Applied Digital Solutions Settles Class Action Lawsuit.
PALM BEACH, Fla.--(BUSINESS WIRE)--March 10, 2003
Applied Digital Solutions, Inc. (Nasdaq: ADSX), an advanced technology development company, announced today that it has reached a memorandum of understanding to settle the pending and consolidated shareholder class action lawsuit.
The settlement involved no admission of liability and will be entirely covered by proceeds from insurance. The settlement is subject to various conditions, including court approvals and approval of a special litigation committee of the Company's Board of Directors.
About Applied Digital Solutions, Inc.
On March 6, 2003, the Company filed a lawsuit against IBM Credit LLC and IBM Corporation. According to the lawsuit, the causes of action include: tortious interference with business relationships; conspiracy to commit fraud/civil RICO; fraud, breach of good faith and fair dealing; lender liability; and breach of the Florida Uniform Trade Secrets Protection Act.
IBM Credit has been the Company's lender since 1999. Under the terms of the IBM credit agreement and a letter sent by IBM Credit last week, IBM required payment of approximately $46.2 million by March 6, 2003. The Company did not make that payment. On March 7, 2003, the Company received a letter from IBM declaring the loan in default and indicating that IBM would exercise any and/or all of its remedies. If IBM were to do so, there would be doubt that the Company would be able to carry on business in the ordinary course. The lawsuit follows a good faith attempt by the Company to negotiate a satisfactory amendment to the credit agreement. The Company believes that its offers in those negotiations were not accepted, in large part, for the reasons set forth in the lawsuit.
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.