VeriChip Corporation Presents at Health and Human Services' Subcommit

    Business Editors/Health/Medical Writers

    DELRAY BEACH, Fla.--(BUSINESS WIRE)--Jan. 18, 2005--

    Applied Digital's Subsidiary Outlines Privacy Issues Surrounding
    Healthcare Applications for RFID Technology Before Key Governmental
    Group

    VeriChip Corporation, a wholly-owned subsidiary of Applied Digital (NASDAQ: ADSX), a provider of Security Through Innovation(TM), announced today that Dr. Richard Seelig, Vice President of Medical Applications, presented (upon request) before a hearing held by the Subcommittee on Privacy and Confidentiality of the National Committee on Vital and Health Statistics (NCVHS), a statutory public advisory body to the Secretary of Health and Human Services (HHS). The hearing's topic was the privacy implications of using RFID technology in health care settings. Dr. Seelig's testimony provided his expert opinion on safeguards that have been implemented to ensure privacy in connection with the company's recent clearance to begin marketing the VeriChip for healthcare applications.
    "As a pioneer in RFID applications, we must take a leadership role in proactively addressing privacy. We do this not only because it is responsible, but also because it is critical for VeriChip's adoption. Our customers (as well as hospitals, physicians and other healthcare providers) demand that VeriChip's convenience and usefulness not be compromised by privacy concerns," said Michael Krawitz, Applied Digital's Chief Privacy Officer. "Recently, Scott R. Silverman, the Company's Chief Executive Officer, laid out the six initial privacy points for the VeriChip technology. We believe our leadership role in addressing privacy issues in the RFID arena will continue to grow."
    The NCVHS and its Subcommittees are charged with advising HHS on the implementation of the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and also provide advice and assistance to HHS. It also serves as a forum for interaction with interested parties in the public and private sector on a variety of key health data issues. Additional information can be found on http://ncvhs.hhs.gov/.

    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.

    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 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.

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CONTACT: CEOcast, Inc. for Applied Digital: Ken Sgro, 212-732-4300 ksgro@ceocast.com

KEYWORD: FLORIDA INDUSTRY KEYWORD: HARDWARE MEDICAL SOFTWARE PRODUCT SOURCE: VeriChip Corporation

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