Liquid Machines Announces Goldman, Sachs & Co. To Lead $7.5 Million Investment

Leading Enterprise Rights Management Vendor Secures Funding to Accelerate Growth and Expand Operations Globally

Waltham, Mass. - September 18, 2006 - Liquid Machines, Inc., the leading provider of Enterprise Rights Management solutions, announced that it has closed its Series C financing with $7.5 million from both new and existing investors. Goldman, Sachs & Co (NYSE:GS), the lead investor in the round, has joined existing investors Atlas Venture, Masthead Ventures and Draper Fisher Jurvetson in supporting Liquid Machines’ accelerated growth and global expansion. The funds will be used to build on Liquid Machines’ success in the commercial and public sector markets and to fuel the company’s international expansion to meet the emerging demand for its enterprise rights management solution.

Goldman, Sachs & Co. is a Liquid Machines customer and relies on the Liquid Machines solution as a core component of its information protection strategy. “We see a significant part of our ongoing information protection strategy to be able to carry that protection with the information itself, not just to the containers of information. Enterprise rights management, and in particular Liquid Machines, will continue to be a significant enabler of this strategy,” said Phil Venables, Managing Director and Chief Information Risk Officer, Goldman Sachs.

“More and more leading enterprises and government agencies rely on Liquid Machines to protect their most sensitive information,” said Mike Ruffolo, Chief Executive Officer at Liquid Machines. “Our innovative ERM software uniquely solves the biggest problem today in information security – protecting the data itself. Goldman Sachs’ dual role as lead investor and marquee customer validates the importance of our solution and its benefits. We’re focused on making Liquid Machines Enterprise Rights Management software the global standard for securing data throughout the enterprise. This round of financing brings us closer to achieving this vision.”

Enterprise Rights Management (ERM) takes a different approach to confidential data security by actually marrying security with the data itself, in particular key intellectual property or customer information subject to compliance regulations. Access protection and usage control enforcement travels with electronic documents from machine to machine, within and beyond the enterprise, to protect against confidential data loss, theft, and modification. The technology is superior to traditional security sources such as firewalls, access controls, and gateway filters, as these can grant or deny access but can’t provide granular enforcement of acceptable use policies that define what users can and cannot do with confidential data.

“The Goldman Sachs investment is further validation of Liquid Machines’ leadership in the enterprise rights management market and its growth potential,” stated Axel Bichara, senior partner at Atlas Venture. “The company, with its differentiated technology and experienced leadership team, has achieved significant market traction and is positioned well for global growth.”

About Liquid Machines
Liquid Machines is the leading provider of Enterprise Rights Management (ERM) solutions that persistently protect critical business content and audit usage while enabling collaboration. Liquid Machines’ Document Control and Email Control solutions allow companies in the consulting, financial services, government, manufacturing, and healthcare industries to share information securely, within any application, wherever it goes, throughout its lifecycle. Liquid Machines ERM solutions help enterprises satisfy today’s ever-increasing information security regulations such as Sarbanes-Oxley, NASD 2711, HIPAA and others, as well as implement and practice internal mandates for intellectual property security, product version control, or clinical data protection.
Based in Waltham, Massachusetts, Liquid Machines is privately held and is backed by Atlas Venture, Masthead Venture Partners, Goldman Sachs & Co., and Draper Fisher Jurvetson. For more information on the company and our vision for The Freedom of Security™, visit us at www.liquidmachines.com.

About Goldman Sachs
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

© 2006 Liquid Machines, Inc. All rights reserved. Liquid Machines, Enabling Secure Business, The Freedom of Security, Policy Droplet, Omniva, and the Liquid Machines logo are trademarks or registered trademarks of Liquid Machines, Inc. Research in Motion, RIM, and BlackBerry are trademarks of Research in Motion Limited. Research in Motion and RIM are registered with the U.S. Patent and Trademark Office and may be pending or registered in other countries. Microsoft and Windows are registered trademarks of Microsoft Corp. in the United States and/or other countries. Product or company names mentioned herein may be the trademarks of their respective owners. The information contained in this document represents the current view of Liquid Machines, Inc. on the issues discussed as of the date of publication.

For More Information:

Ed Harrison
fama PR
617-758-4144
liquidmachines@famapr.com