SAFLINK Reports First Quarter 2005 Financial Results

Revenue for the first quarter of 2005 was $2.2 million, compared to $2.3 million for the fourth quarter of 2004 and $802,000 for the first quarter of 2004. The Company reported a net loss of $6.8 million, or $0.09 per share, in the first quarter of 2005, compared to a net loss of $6.6 million, or $0.08 per share, in the fourth quarter of 2004, and a net loss of $2.0 million, or $0.07 per share, in the first quarter of 2004. Non-GAAP operating loss for the first quarter of 2005 was $5.3 million, which excludes certain non-cash charges such as the amortization or impairment of intangible assets and stock-based compensation expense. This is compared to a non-GAAP operating loss of $3.0 million for the first quarter of 2004. SAFLINK believes that supplementary non-GAAP measures for operating results enhance an investors overall understanding of the Companys financial performance by reconciling more closely the actual cash expenses of the Company in its operations, as well as excluding expenses that, in managements view, are unrelated to the Companys core operations. A reconciliation of non-GAAP operating loss and non-GAAP net loss to reported GAAP operating loss and net loss is provided below.