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Continuum Photonics Raises Over $14 Million in Second Round of Financing

Company Brings Disruptive Technology to Photonic Switch Subsystems

Billerica, MA - July 10, 2002 - Continuum Photonics, Inc., an emerging leader in high-performance photonic subsystems and components, today announced it has closed on over $14 million in its Series B financing. New investors, Flagship Ventures and Prism Venture Partners, co-led the Series B investment round, with additional new equity participation from Harris & Harris. Series A investors Massachusetts Technology Development Corporation (MTDC), Gainesborough LLC, and private individuals also participated in the round. With the completion of the round, Steve Ricci and Robert Fleming, General Partners of Flagship and Prism, respectively, have joined Continuum’s Board of Directors.

“We’re very excited about this infusion of capital and the broad-based company building experience our new investors bring,” commented Jeffrey Farmer, Continuum’s CEO. “Given the challenging market conditions and investment environment, this is a tremendous vote of confidence in our team, our technology and our ability to deliver.”

“We looked long and hard at Continuum and were impressed from the start,” noted Steve Ricci, General Partner at Flagship Ventures. “ Continuum’s track record, unique technology, company culture and the quality of the team they’ve assembled, all point to great things in the future. In our opinion, they have the key elements required to be successful and we look forward to working with them as they move forward.”

This financing provides Continuum with the funds required to continue executing on its development plan and to bring demonstration units to customers. Continuum Photonics’ initial product is a family of photonic switch subsystems that meet the critical needs of future dynamic optical networks: high performance, low loss and low cost in a scalable switching platform that is wavelength, bit-rate and protocol independent.

Robert Fleming, Co-Founder General Partner, Prism Venture Partners, observed, “Continuum is one of the most exciting companies we’ve seen in a long time. With a clear understanding of what will motivate carriers and equipment manufacturers to implement new technologies, Continuum’s photonic switch subsystems offer price and performance unmatched by competitors. Prism’s investment is a direct reflection of our confidence in the company’s ability to deliver exceptional products to a broad telecom customer base.”

Charles Harris, Chairman and CEO of Harris & Harris, commented, "Continuum fits extremely well in our investment portfolio, as we seek to invest in promising young companies deploying nanotechnology and microsystems into large emerging markets where their technology gives a truly dominating edge. Continuum's track record of bringing unique products to market, combined with their deep technical expertise will make this a winning strategy."

Continuum has not announced details of its DirectLight technology, although it demonstrated some of the key performance advantages of DirectLight at the recent OFC conference in Anaheim, including extraordinarily low insertion loss (less than 1db including connectors), small footprint and very low power requirements. The company expects to have demonstration units available later this year.

About Continuum Photonics

Headquartered within Boston's high-tech beltway, Continuum is dedicated to bringing the highest performance photonic subsystem and system products to its customers. Leveraging commonality across its platform of patented technologies, DirectLight optical switches are the first in a series of products from Continuum aimed at changing the traditional economics of the communications and test industries. Founded in 1998, Continuum brings together a world-class team, and an extensive product history in aerospace, automotive, consumer products, and the military, where Continuum's products have been designed to meet the most demanding requirements. Continuum is supported through investments by Flagship Ventures, Prism Venture Partners, Harris and Harris Group, GE Capital, MTDC, Arcadian Venture Partners, and Gainesborough Investments.

For more information, please visit www.continuumphotonics.com

About Flagship Ventures

Founded in 1999, Flagship Ventures is an entrepreneurship and venture capital firm comprised of a family of funds: OneLiberty Funds, AGTC Funds and NewcoGen Group. We currently invest from $400 million in funds raised in 2000, and manage a total pool of committed capital approaching $600 million. The Flagship Ventures team consists of 31 professionals focused on creating, financing, and building companies in the life science, information technology, and communications sectors.

For more information, please visit www.flagshipventures.com

About Prism Venture Partners

Prism Venture Partners, Westwood, MA, is a leading venture capital firm with early-stage investments in communications, business infrastructure software and healthcare. Since inception in 1996, Prism has rapidly gained industry recognition through the firm's high-visibility investment strategies. With $1 billion in capital under management, Prism's growth reflects the extensive entrepreneurial expertise of its partners, a hands-on approach to working with portfolio companies, an integrated network of investors, and access to growing pool of highly skilled entrepreneurs. To better leverage West Coast investment opportunities, Prism has recently established an office based in San Francisco.

For more information, please visit www.www.prismventure.com

About Harris & Harris Group

Harris & Harris Group is a publicly traded venture capital company that now makes initial investments exclusively in tiny technology, including nanotechnology, microsystems and microelectromechanical systems (MEMS). The Company's last 24 initial private equity investments have been in tiny- technology enabled companies. Detailed information about Harris & Harris Group and its holdings can be found on its website at http://www.TinyTechVC.com.

For more information, please visit www.TinyTechVC.com

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Contacts

For Continuum Photonics, Inc.

Aaron A. Bent, PhD
Continuum Photonics, Inc.
978-670-4910, x189