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Merlin Secures First Significant Purchase Order for EssentialServer with Vancouver-based Value Added Reseller

Purchase Order for 55 units of EssentialServer meets the data storage and backup needs of small to medium-sized businesses in the Vancouver market

Burnaby, BC - August 08, 2001 - Merlin Software Technologies International, Inc. - (OTCBB: MLSW), a leader in software development and business solutions for the small to medium-sized enterprise (SME) market, today announced a purchase order for 55 units of its EssentialServer, from L&M Products and Services Inc. of British Columbia.

"We are pleased to welcome L&M as Merlin's first reseller of the EssentialServer," said Robert Heller, CEO of Merlin. "This is a significant purchase order, from a company focused precisely at our target market of small to medium-sized companies. L&M has a solid track record in this market, and has provided valuable feedback to Merlin's product marketing team. I believe the L&M and Merlin relationship will prove profitable for both parties."

"I was pleased to be given the opportunity to preview the EssentialServer product and provide a beta test opportunity to Merlin," replied Peter Lee, President of L&M Products and Services. "The NAS+ is a perfect fit for many of my dealers and clients, and I am sure we are going to be successful in selling this product."

"I am looking forward to a mutually rewarding working relationship. L&M has an excellent understanding of our EssentialServer product and a number of qualified users," said Cheryl McReynolds, VP Sales. "It's assuring to establish a business relationship with a company who shares so much enthusiasm for the success of EssentialServer."

L&M works closely with small to medium-sized end users by acting as a distributor for small computer resellers. This value added reseller will be an important product advisor to Merlin in regard to technology solutions required by the SME customer, and will be influential in rolling out products developed through other Merlin relationships. L&M will purchase the 55 units over a six to eight month period.

About L&M Products and Services Inc.

L&M Products and Services Inc. is a value added reseller and distributor to computer retailers and end users in British Columbia. The company's clients represent a broad range of companies within the small to medium-sized enterprise market.

L&M has operated in British Columbia since 1995, successfully supporting clients in the high-tech, engineering and healthcare fields.

About EssentialServer

The EssentialServer products are a line of network attached appliances that meet the needs of small to medium-sized enterprises, with 1-100 employees. EssentialServer addresses two of the biggest challenges in managing a company's information: scaling data storage capacity as digital files grow, and protecting a business from the financial and legal disaster that arises from the loss of important information. "EssentialServer solves the business need for reliable data storage, with a strong emphasis on recovery and backup solutions. Data has become one of a company's most valuable assets, and the EssentialServer protects businesses from catastrophic data loss," informed Mike Rauscher, Director of Product Marketing. "Merlin has developed a NAS solution that provides both a low cost of ownership and a data management solution that is easily deployed and managed." EssentialServer eliminates the frustration of piecing together components by offering a fully integrated storage and backup solution so companies can focus on their top priority - their business. Complete with hard drive storage, tape drive, CD-RW, and backup software, these products bring, to the customer, confidence that their data is stored safely and regularly backed up. At an entry-level price of $999.00 USD, these products are a perfect fit for a small to medium-sized business, regional office, or corporate department.

About MERLIN Software Technologies International, Inc.

Merlin Software Technologies International, Inc. (OTCBB: MLSW) develops technology solutions for small to medium-sized enterprises. Merlin has developed widely used applications such as PerfectBackUP+ 7.0 and CommunicadoFAX 4.0 for Microsoft (NASDAQ: MSFT) Windows, Apple Macintosh, Netware, RedHat (NASDAQ: RHAT), and other versions of Linux and Unix. Merlin is leveraging these products to deliver new and more powerful network attached solutions to its customers. Merlin has offices in Burnaby, British Columbia and Seattle, Washington. Website: http://www.merlintechnologies.com/

For more information, contact:

Randy Halischuk
Director, Investor Relations
MERLIN Software Technologies International, Inc.
Tel: (604) 320-7227
Toll Free: (877) 988-7227
Email: ir@merlintechnologies.com
Sarah Jane Ormerod
Director, Corporate and Marketing Communications
MERLIN Software Technologies International, Inc.
Tel: (604) 320-7227
Toll Free: (877) 988-7227
Email: sjormerod@merlinsoftech.com

Legal Notice Regarding Forward-Looking Statements

This press release contains "forward-looking statements," including forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this press release include statements regarding Merlin anticipating that the partnership between Merlin and L&M will be profitable for Merlin; and Merlin predicting L&M will be successful in selling the EssentialServer product. It is important to note that Merlin's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this press release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as the emergence of companies with competing or superior network attached storage appliances, continued demand for network appliances, insufficient demand and market acceptance of Merlin's EssentialServer network appliance, unforeseen changes in the software and hardware technology used in connection with the computer networks, unforeseen claims in connection with Merlin's intellectual property rights in connection with its EssentialServer, continued development of computers and computer networks as tools to manage data and information for small and medium sized companies and businesses and the overall success of Merlin and its subsidiaries in general.

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