NASDAQ: CDDD
April 04, 2001

NEWS RELEASE:
Constellation 3D and Avica Technology Announce Partnership in
Digital Cinema

NEW YORK--(BUSINESS WIRE)--April 4, 2001--Constellation 3D, Inc. (Nasdaq/NMS: CDDD - news) announced today that it has reached a partnership agreement with Avica Technology to incorporate C3D's Fluorescent Multilayer Disc (FMD) technologies in Avica's FilmStore™ Digital Cinema playback platform. Under the terms of the agreement, the two firms intend to jointly develop digital cinema products utilizing FMD technology.

"Avica is committed to deploying flexible and future-proof systems that will operate seamlessly with the eventual industry standards developed for
compression, encryption, distribution and display of Digital Cinema content,'' said Avica CEO Andrew Maltz. ``FMD technology offers compelling benefits in operational efficiency and security, and we are eager to provide our customers and partners with solutions that incorporate its features. Our involvement in this partnership will help ensure that cinema products based on FMD address the unique needs and concerns of the motion picture industry, while providing the greatest customer value.''

The FMD Digital Cinema disc has the potential to provide a secure, removable, single disc distribution method. It enables both the secure delivery of an inexpensive physical disc containing an entire digital movie to theaters, and also provides the means for the secure return of the material following its run. A single FMD disc can hold up to 100GB of data.

"Digital Cinema is a natural entry point for FMD technology and we're very excited to be working with an innovative leader in that market,'' said Tom Lipiec, VP Business Development, Video & Audio Entertainment. "FMD has great potential to become established as the preferred format for physical distribution of Digital Cinema content.''

According to industry experts, Digital Cinema distribution is anticipated to provide significant cost benefits in comparison with the film distribution methods used today. Currently, expensive reels of film are shipped to individual theaters at a cost to producers of hundreds of millions of dollars annually. Additionally, Digital Cinema allows for "first run'' picture quality throughout the life of a movie, eliminating the degradation problems currently associated with film.

"As a physical media, FMD is expected to be complimentary to all alternate distribution methods, such as satellite and Internet delivery, because there will always be a need for hard copy back-up systems. Furthermore, future generations of FMD products should have the ability to be the primary media for in-theater display, bypassing the need for comparatively expensive hard drive units,'' added Lipiec. "The forthcoming entry of FMD into the Digital Cinema market is expected to mark the beginning of FMD's entry into a multitude of professional and consumer data storage markets.''

About Avica Technology
Avica Technology Corporation is a leader in digital media acquisition, storage and playback for mastering and post-production applications. The Company has recently expanded to offer new products based upon its digital media platform for the evolving digital cinema market. More information is available at www.avicatech.com.

About Constellation 3D
The Company is commercializing Fluorescent Multilayer Disc and Card (FMD/C) technology. C3D has demonstrated a removable disc technology capable of storing 100 gigabytes (GB) and a credit card-sized memory product that could hold up to 10 GB. Constellation 3D holds or has made applications for over 80 worldwide patents in the field of optical data storage, and is supported by 65 scientists. The Company has offices in New York and Massachusetts, and laboratories in Israel and Russia. More information about the Company is available at www.c-3d.net.

I like the idea of using physical media rather than networks to send digital movies to theaters. It allows for far greater effective bandwidth, thus requiring less compression. And if things like holographic storage take off, it could actually end up making uncompressed digital movies practical someday.

Physical media distribution also makes it easier for multiple distributors to compete, unlike say, the Technicolor system, which essentially gives them 100% control over everything that gets shown on a theater's screen.

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