VeriChip Corporation Hugs(R) and HALO Infant Protection Leadership Expands International Distribution to Kuwait

May 31 2006

YTD Revenue Exceeds $4.0 Million

DELRAY BEACH, Fla.–(BUSINESS WIRE)–May 31, 2006–VeriChip Corporation, a subsidiary of Applied Digital (NASDAQ: ADSX - News), announced today that its Hugs® and HALO infant protection system has expanded its international distribution to Kuwait. YTD 2006 revenue now exceeds $4.0 million, which includes record Q1 sales of 40 new infant protection systems within North America and abroad. This marks the company’s continued strength in the infant protection market, both within North America and abroad, building on the over 900 facilities already using VeriChip’s Radio Frequency Identification (RFID) infant security products.

Using wearable RFID tags placed on infants and mothers combined with electronic monitoring of exits, VeriChip’s systems are designed to help protect newborns from possible abduction and to help ensure mothers are matched with the correct infants during their stay. The Hugs® system offers security against infant abductions while requiring little administration and training. The HALO Infant Protection System® utilizes patented skin-sensing tag technology and is modular in design allowing facilities to add functionality as needed. For more information on VeriChip’s infant protection systems, please contact 1-866-559-6275 or email info@verichipcorp.com. Additional information can be found online at www.verichipcorp.com.

About VeriChip Corporation

VeriChip Corporation, headquartered in Delray Beach, Florida, develops, markets and sells radio frequency identification, or RFID, systems used to identify, locate and protect people and assets. VeriChip’s goal is to become the leading provider of RFID systems for people in the healthcare industry. VeriChip sells passive RFID systems for identification purposes and active RFID systems for local-area location and identification purposes. VeriChip recently began to market its VeriMed(TM) Patient Identification System which is used to rapidly and accurately identify people who arrive in an emergency room and are unable to communicate. This system uses the first human-implantable passive RFID microchip, the implantable VeriChip(TM), cleared for medical use in October 2004 by the United States Food and Drug Administration.

About Applied Digital - “The Power of Identification Technology”

Applied Digital develops innovative identification and security products for consumer, commercial, and government sectors worldwide. The Company’s unique and often proprietary products provide identification and security systems for people, animals, the food supply, government/military arena, and commercial assets. Included in this diversified product line are RFID applications, end-to-end food safety systems, GPS/Satellite communications, and telecomm and security infrastructure, positioning Applied Digital as the leader in identification technology. Applied Digital is the owner of a majority position in Digital Angel Corporation (AMEX:DOC - News).

Statements about the Company’s future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and the Company’s actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances.

Contact: CEOcast, Inc. Investors: Ken Sgro, 212-732-4300 kensgro@ceocast.com or Direct Communications Group Media: John O. Procter, 202-772-2179 jprocter@dcgpr.com