VeriChip Corporation Announces Financial Results for First Quarter 2008

VeriChip Corporation Unaudited Condensed Consolidated Statements of Operations Data (Amounts in thousands except per share data) Three Months Ended ------------------ March 31 ------------------ 2008 2007 --------- -------- Product revenue $ 8,052 $ 6,680 Service revenue 546 431 --------- -------- Total revenue 8,598 7,111 Cost of product 3,121 3,069 Cost of services 437 262 --------- -------- Total cost of products and services 3,558 3,331 Gross profit 5,040 3,780 Operating expenses: Selling, general and administrative 6,110 5,317 Research and development 1,101 1,372 --------- -------- Total operating expenses 7,211 6,689 Operating loss (2,171) (2,909) Interest income and other expense, net 52 (61) Interest expense 361 388 --------- -------- Total other expense 413 327 Loss before income tax provision (2,584) (3,236) Provision for income taxes 283 45 --------- -------- Loss from continuing operations (2,867) (3,281) Net income (loss) from Discontinued Operations 24 (32) --------- -------- Net loss $(2,843) $(3,313) ========= ======== Net loss per common share from continuing operations - basic and diluted $ (0.30) $ (0.47) ========= ======== Net loss (income) per common share from discontinued operations - basic and diluted $ (0.00) $ 0.00 ========= ======== Net loss per common share - basic and diluted $ (0.30) $ (0.47) ========= ======== Weighted average number of shares outstanding - basic and diluted 9,604 7,106 ========= ========

VeriChip Corporation Unaudited Condensed Consolidated Balance Sheet Data (Amounts in thousands) March 31, December 31, ----------- ------------ 2008 2007 ----------- ------------ Assets Current Assets: Cash $ 4,935 $ 7,221 Accounts receivable, net of allowance for doubtful accounts of $229 (2007 - $144) 5,395 5,243 Inventories, net of allowance 2,604 2,335 Prepaid expenses and other current assets 2,130 1,301 Deferred tax asset - 216 Current assets from Discontinued operations 19 202 ----------- ------------ Total Current Assets 15,083 16,518 Equipment, net of accumulated depreciation 875 952 Intangible assets, net of accumulated amortization 16,304 16,752 Goodwill 15,776 15,776 ----------- ------------ Total Assets $ 48,038 $ 49,998 =========== ============ Liabilities and Stockholders' Equity Current Liabilities: Bank indebtedness $ - $ 1,515 Accounts payable 1,086 1,855 Accrued expenses and other current liabilities 3,704 4,237 Note payable to stockholder, current portion - 2,167 Note payable 8,000 - Current liabilities from Discontinued operations - 71 ----------- ------------ Total Current Liabilities 12,790 9,845 Deferred tax liability 3,693 3,809 Note payable to stockholder, less current portion 7,595 10,753 ----------- ------------ Total Liabilities 24,078 24,407 Stockholders' Equity: Capital stock: Preferred stock: Authorized 5,000 shares of $0.001 par value; none outstanding - - Common stock: Authorized 40,000 shares $0.01 par value; 11,007 and 10,144 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively 110 101 Additional paid-in capital 55,689 54,486 Accumulated deficit (31,802) (28,959) Accumulated other comprehensive loss - foreign currency translation (37) (37) ----------- ------------ Total Stockholders' Equity 23,960 25,591 ----------- ------------ Total Liabilities and Stockholders' Equity $ 48,038 $ 49,998 =========== ============

VeriChip Corporation Unaudited Segment Reporting Data (Amounts in thousands) Three Months Ended March 31, 2008 ---------------------------------------------------- Healthcare Security Industrial Implantable Corporate Total ---------- ---------- ----------- --------- -------- Product revenue $6,474 $1,575 $ 3 $ - $ 8,052 Service revenue 150 396 - - 546 ---------- ---------- ----------- --------- -------- Total revenue 6,624 1,971 3 - 8,598 Gross profit 3,865 1,172 3 - 5,040 Operating costs and expenses: Selling, general and administrative 2,209 653 1,312 1,936 6,110 Research and development 641 298 162 - 1,101 ---------- ---------- ----------- --------- -------- Total operating expenses 2,850 951 1,474 1,936 7,211 ---------- ---------- ----------- --------- -------- Operating income (loss) $1,015 $ 221 $(1,471) $(1,936) $(2,171) ========== ========== =========== ========= ======== Non-GAAP Reconciliation: Operating income (loss) $1,015 $ 221 $(1,471) $(1,936) $(2,171) Depreciation and amortization 544 36 9 9 598 Non-cash equity compensation - - 88 793 881 Severance and other exit costs - - - - - ---------- ---------- ----------- --------- -------- Adjusted EBITDA $1,559 $ 257 $(1,374) $(1,134) $ (692) ========== ========== =========== ========= ======== Three Months Ended March 31, 2007 ---------------------------------------------------- Healthcare Security Industrial Implantable Corporate Total ---------- ---------- ----------- --------- -------- Product revenue $5,199 $1,480 $ 1 $ - $ 6,680 Service revenue 111 320 - - 431 ---------- ---------- ----------- --------- -------- Total revenue 5,310 1,800 1 - 7,111 Gross profit 2,703 1,076 1 - 3,780 Operating costs and expenses: Selling, general and administrative 1,995 515 1,177 1,630 5,317 Research and development 1,065 307 - - 1,372 ---------- ---------- ----------- --------- -------- Total operating expenses 3,060 822 1,177 1,630 6,689 ---------- ---------- ----------- --------- -------- Operating income (loss) $ (357) $ 254 $(1,176) $(1,630) $(2,909) ========== ========== =========== ========= ======== Non-GAAP Reconciliation: Operating income (loss) $ (357) $ 254 $(1,176) $(1,630) $(2,909) Depreciation and amortization 430 171 12 12 625 Non-cash equity compensation - - 67 600 667 Severance and other exit costs 277 68 - - 345 ---------- ---------- ----------- --------- -------- Adjusted EBITDA $ 350 $ 493 $(1,097) $(1,018) $(1,272) ========== ========== =========== ========= ========