NEWS

FilesX Reports Strongest Quarter in Company History; Q206 Revenues Increase 70%

NEWTON, Mass.--(BUSINESS WIRE)--Aug. 8, 2006--FilesX, a leading provider of next-generation Continuous Data Protection and CDP On-Demand(TM), today announced stronger than ever results for the second quarter that ended June 30, 2006. Total consolidated revenues for the privately held firm represented an increase of 70% over Q106.

"Q2 results are very encouraging," said Alon Cohen, Chairman and CEO of FilesX. "We saw positive indicators on many fronts. It was not only a record quarter in sales, but even more importantly, we saw approximately 600% growth in our channel sales over Q1, more than 300% growth in repeating sales to our existing customer base and about 30% growth in average deal size. These are all very positive indicators and a good head start for Q3 and the rest of the year."

FilesX also announced that its customer base grew by 10% in Q2, adding new accounts in multiple industries including Education, Legal, High Technology and more.

Other highlights of Q206 include:

A GA Release (v-2.5) of FilesX acclaimed "CDP On-Demand(TM)" solution. CDP On-Demand(TM) addresses all business requirements by providing a wide spectrum of around-the-clock protection capabilities - continuous, frequent and scheduled.

The hiring of three storage industry veterans to lead the company's business development, strategic alliances and outreach programs.

Strategic Developer Solution partnership with HP to promote FilesX line of products.

About FilesX

FilesX Inc. is a leading provider of Continuous Data Protection Solutions, enabling global enterprises around-the-clock protection of mission critical applications. FilesX' unique CDP On-Demand(TM) technology offers the first Adaptive Data Protection solution. By blending Continuous, Frequent and Scheduled Protection Engines, CDP On-Demand(TM) supports all application protection needs, resulting in Wider Protection for Lower Cost.

Backed by an ever-growing customer base and the world's most successful venture capitalists - Benchmark Capital, Index Ventures and Genesis Partners - FilesX is headquartered in Newton, MA. More information: www.filesx.com.