Verso Expects At Least $10 Million in Government-Related Business

The first contract is the Defense Access Transport Services (DATS) contract with the Defense Information Systems Agency, or DISA, formerly known as the Defense Communications Agency. The second contract relates to the Networx project, a $20 billion U.S. General Services Administration (GSA) project. Both projects involve the installation of next generation communication network equipment for military and non-military government agency sites throughout the United States.

DISA is a government agency under the supervision of the U.S. Department of Defense responsible for information technology initiatives, including the upgrading and reconfiguration of the communications network for military installations throughout the world. The DATS contract has a base term of three years and seven one-year extension terms. AT&T, Arrowhead Global Solutions, Inc. and Qwest Communications have been awarded the DATS contract for North America. Two of the three contractors have signed agreements with the same sub-contractor to service this contract. Verso has entered into a distribution agreement with that sub-contractor specifically for the DATS contract. Verso has an existing contract with the third contractor directly.

Based upon discussions with the DISA sub-contractor, Verso expects to realize revenue related to the DATS contract of not less than $10 million over the next three years, commencing late this year. Additional revenue could be realized if the DATS contract is extended beyond the initial three-year base period or if certain Verso products which are currently under consideration by the DISA contractors and sub-contractor for deployment under the DATS contract are actually deployed; however, Verso does not currently expect to realize any such additional revenue.

Networx is a GSA project with a $20 billion budget over 10 years. The project encompasses the upgrade and installation of next generation communication equipment in all federal agencies serving as the primary replacement for the expiring FTS2001 and FTS2001 Crossover contracts and federal wireless contracts. The government awarded contracts to Verizon, AT&T and Qwest for the implementation of the Networx Enterprise project on May 31, 2007. All three companies are long-time distributors of some of the same Verso’s products that may be utilized in the GSA contract. At this stage, Verso is unable to accurately estimate the extent of the revenue (if any) that Verso may realize from this contract, but Verso offers similar products to the products required by this contract and intends to vigorously pursue this opportunity.- Verso Technologies