FDA Clears VeriChip for Medical Applications in the United States
BUSINESS WIRE
October 13, 2004 10:33 AM US Eastern Timezone

DELRAY BEACH, Fla. & SOUTH ST. PAUL, Minn. -- Applied Digital (NASDAQ: ADSX), a
provider of Security Through Innovation(TM) and Digital Angel Corporation
(AMEX:DOC) announced today that VeriChip(TM), the world's first implantable
radio frequency identification (RFID) microchip for human use, has been cleared
by the U.S. Food and Drug Administration (FDA) for medical uses in the United
States. The FDA clearance follows the completion of a de novo application
review.

The Company will hold a conference call today at 10:30 am eastern time in order
to discuss the FDA's decision, Company's marketing strategy and medical
applications for VeriChip. Interested participants should dial (800) 472-8309.
The conference ID is 1531948. International callers should dial (706) 643-9561
and use the same conference ID. The call will also be webcast and will be
available on the Home Page of Applied Digital's web site at www.adsx.com.

As previously disclosed, the FDA response is the result of the Company's 510(k)
application and subsequent de novo application for the medical and healthcare
uses of VeriChip, originally submitted in October 2003. Digital Angel
Corporation is the manufacturer of VeriChip and has licensed the technology to
VeriChip Corporation, a wholly owned subsidiary of Applied Digital, for human
applications.

The VeriChip Health Information Microtransponder System consists of an
implantable RFID microtransponder, an inserter, a proprietary hand-held scanner,
and secure database containing the patient approved healthcare information.
About the size of a grain of rice, VeriChip is a subdermal radio frequency
microchip. Once inserted under the skin in a brief outpatient procedure, the
VeriChip cannot be seen by the human eye. Each VeriChip contains a unique
16-digit verification number that is captured by briefly passing a proprietary
scanner over the insertion site. The captured 16 digit number links to the
database via encrypted Internet access. The previously stored information is
then conveyed via the internet to the registered requesting healthcare provider.

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Applied Digital Solutions soars on FDA ok of microchip
By Michael Baron, Investor's Business Daily
Oct 13, 2004 2:58:00 PM

NEW YORK (CBS.MW) - Shares of Applied Digital Solutions soared Wednesday after
the company and its majority-owned partner Digital Angel received approval of
the VeriChip implantable microchip for use with humans from the Food and Drug
Administration.

The stock (ADSX) leapt $1.14, or 53.3 percent, to $3.26 on heavy volume of 22.6
million, good for ninth on the Nasdaq's most active list. Digital Angel (DOC)
shares also rallied, advancing 16.2 percent to $3.15.

The companies described the VeriChip product as a subdermal radio frequency
identification microchip designed to link to patient approved healthcare
information, and said the clearance follows completion of a de novo application
review by the FDA.

The chips contain 16-digit verification numbers that are captured by a
proprietary scanner system that links to the healthcare information databases
through encrypted Internet access, according to the companies.

About the size of a grain of rice, the microchip is implanted in the triceps
area between the elbow and the shoulder of the right arm. Inserting the chip
involves a brief, painless procedure using local anesthetic, and once under the
skin, the VeriChip is invisible to the naked eye, the companies said.

In early August, Applied Digital reported a loss of $3 million, or 6 cents per
share, in the second quarter ended June 30. Revenue jumped 29 percent in the
period to $26.3 million.

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