Axcess International first-quarter net loss increases to $1,118,732

Axcess International Inc., (OTCBB: AXSI) a leader in local area Wireless ID solutions, today reported results for the quarter ending March 31, 2010.

“The introduction of the new DotTM Wireless ID product at the International Security Conference trade show launched a new era for the Company”

Highlights for the First Quarter ending March 31, 2010

• Revenue for the quarter was $145,289
• Introduced new integrated Wireless ID-Access Control product at ISC Security Trade Show
• Introduced new security industry market channels with global corporate partners
• Gross margin was $59,240 or 41%
• Net Loss $1,118,732 represents $0.03 per share of common stock
• Patented MicroWireless^TM technology continues to demonstrate competitive advantages and opportunities for future innovations

"The introduction of the new Dot^TM Wireless ID product at the International Security Conference trade show launched a new era for the Company," said Allan Griebenow, president and CEO of Axcess. Mr. Griebenow further stated, "The product offers an exciting growth platform for wireless-based features tailored to specific industry segments. Supported by our agreement with HID Global, the dominant access control products supplier in the world, and under the Advantage HID Connect^TM Partner program we are also the first Company to field a local area wireless ID integrated with proximity access control. Now a single badge can provide access to the facility and open up the multitude of security, safety and productivity solutions inside the enterprise. Growing traditional security market channels with HID and others which provide a global sales coverage has set the stage for the product's introduction and revenue contribution while reducing the Company's dependence on large less predictable projects."

Corporate and Industry Developments

Axcess' systems for business and government use its patented MicroWireless^TM technology to wirelessly enable business ID badges, access control cards and other credentials to provide automatic local area real-time business activity monitoring and control solutions. Manual access control and business ID systems, which are constrained in their value to the front door, are easily upgraded to Axcess' solutions inside the enterprise. These include high speed access control, internal security monitoring and intrusion detection, emergency evacuation workforce accounting, automatic asset protection and visitor tracking for security and compliance reporting. Systems are also used for contractor time and attendance data collection, safety monitoring and compliance reporting, and workforce time and motion data collection for business process improvement and business intelligence initiatives.

The Company introduced a new Dot^TM Wireless ID product at the International Security Conference (ISC-West) trade show in Las Vegas in March. Various Axcess Dot^TM solutions were demonstrated in kiosks located in the HID Global and Tyco-ADT corporate trade show booths highlighting the new product and introducing it to sales personnel, independent security system dealers, system integrators and distributors as well as end users. The product is being positioned as a natural evolutionary step for access cards and business IDs to provide added value in the enterprise. It is expected that Axcess' reference accounts in oil/gas, petrochem, construction, utilities, transportation, DoD, and government will provide support for new sales.

During the quarter, Axcess finalized a contract valued at approximately $100,000 to provide a worker safety monitoring solution on an oil platform, the Company's second order on that type of facility. Axcess has numerous proven-in installations in the oil and gas industry. Follow-on sales for systems already installed occurred in the areas of mining personnel safety, IT asset tracking and loss prevention, and government weapons automated inventory and loss prevention.

The Company believes the recent oil refinery, oil platform, and mining disasters will bring a new awareness to the Company's workforce safety solutions. The Dot^TM Wireless ID with an embedded motion sensor now provides personnel telemetry data which is constantly monitored to sense a workplace injury situation. Additional features in support of safety and security are being readied to further the Company's competitive advantage in these areas.

Axcess' core technology area of MicroWireless^TM communications has now 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. Regardless of their hardware platform or form factor, Dot^TM IDs operate in their own wireless frequency and are designed specifically for the unique need, independent from interference and unobtrusive to backbone networks. For these uses, MicroWireless 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.

The core technology continues to be supported by a strong intellectual property foundation of patents and filings. The Company believes this portfolio will continue to open opportunities for IP monetization and strategic partnerships in the near term and long into the future.

Bringing to market the complete set of innovative functions of MicroWireless 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.

Three Months Ended March 31, 2010 Financial Results

Revenue for the three months of 2010 was $145,289 compared to $1,082,682 for the same period in 2009. The decrease in revenue is a result of the Caribbean Port Security Initiative in the first half of 2009 that has not been repeated in 2010. Add-on sales that are considered by the Company to represent a form of recurring revenue were 55% of total sales (excluding the Caribbean Port Security Initiative) in 2010 and 45% for 2009.

Gross margin was 41% or $59,240 for 2010 compared to 31% or $336,708 for 2009, reflecting an improved sales mix and timing of the increased scope of the system installation for the Caribbean Port Security Initiative.

Research and development expenses were $343,677 for the three months ended March 31, 2010 and $309,359 for the three months ended March 31, 2009. The majority of the increase relates to the non-cash stock compensation expense from an option grant that was completed at the end of the 2009 offset by a reduction in prototype development.

Selling, marketing, general & administrative (S, M, G & A) expenses were $732,620 for the three months ended March 31, 2010, as compared to $719,012 in 2009. The majority of the increase relates to the non-cash stock compensation expense from an option grant that was completed at the end of the 2009 and a slight increase in legal, investor relations and advertising expenses.

Other expense for the three months ended March 31, 2010 totaled $96,418, as compared to $63,551 for 2009. Interest expense was $10,943 lower during the three months ended March 31, 2010, compared to the three months ended March 31, 2009, reflecting lower expense associated with warrants that were issued with the convertible notes. The gain on vendor settlements was also decreased by $43,810.

Net loss was $1,118,732 for the three months ended March 31, 2010, compared to $759,878 for the three months ended March 31, 2009. The increase is mainly related to a decrease in gross margin contribution and non-cash stock compensation expense from an option grant that was completed at the end of the 2009.

Recurring preferred stock dividend requirements were $0 for three months ended March 31, 2010 and $47,466 for three months ended March 31, 2009. The decrease is a result of 2003B Series preferred stock being converted to common shares leaving no dividend paying preferred shares outstanding as of December 31, 2009.

Net loss applicable to common stock for the three months ended March 31, 2010 was $1,118,732, or $0.03 per share, compared to a loss of $807,344, or $0.03 per share for same period in 2009. The majority of the increase in loss in the current year period from the prior year is primarily attributable to the increase in non-cash stock compensation expense from option grant that was completed at the end of the 2009 and decreased gross profit contribution from the Caribbean Port Security Initiative.