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Liquid Computing Raises US $27.7M in Series B Financing

Company to expand North American and European footprint

Los Altos, CA & Ottawa, Canada – November 15, 2006 – Liquid Computing Inc., a developer of a new class of scalable computing system, today announced the completion of its Series B financing in the amount of US $27.7 million. The funding comes after the recent launch of Liquid Computing’s Interconnect Driven Server, LiquidIQ. The financing will support Liquid Computing’s commercial expansion in the North American and European Enterprise High Performance Computing and Service Provider (xSP) markets. The funding was led by Newbury Ventures, based in the San Francisco Bay Area.

"The market disruption associated with converged offerings like storage devices from EMC, Blackberries from RIM and Voice Over IP from Cisco, have proven to be fruitful," said Ken Wigglesworth, Senior Managing Director from Newbury Ventures Canada. "Liquid Computing's vision, key customers and demonstrated ability to execute, have positioned the company to fundamentally alter the form, function and economics of scalable computing."    

Liquid Computing had an oversubscribed beta program filled with leading organizations within the oil and gas, financial services, government research, defense and SaaS sectors. LiquidIQ merges computing, networking and broadband into a highly integrated, optimized and controlled system. In initial tests, LiquidIQ delivers a five times or greater improvement in sustained performance scalability over commercially available servers and switches being embedded into offerings today. 

"By staying focused on solving the underlying communications and control bottlenecks that are pervasive in today's data centers, we have paved a solid path towards broader product commercialization," said Brian Hurley, CEO of Liquid Computing. “With the increasing need for scalable computing across a broad range of market segments, we expect considerable revenue growth across North America and Europe.”

Newbury Ventures was joined by existing investors that have previously invested in the company.  They include Vengrowth, ATA Ventures, Business Development Bank of Canada, Export Development Canada, Axis Investment Fund Inc. and Dr. Adam Chowaniec.

“The need for flexible computing systems that deliver ground breaking sustained performance and granular control at dramatically better lifecycle economics is the new face of scalable computing,” said Jay Morrison, Senior Managing Director from Newbury Ventures. “Liquid Computing has groundbreaking technology and we expect LiquidIQ to significantly impact the market.”

About Newbury Ventures

Newbury Ventures was founded in 1992 with the goal of building a company known for its insight, integrity and global approach to the business of venture capital. Newbury has successfully managed investments valued over $500 million throughout the world. The firm typically invests in high growth markets within the technology, communications and IT industries. Newbury's partners have been involved with many successful companies including Oracle, Cadence, Altera, Cirrus Logic, PMC/Sierra, Newbridge Networks, Netro, ACC, Precise, Corvis, Terayon, nCipher, Okena, Highwave Optical, LEA (Laboratoire Europeen ADSL) and Sandvine. Newbury Ventures is based in the San Francisco Bay Area and Newbury Ventures Canada is based in Ottawa, Canada.  

About VenGrowth

With over $1 billion in assets under management, VenGrowth is Canada's largest private equity and venture capital firm managing both retail and institutional assets. Since 1982, VenGrowth's accomplished private equity managers have invested over $1.1 billion in over 180 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. 

About ATA Ventures

With a focus on Information Technologies (IT), the ATA Ventures team makes capital investments in opportunities where the combined backgrounds of the ATA Ventures professionals can provide an extraordinary positive influence on the portfolio company management team. The firm’s investment professionals offer an average of over 25 years of related experience (per Managing Director) to support their portfolio companies as they grow.

About Business Development Bank of Canada

BDC is a financial institution wholly owned by the government of Canada. BDC plays a leadership role in delivering financial, investment and consulting services to Canadian small business, with a particular focus on the technology and export sectors of the economy.

About Export Development Canada

EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Through its Equity Team, EDC also invests private equity and venture capital to facilitate the business expansion and export growth of Canadian companies. Partnering with EDC leverages access to a unique combination of financial tools, expertise, and international networks.

Axis Investment Fund Inc.

Axis Capital Corporation is a venture capital firm that invests in the development and growth of seed and early-stage information technology companies. Established in 2000, Axis is actively involved with a current portfolio of 10 companies developing customer-driven solutions in the software, wireless and computing industries. Axis was the lead investor in Liquid Computing’s 2004 seed round of investment.

Dr. Adam Chowaniec

Dr. Adam Chowaniec is a private investor in Liquid Computing. He is the Chairman of the Board of Directors of Liquid Computing and Tundra Semiconductor Corporation, and Executive in Residence at Vengrowth Capital Partners Inc.

About Liquid Computing

Liquid Computing Corporation is first to deliver a new class of computer system called LiquidIQ™ to meet the needs of scalable computing users within Enterprise High Performance Computing and Software as a Service markets. LiquidIQ™ is an Interconnect Driven Server that delivers a set of managed computing and communications resources. It can be configured with software commands into one or several cluster configurations, shared memory or cache coherent server regions at best lifecycle economics and uncompromising performance, scalability and availability. For more information, visit www.liquidcomputing.com.

All trademarks herein are property of their respective owners.

For more information:

Corporate

Robert Saric
Liquid Computing
613-592-2666 ext 307
robert.saric@liquidcomputing.com

Media

Cerys Goodall
High Road Communications
613-236-0909 ext 309
cgoodall@highroad.com