- Revenues increase by 126% year over year

- Gross margin on revenues increases to 73 percent in the first quarter

- Qwest Government Services' commitment in 2009 to purchase 30,000 MobiKEY devices and 30,000 TruOFFICE subscriptions to commence in second quarter and valued at approximately US$8 Million

TORONTO, ONTARIO--(Marketwire - May 20, 2009) - Route1 Inc. ("Route1") (TSX VENTURE:ROI), the trusted provider of security and identity management network solutions, today reported its 2009 first quarter financial results as at and for the three months ended March 31, 2009.

Revenues increased by 126% or $244,222 for the first quarter in 2009 to $438,519 versus $194,297 during the corresponding period in 2008. Gross margin increased by $300,280 for the period to $317,982 or 73 percent as a percentage of revenues versus $17,702 or 9% in 2008. As Route1 ramps up the sales of its products and subscription-fee revenue stream, gross margin is expected to continue to increase. Operating expenses decreased by 25% or $427,151 for the period to $1,265,276 versus $1,692,427 during the corresponding period in 2008. Net loss improved by $668,492 for the period to $944,058 or $nil per share, compared to a net loss of $1,632,550 or $nil per share in 2008.

"Route1 was founded on ground breaking technology and has remained true to its self and its vision. Our perseverance has been validated by U.S. Department of Homeland Security's adoption of our market creating technology, along with other Governments, Federal Agencies and Multinational companies," stated Andrew White, President and CEO of Route1. "We have devoted significant attention to our sales and distribution strategy over the last year, which resulted in an exclusive agreement with Qwest Government Services announced earlier this year on January 7, 2009, a further validation of our technology and renewed sales execution." White continued, "Under the terms of this Qwest agreement, Route1 will start recording revenues and receiving payments in the second quarter of 2009 and throughout the rest of the fiscal year, with any remaining payment on the contract value to be received no later than January 30, 2010. As a result, Route1's balance sheet will strengthen throughout 2009; however management continues to closely manage cash flow to maintain the balance sheet and service Route1's working capital requirements."

As at March 31, 2009, Route1 had cash amounting to $755,136 compared to $2,120,333 at December 31, 2008. On April 29, 2009, Route1 announced the completion of the installation of the DEFIMNET(TM) for the U.S. Department of Homeland Security, which included a final installment payment amounting to approximately US$525,000. In addition, Qwest Government Services Inc. committed to purchase in 2009 a minimum of 30,000 MobiKEY(TM) devices along with 30,000 TruOFFICE(TM) subscription-based services, which is valued at approximately US$8.0 million, that Route1 has started delivering on in the second quarter of 2009.

Currently, the share capital consisted of 350,388,115 and 393,854,564 on a basic and fully diluted basis, respectively.

(in thousands of Canadian dollars, 
 except per share amounts)           As at and for the three months ended
                                  -----------------------------------------
                                  Mar 31,     Mar 31,     Change     Change
                                    2009        2008           $          %
STATEMENT OF OPERATIONS
Devices                         $    101    $     78    $     23         29%
Services                             338         116         222        191
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  Total revenues                     439         194         245        126
  Cost of revenues                   121         176         (55)       (31)
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  Gross margin                       318          18         300       1666
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Operating expenses
  General administration             461         717        (256)       (36)
  Research and development           487         582         (95)       (16)
  Selling and marketing              285         328         (43)       (13)
  Amortization                        32          66         (34)       (52)
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  Total operating expenses         1,265       1,693        (428)       (26)
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Loss before undernoted              (947)     (1,675)        728         43
  Interest income                      3          42         (39)       (93)
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Net loss for the period         $   (944)   $ (1,633)   $    689         42%
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Loss per share                  $  (0.00)   $  (0.00)          -          -
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CASH FLOW INFORMATION
Operating activities            $ (1,359)   $ (1,526)   $    167
Investing activities                  (3)        (46)         43
Financing activities                  (3)        (54)         51 
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Net cash inflow (outflow)         (1,365)     (1,626)   $    261
Cash, beginning of period          2,120       6,303      (4,183)
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Cash, end of period             $    755    $  4,677    $ (3,922)
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Working capital                 $    608    $  4,806    $ (4,198)
Total assets                    $  2,865    $  6,778    $ (3,913)
Obligation under capital lease  $      -    $     38    $     38
Shareholders' equity            $    698    $  5,167    $ (4,469)

ABOUT ROUTE1 INC.

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 www.route1.com.