AXCESS Inc. Announces Second Quarter Results.

    Business Editors

      DALLAS--(BUSINESS WIRE)--Aug. 11, 2000--AXCESS Inc. (Nasdaq:AXSI)
announced second quarter revenues of $748,227 compared to $82,681 for
the same period in 1999. Six month revenues increased from $123,204 in
1999 to $1,458,871 for the six months ended June 30, 2000.
      During the second quarter, AXCESS began delivering its fully
network-based RFID and digital video products for the enterprise
including the LANcam(TM) network camera and the LANcorder(TM), a
software-based digital video recorder. In the quarter, the company
announced a new network-based architecture for its ActiveTag(TM) RFID
product line, enabling asset management at control points throughout
the enterprise. Also announced at the end of the quarter was an
inventory management solution for automatically locating and tracking
static assets. The "beaconing" asset tag complements the RFID control
point architecture, now allowing all assets, whether moving or
stationary to be located and tracked. The new RFID products began
contributing to revenue in the third quarter.
      "The new products and architectures are the culmination of more
than a year's effort to extend our competitive advantage in both
product lines and to open dramatic new markets. We have an established
base in the broad CCTV and asset management markets. Now we can
provide creative new technology for data centers, education,
healthcare, warehouse management and other vertical markets," said
Allan Griebenow, president and ceo of AXCESS Inc.
      Net loss for the quarter ending June 30, 2000 totaled $2.9 million
or $0.88 per basic and diluted common share, excluding a one-time $5.0
million charge for the beneficial conversion. This compared to a net
loss of $2.3 million or $0.73 per basic and diluted common share, for
the same quarter a year ago after excluding a one-time gain of $2.0
million from the sale of a subsidiary and other assets. Excluding the
same one-time charges, the net loss for the six months ended June 30,
2000 was $5.8 million or $1.74 per basic and diluted common share
compared to $4.7 million loss or $1.52 per basic and diluted common
share for the same period in 1999.

      For more information on AXCESS' products, see the company's Web
site at www.axcessinc.com.

      AXCESS Inc., headquartered in Dallas, provides network-based
system solutions to the enterprise using patented technologies in
wireless, automatic identification and multi-media for improving
operations productivity, physical security, asset and inventory
management, and ERP. Products include hands-free, long range RFID
(radio frequency identification) technology used to track and monitor
people, assets, inventory and vehicles as well as patented digital
video compression technology for enterprise multi-media transmission
and digital recording.

      This news release includes "forward-looking statements" within the
meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results of the company to differ materially from the results
expressed or implied by such statements, including general economic
and business conditions, conditions affecting the industries served by
the company and its subsidiaries, conditions affecting the company's
customers and suppliers, competitor responses to the company's
products and services, the overall market acceptance of such products
and services, access to capital and other factors disclosed in the
company's Annual Report on Form 10KSB for the year ended Dec. 31, 1999
and all of the company's subsequent Quarterly Reports on Form 10QSB,
especially in the "risk factors" sections of these annual and
quarterly reports. Accordingly, although the company believes that the
expectations reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct.

-0-
*T

                              AXCESS INC.
                       STATEMENTS OF OPERATIONS
                             (Unaudited)

                                         Three Months Ended
                                               June 30,

                                    ------------------------------
                                         2000           1999
                                         ----           ----


Sales                               $     748,227   $      82,681
Cost of sales                             439,323          49,167
                                     -------------   -------------

      Gross profit                        308,904          33,514
                                     -------------   -------------
Operating Expenses:
 Research and development                 580,959         308,378
 General and administrative               629,875         790,811
 Selling and marketing                    674,614         547,553
 Depreciation and amortization            394,885         133,175
                                     -------------   -------------

      Operating expenses                2,280,333       1,779,917
                                     -------------   -------------

      Loss from operations             (1,971,429)     (1,746,403)
                                     -------------   -------------
Other income (expense):
  Interest income                         112,281          55,882
  Interest expense                       (278,921)        (64,410)
  Gain on sale of assets and other          8,628       2,042,909
                                     -------------   -------------

      Other income (expense), net        (158,012)      2,034,381
                                     -------------   -------------

      Income (loss) from
        continuing operations          (2,129,441)        287,978
                                     -------------   -------------
Discontinued operations:
  Gain on disposal of discontinued
   operations                                  --       1,856,625
                                     -------------   -------------
      Gain from discontinued
       operations                              --       1,856,625
                                     -------------   -------------
      Net Profit                               --       2,144,603
Preferred stock dividend
 requirements                          (5,806,800)       (576,548)
                                     -------------   -------------

     Net profit (loss) applicable
      to common stock               $  (7,936,241)   $  1,568,055
                                     =============   =============

Basic and diluted net income
 (loss) per common share:
  Continuing operations             $       (2.38)  $       (0.09)
  Discontinued operations           $          --   $        0.58
  Net income (loss)                 $       (2.38)  $        0.49

Weighted average shares of common
 stock outstanding                      3,339,293       3,179,368
                                     =============   =============


                                           Six Months Ended
                                               June 30,
                                    ------------------------------
                                         2000           1999
                                         ----           ----


Sales                               $   1,458,871   $     123,204
Cost of sales                             788,336          65,750
                                     -------------   -------------

      Gross profit                        670,535          57,454
                                     -------------   -------------
Operating Expenses:
 Research and development               1,210,385         673,148
 General and administrative             1,189,151       1,361,037
 Selling and marketing                  1,393,509       1,245,710
 Depreciation and amortization            787,815         270,187
                                     -------------   -------------

      Operating expenses                4,580,860       3,550,082
                                     -------------   -------------

      Loss from operations             (3,910,325)     (3,492,628)
                                     -------------   -------------
Other income (expense):
  Interest income                         197,687          67,950
  Interest expense                       (563,452)       (159,361)
  Gain on sale of assets and other         10,870       2,040,855
                                     -------------   -------------

      Other income (expense), net        (354,895)      1,949,444
                                     -------------   -------------

      Income (loss) from
        continuing operations          (4,265,220)     (1,543,184)
                                     -------------   -------------
Discontinued operations:
  Gain on disposal of discontinued
   operations                                  --       1,856,625
                                     -------------   -------------
      Gain from discontinued
       operations                              --       1,856,625
                                     -------------   -------------
      Net Profit                               --         313,441
Preferred stock dividend
 requirements                          (6,506,820)     (1,140,494)
                                     -------------   -------------

     Net profit (loss) applicable
      to common stock               $ (10,772,040)  $    (827,053)
                                     =============   =============

Basic and diluted net income
 (loss) per common share:
  Continuing operations             $       (3.24)  $       (0.86)
  Discontinued operations           $          --   $        0.60
  Net income (loss)                 $       (3.24)  $       (0.27)

Weighted average shares of common
 stock outstanding                      3,324,063       3,115,632
                                     =============   =============


                              AXCESS INC.
                            BALANCE SHEETS
                              (Unaudited)

                 Assets              June 30, 2000   Dec. 31, 1999
                 ------              -------------   -------------
Current assets:
 Cash and cash equivalents          $   1,008,690   $      69,450
 Accounts receivable, net                 677,761         459,654
 Inventory                                826,500         845,400
 Prepaid expenses and other               568,970         695,334
                                     -------------   -------------
     Total current assets               3,081,921       2,069,838

 Note receivable from stockholder       3,902,375       3,902,375
 Property, plant and equipment, net       523,127         544,441
 Purchased technologies                 5,373,168       6,043,142
                                     -------------   -------------
                                    $  12,880,591   $  12,559,796
                                     =============   =============

   Liabilities and Stockholders'  Equity
   -------------------------------------
Current  liabilities:
 Notes payable to stockholders      $     980,000   $     980,000
 Notes payable                                 --          22,309
 Accounts payable                         276,269         447,889
 Accrued liabilities                    2,100,979       1,242,098
                                     -------------   -------------
   Total current liabilities            3,357,248       2,692,296
Notes payable, long-term                3,425,411       3,259,027
Notes payable to stockholders           2,512,972       2,662,972
                                     -------------   -------------
    Total liabilities                   9,295,631       8,614,295
                                     -------------   -------------
Stockholders' equity:
 Convertible preferred stock           38,853,219      33,598,919
 Common stock                              33,508          32,984
 Nonvoting convertible common stock         1,125           1,125
 Paid-in capital                       66,544,643      61,387,968
 Accumulated deficit                 (101,847,535)    (91,075,495)
                                     -------------   -------------
     Total stockholders' equity         3,584,960       3,945,501
                                     -------------   -------------
                                    $  12,880,591   $  12,559,796
                                     =============   =============

    --30--let/da*

    CONTACT: AXCESS Inc.
             James R. Craig, 972/407-6080


    KEYWORD: TEXAS
    INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS HARDWARE EARNINGS