Mr. Tony Busseri reports

ROUTE1 PROVIDES BUSINESS UPDATE

Route1 Inc. has provided a business update.

Contract award

Route1, through its wholly owned subsidiary Group Mobile Int'l LLC, recently received a purchase order valued at approximately $5.9-million (U.S.) pretax from an integrated energy company engaged primarily in electric power production and retail distribution operations in the Southern United States to provide the client with ruggedized devices. Route1 expects the delivery of the hardware for this order to occur in the third quarter of 2018.

This order demonstrates the positive outcome of the company's initiative to focus on and improve its hardware vendor relations. It believe that it is poised to increase its sales from hardware vendor generated leads. Although hardware vendor originated sales leads normally have lower margins than Group Mobile's recent aggregate experience of 16 to 22 per cent, Route1 is working with its hardware vendors to increase margins with expanded service and application software offerings.

MobiKEY partnerships

On July 5, 2018, Route1 announced that the MobiKEY technology now works with Samsung DeX. Military personnel are required to work wherever their mission takes them -- on base, at home, or deployed in the field. With products like Samsung DeX, which transforms mobile productivity, users can easily connect their latest Samsung Galaxy smart phone to a monitor, keyboard and mouse for a convenient PC-like experience. And, when combined with Route1's MobiKEY solution, personnel gain secure remote access to Department of Defense networks, desktops and files through a Common Access Card-authenticated session.

Additionally, earlier this week Thursby Software Systems Inc. announced the partnership of the Thursby PKard Reader with Route1's MobiKEY software application. Current Thursby DoD and government customers can now add the MobiKEY software application, utilize their PKard Reader to authenticate themselves by using their Department of Defense issued Common Access Cards, federally issued personal identification verification cards, or commercially issued PIV-I cards, and be able to remotely access their local desktop, on any mobile device, with the highest levels of security and encryption.

AirWatch lawsuit update

The claim construction hearing was held on July 2, 2018, in Wilmington, Del., presided over by Richard G. Andrews in relation to civil action No. 1:17-cv-00331-RGA. The company expects the judge's decision on the construction of the claim terms no later than Aug. 31, 2018.

Important upcoming dates in this litigation can be found at the company's website.

Route1 filed a complaint against AirWatch in federal court in Delaware on March 27, 2017, alleging that AirWatch is infringing Route1's U.S. patent No. 7,814,216.

Organization changes

Brian Brunetti, president, will be leaving Route1 on July 27, 2018, to pursue a new career opportunity in the environmental services sector. Mr. Brunetti has been a valuable contributor to Route1 since he first joined the company in the summer of 2010.

Route1 will bring in Bob Hooper as chief sales and marketing officer (CSMO). Mr. Hooper is the president of HTM Sensors and will provide Route1 with his services on a part-time basis. Mr. Hooper has been instrumental in bringing ActionPLAN powered by MobiNET to market.

In addition, Route1 expects to hire by month-end a vice-president of engineering to provide deeper overall management depth to better fit Route1's leadership requirements.

Building a stronger Route1

Fifteen months ago, Route1 started its business pivot to becoming a stronger more profitable company by looking to grow its product offering through leveraging its core competencies, and actualizing on the value of its intellectual property.

Today, the company is aggressively positioning the company to be a leader in empowering organizations with data-centric solutions and insights necessary to streamline operations, minimize costs, and gain competitive advantages while maintaining the high level of cybersecurity posture.

Over the course of the summer the company will be sharing more information on how it plans to evolve as a company. The company expects to announce its Q2 2018 financial results and hold a shareholder webcast and conference call on or about Aug. 17, 2018.

About Route1 Inc.

Route1 is a leading technology solutions innovator dedicated to enabling mobility for government and focused enterprise vertical markets by delivering secure data protection technologies and mobility solutions. The company's suite of patented enterprise security solutions, which includes MobiKEY, ActionPLAN, powered by MobiNET, MobiENCRYPT and DerivID, delivers best-in-class authentication, data security, data analytics and secure remote access, running on a proven, trusted infrastructure, which meets or exceeds the highest security standards for government and industry. Route1 has earned a full authority to operate from the U.S. Department of Defense, the U.S. Department of the Navy, the U.S. Department of the Interior and other government agencies. The company is proud to be a trusted solutions partner in the banking, health care, legal, education, public sector, manufacturing, logistics, field service and warehousing industries.

We seek Safe Harbor.