1 |
Name
of Reporting Person:
Applied
Digital Solutions, Inc. (“ADS”)
I.R.S.
Identification No. of Above Person (entity only)
43-1641533 | ||
2 |
Check
the Appropriate Box if a Member of a Group*
(a)
x
(b)
o | ||
3 |
SEC
use only | ||
4 |
Source
of Funds*
WC
and OO | ||
5 |
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
o | ||
6 |
Citizenship
or Place of Organization
Missouri | ||
7 |
Sole
voting power
8,838,167
shares | ||
Number
of shares beneficially
Owned
by each |
8 |
Shared
voting power
15,453,506
shares (1) | |
Reporting
person with |
9 |
Sole
dispositive power
8,838,167
shares | |
10 |
Shared
dispositive power
15,453,506
shares (1)
| ||
11 |
Aggregate
Amount Beneficially Owned by Each Reporting Person
24,291,673
shares | ||
12 |
Check
box if the Aggregate Amount in Row (11) Excludes Certain
Shares* o
| ||
13 |
Percent
of Class Represented by Amount in Row (11) o
55.2%
| ||
14 |
Type
of Reporting Person*
CO |
(1) |
ADS
shares voting and dispositive power with respect to 750,000 of these
shares with its majority-owned subsidiary, InfoTech USA, Inc., under the
terms of a Stock Pledge Agreement, and 14,703,506 of these shares with the
Digital Angel Share Trust under the terms of an Amended and Restated Trust
Agreement. |
1 |
Name
of Reporting Person:
Digital
Angel Share Trust
I.R.S.
Identification No. of Above Person (entity only)
45-6117433 | ||
2 |
Check
the Appropriate Box if a Member of a Group*
(a)
x
(b)
o | ||
3 |
SEC
use only
| ||
4 |
Source
of Funds*
OO
| ||
5 |
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
o | ||
6 |
Citizenship
or Place of Organization
Delaware | ||
7 |
Sole
voting power
-0- | ||
Number
of shares beneficially
Owned
by each |
8 |
Shared
voting power
14,703,506
shares | |
Reporting
person with |
9 |
Sole
dispositive power
-0- | |
10 |
Shared
dispositive power
14,703,506
shares | ||
11 |
Aggregate
Amount Beneficially Owned by Each Reporting Person
14,703,506
shares | ||
12 |
Check
box if the Aggregate Amount in Row (11) Excludes Certain
Shares* o
| ||
13 |
Percent
of Class Represented by Amount in Row (11) o
33.4% | ||
14 |
Type
of Reporting Person*
OO
|
Total shares held jointly by ADS and the Digital Angel Share
Trust per Amendment No. 4 |
14,703,506 |
|
Shares
pledged to InfoTech USA, Inc. per Amendment No. 4 |
750,000 |
|
Shares
held solely by ADS per Amendment No. 4 |
7,850,000 |
|
Total shares held per Amendment No. 4 |
23,303,506 |
(1) |
Shares
acquired by ADS under a letter agreement with Laurus |
513,121 |
(2) |
Shares
acquired by ADS in the open market |
12,000 |
|
Shares
sold to certain warrant holders of ADS |
(181,094) |
(3)
|
Shares
acquired by ADS under the February 25, 2005 Stock
Purchase Agreement |
644,140 |
|
Total shares beneficially owned by ADS |
24,291,673 |
(1) |
Included
in the total shares held per Amendment No. 4 to Schedule 13D were shares
related to a Share Exchange Agreement between ADS and the Issuer dated
August 14, 2003. The Share Exchange Agreement provided for ADS to purchase
3,000,000 shares of the Issuer’s common stock and a warrant for the
purchase of up to 1,000,000 shares of the Issuer’s common stock. The
Issuer issued the 3,000,000 shares to ADS on March 1, 2004, in exchange
for 1,980,000 shares of ADS’ common stock. The Share Exchange Agreement
was included as Exhibit 2.9 to Amendment No. 4 to Schedule 13D filed with
the Commission on June 17, 2004. The warrant was exercisable for five
years commencing on February 1, 2004, payable in cash or in shares of ADS’
common stock at an exercise price of $3.74 per share. ADS exercised the
warrant on December 21, 2004. ADS paid the aggregate exercise price of
$3,740,000 in cash. No other financing was required to effect the
transaction. |
(2) |
On
June 1, 2004, ADS entered into a letter agreement, referred to as the
Letter Agreement, with the Issuer and Laurus Master Fund, Ltd. (“Laurus”).
The Letter Agreement was included as Exhibit 2.10 to Amendment No. 4 to
Schedule 13D filed with the Commission on June 17, 2004. On July 31, 2003,
the Issuer issued to Laurus a Convertible Note in the amount of
$2,000,000, and on August 28, 2003, the Issuer issued to Laurus a Minimum
Borrowing Convertible Note in the amount of $1,500,000. Pursuant to the
terms of the Letter Agreement, Laurus agreed that with respect to each
conversion by Laurus of an outstanding amount of the Convertible Note or
the Minimum Borrowing |
Convertible
Note into the Issuer’s common stock, the Issuer and ADS had the right to
purchase all of such common stock converted by Laurus at a price per share
equal to the volume weighted average price of the Issuer’s common stock
for the three (3) trading days immediately preceding such conversion
following provision by Laurus to the Issuer and ADS of written or email
notification of such conversion. Pursuant to the terms of the Letter
Agreement, ADS acquired 513,121 shares of the Issuers common
stock: |
Date
of Purchase |
Number
of Shares
Acquired |
Price
Per
Share |
Total
Consideration
Paid |
June
30, 2004 |
150,000 |
$3.040 |
$456,000 |
October
26, 2004 |
50,000 |
$2.964 |
148,200 |
November
19, 2004 |
100,000 |
$3.725 |
372,500 |
December
24, 2004 |
213,121 |
$5.450 |
1,161,509 |
Total |
513,121 |
$2,138,209 |
As
of December 31, 2004, Laurus had fully converted the principal balances of
the Convertible Note and the Minimum Borrowing Convertible Note and, as
such, the Issuers obligations to Laurus were satisfied in full. ADS paid
cash for the shares acquired from Laurus. The number of shares purchased
did not represent 1% or more of the outstanding common stock of the Issuer
on the date of purchase. Not other financing was required to effect the
transaction. |
(3) |
Under
the terms of certain warrants that were issued by ADS on June 30, 2003 in
connection with ADS’ $10,500,000 convertible/exchangeable debentures, the
warrant holders are entitled to exchange warrants into shares of the
Issuer’s common stock owned by ADS. The warrant holders exchanged 181,094
of the warrants into 181,094 shares of the Issuer’s common stock owned by
ADS on November 22, 2004. The number of shares exchanged did not represent
1% or more of the outstanding common stock of the Issuer on such date. The
exchange price, per the terms of the warrants was $3.175 per share and the
cash proceeds to ADS totaled $574,973. No other financing was required to
effect the transaction. |
Name
and Current Business Address |
Present
Principal Occupation or Employment:
Material
Positions Held during the Past Five Years | |
Scott
R. Silverman
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
Silverman, age 41, previously served since August 2001 as a special
advisor to ADS’ Board of Directors. In March 2002, he was appointed to
ADS’ Board of Directors and named ADS’ President. In March 2003, he was
appointed ADS’ Chairman and Chief Executive Officer. | |
J.
Michael Norris
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
Norris, age 58, was appointed a director of ADS on January 12, 2004, and
serves as a member of the Audit Committee and as Chairman of the
Technology Committee of ADS’ Board of Directors. Mr. Norris served as the
Chairman and Chief Executive Officer of Next Level Communications before
it was acquired by Motorola in the spring of 2003. | |
Daniel
E. Penni
260
Eliot Street
Ashland,
MA 01721 |
Mr.
Penni, age 57, has served as a director of ADS since March 1995, and is
Chairman of the Compensation Committee and serves as a member of the
Audit, Nominating and Compliance Committees of ADS’ Board of Directors.
Currently, he is an Area Senior Vice President for Arthur J. Gallagher
& Co. (NYSE:AJG). | |
Dennis
G. Rawan
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
Rawan, age 61, was appointed a director of ADS effective December 10,
2002, and serves as Chairman of the Nominating Committee and as Chairman
of the Audit Committee of ADS’ Board of Directors. Mr. Rawan was Chief
Financial Officer of Expo International, Inc. (“Expo”) from 1996 until his
retirement in 2000. | |
Constance
K. Weaver
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Ms.
Weaver, age 52, was elected a director of ADS in July 1998. She serves as
a member of the Compensation, Nominating and Technology Committees, and as
Chairman of the Compliance Committee of ADS’ Board of Directors. Ms.
Weaver has recently served as Executive Vice President, Public Relations,
Marketing Communications and Brand Management for AT&T Corporation
(AT&T) (NYSE:T). | |
Michael
S. Zarriello
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
Zarriello, age 55, was appointed a director of ADS effective May 9, 2003,
and serves as a member of the Audit Committee and of the Nominating
Committee of ADS’ Board of Directors. Mr. Zarriello has served as a member
of the board of directors of Digital Angel Corporation, since September
2003, and he currently serves as a member of the Compensation Committee of
Digital Angel Corporation’s board of directors. He has served as Senior
Vice President and Chief Financial Officer for Rural/Metro Corporation in
Scottsdale, Arizona since July 2003. | |
Kevin
H. McLaughlin
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
McLaughlin, age 62, was appointed ADS’ Chief Operating Officer in March
2003 and its President in May 2003. Mr. McLaughlin has served as a
director of the Company’s majority-owned subsidiary, Digital Angel
Corporation, since September 2003. From April 2002
until |
the present. Mr. McLaughlin has served as a director, and from
April 2002 to March 2003, Mr. McLaughlin served as the
Chief Executive Officer, President and Chief Operating Officer of InfoTech
USA, Inc., the Company’s 52.5%
owned
subsidiary. | ||
Michael
E. Krawitz
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
Krawitz, age 35, joined the Company as Assistant Vice President and
General Counsel in April 1999, and was appointed Vice President and
Assistant Secretary in December 1999, Senior Vice President in December
2000, Secretary in March 2003 and Executive Vice President in April
2003. | |
Evan
C. McKeown
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Mr.
McKeown, age 46, joined the Company as Vice President, Chief Accounting
Officer and Corporate Controller in March 2001. He was appointed Vice
President and Chief Financial Officer in March 2002 and Senior Vice
President in March 2003. | |
Lorraine
M. Breece
1690
South Congress Avenue
Suite
200
Delray
Beach, Florida 33445 |
Ms.
Breece, age 52, joined ADS as Corporate Controller and Chief Accounting
Officer in April 2000. She was appointed Director of Accounting and SEC
Reporting in March 2001 and Vice President and Chief Accounting Officer in
March 2004. |
2.11 |
Stock
Purchase Agreement
between Applied Digital Solutions, Inc. and Digital Angel Corporation
dated February 25, 2005 |