Axcess International Reports Third Quarter 2007 Results.

DALLAS -- Axcess International Inc. (OTCBB: AXSI), a leading provider of wireless business activity monitoring solutions, today reported financial results for the third quarter ending September 30, 2007.

Highlights for the Third Quarter Ended September 30, 2007

* Third Quarter 2007 Revenue of $281,656 Stayed Flat Compared to Second Quarter 2007 Excluding Large Single Order Recognized in the Second Quarter 2007

* Third Quarter 2007 Revenue Decreased 24% from Third Quarter 2006

* 2007 Revenue Year To Date Exceeds Total Year 2006; to be a Record for Third Consecutive Year

* Year to Date Gross Margins are Up to 57%

* Earnings Per Share Loss of $0.11 for the Third Quarter within Guidance Excluding Non-Recurring Dividends for Financing

* Follow-on Orders Received for Asset Management and Workforce Emergency Evacuation Applications in Industry and Government

* Intellectual Property Portfolio Growing - Received Two New Patent Awards

* New Revolutionary Micro-wireless Technology, The Dot(TM) Introduced

"We continue to extend our record revenue for all of 2007," said Allan Griebenow, President and CEO of Axcess. Mr. Griebenow further stated, "Axcess continued to make progress in the quarter by further building on successful applications in advanced workforce management and automatic asset management. While we did not see the level of new deal awards we were anticipating, growth did continue in these strategic applications and in key accounts. The market continues to mature and evolve toward our robust, low cost micro-wireless system architecture and application solutions. We continue to be best-of-breed in deriving wireless intelligence through automating the sensing, identification and assessment of materials, assets, vehicles, and personnel in and around the enterprise.

"During the quarter, we delivered our first solution where our micro-wireless tags are embedded into computer equipment for automatic asset management and protection. We expanded our asset management solution for a current customer in the financial services industry where customer information and personal privacy information is protected. We delivered our third emergency evacuation system solution, consistent with the installations for Occidental Petroleum and the U.S. Navy. In the oil and gas industry, we delivered our first application for automatic work-in-process tracking as our solutions were found to be an ideal fit.

"Our new technology platform called Dot has just been announced following over three years in development. Dot is the world's smallest, lowest cost and most powerful wireless, battery powered computer. The first end-user product to utilize Dot technology ships in December in a card-based form. As a personnel credential or ultra-thin tag, it wirelessly enables assets, vehicles and workers, immediately providing their wireless visibility. It remains clear that in the coming years our systems will deliver dramatic business efficiencies, improved decision making, automation, and new revenue streams. We feel the introduction of Dot is a major step forward for Axcess."

Corporate and Industry Developments

Axcess provides complete wireless system solutions in the area of real-time business activity monitoring to improve productivity, security and revenue growth. The systems derive wireless intelligence from automatic advanced workforce management, workflow management, asset monitoring, and distributed sensing, thereby improving productivity and security in industry and government. Axcess' solutions are exemplified in what industry analyst firm Forrester Research calls "The Extended Internet" market, forecasted to grow to $11.6 billion by 2012.

The Company's solutions are based on a micro-wireless system implementation that fits seamlessly into, yet operates separately underneath the corporate network to operate efficiently and non-disruptively. These systems are based on low cost "tags" which transmit signals from a few feet to hundreds of feet in order to automatically identify, track, monitor, and protect material, assets, vehicles, and people. Micro-wireless tagging in the enterprise encompasses the complete life cycle of business operations, including raw materials delivery reconciliation, fleet vehicle management, warehousing inventory counts and sensing, production automation, work-in-process tagging, and finished goods locating.

The wireless intelligence comes from wirelessly enabling virtually any and all things in the enterprise in application areas including: advanced workforce management where emergency evacuation information is automatic; improved workflow management where the bill of materials list is automated; the reliable accounting of materials and supplies; asset monitoring where critical assets are automatically inventoried and protected; and low cost, pervasive sensing to improve efficiency and safety.

Overall, the awareness of micro-wireless systems globally continues to grow with the continued adoption of all types of radio frequency identification (RFID), real time location system (RTLS), and wireless sensing technologies across multiple industry segments. Wal-Mart continues to mandate that more of its suppliers use tags for identifying cases and pallets. Global awareness continues to translate into increased user demand for applications supported by the more robust and more flexible solutions provided by Axcess. Axcess remains focused on the enterprise market and believes it is developing its business into a distinct, exciting, and large niche within the total worldwide market basket of wireless solutions.

During the quarter, the Company delivered its first solution where tags are embedded into computer equipment for automatic asset management and protection. In this application, the critical information stored on the computer including intellectual property and customer privacy information is protected by monitoring the assets' whereabouts in the facility and controlling their authorized movement. The system automatically determines if an asset is authorized for removal from a facility and if so with whom. This solution is superior to encryption, data mirroring and software-based asset recovery approaches as the asset is in control all of the time and its unauthorized departure is prevented.

Axcess delivered its third emergency evacuation system solution where personnel and contractors are automatically monitored as to their whereabouts so they can be accounted for in the case of an emergency. In the oil and gas industry, Axcess delivered its first application for automatic work-in-process (WIP) tracking. In WIP tracking, the location, status and composition of goods in the production process are automated. While important for operational efficiencies, we are enabling enhanced financial controls and reporting.

The Company continues to work on its next generation products based on a philosophy of offering the smallest, lowest cost and most reliable tags and infrastructure with multiple features and flexible operating options. Recently, the Company announced its next generation product called Dot[TM], the world's smallest, most powerful, lowest cost battery-powered wireless computer. Because of its low cost and multiple features, it provides a dynamic view into the status of every "thing" operating in the enterprise and how each thing contributes to the goals of the enterprise. By enabling automatic sensing, identification and assessment of business activity in real time, the Dot provides wireless intelligence which was previously unavailable for improved productivity, security and revenue growth.

Axcess' invention combines a processor, memory and wireless communications into one chip about the size of a single grain of rice. It is as powerful as the first personal digital assistants (PDAs). It runs for years on a watch battery, stores at least three pages of information in memory and communicates to the world at high speed, all at a cost of only a few dollars each. Dot technology incorporates a battery powered, software definable wireless transceiver which is compatible with multiple global regulations, including the Electronic Product Code (EPC) Class I and Gen II (passive Radio Frequency Identification [RFID]) standard, and is expected to make supply chain tagging more reliable while opening new applications in sensing and security.

Dot combines the necessary elements of today's monolithic technologies such as RFID, RTLS and wireless sensing into a single, low cost chip. Dot is a one-of-a-kind hybrid, a single wireless source, common to multiple industry standards and supporting virtually all industries including manufacturing, the enterprise, oil and gas, utilities, education, government and the military. Dot is a better solution for access control badges, passive RFID product tags, active RFID asset tags, Real Time Location Systems (RTLS) and distributed sensor transmitters. Memory and sensor inputs enable the Dot to be tailored to each specific data capture need.

In support of Dot and its best-of-breed tagging architecture, during the quarter the Company received a patent which adds to the intellectual property protection of Dot. Overall, Axcess' patent protection is very strong and increasing in size, with a total of six issued to date and more patents pending. We believe our investment in this intellectual property is a key to our future success and attainment of substantial market share. These innovation and growth efforts continue to be supported by our shareholder and key financial advisor Amphion Innovations plc.

Bringing together the new functions of the Dot and building on the current AXCESS micro-wireless infrastructure for enterprise management creates an open architecture for multiple sources of data to be acquired to deliver previously inaccessible wireless intelligence. AXCESS sees this as an opportunity to use its time-to-market and technical advantages to serve an ever-expanding market based on its core technology which has been optimized for the exact needs of the enterprise.

Third Quarter and Nine Months of 2007 Financial Results

Revenue was $281,656 for the three months ended September 30, 2007, a decrease of 24% from the same quarter in 2006. Revenue for the nine months of 2007 was $2,963,437, an increase of 152% from the same period in 2006. The increase in sales is a result of the Barbados Contract, a large single order, awarded in January 2007. Add-on sales that are considered by the Company to represent a form of recurring revenue was 29% of total sales in the third quarter 2007 and 28% for the nine months of 2007.

Gross margin was 51%, or $144,785, in the third quarter 2007 as compared to 47%, or $172,242, in the 2006 period, and 57%, or $1,682,460, in the nine months of 2007 as compared to 44%, or $516,435, in the nine months of 2006. The increase in gross margin was largely due to a change in product mix as a result of the Barbados Contract awarded in January 2007.

Research & Development (R&D) expenses for the third quarter totaled $397,074, compared to $245,888 in the prior year period, and $2,691,499 for the nine months of 2007, compared to $1,109,476 for the nine months of 2006. The increase in R&D is due to the timing of the development of the next generation RFID product, The Enterprise Dot, which will continue to be expensed over the remainder of this year.

Selling, Marketing, General & Administrative (S, M, G & A) expenses for the third quarter totaled $739,067, as compared to $735,848 in the prior year period, and $2,509,028 for the nine months of 2007, as compared to $2,265,310 for the nine months of 2006. The majority of the increase relates to higher salary and related expenses as a result of changing the skill set of our sales team and increased selling expense relating to the Barbados contract, offset in part by a decrease in outside services, stock compensation expense and recruiting.

Other income (expense) for the third quarter of 2007 totaled ($81,545), as compared to ($59,651) for the prior year period in 2006 and ($220,192) for the nine months of 2007 compared to $400,398 for the nine months of 2006. The majority of balance recorded in 2006 relates to the gain on the sale recorded of $600,000 for the video patents during 2006. Excluding this, the increase in expense relates to a reduction of the gain on vendor settlements recorded, offset by the lower interest expense resulting from lower debt balances and the completion of the amortization of our debt service costs.

Net loss for the third quarter of 2007 was $1,076,389, as compared to $873,608 in the prior year period, and $3,750,275 for the nine months of 2007, as compared to $2,471,533 in the nine months of 2006. The increase in the net loss is mainly related to the gross margin contribution of the Barbados contract offset by an increase in expenses as we develop the Enterprise Dot, our next generation RFID product.

Recurring preferred stock dividend requirements for the third quarter of 2007 was $79,728, as compared to $81,735 for 2006, and $239,163 for the nine months of 2007 versus $243,428 for the nine months of 2006. Axcess also recorded a one-time dividend of $2,050,000 for the 2007 preferred equity issued during the third quarter of 2007, $2,000,000 for preferred stock issued in the first quarter 2007, $645,020 for preferred stock issued in the second quarter 2006, and $1,489,245 for preferred stock issued in the first quarter of 2006.

Net loss applicable to common stock for the third quarter of 2007 was $3,206,117, or $0.11 per share, compared to a loss of $955,343, or $0.03 per share, for the third quarter of 2006, and $8,039,438, or $0.28 per share, for the nine months of 2007 compared to $4,849,226, or $0.17 per share, for the same period in 2006. The difference in loss in the current year period from the prior year is primarily attributable to the preferred stock dividend requirements and an increase in research and development relating to the Enterprise Dot.

Conference Call

In conjunction with the third quarter earnings release, Axcess invites you to listen to its conference call today, November 7, 2007, at 1:00 PM Eastern Time. To participate in the call, domestic callers can dial [phone] and international callers can dial [phone] and enter the reservation code "68131627." Participants should dial into the call about 10 minutes prior to the start time.

For those unable to attend the live conference call, a replay will be available by dialing [phone] for domestic callers and [phone] for international callers and entering the replay code "44393844." The replay will be available from approximately two hours after the end of the call until 11:59 (ET) on December 7, 2007. There is no charge for participants to access the live event or replay.

About Axcess International Inc.

Axcess International Inc. (OTCBB: AXSI) delivers wireless intelligence through real-time business activity monitoring solutions that improve productivity, security and revenue growth. The systems derive wireless intelligence from automatic advanced workforce management, workflow management, asset monitoring and distributed sensing. Its revolutionary and patented Dot micro-wireless technology platform combines RFID, RTLS and wireless sensing for better decision-making and control throughout the enterprise. Axcess is a portfolio company of Amphion Innovations plc (AIM: AMP). Additional information on Axcess is available on the Company's Web site at www.axcessinc.com.

This release contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, including statements about future business operations, financial performance and market conditions. Such forward-looking statements involve risks and uncertainties inherent in business forecasts.

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