Thursday, October 21, 2004

Implanted Chip Company Bails Out

Digital Angel Exiting Applied Digital? Did Company Fail To Publicize
VeriChip Risks?

Oct 21, 2004 (financialwire.net via COMTEX) -- (FinancialWire) Digital
Angel (DOC), which manufactures the VeriChip "Big Brother" biochip
licensed by Applied Digital (ADSX) for human applications, appears to be
bailing out of Applied Digital.

According to a filing with the U.S. Securities and Exchange Commission,
"on October 14, 2004, Digital Angel Corporation sold 1,069,650 shares of
Applied Digital common stock held by Digital Angel Corporation. The shares
of Applied Digital common stock were previously registered with the
Securities and Exchange Commission and were sold at prevailing market
prices through a registered broker dealer for net cash proceeds of $4.0
million. Digital Angel Corporation acquired the stock from Applied Digital
in March 2004."

WorldNetDaily.com, meanwhile hints at a possible reason.

"Though Applied Digital, the company that markets the human-implantable
VeriChip device, has trumpeted recent Food and Drug Administration
approval of the technology, it failed to include in its announcement
warnings by the agency about the downsides of having a transponder lodged
under the skin.

"According to a letter issued by the FDA Oct. 12, the ID chip, which is
touted as an immediate way to obtain medical history about the wearer, has
several possible negative effects.

"The potential risks to health associated with the device are: adverse
tissue reaction, migration of implanted transponder, . failure of
implanted transponder, . electromagnetic interference, electrical hazards,
magnetic resonance imaging (MRI) incompatibility and needle stick," said
the letter, which was obtained by Consumers Against Supermarket Privacy
Invasion and Numbering, or CASPIAN.

WorldNetDaily quoted Katherine Albrecht, founder and director of CASPIAN,
chastised Applied Digital and manufacturer Digital Angel for failing to
mention the negative aspects of its technology:

"By omitting this information from their press material, the companies
marketing the VeriChip have painted an inaccurately rosy picture of their
product that could mislead consumers into believing the devices are
completely safe."

She was quoted as singling out the MRI-incompatibility issue as one of
particular concern.

"Patients contemplating a VeriChip implant need to know that the FDA has
raised incompatibity as a potential risk," she said. "If it's a choice
between a potentially life-saving diagnostic procedure or a VeriChip
implant, I believe most patients would choose the MRI." She said a
document from the U.S. Food and Drug Administration warns that when under
MRI, "Electrical currents may be induced in conductive metal implants"
that can cause "potentially severe patient burns."

In addition to outlining the health risks of the VeriChip, WorldNetDaily
says the FDA letter also cites the risk of "compromised information
security" among its concerns.

"The implant, about the size of a grain of rice, uses radio waves to
transmit medical and financial account information to reader devices.
There is a risk that these transmission could be intercepted and
duplicated by others or that ' as privacy advocates have warned ' the
devices could be used to track an individual's movements and location."

"Once you're chipped, you can be identified by doorway portal readers
without your knowledge," it quoted Albrecht. "That tracking potential,
coupled with VeriChip's potential health risks make the VeriChip a very
poor choice for medical patients seeking safety and security."

The VeriChip is in fact used in Europe for non-medical purposes.

A syringe-injected microchip implant provides users with VIP treatment at
the Baja Beach Club in Barcelona. A "reader" recognizes the individual,
credit balance and opens doors automatically into exclusive areas of the
club, according to Conrad K. Chase, the club's director.

VeriPay implanted patrons can buy drinks and food with a "wave of their
hand."

"The objective of this technology is to bring an ID system to a global
level that will destroy the need to carry ID documents and credit cards,"
Chase said.

Only 900 individuals have so far asked to be implanted, howeer.

Chase was also quoted as claiming that the VeriChip company had told him
that the Italian government was preparing to implant government workers.

Religious fundamentals believe that the VeriChip may be "The Mark of the
Beast" referenced in the "Book of Revelations," that says only those with
the "mark" in their hands or forehead may buy or sell.