InPhase Technologies, the leader in holographic data storage drive and media development, today announced that it has closed a $32.1 million third round of funding. Bayer MaterialScience AG, a market and technology leader in developing polymers for optical data storage, represents both a new strategic investor and development partner for InPhase. Nanotech Partners Ltd., another new investor, is a leading venture capital firm sponsored by Mitsubishi Corporation which focuses on emerging nanotechnology at the global level. New Venture Partners LLC and existing investors Hitachi Maxell Ltd., ALPS Information Technology Fund LP, Yasuda Enterprise Development Co., and Japan Asia Investment Co. continued their strong financial support of InPhase in its Series C round.

The new funds will be used to complete the commercialization of the world's first holographic data storage drive and media. The initial product will hold 300 gigabytes (GB) of data with a transfer rate of 20 megabytes (MB) per second. The InPhase Tapestry(TM) media and drive provide customers with access to huge amounts of data on a single disk. InPhase is targeting archive needs in commercial markets such as professional video, regulatory compliance, medical imaging, satellite imaging, and scientific applications where the need for long-term, secure and cost-effective archives of massive amounts of digital data is a critical issue.

"The recent public demonstration by InPhase of the world's first commercial holographic drive prototype validated our technical leadership in the holographic data storage market. Now, with the commitment and support of our investors, we have funds to move from technology leadership to commercial leadership," said Nelson Diaz, president and CEO of InPhase Technologies. "The tremendous interest in the InPhase Tapestry product from the professional video community at the recent National Association of Broadcasters convention was extremely positive and confirmed the insatiable demand for a secure archive solution for digital media assets."

New Venture Partners LLC is the lead investor for Series C and demonstrated their continued support with a substantial investment in this round. They also led the second round that closed in 2004.

"InPhase has consistently demonstrated its ability to advance to market commercial holographic drives and media, for which the storage industry has been waiting 20 years. We are excited about the great customer interest we are seeing for these products," said Steve Socolof, managing partner of New Venture Partners LLC. "The proper combination of solid institutional and strategic financial partners now enables InPhase to execute the final plan that brings this revolutionary data storage technology to market."

Bayer MaterialScience AG and InPhase have signed a joint development agreement for the development and supply of polymer raw materials used in the production of holographic storage media. In addition, Bayer MaterialScience has acquired a license to use the results from jointly developed research for applications that extend beyond the field of holographic storage media.

"It gives us a tremendous opportunity to build a strategic competitive position with sustained added value in holographic applications," says Ian Paterson, the member of the Bayer MaterialScience Board of Management, responsible for marketing and innovation.

"Data storage is one of our investment focuses that utilizes nano-level technology. We see InPhase as a true innovator which will change the paradigm of data storage through their revolutionary holographic technology. It is very exciting for us to be joining the team," says Teruyuki Nakazawa, representative director of Nanotech Partners.

Nanotech Partners was established by Mitsubishi Corporation (MC) and its partners to strategically invest in ventures working on emerging nanotechnology. With the backup of MC, Nanotech Partners is expected to support InPhase in developing business.

About New Venture Partners

New Venture Partners LLC is a seed and early-stage venture capital firm with a proven history of creating communications and information technology startups that leverage institutional innovations. It has unique expertise in identifying promising technologies within corporate R & D laboratories, and in driving the creation, capitalization and growth of independent ventures founded on these assets. For more information, visit www.nvpllc.com.

About Bayer MaterialScience AG

Bayer MaterialScience AG is one of the world's largest producers of polymers and high-performance plastics. Its innovative developments in coating and adhesive raw materials, insulating materials and sealants, polycarbonates and polyurethanes significantly enhance the quality of our lives, particularly in the automotive and construction, electrical and electronics, household, sports and leisure sectors. Based in Leverkusen, Germany, Bayer MaterialScience AG can be visited on the Web at www.bayermaterialscience.com.

About Nanotech Partners

Nanotech Partners is a unique private equity fund that focuses exclusively on nanotechnology around the world. With the sponsorship of Mitsubishi Corporation, the fund was established after Nanotech Partners, Ltd. was founded as a General Partner in September 2001. The fund size is currently JPY 5.4 billion (approximately $50 million) with commitments by companies including Mitsubishi Corporation, Mitsubishi Chemical Corporation and Honjo Chemical Corporation. The fund is globally managed by Nanotech Partners Limited, with the support of the Fullerene International Corporation in the U.S. and the local offices of Mitsubishi Corporation in the U.S., U.K. and France. For more information visit www.nt-p.com

About Hitachi Maxell, Ltd.

Since its foundation in 1960, Hitachi Maxell, Ltd. (TSE: 6810), based in Tokyo, Japan, has led the electronics industry at home and abroad in the fields of memory and mobility. Hitachi Maxell, Ltd. is a leading manufacturer of information storage media products including computer tapes, broadcasting video tapes, optical disks, floppy disks and memory cards, audio and video products including mini discs, audiocassettes and videocassettes, and battery products including lithium ion rechargeable batteries, micro batteries and dry cell batteries. For more information, visit www.maxell.com.

About ALPS Electric

ALPS Electric Co. Ltd. is a Japanese corporation that has manufactured various electronic components since its foundation in 1948. Based on innovative proprietary technology and market outlook, the Company provides cutting-edge electronic components that contribute to the advancement of a multimedia society in four key areas, namely, Magnetic Devices, Communication Devices, Peripheral Products, Mechatronic Devices and Automotive Electronics. ALPS globally operates through affiliates in Japan, America, Europe and countries around Asia.

ALPS global activities strive to create partnerships with customers, countries and regions throughout the world. In addition, ALPS group has over 80 companies including mobile electronics manufacturer ALPINE Electronics and ALPS Logistics, a specialized electronic component distribution company. For more information, visit www.alps.com.

About Yasuda Enterprise Development Co., Ltd.

Yasuda Enterprise Development is a leading Japanese venture capital firm based in Tokyo, with sub-offices in Osaka, Palo Alto in California, USA, and Taipei in the ROC. Managed capital of JPY 40,000M (approx. US$350M) is in insurance firms, commercial banks and corporate investors. The firm invests in the early and expansion stages of information and communication technology, electronics devices, and life science sectors in Asia, Europe, and the United States. Yasuda Enterprise Development has achieved over 200 exits of portfolio companies through IPO in the Japanese OTC market, NASDAQ, OTC market in Taiwan, other stock exchanges, as well as M&A. For more information, visit www.yedvc.co.jp.

About Japan Asia Investment Co., Ltd.

Japan Asia Investment Co., Ltd. (JAIC) is Japan's largest independent venture capital company. JAIC has invested in over 1,000 companies with funds totaling more than $1.7 billion since its establishment in 1981. JAIC helps unlisted venture companies with high growth potential to procure capital and contributes to their growth and improvement of corporate value by offering information and supporting IPOs and providing consultation, along with M&A and MBO proposals. JAIC is continuing to work toward its objective of becoming a distinctive financial group, with venture capital operations as its core business and aims for mutual prosperity among shareholders, fund investors and invested companies. For more information, visit www.jaic-vc.co.jp.

About InPhase Technologies

InPhase Technologies is the leading developer of holographic data storage (HDS) recording media and systems. Based in Longmont, Colorado, InPhase was founded in 2000, and is comprised of some of the storage industry's leading executives and scientists. InPhase is funded by venture capital investors New Venture Partners LLC, Signal Lake Ventures, Madison Dearborn Partners, Newton Technology Partners, Yasuda Enterprise Development, Japan Asia Investment Company, and Mr. B.J. Cassin. Corporate investors are Hitachi Maxell, Ltd., Bayer MaterialScience AG, ALPS Information Technology Fund, and Imation Corp. For more information on InPhase, please visit the company's Web site at www.inphase-tech.com.

EDITOR'S NOTE: For a color photograph of Nelson Diaz, InPhase president and CEO, or the InPhase Tapestry drive or media, please contact Liz Murphy at 720-494-7465 or lizmurphy@inphase-tech.com.