Knobias Clip Report (9-10-2007)

Submitted from Knobias ClipReport

With the anniversary of the Sept. 11th attack on Tuesday, expect a bit of a somber mood as those that were lost six years ago are remembered. Other reasoning for trepidation could arise from the Fed’s meeting expected on September 18th.

Another Company saw investors became very wary following a report but immediately defended the news which could provide investors a buying opportunity.

VeriChip Corporation (CHIP) 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 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. The Company is part of a ‘triple play’ of sorts in the RFID area along with Applied Digital Solutions (ADSX) and Digital Angel Corporation (DOC).

The parent company, ADSX, specializes in property asset RFID tracking, DOC focuses on animal, livestock, and wildlife RFID tracking, while CHIP concentrates on the human implantable RFID sector that has become increasingly popular among parents, hospitals, and governments alike.

On Monday, an Associated Press report surfaced mentioning that chip implants had inducted malignant tumors in lab mice and rats. Specialists have noted that animal tests do not always coincide with results from human tests. Never the less, shares fell some 11% on 418K shares traded.

The Company responded with comments on their website that noted the devices have been cleared by the FDA, cited two studies that noted the implants actually do not cause malignant tumors, reminded holders that millions of dogs and cats have been implanted with the devices while the AP report noted one singular case of tumors in a dog inferring the cause of the tumors was the device, and has even stated its intention to retain Dr Lawrence McGill who was interviewed for the AP report but whose comments were not included. It was noted that Dr. McGill would assist in reviewing the article and the studies that were referenced.

Even before the article by the AP, the Company and its affiliates were already battling the stigma that RFID devices cause health problems. On Sunday, September 9th, the Company noted that its VeriMed(TM) Patient Identification System was featured in a recorded segment on Discovery Channel's MythBusters which attempted to debunk the myth that the microchips were not safe. It was also mentioned that one of the hosts of the show volunteered to get a VeriMed microchip on air.

During Monday’s shake out, analysts at Merriman defended the Company noting that the AP article failed to mention that the mice in the studies cited were genetically engineered to be susceptible to tumor formations.

To top everything off, DealReporter.com proclaimed that the CEO has received buyout interest from General Electric. With the reports, studies, defenses, television coverage and now buyout rumors, the Company is sure to garner attention during Tuesday’s action. Investors would certainly be wise to watch.



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