As Filed with the Securities and Exchange Commission on January 14, 2000
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
APPLIED DIGITAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
3661
(Primary Standard Industrial
Classification Code Number)
MISSOURI 43-1641533
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
(561) 366-4800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Copies of all correspondence to:
David I. Beckett, Esq.
Applied Digital Solutions, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
(561) 366-4800
FAX: (561) 366-0002
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Denis P. McCusker, Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
(314) 259-2000
FAX: (341) 259-2020
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Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per aggregate offering registration fee
unit(1) price(1)
===================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $.001 par
value per share 1,467,653 shares $7.7565 $11,383,850 $3,005
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(c), the proposed offering price and registration fee
have been calculated on the basis of the average of the high and low
trading prices for the Common Stock for the five day period ended January
12, 2000 as reported on the Nasdaq National Market.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
================================================================================
The information in this preliminary prospectus is not complete and may be
changed. The Selling Shareholders may not sell these securities until the
amendment to the registration statement filed with the Securities and Exchange
Commission is effective. This preliminary prospectus is not an offer to sell
these securities and we are not soliciting any offer to buy these securiites in
any state where the offer or sale is not permitted.
================================================================================
SUBJECT TO COMPLETION, DATED JANUARY 14, 2000
1,467,653 Shares
[GRAPHIC OMITTED]
Common Stock
-------------------------------------
This prospectus relates to 1,467,653 shares of our Common Stock, par value
$.001 per share, which will be sold at various times by the Selling Shareholders
listed in this prospectus starting on page 10. More information about the shares
is under "Description of Capital Stock."
The Selling Shareholders may sell the shares of Common Stock in one or more
transactions (which may include "block transactions") on the Nasdaq Stock
Market, in the over-the-counter market, in negotiated transactions or in a
combination of such methods of sales, at fixed prices which may be changed, at
market prices prevailing at the time of sales, at prices related to such
prevailing market prices or at negotiated prices.
Our shares are listed on the Nasdaq Stock Market under the symbol "ADSX."
On January 12, 2000, the last reported sale price of our Common Stock was $7.719
per share. See "Price Range of Common Stock."
We will not receive any proceeds from shares sold by the Selling
Shareholders and we will bear all the expenses incurred in connection with
registering this offering of Common Stock.
The Selling Shareholders may sell the shares of Common Stock directly or
through underwriters, dealers or agents. They may also pledge some of the shares
of Common Stock. This prospectus also relates to any sale of shares of Common
Stock that might take place following any foreclosure of such a pledge. More
information about the way the Selling Shareholders may distribute the Common
Stock is under the heading "Plan of Distribution."
See the information under the heading "Risk Factors" starting on page 4,
which describes certain factors you should consider before purchasing the Common
Stock.
Our principal office is at 400 Royal Palm Way, Suite 410, Palm Beach,
Florida 33480, and our telephone number is (561) 366-4800.
-------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
-------------------------------------
The date of this prospectus is [_____________], 2000.
<PAGE>
TABLE OF CONTENTS
Where You Can Find More Information...........................................2
Incorporation of Certain Documents by Reference...............................3
Risk Factors..................................................................4
Our Business..................................................................7
Selling Shareholders.........................................................10
Description of Capital Stock.................................................12
Price Range of Common Stock..................................................12
Plan of Distribution.........................................................13
Legal Opinion................................................................13
Experts......................................................................13
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act with respect to the shares of our
Common Stock being offered hereby. This prospectus does not contain all of the
information set forth in the registration statement or the exhibits thereto. As
permitted by the rules and regulations of the Securities and Exchange
Commission, this prospectus omits certain information contained or incorporated
by reference in the registration statement. Our description in this prospectus
concerning the contents of any contract, agreement or other document are not
necessarily complete. For those contracts, agreements or other documents that we
filed as exhibits to the registration statement, you should read the exhibit for
a more complete understanding of the documents or subject matter involved. For
further information, reference is hereby made to the registration statement and
exhibits thereto.
On September 14, 1999, our subsidiary Intellesale.com, Inc. filed a
registration statement with the Securities and Exchange Commission in connection
with its proposed initial public offering. The registration statement has been
amended since September 14, 1999 and on January 4, 2000, Intellesale.com filed
its Pre-Effective Amendment No. 6 to the registration statement. In addition to
Intellesale.com selling primary shares, we expect to sell shares of
Intellesale.com stock as a selling shareholder. Although Pre-Effective Amendment
No. 6 to the registration statement has been filed with the Securities and
Exchange Commission, it has not yet become effective, and no assurances can be
given that such offering will be completed.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, file
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy the registration statement, including the
attached exhibits and schedules, and any reports, proxy statements or other
information that we file at the Securities and Exchange Commission's public
reference rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices located at Northeast Regional Office, Seven World Trade Center, Suite
1300, New York, New York 10048 and Midwest Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You can request copies
of these documents by writing to the Securities and Exchange Commission and
paying a duplicating charge. Please call the Securities and Exchange Commission
at 1-800-732-0330 for further information on the operation of its public
reference rooms in other cities. The Securities and Exchange Commission also
makes our filings available to the public on its Internet site (http:\\
www.sec.gov). Quotations relating to our Common Stock appear on the Nasdaq
National Market, and such reports, proxy statements and other information
concerning us can also be inspected at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it. This means that we can disclose
important information to you by referring you to other documents that we have
filed separately with the Securities and Exchange Commission. You should
consider the incorporated information as if we had reproduced it in this
prospectus, except for any information directly superseded by information
contained in this prospectus.
We incorporate by reference into this prospectus, the following documents,
which contain important information about us and our business and financial
results:
1. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1999;
4. Our Quarterly Report on Form 10-Q for the quarter ended September
30, 1999;
5. Our Current Report on Form 8-K/A dated June 8, 1998 (filed with the
Securities and Exchange Commission on March 11, 1999);
6. Our Current Report on Form 8-K dated May 25, 1999 (filed with the
Securities and Exchange Commission on June 2, 1999, and as amended on Form
8-K/A filed with the Securities and Exchange Commission on October 5,
1999);
7. Our Current Report on Form 8-K dated June 4, 1999 (filed with the
Securities and Exchange Commission on June 11, 1999, and as amended on Form
8-K/A filed with the Securities and Exchange Commission on August 12,
1999);
8. Our Current Report on Form 8-K dated September 14, 1999 (filed with
the Securities and Exchange Commission September 14, 1999);
9. Our Current Report on Form 8-K dated November 28, 1999 (filed with
the Securities and Exchange Commission December 13, 1999, as amended on
Form 8-K/A filed with the Securities and Exchange Commission on December
22, 1999, and as amended on Form 8-K/A filed with the Securities and
Exchange Commission on January 11, 2000); and
10. Our Registration Statement on Form 8-A filed on May 5, 1995,
registering our Common Stock under Section 12(g) of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by us with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date hereof and prior to the termination of the offering shall hereby be
deemed to be incorporated by reference in this prospectus and to be a part
hereof from the date of filing of such documents. You should consider any
statement contained in this prospectus (or in a document incorporated or deemed
to be incorporated into this prospectus) to be modified or superseded to the
extent that a statement contained herein or in any other subsequently filed
document incorporated or deemed to be incorporated herein by reference, which
statement is also incorporated herein by reference, modifies or supersedes such
statement. Any such statement so modified or superseded will no longer
constitute a part of this prospectus, except as so modified or superseded.
WE WILL PROVIDE YOU WITH COPIES OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS (OTHER THAN EXHIBITS ATTACHED TO THOSE DOCUMENTS,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE
INFORMATION INCORPORATED HEREIN), WITHOUT CHARGE. PLEASE DIRECT YOUR WRITTEN OR
ORAL REQUEST TO APPLIED DIGITAL SOLUTIONS, INC., 400 ROYAL PALM WAY, SUITE 410,
PALM BEACH, FLORIDA 33480; ATTENTION: KAY LANGSFORD, VICE PRESIDENT OF
ADMINISTRATION (TELEPHONE: (561) 366-4800).
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WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION CONCERNING THIS OFFERING EXCEPT THE INFORMATION AND
REPRESENTATIONS WHICH ARE CONTAINED IN THIS PROSPECTUS OR WHICH ARE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS. IF ANYONE GIVES OR MAKES ANY OTHER INFORMATION
OR REPRESENTATION, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO PURCHASE BY ANY PERSON IN ANY CIRCUMSTANCES IN WHICH AN OFFER OR
SOLICITATION IS UNLAWFUL. YOU SHOULD NOT INTERPRET THE DELIVERY OF THIS
PROSPECTUS OR ANY SALE MADE HEREUNDER AS AN INDICATION THAT THERE HAS BEEN NO
CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROSECTUS. YOU SHOULD ALSO BE AWARE
THAT THE INFORMATION IN THIS PROSPECTUS MAY CHANGE AFTER THIS DATE.
RISK FACTORS
You should carefully consider the risk factors listed below. These risk
factors may cause our future earnings to be less or our financial condition to
be less favorable than we expect. You should read this section together with the
other information in, or incorporated herein by reference into, this prospectus.
Forward-Looking Statements and Associated Risk
This prospectus, including the information incorporated herein by
reference, contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. All such forward-looking information
involves risks and uncertainties and may be affected by many factors, some of
which are beyond our control. These factors include:
o our growth strategies,
o anticipated trends in our business and demographics,
o our ability to successfully integrate the business operations of
recently acquired companies, and
o regulatory, competitive or other economic influences.
Uncertainty of Future Financial Results
While we have been profitable for the last three fiscal years, future
financial results are uncertain. There can be no assurance that we will continue
to be operated in a profitable manner. Profitability depends upon many factors,
including the success of our various marketing programs, the maintenance or
reduction of expense levels and our ability to successfully coordinate the
efforts of the different segments of our business.
Future Sales of and Market for the Shares
As of December 31, 1999, there were 48,259,623 shares of Common Stock
outstanding. In addition, 46,428 shares of Common Stock are reserved for
issuance in exchange for certain exchangeable shares issued by our Canadian
subsidiary. Since January 1, 1999, we have issued an aggregate of 15,454,580
shares of Common Stock, of which 5,928,220 shares of Common Stock were issued as
earnout payments in acquisitions, 3,297,206 shares were issued in exchange for
the exchangeable shares of our Canadian subsidiary and the exchangeable shares
of our former Canadian subsidiary, TigerTel Services Limited, 641,297 shares
were issued to acquire minority interests in three companies, 3,390,843 shares
of Common Stock were issued for acquisitions (including "price protection"
shares), 1,205,550 shares have been issued upon the exercise of options, 924,300
shares have been issued upon the exercise of warrants, and 67,164 shares of
Common Stock were issued for services rendered, including services under
employment agreements and employee bonuses.
Although we previously announced that we intend to limit the use of stock
in future acquisitions, and to focus on cash transactions, we have effected, and
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may continue to effect, acquisitions or contract for certain services through
the issuance of Common Stock or our other equity securities, as we have
typically done in the past. In addition, we have agreed to certain "price
protection" provisions in acquisition agreements which may result in additional
shares of common stock being issued to selling shareholders as of the effective
date of the registration of the shares such selling shareholder previously
received as consideration from us. Such issuances of additional securities may
be dilutive of the value of the Common Stock in certain circumstances and may
have an adverse impact on the market price of the Common Stock.
Competition
Each segment of our business is highly competitive, and we expect that
competitive pressures will continue. Many of our competitors have far greater
financial, technological, marketing, personnel and other resources than us. The
areas which we have identified for continued growth and expansion are also
target market segments for some of the largest and most strongly capitalized
companies in the United States, Canada and Europe. There can be no assurance
that we will have the financial, technical, marketing and other resources
required to compete successfully in this environment in the future.
Risks Associated with Acquisitions and Expansion
We have engaged in a continuing program of acquisitions of other businesses
which are considered to be complementary to our lines of business, and we
anticipate that such acquisitions will continue to occur. Our total assets were
approximately $240 million as of September 30, 1999 and $124 million, $61
million, $33 million and $4 million as of December 31, 1998, 1997, 1996 and
1995, respectively. Net operating revenue was approximately $232 million for the
nine months ended September 30, 1999 and approximately $207 million, $103
million, $20 million and $2 million for the years ended December 31, 1998, 1997,
1996 and 1995, respectively. Managing these dramatic changes in the scope of our
business will present ongoing challenges to management, and there can be no
assurance that our operations as currently structured, or as affected by future
acquisitions, will be successful.
We may require substantial additional capital, and there can be no
assurance as to the availability of such capital when needed, nor as to the
terms on which such capital might be made available to us.
It is our policy to retain existing management of acquired companies, under
the overall supervision of our senior management. The success of the operations
of these subsidiaries will depend, to a great extent, on the continued efforts
of the management of the acquired companies.
We have entered into earnout arrangements with certain selling shareholders
under which they are entitled to additional consideration for their interests in
the companies they sold to us. Under these agreements, assuming that all
earnouts are achieved, we are contingently liable for additional consideration
amounting to approximately $1 million based on achieved 1999 results,
approximately $13.6 million based on achieved 2000 results, approximately $7.9
million based on achieved 2001 results, approximately $1.8 million based on
achieved 2002 results and approximately $2 million based upon achieved 2004
results. Included in the 2000 amount is approximately $6.3 million which will be
payable upon the successful completion of Intellesale.com's initial public
offering.
We have entered into put options with the selling shareholders of those
companies in which we acquired less than a 100% interest. These options require
us to purchase the remaining portion we do not own after periods ranging from
four to five years from the dates of acquisition at amounts per share generally
equal to 10% - 20% of the average annual earnings per share of the company
before income taxes for, generally, a two-year period ending on the effective
date of the put multiplied by a multiple ranging from four to five. The
purchases under these put options are recorded as changes in minority interest
based upon current operating results. Upon the successful completion of
Intellesale.com's initial public offering, approximately $3.9 will become due
and payable.
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Dependence on Key Individuals
Our future success is highly dependent upon our ability to attract and
retain qualified key employees. We are organized with a small senior management
team, with each of our separate operations under the day-to-day control of local
managers. If we were to lose the services of any members of our central
management team, our overall operations could be adversely affected, and the
operations of any of our individual facilities could be adversely affected if
the services of the local managers should be unavailable. We have entered into
employment contracts with our key officers and employees and certain
subsidiaries. The agreements are for periods of one to ten years through June
2009. Some of the employment contracts also call for bonus arrangements based on
earnings.
Lack of Dividends on Common Stock; Issuance of Preferred Stock
We do not have a history of paying dividends on our Common Stock, and there
can be no assurance that such dividends will be paid in the foreseeable future.
Under the terms of our term and revolving credit agreement, we may declare and
pay cash dividends of up to $150,000 in any calendar year. We intend to use any
earnings which may be generated to finance the growth of our businesses. The
Board of Directors has the right to authorize the issuance of preferred stock,
without further shareholder approval, the holders of which may have preferences
over the holders of the Common Stock as to payment of dividends.
Possible Volatility of Stock Price
Our Common Stock is quoted on the Nasdaq Stock Market(R), which stock
market has experienced and is likely to experience in the future significant
price and volume fluctuations which could adversely affect the market price of
our Common Stock without regard to our operating performance. In addition, we
believe that factors such as the significant changes to our business resulting
from continued acquisitions and expansions, quarterly fluctuations in our
financial results or cash flows, shortfalls in earnings or sales below analyst
expectations, changes in the performance of other companies in our same market
sectors and the performance of the overall economy and the financial markets
could cause the price of our Common Stock to fluctuate substantially. During the
12 months preceding the date of this prospectus, the price per share of our
Common Stock has ranged from a high of $16 to a low of $1 5/8.
Termination Payments
Our employment agreements with three of our executive officers include
"change of control" provisions, under which the employees may terminate their
employment within one year after a change of control, and be entitled to receive
specified severance payments and/or continued compensation payments for 60
months. Also, the agreements for both Richard Sullivan and Garrett Sullivan
provide for certain "triggering events" which include a change in control, the
termination of Richard Sullivan's employment other than for cause, or if Richard
Sullivan ceases to hold his current positions with us for any reason other than
a material breach of the terms of his employment agreement. In that case, we
would be obligated to pay, in cash and/or in stock, $12.1 million and $3.5
million, respectively, to Richard Sullivan and to Garrett Sullivan, in addition
to certain other compensation.
Our obligations to make the payments described in this section could
adversely affect our financial condition or could discourage other parties from
entering into transactions with us which might be treated as a change in control
or triggering event for purposes of these agreements.
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Year 2000 Compliance
We have not experienced any significant Year 2000 related problems. During
1998 and 1999, we implemented a company wide program to ensure that we would be
compliant prior to the Year 2000 failure dates. We experienced no problems on
January 1, 2000 and do not anticipate experiencing any problems on February 29,
2000. However we cannot make any assurances that unforeseen problems may not
arise in the future.
Software Sold to Consumers. During 1998 and 1999 we identified what we
believe to be all potential Year 2000 problems with any of the software products
we develop and market. However, management believes that it is not possible to
determine with complete certainty that all Year 2000 problems affecting our
software products will be identified or corrected due to the complexity of these
products. In addition, these products interact with other third party vendor
products and operate on computer systems which are not under our control. For
non-compliant products, we have provided and are continuing to provide
recommendations as to how an organization may address possible Year 2000 issues
regarding that product. Software updates are available for most, but not all,
known issues. Such information is the most currently available concerning the
behavior of our products and is provided "as is" without warranty of any kind.
However, variability of definitions of "compliance" with the Year 2000 and of
different combinations of software, firmware and hardware could likely lead to
lawsuits against us. The outcome of any such lawsuits and the impact on us are
not estimable at this time.
We do not believe that the Year 2000 problem has had or will continue to
have a material adverse effect on our business, results of operations or cash
flows. The estimate of the potential impact on our financial position, overall
results of operations or cash flows for the Year 2000 problem could change in
the future. Our ability to achieve Year 2000 compliance and the level of
incremental costs associated therewith, could be adversely impacted by, among
other things, the availability and cost of programming and testing resources,
vendors' ability to modify proprietary software, and unanticipated problems
identified in the ongoing compliance review. The discussion of our efforts, and
management's expectations, relating to Year 2000 compliance are forward-looking
statements.
OUR BUSINESS
General
Applied Digital Solutions, Inc. is an e-business to business solutions
provider offering Internet, telecom, LAN and software services to a wide variety
of businesses throughout North America. We currently operate in the United
States, Canada and the United Kingdom.
The majority of our current operations are the result of acquisitions
completed during the last five years. Our net operating revenues were $207.1
million, $103.2 million, $19.9 million, $2.3 million and $0.3 million
respectively, in 1998, 1997, 1996, 1995 and 1994. Since 1994 we have completed
39 acquisitions. Management analyzes each acquisition opportunity using criteria
including profitability over a two to three year period, the strength of its
balance sheet, the strength of its customer base and the experience of its
management team. Going forward, we intend to make acquisitions that fit within
one of our five primary operating divisions. Since January 1, 1999, we have
completed six acquisitions.
Business Divisions
Prior to March 1999, our business was organized into three, and then
eventually, four business groups, or industry segments: the Services and
Solutions Group (formerly the Retail Group), the Computer Group, the
Manufacturing Group and the International Group. Each operating business was
conducted through a separate subsidiary company directed by its own management
team, and each subsidiary company had its own marketing and operations support
personnel. Each management team originally reported to our President, who was
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responsible for overall corporate control and coordination, as well as financial
planning. Later, a Group Vice President was added and the management teams
reported to the Group Vice President, who ultimately reported to our President.
The Chairman was responsible for our overall business and strategic planning.
In March 1999, we announced a corporate reorganization at which time we
named five new divisions as outlined below. Each division is managed by a
division president who reports to the Senior Vice President who in turn reports
to the President. Each division either has in place or is in the process of
hiring a vice president of marketing and a financial controller. We believe we
will attain increased operating efficiencies through this reorganization and
believe this structure will facilitate the cross marketing of our products and
services.
Our primary businesses, other than Intellesale.com and the Non-Core
Business Group, are now organized into five business divisions:
o Telecommunications -- offers a wide range of communications services
including interconnect and internet and computer telephony integration. On
December 30, 1999, we sold our interest in our Canadian subsidiary,
TigerTel, Inc.
o Network Infrastructure -- provides personal computer network infrastructure
for the development of local and wide area networks as well as site
analysis, configuration proposals, training and customer support services.
o Internet -- is focused on developing electronic commerce sites for
businesses and providing internet access services to customers of our other
divisions.
o Communications Infrastructure -- is involved in the fabrication,
installation, and maintenance of microwave, cellular and digital personal
communication services (PCS) towers and the construction and installation
of fiber optic, voice/data communications and switchgear systems. Effective
as of October 1, 1999, we sold four companies in this division. These
companies provided installation, service and maintenance of power
distribution systems such as lighting, standby power, alarms, security,
video systems, voice/data, network infrastructure and the installation of
fiber optics within customer premises.
o Application Technology -- provides software applications for large retail
application environments, including point of sale, data acquisition, asset
management and decision support systems and develops programs for portable
data collection equipment, including wireless hand-held devices. It is also
involved in the design, manufacture and support of satellite communication
technology including satellite modems, data broadcast receivers and
wireless global positioning systems for commercial and military
applications.
As of December 31, 1998, 1997 and 1996, revenues from these five divisions
together accounted for 57.0%, 48.8% and 70.1%, respectively, of our total
revenues.
Intellesale.com
Intellesale.com, Inc. sells refurbished and new computer equipment and
related components online, through their website at www.Intellesale.com, and
through other Internet companies, as well as through traditional channels, which
includes sales made by Intellesale.com's sales force.
As of December 31, 1998, 1997 and 1996, revenues from Intellesale.com
accounted for 29.4%, 38.2% and 10.0%, respectively, of our total revenues.
On September 14, 1999, Intellesale.com filed a registration statement with
the Securities and Exchange Commission in connection with its proposed initial
public offering. The registration statement has been amended since September 14,
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1999 and on January 4, 2000, Intellesale.com filed its Pre-Effective Amendment
No. 6 to the registration statement. In addition to Intellesale.com selling
primary shares, we expect to sell shares of Intellesale.com stock as a selling
shareholder. Although Pre-Effective Amendment No. 6 to the registration
statement has been filed with the Securities and Exchange Commission, it has not
yet become effective, and no assurances can be given that such offering will be
completed.
The Non-Core Business Group
This group is comprised of four individually managed companies whose
businesses are as follows:
o Gavin-Graham Electrical Products is a custom manufacturer of electrical
products, specializing in digital and analog panelboards, switchboards,
motor controls and general control panels. The company also provides custom
manufacturing processes such as shearing, punching, forming, welding,
grinding, painting and assembly of various component structures.
o Ground Effects, Ltd., based in Windsor, Canada, is a certified manufacturer
and tier one supplier of standard and specialized vehicle accessory
products to the automotive industry. The company exports over 80% of the
products it produces to the United States, Mexico, South America, the Far
East and the Middle East.
o Hopper Manufacturing Co., Inc. remanufactures and distributes automotive
parts. This primarily includes alternators, starters, water pumps,
distributors and smog pumps.
o Innovative Vacuum Solutions, Inc. designs, installs and re-manufactures
vacuum systems used in industry.
As of December 31, 1998, 1997 and 1996, revenues from this business group
accounted for 13.6%, 13.0% and 19.3%, respectively, of our total revenues.
We announced our intention to divest, in the ordinary course of business,
these non-core businesses at such time and on such terms as the Board of
Directors determines advisable. There can be no assurance that we will divest of
any or all of these businesses or as to the terms of any divestiture
transaction.
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SELLING SHAREHOLDERS
The following table sets forth information regarding the ownership of our
Common Stock by the Selling Shareholders and the shares being offered under this
prospectus.
We have issued the shares from time to time in various acquisition
transactions and in consideration for services rendered, including services
under employment agreements and employee bonuses. The registration of these
shares has been effected pursuant to agreements entered into by us with the
Selling Shareholders.
The percentage owned prior to and after the offering reflects the
outstanding common shares at the time of the registration statement. The amount
and percentage owned after the offering assumes the sale of all of the Common
Stock being registered on behalf of the Selling Shareholders.
<TABLE>
- --------------------------------------------------------------------------------------------------
<CAPTION>
Ownership Prior to Number of Shares Ownership After
Selling Shareholder the Offering Offered Hereby the Offering
- --------------------------------------------------------------------------------------------------
Shares % Shares %
------ - ------ ------ -
<S> <C> <C> <C> <C> <C>
Bradley A. Haslett..................... 3,612 * 3,612(1) -- *
James S. Bosshart...................... 3,612 * 3,612(1) -- *
John K. Murray......................... 301,485 * 301,485(1) -- *
Murray Limited Partnership............. 159,250 * 159,250(1) -- *
Anat Ebenstein......................... 15,925 * 15,925(1) -- *
Sidney L. Karp Holding
Company, Inc........................ 15,925 15,925(1) -- *
Capital Alliance Corporation........... 22,295 * 22,295(1) -- *
Kerry G. Burst......................... 43,260 * 43,260(1) -- *
John Dixson............................ 206 * 206(1) -- *
Sherri Sheerr.......................... 17,283 * 17,283(1) -- *
Edward L. Cummings..................... 1,098 * 1,098(1) -- *
Harvey H. Newman....................... 161,512 * 161,512(1) -- *
Martin D. Zuckerman.................... 142,344 * 142,344(1) -- *
Charles Newman......................... 416 * 416(1) -- *
Albert F. Butters, Jr.................. 27,905 * 27,905(1) -- *
Lawrence R. Wasielewski................ 2,498 * 2,498(1) -- *
Michael Metropolis..................... 9,114 * 9,114(2) -- *
Michelle Metropolis.................... 9,114 * 9,114(2) -- *
Joseph T. Gabriel...................... 9,114 * 9,114(2) -- *
Lance J. Umbertis...................... 16,823 * 16,823(3) -- *
Eric J. Steinmann...................... 18,001 * 18,001(4) -- *
Scott A. Capistrano.................... 1,509 * 1,509(5) -- *
Lora R. Steinmann...................... 100,000 * 100,000(6) -- *
E. Kurt Steinmann...................... 13,760 * 13,760(6) -- *
Dolores L. Franco...................... 3,840 * 3,840(6) -- *
Josef M. Steinmann..................... 16,000 * 16,000(6) -- *
Norman Bangle.......................... 1,120 * 1,120(6) -- *
Robert A. Bospflug..................... 1,600 * 1,600(6) -- *
Andrea L. Downs........................ 800 * 800(6) -- *
Craig C. Gibble........................ 2,080 * 2,080(6) -- *
Pamela L. Pittman...................... 3,440 * 3,440(6) -- *
Victor S. Ahern........................ 2,000 * 2,000(6) -- *
Arie W. Bos............................ 1,600 * 1,600(6) -- *
Patricia A. Miller..................... 240 * 240(6) -- *
Heinz J. Steinmann..................... 2,240 * 2,240(6) -- *
Lance R. Steinmann..................... 2,080 * 2,080(6) -- *
</TABLE>
10
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------------------------
<CAPTION>
Ownership Prior to Number of Shares Ownership After
Selling Shareholder the Offering Offered Hereby the Offering
- --------------------------------------------------------------------------------------------------
Shares % Shares %
------ - ------ ------ -
<S> <C> <C> <C> <C> <C>
Daniel P. Wolfe........................ 1,200 * 1,200(6) -- *
Randy C. Zachary....................... 720 * 720(6) -- *
STC Netcom, Inc. Employees' Trust...... 212,800 * 212,800(6) -- *
John E. Kunish......................... 119,832 * 119,832(7) -- *
------------- --------------- --------
Total 1,467,653 1,467,653 --
============= =============== ========
<FN>
- ------------
* Represents ownership of less than one percent.
(1) Represents shares issued pursuant to the price protection provisions of the
Agreements of Sale.
(2) Includes (a) 487 shares issued pursuant to the price protection provisions
of the Agreement of Sale, and (b) 8,627 shares issued in connection with
the Merger of MVAK Technologies, Inc. into Innovative Vacuum Solutions,
Inc. ("IVS"). These selling shareholders are minority shareholders in IVS.
(3) Includes (a) 823 shares issued pursuant to the price protection provisions
of the Agreement of Sale, and (b) 16,000 shares issued in connection with
our acquisition of the 20% minority interest in STC Netcom, Inc., effective
as of November 1, 1999 that we did not own.
(4) Includes (a) 721 shares issued pursuant to the price protection provisions
of the Agreement of Sale, and (b) 17,280 shares issued in connection with
our acquisition of the 20% minority interest in STC Netcom, Inc., effective
as of November 1, 1999 that we did not own.
(5) Includes (a) 309 shares issued pursuant to the price protection provisions
of the Agreement of Sale, and (b) 1,200 shares issued in connection with
our acquisition of the 20% minority interest in STC Netcom, Inc., effective
as of November 1, 1999 that we did not own.
(6) Represents shares issued in connection with our acquisition of the 20%
minority interest in STC Netcom, Inc., effective as of November 1, 1999
that we did not own.
(7) Represents shares issued in connection with our acquisition of 10% of the
20% minority interest in Atlantic Systems, Inc., effective as of October
1, 1999 that we did not own.
</FN>
</TABLE>
11
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Our Second Restated Articles of Incorporation authorize the issuance of up
to 80,000,000 shares of our Common Stock and up to 5,000,000 shares of preferred
stock (the "Preferred Stock"). The Preferred Stock may be issued from time to
time and on such terms as are specified by our Board of Directors, without
further authorization from our shareholders.
As of December 31, 1999, there were 48,259,623 shares of our Common Stock
outstanding. In addition, 46,428 shares of Common Stock are reserved for
issuance in exchange for the exchangeable shares in our Canadian subsidiary.
As of December 31, 1999, there were issued and outstanding warrants to
purchase 1,235,700 shares of our Common Stock at a weighted average exercise
price of $3.76 per share and options held by our employees to purchase
11,599,629 shares of our Common Stock at a weighted average exercise price of
$2.58 per share. All of the warrants are currently exercisable. Of the
outstanding options, 6,563,150 are now exercisable at a weighted average
exercise price of $3.55 per share, and the rest become exercisable at various
times over the next eight years.
PRICE RANGE OF COMMON STOCK
Our Common Stock trades on the Nasdaq Stock Market(R) under the symbol
"ADSX." The following table sets forth the high and low sale prices of the
Common Stock as reported by the Nasdaq for each of the quarters since the
beginning of 1997.
High Low
1997
First Quarter............................... 5 7/8 4
Second Quarter.............................. 4 3/8 2 5/8
Third Quarter .............................. 8 3/4 2 13/16
Fourth Quarter ............................. 9 3/4 3 25/32
1998
First Quarter............................... 5 1/2 4 1/32
Second Quarter.............................. 4 7/8 3 1/8
Third Quarter .............................. 3 1/2 1 9/16
Fourth Quarter ............................. 5 1/2 1 17/32
1999
First Quarter............................... 4 3/16 2
Second Quarter.............................. 3 1/2 2
Third Quarter............................... 3 3/8 1 11/16
Fourth Quarter.............................. 16 1 5/8
2000
First Quarter (through January 12, 2000).... 8 7/16 6 13/16
Holders
As of December 31, 1999, there were 1,226 holders of record of our Common
Stock.
12
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the shares offered hereby in one or more
transactions (which may include "block" transactions) on the Nasdaq Stock
Market, in the over-the-counter market, in negotiated transactions or in a
combination of such methods of sales, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
effect such transactions by selling the shares directly to purchasers, or may
sell to or through agents, dealers or underwriters designated from time to time,
and such agents, dealers or underwriters may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchaser(s) of the shares of our Common Stock for whom they may act as agent or
to whom they may sell as principals, or both. The Selling Shareholders may also
pledge certain of the shares of our Common Stock from time to time, and this
prospectus also relates to any sale of shares of our Common Stock that might
take place following any foreclosure of such a pledge. The Selling Shareholders
and any agents, dealers or underwriters that act in connection with the sale of
the shares of our Common Stock might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any discount or commission
received by them and any profit on the resale of the shares as principal might
be deemed to be underwriting discounts or commissions under the Securities Act.
We will receive no portion of the proceeds from the sale of the shares and
will bear all of the costs relating to the registration of this offering (other
than any fees and expenses of counsel for the Selling Shareholders). Any
commissions, discounts or other fees payable to a broker, dealer, underwriter,
agent or market maker in connection with the sale of any of the shares will be
borne by the Selling Shareholders.
LEGAL OPINION
Bryan Cave LLP, St. Louis, Missouri, as our counsel, has issued an opinion
as to the legality of the Common Stock.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting. The consolidated financial
statements incorporated in this prospectus by reference to the Annual Report on
Form 10-K for the years ended December 31, 1997 and 1996, have been so
incorporated in reliance on the report of Rubin, Brown, Gornstein & Co. LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (other than underwriting
discounts and commissions), which other than the SEC registration fee are
estimates, payable by the Registrant in connection with the sale and
distribution of the shares registered hereby**:
SEC Registration Fee ................................... $ 3,005
Accounting Fees and Expenses............................ 10,000 *
Legal Fees and Expenses................................. 10,000 *
Miscellaneous Expenses.................................. 6,995 *
----------
Total ...................................... $ 30,000 *
==========
- -------------
* Estimated
** The Selling Shareholders will pay any sales commissions or underwriting
discount and fees incurred in connection with the sale of shares
registered hereunder.
Item 15. Indemnification of Directors and Officers.
Sections 351.355(1) and (2) of The General and Business Corporation Law of
the State of Missouri provide that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful, except that, in the case of an action or suit by or in the right
of the corporation, the corporation may not indemnify such persons against
judgments and fines and no person shall be indemnified as to any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation,
unless and only to the extent that the court in which the action or suit was
brought determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3) provides that, to
the extent that a director, officer, employee or agent of the corporation has
been successful in the defense of any such action, suit or proceeding or any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred in connection with
such action, suit or proceeding. Section 351.355(7) provides that a corporation
may provide additional indemnification to any person indemnifiable under
subsection (1) or (2), provided such additional indemnification is authorized by
the corporation's articles of incorporation or an amendment thereto or by a
shareholder-approved bylaw or agreement, and provided further that no person
shall thereby be indemnified against conduct which was finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct or which
involved an accounting for profits pursuant to Section 16(b) of the Exchange
Act.
The bylaws of the Registrant provide that the Registrant shall indemnify,
to the full extent permitted under Missouri law, any director, officer, employee
or agent of the Registrant who has served as a director, officer, employee or
agent of the Registrant or, at the Registrant's request, has served as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to such provisions, the Registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
II-1
<PAGE>
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
(a) The undersigned issuer hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment hereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Palm Beach, State of Florida, on January 14, 2000.
APPLIED DIGITAL SOLUTIONS, INC.
By: /S/ DAVID A. LOPPERT
------------------------
David A. Loppert, Vice President,
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Garrett A. Sullivan and David A. Loppert, and each of them (with full power to
each of them to act alone), the true and lawful attorney in fact and agent for
the undersigned, to act on behalf of and in the name of the undersigned in
connection with this Registration Statement, including the authority to sign any
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with exhibits and any and all other documents filed with
respect thereto, with the Securities and Exchange Commission (or any other
governmental or regulatory authority), and each such person ratifies and
confirms all that said attorneys in fact and agents may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Chairman of the Board of
Directors, Chief Executive
/S/ RICHARD J. SULLIVAN Officer and Secretary January 14, 2000
- ------------------------- (Principal Executive Officer)
(Richard J. Sullivan)
/S/ GARRETT A. SULLIVAN President and Director (Principal January 14, 2000
- ------------------------- Operating Officer)
(Garrett A. Sullivan)
Vice President, Chief Financial
Officer (Principal Accounting
/S/ DAVID A. LOPPERT Officer) January 14, 2000
- -------------------------
(David A. Loppert)
/S/ RICHARD S. FRIEDLAND Director January 14, 2000
- -------------------------
(RICHARD S. FRIEDLAND)
/S/ ARTHUR F. NOTERMAN Director January 14, 2000
- -------------------------
(Arthur F. Noterman)
/S/ DANIEL E. PENNI Director January 14, 2000
- -------------------------
(Daniel E. Penni)
/S/ ANGELA M. SULLIVAN Director January 14, 2000
- -------------------------
(Angela M. Sullivan)
/S/ CONSTANCE K. WEAVER Director January 14, 2000
- -------------------------
(Constance K. Weaver)
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Second Restated Articles of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 4.1 to the Registrant's
Post-Effective Amendment No. 1 on Form S-1 to Registration Statement
(Form S-3 File No. 333-64605) filed with the Commission on June 24,
1999)
4.2 Amended and Restated Bylaws of the Registrant dated March 31, 1998
(incorporated herein by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-3 (File No. 333-51067) filed with the
Commission on April 27, 1998)
5.1 Opinion of Bryan Cave LLP regarding the validity of the Common Stock
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Rubin, Brown, Gornstein & Co. LLP
23.3 Consent of Bryan Cave LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included in signature page)
Exhibit 5.1
BRYAN CAVE LLP
ONE METROPOLITAN SQUARE
211 N. BROADWAY, SUITE 3600
ST. LOUIS, MISSOURI 63102-2750
(314) 259-2000
FACSIMILE: (314) 259-2020
DENIS P. MCCUSKER INTERNET ADDRESS
Direct Dial Number [email protected]
(314) 259-2455
January 14, 2000
Board of Directors
Applied Digital Solutions, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
Ladies and Gentlemen:
We are acting as counsel for Applied Digital Solutions, Inc., a
Missouri corporation (the "Company"), in connection with the preparation and
filing of a Registration Statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to 1,467,653 shares of the Company's
common stock, $.001 par value per share.
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and originals or
copies certified to our satisfaction of the Registration Statement, the Articles
of Incorporation and By-laws of the Company as amended and now in effect,
proceedings of the Board of Directors of the Company and such other corporate
records, documents, certificates and instruments as we have deemed necessary or
appropriate in order to enable us to render this opinion. In rendering this
opinion, we have assumed the genuineness of all signatures on all documents
examined by us, the due authority of the parties signing such documents, the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based upon and subject to the foregoing, it is our opinion that the
1,467,653 shares of common stock of the Company covered by the Registration
Statement are legally issued, fully paid and non-assessable shares of common
stock of the Company.
We hereby consent to the reference to our name in the Registration
Statement under the caption "Legal Opinion" and further consent to the filing of
this opinion as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/S/ BRYAN CAVE LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Applied Digital Solutions, Inc. (formerly, Applied
Cellular Technology, Inc.) of our report dated February 19, 1999 relating to the
financial statements of Applied Cellular Technology, Inc. as of and for the year
ended December 31, 1998 included in the Form 10-K for the year ended December
31, 1998 of Applied Cellular Technology, Inc. We also consent to the reference
to us under the heading "Experts" in such Registration Statement.
/S/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
St. Louis, Missouri
January 14, 2000
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Applied Digital Solutions, Inc. (formerly, Applied
Cellular Technology, Inc.) of our report dated February 24, 1998 relating to the
financial statements of Applied Cellular Technology, Inc. as of and for the
years ended December 31, 1996 and 1997 included in the Form 10-K for the year
ended December 31, 1998 of Applied Cellular Technology, Inc. We also consent to
the reference to us under the heading "Experts" in such Registration Statement.
/S/ Rubin, Brown, Gornstein & Co. LLP
--------------------------------------
Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 14, 2000
