Digital Angel's Canadian Distributor Named Exclusive Supplier of Identification Tags for U.S. Beef Cattle Imported to Canada

SO. ST. PAUL, Minn., July 21 -- 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 the Canadian Cattlemen's Identification Association (CCIA) has named the Company's Canadian distributor of livestock products as the exclusive supplier for electronic radiofrequency identification (RFID) ear tags for beef cattle imported from the U.S. to Canada. Digital Angel's Canadian distributor, Edmonton-based Compass Animal Health, has placed an initial order for 5,000 electronic tags with an estimated 200,000 U.S. beef cattle expected to cross the border during the course of a year.

The CCIA, created by the Canadian government several years ago to implement a national cattle identification program, recently announced that all beef cattle crossing the borders into Canada must be electronically tagged to identify their place of birth. A bi-lateral ban on cattle importation between Canada and the U.S., which had been in place since the discovery of a cow with Mad Cow disease in December 2003, was recently lifted. This new import tag is intended to visually differentiate U.S. cattle from Canadian cattle and their unique identity will be maintained in the CCIA database. The exclusivity is expected to last until the U.S. implements its own national identification program.

The CCIA had previously approved Digital Angel's full line of Destron-Fearing(R) brand electronic cattle identification products after four years of testing for retention, readability and overall functionality at feed lots and packing programs throughout Canada. Digital Angel is considered one of the pioneers in animal RFID products and has been in the livestock tagging business since 1948.

"We believe this announcement underscores the faith the Canadian government has in our electronic RFID products," said Digital Angel President and CEO Kevin McGrath. "We have already been working closely with the Canadian government on its national cattle identification program and now Compass, our partner, has been granted the exclusive rights to the new, restarted import market. We applaud the Canadian government for understanding the value inherent in tracing the movement of cattle through electronic tagging."

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 pets, humans, fish 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 the Company's majority stockholder, Applied Digital Inc. owns 55.2% of the Company's common stock; that new accounting pronouncements may impact the Company's future results of operation; that the Company may continue to incur losses, that infringements by third parties on the Company's intellectual property or development of substantially equivalent proprietary technology by the Company's competitors could negatively affect the Company's business; that domestic and foreign government regulation and other factors could impair the Company's ability to develop and sell the Company's products in certain markets; that the Company relies on sales to government contractors of its animal identification products, and any decline in the demand by these customers for the Company's products could negatively affect the Company's business; that the Company depends on a single production arrangement for its patented syringe-injectable microchips; that the Company depends on principal customers; that the Company competes with other companies and the products sold by the Company's competitors could become more popular than the Company's products or render the Company's products as obsolete; that the Company's earnings will decline if the Company must write-off goodwill and other intangible assets; that the exercise of options and warrants outstanding and available for issuance may adversely affect the market price of the Company's common stock; that currency exchange rate fluctuations could have an adverse effect on the Company's sales and financial results; and that the Company depends on a small team of senior management and the Company may have difficulty attracting and retaining additional personnel. 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, 2004. 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.

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