Applied Digital's Wholly-Owned Subsidiary, Government Telecommunications, Inc. Awarded a $900,000 Contract for a Video Conferen

Government Telecommunications, Inc., a subsidiary of
Applied Digital (NASDAQ: ADSX), announced today that it has been
awarded a General Services Administration (GSA) CONNECTIONS task order
to install a video conferencing system for the Federal Air Marshall
Service. The initial value of the contract is approximately $900,000
and the system is expected to be complete by the middle of 2006. Rich
Patton, President of GTI, commented, "GTI is pleased to be partnering
with Wire One Communications to deliver a world class video
conferencing system to the Federal Air Marshall Service."
   Under the terms of this contract GTI and its partner Wire One
Communications, Inc. will install a video conference system linking
the Federal Marshall Services' headquarters in New Jersey with key
stakeholders, including other agencies and its 25 remote offices. "We
are proud to be associated with GTI in this endeavor" stated Thomas
Volk, Senior Vice President, Federal Sales for Wire One. "This is yet
another validation of the expertise and skill the joint team of GTI
and Wire One provides. Our combined solution will further strengthen
the capabilities of the Federal Air Marshall Service."

   About Government Telecommunications, Inc.

   GTI, a wholly-owned subsidiary of Applied Digital, is
headquartered in Chantilly, VA. GTI specializes in designing,
deploying and maintaining voice, data and telecommunications networks
for agencies of the federal government. Key customers include the
Departments of Defense, Justice and Agriculture, and the Social
Security Administration. For more information on GTI, please visit
www.govtel.com.

   About Wire One Communications, Inc.

   Wire One Communications delivers integrated video conferencing
services and solutions that are reliable, easy to use and deliver
superior value. We are the global leader in video conferencing
services. That's why 1000's of companies - including 40 of the Fortune
100 companies, are Wire One customers. Let us increase your video
conference adoption and success rates - visit www.wireone.com or call
[phone] in the US and [phone] in the UK.

   About Applied Digital - "The Power of Identification Technology"

   Applied Digital develops innovative identification and security
products for consumer, commercial, and government sectors worldwide.
The Company's unique and often proprietary products provide
identification and security systems for people, animals, the food
supply, government/military arena, and commercial assets. Included in
this diversified product line are RFID applications, end-to-end food
safety systems, GPS/Satellite communications, and telecomm and
security infrastructure, positioning Applied Digital as the leader in
identification technology. Applied Digital is the owner of a majority
position in Digital Angel Corporation (AMEX:DOC).

   Statements about the Company's future expectations, including
future revenues and earnings, and all other statements in this press
release other than historical facts are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and as that term
is defined in the Private Litigation Reform Act of 1995. Such
forward-looking statements involve risks and uncertainties and are
subject to change at any time, and the Company's actual results could
differ materially from expected results. The Company undertakes no
obligation to update forward-looking statements to reflect
subsequently occurring events or circumstances.