AXCESS Inc. Reports Year End Results; Announces Definitive Agreement to Sell Assets Unrelated to Core Business.DALLAS--(BUSINESS WIRE)--April 1, 1999--AXCESS Inc. (Nasdaq:AXSI) today announced financial results for the year ending December December: see month. 31, 1998. In a move designed to provide better focus on its core business of active radio frequency identification See RFID. (RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. )-based access control and asset management solutions, the company announced a definitive agreement to sell its Lasertechnics Marking Corporation (LMC LMC Large Magellanic Cloud (also see SMC) LMC Library Media Center LMC Lees-McRae College (Banner Elk, NC) LMC Lutheran Medical Center LMC League of Minnesota Cities LMC Local Medical Committee ) subsidiary of Albuquerque, N.M. (wholly-owned) to affiliates of Amphion Capital Management, major stockholders of the company. Also included in the sale are the company's rights and interests in DataGlyph(tm) (a Xerox product) and the technology under development with XL Vision, Inc., a Safeguard Scientific partnership company. The company will receive $7.0 million of consideration at closing, comprised of $2.5 million in cash, a $0.5 million demand note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. , and a $4.0 million note receivable (secured by LMC's stock and the assets sold). $2.0 million of the sale proceeds will be used to retire debt. In addition, the company will receive warrants to purchase a minority interest in the new enterprise that LMC will become a part of. The closing is to occur on or before April 30, 1999. Consolidated net losses for the year ending December 31, 1998, totaled $16.96 million, or $6.32 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to consolidated net losses of $13.89 million, or $6.22 per basic and diluted share, for the same period a year ago. The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the year ended December 31, 1998, was $9.21 million, or $3.43 per basic and diluted share, versus a loss of $4.99 million, or $2.24 per basic and diluted share in the same period a year ago. The primary elements of the increased loss from continuing operations in 1998 over the prior year were the additional development costs of $2.6 million associated with the XL Vision, Inc. technology development agreement, increased legal expenses and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. related provisions. The previously reported financial position and results of operation have been restated to reflect the printer business and the marking business as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Discontinued operations for the year ended December 31, 1998, yielded a loss of $6.25 million or $2.33 per basic and diluted share which included the loss associated with the disposition of the printer business. Harry Budow, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "The financial results for the year reflect the cost of clearing the decks and repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the company for future growth in the RFID market. Last year, the decision was made to focus on building long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for our shareholders, realizing that this investment in our future would require some patience in the short term. The agreement to sell LMC allows us to focus solely on our long-term growth strategy and creates a stronger balance sheet, positioning us well with our potential RFID distribution and solutions partners". Since its acquisition of the RFID technology the company has been commercializing its RFID product lines. Consequently, it does not expect to be ready to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. significant orders until early in the second half, 1999. "1999 is a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective year for AXCESS," said Budow, "We just returned from another very successful trade show where demand for the product reinforced our market research. Anyone looking at us now sees a company that is singularly sin·gu·lar adj. 1. Being only one; individual. 2. Being the only one of a kind; unique. 3. Being beyond what is ordinary or usual; remarkable. 4. Deviating from the usual or expected; odd. focused and easily understood in terms of market and investment potential". AXCESS Inc., founded in 1982 as Lasertechnics, Inc. and headquartered in Dallas, markets active RFID technology solutions through indirect channels with a broad line of products for use in tracking and monitoring vehicles, assets and people. For additional information, please see our Web site at www.axsi.com. This press release includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, and other factors disclosed in the company's Annual Report on Form 10KSB KSB Kogod School of Business (American University) KSB Kelley School of Business (Indiana University) KSB Kantonsschule Am Brühl St. for the year ended Dec. 31, 1998, and all of the company's subsequent Quarterly Reports on Form 10QSB QSB Fading QSB Qualified Small Business (IRS category) QSB Queen Street Backpackers (Auckland, New Zealand) QSB Quality System Basics QSB Qualified Supplemental Benefit QSB Quantum Singleton Bound through December 31, 1999. 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-
AXCESS INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
Assets 1998 1997
------ ----------- ----------
Current assets:
Cash and cash equivalents $ 1,575,429 1,102,341
Note receivable from stockholder 1,030,624 1,158,684
Accounts receivable, net 30,987 --
Inventory 256,216 --
Other current assets 160,087 154,234
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Total current assets 3,053,343 2,415,259
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Net assets of discontinued operations 3,186,253 7,738,134
Property, plant and equipment, net 574,499 662,149
RFID technology 1,714,449 --
Other noncurrent assets 542,804 1,511,660
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Total assets $ 9,071,348 12,327,202
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Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable to stockholder $ 1,966,900 2,931,821
Notes payable 90,882 3,942,495
Accounts payable 466,940 1,445,418
Accrued liabilities 2,466,341 998,266
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Total current liabilities 4,991,063 9,318,000
Notes payable, long-term 2,005,205 535,205
Other -- 4,694
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Total liabilities 6,996,268 9,857,899
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Stockholders' equity:
Convertible preferred stock 27,179,880 11,967,233
Common stock 28,794 23,318
Nonvoting convertible common stock 1,125 1,125
Paid-in capital 58,515,848 57,168,716
Accumulated deficit (83,650,567) (66,691,089)
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Total stockholders' equity 2,075,080 2,469,303
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$ 9,071,348 12,327,202
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