Sep 30 2009
VeriChip Corporation ("VeriChip" or the "Company") (NASDAQ: CHIP) today announced it has entered into a definitive agreement for a $10,000,000 investment commitment with Optimus Technology Capital Partners, LLC, or Optimus. 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 RFID microchip. The Company will use the remainder of the funds for working capital and general corporate purposes.
Scott R. Silverman, Chairman and CEO of VeriChip, stated, "This financing arrangement was established at terms we believe are very favorable to the Company. Importantly, this financing, when completed, fully funds our development partnerships with RECEPTORS for both the virus triage detection system and glucose-sensing RFID microchip, and provides funds for additional working capital."
The Company may issue convertible preferred shares from time to time in multiple tranches. The preferred will accrue a 10% in kind dividend and provides an option for the Company to prepay with a make-whole premium. The tranches will be convertible into restricted common stock at the market price on the date of each tranche. In conjunction with the financing, R & R Consulting Partners, LLC, which is controlled by Mr. Silverman, agreed to enter into one or more Stock Loan Agreements with Optimus to facilitate the transaction. The financing is subject to customary closing conditions. The Company plans to file a Form 8-K to provide more details of the financing.
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