Applied Digital Solutions Agrees to Purchase Exclusive License to Proprietary Digital Delivery Service, DDS.

Business Editors/High Tech Writers

PALM BEACH, Fla.--(BUSINESS WIRE)--Oct. 25, 2000

Agreement includes license to a proprietary mixed-media encryption

technology providing file-streaming security of all file types, along

with data tracking capability to recognize the origin and destination

of data packets

Applied Digital Solutions, Inc. (Nasdaq: ADSX) today announced that it has agreed to acquire a series of licenses to proprietary technologies from an undisclosed partner.

The technologies will be integrated into existing products sets, most notably NetVu and the Digital Angel Delivery System which will provide data warehousing, management and distribution, customer service routing, and data security and authentication. Under the terms of the agreement, Applied Digital will pay $40 million for the exclusive rights to the proprietary technologies.

In a statement, Richard J. Sullivan, Chairman and CEO of Applied Digital Solutions, commented on the importance of the licenses: "This technology is a tremendous enhancement to our existing products. This DDS provides complete functionality in areas such as fulfillment, customer service routing, credit card authorization, accounting management, information entry, file storage, and content management-distribution. Moreover, this technology will form the basis of the Digital Angel Delivery System, offering key features such as integration and synchronization of Internet video and audio and data tracking, which are key to providing an efficient and secure site for Digital Angel subscribers."

Background on Digital Angel(TM)

In December of 1999, Applied Digital Solutions announced that it had acquired the patent rights to a miniature digital transceiver -- which it has named Digital Angel. Digital Angel will be able to send and receive data and be located by GPS (Global Positioning System) technology. The company believes this technology will enable it to tap into a multi-billion dollar marketplace with a number of applications that will prove to be extremely popular. These potential applications include: monitoring the medical condition of at-risk patients; tracking endangered wildlife or household pets; managing livestock and other farm-related animals; pinpointing the location of valuable stolen property; finding lost airline baggage and postal packages; managing the commodity supply chain; preventing the unauthorized use of firearms; and providing a tamper-proof means of identification for enhanced e-commerce security. For more information about Digital Angel, visit http://www.digitalangel.net .

About Applied Digital Solutions

Applied Digital Solutions is a leading edge, single-source provider of e-business solutions. The company differentiates itself in the marketplace by enabling e-business through Computer Telephony Internet Integration (CTII). With five-year growth (from 1994 to 1998) of 64,012%, Applied Digital Solutions is ranked as the fifth fastest-growing technology company by Deloitte & Touche in its 1999 Technology Fast 500 listing. For more information, visit the company's web site 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. 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.