VeriChip Corporation (NASDAQ:CHIP) ("VeriChip"), a provider of radio frequency identification (RFID) systems for healthcare and patient-related needs, and Steel Vault Corporation (OTCBB:SVUL) ("Steel Vault"), a premier provider of identity security products and services, announced today that VeriChip has completed its acquisition of Steel Vault to provide unique health and security identification tools to protect consumers and businesses. In conjunction with the merger, VeriChip has changed its name to PositiveID ("PositiveID" or the "Company").
PositiveID represents the convergence of a pioneer in personal health records and the first and only FDA-cleared implantable microchip for patient identification, VeriChip, with a leader in the identity security space, Steel Vault, focused on access and security of consumers' critical data.
PositiveID will initially operate primarily in two areas: HealthID and ID Security. HealthID will focus on bringing innovative health solutions to consumers and businesses based on the Company's intellectual property, specifically a rapid virus detection system for the H1N1 virus and other forms of pandemic viruses, and an in vivo glucose-sensing RFID microchip, both of which are currently under development with partner RECEPTORS LLC. The Company will also offer its Health Link personal health record to help consumers manage their health records online. Through its ID Security segment, the Company will offer identity theft protection and related services including credit monitoring and reporting through its NationalCreditReport.com website.
Under terms of the agreement and plan of reorganization, Steel Vault stockholders will receive 0.5 shares of VeriChip common stock for every share of Steel Vault common stock held. The outstanding stock options and warrants of Steel Vault will also be converted at the same ratio. No fractional shares of VeriChip common stock will be issued in connection with the proposed merger. Instead, VeriChip will make a cash payment to each Steel Vault stockholder who would otherwise receive a fractional share. This merger is a stock–for–stock transaction, and is expected to be a tax free exchange.
Commenting on the transaction, Scott R. Silverman, Chairman and CEO of PositiveID, stated, "In joining these two companies, we believe we are better positioned to accelerate the development of our exciting diagnostic and sensor applications such as glucose-sensing, as well as our rapid virus detection system for the H1N1 virus and other pandemic viruses. By moving beyond the original patient identification application of our implantable RFID microchip technology, we believe that we will be able to get high-value products to market faster with a more efficient use of capital."
Silverman continued, "From a financial standpoint, we believe the merger has made us stronger by eliminating the duplicative costs of running two public companies. Furthermore, we are fully-funded to develop the glucose-sensing microchip and the rapid virus detection system and have no debt."