Dutton Associates Announces Investment Opinion: ICOP Digital Rating Lowered to Neutral by Dutton Associates.

EL DORADO HILLS, Calif. -- Dutton Associates continues its coverage of ICOP Digital (Nasdaq:ICOP) lowering its rating to Neutral. The 9-page report by Dutton senior analyst Mike Loughran is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.

We are downgrading shares of ICOP from Speculative Buy to Neutral based upon the following factors, discussed in detail in our report. These include i) the slowing of the sequential revenue growth from Q2 to Q3 was greater than we had anticipated, ii) as a result, we have lowered our revenue expectations and adjusted our model (additionally, we have some concern that some sales over the course of the next several quarters may be delayed as customers anticipate the arrival of the Company's new product line scheduled to debut in April), and more troubling is our competitor research, which has identified an increasingly competitive pricing environment in the marketplace (although we view ICOP's in-dash design as superior, the customer base is extremely price-sensitive and under significant budgetary constraints). Our model now calls for a loss of $(0.14) in Q406 and $(0.52) for FY06. Losses in FY07 and FY08 are $(0.49) and $(0.28), respectively. In our model, $900,000 or $(0.12) in FY07 and $(0.15) in FY08 are non-cash compensation expenses listed as an executive bonus accrual relating to shares granted certain executive officers. The $630,000 executive tax reimbursement in each of FY07 and FY08 represents a cash charge and is a supplemental bonus to the executives to compensate them for the tax implications of the share grant.

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Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $39,500 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. The Firm does not accept any equity compensation. We received $20,000 from the Company for 2 quarterly Research Reports with coverage commencing on 9/13/2006. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.