Strategic Japanese investor teams up with AO Capital to complete $1.5M funding to propel Morph to IPO.

Cebu, Philippines - March 27, 2008 - Morph Labs, the leading enabler of Software as a Service (SaaS) that leverages virtual infrastructure and open source technologies, has secured a $750,000 deal with CSK Venture Capital Co. Ltd., a Japanese investment firm, to complete a pre-IPO funding round of $1.5 million.

The funding has been led by Philippine-based AO Capital Partners Ltd., which has invested the other $750,000.

The investment is the first step in Morph Labs' Initial Public Offering (IPO) on the Philippine Stock Exchange (PSE), scheduled for the second quarter of 2008. Proceeds from the IPO will enable Morph to expand its operations, capitalize on the global demand for hosted software and the explosive growth of Software as a Service (SaaS), and fund SaaS incubation within its platform.

Global demand for the design and deployment of SaaS is growing rapidly. Industry analyst firm Springboard indicated that the Asia-Pacific SaaS enterprise applications market alone amounted to $154 million USD in 2006 and would grow by 66% by 2010 to account for 15% of the total enterprise software market.
 

Martin Lichauco, Managing Director of AO Capital Partners Ltd., said, "We took a long view of Morph's opportunities and we believe that an investor of CSK's expertise and caliber can provide substantial value to Morph beyond the capital it is investing. AO Capital welcomes the opportunity to partner with CSK to drive success in this rapidly-growing market."
 

CSK Venture Capital Co. Ltd. is a member of the CSK Group and is engaged in the investment of venture companies in Japan and overseas, with a focus on IT and life sciences.
 

Satoshi Konno, General Manager of CSK Venture Capital Co. Ltd., said, "We invested in Morph Labs based on the strategic role it plays in the future of the IT industry and in shaping how businesses approach, develop, and work with technology. Morph Labs offers a VC-caliber financial investment and a strategic business synergy opportunity for CSK Group."
 

Morph Labs' Executive Chairman, Winston Damarillo, is looking beyond the financial partnership. He explained, "As a former corporate investor with Intel Corporation, I fully appreciate the value of working with a corporate investor such as CSK Group. I am honored by CSK Group's vote of confidence and look forward to exploring strategic partnerships beyond the financial investment."
 

Morph Labs recently launched the Morph AppSpace, an innovative on-demand Platform as a Service (PaaS) that provides developers with a complete solution for the deployment, delivery, and ongoing management of web applications in an enterprise-quality setting. Available at www.morphexchange.com, the Morph AppSpace frees developers and independent software vendors from expensive and time-consuming system administration and maintenance tasks.