Item 7.01 Regulation FD Disclosures.

On July 10, 2008, a lawsuit was served on Digital Angel Corporation (the "Company") by Jerome C. Artigliere, a former executive of the Company. The lawsuit also names VeriChip Corporation ("VeriChip"), in which the Company is a stockholder. The lawsuit alleges, among other things, that Mr. Artigliere holds options to acquire shares of VeriChip and has been denied the right to exercise those options and that the Company did not timely register shares of the Company owned by Artigliere in breach of his contractual rights resulting in alleged damages. The complaint seeks damages, including injunctive relief related to the upcoming special meeting of VeriChip stockholders, at which the stockholders will vote on the proposed sale of VeriChip's subsidiary, Xmark Corporation, to The Stanley Works ("Xmark Transaction"). If this Xmark Transaction is approved, the Company would benefit as VeriChip anticipates using the funds from the Xmark Transaction to prepay its approximately $2.5 loan obligation to the Company and make a special distribution to its stockholders, including the Company, as well as in other ways. The Company believes the complaint is without merit and intends to defend the lawsuit.

The information in Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 7.01 of this Current Report shall not be incorporated by reference into any filing under the Securities Exchange Act of 1934 or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

VeriChip has filed with the Securities and Exchange Commission ("SEC") and mailed to its stockholders a proxy statement in connection with the special meeting of stockholders called to approve the Xmark Transaction. The proxy statement contains important information about VeriChip, the Xmark Transaction and related matters. VeriChip investors and stockholders are urged to read the proxy statement carefully. VeriChip investors and stockholders are able to obtain free copies of the proxy statement and other documents filed with the SEC by VeriChip through the web site maintained by the SEC at www.sec.gov. In addition, investors and stockholders are able to obtain free copies of the proxy statement from VeriChip by contacting Michael Feder at 1690 Congress Avenue, Suite 200, Delray Beach, Florida 33445. The Company may be deemed, under SEC rules, to be a participant in the solicitation of proxies from VeriChip's stockholders with respect to the proposed Xmark Transaction. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, is set forth in the proxy statement filed with the SEC in connection with the proposed Xmark Transaction.

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