APPLICATIONS

Nallatech today announced worldwide revenue growth of 80% with an increase in revenue of 120% in North America, for the financial year ended, April 30, 2005. The worldwide revenue growth is the highest year-to-year increase for Nallatech in five years. The American sales increase represents the significant inroads Nallatech, Inc., a subsidiary, is making into the North American market. "Nallatech is proving the viability of FPGA-based high-powered computing, particularly in North America, with our record growth there over the past year," said Allan Cantle, CEO of Nallatech. "During the past year we have booked our two largest contracts to date, together totaling approximately $3 Million. We are looking forward to continued expansion throughout 2005 and 2006 as FPGA awareness and adoption spreads." Nallatech develops low-risk, high-performance FPGA (Field Programmable Gate Array) computing solutions, serving demanding professional markets such as military and defense, telecommunications, imaging systems and scientific computing. With over 10 years of experience addressing complex computing problems for a broad range of companies, Nallatech has been fueling its growth by building on strategic partnerships and new product and service offerings to move into new markets such as seismic/ geophysical, homeland security and higher education applications. Highlights from Financial Year 2004 - 2005 During the financial year 2004, Nallatech launched a steady stream of new products, spearheaded the formation of several key industry alliances and expanded its operations significantly in the North American market. Selected highlights include: -- Nallatech joined several partners, including Xilinx and Scottish Enterprise, to launch the FPGA High Performance Computing Alliance (FHPCA), with the objective of advancing the development and adoption of FPGA-based high-performance computers. -- Nallatech, as part of its continuing strategic relationship with Xilinx, designed and delivered the Virtex-4 XtremeDSP Development Kit. This kit enables designers to leverage Xilinx's DSP-rich Virtex-4 SX FPGAs in advanced FPGA designs. Over 1,000 Nallatech development kits are now in the field as a result of this relationship with Xilinx. -- Nallatech expanded its North American operations to address growing opportunities in the FPGA market. Ed Hennessy joined Nallatech as head of North American operations for Nallatech, Inc., and Jim Mazzola and Paul Houlihan as regional sales managers of the North American team. Nallatech also established offices in the Baltimore, Phoenix, Philadelphia and Boston areas. -- Nallatech delivered the Xilinx Virtex-II Pro XtremeDSP Development Kit. This kit is a powerful DSP development platform for high-performance signal processing applications such as software defined radio, networking, HDTV, 3G wireless and video processing applications. -- Nallatech named EMA as its Channel Partner for the southeast U.S. region, addressing growing opportunities in FPGA market. EMA markets Nallatech products and is the first company in Nallatech's new Channel Partner program. -- Nallatech's sustained growth won the company a place in the Deloitte Technology Fast 50 for Scotland in 2004 for the fifth year in succession. -- Nallatech launched the BenNUEY-VME, a high performance VME-based DIME-II motherboard that provides industry leading TeraOPs computational power and Multi-Gbit bandwidth on a military-strength, ruggedized platform. -- Nallatech crowned a year of sales growth and investment in 2004 with a celebration of its tenth anniversary. Jim Wallace, Minister for Enterprise and Life Long Learning, and Jack Perry, CEO of Scottish Enterprise, visited the company at its Cumbernauld headquarters to mark the occasion.