Applied Digital Solutions Sells Worldwide License for Its Recently Acquired Net-Vu Product for $9 Million Cash.

Business Editors/High Tech Writers

PALM BEACH, Fla.--(BUSINESS WIRE)--Oct. 20, 2000

Applied Digital Solutions, Inc. (Nasdaq: ADSX) today announced that it has sold a non-exclusive worldwide licensing agreement for its recently acquired Net-Vu product.

Net-Vu, a product of recently acquired Perimeter Technologies, Inc., is an Internet-based Automatic Contact Distributor (ACD) which has been winning high praise from customers as an invaluable tool for e-commerce-related Customer Relationship Management (CRM). The identity of the buyer, a publicly held "dot com" entertainment company, was not disclosed.

The agreement, for which Applied Digital Solutions will receive a cash payment of $9 million and $1 million in stock from the licensee, is non-exclusive. The Licensee will be bundling Net-Vu with its existing products to provide the human touch and improved customer contact to its automated environment. The Net-Vu solution will enhance Applied Digital Solutions' ability to deliver digital information with immediate on-line contact for assistance in areas such as fulfillment, customer service, frequently asked questions, credit card verification, internal and external customer support and sales assistance.

In a statement, Richard J. Sullivan, Chairman and CEO of Applied Digital Solutions, indicated that the agreement would impact fourth quarter results in a "very positive manner" with "nearly all of the revenue flowing to the bottom line." He expanded, saying, "We acquired Perimeter Technologies roughly 120 days ago. We have now generated revenue from this acquisition which is very nearly equal to the purchase price of the entire company. Our ability to sell such a lucrative worldwide licensing agreement on a product so recently acquired speaks volumes for our strategy. As we continue to acquire and develop additional proprietary technologies, licenses on those properties will begin to feature more prominently in our revenue stream."

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.