PRESS RELEASE
Applied Digital's VeriChip Corporation Acquires Instantel, Inc.,
Including Its Health Security Division Xmark, Expanding Company's 
Position in Healthcare Security

-- Acquisition Further Expands VeriChip Corporation's RFID Products for 
People and Increases VeriChip Corporation's Estimated Annual Revenue to 
between $22 and $24 Million

DELRAY BEACH, FL-- (BUSINESS WIRE)--June 10, 2005-- VeriChip
Corporation, a subsidiary of Applied Digital (NASDAQ: ADSX - News),
announced today that its Canadian subsidiary has completed the acquisition 
of Ottawa, Ontario-based Instantel Inc. (www.instantel.com and
www.xmarksystems.com). Instantel is a privately-held Canadian company 
which manufactures high-quality remote monitoring products in the areas of 
healthcare security and vibration monitoring for a diverse customer base. 
VeriChip paid $22 million in cash and will issue up to an additional $3 
million in the future in some combination of cash, VeriChip Corporation 
stock and Applied Digital stock, depending on whether and when VeriChip 
Corporation has an initial public offering of its common stock. With this 
acquisition, VeriChip Corporation estimates that the combined companies 
will generate annual (i.e. next 12 months) revenue between $22 and $24 
million.

Instantel Inc.'s Xmark division specializes in smart tag technology for
protecting people and assets in healthcare environments. Its Hugs product 
line is a popular RFID system for preventing the abduction of newborn 
infants in hospital, while the WatchMate system is used in long-term care 
facilities to protect wander-prone residents. Instantel recorded revenue of 
$12.8 million for its fiscal year ended December 31, 2004 with EBITDA of 
approximately $3.6 million. During the past five years, Instantel's reported 
revenue reflects a compound annual growth rate of approximately 14%, with 
strong gross margins and EBITDA margins.

"This acquisition represents another important component of building 
VeriChip Corporation," said Kevin H. McLaughlin, CEO of VeriChip 
Corporation. "Instantel brings to VeriChip a strong R&D and management 
team, combined with an extensive dealer channel focused on the healthcare 
market. With the addition of eXI Wireless and now Instantel, VeriChip has 
acquired a substantial base of revenue, an important distribution network 
and cutting-edge RFID products for safety and security in healthcare 
environments. We continue to take aggressive measures to position VeriChip 
as a leader in RFID for people."

(snip)


Source: Applied Digital - http://www.adsx.com/content/pdf/pr/pr_24.pdf


Cheers, Steve...

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