complete the rtGO acquisition and we do not have any arrangements in place for any future financings. We intend to pay for the acquisition by releasing $1.2 million currently in escrow, deposited in connection with the acquisition, and paying the remaining $6.8 million in cash from a future financing. We may not be able to secure sufficient financing to complete the rtGO acquisition or other additional financing on favorable terms, or at all. We have shares of common stock and preferred stock available for future issuance without stockholder approval, and any additional financings will likely cause substantial dilution to existing stockholders. If we are unable to obtain the necessary additional financing, we would not be able to complete the rtGO acquisition and we may be required to reduce the scope of our operations or cease our operations.

Liquidity and Capital Resources

Since inception, our activities have consisted primarily of developing our Registered Traveler solution, including enrollment processes, a proprietary smart card, and authentication kiosks. Prior to our incorporation in March 2007, our operations were financed by Saflink. Following our incorporation, we have financed our operations primarily through the issuance of our convertible promissory notes, which included net cash proceeds of approximately $1.5 million, and through the issuance of our Series A preferred stock, which included net cash proceeds of approximately $8.2 million. In connection with this financing, Saflink transferred to us all of its Registered Traveler assets and certain liabilities related to its Registered Traveler business in exchange for a promissory note with a principal amount of $6.3 million and accruing interest at 8% per annum. In the third quarter of 2007, we financed our operations through the sale of our Series A preferred stock. On July 3, 2007, we raised approximately $4.7 million through the private placement of shares of our Series A preferred stock, which included net cash proceeds of approximately $4.5 million. On August 24, 2007, and September 13, 2007, we raised approximately $4.4 million and $197,000 in cash proceeds, respectively, through the private placement of shares of our Series A preferred stock to accredited investors. Our principal uses of cash have been, and we expect will continue to be, to fund our operations, capital expenditures, debt service requirements and general corporate purposes. We currently do not have a credit line or other borrowing facility to fund our operations.

Research and Development

Purchase or Sale of Plant or Equipment

In the next twelve months, we plan to make capital expenditures for enrollment and authentication infrastructure as may be required for the fulfillment of airport or airline contracts.

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Employees

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3.

Description of Property

In Chantilly, Virginia, we lease on a month-to-month basis approximately 566 square feet of office space under sublease that expires in May 2008. In Kirkland, Washington, pursuant to a transition services agreement with Saflink, we use approximately 1,000 square feet of office space leased by Saflink. We believe that our facilities are adequate to satisfy our projected requirements for the foreseeable future and that additional space will be available if needed. We do not currently own any real property.

Item 4.

Security Ownership of Certain Beneficial Owners and Management

The following tables set forth, as of December 10, 2007, information regarding beneficial ownership of our capital stock by:

•

each person, or group of affiliated persons, known by us to be the beneficial owner of 5% or more of any class of our voting securities;

•

each of our current directors and nominees;

•

each of our current named executive officers; and

•

all current directors and named executive officers as a group.

Beneficial ownership is determined according to the rules of the SEC. Beneficial ownership means that a person has or shares voting or investment power of a security and includes any securities that person or group has the right to acquire within 60 days after the measurement date, such as pursuant to warrants or conversion privileges in connection with our Series A preferred stock. This table is based on information supplied by officers, directors and principal stockholders. Except as otherwise indicated, we believe that each of the beneficial owners of the common stock listed below, based on the information such beneficial owner has given to us, has sole investment and voting power with respect to such beneficial owner’s shares, except where community property laws may apply.

For purposes of the columns for common stock and Series A preferred stock, in accordance with rules of the SEC, shares of common stock underlying securities that a person has the right to acquire within 60 days after the measurement date are deemed to be beneficially owned by such person for the purpose of computing the person’s percentage ownership but are not treated as outstanding for the purpose of computing any other person’s ownership percentage. The percentages of common stock on an as-converted basis were calculated assuming that all issued and outstanding shares of our Series A preferred stock have converted into shares our common stock, at a conversion ratio of 1-to-4,000 pursuant to our amended and restated certificate of incorporation, but assuming no exercise of issued and outstanding warrants.

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	Common Stock Beneficially Owned				Series A Preferred Stock Beneficially Owned		As-Converted Outstanding Common Stock
Name and Address of Beneficial Owner (1)	Total Outstanding	Shares Underlying Convertible Securities (2)	Total	Percent (3)	Total	Percent (4)	Total (5)	Percent (6)
*Directors and named executive officers*
Glenn L. Argenbright (7)	—	94,354	94,354	4.9%	18.8536	1.3%	75,414	1.3%
Steven M. Oyer (8) (16)	—	25,136	25,136	1.4%	3.1422	*	12,568	*
Kevin Mitchell	—	—	—	—	—	—	—	—
Paul R. Aaronson	—	—	—	—	—	—	—	—
Luke A. Thomas	—	—	—	—	—	—	—	—
Fred P. Fischer	—	—	—	—	—	—	—	—
All directors and executive officers as a group (7 persons)	—	119,490	119,490	6.4%	21.9958	1.5%	87,982	1.1%

*Beneficial owners of 5%*
Cranshire Capital LP (9)	—	199,213	199,213	9.9%	35.6122	2.4%	142,448	1.8%
Crescent Capital (10)	—	199,213	199,213	9.9%	35.6122	2.4%	142,448	1.8%
Entities affiliated with Enable Capital Management, LLC (11)	—	1,777,776	1,777,776	49.8%	213.1213	14.4%	852,484	11.0%
Forum Partners (12)	—	648,935	648,935	26.6%	81.1168	5.5%	324,467	4.2%
International RAM Associates, LLC (13)	—	603,315	603,315	25.2%	75.4143	5.1%	301,657	3.9%
Entities affiliated with Lyrical Opportunity (14)	—	1,777,776	1,777,776	49.8%	222.2221	15.0%	888,888	11.5%
Melleos Onshore Fund LLC (15)	—	414,879	414,879	18.8%	51.8599	3.5%	207,439	2.7%
Saflink Corporation (16)	1,793,118	—	1,793,118	100.0%	—	—	1,793,118	23.2%
Entities affiliated with Soundpost Capital (17)		1,111,108	1,111,108	38.3%	138.8885	9.4%	555,554	7.2%
SXJE LLC (18)	—	2,777,776	2,777,776	60.8%	347.2222	23.4%	1,388,888	18.0%

*	Less than one percent.

(1)

Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is FLO Corporation, 14000 Thunderbolt Place, Building R, Chantilly, Virginia 20151.

(2)	Represents the aggregate number of shares of our common stock underlying convertible securities, options or warrants exercisable within 60 days of December 10, 2007.

(3)

Calculated on the basis of 1,793,118 shares of our common stock issued and outstanding as of December 10, 2007, provided that any additional shares of common stock that a stockholder has the right to acquire within 60 days after December 10, 2007 are deemed to be outstanding for the purpose of calculating that stockholder’s percentage beneficial ownership.

(4)	Calculated on the basis of 1,482.9058 shares of our Series A preferred stock issued and outstanding as of December 10, 2007.

(5)

Represents issued and outstanding shares of our common stock and common stock issuable upon conversion of our Series A preferred stock, assuming the conversion of all of our issued and outstanding Series A preferred stock into shares of our common stock at a conversion ratio of 1-to-4,000, each as of December 10, 2007.

(6)

Calculated on the basis of 1,793,118 shares of our common stock issued and outstanding, and 5,931,623 shares of our common stock issuable upon the conversion of 1,482.9058 issued and outstanding shares our Series A preferred stock at an assumed conversion ratio of 1-to-4,000, each as of December 10, 2007.

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(7)	Includes 75,414 shares of common stock issuable upon conversion of Series A preferred stock and 18,940 shares of common stock issuable upon exercise of warrants.

(8)	Includes 12,568 shares of common stock issuable upon conversion of Series A preferred stock and 12,568 shares of common stock issuable upon exercise of warrants.

(9)

Includes 142,448 shares of common stock issuable upon conversion of Series A preferred stock and 56,765 shares of common stock issuable on exercise of warrants. Downsview Capital, Inc. is the general partner of Cranshire Capital, L.P. Mitchell P. Kopin is the president of Downsview Capital, Inc. and, as such, has voting and investment power. Downsview Capital, Inc. and Mr. Kopin disclaim beneficial ownership of such securities. The address of this stockholder is 3100 Dundee Road, Suite 703, Northbrook, IL 60062.

(10)

Includes 142,448 shares of common stock issuable upon conversion of Series A preferred stock and 56,765 shares of common stock issuable upon exercise of warrants. Cantara (Switzerland) SA is the investment advisor to Crescent International Ltd. Maxi Brezzi and Bachir Taleb-Ibrahimi are managers of Cantara (Switzerland) SA, and as such have authority to vote and dispose of the securities held by Crescent InternatioNal Ltd. Messrs. Brezzi and Taleb-Ibrahimi disclaim beneficial ownership of such securities. The address of this stockholder is 84 Avenue Louis-Casai, CH-1216, Cointrin/Geneva, Switzerland.

(11)

Includes 710,069 shares of common stock issuable upon conversion of Series A preferred stock and 710,070 shares of common stock issuable upon exercise of warrants held by Enable Growth Partners LP (“EGP”), 142,415 shares of common stock issuable upon conversion of Series A preferred stock and 56,798 shares of common stock issuable upon exercise of warrants held by Enable Opportunity Partners LP (“EOP”), 50,276 shares of common stock issuable upon conversion of Series A preferred stock and 44,078 shares of common stock issuable upon exercise of warrants held by Pierce Diversified Mast Fund LLC ENA (“PDMF”), and 44,444 shares of common stock issuable upon conversion of Series A preferred stock and 44,444 shares of common stock issuable upon exercise of warrants held by Pierce Diversified Strategy Master Fund LLC (“PDSMF”). Mitch Levine is the managing partner of EGP, EOP, PDMF and PDSMF and, as such, has voting and investment power. EGP, EOP, PDMF and MDSMF are affiliated with Enable Capital, LLC, a registered broker-dealer. EGP, EOP, PDMF and MDSMF have indicated to us that each acquired the securities in the ordinary course of business and, at the time of acquisition, did not have any plans or proposals, directly or with another person, to distribute the securities. The address for these stockholders is One Ferry Building, Suite 255, San Francisco, CA 94111.

(12)

Includes 324,467 shares of common stock issuable upon conversion of Series A preferred stock and 324,468 shares of common stock issuable upon exercise of warrants. Arnold Mullen is the managing partner of Forum Partners and, as such, has voting and investment power. The address of this stockholder is 3801 PGA Boulevard Street, 910, Palm Beach Gardens, FL 33410.

(13)

Includes 301,657 shares of common stock issuable upon conversion of Series A preferred stock and 301,658 shares of common stock issuable upon exercise of warrants. Chris Mashburn is president and chief executive officer of International RAM Associates, LLC and, by virtue of his positions, may be deemed to beneficially own such shares. Mr. Mashburn disclaims beneficial ownership of such shares. The address of this stockholder is 11044 Research Boulevard, Suite D-200, Austin, TX 78759.

(14)

Includes 462,622 shares of common stock issuable upon conversion of Series A preferred stock and 462,622 shares of common stock issuable upon exercise of warrants held by Lyrical Opportunity Partners II LP and 426,266 shares of common stock issuable upon conversion of Series A preferred stock and 426,266 shares of common stock issuable upon exercise of warrants held by Lyrical Opportunity Partners II Ltd. Jeffrey Keswin, as managing member of the general partner of Lyrical Opportunity Partners II, LP, and as director of Lyrical Opportunity Partners II, Ltd., has voting and investment power. The address of these stockholders is 405 Park Avenue, New York, NY 10022.

(15)

Includes 207,439 shares of common stock issuable upon conversion of Series A preferred stock and 207,440 shares of common stock issuable upon exercise of warrants. Melleos Capital Management LLC (“MCM”) is the managing member of Melleos Onshore Fund LLC. Kevin E. Melly, as managing member of MOF, has voting and investment power. The address of this stockholder is 10 East 40th Street, Suite 3601, New York, NY 10016.

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(16)

Lincoln D. Faurer, Gordon E. Fornell, Asa Hutchinson, Richard P. Kiphart, Trevor Neilson, and Steven M. Oyer comprise the board of directors of Saflink Corporation and, by virtue of such positions, may be deemed to have beneficial ownership of such shares. Mssrs. Faurer, Fornell, Hutchinson, Kiphart, Neilson, and Oyer disclaim beneficial ownership of such shares.

(17)

Includes 97,414 shares of common stock issuable upon conversion of Series A preferred stock and 97,414 shares of common stock issuable upon exercise of warrants held by HFR HE Soundpost Master Trust (“SMT”), 219,756 shares of common stock issuable upon conversion of Series A preferred stock and 219,756 shares of common stock issuable upon exercise of warrants held by Soundpost Capital Offshore, Ltd. (“SCO”), and 238,384 shares of common stock issuable upon conversion of Series A preferred stock and 238,384 shares of common stock issuable upon exercise of warrants held by Soundpost Capital, LP (“Soundpost Capital”). HFR Asset Management, LLC is investment manager to SMT, Soundpost Partners, LP is the trading manager to HFR Asset Management, LLC with respect to SMT, and Soundpost Investments, LLC (“Soundpost”) is the general partner of Soundpost Partners. Soundpost is also general partner to Soundpost Capital and director of SMT. Jamie Lester is the managing member of Soundpost. The address of SMT is 10 S. Riverside Plaza, Suite 700, Chicago, IL 60606 and the address of SCO and Soundpost Capital is 405 Park Avenue, 6th Floor, New York, NY 10022.

(18)

Includes 1,388,888 shares of common stock issuable upon conversion of Series A preferred stock and 1,388,888 shares of common stock issuable upon exercise of warrants. Sam Eyde, as managing member of SXJE LLC, has voting and investment power. The address of this stockholder is 2800 Bryon Circle, Lansing, MI 48912.

Item 5.

Directors and Executive Officers, Promoters and Control Persons

Directors

The following sets forth our current directors and information concerning their ages and background. All directors hold office until the next annual meeting of stockholders and until their respective successors are elected, except in the case of death, resignation or removal:


Name	Principal Occupation	Age	Director Since
Glenn L. Argenbright	President, Chief Executive Officer and Secretary, FLO Corporation	41	2007
Steven M. Oyer	Interim Chief Executive Officer, Saflink; President, Capital Placement Holdings, Inc.	52	2007
Kevin Mitchell	Chairman, Business Travel Coalition, Inc.	51	2007
Paul R. Aaronson	Financial consultant, self-employed	52	2007

Glenn L. Argenbright has served as our president, our chief executive officer, our secretary and a director since our formation in March 2007. Prior to joining us, Mr. Argenbright served as chief executive officer of Saflink, a security solutions company, from December 2000 to September 2006, at which time he became general manager of Saflink’s Registered Traveler Solutions group. Prior to joining Saflink, Mr. Argenbright served as president and chief executive officer of Jotter Technologies, which merged with Saflink in 2000. From May 1998 to November 1999, Mr. Argenbright served as president and chairman of the board of Spotlight Interactive, Inc., a web-incubator and venture capital firm. From February 1999 to August 1999, Mr. Argenbright also served as a director of and consultant to Today’s Communications Inc., a provider and aggregator of web content. From May 1998 to February 1999, Mr. Argenbright was a director and executive vice president of Intelligent Communications, Inc., an satellite internet access provider. From April 1997 to April 1998, Mr. Argenbright served as president and chief executive officer of Internet Extra Corporation, where he organized Internet Extra Media Placement (acquired by ValueClick, Inc.), an internet advertising and software company. Mr. Argenbright has served as a member of the board of directors of Saflink since December 2000. Mr. Argenbright received a bachelor’s degree in urban studies and political science from the University of California at San Diego and a juris doctorate from the University of San Diego.

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Steven M. Oyer has served as a member of our board of directors since our formation in March 2007. Mr. Oyer has served as a member of the board of directors of Saflink, a security solutions company, since December 2001 and as its interim chief executive officer since September 2006. Mr. Oyer is president and principal of Capital Placement Holdings, Inc., a New York advisory firm. Mr. Oyer previously served from October 2001 to August 2005 as managing director of Standard & Poor’s Investment Services, responsible for global business development. From December 2000 to June 2001, Mr. Oyer served as interim chief financial officer for Saflink. From October 1995 to November 2000, Mr. Oyer served as the vice president and regional director of Murray Johnstone International Ltd., a Scottish investment firm. Mr. Oyer is a member of the board of directors of Salton, Inc., a small appliance marketer and maker of the George Foreman Grills. He has been active in industry associations such as Family Office Exchange and has served on the leadership council of the Institute for Private Investors.

Kevin Mitchell has served as a member of our board of directors since November 2007. Mr. Mitchell has served as chairman of BTC, a publishing, consulting and buyer advocacy firm, since January 1997. From 1994 to 1996, Mr. Mitchell served as president of Business Travel Contractors Corporation, a strategic buying group. From 1989 to 1994, Mr. Mitchell served as vice president, conference and travel management, human resources and services, of CIGNA Corporation, a healthcare and financial services company. From 1982 to 1989, Mr. Mitchell served in a variety of executive and management positions with operating subsidiaries of CIGNA. Mr. Mitchell received a bachelor’s degree in International Relations from St. Joseph’s University.

Paul R. Aaronson has served as a member of our board of directors since November 2007. Mr. Aaronson has been self-employed as a financial services consultant since January 2006. From April 2005 to December 2005, Mr. Aaronson served as chief executive officer of PlusFunds Group, Inc., a hedge fund index asset manager. From February 2001 to April 2005, Mr. Aaronson served as executive managing director of Standard & Poor’s Portfolio Services Group, a global business that encompassed S&P’s index business and an investment advisory business. From December 1999 to December 2000, Mr. Aaronson served as managing director of Windrush Asset Management, LLC, a hedge fund manager. From July 1993 to August 1999, Mr. Aaronson was the global product manager of international equity index basket products and exchange traded funds in the Equity Derivatives group at Morgan Stanley. From June 1988 to July 1993, Mr. Aaronson also served as in-house counsel at Morgan Stanley in London, and he served as a securities attorney with the law firm of Sullivan & Cromwell from October 1983 to April 1988. Mr. Aaronson received a bachelor’s degree in history from Middlebury College and a juris doctorate from Yale Law School.

Executive Officers and Significant Employees

Our executive officers are generally elected annually at the meeting of our board of directors held in conjunction with the annual meeting of stockholders. The following sets forth our current executive officers and information concerning their age and background:


Name	Position	Age	Position Since
*Executive Officers*
Glenn L. Argenbright	Director—President, Chief Executive Officer and Secretary	41	2007
Luke A. Thomas	Executive Vice President, Strategy	43	2007
Colin C. McLaughlin	Senior Vice President, Aviation & Screening	35	2007
Fred P. Fischer	Senior Vice President, Sales	50	2007

Glenn L. Argenbright—for a biographical summary of Mr. Argenbright, see the “Directors” section of this Item 5.

Luke A. Thomas has served as our executive vice president, strategy, since our formation in March 2007. In this position, he oversees all operational facets and strategic initiatives relating to our Registered Traveler solution. Prior to joining us, Mr. Thomas served as an executive employee focusing on Registered Traveler

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operations for Saflink, a security solutions company, from May 2005 to March 2007, where he also served as director of strategic alliances and commercial sales from March 2003 to May 2005. From September 2000 to March 2003, Mr. Thomas was director of commercial sales for Identix, Inc. (now L1 Identity Solutions, Inc.), an identity solutions company. Prior to joining Identix, Mr. Thomas held various sales management and business development positions with healthcare software firms for 14 years. Mr. Thomas graduated from Pennsylvania State University with a bachelor’s degree in accounting and a minor in economics.

Colin C. McLaughlin has served as our senior vice president, aviation and screening since our formation in March 2007. In this position, Mr. McLaughlin manages our strategic initiatives and airport operations relating to the Registered Traveler program. Prior to joining us, Mr. McLaughlin served as vice president of the Registered Traveler Solutions group at Saflink, a security solutions company, from January 2007 to March 2007, where he also served as a senior director and sales manager from March 2003 to January 2007. From January 2001 to March 2003, Mr. McLaughlin served as a regional sales manager for Identix, Inc. (now L1 Identity Solutions, Inc.), an identity solutions company. From January 2000 to January 2001, Mr. McLaughlin held a software sales position at techies.com, a software reseller. From August 1998 to January 2000, Mr. McLaughlin served as a sales representative for Elliot Aviation, Inc., a certified dealer of Raytheon Beech aircrafts. Mr. McLaughlin graduated from the University of North Dakota with a bachelor’s degree in economics and a strategic focus in airport administration.

Fred P. Fischer has served as our senior vice president, sales, since our formation in March 2007. In this position, Mr. Fischer oversees corporate and strategic sales in connection with our Registered Traveler program. Prior to joining us, Mr. Fischer served as consultant for Saflink, a security solutions company, from January 2007 to March 2007. From December 2005 to December 2006, Mr. Fischer served as senior vice president, strategic sales for Verified Identity, a Registered Traveler service provider. From January 2005 to November 2005, Mr. Fischer served as senior account director at SITA, Inc., a global aviation industry technology provider. From June 2002 to September 2004, Mr. Fischer served as vice president of global sales at World Travel BTI, Inc., a travel services company. From May 2002 until April 2003, Mr. Fischer served as vice president of global business travel sales of American Express Travel Related Services, Inc. a credit card and travel service provider, where he also served as director of corporate card sales from May 1999 to May 2002, and technical sales manager from March 1996 to May 1999. From March 1987 to March 1996, Mr. Fischer served as automation sales manager for USAirways, Inc., an air travel provider. Mr. Fischer is a member of Association of Corporate Travel Executives’ Global Traveler Security committee.

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Item 6.

Executive Compensation

Summary Compensation Table

We were incorporated on March 9, 2007. No compensation was earned by, awarded to or paid to our principal executive officer and our two other most highly compensated executive officers in 2006, to whom we refer in other parts of this registration statement as our “named executive officers.”

Employment Agreements

We have entered into employment agreements with certain of our executive officers. Our employment arrangements with our named executive officers are described below.

Glenn L. Argenbright. Effective November 28, 2007, we entered into an employment agreement with Glenn L. Argenbright, our president, chief executive officer and secretary. Under his employment agreement, Mr. Argenbright is eligible to receive an annual base salary of $225,000 and incentive compensation based on achievement of targeted goals and objectives. Mr. Argenbright will be reimbursed for reasonable, out-of-pocket business expenses and is eligible for customary benefits generally available to our executive employees, subject to the terms and conditions of our plan documents. Our benefits currently include medical and dental care plans, flexible spending accounts for health and dependent care, a 401(k) plan, paid time off, and life insurance. Mr. Argenbright’s employment is “at will” and may be terminated by Mr. Argenbright or by us at any time, with or without cause. In the event Mr. Argenbright voluntarily resigns without good reason or we terminate him for cause, he will only receive his base salary then in effect and benefits earned and payable as of the date of termination. In the event Mr. Argenbright resigns with good reason or we terminate him without cause, subject to his compliance with the surviving terms of the employment agreement and his execution of a full general release, we must pay him a severance package. The severance package would include: (a) a lump sum amount equivalent to 9 months of his then-effective base salary plus benefits, payable on the next company payday; (b) payment of his COBRA insurance premiums for 9 months; (c) the right to retain his laptop computer and personal digital assistant, subject to his delivery of such devices to us for removal of proprietary information; and (d) 100% acceleration as of the termination date of all of his then-unvested options to acquire shares of our common stock.

Luke A. Thomas. Effective April 1, 2007, we entered into an employment agreement with Luke A. Thomas, our executive vice president, strategy. Under his employment agreement, Mr. Thomas is eligible to receive an annual base salary of $150,000 and incentive compensation based on achievement of targeted goals and objectives. Mr. Thomas will be reimbursed for reasonable, out-of-pocket business expenses and is eligible for customary benefits generally available to our executive employees, subject to the terms and conditions of our plan documents. Our benefits currently include medical and dental care plans, flexible spending accounts for health and dependent care, a 401(k) plan, paid time off, and life insurance. Mr. Thomas’s employment is “at will” and may be terminated by Mr. Thomas or by us at any time, with or without cause. In the event Mr. Thomas voluntarily resigns or we terminate him for cause, he will only receive his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Thomas without cause, we must provide him 30 days’ advance written notice and, subject to his compliance with the surviving terms of the employment agreement and his execution of a full general release, we must pay him a severance amount equivalent to 6 months of his then-effective base salary plus benefits.

Fred P. Fischer. Effective April 1, 2007, we entered into an employment agreement with Fred P. Fischer, our senior vice president, sales. Under his employment agreement, Mr. Fischer is eligible to receive an annual base salary of $158,700 and incentive compensation based on achievement of targeted goals and objectives. Mr. Fischer will be reimbursed for reasonable, out-of-pocket business expenses and is eligible for customary benefits generally available to our executive employees, subject to the terms and conditions of our plan documents. Our benefits currently include medical and dental care plans, flexible spending accounts for health and dependent care, a 401(k) plan, paid time off, and life insurance. Mr. Fischer’s employment is “at will” and may be terminated by Mr. Fischer or by us at any time, with or without cause. In the event Mr. Fischer

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voluntarily resigns or we terminate him for cause, he will only receive his base salary then in effect and benefits earned and payable as of the date of termination. In the event we terminate Mr. Fischer without cause, we must provide him 30 days’ advance written notice and, subject to his compliance with the surviving terms of the employment agreement and his execution of a full general release, we must pay him a severance amount equivalent to 4 months of his then-effective base salary plus benefits.

Outstanding Equity Awards at Fiscal Year End

As of December 31, 2006, we had no outstanding equity awards.

FLO Corporation 2007 Equity Incentive Plan

We have one equity incentive plan, the FLO Corporation 2007 Equity Incentive Plan, or our 2007 Plan. Our 2007 Plan is administered by our compensation committee. The purpose of our 2007 Plan is to advance the interests of the Company and our stockholders by attracting, retaining and rewarding persons performing services for us and to motivate such persons to contribute to our growth and profitability.

Issuance of Awards. The issuance of awards under our 2007 Plan is at the discretion of our board of directors, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2007 Plan, we may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other cash-based or stock-based awards to employees and consultants. Our 2007 Plan also authorizes the grant of awards of stock options, stock appreciation rights, restricted stock and restricted stock units to non-employee members of the board of directors and deferred compensation awards to officers, directors and certain management or highly compensated employees. Our 2007 Plan authorizes the issuance of up to 1,300,000 shares of our common stock for the foregoing awards. As of December 10, 2007, we had made no awards under our 2007 Plan and 1,300,000 shares were available for future awards under our 2007 Plan. We have not adopted any performance targets or other goals or objectives that must be met in order to issue awards under our 2007 Plan and we have not yet determined whether we will do so.

Exercise Price for Options. The exercise price per share for a stock option grant must be no less than 100% of the fair market value per share on the date of grant. The exercise price per share for an incentive stock option grant to an employee who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of stock of Saflink or any parent or subsidiary, must be no less than 110% of the fair market value per share on the date of grant. For nonstatutory stock option grants, the administrator determines the exercise price per share.

Payment of Exercise Price. Generally, the option exercise price may be paid in cash, by check, by cashless exercise, by net exercise or by tender or attestation of ownership of shares having a fair market value not less than the exercise price and that either (A) have been owned by the optionee for more than six months and not used for another exercise by tender or attestation, or (B) were not acquired, directly or indirectly, from us.

Exercisability and Vesting. At the time an award is granted, the administrator must fix the period within which the award may be exercised and determine any conditions that must be satisfied before the award may be exercised.

Term of Options. The maximum term of an option granted under our 2007 Plan is ten years.

Transferability of Awards. Options are nontransferable by the optionee other than by will or by the laws of descent and distribution and are exercisable during the optionee’s lifetime only by the optionee. Our 2007 Plan also limits the transferability of stock appreciation rights, restricted stock awards, restricted stock units and, prior to payment or settlement, performance awards, cash-based awards and other stock-based awards.

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Change in Control. Our 2007 Plan provides that in the event of our merger with or into another corporation, the sale of substantially all of our assets, or the sale or exchange of more than 50% of our voting stock, each outstanding award shall be assumed or an equivalent award substituted by the surviving, continuing, successor or purchasing corporation or a parent thereof. The administrator may also deem an award assumed if the award confers the right to the award-holder to receive, for each share of stock subject to an award immediately prior to the change in control, the consideration that a stockholder is entitled on the effective date of the change in control.

Amendment and Termination. The administrator may at any time amend, suspend or terminate our 2007 Plan.

Severance Arrangements

We have entered into employment agreements with Glenn L. Argenbright, our president, chief executive officer and secretary, Luke A. Thomas, our executive vice president, strategy, and Fred P. Fischer, our senior vice president, sales, which each contain a severance arrangement. Subject to his compliance with the surviving provisions terms of his employment agreement, if Mr. Argenbright resigns with good reason or is terminated without cause, he may receive (a) a lump sum amount equivalent to nine months of his then-effective base salary plus benefits, (b) payment of his COBRA insurance premiums for 9 months, (c) the right to retain his laptop computer and personal digital assistant, subject to his delivery of the such devices to us for removal of proprietary information, and (d) 100% acceleration as of the termination date of all of his then-unvested options to acquire shares of the our common stock. If terminated without cause and subject to their compliance with the surviving terms of their employment agreement, Mr. Thomas may receive a severance amount equivalent to six months of his then-effective base salary plus benefits and Mr. Fischer may receive a severance amount equivalent to four months of his then-effective base salary plus benefits.

Other Benefit Plans

Our employees, including our executive officers, are entitled to various employee benefits. These benefits include medical and dental care plans, flexible spending accounts for health and dependent care, a 401(k) plan, paid time off, and life insurance.

Compensation of Directors

Our directors currently do not receive compensation for their services to us as members of our board of directors. Our 2007 Plan authorizes the grant of awards of stock options, stock appreciation rights, restricted stock and restricted stock units to non-employee members of the board of directors and deferred compensation awards to directors. We expect that we will establish a compensation policy for non-employee members of our board of directors that includes equity and cash compensation for board and committee service as well as reimbursement for reasonable out-of-pocket expenses incurred in attending meetings of the board of directors and committee meetings.

Item 7.

Certain Relationships and Related Transactions and Director Independence

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This summary of certain agreements we have entered into with our stockholders does not purport to be complete and is qualified in its entirety by reference to the respective agreements, a copy of each of which is filed as an exhibit to this registration statement. We believe the terms and conditions set forth in such agreements are reasonable and customary for transactions of these types.

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Registration Rights Agreement

In connection with our Series A preferred stock financing, we entered into, and have amended, a registration rights agreement with certain of our stockholders. Parties to the agreement include Glenn L. Argenbright, our president, our chief executive officer, our secretary and a director, Steven M. Oyer, a director, and other investors in our Series A preferred stock financing who now beneficially own 5% of our capital stock, including Enable Growth Partners LP, Enable Opportunity Partners LP, Lyrical Opportunity Partners II LP, Lyrical Opportunity Partners II Ltd, Melleos Onshore Fund LLC, Forum Partners, International RAM, Cranshire Capital LP, Crescent Capital, London Family Trust, Robert S. London, Trustee, Nite Capital, Mary Farrell, Pierce Diversified Master Fund LLC ENA, Soundpost Capital Offshore, Ltd., Soundpost Capital, LP, Soundpost Master Trust, Saflink, SXJE LLC and ViewTrade Securities, Inc. Under the agreement, we agreed to file with the SEC a registration statement to register our common stock under the Securities Exchange Act of 1934, as amended, or the Exchange Act, on or before October 5, 2007. We agreed to use commercially reasonable efforts to file with the SEC a registration statement covering the resale of the shares of common stock issuable upon conversion of our Series A preferred stock and upon the exercise of the Series A-1 warrants and the Series A-2 warrants and to keep this registration statement continuously effective for up to three years after the effective date. The maximum number of shares of our common stock issuable upon conversion of the Series A preferred stock is 5,931,612 and the maximum number of shares of our common stock issuable upon the exercise of the Series A-1 warrants and the Series A-2 warrants is 7,117,938.

Asset Purchase

On April 16, 2007, we purchased all of Saflink’s assets and assumed certain liabilities related to its Registered Traveler business. We paid $6.3 million for the assets by issuing Saflink a promissory note that accrues interest at 8% per annum and is due April 16, 2008. On August 24, 2007, we paid Saflink the remaining principal balance of the promissory note through a combination of cash and the cancellation of approximately $1.9 million of outstanding Saflink debt that had been assigned to us. At the time of the asset purchase, Saflink owned all of our issued and outstanding shares of common stock. Saflink continues to own all of our issued and outstanding shares of common stock and approximately 23% of the total voting power of our issued and outstanding capital stock.

Promissory Note Issued by Saflink to Glenn L. Argenbright

In connection with Saflink’s severance agreement with Glenn L. Argenbright, Saflink issued Mr. Argenbright a promissory note for $140,000 accruing interest at 8% per annum and due and payable in four equal quarterly installments, with the first such installment due April 1, 2008. Mr. Argenbright, our president, our chief executive officer, our secretary and a director, participated in our April 2007 issuance of approximately $3.5 million in aggregate convertible promissory notes, which automatically converted into our Series A preferred stock in connection with our Series A preferred stock financings in July and August of 2007. In consideration for $150,000 in convertible notes in that offering, Mr. Argenbright paid us $10,000 in cash and assigned us the $140,000 note issued to him by Saflink, which at the time of the transaction owned all of our issued and outstanding common stock. Saflink continues to own all of our issued and outstanding shares of common stock and approximately 23% of the total voting power of our issued and outstanding capital stock. We have cancelled the $140,000 note in exchange for a dollar-for-dollar reduction in the principal amount of debt we owed to Saflink. We believe that the terms and conditions of the note were reasonable and customary for a transaction of this type.

Software Development Agreement

On May 29, 2007, we entered into a software development agreement with International RAM. Chris Mashburn, a former director, serves as Chief Executive Officer and President of International RAM. Under the agreement, International RAM agreed to develop technical designs for and use its best efforts to complete our facility server application, authentication application and related software, components and code. We will own

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all materials, software, tools, data, inventions, works of authorship and other innovations that International RAM may develop in the course of performing its services to us, and we acquired certain licenses of International RAM’s prior intellectual property. During the term of the agreement, International RAM employees assigned to the project may not perform services or provide material or information to any of our competitors. We will pay hourly fees according to a fee schedule to International RAM, reimburse its approved out-of-pocket expenses, and pay taxes in connection with the services its provides. We have paid $300,000 to International RAM as a deposit against the costs and fees that accrue under the agreement, which we expect will be the total dollar value of the transaction. We may terminate the agreement for any reason upon 30-days written notice, and either party may terminate the agreement immediately in the event of a material breach.

Consulting Agreement

On June 8, 2007, we entered into a consulting agreement with BTC. Kevin Mitchell, a director, serves as chairman of BTC. Under the agreement, BTC agreed to provide marketing, communications, industry advisory, and strategic consulting services to us. During the consulting period, we will pay a monthly fee of $20,000 to BTC and reimburse its approved out-of-pocket expenses. We expect that the dollar value involved in the transaction, assuming the agreement continues through its term, will be approximately $720,000. The agreement will continue until February 28, 2010 unless earlier terminated. Either party may terminate the agreement for any reason upon 60-days written notice or immediately upon the other party’s uncured material breach.

Director Independence

Under Rule 4200 of the NASDAQ Stock Market, an “independent director” means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. A director is not independent under this standard if the director is, or at any time during the past three years was, employed by the company, or if the director is an executive officer of any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, subject to certain exclusions.

Under Rule 4200 of the NASDAQ Stock Market, Paul R. Aaronson is considered independent. Glenn L. Argenbright is not considered independent because he is an executive officer of FLO. Steven M. Oyer is not considered independent because of transactions in property or services between us and Saflink, where he serves as an executive officer. Kevin Mitchell is not considered independent because of transactions in property or services between us and BTC, where he serves as an executive officer.

Item 8.

Description of Securities

General

As of December 10, 2007, our authorized capital stock consisted of:

•

100,000,000 shares of common stock, par value $0.001; and

•

15,000,000 shares of preferred stock, par value $0.001.

As of December 10, 2007, 1,793,118 shares of common stock were issued and outstanding and 1,482.9058 shares of preferred stock were issued and outstanding. All of our currently issued and outstanding shares of capital stock were validly issued, fully paid and non-assessable under the Delaware General Corporation Law, as amended, or the DGCL.

Set forth below is a summary description of all the material terms of our capital stock and issued and outstanding warrants. This description is qualified in its entirety by reference to our amended and restated certificate of incorporation, bylaws and form of warrants, each of which is filed as an exhibit to this registration statement.

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Common Stock

All shares of common stock are equal to each other with respect to voting, liquidation, dividend and other rights. Holders of shares of common stock are entitled to one vote for each share of common stock owned in all proceedings in which action may or is required to be taken by stockholders. Holders of shares of common stock are entitled to receive such dividends as may be declared by the board of directors out of funds legally available therefor and, upon liquidation, are entitled to participate pro rata in a distribution of assets available for such a distribution to stockholders.

There are no conversion, preemptive, or other subscription rights or privileges with respect to any shares of our common stock. Our common stock does not have cumulative voting rights, which means that the holders of more than 50% of the shares voting in an election of directors may elect all of the directors if they choose to do so. In such event, the holders of the remaining shares aggregating less than 50% would not be able to elect any directors.

We have neither declared nor paid any dividends with respect to our common stock. In addition, we currently intend to retain any and all earnings in order to provide funds for the operation and expansion of our business and for the servicing and repayment of indebtedness. As such, we do not expect to pay cash, stock or other dividends with respect to any of our common stock in the foreseeable future. Any determination to pay dividends on our stock in the future will be at the sole discretion of our board of directors.

Preferred Stock

The board of directors has the authority, without action by our stockholders, to issue preferred stock and to fix voting powers for each class or series of preferred stock, and to provide that any class or series may be subject to redemption, entitled to receive dividends, entitled to rights upon dissolution or convertible or exchangeable for shares of any other class or classes of capital stock. The rights with respect to a series or class of preferred stock may be greater than the rights attached to our common stock. It is not possible to state the actual effect of the issuance of any shares of our preferred stock on the rights of holders of our common stock until our board of directors determines the specific rights attached to that preferred stock. The effect of issuing preferred stock could include one or more of the following:

•

restricting dividends in respect of our common stock;

•

diluting the voting power of our common stock or providing that holders of preferred stock have the right to vote on matters as a class;

•

impairing the liquidation rights of our common stock; or

•

delaying or preventing a change in control of us.

As of December 10, 2007, 1,482.9058 shares of Series A preferred stock were issued and outstanding. Our amended and restated certificate of incorporation designates 2,000 shares of our preferred stock as Series A preferred stock, par value $0.001 per share. The following is a summary of the material terms of the Series A preferred stock. Our amended and restated certificate of incorporation, which sets forth the powers, designations, preferences, rights and qualifications, limitations and restrictions of the Series A preferred stock, has been filed with the SEC as an exhibit to this registration statement.

Ranking

Our Series A preferred stock is senior to our common stock with respect to rights upon our liquidation, winding up, dissolution and with respect to dividends. Unless and until all required dividends on issued and outstanding shares of Series A preferred stock have been paid or declared and set apart for payment, we may not make any distribution, whether by way of dividend or otherwise with respect to the shares of any other class or series of our equity securities.

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Dividends

Commencing June 15, 2008, holders of our Series A preferred stock are entitled to receive dividends at an annual rate of 8% of the original issue price, which was $9,000 per share. Dividends are payable on the 15th of each June, are cumulative whether or not they are declared, and compound (if not paid within five days of the required payment date) on June 15th of each year. We may pay the dividends on our Series A preferred stock either in cash or in shares of our common stock, at our option (but subject to certain conditions), based on the market value of our common stock at the time the dividend becomes payable. In the event that we pay distributions (other than cash dividends) on our common stock, the holders of our Series A preferred stock are entitled to receive such dividends on an as-converted basis.

Conversion of Preferred Stock into Common Stock

Each share of our Series A preferred stock is convertible, at the option of the holder, or automatically upon the occurrence of certain events, into a number of shares of our common stock equal to $9,000 divided by the conversion price for the Series A preferred stock, initially set at $2.25 per share but subject to anti-dilution adjustments.

Our Series A preferred stock will automatically convert into shares of our common stock (i) if the closing trading price of our common stock for any period of 20 consecutive trading days is at least $7.00 (subject to adjustments for any consolidations, combinations, stock distributions, stock dividends, stock splits or similar events) and a registration statement under the Securities Act of 1933, as amended, or the Securities Act, covering the resale of the shares of common stock issuable upon conversion of the Series A preferred stock is effective, (ii) upon certain transactions, such a merger, consolidation or reorganization, resulting in a change in control of us, or (iii) upon an equity financing transaction yielding at least $10.0 million in gross proceeds to us.

If before July 3, 2008, we complete a subsequent financing involving a private placement of equity securities, the holders of our Series A preferred stock may participate in such subsequent financing by purchasing securities offered in the subsequent financing in exchange for such holder’s shares of our Series A preferred stock, whose value for such purposes will be the original purchase price of $9,000 per share.

Voting Rights

Each holder of Series A preferred stock is entitled to vote, on an as-converted basis, on all matters on which holders of our common stock are entitled to vote. The holders of shares of Series A preferred stock and common stock generally vote together as a single class on all matters.

Liquidation Preference

Upon our liquidation, dissolution or winding up, whether voluntary or involuntary, the holders of our Series A preferred stock will be entitled to receive, first and with priority over holders of our common stock or any other class or series of our equity securities, the original purchase price of $9,000 per share plus any accrued and unpaid dividends on each share of Series A preferred stock. The balance of any assets or surplus funds shall be distributed to holders of our common stock.

Warrants

Series A-1 and Series A-2 Warrants. In July, August and September 2007, in connection with our issuance of Series A preferred stock, we issued Series A-1 warrants to purchase an aggregate of 3,558,969 shares of our common stock and Series A-2 warrants to purchase an aggregate of 3,558,969 shares of our common stock. The Series A-1 warrants have an initial exercise price of $3.00 per share and the Series A-2 warrants have an initial exercise price of $4.00 per share. The warrants are exercisable for a period of five years from the date of their issuance. Subject to an effective registration statement covering the shares issuable upon exercise of the Series

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A-1 warrants, the Series A-1 warrants may be redeemable by us if our common stock has a minimum closing bid of $6.00 per share for 20 consecutive trading days. The Series A-2 warrants are not redeemable. The exercise price of the warrants is subject to adjustment to provide certain anti-dilution protections to holders. The shares into which the warrants are exercisable are subject to resale registration rights.

Placement Agent’s Warrants. Bathgate Capital Partners LLC acted as our placement agent for our April 2007 convertible note offering. In connection with the conversion of the convertible notes on August 24, 2007, we issued to Bathgate warrants to purchase 178,079 shares of our common stock for $2.25 per share, warrants to purchase 89,039 shares of our common stock for $3.00 per share and warrants to purchase 89,039 shares of our common stock for $4.00 per share. The placement agent warrants are exercisable for a period of five years from the date of their issuance. The placement agent warrants contain a cashless exercise provision and standard anti-dilution provisions for stock splits and stock dividends. The shares into which the placement agent warrants are exercisable are subject to resale registration rights.

ViewTrade Securities, Inc. acted as our placement agent for our Series A preferred stock financing. In connection with the closing of that equity offering, we issued to ViewTrade placement agent warrants for the purchase of 830,159 shares of our common stock, 415,079 of which are exercisable at $2.25 per share, 207,540 are exercisable at $3.00 per share and 207,540 are exercisable at $4.00 per share. The placement agent warrants are exercisable for a period of five years from the date of their issuance. The placement agent warrants contain a cashless exercise provision and standard anti-dilution provisions for stock splits and stock dividends. The shares into which the placement agent warrants are exercisable are subject to resale registration rights.

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PART II

Item 1.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information

As of December 10, 2007, there was no established public trading market for our common stock. As of December 10, 2007, we had 1,793,118 shares of common stock issued and outstanding held by one holder of record, Saflink, and 13,656,342 shares of our common stock are issuable upon conversion of outstanding convertible preferred stock and exercise of outstanding warrants held by approximately 55 holders of record. Saflink’s board of directors has decided to spin-off its ownership stake in us by distributing its shares of our common stock to its stockholders on a pro rata basis through the declaration of a special in-kind dividend. We expect that our common stock will be quoted on the OTCBB following the spin-off. We have been in contact with a market maker and requested that it file a Form 211 with the FINRA OTC Compliance Unit in order to quote our common stock. Approval of the Form 211 is required to initiate quotations on the OTCBB, the “Pink Sheets” or any other comparable quotation medium pursuant to SEC Rule 15c2-11.

Shares Eligible for Future Sale

As of December 10, 2007, all of our issued and outstanding shares of common stock were “restricted securities,” none of them are freely tradable, and none may currently be sold pursuant to Rule 144 under the Securities Act. Subject to the provisions of Rules 144 and 144(k), additional shares may become available for sale as set forth below.

Registration Rights Agreement

In connection with our Series A preferred stock financing, we entered into, and have amended and restated, a registration rights agreement with certain of our stockholders. Parties to the agreement include Glenn L. Argenbright, our president, our chief executive officer, our secretary and a director, Steven M. Oyer, a director, and other investors in our Series A preferred stock financing who now beneficially own 5% of our capital stock, including Enable Growth Partners LP, Enable Opportunity Partners LP, Lyrical Opportunity Partners II LP, Lyrical Opportunity Partners II Ltd, Melleos Onshore Fund LLC, Forum Partners, International RAM, Cranshire Capital LP, Crescent Capital, London Family Trust, Robert S. London, Trustee, Nite Capital, Mary Farrell, Pierce Diversified Master Fund LLC ENA, Soundpost Capital Offshore, Ltd., Soundpost Capital, LP, Soundpost Master Trust, Saflink, SXJE LLC and ViewTrade Securities, Inc. Under the agreement, we agreed to file with the SEC a registration statement to register our common stock under the Securities Exchange Act of 1934, as amended, or the Exchange Act, on or before October 5, 2007. We agreed to use commercially reasonable efforts to file with the SEC a registration statement covering the resale of the shares of common stock issuable upon conversion of our Series A preferred stock and upon the exercise of the Series A-1 warrants and the Series A-2 warrants and to keep this registration statement continuously effective for up to three years after the effective date. The maximum number of shares of our common stock issuable upon conversion of the Series A preferred stock is 5,931,612 and the maximum number of shares of our common stock issuable upon the exercise of the Series A-1 warrants and the Series A-2 warrants is 7,117,938.

Any shares that are successfully registered under the Securities Act pursuant to the registration rights agreement will be freely tradable.

Spin-off of FLO Shares by Saflink

Currently, Saflink owns 1,793,118 shares of our common stock, representing all or our issued and outstanding common stock and approximately 23% of the total voting power of our issued and outstanding capital stock. Saflink’s board of directors has decided to spin-off its ownership stake in us by distributing its

A-35

shares of our common stock to its stockholders on a pro rata basis through the declaration of a special in-kind dividend. We expect that Saflink will conduct the spin-off in accordance with the guidance provided by Staff Legal Bulletin No. 4 issued by the staff of the Division of Corporation Finance of the Securities and Exchange Commission, or SEC.

We expect Saflink to provide its stockholders an information statement that describes the spin-off in more detail.

Rule 144

In general, Rule 144 of the Securities Act as currently in effect provides that a person may sell within any three month period a number of shares of the issuer that does not exceed the greater of:

•

1% of the total number of such issuer’s shares of common stock then outstanding, which, in our case, equals approximately 17,931 shares as of December 10, 2007; or

•

the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of notice on Form 144 with respect to the sale;

subject to a requirement that any “restricted” shares have been beneficially owned for at least one year, including the holding period of any prior owner that was not an affiliate. An “affiliate” is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with an issuer. Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 144(k)

Under Rule 144(k) of the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been our affiliate at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years (including the holding period of any prior owner other than an affiliate), is entitled to sell these shares under Rule 144(k) without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Therefore, unless otherwise restricted, “144(k)” shares may be sold immediately.

Dividend Policy

Securities Authorized for Issuance Under Equity Compensation Plans

We have one equity incentive plan, our 2007 Plan. Under our 2007 Plan, we may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other cash-based or stock-based awards to employees and consultants. Our 2007 Plan also authorizes the grant of awards of stock

A-36

options, stock appreciation rights, restricted stock and restricted stock units to non-employee members of the board of directors and deferred compensation awards to officers, directors and certain management or highly compensated employees. Our 2007 Plan authorizes the issuance of up to 1,300,000 shares of our common stock for the foregoing awards. As of December 10, 2007, we had made no awards under our 2007 Plan and 1,300,000 shares were available for future awards under our 2007 Plan and we have not yet determined whether we will do so.

Item 2.

Legal Proceedings

We are not a party to any pending legal proceedings and we are unaware of any proceeding contemplated by a governmental authority.

Item 3.

Changes in and Disagreements with Accountants

Not applicable.

Item 4.

Recent Sales of Unregistered Securities

In connection with our formation, on March 20, 2007, we issued 100 shares of our common stock to Saflink for aggregate cash consideration of $1. We relied on the exemption from securities registration set forth in Section 4(2) of the Securities Act in connection with this transaction. On July 3, 2007, we conducted a 1,793,118-for-100 stock split pursuant to which we issued 1,793,118 shares of our common stock to Saflink.

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Item 5.

Indemnification of Directors and Officers

Section 102 of the DGCL allows a corporation to eliminate the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of a fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the corporation’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies if (i) such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (ii) such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses (including attorneys’ fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his duties to the corporation, unless a court believes that in light of all the circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director who willfully and negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

Our amended and restated certificate of incorporation states that, to the fullest extent permitted by the DGCL, no director shall be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as director.

Our bylaws provide that we shall, to the fullest extent authorized by the DGCL, indemnify any person who was or is made a party or threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative, is or was our director or officer or is or was serving at our request as a director or officer of another corporation, or as a controlling person of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer, against all expenses, liability or loss reasonably incurred or suffered by such person in connection with such action, suit or proceeding. Our bylaws also provide that we may enter into one or more agreements with any director, officer, employee or agent of ours, or any person serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, that provides for indemnification rights equivalent to or, if our board of directors so determines, greater than, those provided for in such bylaws.

We intend to purchase and maintain insurance on behalf of any person who is a director or officer against any loss arising from any claim asserted against and incurred by the person in any such capacity, subject to certain exclusions.

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Report of Independent Registered Accounting Firm

To the Board of Directors

FLO Corporation

Chantilly, VA

We have audited the accompanying balance sheets of FLO Corporation (a development stage company) as of December 31, 2005 and 2006 and the related statements of expenses, changes in stockholders’ deficit, and cash flows for the seven months ended December 31, 2005 and the year ended December 31, 2006 and the period from inception (June 1, 2005) to December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of FLO Corporation as of December 31, 2005 and 2006, and the results of its operations and its cash flows for the seven months ended December 31, 2005 and the year ended December 31, 2006 and the period from inception (June 1, 2005) to December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BDO Seidman, LLP

Seattle, Washington

October 5, 2007

A-F-1

FLO CORPORATION

(A Development Stage Company)

BALANCE SHEETS

(Audited)

(In thousands)


	December 31, 2006			December 31, 2005
ASSETS
Furniture and equipment, net of accumulated depreciation of $17 and $5 as of December 31, 2006, and December 31, 2005, respectively	$	28		$	7

Total assets	$	28		$	7


LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	163		$	—
Accrued expenses		44			19

Total current liabilities		207			19

Total liabilities		207			19
Stockholders’ deficit:
Investment from parent company		3,490			424
Losses accumulated during development stage		(3,669	)		(436	)

Total stockholders’ deficit		(179	)		(12	)

Total liabilities and stockholders’ deficit	$	28		$	7

See accompanying notes to audited financial statements.

A-F-2

FLO CORPORATION

(A Development Stage Company)

STATEMENTS OF EXPENSES

(Audited)

(In thousands, except per share data)


	Twelve months ended December 31, 2006			From inception (June 1, 2005) through December 31, 2005			From inception (June 1, 2005) through December 31, 2006
Operating expenses:
Product development	$	1,156		$	69		$	1,225
Sales, general and administrative		2,077			367			2,444

Net loss	$	(3,233	)	$	(436	)	$	(3,669	)

Pro forma basic and diluted net loss per common share	$	(1.80	)
Pro forma weighted average number of common shares outstanding		1,793

See accompanying notes to audited financial statements.

A-F-3

FLO CORPORATION

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Audited)

(In thousands)


	Twelve months ended December 31, 2006			From inception (June 1, 2005) through December 31, 2005			From inception (June 1, 2005) through December 31, 2006
Cash flows from operating activities:
Net loss	$	(3,233	)	$	(436	)	$	(3,669	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		12			5			17
Changes in operating assets and liabilities:
Accounts payable		163			—			163
Accrued expenses		25			19			44

Net cash used in operating activities		(3,033	)		(412	)		(3,445	)

Cash flows from investing activities:
Purchases of furniture and equipment		(33	)		(12	)		(45	)

Net cash used in investing activities		(33	)		(12	)		(45	)

Cash flows from financing activities:
Investment from parent company		3,066			424			3,490

Net cash provided by financing activities		3,066			424			3,490

Net decrease in cash and cash equivalents		—			—			—
Cash and cash equivalents at beginning of period		—			—			—

Cash and cash equivalents at end of period	$	—		$	—		$	—

See accompanying notes to audited financial statements.

A-F-4

FLO CORPORATION

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Audited)

(In thousands)


	Investment from parent company		Accumulated deficit			Total stockholders’ deficit
Balance at June 1, 2005	$	—	$	—		$	—
Net loss attributable to common stockholders		—		(436	)		(436	)
Investment from parent company		424		—			424

Balance at December 31, 2005		424		(436	)		(12	)

Net loss attributable to common stockholders		—		(3,233	)		(3,233	)
Investment from parent company		3,066		—			3,066

Balance at December 31, 2006	$	3,490	$	(3,669	)	$	(179	)

See accompanying notes to audited financial statements.

A-F-5

FLO CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(AUDITED)

1. Description of Business

FLO Corporation (the “Company”) offers a comprehensive solution for the Registered Traveler program (“RT program”), which is administered by the U.S. Transportation Security Administration (the “TSA”). The Registered Traveler program is designed to identify air passengers who pose a minimal security risk and then to provide those passengers with access to faster and simpler processing at airport security checkpoints.

The Company has designed its solution to provide Registered Traveler program enrollment services using enrollment stations, credentialing of TSA-approved registered travelers through the issuance of a proprietary smart card, and registered traveler authentication services at security checkpoints using authentication kiosks. The smart cards the Company expects to issue to registered travelers are designed to be both secure and interoperable with Registered Traveler authentication stations deployed by other TSA-approved service providers. As a result, registered travelers who enroll with the Company would be able to use the Company’s smart cards at any airport participating in the Registered Traveler program.

The Company was incorporated in the State of Delaware on March 9, 2007, as a wholly-owned subsidiary of Saflink Corporation, a security solutions company. The Company maintains its headquarters in Chantilly, Virginia. Prior to March 9, 2007, the Company began operation on June 1, 2005 as a division of Saflink Corporation known as the Registered Traveler Solutions Group. Saflink Corporation was incorporated in the State of Delaware on October 23, 1991, and maintained its headquarters in Kirkland, Washington.

The Company reports as a development stage company because planned principal operations have not commenced and there have been no revenues generated to date.

2. Liquidity and Capital Resources

These financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management plans to continue to finance operations with a combination of equity or debt issuances, other debt arrangements and, in the longer term, sales of products and services. If adequate funds are not available, the Company may be required to reduce the scope of, delay or eliminate some or all of the planned research, development and commercialization activities or obtain funds through collaborative arrangements with others that could limit the Company’s ability to control its operations.

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements present audited financial information for the Company, which operated as a division of Saflink known as the Registered Traveler Solutions Group for all periods presented. The accompanying financial statements have been prepared on the basis that the assets and liabilities of Saflink Corporation’s business were transferred using the historical carrying values as recorded by Saflink Corporation and the Company’s statements of expenses and cash flows were derived from Saflink Corporation’s historical financial statements. The Company’s statements of expenses include allocations of certain Saflink Corporation

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expenses that were based on a number of factors, including personnel, employee benefits, office space and data processing. The Company believes these allocations to be reasonable and does not believe that its expenses would have been higher had it been a stand-alone, independent business during the periods presented. The financial information is not necessarily indicative of the financial results that would have occurred had the Company been operated as a separate, stand-alone entity during the reporting periods nor is it necessarily indicative of future results.

Use of Estimates

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the balance sheets and expenses for the periods. Actual results could differ from those estimates. Significant estimates used in preparation of the audited financial statements include the allocation of compensation and related benefits of Saflink employees, as well as occupancy and general and administrative expenses, between activities related to Saflink Corporation’s Registered Traveler operations and Saflink Corporation’s other operations.

Investment from Parent Company

The investment from parent company presented on the balance sheets represents operating expenses paid by Saflink Corporation that were allocated to the Registered Traveler Solutions Group.

Furniture and Equipment

Furniture and equipment is stated at original cost. Depreciation is computed on a straight-line basis over the estimated useful lives of three to five years. Furniture and equipment purchased by Saflink Corporation specifically for its Registered Traveler Solutions Group is included on the balance sheets.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Operating Expenses

Operating expenses consist of specifically identified product development, sales, general and administrative and associated legal, consulting, payroll and other expenses for Saflink Corporation’s Registered Traveler Solutions Group. In addition, operating expenses include an allocation of Saflink Corporation occupancy and indirect general and administrative expenses.

The following is a description of operating expenses incurred by the Company for the periods presented:

Product Development—Product development expenses consist primarily of salaries, benefits, stock-based compensation, supplies and materials for software developers, hardware engineers and product architects that were focused on development of the Company’s Registered Traveler solution. Product development expenses also include fees paid for outsourced software development and hardware design and an allocation of Saflink Corporation’s occupancy expenses.

Sales, General and Administrative—Sales, general and administrative expenses consist primarily of salaries, bonuses, and stock-based compensation earned by sales and general and administrative personnel. Sales, general and administrative expenses also include trade shows, advertising and promotional expenses, legal and consulting fees, travel and entertainment costs, and an allocation of Saflink Corporation’s occupancy and indirect general and administrative expenses.

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Stock-Based Compensation

Prior to incorporation, the Company’s employees were issued certain stock options under the Saflink Corporation 2000 Stock Incentive Plan. These options were expensed using the fair value method as described in Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share Based Payment” (“SFAS 123R”) and the expense related to the Company’s employees has been reflected in the accompanying financial statements. The Company has established the FLO Corporation 2007 Equity Incentive Plan but, as of October 5, 2007, has made no awards under it.

Recently Issued Accounting Standards

The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB No. 109” (“FIN 48”) on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no liability for unrecognized income tax benefits at December 31, 2006.

In May 2007, the FASB issued FSP FIN 48-1, Definition of a Settlement in FASB Interpretation No. 48 (“FSP FIN 48-1”). FSP FIN 48-1 clarifies when a tax position is considered settled under FIN 48. Under FSP FIN 48-1, a tax position is considered “effectively settled” upon completion of the examination by the taxing authority without being legally extinguished. For “effectively settled” tax positions, a company can recognize the full amount of the tax benefit. FSP FIN 48-1 is effective upon a company’s adoption of FIN 48. FSP FIN 48-1 did not have a material impact on the Company’s financial position or results of operations.

The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. At December 31, 2006, the Company had no accrued interest related to uncertain tax positions and no accrued penalties.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to provide additional information that will help investors and other financial statement users to more easily understand the effect of the company’s choice to use fair value on its earnings. Finally, SFAS 159 requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS 157 (see below). The Company is currently assessing the impact of SFAS 159 which it will be required to adopt no later than the first quarter of its 2008 fiscal year.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and also expands information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other accounting standards require or permit assets and liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is currently assessing the impact of SFAS 157 which it will be required to adopt no later than the first quarter of its 2008 fiscal year.

4. Comprehensive Loss

For the year ended December 31, 2006 and the period from inception (June 1, 2005) through December 31, 2005, the Company had no components of other comprehensive loss; accordingly, total comprehensive loss equaled the net loss for the respective periods.

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5. Segment Information

In accordance with SFAS No. 131, “Disclosure About Segments of an Enterprise and Related Information,” operating segments are defined as revenue-producing components of an enterprise for which discrete financial information is available and whose operating results are regularly reviewed by the Company’s chief operating decision maker. The Company’s management and chief operating decision maker review financial information on a condensed basis and, therefore, the Company operated as single segment for all periods presented.

6. Pro Forma Net Loss Per Share

On March 20, 2007, the Company issued 100 shares of its common stock to Saflink Corporation for $1.00. On July 3, 2007, the Company conducted a 1,793,118-for-100 stock split pursuant to which it issued 1,793,118 shares of its common stock to Saflink Corporation. There have been no other issuances of the Company’s common stock. The pro forma net loss per common share data is computed assuming the 1,793,118 shares of common stock were issued on the first day of the period presented. The pro forma basic net loss per common share is computed on the basis of the weighted average number of common shares outstanding for the period. Diluted net loss per common share is computed on the basis of the weighted average number of common shares plus dilutive potential common shares outstanding. Dilutive potential common shares are calculated under the treasury stock method. Securities that could potentially dilute basic income per share consist of outstanding preferred stock and common stock warrants. As the Company had a net loss in all of the periods presented, basic and diluted net loss per common share are the same. All potentially dilutive securities were excluded from the calculation of dilutive net loss per share as their effect was anti-dilutive.

7. Subsequent Events

Series A Preferred Stock Issuances

On July 3, 2007, the Company raised approximately $4.7 million through the private placement to accredited investors of approximately 522 shares of its Series A preferred stock. The aggregate consideration for the preferred stock consisted of approximately $4.5 million in cash and the assignment to the Company of $166,667 of outstanding 8% convertible debentures issued by Saflink Corporation. Each share of preferred stock is convertible into 4,000 shares of common stock at a conversion price of $2.25 per common share. The Series A preferred stock has an 8% per year cumulative dividend, payable annually or upon conversion on a pro-rated basis. In connection with this financing, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 1,024,451 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 1,024,451 shares of its common stock, at an exercise price of $4.00 per share. Both series of warrants are exercisable a period five years and contain customary anti-dilution provisions. Concurrent with this financing, the Company conducted a 1,793,118-for-100 split of its common stock pursuant to which it issued 1,793,118 shares of its common stock to Saflink.

On August 24, 2007, the Company raised approximately $4.4 million through the private placement to accredited investors of approximately 494 shares of its Series A preferred stock. In connection with this closing, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 988,666 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 988,666 shares of its common stock, at an exercise price of $4.00 per share.

On August 24, 2007, upon closing sales of its Series A preferred stock for an aggregate amount in excess of $6.0 million, the Company triggered the automatic conversion of the convertible promissory notes sold in April 2007. Accordingly, the Company converted the $3.6 million of principal and accrued but unpaid interest related to the convertible promissory notes into approximately 445 shares of its Series A preferred stock. In connection with this conversion, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 890,399 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 890,399 shares of its common stock, at an exercise price of $4.00 per share.

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Also on August 24, 2007, the Company canceled and applied the approximately $1.9 million in assigned debt from previous financing rounds against the principal balance of the note payable due to Saflink Corporation and paid Saflink Corporation the approximately $2.2 million remaining balance in cash, which satisfied the note in full.

On September 13, 2007, the Company raised an additional $197,000 through the private placement to accredited investors of approximately 22 shares of its Series A preferred stock. In connection with this closing, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 43,777 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 43,777 shares of its common stock, at an exercise price of $4.00 per share.

Acquisition of rtGO Registered Traveler Solution

On October 5, 2007, the Company entered into an asset purchase agreement with Unisys Corporation under which the Company agreed to purchase Unisys Corporation’s rtGO Registered Traveler business for $8.0 million. The assets the Company agreed to acquire include enrollment and verification kiosks and related equipment, intellectual property, prepaid rtGO memberships, the designation and certification of Unisys Corporation’s Registered Traveler technology under the Support Anti-terrorism by Fostering Effective Technologies Act, or SAFETY Act, and certain material contracts used in Unisys Corporation’s rtGO Registered Traveler business. In exchange for the assets, the Company agreed to pay Unisys $8.0 million and to assume certain liabilities related to the assets, including liabilities under assumed contracts and prepaid rtGO memberships.

•

accuracy of the other party’s representations and warranties in the asset purchase agreement;

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the other party’s compliance with its obligations under the asset purchase agreement;

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no order, decree or judgment making the consummation of the transaction illegal;

•

receipt of consent to assignment of certain agreements with third parties;

•

the Company’s receipt of certification from the American Association of Airport Executives; and

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receipt of approval of the U.S. Department of Homeland Security to the transfer to the Company of the designation and certification of Unisys Corporation’s Registered Traveler technology under the SAFETY Act.

The Company expects to complete the acquisition after all conditions to the acquisition in the asset purchase agreement are satisfied or waived, which it currently expects will be during the fourth quarter of 2007. However, it is possible that factors outside of the Company’s control could require it to complete the acquisition at a later time or not to complete it at all. There are no liquidated damages or other penalties if the acquisition is not completed. The Company expects to integrate its solution and the rtGO solution and to assume operation of the Registered Traveler program at Reno/Tahoe International Airport (RNO) following completion of the transaction.

Currently, the Company does not have sufficient funds to complete the rtGO acquisition and does not have any arrangements in place for any future financings. The Company intends to pay for the acquisition by releasing $1.2 million currently in escrow, deposited in connection with the acquisition, and paying the remaining $6.8 million in cash from a future financing.

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FLO CORPORATION

(A Development Stage Company)

CONDENSED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)


	September 30, 2007			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	1,742		$	—
Prepaid expenses and other current assets		1,489			—

Total current assets		3,231			—
Furniture and equipment, net of accumulated depreciation of $22 and $17		52			28

Total assets	$	3,283		$	28


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	741		$	163
Accrued expenses (including expenses to a related party of $124 and $0)		884			44

Total current liabilities		1,625			207

Total liabilities		1,625			207

Stockholders’ equity (deficit):
Common stock, $0.001 par value:
Authorized—100,000,000 and 0 shares
Issued—1,793,118 and 0 shares		2			—
Preferred stock, $0.001 par value:
Authorized—15,000,000 and 0 shares
Issued—1,483 and 0 shares		—			—
Investment from parent company		—			3,490
Additional paid-in capital		12,192			—
Losses accumulated during development stage		(10,536	)		(3,669	)

Total stockholders’ equity (deficit)		1,658			(179	)

Total liabilities and stockholders’ equity (deficit)	$	3,283		$	28

See accompanying notes to unaudited condensed financial statements.

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FLO CORPORATION

(A Development Stage Company)

CONDENSED STATEMENTS OF EXPENSES

(Unaudited)

(In thousands, except per share data)


	Nine months ended September 30,						From Inception (June 1, 2005) through September 30, 2007
	2007			2006			From Inception (June 1, 2005) through September 30, 2007
Operating expenses:
Product development	$	752		$	1,031		$	1,977
Sales, general and administrative		3,779			1,179			6,223

Total operating expenses		4,531			2,210			8,200

Operating loss		(4,531	)		(2,210	)		(8,200	)
Interest expense		(689	)		—			(689	)
Other income		59			—			59

Net loss	$	(5,161	)	$	(2,210	)	$	(8,830	)

Preferred stock dividend		159			—			159

Net loss attributable to common stockholders	$	(5,320	)	$	(2,210	)	$	(8,989	)

Pro forma basic and diluted net loss per common share	$	(2.88	)	$	(1.23	)
Pro forma basic and diluted net loss per common share attributable to common stockholders	$	(2.97	)	$	(1.23	)
Pro forma weighted average number of common shares outstanding		1,793			1,793

See accompanying notes to unaudited condensed financial statements.

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FLO CORPORATION

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine months ended September 30,						From Inception (June 1, 2005) through September 30, 2007
	2007			2006			From Inception (June 1, 2005) through September 30, 2007
Cash flows from operating activities:
Net loss	$	(5,161	)	$	(2,210	)	$	(8,830	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7			8			24
Non-cash interest expense		438			—			438
Impairment loss on furniture and equipment		13			—			13
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(1,489	)		—			(1,489	)
Accounts payable		578			—			720
Accrued expenses		940			(19	)		884

Net cash used in operating activities		(4,674	)		(2,221	)		(8,240	)

Cash flows from investing activities:
Purchase of furniture and equipment		(44	)		(32	)		(89	)

Net cash provided by investing activities		(44	)		(32	)		(89	)

Cash flows from financing activities:
Proceeds from issuance of convertible promissory notes, net of issuance costs		1,542			—			1,542
Proceeds from issuance of Series A preferred stock		8,171			—			8,292
Payments on note payable		(4,357	)		—			(4,357	)
Investment from parent company		1,104			2,253			4,594

Net cash provided by financing activities		6,460			2,253			10,071

Net increase in cash and cash equivalents		1,742			—			1,742
Cash and cash equivalents at beginning of period		—			—			—

Cash and cash equivalents at end of period	$	1,742		$	—		$	1,742


Supplemental disclosure of cash flow information:
Issuance of convertible promissory notes for assignment of debt	$	1,777		$	—		$	1,777
Convertible promissory notes principal and interest converted into equity		3,642			—			3,642
Issuance of Series A preferred stock for assignment of convertible debt		166			—			166
Assigned debt cancelled and applied against $6.3 million note payable to related party		1,943			—			1,943
Reclassification of unamortized debt discount to equity upon conversion of promissory notes into equity		(140	)		—			(140	)

See accompanying notes to unaudited condensed financial statements.

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FLO CORPORATION

(A Development Stage Company)

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In thousands, except share data)


	Common Stock			Preferred Stock			Investment from parent company			Additional paid-in capital			Accumulated deficit			Total stockholders’ equity (deficit)
	Shares	Amount		Shares	Amount		Investment from parent company			Additional paid-in capital			Accumulated deficit			Total stockholders’ equity (deficit)
Balance at June 1, 2005	—	$	—	—	$	—	$	—		$	—		$	—		$	—
Net loss	—		—	—		—		—			—			(436	)		(436	)
Investment from parent company	—		—	—		—		424			—			—			424

Balance at December 31, 2005	—		—	—		—		424			—			(436	)		(12	)

Net loss	—		—	—		—		—			—			(3,233	)		(3,233	)
Investment from parent company	—		—	—		—		3,066			—			—			3,066

Balance at December 31, 2006	—		—	—		—		3,490			—			(3,669	)		(179	)

Net loss	—		—	—		—		—			—			(5,161	)		(5,161	)
Investment from parent company	—		—	—		—		1,104			—			—			1,104
Additional paid-in capital from Asset Purchase and Contribution Agreement with parent company	—		—	—		—		(4,594	)		4,594			—			—
Issuance of note payable to parent for Registered Traveler business	—		—	—		—		—			(4,594	)		(1,706	)		(6,300	)
Issuance of common stock to parent company	1,793,118		2	—		—		—			(2	)		—			—
Issuance of Series A preferred stock, net of issuance costs	—		—	1,483		—		—			11,979			—			11,979
Reclassification of unamortized debt discount upon conversion of promissory notes	—		—	—		—		—			(140	)		—			(140	)
Beneficial conversion feature related to promissory note financing	—		—	—		—		—			355			—			355

Balance at September 30, 2007	1,793,118	$	2	1,483	$	—	$	—		$	12,192		$	(10,536	)	$	1,658

See accompanying notes to unaudited condensed financial statements.

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FLO CORPORATION

(A Development Stage Company)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

1. Description of Business

The Company was incorporated in the State of Delaware on March 9, 2007, as a wholly-owned subsidiary of Saflink Corporation, a security solutions company. The Company maintains its headquarters in Chantilly, Virginia. The Company began operation on June 1, 2005 as a division of Saflink Corporation known as the Registered Traveler Solutions Group. Saflink Corporation was incorporated in the State of Delaware on October 23, 1991, and maintained its headquarters in Kirkland, Washington.

The Company reports as a development stage company because planned principal operations have not commenced and there have been no revenues generated to date.

2. Liquidity and Capital Resources

These condensed financial statements have been prepared assuming that the Company will continue as a going concern. As further discussed below, the Company has incurred recurring losses from operations and there is substantial doubt about its ability to continue as a going concern. These condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has been unable to generate net income from operations. The Company has accumulated net losses of approximately $10.5 million since its inception through September 30, 2007, and has continued to accumulate net losses since September 30, 2007. During the period when the Company operated as a division and wholly-owned subsidiary of Saflink Corporation, the Company’s operations were financed through contributed capital from Saflink Corporation. The Company financed operations during the nine months ended September 30, 2007 primarily through the issuance of our convertible promissory notes, which included net cash proceeds of approximately $1.5 million, and through the issuance of our Series A preferred stock, which included net cash proceeds of approximately $8.2 million. As of September 30, 2007, the Company’s principal source of liquidity consisted of $1.7 million of cash and cash equivalents, while it had working capital of $1.4 million.

On April 16, 2007, the Company issued approximately $3.5 million of convertible promissory notes (the “Notes”) in a private placement. The Notes accrued interest at a rate of 8% per year and were scheduled to be due on April 1, 2008. The aggregate consideration for the Notes consisted of net cash proceeds of approximately $1.5 million, which is net of issuance costs of $223,000, the assignment to the Company of approximately $1.6 million of outstanding 8% convertible debentures issued by its parent company, Saflink Corporation, and the

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assignment to the Company of a $140,000 promissory note also issued by Saflink Corporation. The Notes were to be automatically converted at a 10% discount into equity upon the Company’s completion of an equity offering or series of offerings that yielded the Company gross proceeds of at least $6.0 million, which occurred on August 24, 2007. For additional information regarding the Notes, see Note 5—Stockholders’ Equity and Convertible Promissory Notes, under the heading April 2007 Promissory Notes.

The Company entered into an Asset Purchase and Contribution Agreement with Saflink, effective April 16, 2007, pursuant to which it acquired all of Saflink Corporation’s assets and certain liabilities of Saflink’s Registered Traveler business, in exchange for a promissory note with a principal amount of $6.3 million. The promissory note had a stated interest rate of 8% per year and was scheduled to mature on April 16, 2008. Under the terms of the note, the principal outstanding was to become immediately due and payable in full upon an event of default or if the Company (a) merges or consolidates with or into any other entity, or upon any other reorganization of the Company, in which the holders of outstanding capital stock do not retain a majority of the voting power of the surviving entity or its parent in substantially the same relative proportions as immediately prior to the transaction, (b) sells all or substantially all of the its assets, or (c) issues 20% or more of its capital stock. Payment on the note may be in the form of cash or through the cancellation of outstanding debentures or promissory note issued by Saflink Corporation that has been assigned to the Company. The Company made cash payments to Saflink Corporation against the $6.3 million promissory note in the amounts of $200,000, $400,000 and $1.6 million on May 2, 2007, July 3, 2007, and July 6, 2007, respectively. On August 24, 2007, the Company paid Saflink Corporation the remaining principal balance through a combination of $2.2 million in cash and the cancellation of approximately $1.9 million of outstanding Saflink Corporation debentures and a Saflink Corporation promissory note that had been assigned to the Company by investors in the Company.

On July 3, 2007, the Company raised $4.7 million in gross proceeds through the private placement of 522 shares of the Company’s Series A preferred stock and warrants to purchase shares of its common stock. The aggregate consideration for the preferred stock and common stock warrants consisted of approximately $4.5 million in cash and the assignment to the Company of approximately $166,000 of outstanding 8% convertible debentures issued by Saflink Corporation.

On August 24, 2007, the Company raised an additional $4.4 million in gross cash proceeds through the private placement of approximately 494 shares of its Series A preferred stock and warrants to purchase shares of its common stock. Upon closing, the outstanding balance of $3.6 million in principal and accrued but unpaid interest related to the convertible promissory notes issued in April 2007 was automatically converted into approximately 445 shares of the Company’s Series A preferred stock. Also on August 24, 2007, the Company applied, and concurrently cancelled, its $1.9 million of Saflink Corporation convertible debentures that were assigned to the Company in previous financing rounds against the principal balance of the note payable to Saflink Corporation. The Company also paid the remaining $2.2 million balance on the note payable to Saflink Corporation in cash. As a result of these activities, the Company no longer had any notes payable or convertible promissory notes outstanding as of September 30, 2007.

For additional information on the July 3, 2007, August 24, 2007, and September 13, 2007 Series A preferred stock issuances, see Note 5—Stockholders’ Equity and Convertible Promissory Notes, under the heading Series A Preferred Stock Issuances.

3. Summary of Significant Accounting Policies

Basis of Financial Statement Presentation and Principles of Consolidation

The capital structure presented in these condensed financial statements is that of FLO Corporation.

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Condensed Financial Statements

The accompanying condensed financial statements present unaudited interim financial information and therefore do not contain certain information included in the annual financial statements of FLO Corporation.

Use of Estimates

The condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Preparation of the condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the balance sheets and expenses for the periods. Actual results could differ from those estimates. Significant estimates used in preparation of the condensed audited financial statements include the allocation of compensation and related benefits of Saflink Corporation employees, as well as occupancy and general and administrative expenses, between activities related to the Registered Traveler program and Saflink Corporation’s other operations.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Stock-Based Compensation

Recently Issued Accounting Standards

The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB No. 109” (“FIN 48”) on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no liability for unrecognized income tax benefits at September 30, 2007.

The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. At September 30, 2007, the Company had no accrued interest related to uncertain tax positions and no accrued penalties.

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users to more easily understand the effect of the company’s choice to use fair value on its earnings. Finally, SFAS 159 requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS 157 (see below). The Company is currently assessing the impact of SFAS 159 which it will be required to adopt no later than the first quarter of its 2008 fiscal year.

4. Business Combination

On April 16, 2007, the Company entered into an Asset Purchase and Contribution Agreement with its parent company, Saflink Corporation, pursuant to which it acquired all of Saflink’s assets and certain liabilities of Saflink’s Registered Traveler (RT) business, in exchange for a promissory note with a principal amount of $6.3 million. Pursuant to the agreement, the Company acquired approximately $12,000 in furniture and equipment, and assumed certain contracts and acquired tradenames related to the RT business. In addition, Saflink employees who primarily worked on the RT program transferred their employment to the Company. Liabilities assumed in the transaction included approximately $181,000 in accounts payable related to the RT business and approximately $68,000 in accrued paid time-off related to the transferred employees. The Company applied guidance from SFAS No. 141, “Business Combinations” and Accounting Principals Board (“APB”) Opinion No. 16, “Business Combinations,” and concluded that this transaction should be accounted for as a transaction between entities under common control. Accordingly, upon the consummation of this agreement, the Company reclassified approximately $4.6 million recorded as investment from parent company to additional paid-in capital. In addition, the Company recorded the $6.3 million note payable to Saflink as a debit to additional paid-in capital to the extent that investment from parent company was zero and recorded the $1.7 million remaining balance to accumulated deficit.

5. Stockholders’ Equity and Convertible Promissory Notes

April 2007 Promissory Notes

On April 16, 2007, the Company issued approximately $3.5 million of Notes in a private placement. The Notes accrued interest at a rate of 8% per year and were scheduled to be due April 1, 2008 if not converted by the Company. The aggregate consideration for the Notes consisted of net cash proceeds of approximately $1.5 million, which is net of issuance costs of approximately $223,000, the assignment to the Company of approximately $1.6 million of outstanding 8% convertible debentures issued by Saflink Corporation, and the assignment to the Company of a $140,000 promissory note also issued by Saflink Corporation to a related party. The issuance costs related to these promissory notes were recorded as a long-term asset at the time of issuance and were amortized over the term of the Notes to interest expense. The Notes were to be automatically converted at a 10% discount into equity upon the completion of an equity offering or series of offerings that yields the Company gross proceeds of at least $6.0 million, which occurred on August 24, 2007. Upon conversion of the Notes to equity on August 24, 2007, the Company reclassified $140,000 of unamortized issuance costs to additional paid-in capital on the Company’s condensed consolidated balance sheets.

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The Company applied the guidance of Emerging Issue Task Force (“EITF”) No. 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and EITF No. 00-27, “Application of Issue No. 98-5 Certain Convertible Instruments” and concluded that the beneficial conversion feature contained in the Notes is a contingent event and the Company was unable to calculate the number of shares that would be issued upon conversion of the Notes as of the issuance date of April 16, 2007. On July 3, 2007, upon the closing of the Company’s initial issuance of its Series A preferred stock, the Company was able to calculate the number of shares to be issued upon conversion of the Notes issued on April 16, 2007. The Company calculated the intrinsic value of the beneficial conversion feature contained within the Notes to be approximately $355,000, which was recorded as interest expense during the nine months ended September 30, 2007.

Series A Preferred Stock Issuances

On July 3, 2007, the Company raised $4.7 million in gross proceeds through the private placement to accredited investors of approximately 522 shares of its Series A preferred stock and warrants to purchase shares of its common stock. The aggregate consideration for the preferred stock and common stock warrants consisted of approximately $4.4 million in cash and the assignment to the Company of approximately $166,000 of outstanding 8% convertible debentures issued by Saflink Corporation. Each share of preferred stock is convertible into 4,000 shares of common stock at a conversion price of $2.25 per common share. The Series A preferred stock has an 8% per year cumulative dividend, payable annually or upon conversion on a pro-rated basis. In connection with this financing, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 1,042,969 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 1,042,969 shares of its common stock, at an exercise price of $4.00 per share. Both series of warrants are exercisable a period five years and contain customary anti-dilution provisions. Concurrent with this financing, the Company conducted a 1,793,118-for-100 split of its common stock pursuant to which it issued 1,793,118 shares of its common stock to Saflink.

On August 24, 2007, the Company raised an additional $4.5 million in gross cash proceeds through the private placement to accredited investors of approximately 494 shares of its Series A preferred stock and warrants to purchase shares of its common stock. In connection with this closing, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 988,666 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 988,666 shares of its common stock, at an exercise price of $4.00 per share.

On August 24, 2007, upon closing sales of its Series A preferred stock for an aggregate amount in excess of $6.0 million, the Company triggered the automatic conversion at a 10% discount of the convertible promissory notes sold in April 2007. Upon closing these sales, the outstanding balance of $3.6 million of principal and accrued but unpaid interest related to the convertible promissory notes was automatically converted into approximately 445 shares of the Company’s Series A preferred stock. In connection with this conversion, the Company issued to these investors Series A-1 warrants to purchase an aggregate of 890,399 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 890,399 shares of its common stock, at an exercise price of $4.00 per share.

On September 13, 2007, in the final closing of the Series A preferred stock financing, the Company raised an additional $197,000 in gross cash proceeds through the private placement to accredited investors of approximately 22 shares of its Series A preferred stock and warrants to purchase shares of its common stock. In connection with this closing, the Company issued to these investors Series A-1 warrants to purchase an aggregate

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of 43,777 shares of its common stock, at an exercise price of $3.00 per share, and Series A-2 warrants to purchase an aggregate of 43,777 shares of its common stock, at an exercise price of $4.00 per share.

The foregoing issuances of Series A preferred stock resulted in the Company issuing an aggregate of approximately 1,483 shares of its Series A preferred stock at a price of $9,000 per share, Series A-1 warrants to purchase up to an aggregate of 2,965,811 shares of its common stock at an exercise price of $3.00 per share, and Series A-2 warrants to purchase up to an aggregate of 2,965,811 shares of its common stock at an exercise price of $4.00 per share. The Company also issued warrants to purchase up to an aggregate of 1,186,316 shares of its common stock at an exercise price of $2.25 per share to the placement agents for services rendered in connection with the Company’s financings. Each of the investor and placement agent warrants expires five years from the date of issuance. Total issuance costs associated with the Series A financings were approximately $2.1 million, which included a $1.1 million non-cash estimated fair value for the placement agent warrants and $1.0 million in placement agent and legal fees. Of the net proceeds of $12.0 million raised through the issuance of the Company’s Series A preferred stock, which is net of $1.0 million in direct cash issuance costs, the Company allocated $4.6 million to the Series A preferred stock, $3.7 million to the beneficial conversion feature, and $3.7 million to the Series A-1 and the Series A-2 warrants. The Company determined the fair value of the investor and placement agent warrants by using a Black-Scholes option valuation model, assuming an estimated fair value for its common stock, an expected dividend yield of 0.0%, a risk-free interest rate of approximately 5%, expected volatility of 100%, and an estimated life of 5 years.

The Company applied guidance from SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” and determined that the Series A preferred stock should be classified as equity in the Company’s balance sheet. In accordance with EITF Issue 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios,” the Company evaluated if the Series A preferred stock had a beneficial conversion feature and determined that the effective conversion price was less than the $2.25 conversion price. The beneficial conversion feature was calculated to be approximately $3.7 million.

Series A Preferred Stock Conversion Feature and Cumulative Dividend

The Series A preferred stock issued by the Company contains a mandatory conversion feature by which each share of the Series A preferred stock will automatically be converted into shares of common stock upon the earlier of: (i) the date on which the Company’s common stock has had a minimum closing bid price of at least $7.00 per share for 20 consecutive trading days (subject to an effective registration statement under the Securities Act of 1933, as amended, covering the resale of the shares of common stock issuable upon conversion of the Series A preferred stock), (ii) certain change-of-control transaction or (iii) the completion of an offering of the Company’s equity securities yielding gross proceeds to the Company of at least $10 million.

Holders of the Company’s Series A preferred stock are entitled to receive dividends at an annual rate of 8% of the original issue price, which was $9,000 per share. Dividends are payable on the 15th of each June, are cumulative whether or not they are declared, and compound (if not paid within five days of the required payment date) on June 15th of each year. The Company may pay the dividends on its Series A preferred stock either in cash or in shares of its common stock, at the Company’s option (subject to certain conditions), based on the market value of its common stock at the time the dividend becomes payable.

6. Comprehensive Loss

For the nine months ended September 30, 2007, and 2006, the Company had no components of other comprehensive loss; accordingly, total comprehensive loss equaled the net loss for the respective periods.

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7. Segment Information

8. Pro Forma Net Loss Per Share

On March 20, 2007, the Company issued 100 shares of its common stock to Saflink Corporation for $1.00. On July 3, 2007, the Company conducted a 1,793,118-for-100 stock split pursuant to which it issued 1,793,118 shares of its common stock to Saflink Corporation. There have been no other issuances of the Company’s common stock. The pro forma net loss per common share data is computed assuming the 1,793,118 shares of common stock were issued on the first day of the periods presented. The pro forma basic net loss per common share is computed on the basis of the weighted average number of common shares outstanding for the period. Diluted net loss per common share is computed on the basis of the weighted average number of common shares plus dilutive potential common shares outstanding. Dilutive potential common shares are calculated under the treasury stock method. Securities that could potentially dilute basic income per share consist of outstanding preferred stock and common stock warrants. As the Company had a net loss in all of the periods presented, basic and diluted net loss per common share are the same. All potentially dilutive securities were excluded from the calculation of dilutive net loss per share as their effect was anti-dilutive.

9. Subsequent Events

Acquisition of rtGO Registered Traveler Solution

•

accuracy of the other party’s representations and warranties in the asset purchase agreement;

•

the other party’s compliance with its obligations under the asset purchase agreement;

•

no order, decree or judgment making the consummation of the transaction illegal;

•

receipt of consent to assignment of certain agreements with third parties;

•

the Company’s receipt of certification from the American Association of Airport Executives; and

•

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The Company expects to complete the acquisition after all conditions to the acquisition in the asset purchase agreement are satisfied or waived, which it currently expects will be during the fourth quarter of 2007. However, it is possible that factors outside of the Company’s control could require it to complete the acquisition at a later time or not to complete it at all. The asset purchase agreement may be terminated prior to closing by written agreement of the parties or prior to December 31, 2007 by a party whose failure to fulfill any obligation under the agreement is not the principal cause of the failure to have closed by such date. There are no liquidated damages or other penalties if the acquisition is not completed. The Company expects to integrate its solution and the rtGO solution and to assume operation of the Registered Traveler program at Reno/Tahoe International Airport (RNO) following completion of the transaction.

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PART III

Items 1 & 2 Index to Exhibits and Description of Exhibits

EXHIBIT INDEX


				Incorporated by Reference
Exhibit No. (as filed)	Form 1-A Exhibit No.	Description	Filed Herewith	Form	Exhibit No.	File No.	Filing Date
3.1	2.1	Amended and Restated Certificate of Incorporation of FLO Corporation	+

3.2	2.2	Bylaws of FLO Corporation	+

4.1	3.1	Registration Rights Agreement, dated as of July 3, 2007, between FLO Corporation and the investors signatory thereto, and Amendment No. 1 thereto	+

4.2	3.2	Form of Series A-1 Warrant and Series A-2 Warrant	+

4.3	3.3	Form of Placement Agent Warrant	+

10.1	6.1	Asset Purchase and Contribution Agreement, dated as of April 16, 2007, by and between FLO Corporation and Saflink Corporation	+

10.2	6.2	Transition Services Agreement, dated as of April 16, 2007, by and between FLO Corporation and Saflink Corporation	+

10.3	6.3	2007 Equity Incentive Plan and related agreements	+

10.4	6.4	Employment Agreement, dated as of May 29, 2007, by and among FLO Corporation and Luke Thomas	+

10.5	6.5	Employment Agreement, dated as of March 31, 2007, by and among FLO Corporation and Fred Fischer	+

10.6	6.6	Asset Purchase Agreement, dated as of October 5, 2007, between FLO Corporation and Unisys Corporation	+

10.7	6.7	Software Development Agreement, dated as of May 29, 2007, by and between FLO Corporation and International RAM Associates	+

10.8	6.8	Consulting Agreement, dated as of June 8, 2007, by and between FLO Corporation and Business Travel Coalition, Inc.	+

10.9	6.9	Employment Agreement, dated as of November 28, 2007, by and between FLO Corporation and Glenn L. Argenbright	+

+	Previously filed.

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.


	FLO CORPORATION
	(Registrant)

Date: December 10, 2007	By:	/s/ GLENN L. ARGENBRIGHT
	Name:	Glenn L. Argenbright
	Title:	President, Chief Executive Officer and Secretary

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SAFLINK CORP 8-K