Bioscrypt Reports Results for the Third Quarter Ended September 30, 2007

Revenue up 36% from same period previous year; highest quarterly revenue in history

Toronto, ON (November 12, 2007) – Bioscrypt Inc. (TSX: BYT), a leading provider of identity and access management solutions, today announced its financial results for the third quarter ended September 30, 2007.

Bioscrypt’s third quarter revenue of US$5.2 million increased by 36% from the US$3.8 million reported during the same period in the previous year.  Product gross margin for the quarter was 43%, two percentage points greater than the 41% in the prior quarter and two percent greater than the same quarter in 2006.  Overall gross margins were 47%. 

Loss before interest, tax, foreign exchange, depreciation and amortization (“EBITDA”)1 for the three months ended September 30, 2007 of US$2.3 million or $0.04 per share is approximately US$1.0 million greater than the same period the previous year.  The third quarter net loss was US$3.5 million or $0.04 per share versus a net loss of US$1.8 million in 2006, or $0.03 per share.

Bioscrypt revenue for the nine months ended September 30, 2007 of US$13.7 million increased by 8% from the US$12.6 million reported during the same period of the previous year.  Product gross margin for the nine months was 43%, one percentage point less than the 44% in the prior year.  Overall gross margins were 48% for the nine months ended September 30, 2007, a one percentage point increase over the same period in the prior year.

EBITDA loss for the nine months ended September 30, 2007 of US$7.0 million or $0.09 per share is approximately US$4.1 million greater than the same period the previous year.   The net loss for the nine month period was US$10.1 million or $0.14 per share versus a net loss of US$4.5 million in 2006, or $0.08 per share.

“The return to revenue growth in the third quarter of 2007 has given us early indications the transformation of Bioscrypt is taking hold” said Robert M. Douglas, president and CEO of Bioscrypt Inc.  “Having now had the opportunity to properly review the operations of the organization, the new management team and I are refocusing the Company to better leverage our core capabilities and execute specific initiatives to materially reduce our expenses. Given we are the #1 market leader in the growing biometric physical access control market coupled with our relentless focus on reducing costs, we are confident we will drive tangible value back to the organization.”

“While the third quarter is not reflective of ordinary course of cash utilization, we have put in place a program for expense containment,” said Stephen McDonald, CFO of Bioscrypt Inc.   “Our cash position is such that we can continue to fund operations and drive revenue growth, however, we do recognize the need for a capital infusion and are actively pursuing various financing options.”

Product sales represented 91% of total revenue or US$4.7 million on approximately 14,575 units sold.  Sales of the MV Series units represented approximately 68% of total unit shipments and 39% of product revenue; sales of Veri-Series™ products represented approximately 31% of unit shipments and 57% of product revenue and there were 41 3D Vision face readers sold representing approximately 4% of product revenue. Licensing, royalties and services represented 9% of total revenue.

The total number of units the Company has sold to date is now beyond 245,000.  Currently, the Company maintains the leading 9% share in the biometric physical access control market.

Q3 Corporate Announcements
• Bioscrypt announced that Mark Duato Senior Vice President, Americas Sales to further cement Bioscrypt’s position as the market leader in identity and access management solutions marketplace.
• Bioscrypt’s VeriSoft access manager received the Best Buy award in SC Magazine’s Biometrics Tools 2007 review and its V-Station fingerprint reader and VisionAccess 3D Face Reader also received five out of a possible five stars in all categories.

Q3 New Client Announcements
• A leading multinational biopharmaceutical company chose Bioscrypt’s 3D Facial recognition solution to secure its new international administration and production centers.
• Mexico City International Airport uses Bioscrypt’s Identity and Access Management Solution in new state-of-the-art terminal.

Q3 New Product Developments
• Bioscrypt introduced a new biometric reader, the PIV-Station, to address the evolving needs of the U.S. federal market.
• Bioscrypt’s V-Station MIFARE was placed on the Transportation Security Administration’s Qualified Products List.

Conference Call

The Corporation will be hosting an earnings report conference call today at 8:00 a.m. Eastern Standard Time.  The call can be accessed by phone by dialing 1-866-334-4934 or at www.vcall.com/IC/CEPage.asp?ID=121726.  If you are unable to attend the original call, you may subsequently listen to the playback at 1-866-245-6755, passcode 933747, for one week after the call or by going to www.vcall.com/IC/CEPage.asp?ID=121726 for one year after the call.

Financial Statements Attached:  Q3 2007 financial statements (PDF)

About Bioscrypt Inc.

Bioscrypt is an enterprise access control solution provider, enabling the unification of physical and logical access with its Door to Desktop® products. Bioscrypt’s hardware and software solutions deliver strong authentication processes to facilities, equipment, IT networks and computer applications and allow organizations to administer unified identities across the enterprise.

Building on its proven expertise in biometric technology and its unique multi-factor authentication platform, Bioscrypt integrates all major secure authentication standards, transforming how organizations are bridging the gap between physical and logical access to create secure working environments. More information is available at www.bioscrypt.com.

1 - EBITDA is defined by the company as operating revenues less operating expenses and therefore reflects earnings before interest, foreign exchange, taxes, depreciation and amortization. Bioscrypt uses EBITDA, amongst other measures, to assess the operating performance of its on-going business, and applies the use of such measure consistently from quarter to quarter. The term EBITDA does not have a standardized meaning prescribed by Canadian generally accepted accounting principles and therefore may not be comparable to similarly titled measures presented by other companies. EBITDA should not be construed as the equivalent of net cash flows from operating activities.

Forward-looking (safe harbour) statement

Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes,"  "plans,"  "expects," or "intends" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

Bioscrypt and Door to Desktop® are registered trademarks and Veri-Series and VeriSoft are trademarks of Bioscrypt Inc. All other product and company names mentioned are the property of their respective owners and are mentioned for identification purposes only.

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