Sec Form 13D Filing - Legion Partners Asset Management LLC filing for OneSpan Inc. (OSPN) - 2023-08-14

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________

 

SCHEDULE 13D

(Rule 13d-101)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

 

(Amendment No. 7)¹

 

OneSpan Inc.

(Name of Issuer)

 

Common Stock, $0.001 par value per share

(Title of Class of Securities)

 

68287N100

(CUSIP Number)

 

CHRISTOPHER S. KIPER

LEGION PARTNERS ASSET MANAGEMENT, LLC

12121 Wilshire Blvd, Suite 1240

Los Angeles, CA 90025

(424) 253-1773

 

ELIZABETH GONZALEZ-SUSSMAN, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

August 14, 2023

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box ☐.

 

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

(Continued on following pages)

 

---

¹             The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

	1		NAME OF REPORTING PERSON
				Legion Partners, L.P. I
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							2,721,042
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							2,721,042
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				2,721,042
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				6.8%
	14		TYPE OF REPORTING PERSON
				PN

 

 

1

NAME OF REPORTING PERSON

Legion Partners, L.P. II

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☒

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

- 0 -

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

300,491

PERSON WITH

9

SOLE DISPOSITIVE POWER

- 0 -

10

SHARED DISPOSITIVE POWER

300,491

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

300,491

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Less than 1%

14

TYPE OF REPORTING PERSON

PN

 

 

	1		NAME OF REPORTING PERSON
				Legion Partners Offshore I SP I*
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							445,898
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							445,898
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				445,898
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				1.1%
	14		TYPE OF REPORTING PERSON
				CO

 

* Legion Partners Offshore I SP I is a segregated portfolio company of Legion Partners Offshore Opportunities SPC I.

  

 

	1		NAME OF REPORTING PERSON
				Legion Partners, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							3,021,533
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							3,021,533
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,021,533
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				7.6%
	14		TYPE OF REPORTING PERSON
				OO

 

 

	1		NAME OF REPORTING PERSON
				Legion Partners Asset Management, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							3,467,431
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							3,467,431
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,467,431
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.7%
	14		TYPE OF REPORTING PERSON
				IA

 

 

	1		NAME OF REPORTING PERSON
				Legion Partners Holdings, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				Delaware
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							3,467,631
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							3,467,631
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,467,631
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.7%
	14		TYPE OF REPORTING PERSON
				OO

 

 

	1		NAME OF REPORTING PERSON
				Christopher S. Kiper
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				USA
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							3,467,631
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							3,467,631
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,467,631
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.7%
	14		TYPE OF REPORTING PERSON
				IN

 

 

	1		NAME OF REPORTING PERSON
				Raymond T. White
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☒
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				USA
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							- 0 -
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							3,467,631
PERSON WITH				9		SOLE DISPOSITIVE POWER
							- 0 -
				10		SHARED DISPOSITIVE POWER
							3,467,631
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,467,631
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				8.7%
	14		TYPE OF REPORTING PERSON
				IN

 

 

The following constitutes Amendment No. 7 to the Schedule 13D filed by the undersigned (the “Amendment No. 7”). This Amendment No. 7 amends the Schedule 13D as specifically set forth herein.

 

Item 3.

Source and Amount of Funds or Other Consideration.

 

Item 3 is hereby amended and restated to read as follows:

 

The Shares purchased by each of Legion Partners I, Legion Partners II, Legion Partners Offshore I and Legion Partners Holdings were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted in Schedule B, which is incorporated herein by reference.

 

The aggregate purchase price of the 2,721,042 Shares owned directly by Legion Partners I is approximately $42,880,284, including brokerage commissions. The aggregate purchase price of the 300,491 Shares owned directly by Legion Partners II is approximately $3,994,087, including brokerage commissions. The aggregate purchase price of the 445,898 Shares owned directly by Legion Partners Offshore I is approximately $10,377,571, including brokerage commissions. The aggregate purchase price of the 200 Shares owned directly by Legion Partners Holdings is approximately $3,458, including brokerage commissions.

 

Item 4.

Purpose of Transaction.

 

Item 4 is hereby amended to add the following:

 

On August 14, 2023, the Reporting Persons delivered a letter to the Issuer’s Board of Directors (the “Board”) expressing the Reporting Persons concerns with management’s recent communication regarding the Issuer’s pivot away from growth and towards a focus on cash flow optimization and capital returns. As detailed in the letter, in the Reporting Persons’ view, the Issuer’s recent communication has detracted focus from the Issuer’s inherent advantages and lacks the urgency and magnitude of change required to expeditiously achieve fair value in the public markets, or to extract the highest possible price from a near-term sale of the Issuer. In addition, the Reporting Persons outlined their key recommendations for the Issuer as follows: (1) commit to 30%+ Adjusted EBITDA Margins in 2024; (2) increase capital returns to $50+ million; and (3) pursue a sale of the Issuer. A copy of the letter is attached hereto as exhibit 99.1 and is incorporated herein by reference.

 

Item 5.

Interest in Securities of the Issuer.

 

Items 5(a) - (c) are hereby amended and restated to read as follows:

 

The aggregate percentage of Shares reported owned by each person named herein is based upon 39,978,537 Shares outstanding as of August 1, 2023, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 9, 2023.

 

A.

Legion Partners I

 

(a)

As of the close of business on August 11, 2023, Legion Partners I beneficially owned 2,721,042 Shares.

 

Percentage: Approximately 6.8%

 

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 2,721,042 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 2,721,042

 

(c)

Legion Partners I has not entered into any transactions in the Shares during the past sixty days.

 

B.

Legion Partners II

 

(a)

As of the close of business on August 11, 2023, Legion Partners II beneficially owned 300,491 Shares.

 

Percentage: Less than 1%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 300,491 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 300,491

 

(c)

Legion Partners II has not entered into any transactions in the Shares during the past sixty days.

 

C.

Legion Partners Offshore I

 

(a)

As of the close of business on August 11, 2023, Legion Partners Offshore I beneficially owned 445,898 Shares.

 

Percentage: Approximately 1.1%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 445,898 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 445,898

 

(c)

Legion Partners Offshore I has not entered into any transactions in the Shares during the past sixty days.

 

D.

Legion Partners GP

 

(a)

Legion Partners GP, as the general partner of each of Legion Partners I and Legion Partners II, may be deemed the beneficial owner of the (i) 2,721,042 Shares owned by Legion Partners I and (ii) 300,491 Shares owned by Legion Partners II.

 

Percentage: Approximately 7.6%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vo te: 3,021,533 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 3,021,533

 

(c)

Legion Partners GP has not entered into any transactions in the Shares during the past sixty days.

 

 

E.

Legion Partners Asset Management

 

(a)

Legion Partners Asset Management, as the investment advisor of each of Legion Partners I, Legion Partners II, and Legion Partners Offshore I, may be deemed the beneficial owner of the (i) 2,721,042 Shares owned by Legion Partners I, (ii) 300,491 Shares owned by Legion Partners II, and (iii) 445,898 Shares owned by Legion Partners Offshore I.

 

Percentage: Approximately 8.7%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 3,467,431 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 3,467,431

 

(c)

Legion Partners Asset Management has not entered into any transactions in the Shares during the past sixty days.

 

F.

Legion Partners Holdings

 

(a)

As of the close of business on August 11, 2023, Legion Partners Holdings directly owned 200 Shares. Legion Partners Holdings, as the sole member of Legion Partners Asset Management and sole member of Legion Partners GP, may be deemed the beneficial owner of the (i) 2,721,042 Shares owned by Legion Partners I, (ii) 300,491 Shares owned by Legion Partners II, and (iii) 445,898 Shares owned by Legion Partners Offshore I.

 

Percentage: Approximately 8.7%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 3,467,631 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 3,467,631

 

(c)

Legion Partners Holdings has not entered into any transactions in the Shares during the past sixty days.

 

G.

Messrs. Kiper and White

 

(a)

Each of Messrs. Kiper and White, as a managing director of Legion Partners Asset Management and a managing member of Legion Partners Holdings, may be deemed the beneficial owner of the (i) 2,721,042 Shares owned by Legion Partners I, (ii) 300,491 Shares owned by Legion Partners II, (iii) 445,898 Shares owned by Legion Partners Offshore I and (iv) 200 Shares owned by Legion Partners Holdings.

 

Percentage: Approximately 8.7%

 

(b)

1. Sole power to vote or direct vote: 0 2. Shared power to vote or direct vote: 3,467,631 3. Sole power to dispose or direct the disposition: 0 4. Shared power to dispose or direct the disposition: 3,467,631

 

 

(c)

None of Messrs. Kiper and White has entered into any transactions in the Shares during the past sixty days.

 

The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Act, the beneficial owners of any securities of the Issuer that he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he, she or it does not directly own.

 

Item 7.

Material to be Filed as Exhibits.

 

Item 7 is hereby amended to add the following exhibit:

 

99.1

Letter to the Board of Directors of the Issuer, dated August 14, 2023.

 

 

SIGNATURES

 

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: August 14, 2023

 

	Legion Partners, L.P. I
	By:	Legion Partners Asset Management, LLC
		Investment Advisor
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Managing Director

 

	Legion Partners, L.P. II
	By:	Legion Partners Asset Management, LLC
		Investment Advisor
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Ma naging Director

 

	Legion Partners Offshore I SP I
	By:	Legion Partners Asset Management, LLC
		Investment Advisor
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Managing Director

 

	Legion Partners, LLC
	By:	Legion Partners Holdings, LLC
		Managing Member
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Managing Member

 

	Legion Partners Asset Management, LLC
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Managing Director

 

 

	Legion Partners Holdings, LLC
	By:	/s/ Christopher S. Kiper
		Name:	Christopher S. Kiper
		Title:	Managing Member

 

	/s/ Christopher S. Kiper
	Christopher S. Kiper
	/s/ Raymond T. White
	Raymond T. White