Digital Angel to Develop New Submarine Beacon for Royal Netherlands Navy.

$150,000 Initial Order; Additional Equipment Contract Expected

SOUTH ST. PAUL, Minn. -- Digital Angel Corporation (AMEX: DOC) announced today that the SARBE Division of its London-based subsidiary, Signature Industries, has signed a new contract to develop and supply a new crew escape system for submarines for the Royal Netherlands Navy. The initial development contract to SARBE is for $150,000 and SARBE expects additional orders for equipment purchases.

"SARBE will develop and supply an automatically activated and deployed emergency radio which will alert rescue authorities and pinpoint a stricken submarine submerged or on the surface," said David Cairnie, CEO of Signature Industries. "This is a prestigious contract and we're honored SARBE has been selected to create this new product."

SARBE, a world leader in search and rescue radios, RFD Beaufort, the leader in Submarine Escape Equipment and Weir Strachan and Henshaw, a design authority for submarine launch systems, have partnered in a joint venture to develop the equipment. The venture, Integrated Submarine Escape Capability (ISEC), will collaborate to effectively meet personnel escape requirements from submerged vessels or during surface abandonment situations.

The Royal Netherlands Navy has selected the ISEC System, which triggers the launch of a 35-man life raft either on the surface or at deep-sea levels. Once inflated, the new SARBE beacon is automatically activated and sends emergency Cospas-Sarsat 406 MHz transmissions for up to 10 days.

The Walrus class vessels will be the first submarines to be fitted with the equipment. SARBE is also pursuing opportunities to supply beacons to Scorpene submarines that have been ordered by the Navies of Malaysia, India and Chile.

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 humans, pets, fish, poultry and livestock 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.

Digital Angel Corporation is majority-owned by Applied Digital Inc. (Nasdaq:ADSX). For more information about Digital Angel, please visit www.DigitalAngelCorp.com.

The statements in this press release that are not strictly historical, are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to be covered by the safe harbors created by these sections. The forward-looking statements are subject to risks and uncertainties and the actual results that the Company achieves may differ materially from these forward-looking statements due to such risks and uncertainties, including, but not limited to, that Applied Digital Inc. owns 55.4% of the Company's common stock, that new accounting pronouncements regarding expensing of share based compensation may impact the Company's future results of operations, the Company may continue to incur net losses, infringement by third parties on the Company's intellectual property or development of substantially equivalent proprietary technology by the Company's competitors could negatively impact the Company's business, domestic and foreign government regulation and other factors could impair the Company's ability to develop and sell its products in certain markets, the Company relies on sales to government contractors for its animal identification and search and rescue beacon products, and any decline in the demand by these customers for such products could negatively affect the Company's business, the Company depends on a single production arrangement for its patented syringe-injectable microchips, and the loss of or any significant reduction in the production could have an adverse effect on the Company's business, technological change could cause the Company's products to become obsolete, the loss of one of the Company's principal customers could negatively impact the Company's net revenue, the Company's earnings will decline if the Company writes off goodwill and other intangible assets, options and warrants outstanding and available for issuance may adversely affect the market price of the Company's common stock, currency exchange rate fluctuations could have an adverse effect on the Company's sales and financial results, the Company depends on a small team of senior management. A detailed statement of risks and uncertainties is contained in the Company's reports to the Securities and Exchange Commission, including in particular the Company's Form 10-K for the fiscal year ended December 31, 2005. Investors and stockholders are urged to read this document carefully. The Company can offer no assurances that any projections, assumptions or forecasts made or discussed in this release will be met, and investors should understand the risks of investing solely due to such projections. The Company undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.