Noted Security and Privacy Expert Implanted with VeriChip

Business Wire | February 8, 2005

Applied Digital (NASDAQ: ADSX), a provider of Security Through Innovation(TM), announced today that Joseph E. Krull, CPP, CISSP, IAM, an internationally recognized security and privacy authority, recently received a VeriChip to underscore his strong support for this unique identification technology.

"I envision powerful future applications for VeriChip(TM), including important computer and logical security authentication mechanisms, identify theft protection and even electronic 'dogtags' for military personnel," Krull stated. Mr. Krull is in the process of placing his personal medical information in VeriChip's secure database for linked access to his RFID microtransponder's unique 16-digit verification number, facilitating authorized access to the data through VeriChip's proprietary hand-held scanner system.

"The potential for VeriChip is significant and this technology's benefits far outweigh any perceived privacy issues or common misconceptions," said Krull. "Actually, when compared with using a computer on the Internet or making a mobile phone call," Krull concluded, "use of the VeriChip has minimal privacy implications, particularly in light of the Company's comprehensive policies for protecting personal data."

Mr. Krull has led Virtual Corporation's Information Security Practice since June 2004 and provides security consulting expertise to Fortune 500 and Global 1000 companies. He was formerly a senior security executive at Telecom Finland, Philips Electronics and Lucent Technologies and was a senior intelligence and security officer with the U.S. Defense Intelligence Agency at American Embassies overseas from 1979-1996. Mr. Krull regularly chairs international security and privacy conferences and is a frequent contributor to security publications. In a 2003 privacy paper sponsored by ID World Magazine, Mr. Krull first coined the term "digital dust" to describe the thousands of transactions residents of developed countries initiate each month in connection with Internet and mobile phone use and the impact on personal privacy of these seemingly innocuous transactions.

Mr. Krull will be demonstrating the VeriChip and its associated hand-held reader at the RSA Conference in San Francisco from February 15-17. He will also be available to provide his personal observations of the chipping process at Virtual Corporation's Booth #244

About VeriChip: VeriChip Corporation is a wholly owned subsidiary of Applied Digital. The VeriChip product is a sub dermal RFID micro transponder 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 device contains a unique verification number that is captured by briefly passing a proprietary scanner over the VeriChip. In October 2004, the U.S. Food and Drug Administration (FDA) cleared VeriChip for medical applications in the United States. VeriChip is not an FDA-regulated device with regard to its security, financial, personal identification/safety applications and is MRI compatible.