In the three months ended September 30, 2009, VeriChip accomplished the following milestones:

The Company received $4.4 million in escrow proceeds related to the July 2008 sale of its former Xmark Corporation subsidiary to The Stanley Works.

Scott R. Silverman resumed the role of CEO of the Company.

The Company announced it agreed to acquire Steel Vault Corporation (OTCBB:SVUL) and form PositiveID Corporation to offer identification tools and technologies for consumers and businesses. The companies have approved November 10, 2009 as the date for their stockholder meetings to vote on the merger, and proxies have been mailed to stockholders of record as of September 25, 2009.

The Company expanded its partnership with RECEPTORS LLC and launched the development of a triage detection system for detection of the H1N1 virus; the Company received an exclusive license to RECEPTORS' patents utilized in that development.

VeriChip entered into a financing commitment of up to $10,000,000 with Optimus Technology Capital Partners, LLC. VeriChip plans to use the funds to develop a virus triage detection system for the H1N1 virus, to develop an in vivo glucose-sensing RFID microchip and to support its working capital requirements and general corporate purposes.

VeriChip announced plans to fund its existing development partnership with RECEPTORS LLC to launch Phase II development of an in vivo glucose-sensing RFID microchip. Furthermore, on October 7, 2009, VeriChip announced it received an exclusive license to RECEPTORS' Patent No. 7,504,364 titled "Methods of Making Arrays and Artificial Receptors" and Patent No. 7,469,076 "Sensors Employing Combinatorial Artificial Receptors," to use in conjunction with VeriChip's Patent No. 7,125,382 entitled "Embedded Bio-Sensor System," to develop an in vivo glucose-sensing RFID microchip.

The Company regained compliance with the minimum $1.00 per share bid price requirement, and complies with all other applicable standards for continued listing on The NASDAQ Capital Market.

In July 2008, the Company sold its Xmark subsidiary to The Stanley Works for $47.9 million. In November 2008, VeriChip purchased from Digital Angel Corporation all 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. The Company also received covenants from Digital Angel and its subsidiary that will permit the Company to use Digital Angel's intellectual property related to the Company's VeriMed Health Link business without payment of ongoing royalties. Through the release of the escrowed funds from The Stanley Works, the Company has continued to operate with a small management team and a focus on cost containment.

Scott R. Silverman, VeriChip's Chairman and CEO, said, "When I bought approximately 5.4 million shares and a controlling interest in the Company in November 2008 and resumed the role of Chairman, I was convinced that the Company's technology, relationships and balance sheet were undervalued.