SWATW Security With Advanced Technology - Warrant (MM)

LOVELAND, Colo., Aug. 14 /PRNewswire-FirstCall/ -- A4S Security, Inc. (NASDAQ:SWATNASDAQ:SWATWNASDAQ:andNASDAQ:NYSENASDAQ:Arca:NASDAQ:SWATNASDAQ:SWATW), a leading provider of digital video surveillance solutions, today announced financial results for its fiscal 2006 second quarter ended June 30, 2006. Revenue for the second quarter of 2006 totaled $301,948, an increase of more than six-fold compared to revenue of $46,860 recorded in the second quarter of 2005. Revenue for the six months ended June 30, 2006 totaled $514,783, an increase of more than four-fold compared to revenue of $120,595 for the same period in 2005. "While our revenue growth in total dollars is modest, we have made significant investment in our product platform and believe we are beginning to see a ramp in sales that will generate continued and sustainable growth going forward," said Tom Marinelli, CEO and President of A4S Security. We continue to attract additional public transportation customers for our core ShiftWatch(TM) technology, building on the positive momentum we began generating in the preceding quarter. We were recently selected to install our ShiftWatch TVS systems in the Elk Grove, California E-tran transit system. Since the first quarter of 2006, we have also secured additional customers for initial ShiftWatch installations that include the commuter rail Capitol Corridor Joint Powers Authority, the Northern Nevada Transit System and Southeast Missouri State University. We have also installed demonstration units for evaluation inside the Chicago Transit Authority. Our newest model ShiftWatch TVS 3.0 is experiencing very positive reception. Looking ahead, we continue to be actively involved with key transit agencies across the country and believe our growth momentum will be further enhanced by some key synergies and efficiencies that our recently announced pending acquisition partners will provide," he concluded. "We are excited with the recent strategic and significant step we have taken toward greatly expanding our addressable markets and diversifying our product portfolio and sales channels through the pending acquisitions of Avurt International and Vizer Group," said Greg Pusey, Chairman of A4S Security. "These acquisitions significantly expand our product and service offerings to include personal protection, commercial facility security and access control and we believe they will enhance our position in high-end mobile digital video surveillance and security integration technologies. The combined annual U.S. market for transportation, law enforcement, facility security and personal protection has been estimated to be a $40 billion opportunity. More importantly, as we continue to build sales traction with our ShiftWatch product, we will also be positioned to pursue additional markets with shorter buying lead times than we have experienced in the government sector. I am personally excited about the potential new opportunities presented by the completion of these acquisitions, especially the Avurt technology. We believe the addition of these companies and their management team and products and services will open significant new market verticals for A4S and enable us to leverage our considerable product technology knowledge base to maximize opportunities with a broad base of potential commercial customers," he concluded. "We have carefully invested significant resources in building a strong and dynamic technology development team that we believe places us on the leading edge of new products in the mobile DVR market place," stated Dave Desormeaux VP of Engineering at A4S. "Within the next few months, we expect to officially introduce ShiftWatch TVS 3.0, an advanced product configuration with greater benefits and features including wireless download and additional management features. We believe we will be in a position to develop additional proprietary products from this platform, reducing time to market and cost of development. Our core architecture has broad applications beyond the specific use for which it was originally created. Furthermore, our value proposition is focused on superior security information integration and management. We believe we will continue to meet the challenge of staying ahead of the competition by offering effective management of large amounts of video data coming from multiple vehicle based recorders while intelligently accessing that information in a fast and useful manner," he concluded. A4S Security reported a net loss for the second quarter of 2006 of $1,477,792, or a loss of $0.37 per basic and diluted share, compared to a net loss of $853,640, or a loss of $5.79 per basic and diluted share in the same quarter of 2005. For the first six months ended June 30, 2006, net loss was $2,601,350, or a loss of $0.66 per basic and diluted share, compared to a net loss of 1,408,096, or a loss of $9.55 per share for the same period in 2005. Both 2005 comparative periods include a significant change in shares outstanding, from 147,389 in 2005 to 3,961,498 in 2006, following the July 2005 completion of the Company's initial public offering. Cash balance as of June 30, 2006 was approximately $1.9 million. Conference Call A4S Security will host a conference call and webcast on Tuesday, August 15th at 4:30 p.m. Eastern Time (1:30 p.m. PT) to discuss its second quarter fiscal 2006 results. Those wishing to participate in the live call may dial (800) 240-2430, using the password "A4S." A replay of the call will be available for one week beginning approximately one hour after the call's conclusion by dialing (800) 405-2236 and entering 11068143 followed by the "#" key when prompted for a code. The live and archived web cast of the conference call can be accessed from the investors section of the A4S Security's website at http://www.shiftwatch.com/ or at http://www.mkr-group.com/ (under featured events). The archived web cast replay of the conference call will remain available for one year. About Vizer Group, Inc. Vizer Group specializes in web-based access control, video surveillance and intrusion detection, conveniently accessible through the use of multiple network based devices, including computers, cell phones and PDA's. With access and monitoring devices connected through the network, installation and re-location costs are significantly less than traditional hard wired systems. Vizer's unique proprietary "e-Link" product is built around a web hosted security services model that provides a business complete control over access, alarms, key cards, and video surveillance, all remotely. "We continually have need for a DVR, both mobile and fixed for many of our diverse application and we believe that the ShiftWatch product will offer a superior solution to many problems faced in the commercial world. Furthermore the ShiftWatch video and data management platform will be a dramatic competitive advantage to the ever increasing quantity of security video and data. We expect to integrate the ShiftWatch data management software as an option on our e-Link product" said Scott Sutton, President of Vizer Group and Avurt International. About Avurt International, Inc. Avurt currently sells non-lethal Pepperball(R) products to over 300 law enforcement agencies across the country (go to http://www.non-lethal.com/ to see Avurts' web site). Over the past couple of years Avurt has been researching and developing a new patent pending launcher that has broad based applications. The product is a small, easy to use personal protection device that provides a non-lethal product option for police (650,000 officers), security personnel (1,200,000), postal carriers, animal control, hikers and the general public. The product is in final prototyping and Avurt expects to begin deliveries of its first version of this exciting technology in the first quarter of 2007. "We have spent considerable time both investigating the market and developing a product that we believe will be embraced by numerous potential market verticals due to the products small size, versatility and reasonable pricing." concluded Sutton. About A4S Security, Inc. A4S Security, Inc. develops and markets the ShiftWatch(R) product line of mobile digital video surveillance solutions for public transportation, law enforcement and general security applications. The company's full motion, high resolution video system utilizes patent pending video streaming technology and GPS synchronization capabilities to provide agencies with data security and reliability. The company's open, standards based architecture, facilitates interoperability, easing management of the information and communication complexities and leveraging customers' investment in the future. For additional information about A4S Security and ShiftWatch solutions, call 1-888-825-0247 or visit http://www.shiftwatch.com/. Additional information about Vizer Group is available at http://www.vizergroup.com/. For information on Avurt's current product offerings see http://www.non-lethal.com/ and to view its patent pending prototype in development, go to http://www.avurt.com/. Information on these web sites does not comprise a part of this press release. This press release includes "forward looking statements" as defined by the Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company and may not materialize. Investors are cautioned that any such statements are not guarantees of future performance. Actual results or developments may differ materially from those projected in the forward-looking statements as a result of many factors, including the company's ability to complete development of its products, increase sales of its products, successfully complete and integrate the recently announced acquisitions and enhance, execute and protect its technological capabilities, among others. Furthermore, the company does not intend (and is not obligated) to update publicly any forward-looking statements, except as required by law. The contents of this release should be considered in conjunction with the warnings and cautionary statements contained in the company's recent filings with the SEC. A4S Security, Inc. Statements of Operations Periods Ended June 30, 2006 (Unaudited) Three Months Ended Six Months Ended 2006 2005 2006 2005 Net sales $301,948 $46,860 $514,783 $120,595 Cost of sales 474,121 34,564 681,105 87,323 Gross profit (loss) (172,173) 12,296 (166,322) 33,272 Operating expenses: Selling, general and administrative (includes non-cash compensation of $194,147 and $293,822 for the three and six-month periods ended June 30, 2006) 1,082,050 586,026 2,019,537 970,566 Research and development 250,156 65,645 478,591 137,762 Total operating expenses 1,332,206 651,671 2,498,128 1,108,328 Operating loss (1,504,379) (639,375) (2,664,450) (1,075,056) Other income (expense): Interest expense (182) (217,205) (395) (339,687) Interest income 26,238 66 64,426 3,770 Other income (expense), net 531 2,874 (931) 2,877 Total other income (expense) 26,587 (214,265) 63,100 (333,040) Net loss $(1,477,792) $(853,640) $(2,601,350) $(1,408,096) Basic and diluted net loss per Share $(0.37) $(5.79) $(0.66) $(9.55) Basic and diluted weighted average number of common shares Outstanding 3,961,498 147,389 3,961,470 147,389 A4S Security, Inc. Balance Sheet June 30, 2006 (Unaudited) ASSETS Current assets: Cash and cash equivalents $1,932,501 Accounts receivable (Note 6) 300,990 Inventories (Note 2) 521,274 Prepaid expenses and other current assets 119,088 Total current assets 2,873,853 Property and equipment, net (Note 3) 210,596 Intangible and other assets 104,544 Total assets $3,188,993 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $304,187 Accrued expenses 129,405 Installment obligations 5,761 Total current liabilities 439,353 Installment obligations, net of current portion 1,074 Total liabilities 440,427 Commitments Stockholders' equity (Notes 1 and 5): Preferred stock, no par value, 5,000,000 shares authorized; no shares issued or outstanding -- Common stock, no par value, 30,000,000 shares authorized; 3,961,746 shares issued and outstanding 13,556,063 Accumulated deficit (10,807,497) Total stockholders' equity 2,748,566 Total liabilities and stockholders' equity $3,188,993 DATASOURCE: A4S Security, Inc. CONTACT: Investors, Todd Kehrli or Jim Byers, both of MKR Group, LLC, +1-818-556-3700, , for A4S Security, Inc.; or Media, Pat O'Connor of A4S Security, Inc., +1-970-461-0071, ext. 134, Web site: http://www.vizergroup.com/ Web site: http://www.non-lethal.com/ Web site: http://www.mkr-group.com/ Web site: http://www.shiftwatch.com/

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