HOUSTON, June 28, 2002 (PRIMEZONE) -- The Emerson Firm, a securities class action trial law firm with offices in Texas and Arkansas, announced today that a class action has been filed in the United States District Court for the Southern District of Florida on behalf of purchasers of Applied Digital Solutions, Inc. ("Applied Digital" or the "Company") (Nasdaq:ADSXE) publicly traded securities during the period between February 11, 2000 and May 10, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be obtained from the Firm.
The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 11, 2000 and May 10, 2002. According to the complaint, defendants were in possession of materially adverse information concerning the lack of proper accounting controls and improper revenue recognition practices at certain of the Company's subsidiaries, but failed to disclose the information to investors for more than two years.
On April 18, 2002, Applied Digital disclosed that during the year ending December 31, 2001, one of the Company's subsidiaries had been booking revenue without "evidence of customer acceptance prior to the recognition of certain revenue." The Company also disclosed that the subsidiary "did not have proper restrictions to vendor access within its accounts payable system." Additionally, the Company disclosed that during the year ended December 31, 2000, a second subsidiary of Applied Digital "lacked monitoring controls over its accounts receivable and was unable to provide certain detailed inventory listings for certain general ledger balances." The disclosure of improper accounting practices at Applied Digital subsidiaries drove Applied Digital's stock down 40%. Approximately three weeks later, on May 9, 2002, defendants claimed that nearly every major hospital in the West Palm Beach, Florida, area would be equipped with VeriChip scanners - an indispensable component of the Company's VeriChip technology. However, not one hospital in West Palm Beach or anywhere else had accepted or agreed to use a scanner, an essential device for retrieving the VeriChip's information. One day later, on May 10, 2002, when the truth was disclosed that no hospital had accepted a scanner, Applied Digital's stock fell sharply, dropping nearly 30% in one day.
If you bought Applied Digital publicly traded securities between February 11, 2000 and May 10, 2002 inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than July 23, 2002. If you are a member of this class, you can join this class action by contacting Ms. Tanya Autry in the Shareholder Relations Department of the Firm. Any member of the purported class may move the Court to serve as lead plaintiff through The Emerson Firm or other counsel of their choice.
The Emerson Firm has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Houston, Texas and Little Rock, Arkansas, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm.
The Emerson Firm Investor Relations Department: Tanya R. Autry P.O. Box 25336 Little Rock, AR 72221-5336 Toll Free: 1-800-663-9817 E-mail: tanya.autry@worldnet.att.net
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.