VeriChip Corporation and Austco Communication Systems Introduce the Hugs(R) Infant Protection System in the United Kingdom

VeriChip Corporation, a subsidiary of Applied Digital(NASDAQ:ADSX), announced today that it has shipped its first Hugs(R)infant protection system for use in the United Kingdom. The sale andinstallation of the Hugs system is being coordinated by VeriChip'sinternational distributor, Australia-based Austco CommunicationSystems Pty, Ltd.

VeriChip's Hugs infant protection system is designed to preventmismatching and deter abduction of newborn infants from hospitals, andis part of VeriChip's portfolio of RFID healthcare security products.

"The entry of the Hugs system into the U.K. is another example ofour commitment to develop the international healthcare securitymarket," remarked Kevin McLaughlin, Chief Executive Officer ofVeriChip Corporation.

Speaking for Austco Communication Systems, Robert E. Grey,President and CEO, commented, "The integration of the Hugs infantsecurity system with Austco's MediCom staff and emergency call systemis highly attractive to our worldwide hospital clients."

About Austco

Based in Perth, Western Australia, Austco Communication SystemsPty, Ltd. has been a world leader since 1985 in the highly specializedfield of electronic communications for healthcare and secureaccommodation environments. Austco designs and manufactures dedicatedmicroprocessor based and computer based nurse call systems for thehospital, long-term care, and dementia care markets. There are over4,000 Austco call systems installed throughout 41 countries worldwidesupported by their 9 international offices. For more information onAustco, visit the company's website at www.austco.com.

About VeriChip - "RFID for people"

VeriChip is a subsidiary of Applied Digital and providesstate-of-the-art RFID security solutions that identify, locate, andprotect people, their assets, and their environments. From the world'sfirst and only FDA-cleared, human-implantable RFID microchip to theonly active RFID tag with patented skin sensing capabilities,VeriChip's technology ensures the safety and security organizationsare looking for. Its market-leading infant protection, wanderprevention, asset tracking, and patient identification applicationsmake VeriChip the predominant RFID solutions provider in thehealthcare industry. And today, VeriChip systems are installed in over4,000 locations worldwide in healthcare, security, industrial, andgovernment markets making it the world's premier RFID company forpeople. For more information on VeriChip, please visitwww.verichipcorp.com.

About Applied Digital - "The Power of Identification Technology"

Applied Digital develops innovative identification and securityproducts for consumer, commercial, and government sectors worldwide.The Company's unique and often proprietary products provideidentification and security systems for people, animals, the foodsupply, government/military arena, and commercial assets. Included inthis diversified product line are RFID applications, end-to-end foodsafety systems, GPS/Satellite communications, and telecomm andsecurity infrastructure, positioning Applied Digital as the leader inidentification technology. Applied Digital is the owner of a majorityposition in Digital Angel Corporation (AMEX: DOC).

Statements about the Company's future expectations, includingfuture revenues and earnings, and all other statements in this pressrelease 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 termis defined in the Private Litigation Reform Act of 1995. Suchforward-looking statements involve risks and uncertainties and aresubject to change at any time, and the Company's actual results coulddiffer materially from expected results. The Company undertakes noobligation to update forward-looking statements to reflectsubsequently occurring events or circumstances.