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Axsun Technologies, Inc. to Expand MEMS-Based Offerings in Industrial Process Spectroscopy, Homeland Security and Optical Communications Following Closure of $15M Series D Funding

ESI, Inc leads financing round, joining previous venture capital and private investors


Billerica, MA – (November 7, 2006) - Axsun Technologies, Inc., a leading manufacturer of MEMS-based micro-optoelectronic “spectral engines,” announced today the closure of a $ 15 M financing round. Electro Scientific Industries, Inc. (ESI; Nasdaq: ESIO), a leading supplier of innovative production laser systems for microengineering applications, led the Series D equity round, which was joined by current investors Prism Venture Partners, Vantage Point Venture Partners and Stata Venture Partners along with other private investors. In addition to the equity financing, Axsun closed an asset backed loan agreement with Bridge Bank. Axsun will use the proceeds to enhance its core “spectral engine” offerings in industrial process spectroscopy, including the PAT Pharmaceutical, homeland security and optical communications markets.

Axsun, Inc., has invited Steve Harris, vice president of R&D at ESI, to join its board of directors. Mr. Harris joins Ray Stata, Axsun CEO Dale Flanders, Bill Seifert from Prism Ventures and David Fries from Vantage Point Venture Partners on the board.

Axsun’s groundbreaking MEMS-based “spectral engine”, characterized by high performance in an extremely small package, was introduced in 2002 to the optical communications market and has earned dominant market share position in the optical channel monitor space. In 2004, the company adapted its core “spectral engine,” introducing a Near InfraRed (NIR) spectrometer for process monitoring applications, which won the prestigious R&D 100 Award as well as the Pittcon Editors’ Choice Award as one of the most innovative new products of the year. In 2006 Axsun, extended its micro-optical platform, introducing a unique Raman spectrometer engine targeted at identifying unknown substances in the growing homeland security market.

“Axsun’s unique NIR and Raman spectrometers are now seeing the same broad market acceptance enjoyed by our optical channel monitors in the telecom market,” commented Axsun founder and CEO Dale Flanders. Potential applications extend into a number of new and exciting markets. This round of funding, along with a strong relationship with ESI will allow us to further broaden the reach of this very flexible platform.”

In addition to the funding, Axsun announced today that it had entered into a Strategic Agreement with ESI to explore and develop applications based on Axsun’s “spectral engines”.

“Axsun has proven that its core MEMS optical platform extends well beyond the optical channel monitor market into a range of industries including several where there is synergy with ESI’s technology,” commented ESI’s Harris.

“For these applications, spectroscopic sensors can deliver the chemical information essential in addressing critical manufacturing challenges. We look forward to supporting this team as they continue to provide innovative, real-world spectroscopic solutions.”

About Axsun Technologies
Axsun Technologies, Inc., a Volcano subsidiary, established in 1998, develops and manufactures MEMS-based optical engines for industrial spectroscopy, optical telecommunications and medical imaging, applications. Through its expertise in micro-optics, packaging and precision engineering, Axsun has pioneered an entirely new class of high-performance, miniaturized instruments and devices enabling a dramatic shift from lab based measurements to on-line, at-line and in-vivo measurements, without compromising performance. Axsun was acquired by Volcano in December 2008.

Contact:

Dale Flanders
Axsun Technologies, Inc., a Volcano company

-- or –

Diane Flynn
Business Development
Volcano Corp.

1 Fortune Drive
Billerica MA 01821
Tel 978.262.0049
Fax 978.262.0035
www.axsun.com
www.volcanocorp.com

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