SARBE'S® PARENT COMPANY - DIGITAL ANGEL CORPORATION -

SELECTED FOR UNITED STATES AIR FORCE DEVELOPMENT CONTRACT

London, UK (September, 2006) Signature Industries, manufacturer of SARBE® brand military Personal Locator Beacons, announced that its parent company Digital Angel Corporation (DAC) has been selected by the U.S. Air Force (USAF) to develop a new, advanced Personal Locator Beacon (PLB).

DAC was selected on its technical capability and past performance to develop a brand new PLB, currently designated URT-XX, to replace the URT-33, which is routinely carried as standard USAF aircrew survival equipment. When activated, the URT-33 transmits a distress signal alerting rescue authorities to an emergency. The URT-33 will become obsolete when existing analogue transmissions cease to be monitored by COSPAS-SARSAT on 1st February 2009, following which only beacons capable of digital transmissions on 406MHz will be detected.

The USAF funded development contract calls for DAC to design, develop and build 20 operational radios within eight months. Following successful trials of the new radio systems, the USAF is expected to seek bids to replace all 15,000 URT-33 units in service.

DAC President and Chief Executive Officer, Kevin McGrath stated “This is an enormously important contract for us. Despite the fact that we are one of the premier providers of military Search and Rescue Beacons in the world, this is the first time we have penetrated the U.S. military market, the largest Search and Rescue Beacon segment, globally. This frequency change offers us a long-anticipated opportunity to penetrate a market with new products made specifically to work with the new system. Once we finish the trial radios, our plan is to aggressively pursue this primary contract as well as others from the U.S. armed forces.”

About Signature Industries

SARBE is a major supplier of Search and Rescue (SAR) military air crew Personal 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 owned by Digital Angel Corporation.

For more information about Signature Industries, visit www.signatureindustries.com, and for SARBE visit www.sarbe.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 www.DigitalAngelCorp.com.

For further details, contact:

Brian Clayton, SARBE, Signature Industries, Tom Cribb Road, Thamesmead, London, SE28 OBH

Tel: 020 8316 4477 Fax: 020 8316 6218 or Email: brian.clayton@sarbe.com