VeriChip Corporation Enters into a Memorandum of Understanding for Development of a Firearm's User Authorization System - 'Smart Gun' - Using VeriChip RFID Technology

PALM BEACH, Fla.--(BUSINESS WIRE)--April 13, 2004--Applied Digital Solutions, Inc. (NASDAQ: ADSXD), an advanced technology development company, announced today that its wholly owned subsidiary, VeriChip Corporation, has entered into a memorandum of understanding ("MOU") with FN Manufacturing a leading gun manufacturer to develop a first in the world of firearms. The team's objective is an integrated User Authorization System for firearms using VeriChip RFID technology.

Located in Columbia, South Carolina, this firearms manufacturer produces small arms for military and police forces, as well as the commercial market. The company is engaged in R&D efforts to study and develop various technologies (commonly referred to and understood in industry and the private sector as "smart gun") that could limit the use of a gun to one or more authorized or recognized users.

“feasibility. Our combined resources provide one of the most feasible approaches to this challenge given the current knowledge base, legislative restrictions/requirements, technological hurdles and market preferences.”

The purpose of the MOU is for VeriChip and FN Manufacturing to evaluate the feasibility of developing a long term, strategic relationship to design, manufacture and sell a "smart gun" incorporating VeriChip's RFID technology. The team will investigate a variety of RFID tags including Implant technology.

Keith Bolton Ph.D., President of VeriChip Corporation, commented "The cooperative effort envisioned between our organizations is to apply VeriChip technology and capabilities in concert with the developments of our partner to ultimately realize a production worthy solution to the issue of "smart gun" feasibility. Our combined resources provide one of the most feasible approaches to this challenge given the current knowledge base, legislative restrictions/requirements, technological hurdles and market preferences."

About VeriChip(TM)

VeriChip is a miniaturized, radio frequency identification (RFID) device that can be used in a variety of security, financial, emergency identification and other applications. About the size of a grain of rice, each VeriChip product contains a unique verification number and will be available in several formats, some of which will be insertable under the skin. The verification number is captured by briefly passing a proprietary scanner over the VeriChip. A small amount of radio frequency energy passes from the scanner energizing the dormant VeriChip, which then emits a radio frequency signal transmitting the verification number. In October 2002, the US Food and Drug Administration (FDA) ruled that VeriChip was not a regulated device with regard to its security, financial, personal identification/safety applications but that VeriChip's healthcare information applications are regulated by the FDA. VeriChip Corporation is a wholly owned subsidiary of Applied Digital Solutions. For more information about VeriChip, visit www.adsx.com.

About Applied Digital Solutions, Inc.

Applied Digital Solutions is an advanced technology development company that focuses on a range of life-enhancing, personal safeguard technologies, early warning alert systems, miniaturized power sources and security monitoring systems combined with the comprehensive data management services required to support them. Through its Advanced Technology Group, the company specializes in security-related data collection, value-added data intelligence and complex data delivery systems for a wide variety of end users including commercial operations, government agencies and consumers. Applied Digital Solutions is the beneficial owner of a majority position in Digital Angel Corporation (AMEX: DOC - News). For more information, visit the company's website at http://www.adsx.com.

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. 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.