REINCORPORATION AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

REINCORPORATION AGREEMENT AND PLAN OF MERGER

This REINCORPORATION AGREEMENT AND PLAN OF MERGER (this “AGREEMENT”), dated as of March 30 , 2007, is entered into between APPLIED DIGITAL SOLUTIONS, INC., a Missouri corporation (“APPLIED MISSOURI”) and APPLIED DIGITAL SOLUTIONS, INC., a Delaware corporation and a wholly-owned subsidiary of Applied Missouri (“APPLIED DELAWARE”).

RECITALS

WHEREAS, following approval by the Board of Directors of each of Applied Missouri and Applied Delaware, upon the terms and subject to the conditions herein stated, Applied Missouri shall be merged with and into Applied Delaware, and that Applied Delaware be the surviving corporation (the “REINCORPORATION MERGER”);

WHEREAS, Applied Delaware is the wholly-owned subsidiary corporation of Applied Missouri;

WHEREAS, the Reincorporation Merger is effected pursuant to Section 351.447 of the Missouri General and Business Corporations Law (RSMo. § 351.447) and Section 253 of the Delaware General Corporation Law (8 Del. C. § 253);

WHEREAS, the Reincorporation Merger is intended to qualify as a corporate reorganization pursuant to Section 368(a)(l)(F) of the Internal Revenue Code of 1986, as amended (“Code”); and

WHEREAS, it is intended that as of the Effective Time of the REINCORPORATION MERGER, Applied Delaware shall have substantially the same capitalization, officers and directors as Applied Missouri immediately prior to the Effective Time of the REINCORPORATION MERGER.

NOW, THEREFORE, with the intent to be legally bound, the parties hereto agree as follows:

ARTICLE I

REINCORPORATION MERGER; EFFECTIVE TIME

1.1     Reincorporation Merger.   Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined in Section 1.2), Applied Missouri shall be merged with and into Applied Delaware whereupon the separate existence of Applied Missouri shall cease. Applied Delaware shall be the surviving corporation (sometimes hereinafter referred to as the “SURVIVING CORPORATION”) in the Reincorporation Merger and shall continue to be governed by the laws of the State of Delaware. The Reincorporation Merger shall have the effects specified in the General Corporation Law of the State of Delaware, as amended (the “DGCL”) and in the General and Business Corporation Law of the State of Missouri, as amended (the “MGBCL”) and the Surviving Corporation shall succeed, without other transfer, to

1.2     Effective Time.   Provided that the condition set forth in Section 5.1 has been fulfilled or waived in accordance with this Agreement and that this Agreement has not been terminated or abandoned pursuant to Section 6.1, on the date of the closing of the Reincorporation Merger, Applied Missouri and Applied Delaware shall cause this Agreement or a certificate of merger to be executed and filed with the Delaware Secretary of State (the “DELAWARE CERTIFICATE OF MERGER"), and the Delaware-certified certificate of merger together with articles of merger shall then be filed with the Missouri Secretary of State (the “MISSOURI CERTIFICATE OF MERGER”). The Reincoiporation Merger shall become effective upon the date and time specified in the Delaware Certificate of Merger and the Missouri Articles of Merger (the “EFFECTIVE TIME”).

ARTICLE II

CHARTER AND BYLAWS OF THE SURVIVING CORPORATION

2.1     Certificate of Incorporation.   The certificate of incorporation of Applied Delaware in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation, until amended in accordance with the provisions provided therein or applicable law.

2.2     Bylaws.   The bylaws of Applied Delaware in effect at the Effective Time shall be the bylaws of the Surviving Corporation, until amended in accordance with the provisions provided therein or applicable law.

ARTICLE III

OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION

3.1     Officers.   The officers of Applied Delaware at the Effective Time (which are the identical officers of Applied Missouri prior to the REINCORPORATION MERGER) shall, from and after the Effective Time, be the officers of the Surviving Corporation, until their successors have been duly elected or appointed and qualified, or until their earlier death, resignation or removal.

3.2     Directors.   The directors and the members of the various committees of the Board of Directors of Applied Delaware at the Effective Time (which are the identical directors and board committee members of Applied Missouri prior to the REINCORPORATION MERGER) shall, from and after the Effective Time, be the directors and members of such committees of the Surviving Corporation, until their successors have been duly elected or appointed and qualified, or until their earlier death, resignation or removal.

4.1     Effect of Merger on Capital Stock.   At the Effective Time, as a result of the Rcincorporation Merger and without any action on the part of Applied Missouri, Applied Delaware or the shareholders of Applied Missouri: