June 1, 2007

QSGI Provides Update on Accelerated Marketing Activities

HIGHTSTOWN, NJ—June 1, 2007—QSGI, Inc. (OTC:BB QSGI) the only data security and regulatory compliance provider offering a full suite of life-cycle services for a corporation’s entire IT platform, today provided an update on the company’s recent sales and marketing activities.

Marc Sherman, chairman and chief executive officer, stated, “From a marketing perspective, we are off to a very aggressive start to the second quarter. In particular, we are participating in a greater number of RFP’s for our Data Security & Compliance division. The increased activity should continue due to a number of marketing initiatives we are launching this quarter. First, this quarter we are hosting breakfast seminars, presenting at data security conferences and offering free “teach-ins” to educate prospective clients across the country. Second, we’ve begun assembling a group of current and former CIOs and CTOs that are helping to build and feed our referral network. Third, we are now conducting a more thorough training of our Data Center Maintenance sales team, which is resulting in increased cross selling of our data security services within the data centers. And lastly, we are strengthening our relationships with existing channel partners, including a leading provider of IT services to federal, state, and local government customers. As a result, we recently landed our first contract for a division within the Department of Defense (DoD) to re-market certain IT equipment and apply the residual value of the equipment towards the purchase of new equipment. This represents our first major foray into the government market and another attractive industry sector.”

Mr. Sherman continued, “Two of our three divisions are already consistently profitable, and we continue to make progress within our Data Security & Compliance Division. Although the sales cycle within our Data Security & Compliance division took longer than we had anticipated, the prominent clients we have added, coupled with a significant increase in RFPs during the second quarter, are clear indications our strategy is working. Although we recognize that it takes time for many of these initiatives to bear fruit, revenues derived from our higher margin end-user services are steadily increasing and we are participating in more on-site services than ever before, which will have a favorable impact on our profit margins within the division going forward. As we anticipated, our wholesale re-marketing business within the Data Security & Compliance division is still recovering from delays in corporate IT rollouts due to the launch of Vista. However, we are seeing a strengthening in off-lease returns midway through the second quarter, which we anticipate will continue to improve throughout the year and return to its historic growth levels.”

“At the same time, our Data Center Maintenance division and our Data Center Hardware division both continue to generate very strong cash flow. As a result of new mainframe and mid-range server maintenance contracts, we estimate the Data Center Maintenance division will continue to grow at an exceptional pace with consistently solid margins. Meanwhile, we have remained vigilant in our steps this quarter to keep SG&A in check, so as our revenue continues to grow, we expect to achieve meaningful profitability company-wide. Our relationship with Wells Fargo also remains strong, which provides us the financial flexibility through our line of credit to take advantage of growth opportunities as they arise.”

Mr. Sherman concluded, “Looking ahead, we believe the recent spate of high profile data breaches at Fortune 500 companies, and subsequent class-action lawsuits against these companies, will continue to result in a dramatic increase in awareness surrounding end-of-life IT security. Although a number of companies do have internal processes in place, these processes may have been implemented years ago and are no longer sufficient to meet today’s regulatory as well as internal security and economic requirements. For instance, a major U.S. corporation we recently spoke with is still using electric drills to cut holes in and destroy their hard drives. As this corporation noted, there are two major faults with this process. First, it is subject to human error due to hard drives that may be accidentally skipped; whereas QSGI’s process is fully automated, and we do not issue a certificate of destruction until the process is complete and verified. Second, destroying the hard drives eliminates any potential residual value that may be recovered by instead re-marketing the equipment following a proper disk erasure. Our challenge is to walk clients through the true best practice processes and demonstrate the value-add that we offer. To that end, we have decided to reduce expenses from our India lead generation center in favor of our more consultative selling approach used by our existing U.S. based sales force. Although our India operations were effective for lead-generation, we have found a more consultative process with our U.S. sales team to be far more effective. While we agree that our business was early to market, major corporations across the U.S. are now requiring our processes and we are ideally positioned to benefit from these trends as this market enters it next stage of development.”

About QSGI
QSGI is the only data security and regulatory compliance provider offering a full suite of end-of-life and other life-cycle services for a Fortune 1000 corporation’s and government client’s entire information technology (IT) platform. QSGI offsets its clients’ expenses through its value-added remarketing program. Prior to resale, the company utilizes its proprietary Department of Defense (DOD) level certified data sweep to eliminate otherwise recoverable data. QSGI reduces its clients' potential liability by ensuring regulatory and environmental compliance for IT products. QSGI also maintains and provides services on enterprise-class hardware, including mainframes, midrange servers, tape storage products and disk storage products. Given the sensitive nature of the company’s client relationships, it does not provide the names of its clients. Additional information about the company is available at www.qsgi.com.