SO. ST. PAUL, MN (Aug. 1, 2006) … Digital Angel Corporation (Amex: DOC), an advanced technology company in the field of rapid and accurate identification, location tracking, and condition monitoring of high-value assets, announced today that its electronic RFID (radio frequency identification) livestock tagging system has been approved by the U.S. Department of Agriculture (USDA) for use in the National Animal Identification System (NAIS). Digital Angel is the first animal tag manufacturer to be designated as an Animal Identification (AIN) tag manufacturer by the USDA, which signifies that the Company’s tagging system is capable of identifying livestock with the unique, lifetime animal identification number that is being established as a national standard through the NAIS.

The NAIS, a cooperative program between the state and federal governments and the livestock industry to help trace, manage and eradicate animal diseases like Mad Cow Disease, Foot and Mouth Disease, Pseudo-Rabies Disease and Porcine Reproductive and Respiratory Syndrome in pigs, is being run by the USDA’s Animal and Plant Health Inspection Service (APHIS). APHIS launched the voluntary NAIS in 2004 with the premises registration system and is now continuing its advancement by implementing the animal identification component. While USDA has established visual tags as the minimum standard for some species, cattle for example, producers may elect to use ear tags with RFID technology incased in the official identification tags.

“This is a stamp of approval and an important acknowledgement of the integrity of our tagging system,” said Digital Angel President and CEO Kevin N. McGrath. “The USDA underwent a thorough review of our identification tags and came away convinced that we can produce livestock tags that are up to its standards, but also ensure the uniqueness of the numbers attributed to individual animals that assist in tracking the animal’s origin and movement throughout its life. The flexibility to use the AIN tags in other programs outside the scope of NAIS, like source and age verification programs as well as basic management practices, provides the opportunity for producers to fully utilize the capability of our electronic ear tags.”

Digital Angel, which has been in the livestock tagging business since 1945, has developed a proprietary and comprehensive RFID traceability system that includes electronic tags and scanners as well as a related IT system that can provide for the identification and tracking of all animals tagged as part of the NAIS. The target date for having all livestock identified that are covered in the NAIS guidelines is early 2009.

Digital Angel sells its electronic tags under the brand names e.Tag™ and Destron Combo e.Tag™.

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 http://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.