ANTs Software CEO Joseph Kozak Updates Shareholders

Business Wire, June 26, 2008

Reviews Recent Strategic Transactions - Sees Progress with Compatibility Server

BURLINGAME, Calif. -- ANTs software inc. (OTCBB:ANTS), a leader in compatible, high-performance SQL database management systems, today distributed the following letter to shareholders from CEO and Chairman Joseph Kozak:

Dear Shareholder:

In May, ANTs completed a series of strategic transactions which reshaped the company and positioned us as a leader in database consolidation. Gross income for 2008 is projected to be $8-10 million which is more than the cumulative gross income generated in the history of ANTs Software!

Gross Income             >
Fiscal Year
$450,000                 >
2005
$430,000                 >
2006
$391,000                 >
2007
$8,000,000 - 10,000,000  >
2008 (Projected)

Strategic Transactions

The first strategic transaction is the acquisition of Inventa Technologies. Inventa brings to ANTs a seasoned team of database professionals, a recurring revenue stream from multi year contracts, the ability to capture ANTs Compatibility Server (ACS) service revenue, and the means to rehost applications remotely as opposed to incurring significant expense with implementation teams working at each customer's site.

Inventa's customers include: Wachovia Banking, Aetna Insurance, Sybase, BMC Software and Honda Automotive. A full 99% of Inventa's customers renew their multi year contracts. Both BMC and Sybase recently signed for additional services as well.

The second transaction was our largest license deal to-date, a $1.4 million license of the ANTs Data Server (ADS) to Sybase. This license provides Sybase access to the ADS high-performance technology, with four ADS engineers joining Sybase as part of the transaction.

The third transaction was the sale of ADS to Four Js Development Tools, our European partner. As part of the sale: the remaining eight members of the ADS team joined Four Js, ANTs retains 50% of the revenue generated from the Raytheon/US Navy contract for the next four years, and an unrestricted license to use key ADS technologies as we continue development of ACS.

There are several reasons for the sale of ADS:

* The high performance DB market continues to decline as hardware performance increases.

* TimesTen and Solid Technologies, two companies with high performance DB products were acquired by Oracle and IBM respectively. The purchase price in each case was well below ANTs' current market cap. With those comparables in place it would have been difficult for ANTs to achieve a high market valuation based on an ADS product alone.

* Expense reduction of $2-3 million per year

* We can now focus all resources on the ANTs Compatibility Server.

Note that from time to time, we may choose to extend the exercise period during which former employees (such as those who joined Sybase or Four Js) may exercise their stock options. Those that aren't extended must be exercised within three months according to our stock option plan. To the extent stock options are exercised and sold, this may affect the market activity of our stock in the short term.

The final strategic transaction was the sale of $7.5 million in common stock which was used to acquire Inventa and will be used for operating capital. Concurrent with the capital raise, we successfully negotiated an extension to January 2011 of almost all outstanding convertible debt.

ACS Customer Progress

Our Consortium of ACS pilot customers continues to progress well. We have finalized our first license deal with a consortium customer to rehost an application to Oracle and have been approved as a vendor for a 2nd consortium customer. We are working to bring 2-3 customers into production in the near future. This is quite an accomplishment considering ACS has been under development for less than two years.

Database, Data Center & Server Consolidation

We are in high level discussions with senior executives at Oracle, IBM, and Sybase. I assure you we are on their radar due to the nature of the ACS product suite; here's why.

ACS allows companies to move applications from one database to another in less time, at less expense and with less risk. We are not aware of another product that offers this ability to consolidate applications onto fewer database platforms. There is a wave of "consolidation" technology moving through IT right now, popularized by VMware and followed on with initiatives from HP, IBM, Sun and just about every large IT firm you can name. Consolidation is being used to streamline mostly hardware resources (reducing data center footprint, utility usage and carbon footprint, among other benefits) and it maps right into the "green" initiatives that most enterprises have implemented.

ACS can be used not only for database consolidation (think about moving from ten DB vendors to two) but, for the much larger initiative of data center and hardware server consolidation (think about moving from many hardware servers to few). Consolidating hardware-hungry databases can be done more economically, faster and with less risk with ACS. We believe we have first-mover advantage in this exciting market.