APRIL 1, 1998

LOS ANGELES, April 01 /PRNewswire/ -- Meganet Corporation, the company that challenged Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), Dell (NASDAQ: DELL), AT&T (NYSE: T), NCR (NYSE: NCR) and many other high tech companies with their unbreakable encryption, is shipping VME98 nationwide. As of today, April 1st, 1998, anyone in the continental United States of America can buy VME98 directly from the Meganet web site at www.meganet.com. Prices for the standard edition are only $100 for a fully operational application.

After 12 months of Research & Development, Meganet Corporation completed last month 21 different commercial versions of VME98, and the product is sold nationwide through the World Wide Web.

Since Virtual Matrix Encryption is the strongest encryption available today, the product is available ONLY in the United States of America. For the time being, there are no sales in any other countries, though Meganet Corporation is considering applying for an export license.

Meganet Corporation also keeps on working on standardizing VME with the different standards committees.

Meganet Corporation is also launching its third cracking challenge - $1.2 MILLION DOLLARS. Starting today, and for the next 12 months, Meganet Corporation will post a monthly $100,000 challenge for registered users of VME98. The new challenge demonstrates Meganet Corporation's absolute confidence that VME98 is completely unbreakable.

A year ago on this date the first ONE MILLION DOLLAR challenge brought Meganet Corporation nationwide awareness. Over 55,000 participants accepted the challenge over a 45 day period. Nobody succeeded in breaking the file encrypted with Virtual Matrix Encryption.

Today also marks the end of the second challenge, which lasted over 6 months, where Meganet Corporation challenged the top 250 corporations in the US to test and break VME97. Again, none have succeeded. The challenge solution will be posted on the Meganet website at www.meganet.com .

Meganet Corporation has a US patent pending for VME. The technology uses a new field of encryption and a new algorithm to encrypt data that is completely different from any existing methods. VME is the only algorithm that neither  encrypts the data nor transfers it. By comparing the data to a randomly generated Virtual Matrix, a system of pointers is created, pointers which are meaningless outside the context of the matrix to which they belong.  The result is then repeatedly encrypted through a huge variety of algorithms.  Even in the unlikely event of the algorithms being compromised, the set of pointers is completely unrelated to the original data, and there is no way to derive the original data out of the pointers set.  Virtual Matrix encryption paired with a 1 Million Bit Symmetric Key creates the world's first and only unbreakable encryption.