Press Releases

VeriChip Corporation Announces Financial Results for 2007 Fourth Quarter and Full Year

Company exceeds revenue guidance, reporting record revenue of $8.6 million in the fourth quarter and $32.1 million for the full year

Company to launch direct-to-consumer VeriMed marketing campaign in strategic markets

Prototype development of in vivo glucose-sensing microchip on schedule

DELRAY BEACH, FL – March 5, 2008 – VeriChip Corporation ("VeriChip" or the "Company") (NASDAQ: CHIP), a provider of RFID systems for healthcare and patient-related needs, today reported financial results for its fourth quarter and full year ended December 31, 2007.

Revenue for the fourth quarter of 2007 was $8.6 million compared to revenue of $7.0 million for the fourth quarter of 2006, an increase of 24.0% due to strong sales of the Company’s healthcare security and industrial products. Net loss in the fourth quarter of 2007 was $(2.8) million, or $(0.29) per share, compared to a net loss in the fourth quarter of 2006 of $(3.3) million, or $(0.59) per share.

Scott R. Silverman, Chairman and Chief Executive Officer of VeriChip, said, “I am very proud that we surpassed both of the publicly stated growth metrics we provided to the investor community in early 2007. We reported record revenue of $32.1 million, above our guidance, and also reported hospital registrations and protocol adopted hospitals in the VeriMed Patient Identification System of more than 900 and 200, respectively. Our record annual revenues were driven by our healthcare security business and strong sales of our industrial products. Looking ahead, we expect consolidated revenues for 2008 of $36-38 million, driven primarily from continued double-digit, top-line growth within our healthcare security and industrial businesses. We also expect our healthcare security and industrial businesses to generate adjusted EBITDA of $5.6 to $6.2 million in 2008.”

Gross profit for the fourth quarter of 2007 was $4.5 million, or a gross margin of 52.4%, compared to gross profit of $3.7 million, or a gross margin of 52.8%, in the fourth quarter of 2006.

Revenue for the year ended December 31, 2007 was $32.1 million compared to revenue of $27.3 million for the year ended December 31, 2006, an increase of 17.6%. Net loss for the year ended December 31, 2007 was $(11.9) million, or $(1.36) per share, compared to a net loss of $(6.7) million, or $(1.21) per share, for the year ended December 31, 2006. The increase in net loss is primarily due to increased non-cash equity compensation charges, increased interest expense, severance and other exit costs related to the first quarter 2007 shutdown of the Company’s Vancouver facility, and increased costs related to the Company becoming a public entity in the first quarter of 2007.

The Company ended 2007 with cash and cash equivalents of $7.2 million compared to $1.0 million at the end of 2006.  On February 29, 2007, the Company entered into an $8 million financing from which it used $5.3 million of the proceeds to prepay debt owed to its stockholder, Digital Angel.  As a result of this prepayment, the Company is not obligated to make any further debt service payments to Digital Angel until September 2009 and Digital Angel agreed to subordinate its debt to the Company’s new lender.

Silverman continued, “Following the significant infrastructure build-out of our VeriMed system in 2007, we are now ready to begin marketing VeriMed more directly to patients in certain key geographies. Starting with South Florida, we will launch our direct-to-consumer campaign in early April as we increase our focus on patient adoption. We plan to replicate the success of the South Florida launch in one or two other markets by the end of 2008.”

In December 2007, VeriChip, Digital Angel and Receptors LLC held an event in New York to discuss plans to build a prototype self-contained implantable bio-sensing device included in an RFID microchip that for the first time will have the ability to measure glucose levels in the human body, thereby negating the need for diabetics to prick their fingers multiple times per day.

The companies published a white paper entitled “Development of an Implantable Glucose Sensor” that unveiled development plans for a self-contained implantable RFID glucose-sensing microchip. Upon completion, the in vivo glucose-sensing microchip will be the first device able to measure glucose levels in the human body and be read with an external reader.  The first phase of this development program, the development of a self-contained glucose sensor prototype, is on schedule for the middle of 2008.

Non-GAAP Financial Measure

To supplement the Company’s unaudited condensed consolidated financial statements presented in accordance with GAAP, the Company provides adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is defined as operating loss plus depreciation and amortization, and other non-cash items (such as equity-based compensation) and non-recurring items as presented in the Company’s Unaudited Condensed Consolidated Statement of Operations. Adjusted EBITDA should not be considered as an alternative to operating income or net income (as determined in accordance with generally accepted accounting principles (“GAAP”)) as a measure of the Company’s operating performance or to net cash provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of the Company’s ability to meet cash needs. The Company believes that adjusted EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation and amortization or non-operating factors (such as historical cost). This information has been disclosed here to permit a more complete comparative analysis of the Company’s operating performance relative to other companies. Adjusted EBITDA may not, however, be comparable in all instances to other similar types of measures.

For supplemental information to facilitate evaluation of the impact of non-cash charges, non-recurring charges, and comparisons with historical results, see the attached tables showing the detailed reconciliation of results reported under GAAP to non-GAAP results for the 2007 fourth quarter and full year and the 2006 fourth quarter and full year.

Results Conference Call

The Company will host a conference call tomorrow for all interested parties at 9:00 a.m. ET to discuss these results. Interested participants should call (800) 472-8309 within the United States or (706) 643-9561 internationally. Please use passcode 36492916. Alternatively, an audio-only, simultaneous Web cast of the live conference call can be accessed through the home page of the Company's Web site at www.verichipcorp.com. For persons unable to participate in either the conference call or the Web cast, a digitized replay will be available from March 6 at 11:30 a.m. ET to March 13 at 11:59 p.m. ET. For the replay, dial (800) 642-1687 (USA) or (706) 645-9291 (international), using access code 36492916. Alternatively, a replay can be accessed through the Media/Audio & Video link on the Company's Web site at www.verichipcorp.com

About VeriChip Corporation

VeriChip Corporation, headquartered in Delray Beach, Florida, develops, markets and sells radio frequency identification, or RFID, systems used to identify, locate and protect people and assets. VeriChip's goal is to become the leading provider of RFID systems for people in the healthcare industry. The Company recently began marketing its VeriMed^(TM) Patient Identification 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, the implantable VeriChip^(TM), 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.

This press release contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements included in this press release include, without limitation, those concerning expectations for strong revenue growth of our healthcare security products, continued strengthening of our VeriMed infrastructure, success of the Company’s marketing and sales initiative, including its new direct-to-consumer campaign, and expected growth in sales, earnings and improvement in gross margins and revenue guidance for 2008. These forward-looking statements are based on the Company's current expectations and beliefs and are subject to a number of risks, uncertainties and assumption. Among the important factors that could actual results to  differ materially from those expressed in, or implied by, the forward-looking statements are our ability to successfully implement our business strategy; our expectation that we will incur losses, on a consolidated basis, for the foreseeable future; the relative maturity in the United States and limited size of the markets for our infant protection and wander prevention systems and vibration monitoring instruments; the degree of success we have in leveraging our brand reputation, reseller network and end use customer base for our infant protection and wander prevention systems to gain inroads in the emerging market for asset/staff location and identification systems; the rate and extent of the U.S. healthcare industry’s adoption of RFID asset/staff location and identification systems; the relative degree of market acceptance of our zonal, or cell ID, active RFID systems compared to competing technologies, such as lower power Ultra Wide Band-based location technologies; uncertainty as to whether we will be able to increase our sales of infant protection and wander prevention systems outside of North America; our reliance on third-party dealers to successfully market and sell our products; uncertainty as to whether a market for our VeriMed system will develop and whether we will be able to generate more than a nominal level of revenue from the sale of these systems; and market acceptance of our VeriMed system, which will depend in large part on the future availability of insurance reimbursement for the VeriMed system microchip implant procedure from government and private insurers, and the timing of such reimbursement, if it, in fact, occurs. 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 April 2, 2007, 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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