COMMERCIAL NEWS

New York, NY — C3D, Inc. announced that it anticipates closing its previously announced acquisition of Constellation 3D Holdings, Ltd. by September 30, 1999.

On October 4, 1999, after completion of the acquisition and over five years of research and development, C3D’s newly acquired Israeli subsidiary intends to unveil its revolutionary Fluorescent Multi-layer Disk (FMD) and Card (FMC) optical data storage technologies at a press conference in The Dan Hotel, Tel Aviv, Israel, and later at its laboratories in Rehovoth, Israel. The Company intends to conduct a second demonstration at its Silicon Valley, California office at a future date to be announced.

The demonstrations will showcase fully-functional prototypes implementing the Company’s FMD-ROM disk, FMC ClearCard-ROM and ClearCard-WORM technologies. The Company will immediately seek to license its technology to certain strategic joint venture partners and expects to commence production of the first commercial devices within twelve months.

“The technological potential with respect to large data storage capacity, low cost per Gigabyte and fast data access and read/write speeds of these devices – especially with respect to the ClearCard – is enormous,” said Dr. Eugene Levich, the founder and Chief Executive Officer of the newly acquired companies. “This technology will spawn a whole new breed of data storage-intensive information appliances capable of replicating today’s PC functionality on a palm-sized PDA or mobile phone”

Dr. Levich added, “The advent of high speed Internet downloading capability and the arrival of consumer devices such as HDTV (requiring up to 7.5 GB per hour recorded), personal VCRs and the e-Book underline the exponential increase in demand for media with multi-Gigabyte storage capacity. Likewise, on the corporate side, increasing use of data storage-intensive activities, such as analysis of customer e-commerce transaction data, make the availability of such media essential. Even the first generation of these devices will offer data density largely in excess of anything currently available.”

The Company plans to commence pilot production with: a 10-layer FMD-ROM disk in the standard 120mm (CD & DVD) disk format having up to 140GB capacity; a 20-layer FMC ClearCard-ROM in the form factor of a credit card having up to 10GB capacity; and a 10-layer FMC ClearCard-WORM (Write Once Read Many) in the form factor of a credit card having up to 1GB capacity.

The planned second and third generation cards and disks will have capacities up to and exceeding 1 Terabyte (1,000 Gigabytes). RAM versions of disk and card are also planned.

The Company’s patented technologies overcome current storage media signal contrast and signal-to-noise ratio limitations to enable data to be stored on multiple layers of disks and cards, creating true 3D, or “volumetric” storage, as opposed to current 2-layer DVD and single-layer CD and Flash card technologies. This includes taking advantage of special properties of fluorescent incoherent light (as compared to the coherent light used in current optical storage devices) and implementation of unique “thin replica” and hot-embossing technologies developed by the Company’s scientists.

Existing CD & DVD 120mm disk and drive manufacturing equipment can be adapted with minimal re-tooling to accommodate the new technology. Disk manufacturing processes will in some respects be simplified as there will be no need to deposit reflective materials because the FMD storage medium is completely transparent. The new FMD drives will also be backward compatible with (i.e., capable of reading) existing CD & DVD media.

Because the ClearCard takes Flash card technology to a completely new level – current cards typically range from 1 Megabyte to 64 Megabytes of storage capacity – new production techniques were developed by the Company. These techniques incorporate technology such as advanced optical multi-focal design and significantly reduce the production cost per Megabyte compared to current flash media.

Companies involved in the development and manufacture of data storage disks, cards and associated drives are believed to include Eastman Kodak Co., EMC Corp., IBM Corp., Intel Corp., Hitachi Ltd, Kingston Technology, Panasonic-Matsushita Electrical Industrial Co., Mitsubishi, Philips (Koninklijke Philips Electronics N.V.), Pioneer Corp., Ricoh Co., SanDisk Corp., Sony Corp., TDK Corp., Toshiba Corp., Victor Company of Japan, JVC & Yamaha Corp.

Among the special invitees for the October 4, 1999 demonstration are Mr. Henrikas Iuochkiavitchiuos, Assistant Director General of UNESCO for mass media & mass communications, as well as representatives of several governments, including Israel, and leaders in the optical and memory storage industry.

The Company is focused on the development and commercialization of several digital storage memory products based upon its proprietary technology. Research is conducted by an internationally renowned team of scientists that currently holds over 40 international patents in the field of optical data storage.

C3D, Inc. has offices and laboratories in New York, California, Israel, Russia, and the Ukraine.

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