Digital Angel Announces Appointment of Daniel Penni as Interim President and CEO

NEW LONDON, Conn.-( Business Wire )-

Digital Angel Corporation (OTCBB: DIGA), a distributor of two-way communications equipment in the U.K., today announced that Daniel Penni, Chairman of the Company’s Board of Directors will assume the role as interim President and Chief Executive Officer effective February 1, 2012.

Mr. Penni replaces Joe Grillo, who, as previously disclosed, provided notice of his intention to resign. Mr. Grillo will continue to serve as a member of the Company’s Board of Directors without compensation and has agreed to remain available to the Company for up to 12 months in a consulting capacity.

Mr. Penni commented, “Our priorities continue to be to maximize shareholder value by working to complete additional testing required for the PELS contract with the U.K. Ministry of Defense, and transition to the production phase as soon as possible, while also maximizing the value of the Signature Communications unit and continuing to explore any and all strategic alternatives for Digital Angel.”

Business Update

While no major issues or material findings were identified in field trials for the PELS contract in September 2011, a number of small issues that surfaced are still being worked on and the additional testing required has again delayed the timing of Final Design Review (FDR). Based on current information, we remain cautiously optimistic that this additional testing can be completed in February, and an update on the timing of FDR and production is expected to be available when the Company reports fourth quarter and year-end 2011 earnings in March.

“Revenues from the execution of the PELS contract are a key component of our previously announced desire to distribute special cash dividends to shareholders. Until additional clarity is available on the expected timing of the production phase, the Board has decided it would be financially irresponsible to distribute any special cash dividend at this time. The Company will continue to do what is necessary to complete testing and move into the production phase, at which time we will be able to provide additional information as it relates to the payment of a special cash dividend,” concluded Mr. Penni.

About Digital Angel

Digital Angel (OTCBB: DIGA) is a distributor of two-way communications equipment in the U.K. Products offered range from conventional radio systems used by the majority of its customers, for example, for safety and security uses and construction and manufacturing site monitoring, to trunked radio systems for large scale users, such as local authorities and public utilities. In addition, the Company is in the process of completing a contract to supply the U.K. Ministry of Defense with its personal emergency location, or PELS, beacons. For further information please visit www.digitalangel.com.

Safe Harbor Statement

This press release contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Forward-looking statements included in this press release include, without limitation, those concerning expectations regarding the Board of Directors’ decisions regarding the amount and timing of special dividends, the expected timing and performance on the PELS contract, the values associated with Signature Communications and other strategic alternatives, and the overall impact of these and other recent developments on the Company’s financial results. These forward-looking statements are based on the Company’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Additional information about these and other factors that could affect the Company’s businesses is set forth in the Company’s Form 10-K under the caption “Risk Factors” filed with the Securities and Exchange Commission (“SEC”) on March 31, 2011, as amended on From 10-K/A on May 2, 2011, and subsequent filings with the SEC. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.

Digital Angel CorporationKCSA Strategic CommunicationsRob Fink / Josh Dver, 212-896-1206 / 212-897-1239digitalangel@kcsa.com

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