Axcess International Reports Year End 2008 Results.

DALLAS -- Axcess International Inc., (OTCBB: AXSI) a leading provider of wireless business activity automation solutions, today reported results for the year ended December 31, 2008.

Highlights for the Year Ended December 31, 2008

* YE '08 revenue was $1.50MM, down from $3.41MM in '07 due to delayed award of single order for port security infrastructure

* Port award of $3.54MM in Q1 '09 establishes forecast for record revenue projection in 2009

* "Non-port" revenues from sales channel partners grew in 2008 over 2007

* Growth revenues from installed systems remains strong

* YE '08 gross margin remained strong at 47%

* YE '08 net loss per share of $0.19 within expectations

* Micro-Wireless technology continues to demonstrate competitive advantages and opportunities for future innovations

"Overall in 2008, Axcess replicated sales wins in its primary application areas and vertical market segments including automatic IT asset management in the enterprise office; advanced workforce management in industry; and personalized entertainment and education in amusement and trade shows," said Allan Griebenow, president and CEO of Axcess. Mr. Griebenow further stated, "We worked throughout the year to close another port security infrastructure contract in 2008, which instead was awarded to us in early 2009. Based on that competitive win, we are very happy to be able to forecast record revenues for the year 2009".

Corporate and Industry Developments

Axcess provides complete systems to business and government using specialized Micro-Wireless technology to wirelessly enable "things" for real time business activity automation solutions. The systems directly increase productivity, security, safety and offer short term ROI's in traditional industries. Via its Micro-Wireless communications platform, Axcess transforms common manual identification products into wireless devices capable of automated identification, tracking, and sensing.

Axcess turns manual access control badges into wireless personnel credentials for advanced workforce management, safety, and security. During 2008, the Company installed solutions in the oil/gas, mining, construction, and pharmaceutical industries providing direct productivity improvements of 10 to 14%. Our systems were also used for advanced worker location determination and emergency evacuation management.

Axcess transforms name tags and passes via wireless automated identification to enable individualized education and entertainment. During the year its solution was provided to one of the largest amusement parks in the country enabling an award winning individualized entertainment experience. The Company implemented its solution in a third trade show venue enabling personalized attention and information delivery.

Axcess turns manual property labels into wireless asset tags capable of automating enterprise asset management and protection. Axcess provided its automated IT asset management and protection solution during the year to commercial and government clients. The ROI for these systems is less than one year as statistically from 1-4% of the computer inventory is lost or stolen annually. Axcess' system has been proven to track and protect them from loss along with the personal privacy information and intellectual property residing on them.

Axcess enables vehicle parking passes to become wireless, for high speed lot access and local location determination. During the year, Axcess provided automated vehicle access control and sensing solutions to fleet vehicles for a 10+% improvement in throughput along with increased security. The sensing solutions provided automated road worthiness assessments, also providing double digit savings to the fleet owner.

Micro-Wireless communications has been proven to represent the technological sweet spot where autonomous wireless identification and data transfer are best enabled in very small, low cost battery-powered devices. Based on software and designed to be hardware agnostic, its Micro-Wireless systems are routed with solid intellectual property protection. Devices or tags, regardless of their hardware platform or form factor and which are commonly called Dots(TM) operate in their own wireless frequency. This unlicensed frequency is characterized by the FCC for "remote control devices" yet it recognized as a standard frequency worldwide. Dot message formats, air data transmission protocol, and receiver infrastructure are designed specifically for the unique need, independent from interference and unobtrusive to backbone networks. Once collected locally, data is transmitted via the standard backbone network to tailored applications including legacy systems where business intelligence is generated.

Micro-Wireless eclipses other wireless technologies such as cell phones, EPC-RFID, Ultra-Wideband (UWB), Zig-Bee, Wi-Fi, and Bluetooth which are not suited to the automated monitoring of personnel and assets in the enterprise because of unacceptable cost, size, reliability, infrastructure, and power consumption constraints.

Bringing to market the complete set of innovative functions of Micro-Wireless creates an open architecture for multiple sources of data to be acquired to deliver previously inaccessible information 24/7 in real-time. These innovation and growth efforts continue to be supported by our shareholders and by key financial advisor Amphion Innovations plc.

Subsequent to the end of year in Q1, Axcess won a competitive tender valued initially at $3.54MM for its port infrastructure solutions including visitor and vehicle tracking, wireless WMD sensing, various security scanner solutions and other equipment designed to enhance the security solutions and resources at the main port, The Port of Port-of-Spain in Trinidad. The award is Axcess' second in the region, following the 2007 award in Barbados. Based upon the new award and the run-rate of channel partner sales, Axcess is forecasting record revenues for CY/FY 2009.

Twelve Months of 2007 Financial Results

Revenue for the twelve months of 2008 was $1,504,924, a decrease of 56% from the same period in 2007. The decrease in revenue 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 were 25% of total sales in 2008 and 26% for 2007.

Gross margin was 47% or $708,919 for 2008 compared to 56% or $1,925,106, for 2007, reflecting an improved sales mix and benefits of manufacturing leverage. The increase in gross margin was partly due to the increased scope of the system installation with the Barbados Contract awarded in January 2007.

Research & development (R&D) expenses for the twelve months of 2008 totaled $2,229,590, compared to $3,167,736 in 2007. The decrease in R&D is due to the timing of the development of the next generation RFID product, and The Enterprise Dot.

Selling, marketing, general & administrative (S, M, G & A) expenses for the twelve months of 2008 totaled $2,699,964, as compared to $3,383,288 in the prior year of 2007. The majority of the decrease relates decreased selling expenses, with a majority of it relating to the Barbados contract, lower salary and related expenses as a result of reduced personnel, lower investor relations activity and reduced stock compensation expense. However, some of the savings was offset by increased audit and legal fees and increased lease expenses.

Other expense for 2008 totaled $484,764, as compared to $305,099 for the prior year period in 2007. The majority of the increase in expense relates to increased interest expense as a result of the warrants issued in connection with the convertible note and a reduction of the gain on vendor settlements recorded.

Net loss for the twelve months of 2008 was $4,731,941 as compared to $4,946,682 in the prior year. The decrease in the net loss is mainly related to the decrease in expenses as we develop the Enterprise Dot, our next generation RFID product and decreased selling expenses.

Recurring preferred stock dividend requirements for 2008 was $245,307, as compared to $318,357 for 2007. Axcess also recorded a one-time dividend of $558,686 for the 2008 preferred stock issued in the first quarter of 2008, $187,501 for the 2008B preferred stock issued in the second half of 2008, $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.

Net loss applicable to common stock for 2008 was $5,723,435, or $0.19 per share, compared to a loss of $9,315,039, or $0.32 per share, for 2007. The difference in loss in the current year period from the prior year is primarily attributable to the preferred stock dividend requirements, a decrease in research and development relating to the Enterprise Dot and a decrease in the contribution for the Barbados Contract.

Conference Call

In conjunction with the earnings release, Axcess invites you to listen to its conference call Friday, March 20, 2009, at 12:00 p.m. (Eastern). To participate in the call, domestic callers can dial [phone] and international callers can dial [phone] and enter the reservation code "31068084." 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 "80039704." The replay will be available for one month beginning approximately two hours after the end of the call. There is no charge for participants to access the live event or replay.

The conference call and replay dial in information is also available at Axcess' Website at www.axcessinc.com.

About Axcess International Inc.

Axcess International Inc. (OTCBB: AXSI) is a pioneer in Micro-Wireless, real-time business activity automation solutions which improve productivity, efficiency, security, safety and revenue growth. Its revolutionary and patented Micro-Wireless technology was born out of the need to enable ultra-small, very low cost, reliable local area wireless capabilities for assets, personnel, vehicles and sensors to provide an automatic, exception-based, labor-free way for local location determination, real-time inventory accounting, security protection and condition status monitoring. 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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