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Brainspark buys into new Polar High-definition DVD technology

March 2006, London: Brainspark has announced that it is investing in Polarizonics Corp. Dr. Oron Zachar, founder of Polarizonics Corp (PL), has developed a method of potentially increasing the data storage capacity and read rate of both red and blue laser DVDs by up to three times, a process described as Polar High-definition DVD (PH-DVD) Technology. This technology exploits the polarization element contained in all current DVD formats which is not being used for the physical encoding of the information on the disc. Polar High-definition will significantly increase both the speed and capacity of DVDs. Applications have been made for patents in respect of this technology.

The PH-DVD format can be applied as a modification to increase the data read rate and capacity of any of the competing blue laser formats (such as Sony Blu-Ray and Toshiba HD-DVD). Moreover, the Polarizonics Technology may provide for a red-laser capability to support HD content. Thus, with the potential for over 100GB discs, this innovation is of particular importance for satisfying the coming demands of increased disc capacity of HD video content of movies and video games. Importantly Polarizonics Technology requires no change in the disc structure itself, and present mass replication equipment can be used without modification or additional costs. Hence, PT can be brought to market within a very short time scale. The PH-DVD format also introduces a new hardware level suppression of the possibility of unlicensed replication piracy.

Francesco Gardin, Brainspark chairman commented: "We believe that Polarizonics Technology, developed by leading scientists, could have a significant impact on the development of high definition DVDs. Nevertheless, the Board is aware that this is a high-risk investment given the highly competitive nature of this market."

Mr Gardin adds: "This is Brainspark's first new portfolio company investment since 2003. It is an early stage investment in very high-risk technology and is in line with the declared strategy of the venture capital side of our business. This investment, made in conjunction with a number of sophisticated US private investors, is an indication of the new network of relationships established by the Brainspark Board which is central to our strategy of both identifying selected investment opportunities globally and raising the necessary seed capital."

Brainspark will invest $100,000 (£57,000) in Series B preferred Polarizonics Stock representing a holding of 22,941 shares or approximately 1.96% of the enlarged issued share capital of the company. The price is based on a pre-investment valuation of $5,000,000 (£2,850,000) or $4.359 (£2.485) per share. This investment is part of a funding round raising $250,000 (£142,000) for PL in total, with $695,000 (£396,000) having already been raised with private US investors.

Brainspark has been awarded a transferable option for an additional sum of $50,000 (£28,500) which expires on 15th July 2006, under the same terms of the current Series B Preferred Shares.

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Editorial contact:
John Norris
Moonlight Media
Tel: +44 (0) 20 7250 4770
Email: john@moonlightmedia.co.uk

Notes to editors
Background on Polarizonics Corp.

Polarizonics Technology (PT) simply introduces optical modulation and detection mechanisms to employ the polarization characteristics which, although are present, are currently unused in physical disc formats.
The Polarizonics Technology R&D effort is supported by an expert engineering team. Dr. Zachar, the founder and original inventor of the Polarizonics optical disc memory technology, received his Ph.D in theoretical physics at UCLA.

Prof. David Ezra (Reading University) is a co-founder of the Company. Prof. Ezra was a founder member of Sharp Corporation's European Technology Centre in Oxford. In 2000 he was the Director of Strategic Research of Sharp's European Technology Centre. Prof. Ezra is currently a Visiting Professor at the Department of Physics of Reading University, and remains a Senior Corporate Advisor of Sharp, reporting directly to the Board.

Prof. Masud Mansuripur (University of Arizona), a board member, is supervising the laboratory testing system design. Prof. Mansuripur is Chair of Optical Data Storage, Professor of Optical Sciences University of Arizona Optical Sciences Center, and is a leading scientist in the field of optical data storage.

Prof. Steven McLaughlin is responsible for developing optimal encoding algorithms, determine the maximum achievable information density, and explore possible novel copy protection mechanisms for the PL format. Prof. McLaughlin is director of research at Georgia Tech institute of telecommunications. He presently serves as president of the international IEEE Information Theory Society. He is the author of 23 patents in the field.

Prof. Hong-Wen Jiang (UCLA) is mainly responsible for the development and supply of test samples designed according to the PL specifications. Prof. Jiang was a Postdoctoral Fellow at Princeton University from 1989-91, where he worked with the Nobel laureates Profs. Dan Tsui and Horst Stormer. He joined the Department of Physics at UCLA in 1991. Jiang was a Sloan Fellow (1992-94), recipient of the 1993 McMillan Award for outstanding contributions in condensed matter physics, and the 1996 Overseas Chinese Physics Association Outstanding Young Researcher Award.

Background on Brainspark
Brainspark Plc is an AIM listed company, focusing on investments in best-of-breed Information & Communication Technology (I&CT) primarily in Europe and Israel.

The core competence of the company is the vision and the understanding of I&CT, and how these technologies will be key for the creation of break-through applications, combined with an international network of excellence among researchers and entrepreneurs.

The advent of broadband will have a major impact on the way businesses operate providing opportunities for new services and contents.

We believe it is a timing issue, rather than a 'will be' issue. Brainspark is positioning its portfolio of investments to be ready to take advantage of the broadband opportunities when they become available.

Brainspark Strategy
The core business of Brainspark is identifying new investments consistent with our strategic vision and subsequently defining a profitable exit strategy for each of them.

The company is also implementing an additional strategy of revenues generation primarily based on the two following lines of business.

Capitalising on our core knowledge, staff and infrastructure to offer portfolio management services to institutions that wish to optimise the cost of management of their portfolios and increase opportunities for leveraging their portfolio assets.

Offering assistance for IT&C companies raising funds, providing support for their business strategies, identifying the appropriate financial tools and introducing them to the financial institutions which will act as Lead Managers for the placement of financial instruments.

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