POSITIVEID CORPORATION (OTCMKTS:PSID) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On September 11, 2017, PositiveID Corporation (the “Company”) closed a Securities Purchase Agreement (“GHS SPA”) with GHS Investments, LLC (“GHS”), providing for the purchase of a Secured Convertible Promissory Note in the aggregate principal amount of up to $137,500 (the “GHS Note”), with the first tranche funded being in the amount of $75,000, net of original issue discount (“OID”). A subsequent tranche of $50,000, net of OID, may be delivered to the Company at the sole discretion of GHS. The GHS Note has a 10% OID to offset transaction, diligence and legal costs. The GHS Note bears an interest rate of 10%, which is payable in the Company’s common stock based on the conversion formula (as defined below), and the maturity date for each funded tranche will be 12 months from the date on which the funds are received by the Company. The GHS Note may be converted by GHS at any time into shares of Company’s common stock at a 37.5% discount off the lowest closing bid price for the Company’s common stock during the 20 trading days immediately preceding a conversion date. The GHS Note is secured by all property of the Company. As set forth in the SPA, however, the GHS Note ranks junior to the security interests of three other creditors of the Company.
On September 12, 2017, the Company entered into a Securities Purchase Agreement (“Union SPA”) with Union Capital, LLC (“Union”), providing for the purchase of two Convertible Redeemable Notes in the aggregate principal amount of $104,000 (the “Union Notes”), with the first note being in the amount of $52,000 (“Union Note I”), and the second note being in the amount of $52,000 (“Union Note II”). Union Note I has been funded, with the Company receiving $47,500 of net proceeds (net of OID and legal fees). Union Note II will initially be paid for by the issuance of an offsetting $50,000 note issued to the Company by Union (the “Collateralized Note”). The funding of Union Note II is subject to the mutual agreement of Union and the Company. Union is required to pay the principal amount of the Union Note in cash and in full prior to executing any conversions under Union Note II. The Union Notes bear an interest rate of 12%, and are due and payable on September 12, 2018. The Union Notes may be converted by Union at any time into shares of Company’s common stock (as determined in the Notes) calculated at the time of conversion, except for Union Note II, which requires full payment of the Collateralized Note by Union before conversions may be made. The Union Notes (subject to funding in the case of Union Note II) may be converted by Union at any time into shares of Company’s common stock at a price equal to 62.5% of the lowest closing bid price of the common stock as reported on the OTC Link ATS owned by OTC Markets Group for the 15 prior trading days including the day upon which a notice of conversion is received by the Company.
The GHS Note and Union Notes (collectively, the “Notes”) are long-term debt obligations that are material to the Company. The Notes may be prepaid in accordance with the terms set forth in the Notes. The Notes also contain certain representations, warranties, covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC, and increases in the amount of the principal and interest rates under the Notes in the event of such defaults. In the event of default, at the option of GHS and/or Union (collectively, the “Investors”) and in the Investors’ sole discretion, the Investors may consider the Notes immediately due and payable.
The foregoing description of the terms of the GHS SPA, GHS Note, Union SPA, Union Notes and Collateralized Note, does not purport to be complete and is qualified in its entirety by the complete text of the documents attached as, respectively, Exhibit 10.1, Exhibit 4.1, Exhibit 10.2, Exhibit 4.2, Exhibit 4.3, and Exhibit 10.3 to this Current Report on Form 8-K.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities
The descriptions in Item 1.01 of the Notes issued by the Company that are convertible into the Company’s equity securities at the option of the holder of the note are incorporated herein. The issuance of the securities set forth herein was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(a)(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the securities is an accredited investor. Since August 25, 2017, the Company has issued, in reliance upon Section 4(a)(2) of the Securities Act, 25,080,909 shares of common stock to conversion notices of convertible redeemable notes outstanding totaling $177,223.12. The issuance of such convertible notes was previously disclosed in the Company’s periodic reports filed with the SEC.
Item 9.01 Financial Statements and Exhibits
|
Exhibit Number |
Description |
| 4.1 | Form of Secured Convertible Promissory Note, dated September 11, 2017, with GHS Investments, LLC |
| 4.2 | Form of 12% Convertible Redeemable Note, dated September 12, 2017, with Union Capital, LLC |
| 4.3 | Form of 12% Convertible Redeemable Back-End Note, dated September 12, 2017, with Union Capital, LLC |
| 10.1 | Form of Securities Purchase Agreement, dated September 11, 2017, with GHS Investments, LLC |
| 10.2 | Form of Securities Purchase Agreement, dated September 12, 2017, with Union Capital, LLC |
| 10.3 | Form of Union Capital, LLC Collateralized Secured Promissory Note, dated September 12, 2017, with PositiveID Corporation |
POSITIVEID Corp ExhibitEX-4.1 2 ex4-1.htm Exhibit 4.1 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…To view the full exhibit click here
About POSITIVEID CORPORATION (OTCMKTS:PSID)
PositiveID Corporation, formerly VeriChip Corporation, is a life sciences and technology company focused on the healthcare and homeland security markets. The Company operates through three segments: Molecular Diagnostics, Medical Devices and Mobile Labs. It develops molecular diagnostic systems for medical testing and bio-threat detection. Its Microfluidic Bio-agent Autonomous Networked Detector system is an airborne bio-threat detection system developed for the homeland defense industry to detect biological weapons of mass destruction. It is developing Firefly Dx, an automated pathogen detection system for diagnostics, both for clinical and point-of-need applications. Through its contractual control of Thermomedics, Inc., it markets and sells the Caregiver product for clinical use. Its subsidiary, E-N-G Mobile Systems, Inc., operates in specialty technology vehicle market, with a focus on mobile laboratories, command and communications applications, and mobile cellular systems.