DELRAY BEACH, Fla., Dec. 19, 2011 (GLOBE NEWSWIRE) -- PositiveID Corporation ("PositiveID" or "Company") (OTCBB:PSID), a developer of medical technologies for diabetes management and molecular diagnostic systems, announced today it has entered into a non-binding Letter of Intent to sell non-core assets including the Company's VeriChip and Health Link businesses. This asset sale completes the Company's restructuring efforts, including its new management team, allowing it to focus on its core strategies of diabetes management and rapid biological detection.
PositiveID expects the sale to VeriTeQ Acquisition Corporation ("VeriTeQ"), an entity owned by Scott R. Silverman, PositiveID's former Chairman and CEO, to close by year-end. The potential sale is subject to approval by a special committee of PositiveID's board of directors, and consideration to the Company includes a note for $200,000, a continuing interest of 10% in VeriTeQ, possible future royalty payments from technology licenses, and a shared services agreement. PositiveID will use any future proceeds from the sale for the continued development of its diabetes management and rapid biological detection products. The shared services agreement will reduce the Company's annual cash burn by approximately $400,000, which, in combination with the other restructuring actions taken over the past several months, reduces the Company's total cash burn by over $1.2 million annually.
The sale will include assets that are not related to the Company's diabetes management or molecular diagnostic products. PositiveID will divest the VeriChip business, including an implantable radio frequency identification microchip for patient identification, and the Health Link personal health record, which assets the Company has not marketed for over two years. The VeriChip business does not include GlucoChip™, PositiveID's glucose-sensing microchip currently under development, and the assets being sold are expressly prohibited from being used for blood glucose detection or diabetes management.
PositiveID Chairman and CEO William J. Caragol, said, "This sale of non-core assets, which have not been a part of our focus for the past couple of years, will enable PositiveID to continue to focus our efforts on our key areas of growth. We expect to launch our FDA-cleared iglucose system in early 2012 and continue to position our MicroFluidic Systems subsidiary and our M-BAND early bio-threat warning system for potential contract awards from the federal government, including the opportunity to participate in the $3 billion BioWatch procurement."
PositiveID's diabetes management products under development include GlucoChip; Easy Check™, a non-invasive breath glucose detection device; and the iglucose™ glucometer, a blood glucose meter with PositiveID's FDA-cleared iglucose technology built inside the device.
About PositiveID Corporation
PositiveID Corporation develops unique medical devices and molecular diagnostic systems, focused primarily on diabetes management, rapid medical testing and airborne bio-threat detection. Its wholly-owned subsidiary, MicroFluidic Systems, is focused on the development of microfluidic systems for automated preparation of and performance of biological assays. For more information on PositiveID, please visit www.PositiveIDCorp.com. ;
The PositiveID Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7717
Statements about PositiveID's future expectations, including the likelihood that the asset will complete the Company's restructuring and result in reduction in annual cash burn of over $1.2 million; the likelihood that the asset sale completes the Company's restructuring efforts, including its new management team, allowing it to focus on its core strategies of diabetes management and rapid biological detection; the likelihood that the sale to VeriTeQ will close by year-end; the likelihood that the sale will be approved by a special committee of PositiveID's board of directors; the likelihood that the note will be repaid; the likelihood that the Company will have a continuing interest of 10 % in VeriTeQ; the likelihood that the Company will receive future royalty payments from technology licenses and a shared services agreement; the likelihood that the shared services agreement will reduce the Company's annual cash burn by approximately $400,000, which, in combination with the other restructuring actions taken over the past several months, reduces the total cash burn resulting from restructuring actions taken over the past several months by over $1.2 million annually; the likelihood that PositiveID will use the future proceeds, if any, from the sale for the continued development of its diabetes management and rapid biological detection products; the likelihood that this sale of non-core assets will enable PositiveID to continue to focus its efforts on its key areas of growth; the likelihood the Company will launch its FDA-cleared iglucose system in early 2012 and continue to position its MicroFluidic Systems subsidiary and M-BAND early bio-threat warning system for potential contract awards from the federal government, including the opportunity to participate in the $3 billion BioWatch procurement.; and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and PositiveID's actual results could differ materially from expected results. These risks and uncertainties include PositiveID's ability to successfully complete the sale of non-core assets; the likelihood that the non-core asset sale will result in any proceeds; the Company's ability to commercialize iglucose; the Company's ability to position its MicroFluidic Systems subsidiary and M-BAND early bio-threat warning system for potential contract awards from the federal government, including a possible $3 billion BioWatch procurement; as well as certain other risks. 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 March 25, 2011, and 10-Qs filed on May 13, 2011, August 15, 2011, and November 14, 2011, 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.