Noted Security and Privacy Expert Implanted with VeriChip

Business Wire, Feb 8, 2005

SAN ANTONIO, Texas & FLANDERS, N.J. -- Virtual Corporation's Information Security Practice Leader to Demonstrate VeriChip's Capabilities at World's Largest IT Security Conference

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.

About Virtual Corporation

Virtual Corporation is a consulting company that specializes in Business Continuity (BC) planning. In business for 11 years, Virtual has helped numerous large, geographically dispersed enterprises ensure that they will be able to recover from business disruptions. In addition, Virtual provides training to prepare individuals to perform BCMM(SM) assessments, training for implementing BC programs, and staffing services. For more information, contact Margaret Langsett at Virtual Corporation; mlangsett@virtual-corp.net or Joe Krull, jkrull@virtual-corp.net.

About Applied Digital:

Applied Digital develops innovative security products for consumer, commercial, and government sectors worldwide. The Company's unique and often proprietary products provide security 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 the leader of Security Through Innovation. Applied Digital is the 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.