New Mexico Software Gains Traction With Medical Clients and New Server Reseller Program

May 25, 2006

New Mexico Software Gains Traction With Medical Clients and New Server Reseller Program

Recurring Revenue Increasing in Both Medical and Server Divisions

ALBUQUERQUE, N.M., May 25 /PRNewswire-FirstCall/ -- New Mexico Software, Inc. (OTC Bulletin Board: NMXC) said today that its new reseller program for its DFC3 document and digital asset management and TORC online remote backup product lines initiated in January tripled recurring revenue in the Server Division in the first quarter over the previous quarter. At the same time, new medical division clients are generating consistent recurring revenue growth.

Susan Higgins, director of marketing for Worth Higgins & Associates, Inc., said, "The DFC3 has enabled us to provide comprehensive management of all types of digital files for our clients for the first time. The web-based interface and its ability to change image file types and resolution on the fly and control the distribution and access of files makes the DFC3 extremely simple to use and extremely powerful. Our clients can now manage their graphic design process from initial concept to delivery of files, share, distribute and archive files, and decrease operational costs with a minimum of effort."

New Mexico Software CEO Dick Govatski said, 'The response to our new Server Division Reseller Program has been tremendous. In four months we have added more than 20 new resellers ranging from commercial printers to hardware dealers to system integrators. As each new reseller commits to different qualifying levels, they can offer either our hosted or appliance products. We are seeing quick expansion and immediate benefits from this new sales channel. This is a change from our previous focus on non-recurring revenue formats and should provide us with long-term financial stability and revenue growth.

'The importance of this shift was reflected in our sales in the first quarter ended March 31 as reported in our 10QSB filed with SEC. Although our recurring revenues produced growth, we were not able to match some large one-off sales a year ago, and as a result, revenue for the quarter dropped from $464,000 to $199,000. This was of course disappointing, but the growth we are seeing from our new recurring revenue efforts suggests that we are now headed in the right direction,' Govatski said.

Govatski said the company has also seen growth in its XR-EXpress product division with new clients during the first quarter and stronger growth in revenue from existing customers. 'We are expanding our revenue base as we provide our exceptional solutions to solve complex end user challenges more quickly and in a more varied set of industries. The changeover in revenue models started first in the Medical Division. Now the Server Division is adding to the company's total revenue. We expect to see significant recurring revenue growth during 2006,' Govatski said.

About the DFC3

The DFC3, or Digital Filing Cabinet Version 3, is a software appliance or web service document, digital asset and electronic records management solution for various industries to improve the interface between paper and digital data. The technology can store, organize, read and distribute unstructured information such as images, video files and paper documents and automatically integrate with formatted data fields in a variety of other applications, including popular accounting and supply chain programs. Using a web-based interface, the DFC3 can provide access anytime and anywhere there is an Internet browser and connection, regardless of whether the client is using a hosted or a software appliance edition.

About TORC

TORC is a software appliance or web service backup solution for any industry that is designed to enable the installation, scheduling, storage, retrieval and restoration of either full partition or partial file backups of almost any computer or server via any standard web browser to insure against disaster. The technology automatically schedules full, differential or incremental backups via a browser for one to thousands of computers, stores the backup images on a hosted or central appliance and enables restoration of full partitions or select files from each image in case of disaster. Using a web-based interface, TORC provides access anytime and anywhere there is an Internet browser and connection, allowing users to instantly return their computers and their business to full operating condition.