San Jose, California – September 4, 2007 – SPYRUS, Inc., an innovator in portable high-security hardware and software cryptography products, today announced that the U.S. Government has selected the SPYRUS Hydra Privacy Card® (Hydra PC™) Series II Enterprise Edition as the only hardware encryption USB flash drive awarded a Blanket Purchase Agreement (BPA) to protect data at rest under the Department of Defense (DoD) Enterprise Software Initiative (ESI) and General Services Administration (GSA) SmartBUY co-branded Data at Rest (DAR) Program. The patented Hydra PC technology uniquely met and exceeded the stringent security requirements defined by the U.S. Government to encrypt sensitive data on removable storage media.

The use of USB flash drives has increased significantly within the U.S. Government as a low-cost, convenient way to store and transport large amounts of data. Unfortunately, some are lost or stolen, and important, sensitive data is put at risk in the wrong hands or disclosed to unauthorized persons. These devices are scarcely protected today, merely by a password that is used only to prevent access to the device, not render the data unreadable to the unauthorized user, and can be easily compromised by guessing or using tools widely available on the Internet.

The SPYRUS Hydra PC is unique, providing an on-board hardware engine that encrypts data transferred onto the device "on the fly" and manages authorized access "keys" to the data. Hardware-based key management is a critical security feature and differentiator from other products claiming to deliver "secure" thumb drives. The Hydra PC delivers military-strength protection in a small commercial device.

A user stores data on the Hydra PC just like any other USB flash drive, but with significantly more protection. The Hydra PC device allows users to securely store unlimited encrypted data on removable, replaceable miniSD cards, securely carry data from PC to PC and securely share data with others. The Hydra PC provides controls that restrict access to the data by authorized users and, in another leap of innovation, also restricts access to data through authorized PCs.

"Existing software protection systems for removable media are like hiding your front door key under the mat," said Tom Dickens, Chief Operating Officer, SPYRUS. "Our revolutionary hardware security implementation gives ordinary users a Top Secret-level mechanism for protecting their data on a small commercial data storage device, and is a critical factor in our successfully addressing OMB Directive M-06-16. You can lose your Hydra PC device in the street, and you can even give away the PIN, but the data is still safe—it can only be accessed on computers recognized by the device."

The U.S. Government initiated the DAR Program to meet an Office of Management and Budget (OMB) memorandum issued in June 2006, requiring agencies to encrypt all sensitive data on mobile devices. The GSA and OMB intend to issue regulations that make the DAR Program BPAs mandatory sources for agencies of the federal government. The DoD issued a policy memorandum on July 3, 2007, mandating that all data at rest products purchased by DoD components and their supporting commercial contractors be purchased through the DoD ESI. The Hydra PC is available for sale today through Autonomic Resources (www.autonomicresources.com), a U.S. Small Business Administration Section 8(a) program participant, under DoD ESI/GSA SmartBUY Blanket Purchase Agreement (BPA) FA 8771-07-A-0308.

About SPYRUS, Inc.

SPYRUS, Inc., a Microsoft Gold Certified Partner, has pioneered portable security products and solutions for the information security market since its inception in 1992. Our primary product lines of LYNKS Hardware Security Modules, Rosetta smart cards and USB security devices, Hydra Privacy Card Series II encryption and mass storage, Talisman/DS Data Security Suite, and identity management products (Signal Identity Manager and SPYRUS PKI) meet customer needs for high-assurance security. Our mission is to set the standard for the new era of multinational information sharing and long-term data protection. SPYRUS, Inc. is headquartered in San Jose, CA. See www.spyrus.com for further information.

SPYRUS, Hydra Privacy Card, Hydra PC, LYNKS, Rosetta, Talisman/DS, and Signal Identity Manager are either registered trademarks or trademarks of SPYRUS, Inc., in the U.S. and/or other jurisdictions. All other company, organization and product names are trademarks of their respective organizations.