PositiveID Corporation ("PositiveID" or "Company") PSID -13.16% , a developer of medical technologies for diabetes management, clinical diagnostics and bio-threat detection, announced today that it has entered into a series of agreements for investment commitments with Ironridge Global Technology and its affiliates ("Ironridge"), under which Ironridge has committed, subject to certain conditions, to purchase common and preferred stock totaling up to $13.8 million in several transactions. Two of the transactions include a purchase of perpetual, redeemable, premium fixed priced convertible preferred stock. The preferred stock is convertible into shares of the Company's common stock at a minimum conversion price of $0.50, which represents a premium of 32 percent over the closing price on July 27, 2011. Future tranches of the transactions will include conversion pricing based on the market price of the common stock at the time of the tranche, subject to a minimum conversion price of $0.50. Consistent with its company policy, Ironridge has represented that it has never shorted PositiveID stock and is contractually prohibited from future short sales for one year. If the total amount of the financings is completed, PositiveID believes that it will have funding through at least 2012, including the continued development of its diabetes management products and biological detection technologies.
"These transactions are a first-of-their-kind for PositiveID, with the potential to fund our Company through 2012, without additional warrant dilution," said William J. Caragol, President of PositiveID. "These financings come at a critical time in our evolution, as we prepare for our iglucose(TM) mobile health system for diabetes management to receive regulatory clearance and come to market. We believe that these financings will also enable us to continue the development of additional products including our Easy Check(TM) non-invasive breath glucose detection device and GlucoChip(TM) glucose-sensing microchip for people with diabetes, as well as commercialize our rapid biological detection technologies."
"With this capital injection, PositiveID plans to commercialize the iglucose(TM) mobile health system and continue product development of their patented bio-sensor technologies," said Brendan O'Neil, Managing Director of Ironridge Global Partners. "According to a report by Global Industry Analysts, Inc., the global market for blood glucose meters and strips is expected to reach $18 billion by 2015, and we believe PositiveID has some disruptive technologies poised to participate in that market."
In one of the financings, the Company may receive proceeds of up to $1.5 million, pursuant to which the Company will issue up to $1.5 million of perpetual, redeemable Series F 7.65% Convertible Preferred Stock. In another financing, the Company may issue $2.5 million of registered common stock at a price per share equal to 102% of the closing price of the Company's common stock on July 27, 2011, in exchange for $2.5 million in consideration consisting of a combination of cash and a fully secured demand promissory note for the remaining purchase price.
The final financing may provide up to $9.75 million of additional funding that may include up to $4.0 million of proceeds financed in ten $400,000 tranches, pursuant to which the Company may issue perpetual, redeemable Series G 7% Convertible Preferred Stock, and up to $5.75 million of common stock (at a price per share equal to 102% of the closing price of the Company's common stock on the trading day immediately preceding each tranche) under a common stock purchase obligation, in exchange for a demand promissory note. This financing is subject to the filing and effectiveness of a registration statement.
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