QSGI CEO Marc Sherman Discusses Recent Red Cross Data Security Breach on Fox News Channel's ''Fox & Friends''

Business Wire, July 3, 2006

HIGHTSTOWN, N.J. -- QSGI INC. (NYSE Arca: QGI) Chairman and CEO Marc Sherman discussed the recent data security breach, involving a laptop computer which was stolen from a local Dallas-area office of the American Red Cross, on "FOX & Friends" on the Fox News Channel, on Monday, July 3, 2006. According to the Associated Press, this laptop contained the personal information from thousands of blood donors, including social security numbers and medical information, as well as the donors' sexual and disease histories. Other laptops disappeared from this office on two separate occasions, according to police reports.

Sherman notes, "These security breaches keep occurring because numerous companies, charities, and government agencies have no set process in place to assure data security. In order to truly protect employees as well as clients, it is critical to employ a fully automated security program, which includes a 3-99x overwrite of all hard drive data to Department of Defense standards with an automatically generated certificate of completion. This is the only way to ensure sensitive hard drive data is permanently destroyed, in order to indemnify the client or individual from all liability risk."

QSGI, founded by Sherman in 2001, is the industry leader in providing a depth of technology solutions for a wide range of corporate and government clients by offering numerous life-cycle services including data security, regulatory compliance, and computer asset management. By utilizing sophisticated, Department of Defense-level certified data erasure, QSGI permanently destroys data, on computer hard drives and data tapes. QSGI also offers audit, maintenance, refurbishment, and reselling of desktops, laptops, servers, and enterprise hardware. In 2005, QSGI had gross revenues of $36 million, with approximately 40 percent of its revenue derived from data security, regulatory compliance, and remarketing. QSGI's headquarters and plant are located in Hightstown, New Jersey, and the company has additional offices in New York City, Palm Beach, Florida, Eagan, Minnesota, and Portsmouth, New Hampshire. The firm opened a global sales and marketing office in Delhi, India, in March of 2006.

Sherman continues, "Data security is of paramount importance to our clients. We convert potential liabilities into assets. We are on the cutting edge of what we believe to be a multi-billion dollar industry."

Corporate and government clients must adhere to strict government regulations or face stiff fines and/or penalties and make reparations on the damages resulting from any data security breaches. Critical legislation, which holds companies responsible for properly disposing of all personal information, stored on computers, can cost a company millions of dollars and may even require prison time for violators.

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