Applied Digital Solutions Files Reviewed Financial Statements in Its Amended Form 10-Q for the 1st Quarter of 2002.Business Editors PALM BEACH, Fla.--(BUSINESS WIRE)--July 19, 2002 Applied Digital Solutions, Inc. (Symbol: ADSX ADSX Applied Digital Solutions, Inc. (stock symbol) ), an advanced technology development company, announced today that it has filed its reviewed financial statements in its amended Form 10-Q/A for the first quarter ended March 31, 2002. The results incorporate changes discussed with the Securities and Exchange Commission (SEC). The Company's Form 10-Q/A reflects certain changes from the original 10-Q filed May 20, 2002. The changes arise, in part, from the clarification of two accounting issues. The first item concerns the equity method of accounting, as originally filed, versus the consolidation method of accounting for the March 27, 2002, merger of Digital Angel Corporation. The 10-Q/A reflects the consolidation method of accounting, combining the balance sheet of Applied Digital Solutions and Digital Angel Corporation. Future financial presentations will include consolidating data on the balance sheet, cash flows and operating results. The second item resolves the expense treatment in accounting for stock options outstanding prior to the merger. The originally filed 10-Q expensed those options. This treatment will remain in effect. The impact of the accounting changes and other adjustments to the condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. balance sheet reflects an increase in total assets from $138.5 million to $197 million. For the same period, stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. also reflects an increase from $20.5 million to $37.4 million. Originally reported in the 10-Q, the net loss available to common stockholders was $17.0 million. Applied Digital Solutions' portion of the stock option expense was $14.3 million, which was revised upward by $4.4 million, bringing that total expense to $18.7 million. For the three months ended March 31, 2002, Applied Digital Solutions was in compliance with the financial covenants of the Company's credit facility. The amended 10-Q/A reflects a net loss for the first quarter of 2002 of $24.0 million, or $.09 per share, compared to a net loss of $11.2 million, or $.13 per share for the first quarter of 2001. Revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in the first quarter of 2002 was $28.2 million. For the same three-month period in 2001, the Company's revenue from continuing operations was $47.4 million. The decrease in comparative quarterly revenues was primarily the result of the sale or closure of business units in 2001. Commenting on the filing of the amended Form 10-Q Form 10-Q See 10-Q. , Scott R. Silverman, President of Applied Digital Solutions, stated: "We're obviously pleased that this process is finally complete. While we sought SEC guidance that the one-time non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. should be capitalized, we are pleased that we are now able to consolidate the financial results of Applied Digital and Digital Angel Corporation because we feel it more accurately reflects the financial performance of the Company. The consolidation of Digital Angel's results is also significant in that it sets the groundwork for the future consolidation of businesses as they evolve from VeriChip(TM) and Thermo Life(TM). "As stated in our press release on July 15, 2002, we remain perplexed at the Nasdaq listing qualifications panel's decision to delist delist To drop a security from trading on an organized exchange. Delisting may occur for a number of reasons including failure to meet an exchange's standards or placement of a new listing on another exchange. Compare list. the Company's securities from Nasdaq-NMS. Throughout the SEC guidance process, we have kept the Nasdaq staff fully advised. We hope that we will be successful in our effort to overturn or appeal the delisting decision and will keep our shareholders apprised of developments as they occur. We remain fully committed (Law) committed to prison for trial, in distinction from being detained for examination. See also: Fully to our business model as an advanced technology development company, and we believe the SEC guidance is a positive development from that perspective." About VeriChip(TM) VeriChip, first announced on December 19, 2001, is a miniaturized radio frequency identification See RFID. device (RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. ) that can be used in a variety of security, financial, emergency identification and healthcare 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 energizing, adj giving energy to; revitalizing; rejuvenating. the dormant VeriChip, which then emits a radio frequency signal transmitting the verification number. VeriChip Corporation VeriChip Corporation, a wholly owned subsidiary of Applied Digital (Nasdaq: ADSX), markets a line of Radio Frequency Identification (RFID) Devices (including VeriChip) used in security, financial, emergency identification, and other applications. and its parent company, Applied Digital Solutions, are working with federal regulators to ensure full compliance with applicable regulations. VeriChip Corporation is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Applied Digital Solutions. About Digital Angel Corporation 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 call center in Owings, Maryland Owings is a census-designated place (CDP) in Calvert County, Maryland, United States. The population was 1,325 at the 2000 census. Geography Owings is located at (38.711919, -76.603901)GR1. . Prior to the merger, Digital Angel Corporation was a 93% owned subsidiary of Applied Digital Solutions, Inc. Digital Angel(TM) technology and patents represent the first-ever combination of advanced sensors and Web-enabled wireless telecommunications linked to Global Positioning Systems Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. (GPS). By utilizing advanced sensor capabilities, Digital Angel will be able to monitor key functions - such as ambient temperature Outside temperature at any given altitude, preferably expressed in degrees centigrade. 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 companion pets, fish, and livestock. Digital Angel Corporation owns patents for its inventions in applications of the implantable microchip technology  Microchip Technology (NASDAQ: MCHP) is a manufacturer of microcontroller, memory and analog semiconductors, founded in 1989 when for animals and humans. For more information about Digital
Angel Corporation, visit www.digitalangel.net.
About Thermo Life(TM) Thermo Life is a miniaturized, thermoelectric ther·mo·e·lec·tric also ther·mo·e·lec·tri·cal adj. Characteristic of, resulting from, or using electrical phenomena occurring in conjunction with a flow of heat. 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 Beneficial Owner A person who enjoys the benefits of ownership even though title is in another name. Notes: For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial of a majority position in Digital Angel Corporation. 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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. |
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