CHICAGO, June 14, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that class action lawsuits are pending in the United States District Court for the Southern District of Florida on behalf of purchasers of the securities of Applied Digital Solutions, Inc. ("Applied Digital" or the "Company") (Nasdaq:ADSXE) between February 11, 2000 and May 10, 2002, inclusive ("Class Period").
It has been alleged that Applied Digital and Richard J. Sullivan, its Chief Executive Officer, 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. It has also been alleged that 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.
According to the allegations, on April 18, 2002, Applied Digital disclosed that during the year ending December 31, 2001, one of its 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.
Much Shelist is currently investigating these claims. If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to Applied Digital.
If you purchased Applied Digital securities during the Class Period and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than July 23, 2002.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca