BALA CYNWYD, Pa., July 1, 2002 (PRIMEZONE) -- A pending class action charges Applied Digital Solutions, Inc. ("Applied Digital" or the "Company") (Nasdaq:ADSXE) with misleading investors about its business and financial condition according to the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the Southern District of Florida (02-80509). Plaintiff seeks damages for violations of the federal securities laws on behalf of all investors who purchased Applied Digital Solutions, Inc. securities between February 11, 2000, and May 10, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of Applied Digital Solutions, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the Florida-based Applied Digital Solutions, Inc. was 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 purchased Applied Digital Solutions, Inc. securities between February 11, 2000, and May 10, 2002, you may be a member of the class and have until July 23, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca