CEO Guazzoni Sees Bright Outlook for Balance of 2006 and for 2007
State-of-the-State Comments Made at Zanett at Weekend Investor Gathering... Plans for Share Buy Back Program Announced

NEW YORK--(BUSINESS WIRE)---Zanett Inc. (NASDAQ: ZANE)a leading information technology (IT) consulting firm serving Fortune 500 corporations, mid-market companies, and classified government agencies involved in Homeland Defense and Homeland Security, today announced it plans to file an 8-K today pursuant to Regulation FD of the Securities and Exchange Commission making public certain comments made by its Chairman and CEO, Claudio Guazzoni, to a private gathering of investors over this past weekend.

ALL MATERIAL COMMENTS MADE (IF ANY) ARE FULLY DISCLOSED IN THIS PRESS RELEASE
This past weekend, speaking at a private gathering of investors and potential investors in a "State of the State" address on Saturday, October 21st, Zanett President Claudio Guazzoni commented on the Company's outlook for the balance of 2006 and into 2007. Furthermore Mr Guazzoni also remarked on the Company's stock performance in the recent past.

UPWARD REVISION TO GUIDANCE
< Zanett recently revised its revenue guidance for Q3 upward significantly, from a range of $10.4 million to $10.6 million to over $11 million. For the entire year Zanett forecasted Revenue growth of 27%.

COMMENTS ON FUNDAMENTALS
"Zanett's fundamentals have never been stronger," Mr. Guazzoni noted. "Our company is growing at a rapid rate both as a result of our acquisitive business model, but organically as well. We're producing free cash flow at a record rate. We are about to renew our Line of Credit facilities and double their size to $10 million, providing us with flexibility in pursuing our growth strategy. Finally, the integration of the back office functions of our commercial solutions segment has been completed and we're beginning to realize the benefits of both the economies of scale and the leveraged marketing that we sought."

COMMENTS ON STRATEGY
Commenting on the recent stock activity Mr. Guazzoni also said, "I believe that a lot of investors looking at our operating and stock price performance over the past year have missed the underlying story. The costs of consolidation, SARBOX compliance, rising interest rates and the confusion caused by Oracle's consolidation of the ERP market all took a toll on our bottom line towards the end of 2005, and that sentiment spilled over into 2006," he explained. "But since the beginning of the year we've improved virtually every one of our operating and financial metrics. At our recent Board of Directors Meeting, our management laid out what was a very aggressive acquisition and organic growth strategy campaign for the balance of the year and 2007, reflecting a very bullish outlook for both our commercial and government segments," he revealed.

COMMENTS ON STOCK PRICE
Mr Guazzoni emphasized, "Our stock price has drifted down to a point where very soon Zanett might find a whole lot of value in instituting a Stock Buy Back Program." "We currently have good positive cash flow. And we currently plan to soon take advantage of the disparity between what we believe are the underlying fundamentals and the price of the Zanett's common stock."

BLACKOUT PERIOD
An SEC mandated "Blackout Period" currently exists forbidding for the Company and any of its insiders from purchasing its own Common Stock. The "Blackout Period" expires 3 days after the Company publishes its results for Q3. Mr Guazzoni stated "As soon as we are permitted by statute and regulation to do so, both our management team and the Company itself intend to file with the SEC appropriate documents to be able to acquire shares of the Company's Common Stock in the open market, especially if the stock price remains at such levels that represent value to us."

SHARE BUY BACK PROGRAM
"As soon as permitted, we are planning to re-institute our Share Buyback Program, which upon approval will allow us to acquire up to 150,000 shares of Zanett's common stock when we believe conditions warrant. Furthermore, our management team intends to, subject to regulatory constraints, also acquire Common Stock in the open market at what we feel are these undervalued levels."

POSITIVE INVESTOR RESPONSE
The attendees applauded these measures, and one investor noted privately, "This is the kind of confidence we've been looking for in Zanett management. They've clearly rearranged their house to take advantage of the improved environment for IT Services and Solutions. With fresh financial resources and much improved operating metrics, to me it looks like they'll be accelerating their growth in the coming months."