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PAY BY TOUCH ANNOUNCES NEW BOARD, VOLUNTARY BANKRUPTCY
Solidus Networks Inc., the San Francisco-based biometric-payments company that does business as Pay By Touch, today announced a new board of directors. The announcement comes in the wake of management trouble allegedly caused by its founder and former CEO John Rogers and a case of involuntary bankruptcy filed by disgruntled employees (CardLine, 1/6/2007).
The company also says in a statement today that it filed for voluntary Chapter 11 bankruptcy protection in mid-December. John Morris, a director, tells CardLine the company is doing well in terms of client and customer interest but that the company was “running short of funds” and needs to bring in more financing.
Morris will serve as an advisor while the company works through its bankruptcy. Members of the new board are Morris, Art Petrie, chairman; Eula Adams, chief operating officer; Robert Sigler, chief financial officer; and founder John Rogers, who, according to a company statement, “now functions in a nonemployee director role only.” Rogers had dismissed Morris and Adams, according to a complaint filed Oct. 19 by company investors in the Chancery Court of Delaware, where Solidus is incorporated. The firm was concerned that removal of Solidus board members left the company “headless,” or without leadership, the complaint stated.
The company’s investors, which acquired the right to vote Roger’s share on the board because it was in default, elected the new board and kept Rogers on because they wanted to have him as a resource, Petrie tells CardLine. “He is a large shareholder and has a strong background in the company, and we need that resource,” he says.
The company says “all core and non-core businesses, including consumer biometric and loyalty transactions, continue business as usual.”
Pay By Touch is a biometric-payment method where retail customers use an algorithm derived from a fingerprint and key in a PIN to pay for goods at the point of sale. Funds are drawn from the participant’s bank account using the automated clearinghouse network or from a credit or debit card. Chicago Shell stations (CardLine, 11/1/2007) and Jewel-Osco grocery stores are among the merchants that support Pay By Touch transactions.