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SEC investigating Applied Digital
Posted By Sherrie Gossett On 04/08/2003 @ 1:00 am In Front Page | Comments Disabled
Applied Digital Solutions, maker of implantable microchips for humans, revealed in its annual report that the Securities and Exchange Commission is investigating the company.
The probe is being led by the SEC’s southeast regional office and was termed an “informal inquiry” by Applied. The company’s annual report states, “We are fully and voluntarily cooperating with this informal inquiry. At this point, we are unable to determine whether this informal investigation may lead to potentially adverse action. ”
After missing the deadlines, Applied filed a grandiose lawsuit against IBM and IBM Credit, charging that the technology giant was trying fraudulently to obtain the patent rights to Applied’s implantable microchips – even though, according to SEC filings, the company has yet to obtain any revenue from VeriChips.
Applied soon announced a forbearance agreement had been reached with IBM, which gives Applied Digital the right to buy back its existing indebtedness from IBM Credit with a one-time payment, on or before June 30, of $30 million. If this payment is made, Applied Digital would satisfy its full obligation to IBM Credit.
The firm has continued to struggle financially despite last year’s international media frenzy of coverage for its implantable VeriChip.
The VeriChip is an injectable radio frequency identification chip that can be scanned from about four feet away. In addition to an identification number, the chip can also carry other personal data and is wirelessly write-able. The data on the chips can be read by handheld scanners or by the chip passing through special portals.
Despite all the media hoopla, a few critics dubbed it a product without a market, while other cynics termed it a glorified med-alert bracelet.
In addition, Applied’s “thermolife” technology has not yet been developed for commercial deployment. Thermolife is a tiny power generator that converts heat into electrical energy.
Applied first came into the media limelight in 1999 when it announced it had acquired the patent rights to an implantable identification microchip that could be equipped with biosensors. The company announced the chip could be tracked continuously via GPS, the information then relayed wirelessly to the Internet, where a person’s vital signs, location and movements could be monitored and stored in a database for future reference.
Prior to a prototype unveiling in New York City in October 2000, Applied announced that it had signed a research agreement with Princeton University and the New Jersey Institute of Technology. The scientists purportedly worked on “technical and logistical issues: reception of GPS satellite signals, information transmission to ground stations, antenna size, body tissue absorption, and battery size, power and self-rechargeability.”
At that time, Applied announced, “This relationship has helped implement an accelerated schedule for delivering a working prototype of Digital Angel.”
In the wake of verbal protests from civil-liberties and religious groups, Applied removed almost all references to implantation from the website and subsequently produced the technology as a wristwatch/pager combination.
The reference to “accelerated” development and a GPS chip implant were echoed in a similar press release two and a half years later, in April of 2002: Applied Digital Solutions to accelerate development of a subdermal GPS ‘personal location device’ – working prototype expected in seven months.”
Jackie Fenn, a research fellow and vice president of “Emerging Technologies” with Gartner Research, told WND that she had recently spoken with Applied, and that the company said it was moving ahead with its plans to bring a GPS implant to market.
There are currently no known commercially available GPS implants for humans in existence.
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