VSYS Viscount Systems Inc (CE)

Sales of flagship product line up more than 80%

Viscount Systems Inc., (“Viscount”) (OTCQB:VSYS), a software company specializing in physical and logical security solutions, today announced its fourth quarter and full year 2014 financial results for the period ending December 31, 2014.

“2014 was a stabilizing year for Viscount,” said Dennis Raefield, President and CEO of Viscount. “With the recent appointment of Ambassador Ned L. Siegel as Chairman of the Board of Directors, rising sales figures and a newly revamped commercial sales team, we’re well-positioned to capitalize on the market’s growing demand for a unified, highly-secure and cost-effective approach to physical access control.”

Fourth Quarter & Full Year 2014 Highlights:

• Sales of Viscount’s flagship product line, the Freedom Access Control Platform (Freedom), for the year ending December 31, 2014 were $1,606,114, as compared to $883,680 for the year ending December 31, 2013, representing a rise of 81.8%. The increase is due to the demand in the market for an IT-empowered physical access control system (PACS) that is both cost-effective to deploy and highly-secure against cybersecurity attacks.
• Sales for the year ending December 31, 2014 were $4,769,298, as compared to $4,134,886 for the year ending December 31, 2013, representing a rise of 15.3%. This growth is largely attributable to increased sales from the company’s Freedom Access Control Platform product line.
• In fiscal 2014 Viscount expanded its patent portfolio with a new patent covering the method for physical access control using QR codes and mobile devices. This is part of the company’s continued focus on protecting its investments in mobile technologies and cloud software applications to support its rapidly-growing Freedom platform.
• The company bolstered its commercial sales team to aggressively drive sales for its three product lines, Enterphone, Mesh and Freedom. Among these changes is the addition of Scott Sieracki as new Vice President of Sales, who has more than 20 years of experience driving business deals with key customers, partners, accounts, and industry influencers.

Sales for the years ended December 31, 2014 and 2013 were $4,769,298 and $4,134,886, respectively, an increase of $634,412 or 15.3%. Freedom sales for the years ended December 31, 2014 and 2013 were $1,606,114 and $883,680, respectively, an increase of $722,434 or 81.8%. MESH sales for the years ended December 31, 2014 and 2013 were $1,846,671 and $1,974,482, respectively, a decrease of $127,811 or 6.5%. Enterphone sales for the years ended December 31, 2014 and 2013 were $399,115 and $402,709, respectively, a decrease of $3,594 or 0.9%. Enterphone Sales and Service Division revenues for the years ended December 31, 2014 and 2013 were $1,316,513 and $1,276,724 respectively, an increase of $39,789 or 3.1%.

Gross profit for the years ended December 31, 2014 and 2013 was $2,307,921 and $2,392,609, respectively, a decrease of $84,688 or 3.5%. This decrease was due to an adjustment in obsolete inventory which reduced cost of sales in 2013. The gross margin percentage for the year ended December 31, 2014 for our product categories of MESH, Freedom, Enterphone Sales and Service Division was 33.8%, 68.5%, and 48.4% respectively. The gross margin percentage for the year ended December 31, 2013 for our product categories of MESH, Freedom, Enterphone Sales and Service Division was 47.7%, 80.2%, and 57.9% respectively.

Loss before other items for the year ended December 31, 2014 was $4,069,977 as compared to a loss before other items of $974,515 for the year ended December 31, 2013, an increased loss of $3,095,462. Included in the net loss for the year ended December 31, 2014 was a non-cash compensation expense of $1,519,950 for the issuance by Viscount of warrants and stock options to board members, management and staff.

Mr. Raefield will hold a conference call to review these results and provide a corporate update on Thursday, March 26, 2015 at 1:15 PM PST (4:15 PM EST), after the close of the U.S. financial markets.

Join the meeting by following the procedures below.

1. Please join the meeting by clicking on the following link: https://attendee.gotowebinar.com/register/9023284375628762626

2. Join the conference call.

• Canada (Long distance): +1 (647) 497-9368
• United States: +1(609) 318-0024

3. Access Code: 168-967-191

4. Audio PIN: Shown after joining the session

Should you have questions during the event please send an email to questions@viscount.com.

About ViscountViscount is the leading provider of next generation, IT-centric access control and identity management applications. Viscount’s Freedom application platform allows seamless unification of the physical and digital security worlds by replacing discrete, self-contained systems with an integrated security system that is sophisticated enough to protect today’s critical business assets, and flexible enough to keep up with the evolving IT infrastructures of government and private organizations. For more information please visit: www.viscount.com

Safe Harbor StatementForward looking statements: This press release and other statements by Viscount Systems Inc. may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for earnings and revenues, other future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "estimate," "position," "assume," "potential," "outlook," "continue," "remain," "maintain," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," or similar expressions.

ContactThomas Mei / Allison Monatviscount@kcsa.com212-682-6300

VISCOUNT SYSTEMS, INC. Consolidated Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars) Years Ended December 31, 2014 and 2013                         2014     2013       Sales $ 4,769,298 $ 4,134,886 Cost of sales       2,461,377     1,742,277 Gross profit         2,307,921     2,392,609   Expenses Selling, general and administrative 5,624,312 3,064,786 Research and development 703,288 278,514 Depreciation and amortization     50,298     23,825           6,377,898     3,367,125   Loss before other items       (4,069,977)     (974,516)   Other items Interest income 3,786 322 Preferred share dividends (84,762) (113,647) Fair value adjustment of derivative liabilities     3,160,272     (1,992,659)           3,079,296     (2,105,984)   Net loss and comprehensive loss   $ (990,681)   $ (3,080,500)   Basic and diluted loss per common share   $ (0.01)   $ (0.03)   Weighted average number of common shares outstanding, Basic and diluted       119,454,239     91,969,573

VISCOUNT SYSTEMS, INC. Consolidated Balance Sheets (Expressed in Canadian dollars) As at December 31, 2014 and 2013                                     2014     2013     Assets   Current assets Cash and cash equivalents $ 190,308 $ 172,684 Trade accounts receivable, less allowance for doubtful accounts of $181,529 (2013 - $250,458) 661,629 585,153 Inventory           533,217     532,798 Total current assets 1,385,154 1,290,635   Deposits 1,391 1,391 Equipment 206,004 22,229 Intangible assets         5,224     26,116   Total assets         $ 1,597,773   $ 1,340,371 . Liabilities and stockholders' deficit   Current liabilities Accounts payable $ 362,595 $ 254,682 Accrued liabilities 564,466 601,270 Lease obligation - current 10,285 - Deferred revenue 37,318 37,543 Due to related parties 5,003 33,727 Loans payable           114,536     114,536 Total current liabilities 1,094,203 1,041,758   Lease obligation - long term 17,182 - Derivative financial liabilities       2,858,618     5,118,454               3,970,003     6,160,212   Stockholders' deficit Capital stock Authorized: 300,000,000 common shares with a par value of US$0.001 per share 20,000,000 preferred shares with a par value of US$0.001 per share Issued and outstanding: 126,009,581 common shares (2013 - 97,075,003) 148,787 119,853 1,072 preferred shares (2013 - 1,115) - - Additional paid-in capital 10,140,519 6,731,161 Accumulated deficit           (12,661,536)     (11,670,855) Total stockholders' deficit         (2,372,230)     (4,819,841)   Total liabilities and stockholders' deficit     $ 1,597,773   $ 1,340,371

Viscount Systems Inc.Thomas Mei / Allison Monat212-682-6300viscount@kcsa.com