Form 8-K for POSITIVEID CORP
14-Aug-2015
Entry into a Material Definitive Agreement, Creation of a Direct Financial Obliga
Item 1.01 Entry into a Material Definitive Agreement.
On August 14, 2015 (the "Closing Date"), PositiveID Corporation (the "Company") closed a financing transaction by entering into a Securities Purchase Agreement dated August 14, 2015 (the "Securities Purchase Agreement") with Dominion Capital LLC (the "Purchaser") for an aggregate subscription amount of $2,400,000 (the "Purchase Price"). Pursuant to the Securities Purchase Agreement, the Company shall issue a series of 4% Original Issue Discount Senior Secured Convertible Promissory Notes (collectively, the "Notes") to the Purchaser. The Purchase Price will be paid in six equal monthly tranches (each tranche shall be defined as a "Closing") of $400,000. Each individual Note will be issued upon payment and will be amortized beginning six months after issuance, with amortization payments being 1/24th of the principal and accrued interest, made in cash or common stock at the option of the Company, on a semi-monthly basis, subject to certain conditions contained in the Securities Purchase Agreement. The amortization payments will begin to be due starting on the 15th day of the month immediately following the six-month anniversary of the Closing Date. The Company also reimbursed the Purchaser $30,000 for legal fees and expenses from the proceeds of the first tranche. The use of proceeds from this financing is intended for the completion of the prototype of the Company's Firefly Dx system and general working capital.
4% Original Issue Discount Senior Secured Convertible Promissory Notes
The total principal amount of the Notes is issued with a 4% original issue discount whereby the aggregate Principal Amount of the Notes is $2,500,000, with an aggregate net purchase price of $2,400,000. Each Note accrues interest at a rate equal to 12% per annum (interest is guaranteed for the first twelve months) and the initial note has a maturity date of February 15, 2017. Each Note is convertible any time after its issuance date. The Purchaser has the right to convert any or all of the Notes into shares of the Company's common stock at a fixed conversion price equal to $0.028 (which was a 12% premium to the closing bid price of the Company's common stock on August 11, 2015), subject to adjustment as described in the Notes. The Notes can be prepaid at any time upon five days' notice to the Holder by paying an amount in cash equal to the outstanding principal and interest, and a 20% premium.
Security Agreement
In connection with the Company's obligations under the Notes, the Company entered into a Security Agreement with the Purchaser, pursuant to which the Company granted a lien on all assets of the Company, subject to existing security interests (the "Collateral"), for the benefit of the Purchaser, to secure the Company's obligations under the Notes. In the event of a default as defined in the Notes, the Purchaser may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral, or sell, lease or dispose of the Collateral.
Subsidiary Agreement
In connection with the Company's obligations under the Security Agreement with the Purchaser, pursuant to which the Company granted a lien on all assets of the Company, subject to existing security interests, under a Subsidiary Guaranty, each of our subsidiaries has guaranteed all of our obligations under the Notes.
The foregoing description of the terms of the Purchase Agreement, the Notes, the Security Agreement and the Subsidiary Guarantee do not purport to be complete and are qualified in their entirety by reference to the provisions of such agreements forms of which are filed as exhibits 4.1, 10.1, 10.2 and 10.3 to this Current Report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.The Company engaged Aegis Capital Corp. as placement agent for this offering for a total fee of 10% of the gross cash proceeds from the Purchase Price.
The issuance of the securities described above were completed in accordance with the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits,
