Applied Digital Increases it's Equity Position in Digital Angel Corporation; With this increase, Applied Digital now owns 23,434,412 shares of Digital Angel Corporation.

DELRAY BEACH, Fla. -- Applied Digital (NASDAQ: ADSX), a provider of Security Through Innovation(TM), announced today that it has exercised a one million share warrant in Digital Angel Corporation (AMEX: DOC). With this exercise, Applied Digital increases its ownership position to 23,434,412 shares of Digital Angel Corporation. The exercise price of the warrant, which was granted on August 14, 2003, is $3.74 per share in cash. Applied Digital has no current intention of selling these shares.

Commenting on the exercise, Scott R. Silverman, Chairman and CEO of Applied Digital, stated, "Digital Angel Corporation, its CEO, and the remainder of the Digital Angel team should be applauded for their success during 2004. Operational results continue to improve; the Bio-Thermo microchip for companion pets has been launched in the United Kingdom and will soon be launched in the United States; their SARBE G2R is the first COSPA/SARSAT-approved military search and rescue beacon for the new generation satellite system; and the company is continuing to prove its leadership position in livestock 'trace-back' technology."

Mr. Silverman continued, "Most recently, Digital Angel was the only company referenced, by name, in the Animal Health Monitoring & Surveillance section of the Agricultural, Rural Development, Food & Drug Administration and Related Appropriations Bill 2005, which was recently signed into law. Included in the Law are provisions for $146,157,000 for animal health monitoring and surveillance, and $33,197,000 for a national identification program. While there is no certainty how much of this market Digital Angel will capture, these developments make it the appropriate time to increase our ownership position."

About Applied Digital

Applied Digital develops innovative security products for consumer, commercial, and government sectors worldwide. The Company's unique and often proprietary products provide security 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 of Security Through Innovation. Applied Digital is the owner of a majority position in Digital Angel Corporation For more information, visit the company's website at http://www.adsx.com.

About Digital Angel Corporation

Digital Angel Corporation develops and deploys sensor and communications technologies that enable rapid and accurate identification, location tracking, and condition monitoring of high-value assets. Applications for the Company's products include identification and monitoring of pets, fish, livestock, and humans through its patented implantable microchips; location tracking and message monitoring of vehicles and aircraft in remote locations through systems that integrate GPS and geosynchronous satellite communications; and monitoring of asset conditions such as temperature and movement, through advanced miniature sensors.

For more information about Digital Angel, visit the company's website at www.DigitalAngelCorp.com.

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.