Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securities
Item 1.01. Entry into a Material Definitive Agreement. Preferred Stock Purchase Agreement
On January 13, 2012, PositiveID Corporation, a Delaware corporation (the "Company"), entered into a Preferred Stock Purchase Agreement (the "Preferred Stock Agreement") with Ironridge Technology Co., a division of Ironridge Global IV, Ltd., a British Virgin Islands business company ("Ironridge"), under which Ironridge is committed to purchase for cash $500,000 in shares of the Company's redeemable, convertible Series H Preferred Stock (the "Series H Stock") at $1,000 per share of Series H Stock. Each share of Series H Stock is convertible into shares of the Company's common stock at any time by the holder at a conversion price of $0.15.
The Series H Stock will accrue dividends in the amount of 4.5% per annum, subject to increase if the closing price of the Company's common stock falls below $0.125 per share, up to a maximum rate of 10% per annum. The dividends are payable quarterly, at the Company's option, in cash or shares of the Company's common stock. The holder of the Series H Stock may convert the Series H Stock into shares of the Company's common stock at any time at an initial conversion price of $0.15 per common share plus a make-whole adjustment equal to accrued but unpaid dividends and dividends that otherwise would be due through the 10th anniversary of the Series H Stock.
The Company may convert the Series H Stock if the closing price of the Company's common stock exceeds 200% of the conversion price, and certain other conditions are met. The holder will be prohibited, however, from converting the Series H Stock into shares of the Company's common stock if, as a result of such conversion, the holder together with its affiliates, would own more than 9.99% of the total number of shares of the Company's common stock then issued and outstanding. Ironridge's obligation to purchase the Series H Stock is subject to satisfaction of certain closing conditions, including (i) that the Company's common stock is listed for and trading on a trading market (as such term is defined in the Preferred Stock Agreement), (ii) no uncured default exists under the Preferred Stock Agreement, and (iii) the Company's representations and warranties set forth in the Preferred Stock Agreement are true and correct in all material respects.
The Company is making the offering of Series H Stock and the shares of common stock issuable upon conversion of, and payable as dividends on, the Series H Stock pursuant to a shelf registration statement on Form S-3 (Registration No. 333-165849) declared effective by the Securities and Exchange Commission ("SEC") on April 12, 2010. A copy of the Preferred Stock Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K. The description of certain terms of the Preferred Stock Agreement set forth herein does not purport to be complete and is qualified in its entirety by the provisions of the Preferred Stock Agreement. |
