-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vot/s2ePjLhRY6LW+5fZBNW7Em8Qb2Q6iGoGMWMWLkEIpISsdGsDE+QthlNsa57a 5dcYeSBbm7AFWMXf/H4r+g== 0001144204-10-007816.txt : 20100216 0001144204-10-007816.hdr.sgml : 20100215 20100216102643 ACCESSION NUMBER: 0001144204-10-007816 CONFORMED SUBMISSION TYPE: SC 13G/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20100216 DATE AS OF CHANGE: 20100216 GROUP MEMBERS: DAVID GRIN GROUP MEMBERS: EUGENE GRIN GROUP MEMBERS: LAURUS CAPITAL MANAGEMENT, LLC GROUP MEMBERS: PSOURCE STRUCTURED DEBT LIMITED GROUP MEMBERS: VALENS OFFSHORE SPV II, CORP. GROUP MEMBERS: VALENS U.S. SPV I, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL ANGEL CORP CENTRAL INDEX KEY: 0000924642 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 431641533 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46751 FILM NUMBER: 10603092 BUSINESS ADDRESS: STREET 1: 490 VILLAUME AVENUE CITY: SOUTH SAINT PAUL STATE: MN ZIP: 55075 BUSINESS PHONE: 651-455-1621 MAIL ADDRESS: STREET 1: 490 VILLAUME AVENUE CITY: SOUTH SAINT PAUL STATE: MN ZIP: 55075 FORMER COMPANY: FORMER CONFORMED NAME: APPLIED DIGITAL SOLUTIONS INC DATE OF NAME CHANGE: 19990723 FORMER COMPANY: FORMER CONFORMED NAME: APPLIED CELLULAR TECHNOLOGY INC DATE OF NAME CHANGE: 19940606 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Valens Capital Management, LLC CENTRAL INDEX KEY: 0001413179 IRS NUMBER: 208903345 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G/A BUSINESS ADDRESS: STREET 1: 335 MADISON AVENUE, 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 212-541-5800 MAIL ADDRESS: STREET 1: 335 MADISON AVENUE, 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13G/A 1 v173597_sc13ga.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G (Rule 13d-102) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(b), (c) AND (d) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(b) (AMENDMENT NO. 3)* DIGITAL ANGEL CORPORATION (formerly known as Applied Digital Solutions, Inc.) ----------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ---------------------------------------- (Title of Class of Securities) 25383A200 --------- (CUSIP Number) December 31, 2009 -------------- (Date of Event which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: / / Rule 13d-1 (b) /X/ Rule 13d-1 (c) / / Rule 13d-1 (d) The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Valens Capital Management, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 20-8903345 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Valens Offshore SPV II, Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 98-0539781 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Valens U.S. SPV I, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 20-8903266 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Psource Structured Debt Limited S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Guernsey - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Laurus Capital Management, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 13-4150669 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79 % - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: David Grin - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION United States and Israel - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock. * SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Eugene Grin - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /X/ - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER: 0 shares of Common Stock.* SHARES ------------------------------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER: 1,631,271 shares of Common Stock. * OWNED BY ------------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER: 0 shares of Common Stock. * REPORTING ------------------------------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER: 1,631,271 shares of Common Stock. * - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,631,271 shares of Common Stock - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 7.79% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 Item 1(a). Name of Issuer: Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.) Item 1(b). Address of Issuer's Principal Executive Offices: 490 Villaume Avenue South St. Paul, Minnesota 55075 Item 2(a). Name of Person Filing: Valens Capital Management, LLC. This Schedule 13G is also filed on behalf of Laurus Capital Management, LLC, a Delaware limited liability company, Valens U.S. SPV I, LLC, a Delaware limited liability company, Valens Offshore SPV II, Corp., a Delaware corporation, PSource Structured Debt Limited, a closed-ended company incorporated with limited liability in Guernsey, Eugene Grin and David Grin. Laurus Capital Management, LLC manages PSource Structured Debt Limited, subject to certain preapproval rights of the board of directors of PSource Structured Debt Limited. Valens Capital Management, LLC manages Valens Offshore SPV II, Corp. and Valens U.S. SPV I, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Valens Capital Management, LLC and Laurus Capital Management, LLC and share voting and investment power over the shares owned by Valens U.S. SPV I, LLC, Valens Offshore SPV II, Corp. and PSource Structured Debt Limited. Information related to each of Laurus Capital Management, LLC, Valens U.S. SPV I, LLC, Valens Offshore SPV II, Corp., PSource Structured Debt Limited, Eugene Grin and David Grin is set forth on Appendix A hereto. Item 2(b). Address of Principal Business Office or if none, Residence: 335 Madison Avenue, 10th Floor, New York, NY 10017 Item 2(c). Citizenship: Delaware Item 2(d). Title of Class of Securities: Common Stock ("Common Stock") Item 2(e). CUSIP Number: 038188306 Item 3. Not Applicable Item 4. Ownership: (a) Amount Beneficially Owned: 1,631,271 shares of Common Stock (b) Percent of Class: 7.79% (c) Number of shares as to which such person has: (i) sole power to vote or to direct the vote: 0 shares of Common Stock.* (ii) shared power to vote or to direct the vote: 1,631,271 shares of Common Stock. * (iii) sole power to dispose or to direct the disposition of: 0 shares of Common Stock. * (iv) shared power to dispose or to direct the disposition of: 1,631,271 shares of Common Stock. * Item 5. Ownership of Five Percent or Less of a Class: If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the owner of more than five percent of the class of securities, check the following: Item 6. Ownership of More than Five Percent on Behalf of Another Person: Not applicable Item 7. Identification and Classification of Subsidiary Which Acquired the Securities: Not applicable Item 8. Identification and Classification of Members of the Group: Not applicable Item 9. Notice of Dissolution of Group: Not applicable Item 10. Certification: By signing below, I certify to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect. - ---------------------------------------------------- Based on 20,933,851 shares of the common stock, par value $0.01 per share (the "Shares") outstanding of Digital Angel Corporation (formerly known as Applied Digital Solutions, Inc.), a Delaware corporation (the "Company"), outstanding as of November 3, 2009, as disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009. As of December 31, 2009, Valens Offshore SPV II, Corp. ("Valens SPV II"), Valens U.S. SPV I, LLC ("Valens US"), and PSource Structured Debt Limited ("PSource" and together with Valens SPV II and Valens US, the "Investors") held 1,631,271 Shares. Valens SPV II and Valens US are managed by Valens Capital Management, LLC ("VCM"). PSource is managed by Laurus Capital Management, LLC ("LCM"), subject to certain preapproval rights of the board of directors of PSource. Eugene Grin and David Grin, through other entities, are the controlling principals of VCM and LCM, and share voting and investment power over the securities owned by the Investors reported in this Schedule 13G, as amended. CUSIP No. 25383A200 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. February 12, 2010 ---------------- Date Valens Capital Management, LLC. /s/ Eugene Grin ---------------- Eugene Grin Principal CUSIP No. 038188306 APPENDIX A A. Name: Laurus Capital Management, LLC, a Delaware limited liability company Address: 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Delaware B. Name: Valens U.S. SPV I, LLC, a Delaware limited liability Company Address: c/o Valens Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Delaware C. Name: Valens Offshore SPV II, Corp., a Delaware corporation Address: c/o Valens Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Delaware D. Name: PSource Structured Debt Limited, a closed-ended company incorporated with limited liability in Guernsey Address: c/o Valens Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York 10017 Place of Organization: Guernsey E. Name: David Grin Business 335 Madison Avenue, 10th Floor Address: New York, New York 10017 Principal Occupation: Principal of Laurus Capital Management, LLC, and Valens Capital Management, LLC Citizenship: United States and Israel F. Name: Eugene Grin Business 335 Madison Avenue, 10th Floor Address: New York, New York 10017 Principal Occupation: Principal of Laurus Capital Management, LLC, and Valens Capital Management, LLC Citizenship: United States CUSIP No. 25383A200 Each of Laurus Capital Management, LLC, Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, PSource Structured Debt Limited, David Grin and Eugene Grin hereby agree, by their execution below, that the Schedule 13G to which this Appendix A is attached is filed on behalf of each of them, respectively. PSource Structured Debt Limited By: Laurus Capital Management, LLC, individually and as investment manager /s/ Eugene Grin - ----------------------------------------- Eugene Grin Authorized Signatory February 12, 2010 Valens Offshore SPV II, Corp. Valens U.S. SPV I, LLC By: Valens Capital Management, LLC individually and as investment manager /s/ Eugene Grin - ----------------------------------------- Eugene Grin Authorized Signatory February 12, 2010 /s/ David Grin - ----------------------------------------- David Grin February 12, 2010 /s/ Eugene Grin - ----------------------------------------- Eugene Grin February 12, 2010 -----END PRIVACY-ENHANCED MESSAGE-----