Route1 Provides Business Development Update

Toronto, February 2, 2015 – Route1 Inc. (TSXV: ROI) (the “Company”), a leading provider of secure access technologies for the mobile workspace that protects businesses and government agencies, and whose customers include the U.S. Department of Defense, the Department of Homeland Security, the Department of Energy and the Government of Canada, today provided an update on certain business development initiatives.

U.S Department of the Interior (DOI)

Working with a lead component of the DOI, Route1 has agreed to build and provide for use by DOI a DEFIMNET platform – Route1’s universal identity management system and service delivery platform.  Route1 is in the process of building the DEFIMNET and expects it to be installed and accredited for use in the second quarter of 2015.  Guiding elements of the agreement include:

  • Annual subscription based use of the MobiKEY application software;
  • One time purchase of MobiKEY Fusion devices that allows DOI users to authenticate using their U.S. government issued PIV cards; and
  • Yearly device maintenance.

The agreement also included a first purchase order in the amount of USD $123,000.

The DOI has been a MobiKEY user since early 2011 and Route1 expects to grow its user base within the DOI by leveraging the blanket purchase agreement (BPA) with U.S. Fish and Wildlife Service (FWS) that was first announced in May 2011.  The BPA is for up to 10,000 users.

FWS’ primary goal in expanding the usage of MobiKEY is to enable “Mission Accomplishment while Away from the Office”.  Further goals are:

  • A reduction in the reliance on a Virtual Private Network (VPN) to drive improved reliability, performance and data security;
  • To deliver cost savings through a reduction in Government Furnished Equipment (GFE), including capital and operational expenditures; and
  • To support the move to a virtualization based infrastructure, including integration with Citrix; and
  • Compliancy with the mandated use of U.S. government issued Personal Identity Verification (PIV) cards.

U.S. Department of Homeland Security (DHS)

Over the past few months Route1 has been working with a component of DHS to deliver secure remote scanning capabilities as a feature addition to Route1’s flagship technology, MobiKEY.  The value of the purchase order Route1 recently received to deliver the functionality enhancement is approximately USD $70,000.

Secure remote scanning includes:

  • Support for TWAIN-compatible scanners; and
  • Support for Windows 7, Windows 8, and Windows 8.1 operating system.

The addition of this feature to the MobiKEY technology will enable field agents to scan supporting documentation via MobiKEY and have it delivered seamlessly and securely to their government computers during the MobiKEY data session.  The principal use-case that Route1 sees for this feature is to permit MobiKEY users to attach supporting documentation for government background checks or similar paper based application processes.

McMaster University

Since July 2008, McMaster University (McMaster) has been using Route1’s MobiKEY technology to enable its academic staff to securely access their applications and corresponding data without the risk of data leakage, while enabling mobility and flexibility for its staff.  As part of a growing collaboration between the two parties, McMaster approached Route1 with a challenging scenario.

McMaster, a leader in applying big data to address local and global socio-economic challenges, developed the PEDAL (Public Economics Data Analysis Laboratory) project.  The university’s vision is to provide an environment for the brightest minds in the economics field to collaborate, exchange ideas, develop insights, and ultimately leverage unprecedented access to the data that McMaster has been able to collect and acquire from private and public sectors.  Due to the sensitivity of some of the data, any risk of leakage, or unauthorized dissemination is unacceptable.

Route1’s technology will be the basis of mini-hubs in the PEDAL facility; kiosk-like micro-environments that will permit local and visiting researchers and members of academia, to securely access, analyze and interpret the data.  By leveraging Route1’s patented technology and MobiKEY Fusion devices along with personalized identity cards for each authorized individual, McMaster will be able to offer on-demand local access while maintaining comprehensive identity and access management and strong audit controls.

Another key objective for the project is to make data removal impossible.  The mini-hubs will serve to showcase the innovation born out of the McMaster and Route1 collaboration to academic institutions, as well as government and corporate partners worldwide.

The PEDAL project has received funding from the governments of Ontario and Canada.  McMaster now has 75 paid, active users with most of them under a five-year agreement.

This particular project is a further step towards a broader engagement between McMaster and Route1.

U.S. Department of Defense (DOD)

As announced in the Company’s third quarter 2014 financial results report, Route1 has continued to leverage U.S. government reciprocity rules and the installed accredited infrastructure to grow the number of proof of concepts and pilots within the DOD.  As a result, Route1 expects that as it continues to work towards closing large, enterprise deals, there will also be smaller account purchases from DOD components that will drive increased subscription revenue.

During the third quarter of 2014, Route1 received and fulfilled device orders from a component of the DOD for approximately 720 MobiKEY Fusion devices. The paid, active subscriber closing numbers provided below do not account for the expected user count growth attached to the device orders. The delay in “lighting up the users” is a result of a contracting issue related to the customer’s transition to the Next Generation Enterprise Network (NGEN) Contract; Route1 expects that the issue to be resolved during the current calendar quarter.

Paid, Active Subscribers

As at December 31, 2014, Route1 had 14,792 paying, active subscribers.

Paid, Active Subscribers

Dec 31-14

Sep 30-14

Jun 30-14

Mar 31-14

Dec 31-13
Closing Number

14,792

14,645

14,461

14,240

14,602
Quarterly Growth Number

147

184

221

-362

NA
Average Revenue per User *

$334

$332

$329

$312

$301

* Forecasted value; subject to completion of fiscal year 2014 audit.

ABOUT ROUTE1, INC.

Route1 enables the mobile workspace without compromising on security. Its flagship technology MobiKEY uniquely combines secure mobile access, with high assurance identity validation and plug-and-play usability. Remote and mobile workers are able to securely and cost effectively access their workspace from any device without exposing the organization to the risk of data spillage or malware propagation. MobiKEY customers include Fortune 500 enterprises as well as the U.S. Department of Defense, the Department of Homeland Security, the Department of Energy and the Government of Canada. Headquartered in Toronto, Canada, Route1 is listed on the TSX Venture Exchange.

For more information, visit our website at: www.route1.com.

For More Information Contact:
Tony Busseri, CEO
+1 416 814-2635
tony.busseri@route1.com

This news release, required by applicable Canadian laws, 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.

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.

© Route1 Inc., 2015. All rights reserved. Route1, the Route1 and shield design Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, MobiLINK, Route1 MobiKEY, Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1 MobiNET, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, MobiNET Aggregation Gateway, MobiNET Switching Array, MobiNET Secure Gateway, EnterpriseLIVE, EnterpriseLIVE Virtualization Orchestrator, MobiNET Agent, MobiKEY Classic and MobiKEY Classic 2, 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, MobiKEY Classic 2 and MobiKEY Fusion devices are protected by copyright, international treaties, and various patents, including Route1’s U.S. Patents 7,814,216 and 7,739,726, Canadian Patent 2,578,053, and other patents pending. The MobiKEY Classic 2 is also protected by U.S. Patents 6,748,541 and 6,763,399, and European Patent 1001329 of Aladdin Knowledge Systems Ltd. and used under license. Other patents are registered or pending in various countries around the world.

Other product and company names mentioned herein may be trademarks of their respective companies.