UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2009


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-22693

Steel Vault Corporation

(Exact name of registrant as specified in its charter)

DELAWARE		11-2889809
DELAWARE (State or other jurisdiction of incorporation or organization)		11-2889809 (I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
1690 South Congress Avenue, Suite 200 Delray Beach, Florida 33445 (Address of principal executive offices, including zip code)		(561) 805-8000 (Registrant’s telephone number, including area code)
organization)
1690 South Congress Avenue, Suite 200
Delray Beach, Florida 33445		(561) 805-8000
(Address of principal executive offices,		(Registrant’s telephone number, including area code)
including zip code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on ~~May~~August 84, 2009 is as follows:

Class		Number of Shares
Common Stock: $0.01 Par Value		8,~~496~~696,398

Steel Vault Corporation
Table of Contents

Item	Page
PART I FINANCIAL INFORMATION		1
Item 1. Condensed Consolidated Financial Statements		1
Special Note Regarding Forward-Looking Statements		12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		1516
Item 4T. Controls and Procedures		1516
PART II OTHER INFORMATION		17
Special Note Regarding Forward-Looking Statements		16
Item 1A. Risk Factors		17
PART II OTHER INFORMATION		18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 1A. Risk Factors		18
Item 4. Submission of Matters to a Vote of Security Holders		17
Item 6. Exhibits		18
Item 5. Other Information		17
Signature		19
Item 6. Exhibits		17
Exhibits		20
Signature		18
Exhibits		19
Exhibit 3.1
Exhibit 3.2
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.8
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I — FINANCIAL INFORMATION


Item 1.		Condensed Consolidated Financial Statements

Steel Vault Corporation and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except par value)

Condensed Consolidated Balance Sheets (in thousands, except par value)


	June 30,			September 30,
	2009			2008
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	505		$	1,256
Marketable equity securities, available for sale		—			35
Other current assets		176			10

Total current assets		681			1,301

Fixed assets, net		95			—
Goodwill		538			—
Other assets		19			—

Total assets	$	1,333		$	1,301


Liabilities and Stockholders’ Equity (Capital Deficiency)

Liabilities
Current liabilities:
Accounts payable	$	326		$	2
Convertible note payable, net of discount		472			—
Deferred revenue		111			—
Accrued expenses and other liabilities		483			100

Total current liabilities		1,392			102
Convertible note payable, net of discount		163			—

Total liabilities		1,555			102

Commitments and contingencies

Stockholders’ equity (capital deficiency):
Preferred shares:
Authorized 5,000 shares, no par value; none issued		—			—
Common shares:
Authorized 80,000 shares, $.01 par value; 8,696 and 6,007 shares issued; 8,696 and 5,146 shares outstanding		87			60
Additional paid-in capital		7,268			7,143
Accumulated deficit		(7,577	)		(5,086	)
Treasury stock, nil and 861 shares, at cost		—			(918	)

Total stockholders’ equity (capital deficiency)		(222	)		1,199


Total liabilities and stockholders’ equity (capital deficiency)	$	1,333		$	1,301

	March 31,			September 30,
	2009			2008
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	559		$	1,256
Accounts receivable		3			—
Marketable equity securities, available for sale		8			35
Other current assets		73			10
Total current assets		643			1,301
Fixed assets, net		74			—
Goodwill		538			—
Other assets		19			—
Total assets	$	1,274		$	1,301
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities:
Accounts payable	$	175		$	2
Deferred revenue		35			—
Accrued expenses and other liabilities		182			100
Total current liabilities		392			102
Convertible notes payable, net of discount		158			—
Total liabilities		550			102
Commitments and contingencies
Stockholders’ equity:
Preferred shares:
Authorized 5,000 shares, no par value; none issued		—			—
Common shares:
Authorized 80,000 shares, $.01 par value; 8,609 and 6,007 shares issued; 8,496 and 5,146 shares outstanding		86			60
Additional paid-in capital		7,253			7,143
Accumulated deficit		(6,449	)		(5,086	)
Treasury stock, 113 and 861 shares, at cost		(166	)		(918	)
Total stockholders’ equity		724			1,199
Total liabilities and stockholders’ equity	$	1,274		$	1,301

See the accompanying notes to condensed consolidated financial statements.

Steel Vault Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	For the Three Months						For the ~~Six~~Nine Months
	Ended March 31,						Ended March 31,
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Revenue	$	58343		$	—		$	74418		$	—
Operating expenses:
Cost of revenue		78149			—			85234			—
Sales and marketing		~~219~~681			—			~~220~~901			—
General and administrative		~~523~~631			~~267~~102			1,~~107~~738			~~472~~574
Total operating expenses		~~820~~1,461			~~267~~102			12,~~412~~873			~~472~~574
Operating loss		(~~762~~1,118	)		(~~267~~102	)		(12,~~338~~455	)		(~~472~~574	)
Interest and other (expense) income		(2710	)		43			(2536	)		710
Loss from continuing operations		(~~789~~1,128	)		(~~263~~99	)		(12,~~363~~491	)		(~~465~~564	)
Discontinued Operations:
Loss from discontinued operations		—			~~(12~~—	)		—			(274	)
Gain on sale of discontinued operation		—			87—			—			627
Income from discontinued operations		—			75—			—			353
Net loss	$	(~~789~~1,128	)	$	(~~188~~99	)	$	(12,~~363~~491	)	$	(~~112~~211	)
Net loss per common share from continuing operations — basic and diluted	$	(0.1014	)	$	(0.0502	)	$	(0.1933	)	$	(0.0911	)
Net income per common share from discontinued operations — basic and diluted		—			~~0.01~~—			—			0.07
Net loss per common share — basic and diluted	$	(0.1014	)	$	(0.0402	)	$	(0.1933	)	$	(0.0204	)
Weighted average number of common shares outstanding:
Basic and diluted		8,~~154~~256			5,~~119~~146			7,~~308~~625			5,~~082~~104
Comprehensive Loss
Net loss	$	(~~789~~1,128	)	$	(~~188~~99	)	$	(12,~~363~~491	)	$	(~~112~~211	)
Other comprehensive loss:
Change in unrealized gain (loss) on available for sale securities		~~(12~~—	)		~~109~~46			—			(~~118~~72	)
Comprehensive loss	$	(~~801~~1,128	)	$	(7953	)	$	(12,~~363~~491	)	$	(~~230~~283	)

See the accompanying notes to condensed consolidated financial statements.

Steel Vault Corporation and Subsidiaries Condensed Consolidated Statement of Stockholders’ Equity (Capital Deficiency) (in thousands) (unaudited)

							Additional									Total
																Total
	Common Stock						Paid-in			Accumulated						Stockholders’
							Additional									Stockholders’
	Number			Amount			Capital			Deficit			Treasury Stock			Equity
	Common Stock						Paid-in			Accumulated						Equity
Balance— October 1, 2008		6,007		$	60		$	7,143		$	(5,086	)	$	(918	)	$	1,199
	Number			Amount			Capital			Deficit			Treasury Stock			(Capital Deficiency)
Share-based compensation		2,300			23			431			—			—			454
Balance — October 1, 2008		6,007		$	60		$	7,143		$	(5,086	)	$	(918	)	$	1,199
Share-based compensation		2,300			23			501			—			—			524
Shares and options issued for purchase of NCRC		1,000			10			384			—			—			394
Option exercise		50250			—2			842			—			—			844
Retirement of treasury stock		(~~748~~861	)		(78	)		(~~745~~910	)		—			~~752~~918			—
Issuance of common stock warrant in connection with debt financing		—			—			32			—			—			32
Issuance of common stock warrants in connection with debt financings		—			—			108			—			—			108
Net loss		—			—			—			(12,~~363~~491	)		—			(12,~~363~~491	)
Balance— March 31, 2009		8,609		$	86		$	7,253		$	(6,449	)	$	(166	)	$	724
Balance — June 30, 2009		8,696		$	87		$	7,268		$	(7,577	)	$	—		$	(222	)

See the accompanying notes to condensed consolidated financial statements.

Steel Vault Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	For the six months ended
	For the Nine Months Ended
	March 31,
	June 30,
	2009			2008
Cash flows from operating activities
Net loss	$	(12,~~363~~491	)	$	(~~465~~564	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		~~454~~524			134
Depreciation		25			—
Loss on marketable securities		2724			—
Amortization of debt discount		14			—
Income from discontinued operations		—			(269	)
Changes in operating assets and liabilities:
Decrease in accounts receivable		1			1,291
Accounts receivable		1			1,404
Decrease in inventories		—			106
Inventories		—			106
Increase in other current assets		(55	)		(97	)
Other current assets		(111	)		—
Decrease in other assets		—			6
Other assets		—			6
Increase (decrease) in accounts payable and accrued expenses and other liabilities		159			(874	)
Accounts payable and accrued expenses and other liabilities		681			(980	)
Net cash used in operating activities		(~~775~~1,353	)		(~~168~~163	)
Cash flows from investing activities
Acquisition costs, net of cash acquired		(61	)		—
Purchase of fixed assets and software		(5982	)		—
Net cash provided by discontinued operations		—			800
Proceeds from sale of marketable securities		11			—
Net cash (used in) provided by investing activities		(120	)		800
Proceeds from sale of discontinued operations		—			887
Net cash (used in) provided by investing activities		(132	)		887
Cash flows from financing activities
Proceeds from the issuance of long term notes		190			—
Proceeds from the issuance of convertible notes		690			—
Issuance of common stock from option exercise		8			—
Proceeds from option exercise		44			—
Other		—			(5	)
Net cash provided by (used in) financing activities		~~198~~734			(5	)
Net (decrease) increase in cash and cash equivalents		(~~697~~751	)		~~627~~719
Cash and cash equivalents — beginning of period		1,256			405
Cash and cash equivalents — end of period	$	~~559~~505		$	1,~~032~~124
Noncash:
Retirement of treasury shares	$	~~452~~918		$	—
Issuance of warrant in connection with debt financing	$	32108		$	—
Contributed intercompany debt	$	—		$	94
Issuance of common stock and options for acquisition of NCR	$	394		$	—

See the accompanying notes to condensed consolidated financial statements.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

1. Basis of Presentation

On December 5, 2008, Steel Vault Corporation (the “Company”), formerly known as IFTH Acquisition Corp., completed an acquisition of National Credit Report.com, LLC ~~(“NCRC”)~~, a Florida ~~limited~~ limited liability company (“NCRC”), pursuant to a securities purchase agreement, dated as of December 5, 2008 (the “Purchase Agreement”). The Purchase Agreement provided for the Company’s purchase of all of the issued and outstanding membership interests in NCRC from the sellers of NCRC, in return for 1,000 shares of the Company’s common stock, par value $0.01 per share. In conjunction with the transaction, the Company issued 3,000 stock options to the sellers of NCRC. The stock options vested immediately, have a life of 10 years and have a strike price of $0.18.

In conjunction with the acquisition of NCRC, the Company launched its business plan to offer consumers a variety of identity security products and services primarily on a subscription basis. These services help consumers protect themselves against identity theft or fraud and to understand and monitor their credit profiles and other personal information, which include credit reports, credit monitoring and credit scores.

The Company is a Delaware corporation incorporated in September 1987. Prior to December 31, 2007, the Company was a full service provider of information technology (IT) solutions, delivering complete lifecycle IT solutions for its customers. Effective December 31, 2007, as approved by ~~our~~the Company’s stockholders at a special meeting held December 27, 2007, wethe Company closed the transactions contemplated by the asset purchase and sale agreement, dated November 13, 2007 (the “Sale Agreement”), between us the Company and Corporate Technologies LLC (“Corporate Technologies”), pursuant to which wethe Company sold all of ~~our~~ its operating assets (the business known as “InfoTech USA, Inc.” or “InfoTech”) and ceased ~~our~~ its operations. Prior to March 17, 2009, the Company’s name was IFTH Acquisition Corp.

On August 1, 2008, Digital Angel Corporation (“Digital Angel”) sold 2,570 shares of the Company’s common stock to Blue Moon Energy Partners LLC (“Blue Moon”). The shares represented 49.9% of the Company’s outstanding common stock at that time. See Note 7 — Related Party Transactions.

~~Effective~~On ~~December~~March 320, ~~2008~~2009, the ~~board~~Company ofclosed ~~directors~~a ~~appointed~~convertible ~~William~~debt J.financing ~~Caragol~~transaction aswith ~~chief~~Blue Moon ~~executive~~for ~~officer,~~$190 ~~president,~~pursuant ~~acting~~to ~~chief~~a ~~financial~~secured ~~officer~~convertible ~~and~~promissory ~~director~~note, ofwhich ~~the~~is ~~Company.~~payable Onon ~~the same~~demand ~~date~~after March 20, ~~Kay E~~2011. ~~Langsford~~See ~~resigned~~Note as6 a— ~~member~~Financing ~~of the board of directors of the Company~~Agreements.

On ~~March~~June 204, 2009, the Company closed a two-year convertible debt financing transaction with VeriChip ~~Blue~~Corporation, ~~Moon~~a Delaware corporation (“VeriChip”), for $~~190~~ 500 pursuant to a secured convertible promissory note, which is payable on demand after ~~March~~June 204, ~~2011~~2010. See Note 6 — Financing Agreements.

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries as of ~~March~~June 3130, 2009 and September 30, 2008 (the September 30, 2008 financial information included in this Quarterly Report on Form 10-Q has been extracted from ~~our~~the ~~audited~~Company’s audited financial statements included in ~~our~~its Annual Report on Form 10-K for the year ended September 30, 2008), and for the three and ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008 have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of ~~our~~the Company’s management, all adjustments (including normal recurring adjustments) considered necessary to present fairly the unaudited condensed consolidated financial statements have been made. As a result of the Company’s sale of InfoTech, results of operations and cash flows presented in the ~~March~~June 3130, 2008 period have been presented as discontinued operations for comparative purposes.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. Included in these estimates are assumptions used in Black-Scholes valuation models, estimates of the fair value of acquired assets and assumed liabilities, among others.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

The ~~preparation~~accompanying ofcondensed consolidated financial statements inhave ~~conformity~~been ~~with~~prepared ~~U.S.~~assuming ~~GAAP~~that the ~~requires~~Company ~~management~~will ~~to make~~continue ~~estimates~~as ~~and~~a ~~assumptions~~going ~~that~~concern, ~~affect~~which ~~the~~contemplates ~~reported~~continuity ~~amounts~~of operations, realization of assets and satisfaction of liabilities ~~and disclosure~~in the ordinary course of ~~contingent~~business. ~~assets~~The Company has experienced losses from operations of $2,491 and ~~liabilities~~negative atoperating ~~the~~cash ~~date~~flows of $1,353 for the ~~financial~~nine ~~statements~~months ended June 30, 2009. Its ability to continue as a going concern is dependent upon, among other things, the achievement of future profitable operations and the ability ~~reported~~to ~~amounts~~generate sufficient cash from operations, equity and/or debt financing and other funding sources to meet its obligations over the next twelve months. The balance of ~~sales~~cash and ~~expenses~~cash equivalents as of June 30, 2009 may not be sufficient to meet its anticipated cash requirements through 2009, based on its present plan of operation. As a result, the Company may seek to raise additional capital during fiscal 2009. Delays in the ~~reporting~~timing ~~period~~of raising such capital may require it to delay, scale back or eliminate some or all of its operations while it raises capital. ~~Actual~~No ~~results~~assurance ~~could~~can ~~differ~~be given ~~from~~that ~~those~~additional ~~estimates~~financing will be available on acceptable terms or at all. ~~Included~~Under these circumstances the Company may be unable to continue as a going concern. These condensed financial statements should be read in ~~these~~conjunction ~~estimates~~with ~~are~~the ~~assumptions~~Company’s ~~used~~audited financial statements for the year ended September 30, 2008 included in ~~Black~~its Annual Report on Form 10-~~Scholes~~K ~~valuation~~filed with the Securities ~~models~~and Exchange Commission on December 24, ~~estimates~~2008. ofThe accompanying condensed consolidated financial statements do not include any adjustments relating to the ~~fair~~recoverability ~~value~~and classification of ~~acquired~~the carrying amount of recorded assets or the amount and ~~assumed~~classification of liabilities, ~~among~~that ~~others~~might result should it be unable to continue as a going concern.

The ~~accompanying~~unaudited condensed consolidated ~~financial~~ statements ~~have been prepared assuming that we will continue as a going concern, which contemplates continuity~~ of operations, ~~realization~~for ~~of assets and satisfaction of liabilities in~~ the ~~ordinary~~three ~~course of business. We have experienced losses from operations of $1,363~~ and ~~negative~~nine ~~operating cash flows of $775 for the six~~ months ~~ended~~ ~~March~~ended June 3130, 2009. ~~Our ability to continue as a going concern is dependent upon, among other things, the achievement of future profitable operations~~ and ~~the~~2008 ~~ability~~are to generate sufficient cash from operations, equity and/or debt financing and other funding sources to meet our obligations over the next twelve months. The balance of cash and cash equivalents as of March 31, 2009 is not ~~sufficient~~necessarily toindicative ~~meet our anticipated cash requirements through 2009, based on our present plan~~ of ~~operation. As a result, we anticipate seeking to raise additional capital during 2009. Delays in~~ the ~~timing~~results ofthat ~~raising such capital~~ may ~~require us to delay, scale back or eliminate some or all of our operations while we raise capital. No assurance can~~ be ~~given~~expected ~~that additional financing~~for ~~will~~the beentire ~~available on acceptable terms or at all~~year. ~~Under these circumstances we may be unable to continue as a going concern.~~ These ~~condensed financial~~ statements should be read in conjunction with ~~our~~the ~~audited~~consolidated financial statements ~~for the~~and ~~year~~related ~~ended~~notes ~~September 30,~~thereto ~~2008~~ included in ~~our~~the Company’s Annual Report on Form 10-K ~~filed~~for ~~with~~ the ~~Securities and Exchange~~ ~~Commission.~~year ~~The~~ended ~~accompanying~~September 30, condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of recorded assets or the amount and classification of liabilities that might result should we be unable to continue as a going concern2008.

The unaudited condensed consolidated statements of operations for the three and six months ended March 31, 2009 and 2008 are not necessarily indicative of the results that may be expected for the entire year. These statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended September 30, 2008.

Accounting Policies

Revenue Recognition

Revenue from the sale of a credit report is recognized when the credit report is delivered to the customer. Revenue from the sale of a subscription for credit monitoring services is recognized ratably over each subscriber’s subscription period. In certain circumstances, the Company sells a bundled offer whereby a customer receives a credit report and monitoring. In such circumstances, the Company allocates a portion of the associated revenue to the credit report with the balance recognized ratably over the subscription period.

Subscriber Acquisition Costs

Subscriber acquisition costs represent marketing expenses related to the acquisition of subscribers. Subscriber acquisition costs are expensed in the period incurred. For the three and ~~six~~nine months ended ~~March~~June 3130, 2009, subscriber acquisition costs were $~~121~~583 and $~~122~~705, respectively.

Fair Value Ofof Financial Instruments

The carrying values of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the relatively short maturity of these instruments.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.” SFAS 157 defines fair value and establishes a framework for measuring fair value in accordance with U.S. GAAP. The statement also expands the disclosures related to the fair value measurements used to value assets and liabilities. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company adopted SFAS 157 on October 1, 2008. SFAS ~~157~~ 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in U.S. GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), (2) assumptions that are other than quoted prices which are either directly or indirectly observable for the asset or liability through correlation with market data and (3) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

The three levels of the fair value hierarchy under SFAS 157 are described below:

	•		Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	•		Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	•		Level 3—Inputs that are both significant to the fair value measurement and unobservable.

~~At March~~On April 3113, 2009, the Company ~~had~~sold its remaining Level 1 investments (marketable ~~equity~~ equity securities, available-for-sale) [of approximately $8 for which quoted prices in active markets were used to value the underlying securities.] ~~The~~As ~~Company~~a ~~has~~result, ~~included~~as aof June 30, 2009, the Company had no ~~$27~~Level ~~decline~~1 ininvestments. ~~fair~~The ~~value~~Company ashas ~~other~~included ~~than~~a ~~temporary~~$24 ~~and~~loss ~~reported~~on ~~the~~sale ~~impairment~~of securities in interest and ~~other~~ other expense on the Condensed Consolidated ~~Statement~~Statements of Operations for the ~~three~~nine months ended ~~March 31,~~June 30, 2009.

In April 2009, the FASB issued FASB Staff Position FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1”) and (“APB 28-1”). FSP FAS 107-1 amends FASB Statement No. 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments in interim as well as in annual financial statements and amends APB Opinion No. 28 “Interim Financial Reporting”, to require those disclosures in interim financial statements. FSP FAS 107-1 and APB 28-1 ~~are~~were ~~required to be~~ adopted noby ~~later than~~ the ~~periods~~Company ~~ending~~on ~~after June~~April 151, 2009. These staff positions did not have a material impact on our Condensed Consolidated Financial Statements.

In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this standard did not have a material impact on our Condensed Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162”. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. The adoption of this standard is not expected to have a material impact on our Condensed Consolidated Financial Statements.

2. Principles of Consolidation

The financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

3. Net Income (Loss) Per Common Share

The Company presents basic net income (loss) per common share and, if appropriate, diluted net income per common share in accordance with the provisions of SFAS No. 128, “Earnings per Share.”

At March 31, 2009 and 2008, the Company had options and warrants outstanding for the purchase of shares of common stock upon exercise as follows:

	March 31,
	2009		2008
Outstanding stock options		8,285		3,975
Warrants (exercisable at an average price of $0.54 per share)		408		300
Totals		8,693		4,275

The assumed exercise of the employee stock options and warrants outstanding at March 31, 2008, and the application of the treasury stock method, had no impact on the basic weighted average number of common shares outstanding and, accordingly, had no effect on net income per common share for the three and six months ended March 31, 2008. The application of the treasury stock method had no impact on the basic weighted average number of common shares outstanding because the average price of the Company’s stock for the quarter ended March 31, 2008 did not exceed the strike price of any of the options or warrants outstanding. As a result of the net loss for the three and six months ended March 31, 2009, no potentially dilutive shares were calculated because the effect would be anti-dilutive.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

3. Net Income (Loss) Per Common Share

The Company presents basic net income (loss) per common share and, if appropriate, diluted net income per common share.

At June 30, 2009 and 2008, the Company had options and warrants outstanding for the purchase of shares of common stock upon exercise as follows:


	June 30,
	2009		2008
Outstanding stock options		7,935		3,975
Warrants (exercisable at an average price of $0.38 per share)		1,241		300

Totals		9,176		4,275

As a result of the net loss for the three and nine months ended June 30, 2009 and 2008, no potentially dilutive shares were calculated because the effect would be anti-dilutive.

4. Acquisition

On December 5, 2008, the Company completed the acquisition of NCRC. The Purchase Agreement provided for the Company’s purchase of all of the issued and outstanding membership interests in NCRC from the sellers of NCRC, in return for 1,000 shares of the Company’s common stock, par value $0.01 per share, valued at $130. In conjunction with the transaction, the Company issued 3,000 stock options with a fair value of $264 to the sellers of NCRC in consideration of their continued involvement with the operations of NCRC. The Black Scholes assumption used to value the NCRC options are the same as those described in Note 5 — Stock-Based Compensation. The options vested immediately and have a strike price of $0.18. Included in the purchase price was approximately $76 in acquisition costs. The total cost of the acquisition was $470.

The total purchase price of the business acquired was allocated as follows:


Cash	$	15
Accounts receivable		4
Equipment		17
Other assets		27
Goodwill		538
Current liabilities		(131	)

Total	$	470

The results of NCRC have been included in the condensed consolidated statements of ~~operations~~ operations since the date of acquisition. Unaudited pro forma results of operations for the ~~six~~ nine months ended ~~March~~ June 3130, 2009 are included below. Such pro forma information assumes that the NCRC ~~acquisition~~ acquisition occurred as of October 1, 2008, and revenue is presented in accordance with the Company’s accounting policies. This summary is not necessarily indicative of what the Company’s results of operations would have been had the Company and NCRC been combined entities during such period, nor does it purport to represent results of operations for any future periods.

	Six Months
	Nine Months
	Ended March 31,
	Ended June 30,
(In thousands, except per share amounts)	2009
Net operating revenue	$	~~119~~462
Net loss from continuing operations attributable to common shareholder — basic and diluted		(1,410	)
Net loss from continuing operations attributable to common shareholder	$	(2,538	)
Net loss from continuing operations per common share — basic and diluted	$	(0.1733	)

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

5. Stock-Based Compensation

A summary of option activity (does not include common stock and restricted stock) under the Company’s stock option plans as of ~~March~~June 3130, 2009 and changes during the ~~six~~nine month period is presented below:

						Weighted
				Weighted		Average
	Stock			Average		Contractual		Aggregate
	Options			Exercise Price		Term		Intrinsic Value
Outstanding October 1, 2008		5,570		$	0.35		4.5
Granted		2,743			0.18		9.74
Exercised		(50250	)		0.18		—
Forfeited or Expired		(~~475~~625	)		—		—
Outstanding at March 31, 2009		7,788		$	0.28		6.1	$	1,084	*
Outstanding at June 30, 2009		7,438		$	0.29		5.6	$	223	*
Exercisable at March 31, 2009		6,203		$	0.30		5.2	$	792	*
Exercisable at June 30, 2009		5,953		$	0.31		4.8	$	160	*

* The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds the exercise price of the option. The market value of the Company’s stock was $0.3925 at ~~March~~June 3130, 2009 based upon its closing price on the OTC Bulletin Board.

During the three and ~~six~~nine months ended ~~March~~June 3130, 2009, 50200 and 250 options, ~~were~~respectively, were exercised. There were no options exercised in the three and ~~six~~nine months ended ~~March~~June 3130, 2008. Accordingly, the aggregate intrinsic value of options exercised during the three and ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008 was $1143 and nil, respectively.

In July 2008, the Company granted options exercisable for approximately 1,595 shares of common stock to employees and consultants of the Company. InThe ~~accordance with FAS 123(R), the~~ Company recorded compensation expense of $54 42 and $~~152,~~194 ~~respectively,~~ in the three and ~~six~~nine months ended ~~March~~ June 3130, 2009, respectively, associated with these options based on an estimate of the fair value on each date of grant and using the Black-Scholes valuation model. The Company is required to re-measure the compensation expense associated with the 445 consultant options at the end of each reporting period until the options are vested.

In October 2008, the Company granted 1,000 restricted shares of common stock under the 2001 Flexible Stock Plan to its chief executive officer in lieu of salary through 2009, all of which were fully vested by December 31, 2008. The shares issued were recorded as compensation expense in the period of vesting. In addition, in October 2008, in lieu of salary through 2009, the Company granted 1,000 shares of common stock under the 2001 Flexible Stock Plan to its chairman of the board, ~~half~~all of which ~~vested~~were ~~immediately~~fully ~~and half of which was restricted and~~ vested ~~upon~~by ~~the completion of the acquisition of NCRC in~~ December 31, 2008. Compensation expense of nil and $270 ~~was~~ was recorded in connection with these two stock grants in the three and ~~six~~nine months ended ~~March~~June 3130, 2009, respectively.

In December 2008, the Company granted 3,000 stock options to the sellers of NCRC, 2,503 of which were issued under the 2001 Flexible Stock Plan and 497 of which were issued outside of the 2001 Flexible Stock Plan. The options were valued based on an estimate of the fair value on each date of grant and using the Black-Scholes valuation model. The value of the options ~~were~~was included in in the purchase price of the acquisition as discussed in Note 4 — Acquisition.

In December 2008, the Company granted options exercisable for 240 shares of common stock to consultants and employees of the Company. InThe ~~accordance with FAS 123(R), the~~ Company recorded compensation expense of $144 and $17 21 in the three and ~~six~~nine months ended ~~March~~June 3130, 2009, respectively, associated with these options based on an estimate of the fair value on each date of grant and using the Black-Scholes valuation model. The Company must re-measure the compensation expense associated with the consultant options at the end of each reporting period until the options are vested.

In December 2008, the Company granted 200 shares of restricted stock to two new members of its board of directors. Such restricted shares were issued from the Company’s 2001 Flexible Stock Plan and vest on January 1, 2010. The shares issued were recorded as compensation expense in the period of vesting The Company recorded compensation expense of $15 for the three and six months ended March 31, 2009 associated with these restricted stock.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

OnIn ~~March~~December 312008, ~~2009,~~ the Company granted ~~100~~200 shares of restricted stock to ~~Charles~~two ~~Baker,~~new ~~a director,~~members inof ~~conjunction~~its board ~~with~~of ~~his~~directors. ~~agreement~~Such torestricted ~~serve~~shares aswere ~~the~~issued ~~chairman~~from of the Company’s ~~technology~~2001 Flexible Stock Plan ~~committee.~~and ~~Such~~vest ~~restricted~~on January 1, 2010. The shares issued were ~~issued~~recorded ~~from~~as compensation expense in the period of vesting. The Company’s ~~2001~~recorded ~~Flexible~~compensation ~~Stock~~expense ~~Plan~~of $14 and ~~vest~~$29 for the three and nine months onended ~~March~~June 3130, ~~2010~~2009, respectively, associated with these restricted stock.

~~The~~On ~~fair~~March 31, ~~value~~2009, ofthe ~~each~~Company ~~option~~ granted is100 ~~estimated~~shares ~~using~~of ~~the~~restricted ~~Black-Scholes~~stock ~~options~~to ~~pricing model.~~Charles ~~The~~Baker, ~~assumptions~~a director, ~~used~~in ~~for~~conjunction ~~the~~with ~~three~~his ~~months~~agreement ~~ended~~to ~~December 31,~~serve ~~2008~~as ~~were~~the 5chairman toof ~~6 years~~the ~~for~~Company’s ~~the~~technology ~~expected~~committee. ~~option~~Such ~~lives,~~restricted ~~1.63%~~shares towere ~~3.4%~~issued ~~risk~~from ~~free~~the ~~rate,~~Company’s ~~85%~~2001 toFlexible ~~95%~~Stock ~~expected~~Plan ~~volatility~~ and ~~0% expected~~vest ~~dividend~~on ~~yield~~March 31, 2010. The ~~weighted~~Company ~~average~~recorded ~~fair~~compensation ~~value~~expense of ~~options~~$10 ~~granted~~for ~~during~~ the ~~six~~three ~~months~~and ~~ended~~nine months ~~March~~ended June 3130, 2009 ~~was~~associated $0with these restricted stock.~~18.~~

The fair value of each option granted is estimated using the Black-Scholes options pricing model. The assumptions used for the three months ended December 31, 2008 were 5 to 6 years for the expected option lives, 1.63% to 3.4% risk free rate, 85% to 95% expected volatility and 0% expected dividend yield. The weighted average fair value of options granted during the nine months ended June 30, 2009 was $0.18.

In January 2001, the Company issued a warrant to purchase 300 shares of common stock to a former employee at an exercise price of $0.58 per share. The warrant expires on December 31, 2010.

On March 20, 2009, in connection with the debt financing transaction with Blue Moon, the Company granted a common stock purchase warrant to purchase 108 shares of common stock at a price of $0.44 per share, which warrant is currently exercisable. The warrant was valued based on an estimate of the fair value on the date of grant and using the Black-Scholes valuation model. The value of the warrant was a discount to the debt and will be amortized to interest expense over the life of the financing. Amortized discount charged to interest expense was $4 for the three and nine months ended June 30, 2009.

On June 4, 2009, in connection with the debt financing transaction with VeriChip, the Company granted a common stock purchase warrant to purchase 333 shares of common stock at price of $0.30 per share, which warrant is currently exercisable. The financing transaction also included a guaranty of collection given by William J. Caragol for the benefit of VeriChip, for which Mr. Caragol received a common stock purchase warrant from the Company to purchase 500 common shares of the Company at a price of $0.30 per share, which warrant is currently exercisable. The warrants were valued based on an estimate of the fair value on the date of grant and using the Black-Scholes valuation model. The value of the warrant issued to VeriChip was a discount to the debt and will be amortized using the effective interest method. The value of the warrant issued to Mr. Caragol was considered debt issuance costs and will be amortized using the effective interest method. Amortized discount and issuance costs charged to interest expense was $3 for the three and nine months ended June 30, 2009.

6. Financing Agreements

~~On March 20, 2009, the Company closed a debt financing transaction with~~ Blue Moon ~~for $190~~ pursuant to a secured convertible promissory note (the “Note”). The Note is payable on demand after March 20, 2011, accrues interest at five percent per year compounded monthly and is secured by substantially all of the Company’s assets pursuant to a security agreement between the Company and Blue Moon. The Note can be prepaid at any time without penalty.

~~Blue~~On ~~Moon~~March 20, ~~shall~~2009, ~~have~~ the ~~right,~~Company atclosed ~~any~~a ~~time,~~debt infinancing ~~its~~transaction ~~sole~~with ~~discretion~~Blue toMoon ~~convert~~for ~~the entire~~$190 ~~unpaid~~pursuant ~~principal~~to ~~amount~~a ~~and~~secured ~~accrued~~convertible ~~and~~promissory ~~unpaid~~note ~~interest~~(the ~~thereon~~“Note”). ~~into~~The ~~that~~Note ~~number~~is ofpayable ~~shares~~on ofdemand ~~the~~after ~~Company’s~~March 20, ~~stock~~2011, ataccrues ainterest ~~price~~at offive ~~$0.44~~percent per ~~share.~~year ~~The~~compounded ~~Company~~monthly ~~may~~and ~~convert~~is ~~the~~secured ~~note~~by substantially ~~into~~all ~~common stock~~ of the Company’s ~~anytime~~assets ~~after~~pursuant to a ~~change~~security inagreement ~~control~~between of the Company orand Blue ~~the~~Moon, ~~average~~which ofsecurity ~~the~~interest ~~high~~is ~~and~~subordinate ~~low trading~~to ~~prices of~~ the ~~Company’s~~security ~~common~~interest ~~stock~~granted asto ~~quoted on the~~VeriChip ~~OTC~~Corporation ~~Bulletin Board~~ (orsee ~~any other applicable trading exchange~~below). isThe ~~greater than~~Note ~~120%~~can ofbe ~~the~~prepaid ~~conversion~~at ~~price~~any ~~($0.44~~time ~~per~~without ~~share) over 20 consecutive trading days~~penalty.

~~The~~Blue ~~financing~~Moon ~~transaction~~shall ~~also~~have ~~includes~~the aright, ~~warrant~~at any time, ~~which~~in ~~carries~~its ~~piggy~~sole ~~back~~discretion ~~registration~~to convert the entire ~~rights,~~unpaid ~~given~~principal toamount ~~Blue~~and ~~Moon~~accrued toand ~~purchase~~unpaid ~~108~~interest ~~common~~thereon into that number of shares of the Company’s stock at a price of $0.44 per share. The ~~fair~~Company ~~market~~may ~~value~~convert atthe ~~issuance~~Note ~~was~~into ~~$32.~~common ~~Interest~~stock of ~~accrued~~the Company anytime after a change in control of the Company or if the average of the high and low trading prices of the Company’s common stock as quoted on the OTC Bulletin Board (or any other applicable trading exchange) is greater than 120% of ~~March 31,~~the ~~2009~~conversion ~~was~~price ($0.44 per share) over 20 ~~de-minimus~~consecutive trading days.

7. Related Party Transactions

On January 20, 2006, Jonathan McKeage was appointed the Company’s chief executive officer, president and director. From 2004 until that time, Mr. McKeage was vice president of business development of Digital Angel, as well as of Destron Fearing Corporation, Digital Angel’s now-wholly-owned subsidiary. Following the sale of InfoTech, which became effective on December 31, 2007, Mr. McKeage remained the Company’s president and director and became vice president of corporate development for Digital Angel, as well as of VeriChip Corporation (“VeriChip”), Digital Angel’s then-majority-owned subsidiary. Effective January 1, 2008, the Company began to reimburse VeriChip in the amount of $7 per month for Mr. McKeage’s services related to finding a suitable acquisition target for the Company, which agreement ended in May 2008. As of November 2008, VeriChip is a company that is controlled by Scott Silverman, the Company’s chairman of the board.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

The financing transaction also includes a warrant, which carries piggy back registration rights, given to Blue Moon to purchase 108 common shares of the Company at a price of $0.44 per share. The fair market value at issuance was $32. Interest accrued as of June 30, 2009 was $7.

VeriChip

On June 4, 2009, the Company closed a debt financing transaction with VeriChip for $500 pursuant to a secured convertible promissory note (the “VeriChip Note”). The two year VeriChip Note is payable on demand on or after June 4, 2010, accrues at a rate of twelve percent and is secured by substantially all of the Company’s assets pursuant to a security agreement between the Company and VeriChip. The unpaid principal and accrued and unpaid interest under the VeriChip Note can be converted at any time into common stock at a price of $0.30 per share. The VeriChip Note can be prepaid at any time without penalty.

The financing transaction includes a common stock purchase warrant given to VeriChip to purchase 333 common shares of the Company at a price of $0.30 per share. The fair market value at issuance was $30.

The financing transaction also includes a guaranty of collection given by William J. Caragol for the benefit of VeriChip, for which Mr. Caragol received a common stock purchase warrant from the Company to purchase 500 common shares of the Company at a price of $0.30 per share. The fair market value at issuance was $45. Interest accrued as of June 30, 2009 was $7 (inclusive of amortized discount and costs).

7. Related Party Transactions

On August 1, 2008, Digital Angel sold 2,570 shares of the Company’s common stock to Blue Moon. The shares represented 49.9% of the Company’s outstanding common stock at that time and all of the shares owned by Digital Angel.

On October 8, 2008, the Company entered into a sublease with Digital Angel for its corporate headquarters located in Delray Beach, Florida, consisting of approximately 7,911 feet of office space, which space is shared with VeriChip. The rent for the entire twenty-one-month term of the sublease is $158, which was paid in one lump sum upon execution of the sublease. VeriChip reimbursed the Company for one-half of the sublease payment, representing its share of the total cost of the sublease. In addition, to account for certain shared services and resources, the Company and VeriChip operate under a shared services arrangement, in connection with which the Company pays $86.5 a month to VeriChip.

On March 20, 2009, the Company closed a debt financing transaction with Blue Moon for $190 pursuant to a secured convertible promissory note. See ~~note~~Note 6 — Financing Agreements, for more information on the transaction. As of ~~May~~June 330, 2009, Blue Moon owned 3029.26% of the Company’s outstanding common stock. Currently, Scott R. Silverman, the Company’s chairman of the board, is a manager of Blue Moon and controls a member of Blue Moon, and William J. Caragol, the Company’s chief executive officer, president and acting chief financial officer, is a manager and member of Blue Moon.

On March 31, 2009, the Company granted 100 shares of restricted stock to Charles Baker, a director, in conjunction with his agreement to serve as the chairman of the Company’s technology committee. Such restricted shares were issued from the Company’s 2001 Flexible Stock Plan and vest on March 31, 2010.

On June 4, 2009, the Company closed a debt financing transaction with VeriChip for $500 pursuant to a secured convertible promissory note, which is payable on demand after June 4, 2011. See Note 6 — Financing Agreements, for more information on the transaction. Currently, Scott R. Silverman, the Company’s chairman of the board, is the executive chairman of VeriChip and controls VeriChip, Mr. Caragol, the Company’s chief executive officer, president and acting chief financial officer, is the acting chief financial officer of VeriChip, and Michael E. Krawitz, a director of the Company is also a director of VeriChip.

Steel Vault Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(in thousands, except per share data)
(unaudited)

8. Income Taxes

The Company had an effective tax rate of nil for the three and ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008. The Company incurred consolidated losses before taxes for the three and ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008. However, the Company has not recorded a tax benefit for the resulting U.S. net operating loss carryforwards, as we have determined that a full valuation allowance against its ~~net~~ net deferred tax assets was appropriate based primarily on the Company’s historical operating results.

Based upon the change of ownership rules under IRC Section 382, if in the future the Company issues common stock or additional equity instruments convertible into shares of the Company’s common stock, which result in the Company’s ownership change exceeding the 50% limitation threshold imposed by that section, all of the Company’s net operating loss carryforwards may be significantly limited as to the amount of use in any particular year.

Effective January 1, 2007, the Company adopted FIN 48. The implementation of FIN 48 did not result in any adjustment to the Company’s beginning tax positions. The Company continues to fully recognize its tax benefits, which are appropriately offset by a full valuation allowance to the extent that it is more likely than not that the deferred tax assets will not be realized.

The Company recognizes any interest accrued related to unrecognized tax benefits or exposures in interest expense and penalties in operating expenses. During the ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008, there was no such interest or penalty.

The Company is no longer subject to U.S. Federal or State income examinations for fiscal years before 2002.

119. Treasury Stock

~~Table~~During 2009, the Company’s board of ~~Contents~~directors authorized the retirement and cancellation of up to $918 of the Company’s common stock acquired in previous periods. The Company retired and cancelled 113 and 861 shares of common stock held in treasury for the three and nine months ended June 30, 2009, respectively.

~~Special~~10. ~~Note~~Events ~~Regarding~~Occurring ~~Forward-Looking~~After ~~Statements~~Reporting Date

~~This~~The ~~Quarterly~~Company ~~Report~~has onevaluated ~~Form~~events ~~10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended,~~ and ~~Section 21E~~transactions ~~of the Securities Exchange Act of 1934, as amended,~~ that ~~reflect~~occurred ~~our~~between ~~current estimates~~June 30, ~~expectations~~2009 and ~~projections about our~~ ~~future results~~August 5, ~~performance~~2009, ~~prospects~~which ~~and~~is ~~opportunities.~~the ~~Forward-looking~~date ~~statements~~the ~~include, without~~financial ~~limitation,~~ statements ~~about~~were ~~our~~issued ~~market~~for ~~opportunities,~~possible ~~our~~disclosure ~~business~~ and ~~growth strategies,~~ ~~our~~recognition ~~projected~~in ~~revenue and expense levels,~~ the ~~adequacy~~financial ~~of our available cash resources, our financing plans, our competitive position and the effects of competition and the projected growth of the industries in which we operate~~statements. ~~Forward-looking~~The ~~statements~~Company ~~include~~has ~~all~~determined ~~statements~~ that ~~are not~~there ~~historical~~were ~~facts~~no ~~and can be identified by forward-looking statements~~ such ~~as “may,” “might,”~~events “should,” “could,” “will,” “intends,” “estimates,” “predicts,” “projects,” “potential,” “continue,” “believes,” “anticipates,” “plans,” “expects” and similar expressions. Forward-looking statements are only predictions based on our current expectations and projections, or ~~those~~transactions ofthat ~~third~~warrant ~~parties, about~~disclosure ~~future events~~ and ~~involve~~recognition ~~risks~~in ~~and~~the ~~uncertainties~~financial statements.

Although we believe that the expectations reflected in the forward-looking statements contained in this Quarterly Report on Form 10-Q are based upon reasonable assumptions, no assurance can be given that such expectations will be attained or that any deviations will not be material. In light of these risks, uncertainties and assumptions, the forward-looking statements, events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Important factors that could cause our actual results, level of performance or achievements to differ materially from those expressed or forecasted in, or implied by, the forward-looking statements we make in this Quarterly Report on Form 10-Q are discussed under “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended September 30, 2008, and include:

• our expectation that we will incur losses in the future; • declines in consumer spending may reduce demand for our products; • our failure to replace subscribers lost in the ordinary course of business may negatively harm our results of operations; • marketing laws and regulations can limit our ability and our client’s ability to offer products and services to consumers; • the loss of our ability to purchase data from any of the three major credit reporting repositories would decrease demand for our services; • our competitors may market products that are more effective and less expensive than our products; • our ability to negotiate additional sources of long-term capital; • our affiliates own a significant percentage of our capital stock, and they may make decisions that you do not consider to be in the best interests of our stockholders; • conflicts of interest may arise between Blue Moon and us that could be resolved in a manner unfavorable to us; • if penny stock rules are applicable to our securities, it may be more difficult for investors to sell shares of our common stock, and the market price of our common stock may be adversely affected; and • compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

You should not place undue reliance on any forward-looking statements. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or future period trends. Except as otherwise required by federal securities laws, we disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q and under the section entitled “Risk Factors” in our Annual Report on Form 10-K, as amended, for the year ended September 30, 2008. These are factors that could cause our actual results to differ materially from expected results. Other factors besides those listed could also adversely affect us.


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and related notes contained in Item 1 of this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the year ended September 30, 2008. Certain statements made in this Quarterly Report on Form 10-Q may contain forward-looking statements. For a description of risks and uncertainties relating to such forward-looking statements, see the section entitled “Special Note Regarding Forward-Looking Statements” above.

Business Description

We are a Delaware corporation incorporated in 1987. With the purchase of NCRC, we offer consumers a variety of identity security products and services primarily on a subscription basis. These services help consumers protect themselves against identity theft or fraud and understand and monitor their credit profiles and other personal information, which include credit reports, credit monitoring and credit scores.

Recent Developments

On ~~March~~ June 164, 2009, wethe ~~changed~~Company ~~our~~issued ~~name~~a to$500 ~~Steel~~promissory ~~Vault~~note, ~~Corporation~~convertible into common stock at any time at a price of $0.30 per share, to ~~better~~VeriChip. ~~reflect~~The proceeds are being used to support our continued subscriber growth and working capital needs. For more information on the ~~business~~transaction, see Note 6 — Financing Agreements to our condensed consolidated financial statements. Currently, Scott R. Silverman, the Company’s chairman of ~~providing~~the ~~identity~~board, ~~security~~is ~~products~~the executive chairman of VeriChip and ~~services~~controls VeriChip, ~~including~~Mr. Caragol, ~~credit~~the ~~monitoring~~Company’s chief executive officer, ~~services.~~president ~~The~~and ~~name~~acting ~~change~~chief ~~was~~financial ~~approved~~officer, byis ~~our~~the ~~stockholders~~acting atchief ~~our~~financial officer of VeriChip, ~~annual~~and ~~meeting~~Michael onE. ~~March 16~~Krawitz, ~~2009~~a director of the Company is also a director of VeriChip.

On March 20, 2009, we issued a $190,000 Note, convertible into common stock at any time at a price of $0.44 per share, to Blue Moon. The proceeds will be used to support our continued subscriber growth and working capital needs.

On May 11, 2009, NCRC entered into a Joint Marketing Agreement with First Advantage Membership Services, Inc. (“FAMS”) pursuant to which we will market FAMS’s consumer reports, credit reporting monitoring services and credit scores. See the section entitled “Other Information” below for more information regarding this Joint Marketing Agreement.

Results of Operations

On December 5, 2008, we purchased all of the outstanding membership interests in NCRC, which company became our wholly-owned subsidiary. In February 2009, we launched our first marketing campaigns related to the National Credit Report products and services. Prior to that time, our marketing campaigns for customer acquisition had been minimal.

Three Months Ended ~~March~~June 3130, 2009 Compared to Three Months Ended ~~March~~June 3130, 2008

(in thousands unless otherwise noted)

Revenue

In the three months ended ~~March~~June 3130, 2009, we recorded $58343 of revenue from subscription sales of our identity security products and services. This revenue is generated from active subscribers;. asAs of ~~March~~June 3130, 2009, we had 415,~~415~~565 active subscribers. Active subscribers pay between $14.95 and $19.95 per month for our services.

Cost of Revenue

In the three months ended ~~March~~June 3130, 2009, we recorded $78149 as cost of revenue from subscriber acquisition and fulfillment costs. These costs include our costs of delivering our services and products to our subscribers under a data service ~~agreement~~agreements with a credit reporting ~~aggregator~~aggregators.

Sales and Marketing Expenses

For the three months ended ~~March~~June 3130, 2009, we recorded $~~219~~681 in sales and marketing expenses, which consisted of commissions paid for subscriber acquisition, website development and sales and marketing salaries.

~~Selling,~~ General and Administrative Expenses

General and administrative expenses from continuing operations for the quarter ended ~~March~~June 3130, 2009 increased $~~256~~529, or 95518.92%, to $~~523~~631 from $~~267~~102 for the same quarter last year. The increase was primarily due to a substantial increase in commercial operations subsequent to the acquisition of NCRC and the launch of commercial operations in February 2007.

~~Six Months Ended March 31, 2009 Compared to Six Months Ended March 31, 2008~~13

Nine Months Ended June 30, 2009 Compared to Nine Months Ended June 30, 2008

(in thousands unless otherwise noted)

Revenue

In the ~~six~~nine months ended ~~March~~June 3130, 2009, we recorded $74418 of revenue from subscription sales of our identity security products and services. This revenue is generated from active subscribers;. asAs of ~~March~~June 3130, 2009, we had 415,~~415~~565 active subscribers. Active subscribers pay between $14.95 and $19.95 per month for our services.

Cost of Revenue

In the ~~six~~nine months ended ~~March~~June 3130, 2009, we recorded $85234 as cost of revenue from subscriber acquisition and fulfillment costs. These costs include our costs of delivering our services and products to our subscribers under a data service ~~agreement~~agreements with a credit reporting aggregator.

Sales and Marketing Expenses

For the ~~six~~nine months ended ~~March~~June 3130, 2009, we recorded $~~220~~901 in sales and marketing expenses, which consisted of commissions paid for subscriber acquisition, website development and sales and marketing salaries.

General and Administrative Expenses

~~Selling,~~General ~~general~~ and administrative expenses from continuing operations for the ~~six~~nine months ended ~~March 31~~June 30, 2009 increased $~~635~~1,164, or ~~134~~202.68%, to $1,~~107~~738 from $~~472~~574 for the same period last year. ~~Stock~~ Stock based compensation expense in the ~~six~~nine months ended ~~March~~June 3130, 2009 was $~~454~~524 compared to $134 in the nine ~~six~~ months ended ~~March~~June 3130, 2008. The increase was primarily due to a substantial increase in commercial operations subsequent to the acquisition of NCRC and stock-based compensation.

Liquidity and Capital Resources

(in thousands unless otherwise noted)

Cash used in operating activities during the ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008 was ~~$775~~ $1,353 and $~~168~~163, respectively. The cash used in the ~~six~~nine months ended ~~March~~June 3130, 2009 and 2008 was ~~primarily~~ ~~from~~primarily to fund operating losses.

Cash used in investing activities was $~~120~~132 for the ~~six~~nine months ended ~~March~~June 3130, 2009, compared to cash provided by investing activities of $~~800~~887 for the ~~six~~nine months ended ~~March~~June 3130, 2008. Cash used in investing activities for the ~~six~~nine months ended ~~March~~June 3130, 2009 was a result of acquisition costs for the NCRC purchase of $61, net of the cash provided by the acquisition of $15, and purchases of software and equipment. Cash provided by investing activities in the ~~six~~nine months ended ~~March~~June 3130, 2008 was from the proceeds from the sale of InfoTech under the Sale Agreement.

Cash provided by financing activities was $734 for the nine months ended June 30, 2009, of which $690 was the result of the proceeds from the Blue Moon and VeriChip debt financing.

We have $505 of cash at June 30, 2009. In line with our strategy to grow our customer and subscriber base, we plan to review opportunities for new sources of capital, both debt and equity, which would be used to grow our subscriber base by investing in sales and marketing initiatives to acquire new customers. Management believes that with cash on hand, operating cash inflows, and through additional debt or equity financing, that we will be able to continue to finance our growth initiatives.

~~Cash~~We ~~provided~~have byexperienced ~~financing~~losses ~~activities~~from ~~was~~operations of $~~198~~2,491 and negative operating cash flows of $1,353 for the ~~six~~nine months ended ~~March~~June 3130, 2009. Our ability to continue as a going concern is dependent upon, among other things, the achievement of future profitable operations and the ability ~~which~~to ~~$190~~generate ~~was~~sufficient cash from operations, equity and/or debt financing and other funding sources to meet our obligations over the ~~result~~next twelve months. The balance of cash and cash equivalents as of June 30, 2009 may not be sufficient to meet our anticipated cash requirements through 2009, based on our present plan of operation. As a result, we may seek to raise additional capital during fiscal 2009. Delays in the ~~Blue~~timing ~~Moon~~of ~~debt~~raising such capital may require us to delay, scale back or eliminate some or all of our operations while we raise capital. No assurance can be given that additional financing will be available on acceptable terms or at all. Under these circumstances we may be unable to continue as a going concern. These condensed financial statements should be read in conjunction with our audited financial statements for the year ended September 30, 2008 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of recorded assets or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

We have $559 of cash at March 31, 2009. In line with our strategy to grow our customer and subscriber base, we plan to review opportunities for new sources of capital, both debt and equity, which would be used to grow our subscriber base by investing in sales and marketing initiatives to acquire new customers. Management believes that with cash on hand, operating cash inflows, and through additional debt or equity financing, that we will be able to continue to finance our growth initiatives.

We have experienced losses from operations of $1,363 and negative operating cash flows of $775 for the six months ended March 31, 2009. Our ability to continue as a going concern is dependent upon, among other things, the achievement of future profitable operations and the ability to generate sufficient cash from operations, equity and/or debt financing and other funding sources to meet our obligations over the next twelve months. As a result, we anticipate seeking to raise additional capital during 2009. Delays in the process of raising such capital may require us to delay, scale back or eliminate some or all of our operations while we raise capital. No assurance can be given that additional financing will be available on acceptable terms or at all. Under these circumstances we may be unable to continue as a going concern. These condensed financial statements should be read in conjunction with our audited financial statements for the year ended September 30, 2008 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of recorded assets or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). In SFAS 141(R), the FASB retained the fundamental requirements of Statement No. 141 to account for all business combinations using the acquisition method (formerly the purchase method) and for an acquiring entity to be identified in all business combinations. However, SFAS 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS 141(R) is effective for annual periods beginning on or after December 15, 2008. We are currently evaluating whether the adoption of SFAS 141(R) will have a material impact on our financial statements.

In June 2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock.” EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008. We are currently assessing the impact of EITF 07-5 on our consolidated financial position and results of operations.

NoIn ~~other~~May 2009, ~~recently~~the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting ~~pronouncements~~for ~~that~~and ~~became~~disclosure ~~effective~~of ~~during~~events that occur after the balance ~~six~~sheet date but before financial statements are issued or are available to be issued. SFAS ~~months~~165 ~~ended~~sets ~~March~~forth (1) ~~31,~~the ~~2009,~~period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that ~~will~~may ~~become~~occur ~~effective~~for potential recognition or disclosure in athe ~~subsequent~~financial ~~period~~statements, ~~have~~(2) the ~~had~~circumstances under which an entity should recognize events or ~~are~~transactions occurring after the balance sheet date in its financial statements ~~expected~~and to(3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this standard did not have a material impact on ~~the~~our ~~Company’s~~Condensed Consolidated ~~consolidated~~Financial ~~financial statements~~Statements.

No other recently issued accounting pronouncements that became effective during the nine months ended June 30, 2009, or that will become effective in a subsequent period, have had or are expected to have a material impact on the Company’s consolidated financial statements.


Item 3.		Quantitative and Qualitative Disclosures About Market Risk

As a “Smaller Reporting Company,” we are not required to provide the information required by this item.


Item 4T.		Controls and Procedures

Disclosure Controls and Procedures

Evaluation of Disclosure Controls. We evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Exchange Act as of ~~March~~June 3130, 2009. This evaluation (the “disclosure controls evaluation”) was done under the supervision and with the participation of management, including the persons performing the functions of chief executive officer (“CEO”) and chief financial officer (“CFO”). Rules adopted by the SEC require that in this section of our Quarterly Report on Form 10-Q we present the conclusions of the CEO and CFO about the effectiveness of our disclosure controls and procedures as of ~~March~~June 3130, 2009 based on the disclosure controls evaluation.

Objective of Controls. Our disclosure controls and procedures are designed so that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Conclusion. Based upon the disclosure controls evaluation, our CEO and CFO have concluded that, as of ~~March~~June 3130, 2009, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act that occurred during the quarter ended ~~March~~June 3130, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, without limitation, statements about our market opportunities, our business and growth strategies, our projected revenue and expense levels, the adequacy of our available cash resources, our financing plans, our competitive position and the effects of competition and the projected growth of the industries in which we operate. Forward-looking statements include all statements that are not historical facts and can be identified by forward-looking statements such as “may,” “might,” “should,” “could,” “will,” “intends,” “estimates,” “predicts,” “projects,” “potential,” “continue,” “believes,” “anticipates,” “plans,” “expects” and similar expressions. Forward-looking statements are only predictions based on our current expectations and projections, or those of third parties, about future events and involve risks and uncertainties.

	•		our expectation that we will incur losses in the future;

	•		declines in consumer spending may reduce demand for our products;

	•		our failure to replace subscribers lost in the ordinary course of business may negatively harm our results of operations;

	•		marketing laws and regulations can limit our ability and our client’s ability to offer products and services to consumers;

	•		the loss of our ability to purchase data from any of the three major credit reporting repositories would decrease demand for our services;

	•		our competitors may market products that are more effective and less expensive than our products;

	•		our ability to negotiate additional sources of long-term capital;

	•		our affiliates own a significant percentage of our capital stock, and they may make decisions that you do not consider to be in the best interests of our stockholders;

	•		conflicts of interest may arise between Blue Moon and us that could be resolved in a manner unfavorable to us;

	•		if penny stock rules are applicable to our securities, it may be more difficult for investors to sell shares of our common stock, and the market price of our common stock may be adversely affected; and

	•		compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

You should not place undue reliance on any forward-looking statements. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or future period trends. Except as otherwise required by federal securities laws, we disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q and under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2008. These are factors that could cause our actual results to differ materially from expected results. Other factors besides those listed could also adversely affect us.

PART II — OTHER INFORMATION


Item 1A.		Risk Factors

Our Annual Report on Form 10-K for the fiscal year ended September 30, 2008 includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future results.

Item 2 6. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~ Exhibits

OnWe ~~March 20,~~have ~~2009,~~listed ~~in connection with~~ the ~~debt~~exhibits ~~financing~~by ~~transaction~~numbers ~~with~~corresponding ~~Blue Moon, which is more fully discussed in Note 6, we granted a common stock purchase warrant~~ to ~~Blue~~the ~~Moon~~Exhibit Table ~~to purchase 108,000 shares~~ of ~~common~~Item 601 ~~stock at a price of $0.44 per share. The warrant is currently exercisable,~~in ~~expires~~Regulation S-K on ~~March 19, 2014 and contains piggy back registration rights. The warrant was issued without registration in reliance upon~~ the ~~exemption provided by Section~~Exhibit ~~4(2)~~List ofattached ~~the~~to ~~Securities~~this ~~Act of~~Quarterly ~~1933,~~Report ason ~~amended,~~Form ~~and Rule 506 of Regulation D promulgated thereunder~~10-Q.

~~Item 4. Submission of Matters to a Vote of Security Holders~~18

AnTable annual meeting of our stockholders was held on March 16, 2009 to: Contents

~~(1) Elect two directors to hold office until the 2012 Annual Meeting of Stockholders and until~~SIGNATURE their successors have been duly elected and qualified and ratify the appointment of two directors. Scott R. Silverman’s term of office as a director continued after the annual meeting and expires in 2011. The results of the vote to elect two directors and ratify two directors were as follows:

Name of Director	For		Withheld
Charles E. Baker (election)		6,705,360		15,026
William J. Caragol (ratification)		6,705,360		15,026
Kevin H. McLaughlin (election)		6,705,382		15,004
Michael E. Krawitz (ratification)		6,705,382		15,004

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~(2) Approve~~Steel anVault ~~amendment~~Corporation toBy: ~~our~~/s/ ~~certificate~~William ofJ. ~~incorporation~~Caragol toWilliam ~~change our name to Steel Vault Corporation~~J. ~~The~~Caragol ~~proposal~~Chief ~~received~~Executive 6Officer,~~502,866~~ ~~votes~~President ~~for,~~and ~~271,520~~Acting ~~votes~~Chief ~~against~~Financial ~~and~~Officer no(Duly ~~abstentions~~Authorized ~~or broker non-votes.~~ Officer)

~~(3)~~Date: August ~~Approve~~5, ~~and adopt the Steel Vault Corporation~~ 2009 ~~Stock Incentive Plan. The proposal~~ ~~received 4,831,073 votes for, 252,247 votes against, no abstentions and 1,637,066 broker non-votes.~~

~~(4) Ratify the appointment of Eisner LLP as our independent auditors for the year ending~~19 ~~September 30, 2009. The proposal received 6,719,524 votes for, 22 votes against, 840 abstentions and no broker non-votes.~~

OurTable stockholders approved each of the four proposals. Contents

~~Item~~EXHIBIT ~~5. Other Information~~INDEX

Joint Marketing Agreement


Exhibit
Number			Description
	3.1		Amended and Restated Certificate of Incorporation dated April 21, 1997, as amended (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 12, 2009)

	3.2		Second Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 12, 2009)

	10.1	*	Secured Convertible Promissory Note, dated June 4, 2009, between Steel Vault Corporation and VeriChip Corporation

	10.2	*	Common Stock Purchase Warrant, dated June 4, 2009, between Steel Vault Corporation and VeriChip Corporation

	10.3	*	Convertible Note and Warrant Subscription Agreement, dated June 4, 2009, between Steel Vault Corporation and VeriChip Corporation

	10.4	*	Security Agreement, dated June 4, 2009, between Steel Vault Corporation and VeriChip Corporation

	10.5	*	Security Agreement, dated June 4, 2009, between National Credit Report.com, LLC and VeriChip Corporation

	10.6	*	Subordination and Intercreditor Agreement, dated June 4, 2009, between Blue Moon Energy Partners LLC and VeriChip Corporation

	10.7	*	Common Stock Purchase Warrant, dated June 4, 2009, between Steel Vault Corporation and William J. Caragol

	10.8	*	Guaranty of Collection, dated June 4, 2009, among Steel Vault Corporation, William J. Caragol and VeriChip Corporation

	31.1	*	Certification by Chief Executive Officer of the registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2	*	Certification by Chief Financial Officer of the registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32.1	*	Certification by Chief Executive Officer and Chief Financial Officer of the registrant pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~On May 11,~~* ~~2009,~~Filed ~~NCRC entered into a Joint Marketing Agreement (“JMA”) with FAMS, pursuant to which we will market FAMS’s consumer reports, credit reporting monitoring services and credit scores~~herewith. The initial term of the JMA is two years with automatic renewal for one year terms unless written notice of termination is provided 60 days before the end of a term. FAMS can terminate the JMA if NCRC does not meet minimum purchase requirements.

~~The foregoing description of the JMA does not purport to be complete and is qualified in its entirety by the JMA~~20 ~~that is filed as Exhibit 10.2 to this Quarterly Report.~~

Board of Director Approval of Second Amended and Restated Bylaws (the “Bylaws”)

On May 11, 2009, our Board of Directors unanimously approved amendments to, and restated, our Amended and Restated Bylaws. The following amendments were made so that our Bylaws are consistent with our Amended and Restated Certificate of Incorporation, as amended:

(i) provide that special meetings may also be called by a majority of the outstanding shares of common stock;

(ii) require that, if the date of the annual meeting is advanced by more than thirty days or delayed by more than sixty days from the anniversary date of the preceding year’s annual meeting, notice by the stockholder to be timely must be received not earlier than the ninetieth day prior to such annual meeting and not later than the close of business on the later of (1) the sixtieth day prior to such annual meeting or (2) the tenth day following the date on which notice of the date of the annual meeting is mailed or public disclosure thereof is made, whichever first occurs;

(iii) require that stockholder nominations for directors at a special meeting called for that purpose must be made not earlier than the ninetieth day prior to such special meeting and not later than the close of business on the later of (x) the sixtieth day prior to such meeting or (y) the tenth day following the day on which notice of the date of the special meeting is mailed or public disclosure thereof is made, whichever comes first; and

(iv) clarify that, unless provided otherwise by the Amended and Restated Certificate of Incorporation, as amended, or the Bylaws, all matters are decided by the holders of a majority in voting power of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter.

The following additional amendments were also made to our Bylaws:

(i) allow notice of meeting to be given in different forms;

(ii) clarify that a stockholder who desires to submit a proposal must be the stockholder of record on the date of the stockholder’s notice and on the record date for the determination of stockholders to vote at the annual or special meeting and that the applicable stockholder proposal provisions in the Bylaws are the exclusive means for a stockholder to submit business before a stockholders’ meeting;

(iii) add information requirements regarding the stockholder submitting a proposals, including, the text of the proposal or business, the name and address of the beneficial owner, if any, on whose behalf the proposal is made, specific information regarding ownership of our shares, including any derivative instruments or short interest in our securities, any rights to dividends on our shares, and any performance-related fees that the stockholder or beneficial owner is entitled to based on an increase or decrease in the value of our securities;

(iv) add information requirements regarding the candidate a stockholder is nominating for election of directors, including, a complete resume, his or her compensation and other material monetary agreements during the past three years, any material relationships between the stockholder or beneficial owner and their affiliates on the one hand and the candidate and his or her affiliates on the other hand, and the information described in section (iii) immediately preceding;

(v) add advance notice requirements for a stockholder seeking to nominate a director as a result of an increase in board size;

(vi) clarify that voting at stockholders’ meetings may be by electronic transmission and that any vote not required to be taken by written ballot or electronic transmission may be conducted in any manner approved by our board of directors;

(vii) permit our board of directors to set one record date for stockholders required to receive notice of a stockholders’ meeting and a separate record date for stockholders who may vote at such meeting;

(viii) provide that notice must be given to the directors if a meeting of the directors is adjourned and the time or place of the adjourned meeting is not announced at the time of adjournment;

(ix) add that directors may consent in writing by facsimile or other electronic transmission;

(x) add provisions regarding the resignation, removal and vacancy procedures for committees of the board of directors;

(xi) provide that stock may be uncertificated and signatures on our stock certificates may be by facsimile;

(xii) clarify that a dividend may be paid in cash, property or shares of our capital stock;

(xiii) provide that we are not obligated to indemnify a director or officer in a proceeding instituted by such person unless appropriate approval is obtained;

(xiv) provide that any alteration, repeal or amendment to the indemnification provision of the Bylaws cannot eliminate a right to indemnification that occurred before such change;

(xv) repeal a provision requiring, for interested director transactions, the affirmative vote of at least two-thirds of the votes entitled to be cast by holders of all the then outstanding voting stock, excluding stock owned by the interested person; and

(xvi) add a provision regarding our board of director’s ability to authorize officers to enter into contracts.

The Board of Directors also made certain technical and conforming amendments to the Bylaws. The foregoing description of our Bylaws does not purport to be complete and is qualified in its entirety by the Bylaws filed as Exhibit 3.2 to this Quarterly Report.

Changes to Stockholder Nominations for Directors

As a result of the amendment and restatement of our Bylaws, effective May 11, 2009, certain material changes to the procedures by which our stockholders may recommend nominees to our board of directors occurred. For more information, see the section entitled “Board of Director Approval of Second Amended and Restated Bylaws” above and Exhibit 3.2 to this Quarterly Report.

Item 6. Exhibits

We have listed the exhibits by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K on the Exhibit List attached to this Quarterly Report on Form 10-Q.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Steel Vault Corporation By: /s/ William J. Caragol William J. Caragol Chief Executive Officer, President and Acting Chief Financial Officer (Duly Authorized Officer)

Date: May 12, 2009

EXHIBIT INDEX

Exhibit
Number			Description
	3.1	*	Amended and Restated Certificate of Incorporation dated April 21, 1997, as amended
	3.2	*	Second Amended and Restated By-Laws
	10.1	*	Steel Vault Corporation 2009 Stock Incentive Plan
	10.2	*†	Joint Marketing Agreement, dated May 11, 2009, between National Credit Report.com, LLC and First Advantage Membership Services, Inc.
	10.3		Letter Agreement, dated February 13, 2009, by and between Steel Vault Corporation and William J. Caragol (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on February 17, 2009)
	10.4		Secured Convertible Promissory Note, dated March 20, 2009, between Steel Vault Corporation and Blue Moon Energy Partners LLC (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 24, 2009)
	10.5		Security Agreement, dated March 20, 2009, between Steel Vault Corporation and Blue Moon Energy Partners LLC (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on March 24, 2009)
	10.6		Warrant to Purchase Common Stock of Steel Vault Corporation, dated March 20, 2009, given to Blue Moon Energy Partners LLC (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on March 24, 2009)
	31.1	*	Certification by Chief Executive Officer of the registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	*	Certification by Chief Financial Officer of the registrant Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	*	Certification by Chief Executive Officer and Chief Financial Officer of the registrant pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith. † Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

Filing Compare · Steel Vault Corp