Finline Signs Letter of Intent with IP Flex Inc. for Technology Joint Venture-To Jointly Develop New High-Speed Chip for Video Compression Applications.

Business Editors

WATERLOO, Ontario--(BUSINESS WIRE)--Oct. 13, 2000

Finline Technologies Ltd. (CDNX:FIN.) is pleased to announce that it has signed a Letter of Intent with IP Flex Inc. for a joint venture to co-develop and market a new type of low cost, ultra high-speed silicon processor integrating Finline's patented wavelet compression technology.

It is anticipated that this new chip will overcome the current barriers to high quality, highly compressed streaming video over the internet and other data networks.

IP Flex Inc. (http://ipflexusa.com) is a privately held Japanese corporation that has developed proprietary semi-conductor methodologies described as Digital Application Processor (DAP) and Distributed Network Architecture (DNA). IP Flex's technology provides for data processing speeds in excess of ten times that of currently available silicon processors at any given clock speed, at a significantly lower cost than typical current processors.

The combination of Finline's patented Impress compression technology and IP Flex's processing architecture will allow the final phase of Finline's compression research and development to be completed for implementation into its broadband wireless access solution. It is further the intent of the joint venture to sell this product to the numerous manufacturers of personal computers, video delivery equipment, video games, and other applications, as well as licensing the technology where appropriate, particularly in the area of streaming video where the technology will have a distinct advantage over MPEG compression.

"The proposed joint venture will realize ultra high speed semiconductor technology to facilitate the delivery of large volumes of information over the internet and other networks. The marriage of IP-Flex' DAP/DNA and Finline's Impress Image Compression Technology makes for a revolution in the speed in which image data can be delivered over networks," said James R. Jones, Marketing Manager, IP Flex Inc.

"Finline's compression technology is the ideal application for IP Flex's revolutionary computing architecture. Not only will it enable Finline's next generation wavelet MMDS solution, but it has vast applications in improving video and image transfer in all areas of wired and wireless communications, including hand held devices and video over Digital Subscriber Lines (DSL)", said Einar Fiskvatn, President and CEO 

"The extra processing power of IP Flex architecture will enable us to more fully utilize the human visual model in Impress, giving substantially better compression than can be achieved with competing compression algorithms on currently available processors", said Andrew Zador, Vice-President of Technology

It is planned that each of the IP Flex technology and Finline's technology be licensed by each party to a joint venture entity to be owned equally by IP Flex and Finline. Formation of the joint venture is contingent upon execution of a definitive joint venture agreement, licensing agreements, the completion of a mutually acceptable business plan, and arranging of initial financing as may be required for implementation of the business plan.

Finline Technologies Ltd. is a designer and manufacturer of broadband wireless systems, focusing on MMDS "Wireless Cable" solutions for the provision of video, voice, and high speed internet services. Based in Waterloo, Ontario, Canada, Finline has successfully deployed its systems and components worldwide to operators in fourteen countries on five continents.

The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.