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Liquid Computing secures US$14M in Series A financing

Funding to complete development of ground-breaking server innovation

OTTAWA, Ontario, Canada – May 9th, 2005 – Liquid Computing Corp., an Ottawa- and Los Altos, California-based company developing a new class of computing server, today announced it has secured US$14-million in a Series A financing round from a North American investment syndicate including VenGrowth Capital Partners, ATA Ventures, the Business Development Bank of Canada, Export Development Canada, Axis Capital Corporation and Doctor Adam Chowaniec. The funds will be used to complete development of the company’s ground-breaking server innovation and bring it to market.

“Despite industry restructuring and consolidation, the investment community has concluded that the market is ready for a fundamentally new approach to high-performance computing (HPC) and enterprise computing,” said Brian Hurley, CEO of Liquid Computing. “The over-subscribed interest we received for this funding round validates our vision.”

Pete Thomas, managing director of ATA Ventures in Redwood City, California, agreed. "Liquid Computing is poised to bring fundamental changes to the economics of server deployment and ownership," he said. "We were particularly impressed with the Liquid vision, the market reception to their innovation, and the team that they have assembled."

Over the past two years, the company carried out hundreds of meetings with partners and potential customers, many of whom are now poised to capitalize on what the Liquid Computing server will deliver. “Their product will fundamentally change the approach we’ll use to acquire, deploy, and run our data center,” said Mark Hargrove, senior vice president of operations and CIO of DigitalGlobe, a leader in the global commercial Earth imagery and geospatial information market. “A Liquid Server will let us solve our HPC and enterprise computing problems with the same platform, and will completely recast the traditional total cost of ownership model in a very favorable way.”

Business requirements traditionally have been disconnected from the underlying computing infrastructure. This has required an entire service industry to keep several adjunct hardware, software and networking components synchronized. These structural limitations restricted the throughput of high performance computing and limited the availability and flexibility of enterprise computing. Liquid Computing is compressing an entire layer of manual configuration, adaptation and performance-tuning tasks while shrinking the overall total cost of ownership.

“The ability to recast the nature of server deployment comes from the years of experience building powerful, reliable, scalable and more cost-effective systems that were delivered to the telecommunications sector,” said Pat DiPietro, Managing Partner at Vengrowth Capital Partners.

Liquid Computing’s vision of how high-performance and enterprise computing must evolve has been heralded by industry watchers such as Harry S. Dent, Jr., author of the “The Next Great Bubble Boom.” “Industry convergence has been a driving force within voice, data and storage networks over the past several years,” Dent said. “Liquid Computing represents the type of leading-edge innovation that will drive the next explosion in technology growth that we are forecasting for late 2005 to 2009.”

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.

About VenGrowth Capital Partners

Founded in 1982, VenGrowth is dedicated to providing Canadians with superior, value-added investment alternatives. A conservative investment philosophy, deep operational expertise and exceptional client service underpin VenGrowth’s premier investment offerings. (http://www.vengrowth.com)

About ATA Ventures

ATA Ventures is a venture capital firm focused on early-stage investment opportunities in the Information Technology sectors. Established in 2004, the firm combines the skills of its investment professionals to provide a team approach in the way it supports portfolio companies. (http://www.ataventures.com)

About the 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. (http://www.bdc.ca)

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. (http://www.edc.ca)

Axis Capital Corporation

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. (http://www.axisfunds.com)

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.

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