Top Layer Networks Achieves Record-Breaking Third Quarter and Closes Capital Growth Funding.

Company Realizes 16 percent Global Revenue Growth in Q3 vs. Q2, 23 percent Growth in North America; Adds Major Brands to Growing Customer List, Achieves 1000 ( th ) Customer and Closes New Funding Round

WESTBOROUGH, Mass. -- Top Layer Networks, a global leader for high performance intrusion prevention solutions, today announced it has achieved record third quarter 2006 revenues, with 16 percent growth over Q2, enabling its most profitable quarter in company history. New customer wins in Q3 2006 include European Union, NAV Canada, Samsung, among others.

"Top Layer is pleased to have achieved a record-breaking third quarter with sales exceeding expectations and enabling us to have our most profitable quarter to date," said Peter Rendall, president and CEO of Top Layer Networks. "The company's Q3 performance is testament to our product's ability to meet the increasing market demand for high-quality intrusion prevention solutions that deliver three dimensional protection against escalating threats of undesired access, malicious content and rate-based attacks. Our new funding will enable us to rapidly execute on our strategy to achieve further success in the coming years and help position Top Layer as the leading intrusion prevention provider."

In a recent report issued by Gartner entitled "Hype Cycle for Cyberthreats, 20061," the research firm outlined the growing dangers of prevalent cyber threats that could significantly damage the enterprise, including targeted threats, viruses, spyware, social engineering, and identity theft. According to the Gartner report, "Together with targeted attacks, the threat of undetected malicious code variants means that traditional firewall and signature-based antivirus approaches to security must be strengthened with other styles of protection. This includes network and host-based intrusion prevention systems (IPSs), vulnerability-facing filters that can block any attack on known vulnerabilities and advanced non-signature-based mechanisms for malicious code detection at e-mail edge servers."

In addition to the successful Q3 2006 financial performance, Top Layer Networks IPS 5500 intrusion prevention solution received an Editor's Choice Award for 2006 and "five star" classification in Communications Week, as well as recognition from Network World as one of the top IPS solutions on the market, in the third quarter.

The capital growth funding Top Layer secured came from existing investors and a new investor, London-based Panmure Capital Partners, a private equity fund financed by Bank of Scotland and Panmure Gordon & Co. plc. Edward Forwood, Managing Director of Panmure Capital Partners Limited commented, "We are pleased to support Top Layer Networks in executing upon its strategy. Its intrusion prevention technology is market leading and the company has been very successful in getting the attention of major corporate buyers."

About the Top Layer IPS 5500

The IPS 5500 family of products offers the strongest levels of network protection, performance and reliability on the market today. By combining stateful firewall, content-based IPS/IDS, and attack mitigation algorithms, the IPS 5500 is the only solution that provides Three Dimensional Protection (3DP) against undesired access, malicious content and rate-based attacks. Top Layer's architecture enables the IPS 5500 to protect enterprises and service providers from sophisticated attacks in real-time while enabling the highest throughput of legitimate traffic.

Top Layer Networks' family of network intrusion prevention solutions, the IPS 5500 series, has received top accolades from the world's most prestigious labs and influential publications. Top Layer has received significant recognition from the NSS Group, Computer Reseller News, Information Security Magazine, SC Magazine, IT Week, Service Provider Weekly, the Tolly Group, and more.

About Top Layer Networks

Top Layer Networks is dedicated to its role as a leading global provider of Network Intrusion Prevention Systems (IPS), developing and bringing to market network security infrastructure solutions that help commercial and government organizations protect their critical on-line assets from the losses and risks associated with cyber threats. Its family of IPS appliances is designed with "Three Dimensional Protection" that provides the most advanced protection capabilities against known and unknown attacks at the highest performance rates. Top Layer Networks is headquartered in Massachusetts, USA with sales and support presence in Canada, Germany, Japan, Korea, The Netherlands and the United Kingdom.

All trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.

1 Gartner: Hype Cycle for Cyberthreats, 2006, Amrit T. Williams, et al., Sept. 13. 2006