DELRAY BEACH, Fla., Jul 28, 2011 (GlobeNewswire via COMTEX) -- PositiveID Corporation ("PositiveID" or "Company") /quotes/zigman/115332/quotes/nls/psid PSID 0.00% , 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.
C.K. Cooper & Company acted as exclusive financial advisor for this transaction.
The registered offering of common stock is being made pursuant to a prospectus supplement included as part of a shelf registration statement filed with the Securities and Exchange Commission (SEC) that was declared effective on April 12, 2010. A prospectus supplement related to the registered direct offering will be filed with the SEC. Copies of the prospectus supplement together with the accompanying prospectus can be obtained at the SEC's website at http://www.sec.gov . This announcement is neither an offer to sell nor a solicitation of an offer to buy any shares of common stock of the Company. No offer, solicitation or sale will be made in any jurisdiction in which such offer, solicitation or sale is unlawful.
The shares of common stock and Series F and G preferred stock to be sold in the private placements have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement of such Act and applicable state securities laws. However, the Company has agreed to register for resale the shares of common stock issued in the private placement.
About PositiveID Corporation
PositiveID Corporation develops unique medical devices and biological detection systems, focused primarily on diabetes management, rapid medical testing and airborne bio-threat detection. Its wholly owned subsidiary, MicroFluidic Systems, is focused on the development of microfluidic systems for automated preparation of and performance of biological assays. For more information on PositiveID, please visit www.PositiveIDCorp.com .
The PositiveID Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7717
About Ironridge Global
Ironridge Global Partners, LLC is a public equity firm that brings traditional private equity financial sophistication to small cap public companies. By supplying innovative financing solutions and flexible capital, Ironridge Global seeks to unlock the full potential of cash-constrained businesses. The firm's core objective is to propel high growth companies in building faster growing and more profitable enterprises.
Statements about PositiveID's future expectations, including, the expectation that if the total amount of the financings is completed, PositiveID will have funding through at least 2012, including the continued development of its diabetes management products and biological detection technologies; the likelihood that this transaction will potentially fund PositiveID with no ratchets, resets or warrants; the belief that this capital comes at a critical time in PositiveID's evolution, as it prepares for its iglucose(TM) mobile health system for diabetes management to receive regulatory clearance and come to market; the belief that this capital, if realized, will also enable PositiveID to continue the development of its Easy Check(TM) non-invasive breath glucose detection device and GlucoChip(TM) glucose-sensing microchip for people with diabetes, as well as commercialize its rapid biological detection technologies; and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and PositiveID's actual results could differ materially from expected results. These risks and uncertainties include the Company's ability to satisfy the conditions to the completion of the financings, including that the Securities and Exchange Commission will declare effective a registration statement filed by PositiveID for the resale of PositiveID's common stock in connection with the transactions described herein; delays in the completion of the financings; the ability of Ironridge to pay the principal balance of the promissory notes upon maturity; the Company's ability to continue the development of its diabetes management and rapid biological detection products; as well as certain other risks. Additional information about these and other factors that could affect the Company's business is set forth in the Company's various filings with the Securities and Exchange Commission, including those set forth in the Company's 10-K filed on March 25, 2011, and 10-Q filed on May 13, 2011, under the caption "Risk Factors." The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
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SOURCE: PositiveID Corporation
CONTACT: Allison Tomek 561-805-8000 [email protected] Dan Schustack CEOcast 212-732-4300 [email protected]