Route1 Inc.
TSX VENTURE : ROI

Route1 Inc.

March 01, 2012 08:00 ET

Route1 Awarded Supply Arrangement With the Government of Canada

TORONTO, ONTARIO--(Marketwire - March 1, 2012) - Route1 Inc. (TSX VENTURE:ROI), a security and identity management company, today announced that it has been awarded a Supply Arrangement by the Government of Canada to facilitate the government's procurement of required software products including but not limited to security, identity management and remote access solutions. The Company also is providing a review and update on the status of its business development initiatives and priorities since 2010.

Supply Agreement with the Government of Canada

As of January 1, 2012, the Canadian government put in place a new, comprehensive approach for the procurement of all software products - Software and Shared Systems and Procurement Directorate's New Method of Supply, the Software Licensing Supply Arrangement (SLSA). SLSA officially replaced the software departmental individual standing offers.

The SLSA is a two-phased procurement process. The first phase consists of suppliers qualifying through the SLSA Request for Supply Arrangement permanently posted on GETS. Once qualified, as Route1 now is, suppliers list their products and ceiling prices in the publicly available SLSA Catalogue. Based on the information in the SLSA Catalogue, the second phase consists of the approved Public Works and Government Services Canada service providers competing their requirements via request for quotations, simplified bid solicitations or through sole sourcing.

Route1's Supply Arrangement number is EN578-100808/071/EE. The period of the Supply Arrangement is February 29, 2012 through to and including December 31, 2014. There is no minimum or maximum dollar amount attached to the Supply Arrangement.

"We know the government of Canada requires much stronger identity management and data security tools, and that their leadership is becoming much more aware of the data security risk," said Tony Busseri, Chief Executive Officer of Route1. "Through our local sales partners and business advisors we have been able to increase awareness of our approach to this comprehensive and serious issue, and are very pleased to have been awarded the Supply Agreement, which we believe will lead to additional business."

Business Development Update

The Company's business development objectives through calendar 2010 and mid 2011 were focused on (a) stabilizing and improving core client relationships, and (b) opening up new client opportunities within the U.S. government including the U.S. Navy, and the U.S. Fish and Wildlife Service.

Since mid 2011, Route1 has been aggressively working to complete the following business development initiatives:

  • Leverage the success of core U.S. government accounts to initiate pilots with related U.S. government departments and agencies,
  • Focus on non-government enterprise verticals that highly value data security,
  • Establish a larger presence with Canadian based governmental entities, and
  • In a broader sense, create brand awareness around the principles of "protecting the fortress" - data should stay behind enterprise firewalls, and "authenticate the person, not the device".

"We believe we have made material progress in building a deep, diversified pipeline that will result in significant paid, active user growth. Account diversification is not only within the U.S. government's civilian and defense departments and agencies, but also through the growth of enterprise clients in the banking, investment management, insurance and healthcare verticals," said Brian Brunetti, President of Route1.

The chart below provides an overview of Route1's new account and organic growth business development pipeline as of today's date. The chart's contents are dynamic and change frequently. The Company will provide quarterly updates in a similar format.

Demo Pilot Roll Out
Phase 1 Phase 2 Phase 3
Client <10 <50 <500 <2.5k <10k Opp.
Client Description No. Type users users users users users Sizing
Government U.S. 1 Defense X 700k (a)
2 Defense X (a)
3 Defense X (a)
4 Defense X 3k
5 Defense X 26K
6 Civilian X 70k (b)
7 Civilian X (b)
8 Civilian X (b)
9 Civilian X 20k
10 Civilian X 2k
11 Civilian X 109k
12 Defense X 2k
Government Other 13 Civilian X 2k
14 Civilian X 70k
15 Civilian X 1k
16 Civilian X 10k
Enterprise 17 Healthcare X 10K
Enterprise 18 Banking X 5k
19 Banking X 1K
20 Investment X 2k
Enterprise 21 Other X 1k
22 Other X 1k
23 Other X 100k
Total 13 8 1 1 0 Approx. 1 M

The table above does not include business development opportunities that have not started a demonstration or have completed a demonstration but as of today's date not yet initiated a pilot.

It should be noted that the U.S. government is a large and profoundly complex organization with more than five million employees, contractors and military personnel across its legislative, judicial and executive branches, encompassing more than 300 agencies, sub agencies and branches.

"Although full procurement within certain civilian agencies and branches of defense does take a good deal of time given the complexity of the organization, we are extremely excited about Route1's continued penetration with the U.S. government and look forward to increase organic growth throughout 2012 and beyond," added Mr. Brunetti.

ABOUT ROUTE1, INC.

Route1 delivers industry-leading security and identity management solutions to enterprises worldwide, such as businesses, government and military, which need universal, secure access to all digital resources and sensitive data. These customers depend on The Power of MobiNET - Route1's communications and service delivery platform. MobiNET provides identity assurance and individualized access to networks and data. Route1's patented solutions are based on FIPS 140-2 cryptographic modules, and simplify the process of meeting increasingly stringent regulatory requirements for privacy and security. Headquartered in Toronto, Canada, Route1 is listed on the TSX Venture Exchange.

This news release contains statements that are not current or historical factual statements that may constitute forward-looking statements. These statements are based on certain factors and assumptions, including, expected financial performance, business prospects, technological developments, and development activities and like matters. While Route1 considers these factors and assumptions to be reasonable, based on information currently available, they may prove to be incorrect. These statements involve risks and uncertainties, including but not limited to the risk factors described in reporting documents filed by the Company. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, except as required by law. Estimates used in this presentation are from Company sources.

This news release, required by applicable Canadian laws, and does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

©Route1 Inc., 2012. All rights reserved. Route1, the Route1 and shield design Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, Route1 MobiKEY, Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1 MobiNET, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, EnterpriseLIVE, EnterpriseLIVE VO, MobiNET Agent and MobiKEY Classic, are either registered trademarks or trademarks of Route1 Inc. in the United States and or Canada. All other trademarks and trade names are the property of their respective owners. The DEFIMNET and MobiNET platforms and the MobiKEY, MobiKEY Classic and MobiKEY Fusion devices are protected by U.S. Patents 7,814,216 and 7,739,726, and other patents pending.

Neither the 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.

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