Route1 Inc.

Route1 Inc.

April 29, 2009 07:30 ET

Route1 Completes Installation of DEFIMNET for the U.S. Government's Department of Homeland Security

TORONTO, ONTARIO--(Marketwire - April 29, 2009) - Route1 Inc. ("Route1" or the "Company") (TSX VENTURE:ROI) today announced the successful installation of its DEFIMNET(TM) (DEFense Identity Management NETwork), its military version of its service delivery platform for identity and entitlement management, at a United States Government's Department of Homeland Security ("DHS") site. DEFIMNET was developed and designed to reside within all levels of classified and unclassified networks, to interact with other defense network systems. DEFIMNET is sanctioned for use by military units to command and control confidentiality, integrity and availability of secure and real-time data.

This initial three-year agreement announced in October 2008 for the installation and maintenance of DEFIMNET is valued in excess of US$2 million to the Company and is being delivered through Route1's reseller partner, Qwest Government Services Inc. ("Qwest") under the Washington Interagency Telecommunications System (WITS) 2001 Crossover contract. Based on preliminary discussions and the leverage strength of DEFIMNET, management expects with the completion of the installation, will see DHS's subscriber base to significantly grow for the Company's TruOFFICE(TM) subscription-based services over the next 12 to 18 months.

In addition, the Company announced in January 2009 that it had entered into an exclusivity agreement with Qwest, granting Qwest the exclusive rights to resell Route1's solutions to the U.S. Federal Government for 2009, which would include sales to DHS. In exchange for Route1 granting this exclusivity, Qwest has committed to purchase and accept for delivery in 2009 a minimum of 30,000 Route1 MobiKEY(TM) devices along with 30,000 TruOFFICE one (1) year subscription-based services, which is valued at approximately US$8.0 million. The future reoccurring revenue stream to Route1 from these 30,000 TruOFFICE one (1) year subscription-based services is estimated at US$5.5 million per year.

"With this binding purchase commitment from Qwest in 2009 plus our current subscriber base, we will have surpassed our break-even point on an annualized basis and will start generating positive earnings and cash flows in 2010," said Andrew White, President and CEO of Route1. "We are proud to be recognized as a leader in the provision of security solutions to a complex organization such as DHS, and look forward to further adding value to other government agencies in the U.S."

The DEFIMNET platform also supports the newly introduced Telework Improvements Act of 2009 by enabling United States Government federal employees to securely perform their duties and responsibilities from home or from other work sites removed from their regular place of employment. DEFIMNET enables federal agencies to comply with the Act's teleworking technology guidelines and incorporates telework into their continuity of operations planning (COOP) strategy, such that mission critical personnel are equipped to telework in time of a catastrophe. DEFIMNET controls access to and protects agency information and information systems, limits the introduction of vulnerabilities and safeguards wireless and other telecommunications capabilities that are used for teleworking.

"The Telework Improvements Act of 2009 continues to validate the opinion among many continuity of operations (COOP) experts that teleworking is as an effective pillar within a COOP strategy. Route1 and Qwest are equipped with a government-ready teleworking solution that will allow federal agencies and their workers to transition to an out-of-the-office work environment," said White.


Route1 delivers award-winning security and identity management solutions to customers world-wide. These solutions provide universal, secure access to all digital resources and sensitive data. At the heart of Route1's solutions is MobiNET, a communications and service delivery platform focused on identity management and entitlement-based access to resources. Route1's patent-pending solutions are based on FIPS-140-2 cryptographic modules, and simplify the process of meeting increasingly stringent regulatory requirements around privacy and security. Headquartered in Toronto, Route1 is listed on the TSX Venture Exchange (symbol: ROI). For more information, visit

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.

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Route1's current expectations, estimates, forecasts and projections about the operating environment, legal environment, economies and markets in which Route1 operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. Unless otherwise required by applicable securities laws, Route1 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

(C)2009 All rights reserved. Route1, the Route1 Logo, Mobi, Route1 MobiKEY, TruOFFICE, PurLINK, EnterpriseLIVE, DEFIMNET, IBAD and Route1 MobiNET 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 TSX Venture Exchange has not reviewed or approved the contents of this press release and does not accept responsibility for its adequacy or accuracy.

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