May 21, 2003

FOR IMMEDIATE RELEASE

CIPHEROPTICS SECURES $9.6 MILLION SERIES B FINANCING
Round Led By Kodiak Venture Partners

(Raleigh, NC: May 21, 2003) CipherOptics, Inc., a developer and manufacturer of leading-edge, high-performance information protection solutions, announced today that it has closed a Series B round of venture funding totaling $9.6 million. The financing, led by Kodiak Venture Partners, was supported by Origin Partners L.P., Axiom Venture Partners L.P. and New Tampa Technologies, L.L.C.

CipherOptics will use the funding to broaden its sales and marketing activities, continue to build its partner distribution network, and expand development of its family of next generation information protection products.

"We believe this is a strong vote of confidence in our people and our technology, and we look forward to the opportunity it provides to grow and expand our business and customer base," said CipherOptics CEO Ron Willis. "CipherOptics has a unique value proposition to offer the security market - industry-leading performance, simplicity, and affordability - something not offered by any competitor we've seen."

"CipherOptics has gained a strong foothold in the growing security market," said Ilan Carmi, partner at Kodiak Venture Partners, and CipherOptics chairman. "As an early investor in the company, we are pleased to support CipherOptics in this expansion phase as together we build it into the next market leader."

Concentrating on today's performance-demanding applications, CipherOptics information protection appliances give organizations concerned about data security the ability to cost-effectively and easily protect their data while it traverses the network. The company's products help a wide variety of industry and government customers secure their vital information assets. CipherOptics provides affordable security without compromising networking capabilities, allowing customers to reduce their security infrastructure costs while maintaining network performance and speed.

"CipherOptics delivers a differentiable and sustainable platform of technology in cost-effective products," said Scott Jones, founding managing director of Origin Partners. "The company has proven itself in tough field trials with some of the most demanding customers in the world. In a market cluttered with ineffective players, CipherOptics is the one to watch. This new funding reflects our confidence in a well-known, respected, and proven management team that has joined hands with a highly compatible, experienced, and effective investor group."

About CipherOptics, Inc.
CipherOptics is determined to change the face of secure high-speed networks in the 21st century by shattering performance barriers and maximizing network security efficiency. The CipherOptics line of information protection products enables the secure communication of data over high-speed networks. The corporate vision is to architect and deliver best-of-breed information protection products that enable today's most demanding organizations to cost-effectively secure all of their mission-critical data. Founded in 2000, CipherOptics is a privately held company headquartered in Raleigh, North Carolina.

For more information, please contact

David Abels, Koroberi, Inc.,
phone (919) 960-9794 ext. 22
david@koroberi.com

www.cipheroptics.com

About Kodiak Venture Partners
Kodiak Venture Partners is a Waltham, MA-based venture capital firm focused on seed and early stage investments in emerging communications/IT, semiconductor and software companies. With a focus in the eastern regions of the U.S. and Canada, Kodiak Venture Partners builds relationships with entrepreneurs seeking accelerated market success. Kodiak's investment partners are successful high-technology business entrepreneurs who take a high-impact, hands-on approach to forming, operating, building and funding market leaders. For more information, visit www.kodiakvp.com.

About Origin Partners L.P.
Origin Partners is a traditional venture capital firm specializing in startup and emerging-growth companies in IT, communications, and medical technology. Managed by seasoned venture capital investors and proven operating executives, Origin has a strong record of assisting entrepreneurs in building exceptional start-ups that become change-makers in their field. The firm has offices in the Boston, NY/NJ, and Austin, TX metro markets. More information about Origin Partners is available at www.originpartners.com.

About Axiom Venture Partners L.P.
Axiom Venture Partners provides capital and strategic assistance to rapidly growing high technology companies. Axiom's professionals bring substantial investing experience and industry expertise to the venture capital process. With over $200M in capital under management, the firm seeks to consider investment proposals in two main industry areas. The first is high technology, which includes communications, software, Internet infrastructure, and information technology. Biotechnology constitutes the second area. Through its office in Connecticut, Axiom invests actively throughout the United States in early or late stage companies. For more information, visit www.axiomventures.com