Applied Digital Solutions Announces Working Prototype of Subdermal GPS Personal Location Device.

Business Editors/Health/Medical Writers/High-Tech Writers

PALM BEACH, Fla.--(BUSINESS WIRE)--May 13, 2003

Specially Designed Antenna and Induction-Based Power-Recharging

Method Function Properly in Field Testing

Disk-Shaped Prototype is Roughly the Size of a Pacemaker -

Future Miniaturization Expected

Applied Digital Solutions, Inc. (Nasdaq: ADSX), an advanced technology development company, today announced that it has developed and successfully field tested a working prototype of what the company believes is the first-ever subdermal GPS "personal location device" (PLD).

Field testing and follow-up laboratory testing of the disk-shaped prototype confirm that the specially designed antenna and the induction-based power-recharging method function properly.

The dimensions of this initial PLD prototype are 2.5 inches in diameter by 0.5 inches in depth, roughly the size of a pacemaker. As the process of miniaturization proceeds in the coming months, the Company expects to be able to shrink the size of the device to at least one-half and perhaps to as little as one-tenth the current size.

The induction-based power-recharging method is similar to that used to recharge implantable pacemakers. This recharging technique functions without requiring any physical connection between the power source and the implant.

Dr. Peter Zhou, Vice President and Chief Scientist of Applied Digital Solutions, said: "We're very encouraged by the successful field testing and follow-up laboratory testing of this working PLD prototype. The specially designed antenna is working as planned. While reaching the working prototype stage represents a significant advancement in the development of PLD, we continue to pursue further enhancements, especially with regard to miniaturization and the power supply. We should be able to reduce the size of the device dramatically before the end of this year."

Last year, the Company announced that it was accelerating development of PLD in response to demand from high-risk countries and other potential customers. The exact timing of commercial availability of PLD is unclear pending further technological refinements and achieving any required regulatory clearances. The PLD technology builds on United States Patent Number 5,629,678 for a "personal tracking and recovery system" which Applied Digital acquired in 1999.

In its PLD announcement last year, the Company said it is committed to providing customers with a full range of "personal safeguard technologies" that enhance personal safety, security and peace of mind. Other technologies in the Company's line-up of life-enhancing technologies include VeriChip(TM), Digital Angel(TM), and Thermo Life(TM)."

About VeriChip(TM)

VeriChip is a miniaturized radio frequency identification device (RFID) 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.

About Digital Angel Corporation (AMEX:DOC)

On March 27, 2002, Digital Angel Corporation completed a merger with Medical Advisory Systems, Inc., which for two decades has operated a 24/7, physician-staffed response center in Owings, Maryland. Prior to the merger, Digital Angel Corporation was a 93% owned subsidiary of Applied Digital Solutions, Inc. (Nasdaq: ADSX), which now is a beneficial owner of the company. Digital Angel(TM) technology represents the first-ever combination of advanced sensors and Web-enabled wireless telecommunications linked to Global Positioning Systems (GPS). By utilizing advanced sensor capabilities, Digital Angel is able to monitor key functions - such as ambient temperature and physical movement - and transmit that data, along with accurate emergency location information, to a ground station or monitoring facility. The company also invented, manufactures and markets implantable identification microchips the size of a grain of rice for use in humans, companion pets, fish, and livestock. Digital Angel Corp. owns the patents for its inventions in all applications of the implantable microchip technology for humans and animals. For more information about Digital Angel Corp., visit www.DigitalAngelCorp.com.

About Thermo Life(TM)

Thermo Life is a miniaturized, thermoelectric generator powered by body heat. On July 9, 2002, the Company announced that it had achieved an important breakthrough: 3.0-volts of electrical power successfully generated by Thermo Life in laboratory tests. The Company believes Thermo Life technology has a wide variety of potential uses, including the powering of various electronic devices, wristwatches, medical devices, smoke detectors and other heat-related sensors. If Thermo Life performs as expected in commercial applications, this technology could effectively eliminate the need to periodically replace the power source of these devices. Thermo Life technology can also provide an independent, heat-generated power source for security related sensors. Thermo Life Energy Corporation is a wholly owned subsidiary of Applied Digital Solutions.

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). 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.