Royal Malaysian Air Force Places Order for SARBE Rescue Beacons from Digital Angel.

$115,000 Initial Order; Additional Orders Expected in 2007

SO. 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 with Royal Malaysian Air Force (RMAF) to provide SARBE G2R Personal Locator Beacon (PLB) for use by fast jet and helicopter aircrew. RMAF has placed an initial order of more than $115,000 and the Company believes that additional orders approximating $2.5 million for such equipment will be made by the Royal Malaysian Air Force in 2007. Training, support and spares will be ongoing and are expected to generate significant future revenue.

"After a rigorous selection process, we're delighted the Royal Malaysian Air Force has chosen our SARBE G2R Personal Locator Beacon," said Kevin McGrath, CEO of Digital Angel. "The Malaysian Air Force has used SARBE beacons for more than 30 years. We look forward to a continued partnership by providing RMAF with products that will perform in the most demanding environments."

PLBs are routinely carried as standard survival equipment by aircrews of fixed and rotary wing aircraft and are used to summon assistance following an ejection or other events resulting in crew evacuation. The new beacons offer significantly improved alerting capabilities with much higher levels of accuracy leading to the prospect of faster rescues and better survival prospects. A change in the satellite monitoring of PLB distress transmissions has resulted in the need for military organizations to replace older style analogue equipment with more advanced digital beacons. As a result, SARBE G2R will eventually replace the widely deployed SARBE 6 PLB.

Signature Industries is working with customers around the world to help ensure SARBE beacons retain their position as market leader for this type of equipment. The SARBE Division of Signature Industries manufactures a complete line of military search and rescue beacons and has worked with RMAF for more than 30 years and the UK Ministry of Defense for more than 50 years.

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.