VeriChip Corporation Announces Sale of VeriTrace(TM) System and 700 VeriChips and Inserters to the States of Florida And Hawaii.

DELRAY BEACH, Fla. -- VeriTrace System Utilized for Disaster Relief and Emergency Management Efforts in the Gulf Coast During the Aftermath of Hurricane Katrina

VeriChip Corporation, a subsidiary of Applied Digital Solutions (NASDAQ: ADSX), announced today that the State of Florida, through the Florida Emergency Mortuary Operations Response System (FEMORS), and the State of Hawaii Department of Health, have each purchased the VeriTrace system for disaster relief and emergency management needs.

The VeriTrace system was created in the immediate aftermath of Hurricane Katrina. The VeriTrace System proved helpful in identifying, tracking and accounting for the remains of victims from the hurricane. According to Gary Hargrove, Coroner in charge of the Disaster Mortuary Operational Response Team (DMORT), Harrison County, Mississippi, "Shortly after Hurricane Katrina struck the Mississippi Gulf Coast, employees of VeriChip Corporation arrived in Harrison County to provide assistance with the VeriTrace system. VeriTrace was used during the DMORT and recovery operations. The system greatly enhanced coordination between the tracking of the deceased and paperwork. The system was a great tool to use in the recovery, providing added safety to return the right deceased to the right family."

VeriTrace is designed to assist state and federal agencies to plan for and manage emergency situations and disaster recovery using implantable RFID technology. The VeriTrace system includes a unique implantable RFID microchip, a VeriTrace Bluetooth(TM) handheld reader, a customized Ricoh Caplio Pro G3 Digital Camera capable of receiving both RFID scanned data and GPS data wirelessly, and a Web-enabled database for gathering and storing information and images captured during emergency response operations. This database ensures the precise collection, storage and inventory of all data and images related to remains and the associated evidentiary items. This also allows the creation of an accurate and complete reconstruction of a disaster setting, crime scene or similar environment and location, where necessary or appropriate.

VeriTrace is the only end-to-end solution to use implantable RFID tags for such a purpose. The VeriTrace system is also the first identification and tracking modality to automatically record each tag's identification number along with the GPS coordinates captured by the Ricoh camera into the images, also captured by the Ricoh camera, during disaster response and recovery situations.

Marc Nishimoto, Planner, Office of Public Health Emergency Preparedness for the County of Maui, stated, "We ordered VeriTrace because we are the public health and emergency preparedness branch for the Department of Health for the State of Hawaii. In case of a major disaster or fatality, we will be able to have the resources and equipment necessary to efficiently identify bodies."

In addition to the purchases from the States of Florida and Hawaii, training has already been provided on the VeriTrace system to nearly 500 personnel from the Federal Emergency Management Agency (FEMA), Disaster Mortuary Operational Response Teams, the National Disaster Medical System (NDMS) and the Georgia Bureau of Investigation (GBI).

About VeriChip Corporation

VeriChip Corporation, headquartered in Delray Beach, Florida, develops, markets and sells radio frequency identification, or RFID, systems used to identify, locate and protect people and assets. VeriChip's goal is to become the leading provider of RFID systems for people in the healthcare industry. VeriChip sells passive RFID systems for identification purposes and active RFID systems for local-area location and identification purposes. VeriChip recently began to market its VeriMed(TM) Patient Identification System which is used to rapidly and accurately identify people who arrive in an emergency room and are unable to communicate. This system uses the first human-implantable passive RFID microchip, the implantable VeriChip(TM), cleared for medical use in October 2004 by the United States Food and Drug Administration. For more information on VeriChip, please call 1-800-970-2447, or email [e-mail]. Additional information can be found online at www.verichipcorp.com.

About Applied Digital - "The Power of Identification Technology"

Applied Digital is the parent company of VeriChip Corporation. Applied Digital develops innovative identification and security products for consumer, commercial, and government sectors worldwide. Through Applied Digital's affiliates, the company offers unique and often proprietary products provide identification and security systems for people, animals, the food supply, government/military arena, and commercial assets. Included in this diversified product line are RFID applications, end-to-end food safety systems, GPS/Satellite communications, and telecomm and security infrastructure, positioning Applied Digital as a leader in identification technology. Applied Digital is the owner of a majority position in Digital Angel Corporation (AMEX:DOC).

Statements about Applied Digital'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 Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and Applied Digital'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.