Finline Technologies To Acquire Impress Image Compression Inc.; To Integrate Patented Wavelet Compression Technology Into Broadband Wireless Access Platform.

Business Editors

WATERLOO, Canada--(BUSINESS WIRE)--Feb. 3, 2000

Finline Technologies (CDNX:FIN)

Finline To Raise Up To $3,000,000 Through Unit Private Placement

Finline Technologies Ltd. (CDNX: FIN) is pleased to announce that it has signed an agreement to acquire, at arm's length, Impress Image Compression Inc. (&uot;Impress&uot;), under which Finline will issue 1,500,000 common shares at a deemed price of $1.52 to acquire all issued and outstanding shares of Impress. The acquisition is expected to close within 30 days pending regulatory approval and final documentation.

Impress Image Compression Inc. is a Waterloo-based developer of patented Wavelet image compression technology. Their technology achieves compression rates of approximately four to five times greater than the current industry standard, JPEG for any given level of quality. Upon completion of the acquisition, Finline intends to integrate Impress' technology into Finline's Wireless access solutions to achieve channel capacity and data transmission rates significantly above current competitive wireless technologies.

Impress was founded by Dr. James Leslie of the University and its wavelet technology is a result of over seven years of research and development. &uot;We recognized a number of years ago that Wavelets were the key to efficient transmission of image based content. Much effort has been spent perfecting our technology, and we believe we have the best image compression algorithm in the world today. We look forward to joining Finline to further the commercialization of Impress' technology and tap world markets for our products, particularly in wireless broadcasting,&uot; said Dr. Leslie.

&uot;By integrating Impress' wavelet technology into our MMDS systems, Finline will emerge as a clear leader in fixed wireless broadband access solutions. Given this integration, the potential for increased channel capacity within the microwave spectrum is tremendous, will result in significant cost savings for system operators, and will make video-on-demand over the internet feasible,&uot; said Einar Fiskvatn, President &CEO of Finline.

&uot;The technology has a natural fit with our customer premises equipment development, and we believe that offering significantly enhanced efficiency versus current MPEG based solutions is precisely what the market needs given the rapid growth of multimedia content. Impress' visual quantized wavelet compression, coupled with robust modulation techniques such as OFDM will result in a new broadband wireless standard,&uot; further said Fiskvatn.

By applying an understanding of the human visual system and its sensitivity to contrast, noise, luminance, etc., and an understanding of spatial/amplitude entropy relationships within images, a unique approach to image compression has been developed by Impress. With Impress' modified amplitude-zerotrees, zerotree-linked texture maps, adaptive model arithmetic coding, and visual-rules bit allocation, Impress' algorithms have been designed to obtain optimal compression with acceptable program complexity. Impress has patent applications on its technology in USA, Canada, Europe, Australia and Japan. Impress has recently been given a Notice of Allowance for the U.S. Patent for its technology covering claims related to the following advantages over competing wavelet compression techniques:

--   Better compression of object edges by exploiting amplitude
     similarity of related edges in the zerotree.
--   Better compression of texture by using secondary wavelet passes
     in high detail blocks
--   Better compression of texture-type features by use of zerotree
     embedded vector codes
--   Better compression overall by use of tuned arithmetic coders

&uot;With patent protection, Finline also recognizes that new growth opportunities will be available through licensing of the technology to third parties. Opportunities that we see span the areas of internet content development, streaming video, digital photography, medical imaging, surveillance, image archiving and storage, and any other area where increased efficiency in imaging is beneficial,&uot; said Jonathan Carley, Corporate Development, Finline Technologies.

Upon closing of the acquisition, Andrew Zador, currently V.P., Technology of Impress and the architect of Impress' compression will join Finline in the same capacity. Further, Dr. Leonard Bradfield, currently Manager of Software Development of Impress will join Finline in the same role, and Dr. James Leslie will join Finline in a consultant capacity. Upon closing of the acquisition, and pending regulatory approval, Dr. James Leslie will also join Finline's Board of Directors.

Zador has a B.Sc. in physics from the University of Waterloo. His background includes video systems, optical and electronic hardware development, and software design and management. He has done research in human vision related to colour sensitivity, stereo perception, and flicker/contrast thresholds both while working in UW's School of Optometry and at Impress. Zador has also held research and engineering positions at Volker Craig Ltd., Electrohome Ltd. and Science Scribe Inc.

Dr. Bradfield has a Ph.D. in physics from the University of Waterloo. He has done research in semiconductor physics involving gallium arsenide, designed automation for electro-optical measurement systems in the astronomy department at UW, and previously co-developed VeriPLOT(r) electronic circuit CAD software with Zador.

Dr. James D. Leslie is a Professor of Physics at the University of Waterloo. He has conducted research in superconductivity, semiconductors, plasma oxidation and ellipsometry over his career at Waterloo. He founded the University of Waterloo Correspondence Program in 1968 and served as its Director until 1980. In 1979, he founded Waterloo Distance Education Inc. to apply to industrial training what he had learned in developing the Correspondence Program. Dr. Leslie has been in charge of managing the development of Impress and holds the position of President.

Finline Technologies is also pleased to announce that it intends to complete at arm's length, a non-brokered private placement of up to 1,973,685 units at a price of $1.52 per unit. Each unit will consist of one common share and one-half purchase warrant. Each full purchase warrant will entitle the holder to acquire one common share at price of $1.85 for one year from the date of issuance. The completion of the private placement is subject to receipt of approval from the Canadian Venture Exchange.

Finline Technologies Ltd. is a designer and manufacturer of broadband wireless systems, focusing on MMDS &uot;Wireless Cable&uot; solutions for the broadcast 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.

Note to Editors: The Canadian Venture Exchange has neither approved nor disapproved the information contained herein.