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 7, 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
Company Receives a Notice of Default from IBM Credit LLC.
ON MARCH 3, 2003, IBM CREDIT LLC, FORMERLY IBM CREDIT CORPORATION ("IBM
CREDIT"), NOTIFIED APPLIED DIGITAL SOLUTIONS, INC. (THE "COMPANY") THAT THE
COMPANY HAD UNTIL MARCH 6, 2003, TO PAY IBM CREDIT $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). THE COMPANY DID NOT MAKE THE PAYMENT ON MARCH 6, 2003, AS
REQUIRED. THE COMPANY FILED A CURRENT REPORT ON FORM 8-K WITH RESPECT TO
THESE EVENTS EARLIER TODAY. ON MARCH 7, 2003, IBM CREDIT NOTIFIED THE
COMPANY AND THE OTHER LOAN PARTIES THAT AN EVENT OF DEFAULT HAD OCCURRED AND
IS CONTINUING UNDER THE THIRD AMENDED AND RESTATED TERM CREDIT AGREEMENT
("THE IBM CREDIT AGREEMENT") AMONG THE COMPANY, THE DIGITAL ANGEL SHARE
TRUST AND IBM CREDIT. IBM CREDIT ALSO NOTIFIED THE COMPANY THAT IT WILL
IMMEDIATELY COMMENCE EXERCISING ANY AND/OR ALL OF IS RIGHTS AND REMEDIES. IF
IBM CREDIT WERE TO TAKE SUCH ACTION, THERE WOULD BE DOUBT THAT THE COMPANY
WOULD BE ABLE TO CONTINUE OPERATIONS IN THE NORMAL COURSE OF BUSINESS.
IN CONNECTION WITH THESE EVENTS, AND AS REPORTED ON THE COMPANY'S CURRENT
REPORT ON FORM 8-K FILED EARLIER TODAY, THE COMPANY HAS INSTITUTED LITIGATION
AGAINST IBM CREDIT AND IBM.
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