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Liquid Computing Announces Completion of First Round Financing

OTTAWA, Ontario, Canada - January 31 st , 2005 - Liquid Computing, an Ottawa and Los Altos, California based company, is pleased to announce that it has recently extended its first round of seed financing. The two million dollar cumulative investment was led by Axis Investment Fund, an Ottawa-based venture capital firm that invests in early-stage technology companies. Axis was joined by The Business Development Bank of Canada (BDC), Vengrowth Capital Partners, and Dr. Adam Chowaniec, one of Canada's leading technology entrepreneurs, as co-investors. The funds raised by Liquid Computing have fueled market research, customer validation and product development activities that will be integral to the success of its upcoming series A financing activities.

Liquid Computing is developing a new class of high performance, high availability scalable computer which addresses the business issues of management complexity, resource under-utilization and high total ownership costs currently faced by IT departments. The Liquid Computing solution will also respond to the increasingly critical "always-on" requirements of enterprise IT, and the need for on-going dynamic reconfiguration and flexible resource management. Liquid Computing intends to harness its communications and computing expertise to exploit current industry trends including virtualization, automation and modularity, to meet the demand for scalable, lower cost and more flexible computing architectures.

"Challenges facing enterprise datacenters and technical computing users continue to provide opportunities for new approaches to improve computing performance while reducing complexities, inefficiencies and costs. We believe that a convergence of communications and processing technologies in computing will drive revolutionary change. We invested in Liquid Computing because it is at the forefront of changing the economics and behavior of technology deployment and it will enable industry convergence," said Greg McElheran, a Partner at Axis Capital Corporation and manager of the Axis Investment Fund.

"We are particularly impressed with the team assembled by Liquid Computing - a seasoned team of computer and communications experts who have experience designing, building, delivering and marketing complex and massively scalable products from the design stage to commercial revenue-generating deployment," said Mr. McElheran.

"Scalable Computing without Compromise is just around the corner," states Brian Hurley, CEO of Liquid Computing. "Our system will enable previously unachievable levels of scalability, performance and reliability at lower cost across several industry metrics. The autonomic control and management and operational flexibility have simply evaded mainstream enterprise computing users...until now."

"We are excited about our investment team, Axis, BDC, Vengrowth and Dr. Adam Chowaniec who are not only early adopters of our vision for a new class of high performance computing, but also have a demonstrated track record and expertise in building successful technology businesses."

About Axis Capital Corporation

Axis Capital Corporation (www.axisfunds.com) is a hands-on venture capital management firm focused on early-stage technology companies. After successfully investing a private fund, Axis Capital launched Axis Investment Fund, a labour-sponsored investment fund that invests in Ontario-based emerging software and wireless companies. Contact Greg McElheran, Partner, Axis Capital, for further information. Phone 613-236-6006, #224 or email gmcelheran@axisfunds.com.

About Liquid Computing Corporation

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.

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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