PositiveID Announces Chair, CEO Issued Letter to Holders

PositiveID Corporation ("PositiveID" or "Company") PSID, a developer of biological detection and diagnostics solutions, announced today that Chairman and CEO William J. Caragol released a letter to stockholders. Dear Fellow Stockholders: I am extremely proud of what the PositiveID team accomplished during 2014, including the Company's first revenue generation since launching our business plan in 2011. I am eager to kick off 2015 so that we can continue to build upon our many successes achieved over the past year. I would also like to thank you, our stockholders, for your support and faith in our team and our products. For those of you who have been with us over the years, I believe there continue to be many significant opportunities ahead and ensure to you that we are ready to capitalize on these opportunities to deliver value for our stockholders. As you may recall, we achieved several key milestones and forged noteworthy relationships in 2014 with world-class partners, both government and commercial. In November, we also entered into a $4 million financing that, we believe, will help us to bring our Firefly Dx technology to field testing and commercialization. I have summarized below the status of our two main products and highlighted what we expect to achieve in 2015. M-BAND In 2014, we entered into an agreement with a large government contractor to support a contract for the U.S. Department of Defense ("DoD") to support the Joint United States Forces Korea Portal and Integrated Threat Recognition ("JUPITR") Program. We also shipped M-BAND systems to the Korean peninsula and Aberdeen Proving Ground in Maryland for continued testing as part of the JUPITR program. The contract had a total value to PositiveID of $1 million. On December 16, 2014, the U.S. Department of Homeland Security ("DHS") released a request for information ("RFI") related to automated detection systems for the BioWatch system. We believe that the beginning of the procurement process and our teaming and license agreements currently in place, position us well for the next steps in the rollout of M-BAND in 2015. We expect to continue operational testing and evaluation of M-BAND in 2015, positioning us well for potential opportunities in both DoD and DHS markets. In April of last year, we announced a teaming partner was awarded a prime contract by the U.S. Defense Threat Reduction Agency ("DTRA") to conduct research and development to combat weapons of mass destruction. The multiple-award indefinite delivery/indefinite quantity ("ID/IQ") contract has a total value of approximately $4 billion for all awardees, if all options are exercised. Both our Firefly Dx system and M-BAND airborne bio-threat detector are part of the teaming agreement. Firefly Dx In 2014 we accelerated the prototype development of Firefly Dx, our real-time, hand held, polymerase chain reaction (PCR) pathogen detection system, and engaged specialized engineering firm Infinite Vision. We also announced two U.S. government agreements related to Firefly Dx, including a SenseNet Program contract from the U.S. Department of the Interior on behalf of DHS, and a U.S. Special Operations Command ("USSOCOM") Cooperative Research and Development Agreement with Special Operations Research, Development, & Acquisition Center, Science & Technology Directorate, to further develop Firefly Dx for use across the USSOCOM mission space. In May 2014, we announced we signed a Space Act Agreement with NASA's Ames Research Center. Under this Space Act Agreement, NASA will assess our Firefly Dx technology for potential ground and space applications, while we assess the Firefly Dx technology to improve the development of its hardware for extreme environments, such as DoD field applications. We are continuing to pursue several U.S. government agency contracts for the continued development of Firefly Dx. We are seeking these development contract opportunities to de-risk and co-fund the final stages of Firefly Dx development, in a model similar to the one used to complete M-BAND. We anticipate completing the second phase prototype of Firefly Dx in the first half of 2015, which will enable us to demonstrate the technology and run data for potential partners, an important step in the development of the final prototype. The global PCR market is vast, and is projected to reach approximately $27.4 billion by 2015, according Research and Markets' "Polymerase Chain Reaction (PCR) - Products/Tools - A Global Market Watch, 2009-2015." We are aiming for this large market with Firefly Dx and believe we can begin the ramp of commercial sales of the product in 2016 and 2017. In closing, I hope you remain as excited about the prospects for PositiveID as we are. I am proud of what we accomplished in 2014, including our contracts and agreements, and the relationships we have fostered to enhance our positioning and underscore the validity and promise of our technology, products and our team. We believe that we are well positioned to outperform last year in 2015, with backlog revenue double that which has been recognized to date, and a significant revenue pipeline for 2015 and 2016. We are dedicated to delivering continued execution for our stockholders and, importantly, are prepared to benefit from the opportunities ahead. We plan to hold a conference call later this month to more fully review these results and our plans for 2015 and beyond. Please watch for coming details. I thank you for staying with us on this journey. Happy New Year! William J. Caragol Chairman and Chief Executive Officer