Technest Wins Unanimous Binding Arbitration Award of Over $23 Million

BETHESDA, MD, Aug 24 (MARKET WIRE) --
On August 21, 2009, an American Arbitration Association Panel of three
arbitrators awarded Technest Holdings, Inc. (OTCBB: TCNH) $23,778,402.83
following a seven-day hearing that ended on June 30, 2009. Technest filed
a demand for arbitration on September 24, 2008 against EOIR Holdings LLC,
an affiliate of The White Oak Group, Inc., for breach of the Stock
Purchase Agreement ("SPA") which the parties entered into in 2007 to
effectuate the sale of EOIR Technologies, Inc. ("EOIR"), a subsidiary of
Technest at the time, in exchange for approximately $34 million. Technest
alleged in its demand that EOIR Holdings LLC breached the SPA when it
failed to pay to Technest approximately $23 million of the purchase
price, which became due upon the successful award to EOIR of the
follow-on of an existing contract with the U.S. Army's Night Vision and
Electronic Sensors Directorate. EOIR Holdings LLC alleged that the amount
was not due because the award of the contract to EOIR did not meet the
requirements for payment under the SPA. However, the arbitration panel
unanimously agreed with Technest and ruled that EOIR Holdings LLC
"breached the SPA and must pay [Technest] the remainder of the purchase
price" in the amount of $23,778,402.83. While this award is final and
binding, collection of the award remains subject to confirmation and
enforcement.

The lead attorney for Technest, Carmine Zarlenga of Howrey LLP in
Washington, stated, "This was a hard fought battle involving a very
important issue for our client with two-thirds of the purchase price for a
valuable subsidiary at stake. Obviously, we are very pleased with the
award in favor of our client. It's clear from the 13-page ruling
accompanying the award that the arbitrators gave thorough consideration to
all of the evidence and that a just and fair outcome was reached. When you
call a client with news of this sort, as I had the good fortune to do this
morning, it really doesn't get any better than that."

Gino M. Pereira, the Chief Executive Officer of Technest, stated, "We are
very pleased with the outcome of the arbitration which vindicates our
position. We now look forward to continuing to grow Technest's world class
advanced imaging solutions."

As previously announced, Technest remains committed to distributing a
portion of its proceeds to its stockholders in accordance with the Release
Agreement dated August 31, 2007 with Southridge, Technest's largest
stockholder.

About Technest Holdings, Inc.

Technest Holdings, Inc. is a provider of: advanced remote sensor systems,
intelligent surveillance and advanced 3D imaging technology solutions to
the defense, homeland security and healthcare marketplaces. Technest is
committed to setting next-generation imaging standards through the
provision of innovative emerging technologies. Through strategic
development, Technest focuses on the creation of dual-use technology and
products with applications in healthcare as well as the fields of defense,
civilian homeland security and law enforcement. For more information,
please visit the company's website at http://www.technestinc.com.

Investors are cautioned that certain statements contained in this press
release are "forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking
statements include statements which are predictive in nature, which depend
upon or refer to future events or conditions, which include words such as
"expects," "anticipates," "intends," "plans," "believes," "estimates," or
similar expressions. In addition, any statements concerning the
anticipated proceeds, future financial performance (including future
revenues, earnings or growth rates), and possible future actions, which
may be provided by management, are also forward-looking statements as
defined by the Act. Forward-looking statements are based upon current
expectations and projections about future events and are subject to
risks, uncertainties, and assumptions about Technest Holdings, its
products, economic and market factors and the industries in which
Technest Holdings does business, among other things. These statements are
not guarantees of future performance and Technest Holdings has no
specific intention to update these statements. More detailed information
about those factors is contained in Technest Holdings' filings with the
Securities and Exchange Commission. http://www.sec.gov

Contact:
Stanley Wunderlich
CEO
Consulting for Strategic Growth 1
T: 1-800-625-2236
F: 1-646-205-7771
Email: Email Contact
Web site: www.cfsg1.com

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