PositiveID prepares to commence exchange offer to acquire control of DIGA

PositiveID Corporation ("PositiveID" or the "Company") (Nasdaq:PSID) commented today on Digital Angel Corporation's ("DIGA") (Nasdaq:DIGA) response to the Company's proposal to acquire all of the outstanding common stock of DIGA through a merger transaction. Prior to the commencement of trading on September 16th, PositiveID made a firm offer to purchase all of the outstanding shares of DIGA's common stock at an exchange ratio of .67 shares of PositiveID for each share of DIGA, representing a 60 percent premium to DIGA's average closing price for the 20 trading days ending on September 14th. After news of the offer was announced, shares of DIGA increased by 28 percent on significantly higher volume than normal. DIGA has not responded to PositiveID's proposal, other than to state in a press release that it would "review the proposal this month at its next regularly scheduled meeting." PositiveID urges DIGA's Board of Directors to schedule a special meeting to consider the proposal. In the event that DIGA chooses to delay the process, PositiveID is prepared to commence an exchange offer to acquire control of DIGA.

"We are disappointed that DIGA does not appear to be considering our offer with the urgency we believe it merits," said Scott R. Silverman, PositiveID's Chairman and CEO. "We believe that the combination of the two companies is compelling, and that a meeting of the Board on an accelerated basis is an appropriate measure for the DIGA Board to take in order to provide a timely reply to PositiveID and the stockholders of both companies. We believe we can complete the merger in a timely manner and are prepared to see the transaction to completion. We remain prepared and willing to meet with DIGA's Board and management to discuss this proposal in detail."

PositiveID believes the benefits of the proposed merger include:

Marketing synergies: PositiveID believes that its healthcare development products and technologies would provide a new platform for growth for Digital Angel's animal identification business and differentiate it from its competitors. Digital Angel's animal identification business currently has a limited product offering. The Company believes its healthcare development products can be used for animal health and food safety applications, particularly its GlucoChip(TM) and virus detection system, making the combined company a leader in animal health and food safety.

Expanded product line: PositiveID believes that having a larger product line would make it a more valuable supplier to its customer base. The combination of PositiveID's healthcare products under development, primarily focused on diabetes management and rapid virus detection, combined with Digital Angel's animal identification business, a long-established leader in the industry, should make the combined company a more important vendor to its customers due to an expanded product offering.

Expanded intellectual property: The combined company's portfolio of intellectual property would make it one of the leaders in the sector, providing it with a platform to continue to develop new products and enter strategic partnerships.

Significant cost savings, accelerating the path to profitability: PositiveID believes the proposed merger would provide significant operating and financial synergies enabling the companies to eliminate approximately $2 million in duplicative costs.

Improved competitive position through strengthened balance sheet: As of June 30, 2010, PositiveID had cash and cash equivalents of $5.4 million and no debt. The merger would also add approximately $35 million in annual revenue to PositiveID.