UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) SEPTEMBER 19, 2003
APPLIED DIGITAL SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
Missouri 000-26020 43-1641533
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 Royal Palm Way, Suite 410, Palm Beach, Florida 33480
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 561-805-8000
ITEM 5. OTHER EVENTS
Securities Purchase Agreements Between the Company and First Investors
Holding Co., Inc., Magellan International LTD and Cranshire Capital, LP
On September 19, 2003, Applied Digital Solutions, Inc. ("the
Company") entered into three separate securities purchase agreements (the
"Agreements") with each of First Investors Holding Co., Inc., Magellan
International LTD and Cranshire Capital, LP (collectively referred to herein
as the "Purchasers") for the purchase of up to 11,428,571 shares, 5,714,286
shares and 5,714,286 shares of the Company's common stock, respectively,
(22,857,143 shares in the aggregate). However, in no event may the aggregate
number of shares purchased under each of the agreements with First Investors
Holding Co., Inc., Magellan International LTD and Cranshire Capital, LP
exceed that number of shares having an aggregate purchase price in excess of
$3,999,999.99, $2,000,000 and $2,000,000, respectively. The 22,857,143
shares of common stock are part of the 30,000,000 shares of common stock
being offered by the Company pursuant to its Registration Statement on Form
S-1 (File No. 333-106300). The Company intends to use the net proceeds from
the purchases to help fund interest and principal payments under the terms of
the Company's $10.5 million aggregate principal balance of 8.5% Convertible,
Exchangeable Debentures and for general corporate purposes (including
working capital requirements, sales and marketing and capital expenditures).
J.P. Carey Securities, Inc. ("J.P. Carey"), acted as the
Company's placement agent with respect to the Agreements. Under the terms of
the placement agency agreement with J.P. Carey, the Company has agreed to
pay J.P. Carey a fee of 2.0% of the gross subscription proceeds from the
shares sold to the Purchasers.
TERMS OF THE SECURITIES PURCHASE AGREEMENTS
The Agreements provide for up to ten (10) settlement dates for
purchases of shares of the Company's common stock over a 31-trading day
period. The Agreements provide for the purchases of the shares to be at a
per share price equal to 87.00% of the average of the volume weighted
average price of the Company's common stock (as reported by Bloomberg
Financial L.P., using the VAP function) for the three trading days
immediately preceding each applicable settlement date. The Company is not
obligated to sell any shares under the Agreements at a price less than the
floor price of $0.35 per share. The terms of the Agreements contemplate that
the number of shares to be purchased will, in general, be apportioned evenly
over the ten (10) settlement dates.
There are several exceptions to the per share purchase price,
the timing, the number of shares to be purchased, and the Purchasers'
obligations. First, the Purchasers each have the right, on the day
preceding any settlement date, to elect to acquire up to the maximum
aggregate amount of shares to be acquired under their respective agreement
on the applicable settlement date, subject to the dollar limitation on the
proceeds. Second, the Company is not required to sell, and the Purchasers are
not required to purchase any of the Company's common stock at a price that
is less than the floor price. If the per share price with respect to a
particular settlement date is less than the floor price, the Purchasers may
but are not required to each purchase up to the maximum aggregate amount of
shares under their respective agreements at the floor price, subject to the
dollar limitation on the proceeds. Third, if the volume weighted average
trading price on two consecutive settlement dates is less than $0.42, then,
at any time thereafter, the Purchasers are each entitled to terminate any
and all of their obligations under their respective agreement.
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The Securities Purchase Agreements with each of First Investors
Holding Co., Inc., Magellan International LTD and Cranshire Capital, LP are
included herein as exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10.1 Securities Purchase Agreement between Applied Digital
Solutions, Inc. and First Investors Holding Co., Inc.,
dated September 19, 2003
10.2 Securities Purchase Agreement between Applied Digital
Solutions, Inc. and Magellan International LTD, dated
September 19, 2003
10.3 Securities Purchase Agreement between Applied Digital
Solutions, Inc. and Cranshire Capital, LP, dated September
19, 2003
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
APPLIED DIGITAL SOLUTIONS, INC.
(Registrant)
Date: September 19, 2003 By: /s/ Evan C. McKeown
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Evan C. McKeown
Senior Vice President and Chief
Financial Officer
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