Filed
Pursuant to Rule 424(b)(3)
Registration No. 333-157696
PROSPECTUS
SUPPLEMENT
(to the Prospectus dated March 12, 2009)
VERICHIP CORPORATION
8,087,038
Shares of
Common Stock
This
prospectus supplement and the accompanying prospectus relate to the resale from time to time of a total of up to 8,087,038 shares
of our common stock, par value $.01 per share, by the selling stockholders described in the section
entitled Selling Security Holders beginning on page 7 of the accompanying prospectus.
The selling stockholders may offer and sell any of the shares of common stock from time to
time at fixed prices, at market prices or at negotiated prices, and may engage a broker, dealer or
underwriter to sell the shares. One of the selling stockholders, R & R Consulting Partners, LLC, entered into a Stock Loan
Agreement with an affiliate of Optimus CG II, Ltd. on September 29, 2009, under which R & R has
agreed to lend up to $13.5 million of shares of our common stock pursuant to this prospectus
supplement and the accompanying prospectus. For additional information on
the possible methods of sale that may be used by the selling stockholders, you should refer to the
section entitled Plan of Distribution beginning on page 9 of the accompanying prospectus. We will not receive
any proceeds from the sale of the shares of common stock by the selling stockholders. We will pay
all expenses incurred in effecting the registration statement of which this prospectus supplement and accompanying prospectus constitute
a part.
Our
shares of common stock are listed on the Nasdaq Capital Market under the symbol CHIP. On
September 28, 2009, the last reported sale price of our common stock was
$3.07 per share.
Our principal executive offices are located at 1690 South Congress Avenue, Suite 200, Delray
Beach, Florida 33445, and our telephone number is (561) 805-8008.
THIS PROSPECTUS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH, AND MAY NOT BE DELIVERED OR UTILIZED WITHOUT, THE ACCOMPANYING PROSPECTUS.
INVESTING IN THESE SECURITIES INVOLVES RISKS. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BEGINNING ON PAGE 3 OF THE ACCOMPANYING PROSPECTUS BEFORE PURCHASING THE COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus supplement is September 29, 2009.
This prospectus supplement supplements the Selling Security Holders information in the accompanying prospectus
by adding the following information.
Stock Loan Agreement
One of the selling stockholders, R & R Consulting Partners, LLC, entered into a Stock Loan
Agreement with an affiliate of Optimus CG II, Ltd. on September 29, 2009, under which R & R has
agreed to lend up to $13.5 million of shares of our common stock pursuant to this prospectus
supplement and the accompanying prospectus.
The Stock Loan Agreement was entered into as a condition of Optimus CG II, Ltd.s affiliate,
Optimus Capital Partners, LLC, dba Optimus Technology Capital Partners, LLC, entering into a
Convertible Preferred Stock Purchase Agreement with us on the same date. The transactions were
reported in our current report on Form 8-K dated September 29, 2009.
Under the Stock Loan Agreement, at any time or from time to time after receipt, Optimus CG II,
Ltd. may sell, transfer, assign, encumber or otherwise dispose of the borrowed shares in any
manner, at any time, and for any consideration in its sole discretion. The borrowed shares may not
be voted by the borrower, nor may any other shares of our common stock held by the borrower or its
affiliates until all of the borrowed shares have been returned to R & R. R & R may demand the
return of some or all of the borrowed shares at any time after the six-month anniversary date the
borrowed shares are delivered, provided that no shares of our Series A Preferred Stock are then
outstanding. R & R received a fee of $100,000.00 plus interest at a rate of 2.0% per annum based
upon the calculated value of the borrowed shares for lending its stock.
The sole stockholder of Optimus CG II, Ltd. is Optimus Capital Partners, LLC, dba Optimus
Technology Capital Partners, LLC. Voting and dispositive power with respect to any shares held or
controlled by Optimus CG II, Ltd. is exercised by Terry Peizer, the Managing Director of Optimus
Technology Capital Partners, LLC, who acts as investment advisor to Optimus CG II, Ltd. Optimus CG
II, Ltd. is not a broker-dealer or an affiliate of a broker-dealer.
R & R, Optimus CG II, Ltd. and any broker-dealers that act in connection with the sale of the
shares might be deemed to be underwriters within the meaning of Section 2(11) of the Securities
Act of 1933. Any commissions received by such broker-dealers and any profit on the resale of the
shares sold by them while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. R & R or Optimus may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. If R &R or Optimus is deemed
to be an underwriter within the meaning of Section 2(11) of the Securities Act, R & R or Optimus
may be subject to the prospectus delivery requirements of the Securities Act. We have informed R &
R and Optimus that the anti-manipulative provisions of Regulation M promulgated under the
Securities Exchange Act of 1934 may apply to its sales in the market. We have agreed to indemnify
R & R and Optimus against certain liabilities, including certain liabilities under the Securities
Act and state securities laws, relating to the registration of the shares offered by this
prospectus supplement and the accompanying prospectus.
S-1
VERICHIP CORPORATION
8,087,038
Shares of
Common Stock
This prospectus relates to the resale from time to time of a total of up to 8,087,038 shares
of our common stock, par value $.01 per share, by the selling stockholders described in the section
entitled Selling Security Holders beginning on page 7 of this prospectus.
The selling stockholders may offer and sell any of the shares of common stock from time to
time at fixed prices, at market prices or at negotiated prices, and may engage a broker, dealer or
underwriter to sell the shares. However, as of March 11, 2009, they have represented to us that
they do not have any intentions at such time to sell the securities registered pursuant to the
registration statement of which this prospectus constitutes a part. For additional information on
the possible methods of sale that may be used by the selling stockholders, you should refer to the
section entitled Plan of Distribution beginning on page 9 of this prospectus. We will not receive
any proceeds from the sale of the shares of common stock by the selling stockholders. We will pay
all expenses incurred in effecting the registration statement of which this prospectus constitutes
a part.
Our shares of common stock are listed on the Nasdaq Global Market under the symbol CHIP. On
March 11, 2009, the last reported sale price of our common stock was
$0.33 per share.
Our principal executive offices are located at 1690 South Congress Avenue, Suite 200, Delray
Beach, Florida 33445, and our telephone number is (561) 805-8008.
INVESTING IN THESE SECURITIES INVOLVES RISKS. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BEGINNING ON PAGE 3 OF THIS PROSPECTUS BEFORE PURCHASING THE COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is March 12, 2009.
TABLE OF CONTENTS
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Page
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1
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3
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7
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7
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7
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9
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11
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11
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11
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12
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13
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SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This
summary does not contain all of the information you should consider before making an investment
decision. You should read the entire prospectus carefully, including the Risk Factors beginning
on page 3, and the consolidated financial statements and the notes to those financial statements
incorporated in this prospectus by reference to our Annual Report on
Form 10-K
filed with the
Securities and Exchange Commission, or the SEC, on February 12, 2009, before making an investment
decision. Unless the context otherwise requires in this prospectus, the terms we, us and our
refer to VeriChip Corporation.
VERICHIP CORPORATION
Our Business
We have historically developed, marketed and sold radio frequency identification, or RFID,
systems used for the identification of people in the healthcare market. We are currently focused on
our options, including the possible development of the glucose sensing microchip, and are
considering and will review other strategic opportunities. As a result of our sale of Xmark
Corporation, or Xmark, our wholly-owned Canadian subsidiary, our only remaining business is our
VeriMed Health Link system, formerly known as the VeriMed patient identification system, which uses
an implantable passive RFID microchip that is used in patient identification applications. Each
implantable microchip contains a unique verification number that is read when it is scanned by our
scanner. In October 2004, the U.S. Food and Drug Administration, or FDA, cleared our VeriMed Health
Link system for use in medical applications in the United States. As
of March 3, 2009, we have
generated nominal revenue from sales of our Health Link system. The key components of the Health
Link system are a passive microchip, which is approximately the size of a grain of rice, a fixed
location or a wireless handheld scanner used to read the 16-digit identification number contained
on the microchip, and a secure, web-enabled database containing a patients personal health record.
The Company
We were formed as a Delaware corporation by Digital Angel Corporation in November 2001. In
January 2002, we began our efforts to create a market for RFID systems that utilize our human
implantable microchip. On February 14, 2007, we completed our initial public offering in which we
sold 3,100,000 shares of our common stock at $6.50 per share.
On July 18, 2008, we completed the sale of all of the outstanding capital stock of Xmark,
which was principally all of our operations, to Stanley Canada Corporation, a wholly-owned
subsidiary of The Stanley Works. The sale transaction was closed for $47.9 million in cash, which
consisted of the $45 million purchase price plus a balance sheet adjustment of approximately $2.9
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 to provide for indemnification obligations under the stock
purchase agreement, if any. As a result, we recorded a gain on the sale of Xmark of $6.2 million,
with $4.5 million of that gain deferred until the escrow is settled. The financial position,
results of operations and cash flows of Xmark have been reclassified as discontinued operations in
2008 and 2007.
Following the completion of the sale of Xmark to Stanley Canada, we retired all of our
outstanding debt for a combined payment of $13.5 million and settled all contractual payments to
Xmarks and our officers and management for $9.1 million. On August 28, 2008, we paid a special
dividend to stockholders of $15.8 million.
On November 12, 2008, we entered into an Asset Purchase Agreement, or APA, with Digital Angel
Corporation and Destron Fearing Corporation, a wholly-owned subsidiary of Digital Angel
Corporation, which collectively are referred to as Digital Angel. The terms of the APA included
the sale to us of patents related to an embedded bio-sensor system for use in humans, and the
assignment of any rights of Digital Angel under a development agreement associated with the
development of an implantable glucose sensing microchip. We also received covenants from Digital
Angel and Destron Fearing that will permit the use of intellectual property of Digital Angel
related to our VeriMed Health Link business without payment of ongoing royalties, as well as
inventory and a limited period of technology support by Digital Angel for $500 thousand. Management
determined that the value paid was entirely attributable to the glucose sensing microchip. As such
the entire purchase price was recorded as an expense as of December 31, 2008.
Also pursuant to the APA, on November 12, 2008, the parties terminated the letter agreement
between Digital Angel and us, dated May 15, 2008, except for certain provisions relating to
indemnification in connection with the stock purchase agreement with The Stanley Works.
Additionally, the amended and restated supply agreement between Digital Angel and us, dated
December 27, 2005, was terminated, except that product warranties continue to apply to products
sold to us under that agreement subject to certain limitations, and the indemnification provisions
survive through March 4, 2013 for claims associated with the products purchased under the amended
and restated supply agreement.
On November 12, 2008, Digital Angel sold the 5,355,556 shares of our common stock that it
owned to R & R Consulting Partners, LLC, an entity owned and controlled by Scott R. Silverman, in a
private transaction. Digital Angel owned these shares of VeriChip prior to VeriChips initial
public offering in February 2007 and therefore these shares were not registered in connection with
the initial public offering. As a result of the transaction, R & R Consulting Partners, LLC and Mr.
Silverman now own 53% of our outstanding common stock, and Mr. Silverman was re-appointed as
chairman of our board effective November 12, 2008.
On November 14, 2008, we purchased from Digital Angel the remaining inventory owned by Digital
Angel related to our VeriMed Health Link business for $161 thousand which were written off to cost
of sales.
On November 12, 2008, we also announced our intention to continue to explore potential
strategic transactions with third parties, while continuing to develop our VeriMed Health Link
business.
Our principal executive offices are located at VeriChip Corporation, 1690 South Congress
Avenue, Suite 200, Delray Beach, Florida 33445, and our telephone number is (561) 805-8008.
1
The Offering
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Common stock offered by the
selling security holders
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8,087,038 shares (1)
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Common stock outstanding
after this offering
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14,110,179 (2) shares as of
March 11, 2009
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Use of proceeds
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We will not receive any proceeds from the
sale of shares of our common stock by the
selling security holders listed in this
prospectus under Selling Security Holders.
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Market price of common stock
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On March 11, 2009, the last
reported sale price of our common stock was $0.33 per share.
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Risk factors
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See Risk Factors
beginning on page 3, for a
discussion of factors you should carefully
consider before deciding to invest in our
common stock.
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Nasdaq Global Market symbol
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CHIP
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(1)
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An aggregate of 8,087,038 shares of our common stock, par value $.01
per share, held by the selling stockholders described in the section
entitled Selling Security Holders beginning on page 7 of this
prospectus.
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(2)
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Based on the number of shares outstanding as of March 11, 2009. As
of March 11, 2009, we had (i) no outstanding warrants to purchase
shares of our common stock and (ii) options outstanding to
purchase 1,225,407
shares of our common stock, of which 1,055,407 are currently exercisable at a
weighted average exercise price of $5.24 per share.
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2
RISK FACTORS
An investment in our securities involves a high degree of risk. Prior to making a decision
about investing in our securities, you should carefully consider the specific risk factors
discussed in the sections entitled Risk Factors contained in any applicable prospectus supplement
and our filings with the SEC and incorporated by reference in this prospectus, such as the risk
factors under the heading Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2008 on file with the SEC, together with all of the other information contained in
this prospectus, or any applicable prospectus supplement. These risks and uncertainties are not the
only risks and uncertainties we face. Additional risks and uncertainties not presently known to us,
or that we currently view as immaterial, may also impair our business. If any of the risks or
uncertainties described in our SEC filings or any prospectus supplement or any additional risks and
uncertainties actually occur, our business, financial condition and results of operations could be
materially and adversely affected. In that case, the trading price of our securities could decline,
and you might lose all or part of your investment.
Risks Occasioned by the Xmark Transaction
We will be unable to compete with Xmarks business for four years from the date of closing.
We have agreed that, for a period of four years after the closing of the Xmark Transaction, or
July 2012, we will not (i) directly or indirectly participate with, control or own an interest in
any entity that is engaged in the business of manufacturing, selling, financing, supplying,
marketing or distributing infant security systems, wander prevention systems, asset/personnel and
identification systems, and vibration monitoring instruments anywhere in the world or (ii) solicit,
induce, encourage or attempt to persuade any employee of Xmark to terminate his or her employment
relationship with Xmark, or offer to hire any Xmark employee. Our remaining business, the VeriMed
Health Link business, is not deemed to compete with Xmarks business. However, the non-compete
provisions will restrict our ability to engage in any business that competes with Xmarks business
until July 2012.
We will continue to incur the expenses of complying with public company reporting requirements.
We have an obligation to continue to comply with the applicable reporting requirements of the
Securities Exchange Act of 1934, or the Exchange Act, which includes the filing with the SEC of
periodic reports, proxy statements and other documents relating to our business, financial
conditions and other matters, even though compliance with such reporting requirements is
economically burdensome.
Risks Related to Our VeriMed Health Link Business Which Utilizes the Implantable Microchip
We may never achieve market acceptance or significant sales of this system.
Through
March 3, 2009, we had generated nominal revenue from sales of the microchip
inserter kits. We may never achieve market acceptance or more than nominal or modest sales of this
system.
We
attribute the modest number of people who, through March 3, 2009, have undergone the
microchip implant procedure to the following factors:
Many people who fit the profile for which the VeriMed Health Link
system was designed may not be willing to have a microchip
implanted in their upper right arm.
Physicians may be reluctant to discuss the implant procedure with
their patients until a greater number of hospital emergency rooms
have adopted the VeriMed Health Link system as part of their
standard protocol.
Physicians may be reluctant to discuss the implant procedure with
their patients because of the cost to their patients.
The media has from time to time reported, and may continue to
report, on the VeriMed Health Link system in an unfavorable and,
on occasion, an inaccurate manner. For example, there have been
articles published asserting, despite at least one study to the
contrary, that the implanted microchip is not magnetic resonance
imaging, or MRI, compatible. There have also been articles
published asserting, despite numerous studies to the contrary,
that the implanted microchip causes malignant tumor formation in
laboratory animals.
Privacy concerns may influence individuals to refrain from
undergoing the implant procedure or dissuade physicians from
recommending the VeriMed Health Link system to their patients.
Misperceptions that a microchip-implanted person can be tracked
and that the microchip itself contains a persons basic
information, such as name, contact information, and personal
health records, may contribute to such concerns.
3
Misperceptions and/or negative publicity may prompt legislative or
administrative efforts by politicians or groups opposed to the
development and use of human-implantable RFID microchips. In 2007
and 2008, a number of states introduced, and at least four states
(Wisconsin, California, Oklahoma and North Dakota) have enacted,
legislation that would prohibit any requirement that an individual
undergo a microchip-implant procedure. While we support all
pending and enacted legislation that would preclude anything other
than voluntary implantation, legislative bodies or government
agencies may determine to go further, and their actions may have
the effect, directly or indirectly, of delaying, limiting or
preventing the use of human-implantable RFID microchips or the
sale, manufacture or use of RFID systems utilizing such
microchips.
At present, the cost of the microchip implant procedure is not
covered by Medicare, Medicaid or private health insurance.
At present, no studies to assess the impact of the VeriMed Health
Link system on the quality of emergency department care have been
completed and publicly released.
We do not expect to generate more than nominal revenue from our VeriMed Health Link business
over the next 12 to 18 months, and we cannot assure you that our VeriMed Health Link business will
achieve profitability in the near term. Our VeriMed Health Link business generated gross sales of
$76,000 in 2007 and $43,000 in 2008. We are currently focused on our options, including the
possible development of the glucose sensing microchip, and are considering and will review other
strategic opportunities. However, there can be no assurance that we will be able to successfully
implement such options or strategic alternatives.
We believe that sales of our implantable microchip, and the extent to which our VeriMed Health Link
system achieves market acceptance, will depend, in part, on the availability of insurance
reimbursement from third-party payers, including federal and state governments under programs, such
as Medicare and Medicaid, and private insurance plans. Insurers may not determine to cover the cost
of the implant procedure, or it may take a considerable period of time for this to occur.
We believe that sales of our implantable microchip, and the extent to which our VeriMed Health
Link system achieves market acceptance, will depend, in part, on the availability of insurance
reimbursement from third-party payers, including federal and state government programs, such as
Medicare and Medicaid, private health insurers, managed care organizations and other healthcare
providers. Both governmental and private third-party payers are increasingly challenging the
coverage and prices of medical products and services, and require proven efficacy and cost
effectiveness for reimbursement. If patients undergoing the microchip implant procedure, or health
institutions and doctors using the VeriMed Health Link system, are not able to obtain adequate
reimbursement for the cost of using these products and services, they may forego or reduce their
use. While we are in the process of facilitating and, in one case, funding clinical studies that
may demonstrate the efficacy of the VeriMed Health Link system, which we believe will make it more
likely that government and private insurers will cover the cost of the microchip implant process,
it may take a considerable period of time for this to occur, if, in fact, it does occur. If
government and private insurers do not determine to reimburse the cost of the implant process, we
would not expect to realize the anticipated level of future sales of our implantable microchip and
the database subscription fees.
Implantation of our implantable microchip may be found to cause risks to a persons health, which
could adversely affect sales of our systems which incorporate the implantable microchip.
The implantation of our implantable microchip may be found, or be perceived, to cause risks to
a persons health. Potential or perceived risks include adverse tissue reactions, migration of the
microchip and infection from implantation. There have been articles published asserting, despite
numerous studies to the contrary, that the implanted microchip causes malignant tumor formation in
laboratory animals. As more people are implanted with our implantable microchip, it is possible
that these and other risks to health will manifest themselves. Actual or perceived risks to a
persons health associated with the microchip implantation process could constrain our sales of the
VeriMed Health Link system or result in costly and expensive litigation. Further, the potential
resultant negative publicity could damage our business reputation, leading to loss in sales of our
other systems targeted at the healthcare market which would harm our business and negatively affect
our prospects.
If we are required to effect a recall of our implantable microchip, our reputation could be
materially and adversely affected and the cost of any such recall could be substantial, which could
adversely affect our results of operations and financial condition.
From time to time, implanted devices have become subject to recall due to safety, efficacy,
product failures or other concerns. To date, we have not had to recall any of our implantable
microchips. However, if, in the future, we are required to effect such a recall, the cost of the
recall, and the likely related loss of system sales, could be substantial and could materially and
adversely affect our results of operations and financial condition. In addition, any such recall
could materially adversely affect our reputation and our ability to sell our systems that make use
of the implantable microchip which would harm our business and negatively affect our prospects.
4
Interruptions in access to, or the hacking into, our VeriMed Health Link patient information
database may have a negative impact on our revenue, damage our reputation and expose us to
litigation.
Reliable access to the VeriMed Health Link patient information database is a key component of
the functionality of our VeriMed Health Link system. Our ability to provide uninterrupted access to
the database, whether operated by us or one or more third parties with whom we contract, will
depend on the efficient and uninterrupted operation of the computer and communications systems
involved. Although certain elements of technological, power, communications, personnel and site
redundancy are maintained, the database may not be fully redundant. Further, the database may not
function properly if certain necessary third-party systems fail, or if some other unforeseen act or
natural disaster should occur. In the past, we have experienced short periods during which the
database was inaccessible as a result of development work, system maintenance and power outages.
Any disruption of the database services, computer systems or communications networks, or those of
third parties that we rely on, could result in the inability of users to access the database for an
indeterminate period of time. This, in turn, could cause us to lose the confidence of the
healthcare community and persons who have undergone the microchip implant procedure, resulting in a
loss of revenue and possible litigation.
In addition, if the firewall software protecting the information contained in our database
fails or someone is successful in hacking into the database, we could face damage to our business
reputation and litigation.
Regulation of products and services that collect personally-identifiable information or otherwise
monitor an individuals activities may make the provision of our services more difficult or
expensive and could jeopardize our growth prospects.
Certain technologies that we currently, or may in the future, support are capable of
collecting personally-identifiable information. A growing body of laws designed to protect the
privacy of personally-identifiable information, as well as to protect against its misuse, and the
judicial interpretations of such laws, may adversely affect the growth of our business. In the
U.S., these laws include the Health Insurance Portability and Accountability Act, or HIPAA, the
Federal Trade Commission Act, the Electronic Communications Privacy Act, the Fair Credit Reporting
Act, and the Gramm-Leach-Bliley Act, as well as various state laws and related regulations.
Although we are not a covered entity under HIPAA, we have entered into agreements with certain
covered entities in which we are considered to be a business associate under HIPAA. As a business
associate, we are required to implement policies, procedures and reasonable and appropriate
security measures to protect individually identifiable health information we receive from covered
entities. Our failure to protect health information received from customers could subject us to
liability and adverse publicity, and could harm our business and impair our ability to attract new
customers.
In addition, certain governmental agencies, like the U.S. Department of Health and Human
Services and the Federal Trade Commission, have the authority to protect against the misuse of
consumer information by targeting companies that collect, disseminate or maintain personal
information in an unfair or deceptive manner. We are also subject to the laws of those foreign
jurisdictions in which we operate, some of which currently have more protective privacy laws. If we
fail to comply with applicable regulations in this area, our business and prospects could be
harmed.
Certain regulatory approvals generally must be obtained from the governments of the countries
in which our foreign distributors sell our systems. However, any such approval may be subject to
significant delays or may not be obtained. Any actions by regulatory agencies could materially and
adversely affect our growth plans and the success of our business.
If we fail to comply with anti-kickback and false claims laws, we could be subject to costly and
time-consuming litigation and possible fines or other penalties.
We are, or may become subject to, various federal and state laws designed to address
healthcare fraud and abuse, including anti-kickback laws and false claims laws. The federal
anti-kickback statute prohibits the offer, payment, solicitation or receipt of any form of
remuneration in return for referring items or services payable by Medicare, Medicaid or any other
federally-funded healthcare program. This statute also prohibits remuneration in return for
purchasing, leasing or ordering or arranging, or recommending the purchasing, leasing or ordering,
of items or services payable by Medicare, Medicaid or any other federally-funded healthcare
program. The anti-kickback laws of various states apply more broadly to prohibit remuneration in
return for referrals of business payable by payers other than federal healthcare programs.
False claims laws prohibit anyone from knowingly presenting, or causing to be presented, for
payment to third-party payers, including Medicare and Medicaid, which currently do not provide
reimbursement for our microchip implant procedure, claims for reimbursed drugs or services that are
false or fraudulent, claims for items or services not provided as claimed, or claims for medically
unnecessary items or services. Our activities relating to the reporting of wholesale or estimated
retail prices of our VeriMed Health Link system, the reporting of Medicaid rebate information, and
other information affecting federal, state and third-party payment for the VeriMed Health Link
system, if such payment becomes available, will be subject to scrutiny under these laws.
5
The anti-kickback statute and other fraud and abuse laws are very broad in scope, and many of
their provisions have not been uniformly or definitively interpreted by existing case law or
regulations. Violations of the anti-kickback statute and other fraud and abuse laws may be
punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as
well as the
possibility of exclusion from federal healthcare programs, including Medicare and Medicaid,
which currently do not provide reimbursement for our microchip implant procedure. We have not been
challenged by a governmental authority under any of these laws and believe that our operations are
in compliance with such laws. However, because of the far-reaching nature of these laws, we may be
required to alter one or more of our practices to be in compliance with these laws. Healthcare
fraud and abuse regulations are complex and even minor, inadvertent irregularities in submissions
can potentially give rise to claims that the statute has been violated. If we are found to have
violated these laws, or are charged with violating them, our business, financial condition and
results of operations could suffer, and our management team could be required to dedicate
significant time and resources addressing the actual or alleged violations.
If we are found liable in lawsuits that have been brought against us or if we are found liable in
other litigation to which we may become subject in the future, we may be forced to pay substantial
damages, which could have a material adverse effect on our business.
We are currently involved in a few legal proceedings. We have accrued our estimate of the
probable costs for the resolution of these claims. It is possible, however, that future results of
operations for any particular quarterly or annual period could be materially affected by changes in
these estimates. If we are unsuccessful in the defense against any of the legal proceedings, we may
be forced to pay substantial damages, which could have a material adverse effect on our business.
If we fail to continue to meet all applicable Nasdaq Stock Market requirements, our stock could be
delisted by the Nasdaq Stock Market. If delisting occurs, it would adversely affect the market
liquidity of our common stock and harm our businesses.
On October 21, 2008, we received a letter from Nasdaq indicating that we are not in compliance
with the Nasdaqs requirements for continued listing because, for the 30 consecutive business days
prior to October 16, 2008, the bid price of our common stock closed below the minimum $1.00 per
share price requirement for continued listing under Nasdaq Marketplace Rule 4450(a) (the Rule)
and, our common stock had not maintained a minimum market value of publicly held shares (MVPHS)
of $5 million as required for continued inclusion by the Rule. On November 17, 2008, we received a
notice from Nasdaq indicating that our stockholders equity at September 30, 2008 was less than the
$10 million in stockholders equity required for continued listing on The Nasdaq Global Market
under Marketplace Rule 4450(a)(3). In its notice, Nasdaq requested that we provide our plan to
achieve and sustain compliance with the continued listing requirements of The Nasdaq Global Market,
including the minimum stockholders equity requirement, before December 2, 2008, which we complied
with. On February 27, 2009, we filed an application to transfer the listing of our common stock from the Nasdaq
Global Market to the Nasdaq Capital Market.
On March 5, 2009, we received a notice from Nasdaq indicating that we had not evidenced compliance
with the $10 million in stockholders equity requirement for continued listing on the Nasdaq Global
Market under Marketplace Rule 4450(a)(3), and that we do not currently meet the requirements for
continued listing on The Nasdaq Capital Market because our stockholders equity at December 31,
2008 of $2.4 million is below the $2.5 million requirement under Marketplace Rule 4310(c)(3). As a
result, our securities are subject to delisting. We plan to appeal the Nasdaq staffs determination
and request an oral hearing before a Nasdaq Listing Qualifications
Panel, which will, if successful, temporarily
stay the delisting of our common stock. When the hearing takes place, we intend to seek a transfer
of our listing to the Nasdaq Capital Market, based on the $4.5 million deferred gain on our balance
sheet resulting from our sale of Xmark in July 2008.
Given the current market conditions, Nasdaq suspended enforcement of the bid price and market
value of publicly held shares requirements for all companies listed on Nasdaq through Sunday, April
19, 2009. Following the reinstatement of these rules, and in accordance with Marketplace Rule
4450(e)(2), we have 180 calendar days from Monday, April 20, 2009, or until October 19, 2009, to
regain compliance with the bid price requirement. Following the reinstatement of these rules, and
in accordance with Marketplace Rule 4450(e)(1), we have 90 calendar days from April 20, 2009, or
until July 20, 2009, to regain compliance with the market value requirements.
If, at anytime before October 19, 2009, including during the suspension period, the bid price
of our common stock closes at $1.00 per share or more for a minimum of ten (10) consecutive
business days, the Nasdaq staff will provide written notification that we have achieved compliance
with the Rule. However, if we do not regain compliance with the Rule by October 19, 2009, the
Nasdaq staff will provide written notification that our securities will be delisted. At that time,
we may appeal the Nasdaq staffs determination to delist our securities to a Listing Qualifications
Panel.
If, at anytime before July 20, 2009, the MVPHS of our common stock is $5,000,000 or greater
for a minimum of ten (10) consecutive trading days, the Nasdaq staff will provide written
notification that we comply with the Rule. If compliance with the Rule cannot be demonstrated by
July 20, 2009, the Nasdaq staff will provide written notification that our securities will be
delisted. At that time, we may appeal the Nasdaq staffs determination to a Listing Qualifications
Panel.
If our common stock is delisted from the Nasdaq Stock Market, trading of our common stock most
likely will be conducted in the over-the-counter market on an electronic bulletin board established
for unlisted securities, such as the Pink Sheets or the OTC Bulletin Board. Delisting would
adversely affect the market liquidity of our common stock and harm our business. Such delisting
could also adversely affect our ability to obtain financing for the continuation of our operations
and could result in the loss of confidence by investors, suppliers and employees.
6
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This prospectus and some of the documents incorporated in this prospectus by reference contain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Exchange Act. All statements other than
statements of historical facts, including statements regarding the prospects of our industry and
our prospects, plans, financial position, anticipated product offerings, and business strategy
constitute forward-looking statements. These statements are subject to many important factors that
could cause actual results to differ materially from those projected in the forward-looking
statements. Among these factors are those included in this prospectus under the heading Risk
Factors and those which are discussed in our most recently filed Annual Report on Form 10-K, under
the heading Risk Factors and elsewhere, which is incorporated by reference in this prospectus.
All forward-looking statements included in this prospectus and the documents we incorporate by
reference are made only as of the date of this prospectus, and we do not undertake any obligation
to publicly update or correct any forward-looking statements to reflect events or circumstances
that subsequently occur or of which we hereafter become aware. Subsequent written and oral
forward-looking statements attributable to us or to persons acting on our behalf are expressly
qualified by the cautionary statements set forth above and elsewhere in this prospectus and in
other reports filed by us with the SEC.
USE OF PROCEEDS
This prospectus relates to our common stock to be offered for sale for the account of the
selling security holders named under the caption Selling Security Holders in this prospectus and
any amendment to this prospectus. We will not receive any of the proceeds from the sale of shares
of our common stock by the selling security holders.
SELLING SECURITY HOLDERS
R&R (an entity that is owned and controlled by Scott R. Silverman) is a selling security
holder with respect to up to 5,355,556 shares of our common stock.
Scott R. Silverman is a selling security holder with respect to up to 1,462,963 shares of our
common stock that are held by him in his personal capacity.
Mr. Silverman served as our acting president from March 2007 through May 4, 2007, as our chief
executive officer from December 5, 2006 through July 18, 2008, as chairman of our Board of
Directors from March 2003 through July 18, 2008 and as a member of our Board of Directors from
February 2002 through July 18, 2008. On November 12, 2008, he was again appointed to our Board of
Directors, to serve as chairman. On December 31, 2008, we entered into a letter agreement with Mr.
Silverman, effective December 1, 2008, which provides that Mr. Silverman will serve as our
executive chairman from December 1, 2008 through December 31, 2009.
In addition, Mr. Silverman served as the chairman of the Board of Directors of Digital Angel,
which was our affiliate until the first quarter of 2008, from March 2003 through July 3, 2007, and
served as chief executive officer of Digital Angel from March 2003 to December 5, 2006, and as
acting president of Digital Angel from April 2005 to December 5, 2006.
William J. Caragol is a selling security holder with respect to up to 618,519 shares of our
common stock. He has served as our president since May 2007, our chief financial officer since
August 2006, our treasurer since December 2006, and our secretary since March 2007. On December 31,
2008, we entered into a letter agreement with Mr. Caragol, which terminated the letter agreement
between Mr. Caragol and us, dated May 15, 2008, under which we had retained Mr. Caragols executive
services as president, chief financial officer, secretary and treasurer following the sale of
Xmark. The December 31, 2008 letter agreement provides that Mr. Caragol will serve as our acting
chief financial officer effective January 1, 2009 through July 31, 2009.
Jeffrey S. Cobb is a selling security holder with respect to up to 200,000 shares of our
common stock. He has served as a member of our Board of Directors since March 2007.
Barry M. Edelstein is a selling security holder with respect to up to 200,000 shares of our
common stock. He has served as a member of our Board of Directors since January 2008.
Steven R. Foland is a selling security holder with respect to up to 150,000 shares of our
common stock. He has served as a member of our Board of Directors since February 2008.
Michael E. Krawitz is a selling security holder with respect to up to 100,000 shares of our
common stock. He has served as a member of our Board of Directors since November 2008. From
December 2006 to December 2007, Mr. Krawitz served as the chief executive officer and president of
Digital Angel, which was our affiliate until the first quarter of 2008. Prior to that, during his
time at Digital Angel, he served as assistant vice president and general counsel beginning in April
1999, and was appointed vice president and assistant secretary in December 1999, senior vice
president in December 2000, secretary in March 2003, executive vice president in
April 2003 and chief privacy officer in November 2004. From July 2007 to December 2007, Mr.
Krawitz served as a member of the Board of Directors of Digital Angel.
7
The table below lists the following information with respect to each of the selling security
holders: (i) the selling security holders name; (ii) the number of outstanding shares of common
stock beneficially owned by the selling security holder prior to this offering; (iii) the number of
shares of common stock offered by the selling security holder in this offering; (iv) the number of
shares of common stock to be beneficially owned by the selling security holder after the completion
of this offering, assuming the sale of all of the shares of common stock offered by the selling
security holder; and (v) the percentage of outstanding shares of common stock to be beneficially
owned by the selling security holder after the completion of this offering, assuming the sale of
all of the shares of common stock offered by the selling security holder.
Information presented in the table below is from the selling security holders, the reports
furnished to us under rules of the SEC, and our stock ownership records.
The aggregate number of shares of our common stock in this offering constitutes approximately
57% of the outstanding shares of our common stock, based on 14,110,179 shares of common stock
outstanding as of March 11, 2009.
The selling security holders may, from time to time, sell all, some or none of their shares in
this offering. See Plan of Distribution below. No estimate can be given as to the number of
shares that will be held by the selling security holders after completion of this offering, because
the selling security holders may offer some or all of the shares, and, to our knowledge, there are
currently no agreements, arrangements or understandings with respect to the sale of any of the
shares. As of March 11, 2009, the selling security holders have represented to us that they do
not have any intentions at such time to sell the securities registered pursuant to the registration
statement of which this prospectus constitutes a part. The selling security holders are not
broker-dealers or affiliates of a broker-dealer.
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Shares
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Beneficially
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Owned
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Number of
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Shares Beneficially
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Prior to the
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Shares
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Owned
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Selling Security Holder
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Offering
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Offered Hereby
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After the Offering
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Number
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%
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R & R Consulting Partners, LLC
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5,355,556
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(1)
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5,355,556
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Scott R. Silverman
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6,823,519
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(2)
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1,462,963
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5,000
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*
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William J. Caragol
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671,519
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(3)
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618,519
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53,000
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*
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Jeffrey S. Cobb
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225,000
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(4)
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200,000
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25,000
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*
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Barry M. Edelstein
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225,000
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(5)
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200,000
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25,000
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*
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Steven R. Foland
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155,600
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(6)
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150,000
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5,600
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*
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Michael E. Krawitz
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100,000
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(7)
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100,000
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*
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Less than 1%
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(1)
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Represents shares held by R&R. Scott R. Silverman has voting and investment control over these shares.
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(2)
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Represents 1,467,963 shares of our common stock held by Mr. Silverman in his personal capacity and
5,355,556 shares owned by R&R, over which Mr. Silverman has voting and investment control.
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(3)
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Includes 621,519 shares of our common stock and 50,000 shares of our common stock issuable upon the
exercise of stock options that are currently exercisable or
exercisable within 60 days of March 11,
2009.
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(4)
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Includes 200,000 shares of our common stock and 25,000 shares of our common stock issuable upon the
exercise of stock options that are currently exercisable or
exercisable within 60 days of March 11,
2009.
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(5)
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Includes 200,000 shares of our common stock and 25,000 shares of our common stock issuable upon the
exercise of stock options that are currently exercisable or
exercisable within 60 days of March 11, 2009.
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(6)
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Includes 155,600 shares of our common stock.
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(7)
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Includes 100,000 shares of our common stock.
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To our knowledge, the preceding table represents the holdings by the selling security holders.
Information concerning the selling security holders may change from time to time, which changed
information will be set forth in supplements to this prospectus if and when necessary. Because the
selling security holders may offer all or some of the common stock that they hold, we can only give
an
estimate as to the amount of common stock that will be held by the selling security holders upon
the termination of this offering. See Plan of Distribution.
8
PLAN OF DISTRIBUTION
The selling security holders or any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. The selling security holders may
use any one or more of the following methods when selling shares:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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short sales effected after the date of this prospectus;
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broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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The selling security holders may also sell shares that qualify for sale pursuant to Rule 144
under the Securities Act, rather than under this prospectus. In effecting sales, broker-dealers
engaged by the selling security holders may arrange for other broker-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the selling security holders (or,
if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to
be negotiated. The selling security holders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved. Broker-dealers may agree to sell a
specified number of such shares at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for us or a selling security holder, to purchase
as principal any unsold shares at the price required to fulfill the broker-dealer commitment.
Broker-dealers who acquire shares as principal may thereafter resell such shares from time to time
in transactions, which may involve block transactions and sales to and through other
broker-dealers, including transactions of the nature described above, in the over-the-counter
markets or otherwise at prices and on terms then prevailing at the time of sale, at prices other
than related to the then-current market price or in negotiated transactions. In connection with
such resales, broker-dealers may pay to or receive from the purchasers of such shares commissions
as described above.
The selling security holders may, from time to time, pledge or grant a security interest in
some or all of the shares of common stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell the shares of common
stock from time to time under this prospectus, or under an amendment to this prospectus pursuant to
Rule 424(b)(3) or other applicable provision of the Securities Act amending the selling security
holders list to include the pledgee, transferee or other successors in interest as selling
security holder under this prospectus.
The selling security holders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees, donees or other successors-in-interest will
be the selling beneficial owners for purposes of this prospectus.
The selling security holders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
We are required to pay all fees and expenses incurred by us incident to the registration of
the shares. We will receive no portion of the proceeds from the sale of the shares and will bear
all of the costs relating to the registration of this offering (other than any fees and expenses of
counsel for the selling security holders). Any commissions, discounts or other fees payable to a
broker, dealer, underwriter, agent or market maker in connection with the sale of any of the shares
will be borne by the selling security holders. We will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling security holders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act.
9
We have agreed to use commercially reasonable efforts to register or qualify the shares being
registered hereunder for the selling security holders under the securities or blue sky law of
such jurisdictions within the United States as they request.
We have agreed to indemnify the selling security holders against certain liabilities,
including certain liabilities under the Securities Act and state securities laws, relating to the
registration of the shares offered by this prospectus.
We have agreed with certain of the selling security holders to keep the registration statement
of which this prospectus constitutes a part effective until such time as all of the shares covered
by this prospectus for such security holder have been disposed of pursuant to and in accordance
with the registration statement or until such earlier time that we reasonably determine, based on
the advice of counsel, that such selling security holder, acting independently of all other selling
security holders, will be eligible to sell under Rule 144 of the Securities Act all shares covered
by this prospectus then owned by such selling security holder immediately following the termination
of the effectiveness of the registration statement of which this prospectus forms a part.
Our
shares of common stock are listed on the Nasdaq Global Market under
the symbol CHIP. On February 27, 2009, we filed an application to transfer the listing of our common stock from the Nasdaq Global
Market to the Nasdaq Capital Market. On March 5, 2009, we received a notice from Nasdaq indicating that we had not evidenced compliance
with the $10 million in stockholders equity requirement for continued listing on the Nasdaq Global
Market under Marketplace Rule 4450(a)(3), and that we do not currently meet the requirements for
continued listing on The Nasdaq Capital Market because our stockholders equity at December 31,
2008 of $2.4 million is below the $2.5 million requirement under Marketplace Rule 4310(c)(3). As a
result, our securities are subject to delisting. We plan to appeal the Nasdaq staffs determination
and request an oral hearing before a Nasdaq Listing Qualifications
Panel, which will, if successful, temporarily
stay the delisting of our common stock. When the hearing takes place, we intend to seek a transfer
of our listing to the Nasdaq Capital Market, based on the $4.5 million deferred gain on our balance
sheet resulting from our sale of Xmark in July 2008.
UNDER THE SECURITIES LAWS OF SOME STATES, THE SHARES OF COMMON STOCK MAY BE SOLD IN SUCH
STATES ONLY THROUGH REGISTERED OR LICENSED BROKERS OR DEALERS. IN ADDITION, IN SOME STATES, THE
SHARES OF COMMON STOCK MAY NOT BE SOLD UNLESS SUCH SHARES HAVE BEEN REGISTERED OR QUALIFIED FOR
SALE IN SUCH STATE OR AN EXEMPTION FROM REGISTRATION OR QUALIFICATION IS AVAILABLE AND IS COMPLIED
WITH.
10
LEGAL MATTERS
The validity of the securities offered hereby will be passed on for us by Holland & Knight
LLP, One East Broward Boulevard, Suite 1300, Fort Lauderdale, Florida 33301.
EXPERTS
The consolidated financial statements incorporated by reference in this prospectus from
VeriChip Corporations Annual Report on Form 10-K filed with the SEC on February 12, 2009 have been
audited by Eisner LLP, an independent registered public accounting firm, as stated in their reports
which are incorporated herein by reference, which reports express an unqualified opinion on the
financial statements, which included language relating to VeriChips sale of Xmark Corporation in
2008 and classified as discontinued operations and the implementation of FIN 48, and have been
incorporated herein by reference in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
INDEMNIFICATION
Under Section 145 of the Delaware General Corporation Law, or the DGCL, a corporation may
indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by reason of the fact
that the person is or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit or proceeding if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to
believe the persons conduct was unlawful.
Section 145 also provides that a corporation has the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact
that the person is or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against expenses (including
attorneys fees) actually and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the corporation. However, no
indemnification shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
Expenses (including attorneys fees) incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by the corporation as
authorized in Section 145 of the DGCL. Such expenses (including attorneys fees) incurred by former
directors and officers or other employees and agents may be so paid upon such terms and conditions,
if any, as the corporation deems appropriate.
Notwithstanding the instances outlined above where a corporation may indemnify its current and
former directors and officers, a corporation may purchase and maintain insurance on behalf of any
person who is or was a director or officer of the corporation against any liability asserted
against such person and incurred by such person in any such capacity, or arising out of such
persons status as such. Correspondingly, we have purchased and maintain insurance on behalf of our
directors and officers against any liability asserted against such directors and officers in their
capacities as such.
Our certificate of incorporation and by-laws provide that we shall indemnify, to the full
extent permitted by law, any of our current or former directors or officers and that we may
indemnify, to the full extent permitted by law, any of our current or former employees or agents
against all expense, liability and loss incurred as a result of such service, or as a result of any
other service on our behalf, or service at our request as a director, officer, employee member of
agent of another corporation, partnership, joint venture, trust or other enterprise.
11
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We have filed a registration statement, of which this prospectus is a part, with the SEC under
the Securities Act with respect to our common stock. This prospectus, which constitutes a part of
the registration statement, does not contain all of the information set forth in the registration
statement, parts of which are omitted as permitted by the rules and regulations of the SEC.
Statements contained in this prospectus as to the contents of any contract or other document are
not necessarily complete. For further information pertaining to us and our common stock, we refer
you to our registration statement and the exhibits thereto, copies of which may be inspected
without charge at the SECs Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.
Information concerning the operation of the SECs Public Reference Room is available by calling the
SEC at 1-800-SEC-0330. Copies of all or any part of the registration statement may be obtained at
prescribed rates from the SEC. The SEC also makes our filings available to the public on its
Internet site (http://www.sec.gov). Quotations relating to our common stock appear on Nasdaq, and
such reports, proxy statements and other information concerning us can also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street N.W., Washington,
D.C. 20006.
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. Such periodic reports, proxy and information statements and other information are available
for inspection and copying at the public reference facilities and Internet site of the SEC referred
to above.
Website Access to Information and Disclosure of Web Access to Company Reports
Our website address is: http://www.verichipcorp.com. We make available free of charge through
our website our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports
on Form 8-K, Forms 3, 4 and 5 and all amendments to those reports as soon as reasonably practicable
after such material is electronically filed with the SEC.
12
DOCUMENTS INCORPORATED BY REFERENCE
We incorporate by reference into this prospectus the information in documents we file with the
SEC, which means we can disclose important information to you through those documents. The
information incorporated by reference is an important part of this prospectus. Some information
contained in this prospectus has updated the information incorporated by reference and some
information filed subsequently with the SEC will automatically update this prospectus. We
incorporate by reference:
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(a)
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Our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on February 12, 2009;
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(b)
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Our Current Report on Form 8-K filed with the SEC on January 6, 2009;
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(c)
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Our Current Report on Form 8-K filed with the SEC on
March 4, 2009;
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(d)
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Our Current Report on Form 8-K filed with the SEC on
March 11, 2009;
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(e)
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Our Definitive Proxy Statement on Schedule 14A filed with the SEC on June 17, 2008;
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(f)
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Our Definitive Proxy Statement on Schedule 14A filed with the SEC on November 18, 2008; and
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(g)
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The description of our common stock contained in the registration statement on Form 8-A/A, filed with the SEC pursuant to the Exchange Act on
February 6, 2007, including any amendments or reports filed for the purposes of updating the description of our common stock.
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All documents subsequently filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, after the date of the initial registration
statement and prior to effectiveness of the registration statement,
and prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the
date of filing of such documents; provided, however, that we are not incorporating by reference any
information furnished under either Item 2.02 or Item 7.01 of any Current Report on Form 8-K.
To the extent that any statement in this prospectus is inconsistent with any statement that is
incorporated by reference and that was made on or before the date of this prospectus, the statement
in this prospectus shall control. The incorporated statement shall not be deemed, except as
modified or superseded, to constitute a part of this prospectus or the registration statement of
which this prospectus is a part. Statements contained in this prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance, we refer you to the
copy of each contract or document filed as an exhibit to the registration statement of which this
prospectus is a part.
YOU MAY REQUEST, EITHER ORALLY OR IN WRITING, AND WE WILL PROVIDE, A COPY OF THOSE FILINGS,
INCLUDING ANY EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN, AT NO COST BY
CONTACTING WILLIAM J. CARAGOL, OUR SECRETARY, AT VERICHIP CORPORATION, 1690 SOUTH CONGRESS AVENUE,
SUITE 200, DELRAY BEACH, FLORIDA 33445, OR BY CALLING (561) 805-8008.
13
We have not authorized anyone to give any information or to make any representation concerning
this offering except the information and representations which are contained in this prospectus or
which are incorporated by reference in this prospectus. If anyone gives or makes any other
information or representation, you should not rely on it. This prospectus is not an offer to sell,
or a solicitation of an offer to purchase, any securities other than those to which it relates, nor
does it constitute an offer to sell or a solicitation of an offer to purchase by any person in any
circumstances in which an offer or solicitation is unlawful. You should not interpret the delivery
of this prospectus or any sale made hereunder as an indication that there has been no change in our
affairs since the date of this prospectus. You should also be aware that the information in this
prospectus may change after this date.
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