By Angela McDaniels
Tacoma, Wash., Sept. 29 - VeriChip Corp. will sell up to $10 million of series A convertible preferred stock to Optimus Technology Capital Partners, LLC under a stock purchase agreement reached Tuesday, according to an 8-K filing with the Securities and Exchange Commission.
The company will issue the preferreds for $10,000 each in multiple tranches.
Dividends are payable in kind and accrue at 10% per year.
The preferreds are callable at any time subject to the payment of a make-whole premium if called during the first four years.
The tranches will be convertible into restricted common stock at the market price on the date of each tranche.
The company received $800,000 from the investor on the closing date, which will be credited toward the first tranche.
The company expects to use a portion of the proceeds to fund its development programs with Receptors LLC to develop a virus triage detection system for the H1N1 virus and an in vivo glucose-sensing microchip. The remainder will be used for working capital and general corporate purposes.
VeriChip makes radio frequency identification systems for the health-care sector and is based in Delray Beach, Fla.
| Issuer: | VeriChip Corp.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $10 million
|
| Dividends: | 10%, payable in kind
|
| Price: | $10,000
|
| Conversion price: | Equal to the market price on the tranche's closing date
|
| Call option: | At any time
|
| Warrants: | No
|
| Investor: | Optimus Technology Capital Partners, LLC
|
| Pricing date: | Sept. 29
|
| Stock symbol: | Nasdaq: CHIP
|
| Stock price: | $2.61 at close Sept. 29
|
| Market capitalization: | $35.91 million
|
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