UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): November 12, 2003
APPLIED DIGITAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 000-26020 43-1641533
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
400 ROYAL PALM WAY, SUITE 410
PALM BEACH, FLORIDA 33480
(Address of principal executive offices)
561-805-8000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On November 12, 2003, Applied Digital Solutions, Inc. (Nasdaq:
ADSX) announced that it had entered into a letter agreement with the
Purchasers of its $10.5 million aggregate principal amount of 8.5%
Convertible Exchangeable Debentures ("the Debentures") that were issued on
June 30, 2003. Under the letter agreement, the Purchasers were required to
convert a minimum of 50% of the outstanding principal amount of the
Debentures plus all accrued and unpaid interest into shares of the Company's
common stock on November 12, 2003, the First Conversion Date. The conversion
price was $0.35 per share. In addition, per the terms of the letter
agreement the Purchasers are required to convert any remaining outstanding
principal amount of the Debentures plus accrued interest on or before
November 19, 2003, the Second Conversion Date. The conversion price for the
Second Conversion Date is 84% of the volume weighted average trading price
of the Company's common stock for the five trading days prior to November
17, 2003, (the "Discounted VWAP"). If the Discounted VWAP is less than $0.35
per share, the conversion price shall be $0.35 per share and not the
Discounted VWAP and the Purchasers shall not be obligated to purchase any
remaining principal amount. As of the First Conversion Date, approximately
93% of the original principal amount of the Debentures has been converted.
The Company has issued 23.8 million shares of its common stock in connection
with the conversions taking place on the First Conversion Date.
Any Debenture that is not converted under the terms of the letter
agreement will continue in accordance with the terms of the Debentures and
related agreements, except that a Purchaser electing not to convert its
Debenture under the offer may not deem the participation in the offer by the
other Purchasers to change the price or cause other adjustment to the
Debentures.
The Company issued a press release on November 12, 2003, announcing
that it had entered into a letter agreement with the Purchasers. That press
release incorrectly stated that the Second Conversion Date was November 26,
2003, instead of November 19, 2003.
A Form of Letter Agreement between the Company and the Purchasers
is included herein as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
(99.1) Form of Letter Agreement between Applied Digital Solutions,
Inc. and each of the Purchasers
SIGNATURES
Pursuant to the requirements of the Securities Exchange 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.
By: /s/ Evan C. McKeown
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Name: Evan C. McKeown
Title: Senior Vice President and
Chief Financial Officer
Dated: November 13, 2003
INDEX TO EXHIBITS
Exhibit Number Description
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99.1 Form of Letter Agreement between Applied Digital
Solutions, Inc. and each of the Purchasers