SO. ST. PAUL, MN (September 25, 2006) – Following strong demand for its Bio-Thermo™ chip in California and a successful regional marketing program, Digital Angel Corporation (Amex: DOC) today announced an aggressive national initiative to target the more than $100 million equine market for identification products with its patented, temperature-sensing implantable microchip.

The product, Bio-Thermo™, will provide approximately 8 million horses in the United States with a unique identification and health status surveillance required by local and state equine animal health professionals. Digital Angel, which specializes in the field of rapid and accurate identification, location tracking, and condition monitoring of high-value assets, is in discussions with several large distributors.

“This is a major development for Digital Angel. The early results of our current program in Southern California have been overwhelmingly positive. Since late last year the California Horseracing Board, a division of the California Department of Agriculture, has been using federal funds to implant all new, in-coming young horses entering their racing career, with the Digital Angel Bio-Thermo chips,” said President and CEO Kevin N. McGrath. “To date, the California Horseracing Board has purchased 1,500 Bio-Thermo chips, out of an order of 4,000, and an estimated 500 horses at Southern California racetracks have already been successfully implanted.”

According to the company, The New York State Horse Health Assurance Program recently implemented a comprehensive health campaign that utilizes Bio-Thermo chips, and other state agencies are expected to launch similar programs.

The bio-thermo microchip is about the size of a grain of rice. It is easily, and harmlessly, injected into the crest of a horse’s neck. The chip monitors the horse’s temperature, which is a good indicator of the animal’s health. The chip also contains a unique identification number that, when activated by a scanner, can be connected to a database with the horse’s documentation.

Digital Angel has made significant progress in its electronic tags for livestock segment, a critical growth area for the company. It expects to post record-breaking numbers by the end of September, anticipating sales of 1.9 million electronic RFID livestock in the first nine months of 2006, rapidly exceeding full-year 2005 sales. Additionally, the U.S. Department of Agriculture named Digital Angel the first animal tag manufacturer in the government-sponsored National Animal Identification System program, underscoring the company’s leadership position in the market.

“In bringing this new heat-sensing technology to the robust equine market, we are building from our leadership position in implantable tracking devices for livestock, pets and fish,” said McGrath. “We are confident that nearly every horse in the United States can benefit from our Bio-thermo microchips, which will provide proper documentation, monitoring for infectious diseases, and preventing theft.”

The announcement of the national equine chipping program reinforces the company’s commitment to expand revenues and drive shareholder and market value. Digital Angel is already marketing the Bio-Thermo chip in the companion pet markets in the United Kingdom and Japan.

About Digital Angel Corporation

Digital Angel Corporation (http://www.digitalangelcorp.com/) 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).

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.