Homeland Security Capital Corporation Announces Annual Results

Homeland Security Capital Corporation (OTCBB: HOMS), an international provider of specialized technology-based radiological, nuclear, environmental, disaster relief, and security solutions to government and commercial customers, today filed its Annual Report on Form 10K for the year ended June 30, 2009.

For the three month period ended June 30, 2009, the Company reported revenue of $20.6 million and a loss from continuing operations of $5.4 million. Included in the loss is $1.9 million of interest expense, taxes, depreciation, amortization and non-cash compensation (EBITDAS adjustments) and $3.7 million of asset impairment and currency translation charges, which the Company considers one time charges. Without giving effect to the EBITDAS adjustments and the one time charges the Company would have reported approximately $200,000 income from continuing operations.

For the year ended June 30, 2009, the Company reported revenue of $79.5 million and a loss from continuing operations of $9.5 million. Included in the loss is $6.6 million of interest expense, taxes, depreciation, amortization and non-cash compensation (EBITDAS adjustments) and $3.7 million of asset impairment and currency translation charges, which the Company considers one time charges. Without giving effect to the EBITDAS adjustments and one time charges, the Company would have had reported approximately $800,000 income from continuing operations.

The overall loss for the year attributable to common stockholders was $11.6 million or $0.24 per common share, giving effect to preferred dividends and conversion features associated which preferred stock issuance. At June 30, 2009 there were 49.7 million shares of common stock outstanding.

The Company reported funded backlog of $67.6 million at June 30, 2009. Backlog reflects new additions, less revenue earned and any adjustments for contract cancellations. Our funded backlog increased from the third quarter by approximately $13.2 million primarily as a result of new contracts being awarded to subsidiary company, Safety and Ecology Corporation (SEC).

C. Thomas McMillen, HOMS Chairman and CEO, stated, "The second half of the year has certainly presented challenges as the federal government has slowed other procurements as they ramped up for the stimulus spending and our projects generated slimmer margins. In addition, we experienced losses due to US dollar weakness that led to a currency loss related to our UK operation and due to stock market declines which has diminished our Vuance stock holdings. As we enter into our new fiscal year, we have positioned the Company to win federal stimulus awards and we believe these procurements hold great potential for our Company.”

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. The Company measures it operating performance against plan taking into consideration EBITDAS adjustments and one time charges.

Financial Measures

In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, in this press release, the Company presents EBITDA and EBITDAS which are non-GAAP measures. EBITDA is determined by taking the net loss and adding back amortization of intangible assets, depreciation and amortization of property and equipment and interest expense (income), net. EBITDAS is determined by taking EBITDA and then adding back stock based compensation expense. The Company believes that these non-GAAP measures, viewed in addition to and not in lieu of the Company's reported GAAP results, provides useful information to investors because these metrics provide a more focused measure of operating results. These metrics are an integral part of the Company's internal reporting to measure operations of the company and the performance of senior management.

Conference Call

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, October 1 , 2009. During the call, C. Thomas McMillen, Chairman and Chief Executive Officer, Chris Leichtweis, President and Michael Brigante, Chief Financial Officer, will discuss the Company's performance and financial results. The telephone number for the conference call is 877-407-0778 (Toll Free US); and 1-201-689-8565 (International). A live webcast of the call will also be available on the Company's website, www.hscapcorp.com.

The webcast will be archived on the site, and investors will be able to access an encore recording of the conference call for one week by calling 877-660-6853 (Replay Toll Free US); 1-201-612-7415 (Replay International), conference ID #334016. The encore recording will be available after the conference call has concluded.

About Homeland Security Capital Corporation

Homeland Security Capital Corporation is a company engaged in the strategic acquisition, development, and consolidation of homeland security-related businesses, within the fragmented homeland security industry. The company is focused on creating long-term value by taking controlling interest and developing its subsidiary companies through superior operations and management. 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.

Homeland Security Capital Corporation operates businesses that provide homeland security products and services solutions, growing organically and by acquisitions. The company is targeting emerging companies that are generating revenues but face challenges in scaling their businesses to capitalize on homeland security opportunities.

Homeland Security Capital Corporation’s portfolio of companies include:

Safety and Ecology Corporation is a rapidly growing environmental services company in the U.S., providing services nationally, in Europe and the Caribbean. The Company specializes in the removal and remediation of hazardous nuclear materials for the U.S. Department of Energy, U.S. Department of Defense, and other federal agencies. SEC also provides advanced environmental services for private industry across the country and internationally. Since its founding in 1991, SEC has grown approximately 30 percent per year, and has emerged as a technology innovator with more than 450 personnel worldwide and with annual revenues of more than U.S. $70 million. For more information on SEC, visit www.sec-tn.com.

Nexus Technologies Group, a mid-Atlantic security integrator for the corporate and governmental security markets that specializes in non-proprietary integrated security solutions including access control, alarm, video, communication, perimeter protection and bomb and metal detection security systems. Utilizing cutting-edge technologies, Nexus provides innovative, engineered and scalable solutions to effectively protect people, property and assets. For more information about Nexus, visit www.nexusna.com.

Polimatrix, Inc., a system integrator and total solutions provider delivering advanced radiation and nuclear protection and detection services. The company has been operating since September 2006 as a joint venture between Homeland Security Capital Corporation and Polimaster, Inc. For more information about Polimatrix, visit www.polimatrix.com.

For more information about Homeland Security Capital Corporation, 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 HOMS 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.