UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) MARCH 6, 2003
APPLIED DIGITAL SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
Missouri 000-26020 43-1641533
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 Royal Palm Way, Suite 410, Palm Beach, Florida 33480
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 561-805-8000
ITEM 5. OTHER EVENTS
Required payment not made by Company under the IBM Credit Agreement and Press
Release Regarding Certain Litigation Filed Against IBM Credit LLC and IBM
Corporation.
UNDER THE TERMS OF THE THIRD AMENDED AND RESTATED TERM CREDIT
AGREEMENT (THE "IBM CREDIT AGREEMENT") WITH IBM CREDIT CORPORATION, APPLIED
DIGITAL SOLUTIONS, INC. (THE "COMPANY") WAS REQUIRED TO REPAY IBM CREDIT
CORPORATION $29.8 MILLION OF THE $77.2 MILLION OUTSTANDING PRINCIPAL BALANCE
CURRENTLY OWED TO THEM, PLUS $16.4 MILLION OF ACCRUED INTEREST AND EXPENSES
(TOTALING APPROXIMATELY $46.2 MILLION), ON OR BEFORE FEBRUARY 28, 2003. THE
COMPANY DID NOT MAKE SUCH PAYMENT BY FEBRUARY 28, 2003. ON MARCH 3, 2003,
IBM CREDIT CORPORATION NOTIFIED THE COMPANY THAT IT HAD UNTIL MARCH 6, 2003,
TO MAKE THE PAYMENT. THE COMPANY DID NOT MAKE THE PAYMENT ON MARCH 6, 2003,
AS REQUIRED, AND THE COMPANY HAS NOT ENTERED INTO AN AMENDMENT WITH IBM
CREDIT CORPORATION TO RESTRUCTURE THE PAYMENT TERMS AND OTHER PROVISIONS OF
THE IBM CREDIT AGREEMENT. IF IBM CREDIT CORPORATION WERE TO ENFORCE ITS
RIGHTS AGAINST THE COLLATERAL SECURING THESE OBLIGATIONS, THERE WOULD BE
DOUBT THAT THE COMPANY WOULD BE ABLE TO CONTINUE OPERATIONS IN THE NORMAL
COURSE OF BUSINESS.
WITH RESPECT TO CERTAIN LITIGATION FILED AGAINST IBM CREDIT LLC AND IBM
CORPORATION, THE COMPANY ISSUED A PRESS RELEASE ATTACHED AS EXHIBIT 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
C. EXHIBITS
Exhibit Number Description
99.1 PRESS RELEASE DATED MARCH 7, 2003.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
APPLIED DIGITAL SOLUTIONS, INC.
(Registrant)
Date: March 7, 2003 By: /s/ EVAN C. MCKEOWN
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Evan C. McKeown
Vice President and Chief Financial Officer
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