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VeriChip to Place Implantable Division on Block
"Assuming we reach our goal of 1,000, we are prepared to expand," Silverman told RFID Journal in April, noting that HearUSA has locations throughout the country. "If, three months from now, nobody gets the chip, we will have to look at our business model."
Apparently, VeriChip's board of directors decided not to wait the three months to re-examine that model. At the closing of the Xmark transaction, Silverman will no longer serve as an officer or director of the company; instead, Joseph Grillo, Digital Angel's president and CEO, will replace him as a board member of the company, to become its chairman.
After VeriChip went public in February (see VeriChip Launches IPO), VeriTrace generated the first revenue for the company's implantable division. And in its financial report for the first quarter of 2008, the Delray Beach, Fla., firm indicated that its losses shrank. It lost $2.8 million, or 30 cents per share, on revenue of $8.6 million. In the prior-year quarter, it lost $3.3 million, or 47 cents a share, on revenue of $7.1 million. What's more, its gross profit was up by 5.4 percent.
VeriChip's implantable business, however, only generated $3,000 in revenue in the quarter ending March 31, 2008, during which the company saw a $1.9 million loss. According to a press statement released by Stanley, Xmark generates annual revenues in excess of $30 million, so without that revenue, VeriChip's implantable business would be unsustainable.
When the Xmark sale is complete, VeriChip plans to use the $45 million from Stanley to pay outstanding debt, then utilize $15 million of the remaining $21.4 million to pay shareholders a special dividend. If the firm sells the VeriMed business or the whole of VeriChip, it plans to propose a second, special dividend to its stockholders consisting of all remaining distributable cash then held by VeriChip.
Privacy advocates have long complained that VeriChip's implantable tag could put consumers' personal privacy at risk, proposing that the tags could be read without a carrier's knowledge. A news report released last fall, linking implanted RFID transponders to tumors in lab mice, caused additional public relations hurdles for the company (see VeriChip Defends the Safety of Implanted RFID Tags).
VeriChip has also been involved in research to develop an RFID-enabled sensor tag that could make it easier for diabetics to monitor blood-sugar levels (see VeriChip, Digital Angel Partner With Receptors LLC to Develop Glucose Sensor). While Digital Angel, along with Receptors LLC, are funding that research, McKeage says it would be up to the VeriMed buyer whether or not to continue such funding.
Xmark sells three types of branded RFID-based security products: infant security systems (under the Hugs and Halo brands), wander protection systems (under the RoamAlert brand) and hospital asset-tracking systems (under the Assetrac brand). Stanley has three main business divisions: construction tools, industrial tools and security (which comprises electrical and mechanical door locks). The Xmark products will be integrated into its security business.
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Apparently, VeriChip's board of directors decided not to wait the three months to re-examine that model. At the closing of the Xmark transaction, Silverman will no longer serve as an officer or director of the company; instead, Joseph Grillo, Digital Angel's president and CEO, will replace him as a board member of the company, to become its chairman.
After VeriChip went public in February (see VeriChip Launches IPO), VeriTrace generated the first revenue for the company's implantable division. And in its financial report for the first quarter of 2008, the Delray Beach, Fla., firm indicated that its losses shrank. It lost $2.8 million, or 30 cents per share, on revenue of $8.6 million. In the prior-year quarter, it lost $3.3 million, or 47 cents a share, on revenue of $7.1 million. What's more, its gross profit was up by 5.4 percent.
VeriChip's implantable business, however, only generated $3,000 in revenue in the quarter ending March 31, 2008, during which the company saw a $1.9 million loss. According to a press statement released by Stanley, Xmark generates annual revenues in excess of $30 million, so without that revenue, VeriChip's implantable business would be unsustainable.
When the Xmark sale is complete, VeriChip plans to use the $45 million from Stanley to pay outstanding debt, then utilize $15 million of the remaining $21.4 million to pay shareholders a special dividend. If the firm sells the VeriMed business or the whole of VeriChip, it plans to propose a second, special dividend to its stockholders consisting of all remaining distributable cash then held by VeriChip.
Privacy advocates have long complained that VeriChip's implantable tag could put consumers' personal privacy at risk, proposing that the tags could be read without a carrier's knowledge. A news report released last fall, linking implanted RFID transponders to tumors in lab mice, caused additional public relations hurdles for the company (see VeriChip Defends the Safety of Implanted RFID Tags).
Xmark sells three types of branded RFID-based security products: infant security systems (under the Hugs and Halo brands), wander protection systems (under the RoamAlert brand) and hospital asset-tracking systems (under the Assetrac brand). Stanley has three main business divisions: construction tools, industrial tools and security (which comprises electrical and mechanical door locks). The Xmark products will be integrated into its security business.
