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<TITLE>Filed by Bowne Pure Compliance</TITLE>
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<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>

<P align="center" style="font-size: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P align="center" style="font-size: 10pt"><B>Date of Report (Date of earliest event reported): November 12, 2008</B>

<P align="center">

<P align="center" style="font-size: 24pt"><B>DIGITAL ANGEL CORPORATION<BR></B>
<FONT style="font-size: 10pt">(Exact name of registrant as specified in its charter)
</FONT>

<TABLE border="0" width="100%" cellspacing="0" cellpadding="0" style="font-size: 10pt; text-align: center">
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    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>DELAWARE</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>0-26020</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>43-1641533</B></TD>
</TR>
<TR valign="top">
    <TD>(State or other Jurisdiction of Incorporation)</TD>
    <TD>&nbsp;</TD>
    <TD>(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>(IRS Employer Identification No.)</TD>
</TR>
</TABLE>

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    <TD width="49%">&nbsp;</TD>
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    <TD width="49%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>490 VILLAUME AVENUE<BR>SOUTH ST. PAUL, MINNESOTA<BR></B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>55075</B></TD>
</TR>
<TR valign="top">
    <TD>(Address of Principal Executive Offices)</TD>
    <TD>&nbsp;</TD>
    <TD>(Zip Code)</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>651-455-1621</B>


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</TR>
<TR>
    <TD nowrap style="border-bottom: 1px solid #000000"><B>&nbsp;</B></TD>
</TR>
<TR>
    <TD nowrap>(Former name or former address if changed since last report.)</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:

<P align="left" style="font-size: 10pt">
<FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt; display: none">1
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<P align="justify" style="font-size: 10pt"><B>Section&nbsp;1 &#151; Registrant&#146;s Business and Operations</B>


<P align="justify" style="font-size: 10pt"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement.</B>


<P align="justify" style="font-size: 10pt; text-indent: 2%">On November&nbsp;12, 2008, Digital Angel Corporation (&#147;Company&#148;) entered into a Stock Purchase Agreement (&#147;Stock
Purchase Agreement&#148;) with R&#038;R Consulting Partners, LLC, a company controlled by Scott Silverman, and Scott Silverman, a
past executive officer and director of the Company and VeriChip Corporation and the current Chairman of the Board of VeriChip, (collectively, the &#147;Stock Buyers&#148;), whereby the Company sold all 5,355,556 shares of VeriChip it owned to
the Stock Buyers for $750,000 in cash. The stock sold was approximately 45.6% of VeriChip&#146;s issued and outstanding
shares of common stock. The proceeds from the sale, less expenses, were used for debt repayment.


<P align="justify" style="font-size: 10pt; text-indent: 2%">In addition, the Company and Destron Fearing Corporation, the Company&#146;s wholly-owned subsidiary, entered into an
Asset Purchase Agreement with VeriChip Corporation (&#147;Asset Purchase Agreement&#148;), whereby VeriChip acquired certain
assets used or useful in the operation of the business of human-implantable passive radio-frequency products (&#147;Human
RFID Business&#148;) in exchange for $500,000 in cash. Under this agreement, among other things, VeriChip was assigned
certain patents, obtained the right not to be sued by the Company for use of certain other patents held by the Company,
was granted a license to use certain trade secrets and business know-how related to the Human RFID Business and was
assigned the Company&#146;s rights in the Glucose Sensor Development Agreement dated January&nbsp;1, 2008 between the Company,
VeriChip and Receptors, LLC. The proceeds from the sale, less expenses, were used for debt repayment.


<P align="justify" style="font-size: 10pt; text-indent: 2%">Pursuant to the terms of the Asset Purchase Agreement, Joseph J. Grillo, the Company&#146;s Chief Executive Officer and
President, resigned as the Chairman of the Board of Directors of VeriChip. In addition, several agreements were
terminated including the 2006 Tax Allocation Agreement dated as of December&nbsp;21, 2006 between the Company and VeriChip,
the Letter Agreements dated May&nbsp;15, 2008 and December&nbsp;17, 2007 between the Company and VeriChip and the Amended and
Restated Supply, License and Development Agreement dated as of December&nbsp;27, 2005, as amended, between Destron Fearing
and VeriChip.


<P align="justify" style="font-size: 10pt; text-indent: 2%">In connection with these transactions, the Company entered into a sublease with IFTH Acquisition Corp., formerly
known as InfoTech USA, Inc. and a former affiliate of the Company, whereby IFTH subleased from the Company the property
located in Delray Beach, FL, the previous location of the Company&#146;s headquarters, and purchased lease prepayments made
by the Company for $157,250 in cash. Blue Moon Energy Partners, LLC, which is managed by Scott Silverman and William J. Caragol, a current executive officer of VeriChip, is a majority owner of IFTH Acquisition Corp. On November&nbsp;14, 2008, the Company also entered into a purchase order with VeriChip
to acquire certain inventory related to the Human RFID Business for approximately $161,500 in cash. The proceeds from
these two transactions will be used for working capital.


<P align="justify" style="font-size: 10pt; text-indent: 2%">The foregoing descriptions of the Stock Purchase Agreement and Asset Purchase Agreement do not purport to be
complete and are qualified in their entirety by reference to the complete text of the transactional documents, copies
of which are filed as Exhibits 10.1 and 10.2, respectively to this Current Report on Form 8-K and are incorporated
herein by reference.


<P align="justify" style="font-size: 10pt; text-indent: 2%">On November&nbsp;13, 2008, the Company issued a press release regarding these transactions. A copy of the press release
is attached hereto as Exhibit&nbsp;99.1, which is being furnished and shall not be deemed &#147;filed&#148; for the purposes of
Section&nbsp;18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
The information in Exhibit&nbsp;99.1 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.


<P align="justify" style="font-size: 10pt"><B>Item&nbsp;1.02 Termination of a Material Definitive Agreement.</B>


<P align="justify" style="font-size: 10pt; text-indent: 4%">Pursuant to the Asset Purchase Agreement, the Amended and Restated Supply, License and Development Agreement dated
as of December&nbsp;27, 2005, as amended, between Destron Fearing and VeriChip was terminated on November&nbsp;12, 2008. Under
the terms of this agreement, Destron Fearing was obligated to manufacture and supply certain developed products to
VeriChip and VeriChip was obligated to purchase a minimum amount of developed products per year. Information set forth
in Item&nbsp;1.01 provides additional information on the Asset Purchase Agreement and is incorporated by reference herein.


<P align="center" style="font-size: 10pt">2




<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt; display: none">2
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<P align="justify" style="font-size: 10pt"><B>Section&nbsp;2 &#151; Financial Information</B>


<P align="justify" style="font-size: 10pt"><B>Item&nbsp;2.01 Completion of Acquisition or Disposition of Assets.</B>


<P align="justify" style="font-size: 10pt; text-indent: 1%">The information set forth in Item&nbsp;1.01 is incorporated by reference herein.


<P align="justify" style="font-size: 10pt; text-indent: 1%">The terms of the Stock Purchase Agreement were negotiated between certain of the Company&#146;s executive officers and
certain executive officers of R&#038;R Consulting Partners, LLC and Scott Silverman.&nbsp; In determining the value of the
VeriChip common stock, the Company considered the current market price, the lack of liquidity, the closely-held
ownership and other market conditions surrounding the VeriChip common
stock, including Nasdaq&#146;s notice to VeriChip of its
noncompliance with Nasdaq&#146;s requirements for continued listing, VeriChip&#146;s future business prospects following the sale of the
Xmark Corporation business and the current general economic
environment. The terms of the Asset Purchase Agreement were negotiated between certain of the Company&#146;s executive
officers and certain executive officers of VeriChip.&nbsp; In determining the value of these assets, the Company considered
the historical amounts it had incurred for the development of the
assets, the additional investment required for the assets to have
market viability in the future, its belief that the assets were no longer
part of the Company&#146;s long-term strategic plans and the nature of the assets, which were specific to VeriChip&#146;s
business. &nbsp;The terms of the sub-lease were negotiated between the parties and were based upon an estimate of the
current office space rental market in the South Florida area &nbsp;Accordingly, the Company believes that it negotiated the
best terms and conditions under the circumstances. However, these prices are not necessarily indicative of the prices
that may have been negotiated by independent third parties.


<P align="justify" style="font-size: 10pt; text-indent: 1%">Unaudited pro forma condensed financial information showing how the disposition of assets might have affected the
historical consolidated financial statements of the Company if the disposition had been consummated on September&nbsp;30,
2008 are filed herewith as Exhibit&nbsp;99.2.


<P align="justify" style="font-size: 10pt"><B>Section&nbsp;9 &#151; Financial Statements and Exhibits</B>
<BR>
&nbsp;
<BR>
<B>Item&nbsp;9.01 Financial Statements and Exhibits.</B>
<BR>
&nbsp;


<P align="justify" style="font-size: 10pt; text-indent: 4%">(b)&nbsp;Pro Forma Financial Information.

&nbsp;
<DIV align="center">
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    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Unaudited Pro forma condensed financial data</TD>
</TR>
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</TABLE>
</DIV>


<P align="justify" style="font-size: 10pt; text-indent: 4%">(d)&nbsp;Exhibits.

&nbsp;
<DIV align="center">
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<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release dated November&nbsp;13, 2008</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement dated November&nbsp;12, 2008 between Digital Angel
Corporation, Scott Silverman and R&#038;R Consulting Partners, LLC.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Asset Purchase Agreement dated November&nbsp;12, 2008 between Digital Angel
Corporation and VeriChip Corporation.</TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">3




<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt; display: none">3
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<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="justify" style="font-size: 10pt; text-indent: 2%">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.

<DIV align="center">
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    <TD width="44%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>DIGITAL ANGEL CORPORATION</B></TD>
</TR>

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: November&nbsp;18, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>/</B>s/ Lorraine M. Breece&nbsp;&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap colspan="2" align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Lorraine M. Breece</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Senior Vice President and
Chief Financial Officer</TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">4




<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt; display: none">4
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<P align="center" style="font-size: 10pt"><B>Exhibit&nbsp;Index</B><BR>
&nbsp;


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit&nbsp;No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description&nbsp;of&nbsp;Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
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<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release dated November&nbsp;13, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Unaudited Pro forma condensed financial data
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement dated November&nbsp;12, 2008 between Digital Angel
Corporation, Scott Silverman and R&#038;R Consulting Partners, LLC.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Asset Purchase Agreement dated November&nbsp;12, 2008 between Digital Angel
Corporation and VeriChip Corporation.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">5



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt; display: none">5




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{"company-data": {"conformed-name": "DIGITAL ANGEL CORP", "cik": "0000924642", "assigned-sic": "3669", "irs-number": "431641533", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26020", "film-number": "081198905"}, "business-address": {"street1": "1690 SOUTH CONGRESS AVENUE", "street2": "SUITE 201", "city": "DELRAY BEACH", "state": "FL", "zip": "33445", "phone": "561-276-0477"}, "mail-address": {"street1": "1690 SOUTH CONGRESS AVENUE", "street2": "SUITE 201", "city": "DELRAY BEACH", "state": "FL", "zip": "33445"}, "former-company": [{"former-conformed-name": "APPLIED DIGITAL SOLUTIONS INC", "date-changed": "19990723"}, {"former-conformed-name": "APPLIED CELLULAR TECHNOLOGY INC", "date-changed": "19940606"}]}
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 2008
DIGITAL ANGEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
0-26020
43-1641533
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
490 VILLAUME AVENUE
SOUTH ST. PAUL, MINNESOTA
55075
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
651-455-1621
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 1 — Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On November 12, 2008, Digital Angel Corporation ("Company") entered into a Stock Purchase Agreement ("Stock
Purchase Agreement") with R&R Consulting Partners, LLC, a company controlled by Scott Silverman, and Scott Silverman, a
past executive officer and director of the Company and VeriChip Corporation and the current Chairman of the Board of VeriChip, (collectively, the "Stock Buyers"), whereby the Company sold all 5,355,556 shares of VeriChip it owned to
the Stock Buyers for $750,000 in cash. The stock sold was approximately 45.6% of VeriChip's issued and outstanding
shares of common stock. The proceeds from the sale, less expenses, were used for debt repayment.
In addition, the Company and Destron Fearing Corporation, the Company's wholly-owned subsidiary, entered into an
Asset Purchase Agreement with VeriChip Corporation ("Asset Purchase Agreement"), whereby VeriChip acquired certain
assets used or useful in the operation of the business of human-implantable passive radio-frequency products ("Human
RFID Business") in exchange for $500,000 in cash. Under this agreement, among other things, VeriChip was assigned
certain patents, obtained the right not to be sued by the Company for use of certain other patents held by the Company,
was granted a license to use certain trade secrets and business know-how related to the Human RFID Business and was
assigned the Company's rights in the Glucose Sensor Development Agreement dated January 1, 2008 between the Company,
VeriChip and Receptors, LLC. The proceeds from the sale, less expenses, were used for debt repayment.
Pursuant to the terms of the Asset Purchase Agreement, Joseph J. Grillo, the Company's Chief Executive Officer and
President, resigned as the Chairman of the Board of Directors of VeriChip. In addition, several agreements were
terminated including the 2006 Tax Allocation Agreement dated as of December 21, 2006 between the Company and VeriChip,
the Letter Agreements dated May 15, 2008 and December 17, 2007 between the Company and VeriChip and the Amended and
Restated Supply, License and Development Agreement dated as of December 27, 2005, as amended, between Destron Fearing
and VeriChip.
In connection with these transactions, the Company entered into a sublease with IFTH Acquisition Corp., formerly
known as InfoTech USA, Inc. and a former affiliate of the Company, whereby IFTH subleased from the Company the property
located in Delray Beach, FL, the previous location of the Company's headquarters, and purchased lease prepayments made
by the Company for $157,250 in cash. Blue Moon Energy Partners, LLC, which is managed by Scott Silverman and William J. Caragol, a current executive officer of VeriChip, is a majority owner of IFTH Acquisition Corp. On November 14, 2008, the Company also entered into a purchase order with VeriChip
to acquire certain inventory related to the Human RFID Business for approximately $161,500 in cash. The proceeds from
these two transactions will be used for working capital.
The foregoing descriptions of the Stock Purchase Agreement and Asset Purchase Agreement do not purport to be
complete and are qualified in their entirety by reference to the complete text of the transactional documents, copies
of which are filed as Exhibits 10.1 and 10.2, respectively to this Current Report on Form 8-K and are incorporated
herein by reference.
On November 13, 2008, the Company issued a press release regarding these transactions. A copy of the press release
is attached hereto as Exhibit 99.1, which 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 Exhibit 99.1 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.
Item 1.02 Termination of a Material Definitive Agreement.
Pursuant to the Asset Purchase Agreement, the Amended and Restated Supply, License and Development Agreement dated
as of December 27, 2005, as amended, between Destron Fearing and VeriChip was terminated on November 12, 2008. Under
the terms of this agreement, Destron Fearing was obligated to manufacture and supply certain developed products to
VeriChip and VeriChip was obligated to purchase a minimum amount of developed products per year. Information set forth
in Item 1.01 provides additional information on the Asset Purchase Agreement and is incorporated by reference herein.
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Section 2 — Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 is incorporated by reference herein.
The terms of the Stock Purchase Agreement were negotiated between certain of the Company's executive officers and
certain executive officers of R&R Consulting Partners, LLC and Scott Silverman.  In determining the value of the
VeriChip common stock, the Company considered the current market price, the lack of liquidity, the closely-held
ownership and other market conditions surrounding the VeriChip common
stock, including Nasdaq's notice to VeriChip of its
noncompliance with Nasdaq's requirements for continued listing, VeriChip's future business prospects following the sale of the
Xmark Corporation business and the current general economic
environment. The terms of the Asset Purchase Agreement were negotiated between certain of the Company's executive
officers and certain executive officers of VeriChip.  In determining the value of these assets, the Company considered
the historical amounts it had incurred for the development of the
assets, the additional investment required for the assets to have
market viability in the future, its belief that the assets were no longer
part of the Company's long-term strategic plans and the nature of the assets, which were specific to VeriChip's
business.  The terms of the sub-lease were negotiated between the parties and were based upon an estimate of the
current office space rental market in the South Florida area  Accordingly, the Company believes that it negotiated the
best terms and conditions under the circumstances. However, these prices are not necessarily indicative of the prices
that may have been negotiated by independent third parties.
Unaudited pro forma condensed financial information showing how the disposition of assets might have affected the
historical consolidated financial statements of the Company if the disposition had been consummated on September 30,
2008 are filed herewith as Exhibit 99.2.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
99.2
Unaudited Pro forma condensed financial data
(d) Exhibits.
99.1
Press Release dated November 13, 2008
10.1
Stock Purchase Agreement dated November 12, 2008 between Digital Angel
Corporation, Scott Silverman and R&R Consulting Partners, LLC.
10.2
Asset Purchase Agreement dated November 12, 2008 between Digital Angel
Corporation and VeriChip Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
DIGITAL ANGEL CORPORATION
Date: November 18, 2008
By:
/
s/ Lorraine M. Breece
Name: Lorraine M. Breece
Title: Senior Vice President and
Chief Financial Officer
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Exhibit Index
Exhibit No.
Description of Exhibit
Page
99.1
Press Release dated November 13, 2008
99.2
Unaudited Pro forma condensed financial data
10.1
Stock Purchase Agreement dated November 12, 2008 between Digital Angel
Corporation, Scott Silverman and R&R Consulting Partners, LLC.
10.2
Asset Purchase Agreement dated November 12, 2008 between Digital Angel
Corporation and VeriChip Corporation.
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