ICOP Digital Reports Third Quarter 2005 Financial Performance

Results Reflect Revenue Ramp-up Underway; Sales Up 176% on Sequential Quarter-Over-Quarter Basis 


LENEXA, Kan., Nov. 10  /PRNewswire-FirstCall/ -- ICOP Digital, Inc. (NASDAQ:ICOP) (PCX:ICOP), a leading provider of digital in-car video systems for law enforcement, today reported its financial results for the three- and nine-month periods, ended September 30, 2005.

Financial Highlights for the Three-Month Period Ended September 30, 2005 Compared to Same Three Month Period Ended September 30, 2004:

* Revenues increased to approximately $903,000 from $0; on a sequential quarter-over-quarter basis, revenues grew 176%, up from $327,000 reported for the three months ended June 30, 2005.

* Gross profit margin for the current three month reporting period was 42%; this compared to a gross profit margin of 27% for the three months ended June 30, 2005.

* Net Losses decreased 35% to approximately $500,000, or $0.11 basic and diluted loss per share, compared to net losses of approximately $770,000, or $.48 basic and diluted loss per share.

Financial Highlights for the Nine-Month Period Ended September 30, 2005 Compared to Same Nine-Month Period Ended September 30, 2004:

* Revenues rose to $1.23 million from $0.

* Net losses modestly decreased to $1.69 million, down 4% from $1.75 million.

As of September 30, 2005, the Company had approximately $4.4 million in cash and receivables and total stockholders' equity of approximately $6.3 million. Current available working capital stands at $5.77 million.

Dave Owen, Chief Executive Officer of ICOP, stated, "We remain very pleased with the financial and operational excellence that ICOP continues to demonstrate as we proceed with the aggressive global roll-out of the ICOP Model 20/20(TM).  Following the completion of our offering in July, ICOP began building a highly talented national sales team that has readily achieved strong initial market penetration and established a robust pipeline of solid prospects that we are vigorously pursuing.  During the third quarter, ICOP shipped 161 units to 32 law enforcement agencies located throughout the United States, and have advanced discussions with potential customers in Europe and the Middle East.  We are especially pleased with the rate at which we are receiving re-orders from existing customers and expect that this trend will continue, and accelerate, as we progress our concentrated sales and marketing effort."

Continuing, Owen added, "As we fast approach the end of 2005, the strong momentum we've achieved since launching commercial product sales this past summer gives us reason to feel highly confident that ICOP will perpetuate its early success well into the foreseeable future."

ICOP Digital will host a teleconference this afternoon beginning at 4:15 PM Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progression and other meaningful developments.  The conference call can be accessed via telephone by dialing toll free 1-800-240-5318 or via the web at http://www.icop.com/ .  For those unable to participate at that time, a replay of the web cast will be available for 90 days on http://www.icop.com/ .

                            ICOP DIGITAL, INC.
                              BALANCE SHEET
                               (Unaudited)
                         As of September 30, 2005


                                    Assets

  Current assets:
    Cash                                                         $3,836,924
    Accounts receivable, net                                        611,583
    Inventories, at cost                                          2,187,356
    Prepaid expenses                                                101,697
               Total current assets                               6,737,560

  Property and equipment, less
   accumulated
   depreciation of $99,959                                          502,162

  Other assets:
    Deferred patent costs                                            61,480
    Security deposit                                                 15,000

                                                                 $7,316,202



                     Liabilities and Shareholders' Equity
  Current liabilities:
    Accounts payable                                               $662,106
    Accrued liabilities                                             274,163
    Current maturities of long-term debt                             28,261
               Total current liabilities                            964,530

  Long-term debt, net of current
   maturities                                                        83,678
               Total liabilities                                  1,048,208

  Shareholders' equity:
    Preferred stock, no par value;
     5,000,000 shares authorized,
     0 shares issued and outstanding                                   --
    Common stock, no par value;
     50,000,000 shares authorized,
     4,828,182 shares issued and
     outstanding                                                 15,202,433
    Accumulated other comprehensive
     income, net of tax                                              19,120
    Retained deficit                                             (8,953,559)
               Total shareholders'
                equity                                            6,267,994

                                                                 $7,316,202


                            ICOP DIGITAL, INC.
                         STATEMENTS OF OPERATIONS
                               (Unaudited)


                            Three Months              Nine Months
                                Ended                    Ended
                            September 30,            September 30,
                          2005        2004         2005        2004
  Sales, net of
   returns               $902,297         $--   $1,229,691           $--
  Cost of sales           523,911          --      762,814            --
      Gross profit        378,386          --      466,877            --
  Operating
   expenses:
   Selling, general
    and administrative    750,674     702,282    1,617,240     1,561,794
   Research and
    development           137,337      62,948      399,065       668,568
      Total operating
       expenses           888,011     765,230    2,016,305     2,230,362

      Loss from
       operations        (509,625)   (765,230)  (1,549,428)   (2,230,362)

  Other income
   (expense):
   Realized gain (loss)
    on foreign currency
    translation             1,283          --      (55,023)           --
   Unusual item:
    Gain on restructure
     of trade debt             --          --           --       485,482
   Interest income         30,190          --       30,190            --
   Interest expense       (21,325)     (4,809)    (106,128)       (5,828)

      Loss before
       income taxes      (499,477)   (770,039)  (1,680,389)   (1,750,708)

  Income tax provision         --          --           --            --

      Net loss          $(499,477)  $(770,039)  (1,680,389)  $(1,750,708)

      Net loss available
       to common
       shareholders
       after
       beneficial
       conversion
       feature          $(499,477)  $(770,039)  (1,680,389)  $(2,250,708)

  Basic and diluted
   loss per share          $(0.11)     $(0.48)       (0.66)       $(1.40)

  Basic and diluted
   weighted average
   common shares
   outstanding          4,390,059   1,602,033    2,557,435     1,606,938



  About ICOP Digital, Inc.


ICOP Digital, Inc. is a Kansas-based company that delivers innovative, mission-critical security, surveillance, and communications solutions that provide timely and accurate information for security for the public and private sectors, to monitor and protect people, assets and profits. The ICOP Model 20/20(TM) is the leading digital in-car video recorder system, for use by law enforcement. ICOP Digital is committed to providing surveillance and communications solutions that help our customers improve their safety and security, through effective deployments of innovative technologies. ICOP Digital, Inc. is dual listed on the NASDAQ SmallCap market and the PCX, and the common stock and warrants trade under the ticker symbols "ICOP" and "ICOPW," respectively. For more information, please visit http://www.icop.com/ .

Safe Harbor Statement

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The Company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the Company and its operations, are included in certain forms the Company has filed with the Securities and Exchange Commission.

   For more information, contact:
   Laura E. Owen, COO
   16801 West 116th Street
   Lenexa, KS 66219 USA
   Phone:  [phone]
   Fax: [phone]
   
   http://www.icop.com/

   For Investor Relations:
   Elite Financial Communications Group, LLC
   Dodi Handy, President and CEO
   Phone: [phone]
   

DATASOURCE: ICOP Digital, Inc.



CONTACT:  Laura E. Owen, COO, ICOP, [phone], or [phone],

or ; or Dodi Handy, President and CEO, Elite Financial

Communications, [phone], or , for ICOP



Web site:  http://www.icopdigital.com/ 

Copyright