Homeland Security Capital Corporation Announces First Quarter Financial Results for Period Ended September 30, 2008

ARLINGTON, Va.--(BUSINESS WIRE)--Homeland Security Capital Corporation (“HSCC”) (OTCBB: HOMS.OB), an international provider of specialized technology-based radiological, nuclear, environmental, disaster relief, and security solutions to government and commercial customers, today filed its quarterly report on Form 10-Q for the first quarter ended September 30, 2008.

Revenue for the first quarter was $17.7 million, as compared with $2.6 million for the same period in 2007. EBITDAS from continuing operations (earnings before interest, taxes, depreciation, amortization, and stock based compensation expense) was $150,000, as compared to a loss of $330,000 for the same quarter of 2007. Overall HSCC had a $2.3 million loss, or $0.05 per share, attributable to common shareholders for the quarter as compared to a $3.8 million gain, or $0.09 share, for the same period in 2007. In the quarter ended September 30, 2008, HSCC recorded one-time charges of $450,000 with respect to a beneficial conversion feature on its preferred stock and miscellaneous acquisition costs. In the quarter ended September 30, 2007, HSCC recorded a gain of $3.6 million with respect to the sale of a subsidiary.

The Company consolidates the results of subsidiaries Safety & Ecology Holdings Corporation, Nexus Technologies Group, Inc., Polimatrix, Inc., and Homeland Security Capital Corporation, the holding company. At September 30, 2008, and 2007 there were 48.8 million and 41.8 million shares of common stock outstanding, respectively.

“We booked in excess of $53 million of new business contracts in the quarter and I am pleased with our overall revenue results and the progress made in securing new business,” said HSCC Chairman and CEO C. Thomas McMillen. “In addition to further executing on the growth strategy we set forth, we look to continue placing a strong focus on improving our margins and streamlining our administrative costs as we progress into the year.”

HSCC President and Safety & Ecology Corporation CEO Christopher Leichtweis commented, “Much of the new business booked this past quarter is at higher margins, even in light of the softening economy. We will need to ensure we effectively manage these projects and maximize those higher margins.”

Financial Measures

In addition to the results presented in accordance with generally accepted accounting principles in this press release, the Company reported a positive EBITDAS (EBITDA before stock based compensation expense of $150,000 for the period). EBITDAS, a non-GAAP measure, is determined by taking the net loss and adding back amortization of intangible assets, debt offering costs and debt discounts, depreciation and amortization of property and equipment, stock based compensation expense and interest expense (income), net. The Company believes that this non-GAAP measure, viewed in addition to and not in lieu of the Company’s reported GAAP results, provides useful information to shareholders and investors because this metric provides a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to measure operations of the Company. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.

Investor Quarterly Conference Call:

The Company will host an investor conference call on Tuesday, November 18, 2008, at 9:00 am EST. We ask that all participants pre-register by sending an e-mail to: HOMS@investorrelationsgroup.com or calling: The Investor Relations Group, (212) 825-3210.

About Homeland Security Capital Corporation

HSCC is an international provider of specialized technology-based radiological, nuclear, environmental, disaster relief, and security solutions to government and commercial customers through its portfolio companies. Former Maryland Congressman C. Thomas McMillen, who served three consecutive terms in the U.S. House of Representatives from the 4th Congressional District of Maryland, heads the company.

For more information about Homeland Security Capital Corporation, or to be added to our e-mail distribution list, please visit www.hscapcorp.com.

Forward-Looking Statement

This release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future activities, performance, events, or developments, are forward-looking statements. Although Homeland Security Capital Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements.

Homeland Security Capital Corporation, Arlington, VA
SEC Public Relations
Anne Smith, 865-342-7668
asmith@sec-tn.com
or
The Investor Relations Group
212-825-3210
Investor Relations:
Adam Holdsworth
aholdsworth@investorrelationsgroup.com
or
Public Relations:
Susan Morgenbesser
smorgenbesser@investorrelationsgroup.com