ICOP Digital Reports First Quarter 2009 Results

LENEXA, KS -- (Marketwire) -- 05/15/09 -- ICOP Digital, Inc. (NASDAQ: ICOP) today announced financial and operational results for the three months ended March 31, 2009. ICOP is a leading provider of advanced digital video surveillance and management solutions.

Conference Call

The Company intends to schedule a conference call to be announced at a later date to discuss first quarter financial results.

Key Operational Highlights

--  The Company has appointed DDIT, a registered Saudi company, as its
    exclusive distributor for pending and future business opportunities in the
    Middle East. DDIT has provided the financial and sales leadership for ICOP
    projects in the Kingdom of Saudi Arabia, and now expands its relationship
    with ICOP for sales and technical support of ICOP products in the Gulf
    Region.

--  ICOP has shipped the first order for 100 units to the Ministry of the
    Interior in Saudi Arabia. The high quality and superior performance of the
    ICOP Model 20/20-W system were major factors in its selection, as well as
    the unit's ability to integrate with other key equipment in Saudi security
    vehicles.

--  On March 24, 2009, the Company announced the appointment of Mickie R.
    Koslofsky as the Company's new Chief Financial Officer.

--  ICOP continues to have a success in RFP responses, and has realized a
    50% win ratio for the three month period ended March 31, 2009.
    

Financial highlights for the three months ended March 31, 2009 compared to three months ended March 31, 2008:

--  Sales for the three month period ended March 31, 2009 and 2008 were
    $2,248,533 and $2,815,323, respectively, a decrease of $566,790 (20.1%) due
    to a reduction in units sold, primarily driven by the economic downturn and
    the negative impact from the announcement of a non-payment default on our
    previous line of credit.

--  Cost of sales for the three months ended March 31, 2009 and 2008 were
    $1,162,370 and $1,789,414, respectively, a decrease of $627,044 (35.0%).
    The decline is in relation to the decrease in units sold.

--  Gross margin as a percentage of sales was 48.3% for the three month
    period ended March 31, 2009 compared to 36.4% for the three month period
    ended March 31, 2008.  The increase in gross margin as percentage of sales
    is the result of the lower margin on servers in 2008, along with cost of
    goods sold being higher in the previous year as a result of the ICOP
    EXTREME microphone exchange program initiated in February 2008.

--  On March 31, 2009, the Company had $551,112 in cash, $1,141,642 in
    accounts receivable, $2,523,488 in inventory and $2,867,227 in current
    liabilities, for a net working capital of $2,362,265.

--  Net cash provided by operating activities for the three month period
    ended March 31, 2009 was $463,846 compared to net cash used in operating
    activities of $1,842,733 for the three month period ended March 31, 2008.
    The increase in net cash from operations is mainly due to decreases in
    inventory and accounts receivable in 2009 along with a lower net loss in
    the 2009 three month period compared to the 2008 three month period.
    

About ICOP Digital, Inc.

ICOP Digital, Inc. (NASDAQ: ICOP) protects people, assets and profits through its surveillance and communications solutions for the public and private sectors. The ICOP Model 20/20®-W is the leading digital in-car video system for law enforcement. ICOP DVMS(TM) and ICOP iVAULT MMS(TM) (enterprise) server software solutions store and manage video files. The ICOP Model 4000(TM) mobile digital video system records video from transit and school buses, and rail. ICOP LIVE(TM) delivers real-time situational awareness from mobile or fixed cameras (live video to a first responder vehicle and/or to headquarters), helping to optimize the outcome of a crisis. www.ICOP.com (GSA Contractor).

Financial Charts Follow

                         Condensed Balance Sheets

                                                  March 31,   December 31,
                                                    2009          2008
                                                ------------  ------------
                                                (unaudited)
                     Assets
Current assets:
  Cash and cash equivalents                     $    551,112  $     99,192
  Accounts receivable, net of allowances of
   $62,357 and $121,173 at March 31, 2009 and
   December 31, 2008, respectively                 1,141,642     1,775,741
  Inventory, at lower of cost or market            2,523,488     3,568,596
  Prepaid expenses                                   236,830       209,545
  Other current assets                               776,420       549,867
                                                ------------  ------------
      Total current assets                         5,229,492     6,202,941

Property and equipment, net of accumulated
 depreciation $1,381,623 and $1,230,779 at
 March 31, 2009 and December 31, 2008,
 respectively                                      1,902,719     2,024,318

Other assets:
  Deferred patent costs                               87,621        87,621
  Investment, at cost                                 25,000        25,000
  Security deposit                                    18,258        18,258
                                                ------------  ------------
Total other assets                                   130,879       130,879
                                                ------------  ------------
Total assets                                    $  7,263,090  $  8,358,138
                                                ============  ============


      Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                              $    480,735  $    643,124
  Accrued liabilities                                460,649       596,854
  Notes payable                                      629,985       780,000
  Due to factor                                      773,152       602,009
  Unearned revenue                                   522,706       466,983
                                                ------------  ------------
    Total current liabilities                      2,867,227     3,088,970
                                                ------------  ------------

Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares
 authorized, no shares issued
 and outstanding                                           -             -
Common stock, no par value; 50,000,000 shares
 authorized, 7,306,232 and  7,286,385
 issued and outstanding at March 31, 2009 and
 December 31, 2008, respectively                  30,406,947    30,338,572
Accumulated other comprehensive income                 1,598           272
Retained deficit                                 (26,012,682)  (25,069,676)
                                                ------------  ------------
  Total shareholders' equity                       4,395,863     5,269,168
                                                ------------  ------------
Total liabilities and shareholders' equity      $  7,263,090  $  8,358,138
                                                ============  ============





                     Condensed Statement of Operations
                                 Unaudited

                                                    Three Months Ended
                                                        March 31,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Sales, net of returns and allowances            $  2,248,533  $  2,815,323
Cost of sales                                      1,162,370     1,789,414
                                                ------------  ------------
        Gross profit                               1,086,163     1,025,909
Operating expenses:
      Selling, general and administrative          1,824,404     2,070,238
      Research and development                       216,979       246,355
                                                ------------  ------------
        Total operating expenses                   2,041,383     2,316,593
                                                ------------  ------------
Operating loss                                      (955,220)   (1,290,684)
Other income (expense):
  Gain on derecognition of liabilities                52,765             -
  Loss on disposal of property and equipment          (4,170)       (5,283)
  Interest income                                          -        17,188
  Interest expense                                   (37,035)      (10,397)
  Other income                                           654             -
                                                ------------  ------------
    Loss before income taxes                        (943,006)   (1,289,176)
Income tax provision                                       -             -
                                                ------------  ------------
    Net Loss                                    $   (943,006) $ (1,289,176)
                                                ============  ============
Basic and diluted net loss per share            $      (0.13) $      (0.17)
                                                ============  ============
Basic and diluted weighted average common
 shares outstanding                                7,299,175     7,460,134

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 forward-looking statements include statements describing the objectives, projections, estimates or future predictions of ICOP's operations. These statements may be identified by the use of forward-looking terminology such as "anticipates," "believes," "could," "estimate," "expect," "will," or other variations on these terms. 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, the performance or reliability of our products, our ability to draw funds, meet obligations and regain covenant compliance under our line of credit, the success of our proposed Units offering, our ability to regain compliance with Nasdaq listing standards, our ability to generate working capital to sustain operations, the impact of the current recession on sales and profitability, the risks of doing business internationally, the size and timing of customer contracts, seasonality, our continuing losses from operations and our need to achieve profitable operations and positive cash flow, and our continued ability to meet the conditions for operating as a going concern as described in the footnotes to our financial statements for the year ended December 31, 2008. 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, including but not limited to the section entitled "Risk Factors" and the notes to financial statements contained in our registration statement on Form S-1 filed with the SEC on April 13, 2009. You should not place undue reliance on such forward-looking statements, which speak only as of the date on which they are made. ICOP has no obligation and does not undertake publicly to update, revise or correct any forward-looking statement for any reason.