SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

SDS CAPITAL GROUP SPC LTD

(Last)

(First)

(Middle)

RK CONSULTING (CAYMAN) LTD PO BOX 174865

CAYMAN CORPORATE CENTER 27 HOSPITAL RD

(Street)

GRAND CAYMAN

00000

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
SAFLINK CORP [ SFLK ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
08/06/2004

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock, $.01 par value per share	08/06/2004		X		903,875⁽¹⁾	A	$2.5	6,798,464	D
Common Stock, $.01 par value per share	08/06/2004		X		903,875⁽¹⁾	A	$2.5	6,798,464	I	By SDS Management, LLC⁽²⁾
Common Stock, $.01 par value per share	08/06/2004		X		903,875⁽¹⁾	A	$2.5	6,798,464	I	By Mr. Steven Derby⁽³⁾
Common Stock, $.01 par value per share	08/06/2004		X		430,442⁽⁴⁾	A	$2.5	7,228,906	D
Common Stock, $.01 par value per share	08/06/2004		X		430,442⁽⁴⁾	A	$2.5	7,228,906	I	By SDS Management, LLC
Common Stock, $.01 par value per share	08/06/2004		X		430,442⁽⁴⁾	A	$2.5	7,228,906	I	By Mr. Steven Derby
Common Stock, $.01 par value per share	08/06/2004		A		581,880	A	⁽⁵⁾	7,810,706	D
Common Stock, $.01 par value per share	08/06/2004		A		581,880	A	⁽⁵⁾	7,810,706	I	By SDS Management LLC
Common Stock, $.01 par value per share	08/06/2004		A		581,880	A	⁽⁵⁾	7,810,706	I	By Mr. Steven Derby
Common Stock, $.01 par value per share	08/06/2004		A		1,135,020	A	⁽⁶⁾	8,945,726	D
Common Stock, $.01 par value per share	08/06/2004		A		1,135,020	A	⁽⁶⁾	8,945,726	I	By SDS Management, LLC
Common Stock, $.01 par value per share	08/06/2004		A		1,135,020	A	⁽⁶⁾	8,945,726	I	By Mr. Steven Derby

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock Warrant (right to buy)	$10.5	03/22/2001		J		8,929		⁽⁷⁾	03/22/2006	Common Stock	8,929	$0	8,929	D
Common Stock Warrant (right to buy)	$10.5	03/22/2001		J		8,929		⁽⁷⁾	03/22/2006	Common Stock	8,929	$0	8,929	I	By SDS Management, LLC
Common Stock Warrant (right to buy)	$10.5	03/22/2001		J		8,929		⁽⁷⁾	03/22/2006	Common Stock	8,929	$0	8,929	I	By Mr. Steven Derby
Common Stock Warrant (right to buy)	$1.3	06/05/2001		J		15,386		⁽⁷⁾	06/05/2006	Common Stock	15,386	$0	15,386	D
Common Stock Warrant (right to buy)	$1.3	06/05/2001		J		15,386		⁽⁷⁾	06/05/2006	Common Stock	15,386	$0	15,386	I	By SDS Management, LLC
Common Stock Warrant (right to buy)	$1.3	06/05/2001		J		15,386		⁽⁷⁾	06/05/2006	Common Stock	15,386	$0	15,386	I	By Mr. Steven Derby
Common Stock Warrant (right to buy)	$2.5⁽¹⁾	08/06/2004		X			903,875	⁽⁷⁾	06/05/2006	Common Stock	903,875	$0	0	D
Common Stock Warrant (right to buy)	$2.5⁽¹⁾	08/06/2004		X			903,875	⁽⁷⁾	06/05/2006	Common Stock	903,875	$0	0	I	By SDS Management, LLC
Common Stock Warrant (right to buy)	$2.5⁽¹⁾	08/06/2004		X			903,875	⁽⁷⁾	06/05/2006	Common Stock	903,875	$0	0	I	By Mr. Steven Derby
Common Stock Warrant (right to buy)	$2.5⁽⁴⁾	08/06/2004		X			430,442	⁽⁷⁾	11/27/2007	Common Stock	430,442	$0	0	D
Common Stock Warrant (right to buy)	$2.5⁽⁴⁾	08/06/2004		X			430,442	⁽⁷⁾	11/27/2007	Common Stock	430,442	$0	0	I	By SDS Management, LLC
Common Stock Warrant (right to buy)	$2.5⁽⁴⁾	08/06/2004		X			430,442	⁽⁷⁾	11/27/2007	Common Stock	430,442	$0	0	I	By Mr. Steven Derby

Explanation of Responses:

1. Issued upon the exercise of a warrant issued on June 5, 2001.

2. SDS Management, LLC is the investment manager of the Reporting Person and has ultimate voting and dispositve power over the securities held by the Reporting Person. The address of SDS Management, LLC is 53 Forest Avenue, 2nd Floor, Old Greenwich, Connecticut 06870.

3. Mr. Steven Derby is the sole managing member of SDS Management, LLC. The address of Mr. Steven Derby is c/o SDS Management, LLC, 53 Forest Avenue, 2nd Floor, Old Greenwich, Connecticut 06870.

4. Issued upon the exercise of a warrant issued on November 27, 2002.

5. Received in exchange for 969,668 shares of SSP Solutions, Inc. common stock in connection with the merger of SSP Solutions, Inc. with and into SAFLINK Corporation.

6. Received in exchange for 1,891,700 shares of SSP Solutions, Inc. common stock issued upon the conversion of 189.17 shares of SSP Solutions, Inc. preferred stock in connection with the merger of SSP Solutions, Inc. with and into SAFLINK Corporation.

7. Immediately

	SDS Capital Group SPC, Ltd., By SDS Management, LLC, its Investment Manager, /s/ Steven Derby, Managing Member	08/13/2004
	SDS Management, LLC, /s/ Steven Derby, Managing Member	08/13/2004
	/s/ Steven Derby	08/13/2004
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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