IceWEB Sells Its Subsidiary

IceWEB, Inc., manufacturer of storage solutions and on-line application services, has completed the sale of its IceWEB Solutions Group, Inc. (VA) subsidiary. Details of this transaction will be disclosed on form 8-k to be filed with the Securities and Exchange Commission. The Company has elected to focus on higher-margin sales of its own manufactured products, which includes online cloud computing, software services and data storage products.

As a result of the transaction, the Company expects to reduce current liabilities and indebtedness from approximately $9 million at its fiscal year ended September 30, 2008, to $3.4 million as of its fiscal second quarter ended March 31, 2009.

“The sale of this subsidiary dramatically improves our capital structure, allowing the company to narrow its focus and broaden its reach in the Online and Storage Markets,” said John R. Signorello, IceWEB’s Chief Executive Officer. “We believe there are significant opportunities to grow the IceWEB family of products within the current customers we have now. A clear strategic direction and an improved balance sheet will allow us to expand profitably and deliver world class customer service.”