Wednesday December 15, 9:46 am Eastern Time

Company Press Release

Applied Digital Solutions Acquires Rights to World's First Digital Device Implantable in Humans


- With Applications in E-business to Business Security, Health Care and Criminal Justice

PALM BEACH, Fla.--(BUSINESS WIRE)--Dec. 15, 1999-- Inserted just under the skin, with maintenance-free regenerating power supply, miniature ``Digital Angel®'' has multi-billion dollar market potential

Applied Digital Solutions, Inc. (NASDAQ:ADSX - news) today announced that it has acquired the patent rights to a miniature digital transceiver -- which it has named ``Digital Angel®'' -- that can be used for a variety of purposes, such as providing a tamper-proof means of identification for enhanced e-business security, locating lost or missing individuals, tracking the location of valuable property and monitoring the medical conditions of at-risk patients.

In the agreement signed last week, ADS acquired the right to develop this unique product itself for all of its applications or to sublicense the development of specific applications to other entities. A special technology group has been formed within ADS to supervise the development of the device.

The implantable transceiver sends and receives data and can be continuously tracked by GPS (Global Positioning Satellite) technology. The transceiver's power supply and actuation system are unlike anything ever created. When implanted within a body, the device is powered electromechanically through the movement of muscles, and it can be activated either by the ``wearer'' or by the monitoring facility. A novel sensation feedback feature will even allow the wearer to control the device to some degree. The ``smart'' device is also small enough to be hidden inconspicuously on or within valuable personal belongings and priceless works of art.

Commenting on Digital Angel's® many potential applications, Richard J. Sullivan, Chairman and CEO of Applied Digital Solutions, Inc. (ADS), said: ``We believe its potential for improving individual and e-business security and enhancing the quality of life for millions of people is virtually limitless. Although we're in the early developmental phase, we expect to come forward with applications in many different areas, from medical monitoring to law enforcement. However, in keeping with our core strengths in the e-business to business arena, we plan to focus our initial development efforts on the growing field of e-commerce security and user ID verification.''

Sullivan added that the multi-purpose technology would enable ADS to tap into a vast global market, through licensing and other commercial arrangements, with an estimated total value in excess of $100 billion. ``The e-business to business security market alone could reach as high as $10 to $12 billion in the near future,'' Sullivan added.

ADS is actively seeking joint venture partners to help develop and market the unique technology. The company expects to create a working prototype by the end of next year.

Applied Digital Solutions, Inc. is an e-business to business solutions provider offering Internet, telecom, LAN and software services to a wide variety of businesses throughout North America. For more information, visit the Company's web site at Applied Digital Solutions

Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. The Company intends that such forward-looking statements involve risks and uncertainties and are subject to change at any time, and the Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances.

BACKGROUND AND TECHNICAL ABSTRACT

Digital Angel®

E-Business Security, Emergency Location and Medical Monitoring

Background


On May 13, 1997, United States Patent Number 5,629,678 was granted for a ``personal tracking and recovery system,'' consisting of a miniature digital transceiver -- implantable in humans -- with a built-in, electromechanical power supply and actuation system. These features enable the device to remain implanted and functional for years without maintenance. This transceiver sends and receives data and can be continuously tracked by Global Positioning Satellite (GPS) technology.

On December 10, 1999, Applied Digital Solutions, Inc. (ADS) acquired the patent rights to this technology, which the company refers to as ``Digital Angel®.'' The agreement gives ADS the right to develop this unique product for all of its applications or to sublicense the development of specific applications to other entities. ADS is actively seeking joint venture partners to develop and market this technology. We expect to produce a prototype of the device by the end of 2000. We believe the potential global market for this device -- in all of its applications -- could exceed $100 billion.

Limitations of Competing Technologies

While a number of other tracking and monitoring technologies have been patented and marketed in the past, they are all unsuitable for the widespread tracking, recovery and identification of people due to a variety of limitations, including unwieldy size, maintenance requirements, insufficient or inconvenient power-supply and activation difficulties. For the first time in the history of location and monitoring technology, Digital Angel® overcomes these limitations.

Basic Features and Potential Uses of Digital Angel®

The Digital Angel® transceiver can be implanted just under the skin or hidden inconspicuously on or within valuable personal belongings and priceless works of art. When implanted within the human body, the transceiver is powered electromechanically through the movement of muscles. It can be activated either by the ``wearer'' or by a remote monitoring facility. The device also can monitor certain biological functions of the human body - such as heart rate - and send a distress signal to a monitoring facility when it detects a medical emergency.

Although still in the early developmental stage, we believe Digital Angel® could have an array of beneficial potential applications: provide a tamper-proof means of locating and identifying individuals for e-business and e-commerce security; locate individuals, including children, who are lost or who have been abducted; monitor the medical conditions of at-risk patients; track and locate military, diplomatic and other essential government personnel; determine the location or the authenticity of valuable property; track the whereabouts of wilderness sports enthusiasts (mountain climbers, hikers, skiers, etc.).

About Applied Digital Solutions, Inc.

Applied Digital Solutions, Inc. is an e-business to business solutions provider offering Internet, telecom, LAN and software services to a wide variety of businesses throughout North America. ADS is led by Richard J. Sullivan, who was elected Chairman of the Board of Directors and named Chief Executive Officer in May 1993. Since assuming this role, he has spearheaded the acquisition of some 40 companies over the past five years. During his tenure as Chairman and CEO, ADS has experienced record revenue and profit growth.

For more information, visit the Company's web site at www.adsx.com

Contact:

Applied Digital Solutions, Palm Beach
Lynn Anderson, 561/366-4800
or
Crawford Public Relations
Jim Crawford, 703/318-5460
or
Ovations International, Inc.
Matthew Cossolotto, 914/245-9721