Cloakware Earns Record Revenues in 2006, Firmly Establishing Itself as a Security Market Leader.

Strong Combination of New Sales Channels, Markets and Customers Drives Year-Over-Year Revenue Increase, Sets Stage for Ongoing Growth

VIENNA, Va. -- Cloakware Inc., a security solutions provider that makes security inseparable from software, today announced that 2006 was a record year of execution. Highlighted by an 86 percent year-over-year growth rate, impressive customer wins and new Value-Added-Reseller (VAR) and Professional Service partnerships, Cloakware continued its strong momentum of providing high-value security solutions in the content protection, enterprise and government security arenas.

"In 2006, Cloakware achieved a number of short and long term goals," said Jeff Waxman, CEO of Cloakware. "We've taken the necessary steps to grow our business today and also to position ourselves for even more opportunity tomorrow. As we look forward to 2007, we will continue to leverage our proven technology, marquee customers, industry-leading partners and strong leadership to continue and expand our revenue growth and market leadership."

During 2006, Cloakware:

* Announced that the world's leading manufacturers of PCs, portable devices, mobile phones and set-top boxes have deployed the company's self-defending security solutions on more than 500 million devices worldwide.

* Increased revenues by 86 percent year-over-year and added significantly to future revenue commitments from customers. The Cloakware business model typically creates multi-year relationships with multinational customers to assure a healthy business going forward.

* Grew its customer base exponentially, gaining numerous industry-leading customers worldwide, including Texas Instruments; Mobile Broadcasting Corporation (MBCo), a leading Japanese mobile digital satellite broadcasting service provider; Lamprey Networks, a provider of integrated compliance and interoperability testing solutions; and a who's-who list of leading global media and entertainment, consumer electronics and software companies. The organizations' names are not publicly disclosed due to the secure nature of the work performed, but Cloakware's total list of customers now include:

    -- 4 of the top 5 mobile phone manufacturers

    -- 4 of the top 5 semiconductor manufacturers

    -- 2 of the world's largest software companies

    -- 4 leading mobile telecom service providers

    -- 3 leading financial services companies

    -- 5 US Federal Agencies/Departments

    -- 3 leading conditional access vendors

    -- 2 of the top 3 video card manufacturers

* Launched its new government channel partner program to help VARs respond to application-to-application, server password management and application security needs in government agencies. This led to partnering with Computer Security Solutions (CompSec), a leading VAR of security solutions, and ShieldWolf, a provider of engineering services to the Department of Defense and Federal government, to provide the CSPM solution and Cloakware Security Suite to government intelligence community customers, helping them improve data center security, decrease management costs and increase both operational efficiency and software security.

* Joined the Digital Living Network Alliance (DLNA) to further the company's mission of protecting and securing digital content from piracy and tampering. DLNA encourages industry leaders in the consumer electronics, mobile and PC industries to create guidelines for digital home networking.

* Joined The Coral Consortium, an industry-wide technology initiative whose goal is to deliver an open, voluntary standard for interoperability between digital rights management (DRM) technologies for consumer devices and services. The membership furthers Cloakware's efforts to help drive DRM interoperability standards and ensure increased security for copyrighted content.

* Expanded it employee recruitment efforts, doubling the number of employees, including the appointment of Greg Coticchia as senior vice president and chief marketing officer and Don Clarke as chief financial officer.

* Won the Hot Companies Award from Info Security Products Guide, and was a finalist for the 2006 NVTC Hot Tickets Awards in the category of Hottest VC Deal.

About Cloakware

Cloakware is a security solutions provider that makes security inseparable from the software it protects. From applications and databases deep inside corporations, to consumer devices like music players, to military weapon systems-more and more software applications need to protect themselves from unauthorized user access, reverse engineering and tampering. Only Cloakware's patented, layered and compliance-driven approach to software self-protection delivers the trusted environment that the government, enterprise and consumer markets require. As a result, Cloakware's software security solutions are on more than 500 million devices, protecting the assets of some of the world's largest, most recognizable and technologically advanced companies. The company is headquartered in Vienna, Va., with offices in Ottawa, Canada and the UK, and regional sales offices throughout the US.