Technest Holdings Reports Fiscal Second-Quarter Revenues

Boston, Mass., 21 February 2006. Technest Holdings Inc. (www.technestholdings.com), a defense and homeland security company, has announced today its operating results for the company's fiscal second quarter ended December 31, 2005.

Boston, Mass., 21 February 2006. Technest Holdings Inc. (www.technestholdings.com), a defense and homeland security company, has announced today its operating results for the company's fiscal second quarter ended December 31, 2005.

Revenue for the six months ended December 31, 2005 was $37,285,917. Revenue for the three months ended December 31, 2005 was $18,289,576. At the same time, the operating loss for the six months ended December 31, 2005 was $284,011. The operating loss for the same period in 2004 was $99,031. The operating loss for the three months ended December 31, 2005 was $220,943. The operating loss for the same period in 2004 was $7,499. The operating loss for the six-month period ended December 31, 2005 included non-cash charges for depreciation and amortization of intangible assets of $1,072,615.

The net loss attributable to common shareholders for the six-month period ended December 31, 2005 was $1,796,653 or a loss of $0.12 per share compared to a net loss of $106,721 or $0.79 per share for the corresponding period in 2004. The net loss attributable to common shareholders for the six-month period ended December 31, 2005 was affected by interest payments. Total interest payments for the six months ended December 31, 2005 was $1,595,820. Of that amount $1,150,000 was incurred as non cash interest expense related to failure to promptly file a registration statement. During the period, the weighted average number of shares outstanding increased to 14,719,365 from 135,495 for the prior year period.

Technest Holdings Inc. is a provider of remote sensor systems, chemical detectors, intelligent surveillance, and advanced 3D imaging technology solutions to the defense and homeland security marketplaces.

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