November 6, 2007

QSGI Reports Third Quarter Results

54% Increase in Gross Profit within Data Security & Compliance Division
19% Increase in Gross Profit within Data Center Maintenance Division
Achieves Third Consecutive Quarter of Positive EBITDA

HIGHTSTOWN, NJ-November 6, 2007-QSGI, Inc. (OTC:BB QSGI) the only provider of a full suite of information technology solutions to help corporations better manage hardware assets, maintenance expenses, and ensure best practices for data security and regulatory compliance, today reported financial results for the three and nine months ended September 30, 2007.

Recent Developments:

• 54% increase in gross profit within Data Security & Compliance division and 19% increase in gross profit within Data Center Maintenance division
• Added over $300,000 of additional Data Center Maintenance contracts increasing the division’s anticipated annualized revenue run rate to $7.0 million during the fourth quarter
• Added global consumer products company and the U.S. subsidiary of a leading international tire manufacturer for full suite of data security and compliance services
• Entered into an agreement with one of the largest electronics OEMs headquartered in Europe to re-market excess North American manufacturing and service parts
• Data Center Hardware division negatively impacted due to anti-competitive business practices by a leading OEM

Marc Sherman, chairman and chief executive officer of QSGI, commented, "The third quarter was characterized by continued strong growth in recurring services within both our Data Security & Compliance as well as our Data Center Maintenance divisions, which was offset by a sharp decline in our Data Center Hardware division due to what the company believes to be actionable anti-competitive business practice by a leading OEM. These practices have impacted the entire industry for remarketing zSeries mainframe systems. The Company is evaluating its options with respect to these practices and the OEM. Nevertheless, the Data Center Maintenance Division achieved yet another double digit increase in revenue and gross profit posting a 19% increase while maintaining gross margins at 64%. At the same time, growth in higher margin end-user data security services allowed the Data Security & Compliance division to post a double digit increase in revenue and gross profits as well."

Mr. Sherman continued, "Growth in the Data Security & Compliance division is being driven by legislation to protect confidential information contained on enterprise storage systems, servers, and desktop PCs. Revenue within the division increased to $6.2 million, from $5.0 million in the comparable quarter last year, while gross profit rose 54% and gross margin increased over 290 basis points. Recent client wins in this division included one of the largest electronics OEMs in Europe, a global consumer products company with over 100,000 employees, a U.S. subsidiary of a leading international tire manufacturer with production facilities throughout the U.S., a major wholesale distributor and GE Commercial Finance in India. We look forward to reaping the rewards of these additional revenue sources in the coming months. Excluding a one-time gain, net of expenses of approximately $300,000, attributable to the successful settlement of a matter that the Company had pursued in litigation, EBITDA loss for this division was $273,000, but greatly improved over the $583,000 and $357,000 EBITDA losses in the first and second quarters this year. This reflects the fact we were able to maintain our reduced level of SG&A during the quarter as we increased gross profit within the division. We look forward to crossing the threshold to profitability within this division in the very near future."

"As we have stated in the past, we are shifting resources from the lower margin re-marketing of technology equipment towards our higher margin recurring IT services across the spectrum of equipment in data centers and the corporate computing environment. Accordingly, revenues within our Data Center Maintenance division increased to $1.7 million compared with $1.3 million in the third quarter of last year, an increase of over 24%. This division has now experienced double digit growth for over 14 consecutive quarters and we are currently at a revenue run-rate of approximately $7 million heading into the fourth quarter, up from just $5.3 million annualized run rate for the fourth quarter of 2006. Mainframe and mid-range server maintenance contracts obtained in the second quarter and early third quarter contributed to the revenue gain and with new contracts coming online, we expect this growth to continue. Our new business pipeline continues to expand as word spreads regarding our capabilities and the outstanding value we offer our customers versus the alternatives in the marketplace. We also continue to expand our suite of services, adding Sun server expertise earlier this year, as well as building upon our midrange p-Series, x-Series, i-Series and HP capabilities."

"While we experienced a sharp decline in the Data Center Hardware division during the third quarter, revenue in our other two divisions was quite strong. We expect revenues in the Data Center Hardware division will continue to feel the impact of the OEM's trade practices and for this reason we will continue to shift our resources towards the recurring and higher margin services in our other two divisions. Even with the impact of these new trade practices, the ongoing shift in our revenues allowed us to achieve positive EBITDA for our third consecutive quarter and we expect this trend to continue."

Total revenue for the third quarter of 2007 was $8.8 million, as compared with $9.4 million for the same period in 2006. Gross profit was $2.1 million, compared to gross profit of $2.3 million in the third quarter last year reflecting the decline in revenue within the Data Center Hardware division. Gross margin for the third quarter of 2007 was 24% compared to 24% for the same period last year. Revenue within the Data Security & Compliance division for the third quarter of 2007 was $6.2 million, while gross profit increased 54% and gross margin increased over 290 basis points to 15%, reflecting the company's shift from wholesale remarketing to higher margin end-user services. Revenue within the Data Center Maintenance division increased 24% to $1.7 million, while gross profit increased 19% on gross margins of 64%. The year-over-year decline in gross margin from historical levels within the Data Center Maintenance division reflects additional personnel the company added to handle its new mid-range maintenance service offering, which improved over the second quarter of 2007 as the company increased utilization of its new personnel. The strength in QSGI's Maintenance division and data security services was offset by revenues within the Data Center Hardware division, which decreased 70% to $911,000, after elimination of intercompany revenues. The decline in revenue within the Data Center Hardware division reflects the erratic nature of sales within the division and a difficult selling environment. Selling, general and administrative expenses were $1.9 million, versus $2.3 million for the same period last year, as overhead reductions and settlement of litigation in the company's Data Security & Compliance division offset the additional technical capabilities added to provide services for the maintenance of IBM mid-range and Sun server hardware. Net loss available to common stockholders for the third quarter of 2007 was $182,773, or $0.01 per share, compared to a net loss of $226,138, or $0.01 per share, for the same period in 2006.

Conference Call
QSGI will host a conference call at 10:00 a.m. Eastern Time today, November 6, 2007. During the call, Marc Sherman, chairman and chief executive officer, Seth Grossman, president and chief operating officer, and Ed Cummings, chief financial officer, will discuss the Company's quarterly performance and financial results. The telephone number for the conference call is 866-334-4934. A live webcast of the call will also be available on the company's website, www.QSGI.com. To listen to the live call online, please visit the site at least 10 minutes early to register, download and install any necessary audio software.

The webcast will be archived on the site, and investors will be able to access an encore recording of the conference call for one week by calling 866-245-6755, conference ID # 299402. The encore recording will be available two hours after the conference call has concluded.