Digital Angel Receives $800,000 Order From United Kingdom Ministry of Defence

Ministry Agrees to Purchase 3500 Batteries for SARBE Units 


SO. ST. PAUL, Minn., May 16  /PRNewswire-FirstCall/ -- 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 London-based subsidiary, Signature Industries, has received an $800,000 order from the United Kingdom Ministry of Defence for 3,500 high-performance replacement batteries for the SARBE(R) 7 Search and Rescue Beacon.

Signature Industries, through its SARBE division, manufactures a complete line of military search and rescue beacons and has worked with the UK Ministry of Defence for more than 50 years.  SARBE provided the Ministry of Defence 7,500 SARBE 7 Radio Beacons during the late 1990's, said Digital Angel President and CEO Kevin N. McGrath.

"The battery business is a new line of business for Signature Industries and Digital Angel that can be very important strategically for us," McGrath said.  "This business fits very nicely into our line of military radio products and offers us significant upside potential for both revenue and margin contribution.  The UK Ministry of Defence is a long-time customer of ours and we look forward to continuing this relationship for many years to come."

The current line of SARBE 7 Radio Beacons is expected to be in service until 2009, McGrath added.

About Signature Industries

SARBE is a major supplier of Search and Rescue (SAR) military air crew Pilot Locator Beacons (PLBs) and other military rescue beacons for use in the event of an ejection or other event requiring emergency evacuation of an aircraft in a remote, possibly hostile location.  Now in its fifth decade of developing and manufacturing PLBs, SARBE is the chosen supplier of PLBs in more than 40 countries worldwide.  Signature Industries is majority owned by Digital Angel Corporation.  For more information about Signature Industries, visit http://www.signatureindustries.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 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.

  Contact:
          Allen & Caron Inc
          Michael Lucarelli (investors)         Len Hall (media)
          212-691-8087                          212-691-8087
                      

DATASOURCE: Digital Angel Corporation



CONTACT:  Investors, Michael Lucarelli, , or

Media, Len Hall, , both of Allen & Caron Inc,

[phone], for Digital Angel Corporation



Web site:  http://www.signatureindustries.com/

Web site:  http://www.digitalangelcorp.com/

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