VeriChip Corporation Comments on Associated Press Article

1. VeriChip is safe and has been cleared by the FDA as a Class II Medical Device.

The VeriMed Patient Identification System has been cleared by the FDA and, as stated in the Associated Press article, the FDA stands by its approval. The article and the alleged research cited make no link whatsoever to malignant tumor formation from microchips in humans. As the article states, research protocol guidelines clearly indicate that making such a link from mice to humans is a very big leap.

Since learning of the article, we have discovered two studies from our manufacturer – Chronic Evaluation in Rodents to a Microchip Implant Used for Animal Identification [D.J. Ball, R.L. Robinson, R.E. Stoll and G.E. Visscher, Sandoz Research Institute, East Hanover, NJ] and Tissue Reaction to an Implantable Identification Device in Mice [Ghanta N. Rao and Jennifer Edmondson] – that examine microchip implants in laboratory mice and rats and conclude that microchip implants DO NOT cause malignant tumors.

2. Millions of dogs and cats have safely received a similar microchip over the past 15 years.

The article and the alleged research cited make no link whatsoever to malignant tumor formation in dogs and cats but for one unsubstantiated report. It is important to note this report was not a controlled, scientific study, rather it was a report of a single dog that presented with a tumor, and therefore it should not be inferred that the microchip caused the tumor without further study.

Over the last 15 years, millions of dogs and cats have safely received an implantable microchip with limited or no reports of adverse health reactions from this life-saving product, which was recently endorsed by the USDA. These chips are a well-accepted and well-respected means of global identification for pets in the veterinary community. Veterinarians would not continue to prescribe pet microchips if they believed they presented significant risk of malignant tumors in dogs and cats.

3. Laboratory mice and rats have a high probability of tumors at any injection site, regardless of the type of injection.

The article and the alleged research cited appear to be completely focused on laboratory mice/rats. It is important to note that the incidence of tumor formation in mice/rats from simple injections of any type (including vaccinations) is much higher than in any other type of laboratory animals.

Upon learning some of these lab mice/rat characteristics, the Company asked a prominent veterinary pathologist researcher, Dr. Lawrence McGill, a 30-year industry veteran, former Chair of the Council of Communications of the American Veterinary Medical Association, and former president of the Utah Veterinary Medical Association, to discuss these characteristics (and more) on an independent basis with the reporter. It is our understanding that the reporter interviewed Dr. McGill but failed to include his review or comments in the article. The Company now intends to retain Dr. McGill as an expert to assist in the review process of this article and the studies referenced therein.

Dr. McGill, said, “In my experience in the veterinary diagnostic laboratory, I have seen thousands of injection site sarcomas in cats and a few in dogs. I have done extensive research with dogs and cats and am familiar with much of the research in rats and mice. As I review the reports in the literature, the sites that have sarcomas attributed to microchips are also sites where injections are given. The epidemiologic data from several different authors some of which I am a coauthor, do not show any association of these sarcomas with microchips.”

4. The companies take these reports seriously and recognize our responsibility to ensure product safety and to protect our corporate reputation.

We will continue to review the content, veracity and credibility of the studies alluded to in the article, as well as all studies relevant to this and other potential health issues. The Company will take the necessary steps to ensure that our products remain safe to the end user. We are in the business of protecting people and pets and we will continue to use our fullest efforts, in all regards, towards that end.

We also believe in protecting our corporate reputation and shareholder value by reviewing all relevant press reports and determining their veracity and credibility based on their factual content, innuendo and source.