VeriChip Corporation, a provider of RFID systems for healthcare and patient-related needs, has entered into a definitive stock purchase agreement with The Stanley Works ("Stanley") for the sale of its wholly-owned Canadian subsidiary, Xmark Corporation ("Xmark"), for $45 million in cash.
Following the completion of the sale of Xmark to Stanley, the Company will retire all of its outstanding debt. The Company expects to realize net proceeds, after retiring its outstanding debt, paying transaction related costs, and other contractual commitments, of approximately $21.4 million. Under the terms of the stock purchase agreement, $4.5 million of the proceeds will be held in escrow for a period of 12 months. The Company intends to fund a special dividend to stockholders estimated to be at least $15 million. The record date for this special dividend will be set and will be announced in the proxy statement. As of May 15, 2008, the Company had approximately 11.0 million common shares outstanding.
The Company also announced that it has retained the investment banking firm of Kaufman Bros., L.P., to assist in the sale of the Company's VeriMed Health Link business, and the possible sale of the entire Company, after the sale of Xmark. The Company intends to propose a second, special dividend to its stockholders consisting of all of the remaining distributable cash then held by the Company following any sale of the VeriMed Health Link business or the Company and the release of the escrowed funds.
At the closing of the Xmark transaction, Scott R. Silverman and the Company have mutually agreed that Mr. Silverman will no longer be an officer or director of the Company, although he will remain active as a consultant in the sale of the VeriMed Health Link business and the Company. William J. Caragol will continue as President and Chief Financial Officer of the Company. Joseph J. Grillo, President and Chief Executive Officer of Applied Digital Solutions, Inc. d/b/a Digital Angel, will replace Mr. Silverman as a Board Member of the Company, as its Chairman.
The Xmark transaction is not subject to any financing conditions and is subject to approval by the Company's stockholders. The Company's 48.2% stockholder, Digital Angel, along with Scott R. Silverman, the Company's chief executive officer, have formally agreed to vote in favor of the transaction.
About VeriChip Corporation
VeriChip Corporation, headquartered in Delray Beach, Florida, develops, markets and sells RFID systems used to identify, locate and protect people and assets. The Company recently began marketing its VeriMed Health Link System for rapidly and accurately identifying people who arrive in an emergency room and are unable to communicate. This system uses the first human-implantable passive RFID microchip, cleared for medical use in October 2004 by the United States Food and Drug Administration.