DENVER, CO -- (Marketwire) -- 11/30/12 -- ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF)

• Focus on employee benefits channel added year over year customer growth of 33.4% driving overall customer growth of 10.9%
• New data agreement will lift gross margins to over 65% beginning January 2013

ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF) ("ID Watchdog" or the "Company"), provider of consumer-facing identity theft protection and resolution services, today announced its results for the third quarter ended September 30, 2012. All amounts are in U.S. dollars.

Third Quarter 2012 Highlights:

• Revenue: Revenue was $434,052 for the third quarter of 2012, a decrease of 2.9% from the third quarter of 2011. Our total average customer base increased by 10.9% year over year with our employee benefits customers increasing by 33.4%
• Gross Profit: Gross profit was $172,469 for the third quarter of 2012 as compared to $144,699 for the third quarter of 2011. The gross margin rate for the third quarter of 2012 and 2011 was 39.7% and 32.4%, respectively. Subsequent to the end of the third quarter, we entered into a new data agreement which will substantially decrease our cost of revenue beginning in January 2013. Had this agreement been in place at the beginning of the respective quarters, our gross profit for the third quarter of 2012 and 2011 would have been $292,469 and $264,699, respectively, with a gross profit margin of 67.4% for the third quarter of 2012.
• Operating Expense: General and administrative expense decreased by $138,482, or 33.3%, from the third quarter of 2011. G&A expense was 63.8% and 93.0% of revenue for the third quarter of 2012 and 2011, respectively.
• Balance Sheet: Cash and cash equivalents at the end of the third quarter were $685,781.

ID Watchdog CEO, Michael Greene, commented, "We saw strong customer growth from both our employee benefits and our anti-virus/tech support channels during the quarter and we continue to make great progress in building our employee benefits broker network to drive long-term growth. We did experience a slight contraction in revenue during the third quarter as most of our new customers pay lower net subscription rates as compared to our existing customer base. However, our expectation is that we will experience much higher retention rates and lower unit sales and marketing costs to attract these new customers." Mr. Greene added, "Through a combination of revenue growth, a substantial improvement in our gross margin beginning in January 2013 and further reductions in our operating costs, we look forward to generating positive operating income beginning in the second quarter of 2013."

                             ID Watchdog, Inc.
              Consolidated Condensed Statements of Operations
                                (Unaudited)

                         Three months ended           Nine months ended
                            September 30,               September 30,
                     --------------------------  --------------------------
                         2012          2011          2012           2011
                     ------------  ------------  ------------   -----------

Revenue              $    434,052  $    446,817  $  1,348,429   $ 1,542,511

Cost of revenue           261,583       302,118       847,312       651,437
                     ------------  ------------  ------------   -----------
Gross profit              172,469       144,699       501,117       891,074

% to Revenue                 39.7%         32.4%         37.2%         57.8%


Operating expense:
  General and
   administrative
   expense                277,087       415,569     1,131,101     1,637,136
  Sales and
   Marketing expense      235,847       195,148       449,026       454,827
  Stock-based
   compensation
   expense                103,725       242,647       445,896       612,445
  Depreciation and
   amortization
   expense                 21,937        68,381        68,835       143,521
                     ------------  ------------  ------------   -----------
                          638,596       921,745     2,094,858     2,847,929
Operating loss           (466,127)     (777,046)   (1,593,741)   (1,956,855)

Other income
 (expense):
  Gain (loss) on
   warrant liability        3,639     1,668,000       384,158      (636,000)
  Interest income             400         1,133         5,011         3,527
  Interest expense       (184,902)     (182,913)     (556,121)     (508,413)
                     ------------  ------------  ------------   -----------

                         (180,863)    1,486,220      (166,952)   (1,140,886)

    Net income
     (loss) and
     comprehensive
     income (loss)
     applicable to
     ordinary shares $   (646,990) $    709,174  $ (1,760,693)  $(3,097,741)

    Net income
     (loss) per
     share
     applicable to
     ordinary
     shares:

      Basic          $      (0.01) $       0.01  $      (0.01)  $     (0.03)
                     ------------  ------------  ------------   -----------

                     ------------  ------------  ------------   -----------
      Diluted        $      (0.01) $       0.00  $      (0.01)  $     (0.03)
                     ------------  ------------  ------------   -----------

    Weighted average
     number of
     shares
     outstanding:

      Basic           118,834,997   101,348,330   118,537,114    93,605,574
                     ------------  ------------  ------------   -----------

                     ------------  ------------  ------------   -----------
      Diluted         118,834,997   156,188,427   118,537,114    93,605,574
                     ------------  ------------  ------------   -----------


Consolidated Condensed Balance Sheets
                                                September 30,  December 31,
                                                    2012           2011
                                               --------------  ------------
                                                 (Unaudited)    (Unaudited)
ASSETS
Cash, cash equivalents and available-for-sale
 securities                                    $      685,781  $  1,589,688
Accounts receivable                                    90,320       109,591
Prepaid expenses and other                             39,973        52,901
                                               --------------  ------------
  Total current assets                                816,074     1,752,180
Property and equipment                                175,549       238,658
                                               --------------  ------------
    Total Assets                               $      991,623  $  1,990,838
                                               ==============  ============
LIABILITIES
Accounts payable, accrued liabilities and
 other                                         $      541,329  $    480,639
Deferred Revenue                                      282,087       215,200
                                               --------------  ------------
  Total current liabilities                           823,416       695,839
Deferred Rent                                          90,734        91,919
Finance lease obligations, net of current
 portion                                               48,127        58,449
Series C Preferred mandatorily redeemable
 preferred shares, net of discount and
 conversion feature                                 2,710,254     2,204,390
Warrants                                              240,444       624,602
                                               --------------  ------------
    Total Liabilities                               3,912,975     3,675,199
                                               --------------  ------------
    Total Shareholders' Deficit                    (2,921,352)   (1,684,361)
                                               --------------  ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT    $      991,623  $  1,990,838
                                               ==============  ============

Financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent quarterly reports and our annual report. These documents are available online at www.sedar.com and in the "Company Overview" section of our website at www.IDWatchdog.com.

About ID Watchdog, Inc.
ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides patent-pending, three-tiered comprehensive monitoring, detection and resolution for identity theft. ID Watchdog proactively detects identity theft problems at their source and provides immediate resolution services to ensure complete peace of mind for individuals. All the Company's services have been developed with input from industry experts; national consumer advocacy groups; federal, state, and local law enforcement agencies; consumer protection agencies; and adhere to guidelines published by the Consumer Federation of America. For more information, please visit www.IDWatchdog.com.

Forward-Looking Statement
This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company's filings with Canadian regulators at www.sedar.com. ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.