IPOLICY NETWORKS ANNOUNCES RECORD GROWTH YEAR

Leading Intrusion Prevention Firewall Provider Reports over 100% Installed Base Growth, over 100% Revenue Growth, Global Expansion and Strong Partner Development

Interop 2006, Las Vegas, NV– May 2, 2006— iPolicy Networks, provider of integrated network security solutions, today announced record performance over the past twelve months, based on key movements including customer acquisition and satisfaction, revenue growth and technology innovation. In addition to these achievements, iPolicy Networks received $15 million in new funding, secured a number of key partnerships, and grew its international business to further solidify its leading position in the Intrusion Prevention Firewall integrated security market. The company announced this success at Interop Las Vegas 2006, where it is exhibiting at Booth # 775.

During the past year, iPolicy Networks continued to see growing demand for its Intrusion Prevention Firewall solutions, as measured by key financial and operational metrics including:

• Significant installed base growth: iPolicy’s installed base surged by over 100 percent with the addition of several new customer installations including Los Angeles Community College District, Nederland Independent School District, eUtah and Ohio.gov.
• Integrated security appliance demand growth: Market demand for integrated security appliances with intrusion prevention continues to grow at a rapid pace. The company experienced a 60% increase in iPolicy Intrusion Prevention Firewall units shipped.
• Exceptional revenue growth: Annual revenue grew by more than 100 percent making this the strongest year in the company’s history.
• Partnerships: iPolicy introduced a new reseller channel partner program during the year and significantly grew its reseller business by more than 50 percent. The company signed several new reseller agreements with leading network security VARs and systems integrators including Goldfield Telecom, Intelli-Tech, Security Inspection and Networks Plus Technology Group.  
• Continued investment: iPolicy secured additional funding of $15 million during the year and increased employee base by more than 25% focusing on advanced security research, sales and marketing areas.

“We are proud of our success over the past year and the momentum and market traction we have achieved,” says Arun Chandra, president and CEO of iPolicy Networks. “iPolicy’s strategy has been to drive technological innovation to continue to deliver scalable, high performance security products to our carrier and enterprise customers to manage ever-increasing security threats.”

By offering solutions that address our customers’ most demanding security challenges, we will continue to grow rapidly as a company. Our international business grew to a healthy 25% of total sales last year - and the company plans to expand further in Asia Pacific and Europe this year,” added Chandra.

Technology Innovation
The iPolicy Networks security solution offers world-class protection while greatly reducing acquisition, installation, management and on-going maintenance costs compared to competing solutions.

Over the past year, iPolicy Networks has remained true to its heritage of technical innovation and product excellence with the launch of iPolicy Intrusion Prevention Firewall Release 2.5, extending its market reach with an easy-to-use solution for enterprise, carriers and service provider networks. Release 2.5 allows enforcement of consistent security policies from a single management console across a geographically distributed network of over 500 integrated security appliances, and large-scale virtualization with simultaneous access for over 100 security administrators. iPolicy is seeing significant adoption of release 2.5 among existing and new market segments.

Third-Party Accolades
In 2005, iPolicy Networks was named a visionary in Gartner's 2005 Magic Quadrant on Firewalls. This widely recognized and highly regarded Gartner report evaluates network security vendors along two key dimensions: ability to execute and completeness of vision.

According to Gartner, the network security space shows a rapidly changing marketplace. The change in the firewall space represented by new vendors, enhanced technologies and defenses against new threats is largely due to the continually evolving threat landscape. iPolicy’s Intrusion Prevention Firewall protects data networks from a wide range of evolving security threats with no compromise to network performance.

Recently reviewed by independent reviews lab, Miercom, iPolicy was tested and proven the most scalable and highly reliable integrated network security management system in the industry. The detailed results will be released shortly.

Funding
iPolicy secured $15 million in a Series B round of financing to accelerate its go-to-market plans and continue the innovation to address next-generation security threats for enterprise and service provider customers. The funding was led by the Ignite Group, which joined the syndicate of existing major investors including Clearstone Venture Partners, WK Technology Fund, iPolicy Networks’ chairman Prabhu Goel, and The Entrepreneurs’ Fund, which increased its investment in iPolicy. The syndicate was also expanded to include another new investor, Parawin Venture Capital.

About iPolicy Networks
iPolicy Networks, an integrated network security product company, empowers customers to dynamically adapt their security to optimally address constantly emerging threats. iPolicy Networks’ intrusion prevention firewall appliances are the only ones to utilize a deep-packet inspection, single pass architecture that enables organizations to enforce a wide variety of real- time security processes at extremely high speeds without impacting performance. Its scalable management solution provides consistent security enforcement across the network, through a large number of geographically dispersed iPolicy Networks appliances and advanced multi-security virtualization. Headquartered in Fremont, California, iPolicy Networks’ customers include some of the world's largest network service providers and leading government, financial services and educational organizations. For more information, please visit www.ipolicynetworks.com or call 1.510.687.3000.