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VeriChip Corporation Agrees to Sell Xmark Corporation to The
Stanley Works for
$45 Million Cash
Company Provides Strategic Plan Resulting From the
Sale
Of
Xmark Corporation
VeriMed Business and Corporate Entity To Be Marketed
for
Sale
DELRAY
BEACH, FL – May 15, 2008 –VeriChip Corporation (the "Company")
(NASDAQ: CHIP), a provider of radio frequency identification (RFID)
systems for healthcare and patient-related needs, has entered into a
definitive stock purchase agreement
with The Stanley
Works ("Stanley")
for the sale of its wholly-owned Canadian
subsidiary, Xmark Corporation (“Xmark”), for $45 million in cash.
Following the
completion of the sale of Xmark
to
Stanley,
the Company will retire all of its outstanding debt.
The Company expects to realize net proceeds, after retiring
its outstanding debt, paying transaction related costs, and other
contractual commitments, of approximately $21.4 million.
Under the terms of the stock purchase agreement, $4.5
million of the proceeds will be held in escrow for a period of 12
months. The Company intends to fund a special
dividend to stockholders estimated to be at least $15 million.
The record date for this special dividend will be set and
will be announced in the proxy statement. As of
May 15, 2008, the Company had approximately 11.0 million common
shares outstanding.
The Company
also announced that it has retained the investment banking firm of
Kaufman Bros., L.P., to assist in the sale of the Company’s VeriMed
Health Link business, and the possible sale of the entire Company,
after the sale of Xmark. The Company intends to
propose a second, special dividend to its stockholders consisting of
all of the remaining distributable cash then held by the Company
following any sale of the VeriMed Health Link business or the
Company and the release of the escrowed funds.
At the
closing of the Xmark transaction, Scott R. Silverman and the Company
have mutually agreed that Mr. Silverman will no longer be an officer
or director of the Company, although he will remain active as a
consultant in the sale of the VeriMed Health Link business and the
Company. William J. Caragol will continue as
President and Chief Financial Officer of the Company.
Joseph J. Grillo,
President and Chief Executive Officer of Applied Digital Solutions,
Inc. d/b/a Digital Angel (NASDAQ: DIGA), will replace Mr. Silverman
as a Board Member of the Company, as its Chairman.
The
Xmark transaction is not subject to any financing conditions and is
subject to approval by the Company’s stockholders.
The Company’s 48.2% stockholder, Digital Angel, along with
Scott R. Silverman, the Company's chief executive officer, have
formally agreed to vote in favor of the transaction.
Proxy
Statement
The Company
plans to file with the Securities and Exchange Commission ("SEC")
and mail to its stockholders a proxy statement in connection with
the special meeting of stockholders to be called to approve the
Xmark transaction. The proxy statement will
contain important information about the Company, the transaction and
related matters. Investors and stockholders are urged to read the
proxy statement carefully when it is available. Investors and
stockholders will be able to obtain free copies of the proxy
statement and other documents filed with the SEC by the Company
through the web site maintained by the SEC at www.sec.gov. In
addition, investors and stockholders will be able to obtain free
copies of the proxy statement from the Company by contacting Kay E.
Langsford, at 1690
Congress Avenue, Suite 200, Delray
Beach, Florida
33445.
Participants in the Solicitation
The Company
and its executive officers and directors may be deemed, under SEC
rules, to be participants in the solicitation of proxies from the
Company’s stockholders with respect to the proposed Xmark
transaction. Information regarding the executive officers and
directors of the Company is included in its Form 10-K/A filed with
the SEC on April 29, 2008. More detailed information regarding the
identity of potential participants, and their direct or indirect
interests, by securities, holdings or otherwise, will be set forth
in the proxy statement to be filed with the SEC in connection with
the proposed Xmark transaction.
About VeriChip Corporation
VeriChip Corporation, headquartered in
Delray Beach, Florida,
develops, markets and sells RFID systems used to identify, locate
and protect people and assets. The Company recently began marketing
its VeriMed™ Health Link System for rapidly and accurately
identifying people who arrive in an emergency room and are unable to
communicate. This system uses the first human-implantable passive
RFID microchip, cleared for medical use in October 2004 by the
United States Food and Drug Administration.
For
more information on VeriChip, please call 1-800-970-2447, or email
info@verichipcorp.com.
Additional information can be found online at
www.verichipcorp.com.
Contact:
VeriChip
Corporation
Jay F.
McKeage
561-805-8041
jmckeage@verichipcorp.com
CEOcast
Dan Schustack
212-732-4300
dschustack@ceocast.com
Forward
Looking Statements
Certain
statements made in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are statements
regarding the intent, belief or current expectations, estimates or
projections of the Company, its directors or its officers, and
include among other items statements regarding the timing of
distributing a proxy statement and holding a stockholder meeting,
the closing of the
Xmark
transaction
with Stanley,
and of the plan to sell the VeriMed Health Link business or the
entire Company and to distribute proceeds to stockholders following
repayment of debt, satisfaction of certain liabilities and
associated Company costs, and the availability of proceeds, as well
as the potential range per share of any available proceeds, to
distribute to stockholders assuming completion of these
transactions. When used in this release, the words "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates,"
and similar expressions are generally intended to identify
forward-looking statements. Because such statements involve risks
and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Although
the Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that the anticipated results
will occur. Important factors that could cause the actual results to
differ materially from those in the forward-looking statements
include, among other items, management's ability to successfully
satisfy the conditions to the closing of the
Xmark
transaction
with Stanley,
the ability of the Company to comply with its obligations under
agreements governing indebtedness or obtain waivers from lenders in
the event of non-compliance, the continued availability of liquidity
and capital resources required to complete these transactions,
particularly in the event that such transactions require more time
than management anticipates, and other factors.
Additional
information about these and other factors that could affect the
Company’s business is set forth in the Company’s various filings
with the Securities and Exchange Commission, including those set
forth in the Company’s 10-K filed on March 28, 2008, as amended,
under the caption “Risk Factors.” The Company undertakes no
obligation to update or release any revisions to these
forward-looking statements to reflect events or circumstances after
the date of this statement or to reflect the occurrence of
unanticipated events, except as required by law.
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