Modulus Video and Path 1 Partner to Deliver Reliable Broadcast-Quality MPEG-4 AVC Video Over Public IP Networks.

SUNNYVALE, Calif. & SAN DIEGO -- Modulus Video, Inc., the AVC company, and Path 1 Network Technology Inc. (AMEX:PNO), a leading provider of broadcast-quality video-over-IP networks, have entered into a joint technology partnership to deliver high-quality MPEG-4 AVC video over public IP networks. The agreement builds upon a strong relationship that began more than a year ago. Together the companies now offer the first complete solution delivering reliable broadcast-quality MPEG-4 AVC video over IP networks with guaranteed quality of service. A demonstration will be on display at the IBC 2004 convention in Amsterdam, September 10-14, at the Modulus Video Stand #3.218.

"The lower bandwidth used by MPEG-4 AVC encoding compared to MPEG-2 means that every packet transmitted is twice as important," said John Zavoli, President and CEO of Path 1. "Modulus Video's next-generation high-definition and standard-definition encoders and decoders, coupled with the superior quality of service features offered by Path 1 products, will be critical in ensuring reliable video transmission over IP networks around the world."

Bob Wilson, Modulus Video President and CEO, said, "With MPEG-4 AVC encoding and decoding systems from Modulus Video, and the Chameleon vidX products from Path 1, the public Internet can now become a viable and cost-effective video conduit. Customers can exploit ubiquitous network infrastructures and make efficient use of that bandwidth to deploy an optimized, cost-effective solution for reliably delivering broadcast-quality AVC video. We are very pleased to formalize the long-standing cooperation between Modulus Video and Path 1 to bring these solutions to a global market."

MPEG-4 AVC encoding and decoding products from Modulus Video provide twice the channel capacity and equal or superior video quality while using the same bandwidth as legacy MPEG-2 systems. Modulus Video offers standard-definition (SD) and HD products based on a scalable hardware and software platform that allows ample room for future growth. The Modulus Video ME1000 is a real-time, full-resolution SD encoder that compresses up to full D1 resolution for 525/60 and 625/50 applications. The compressed video stream is encapsulated in an MPEG-2 Transport Stream with output over IP multicast. The Modulus Video MD1000 full-resolution decoder also provides real-time AVC processing.

About Path 1 Network Technology, Inc.

Path 1 Network Technologies, Inc. develops video routing products that enable the transportation and distribution of real-time, broadcast-quality video over IP networks. From the delivery and distribution of broadcast video content to Video on Demand (VOD), Path 1's video infrastructure platforms allow high-quality transmission of point-to-point, multipoint and multiplexed data over legacy IP systems. To find out more about Path 1 Network Technologies, Inc. (AMEX:PNO), visit www.path1.com or call 877/ONE-PATH (663-7284).

About Modulus Video, Inc.

Modulus Video, Inc. is a provider of next-generation HD and SD video compression solutions for digital television based on the AVC (H.264 / MPEG-4.10) standard. Its products include encoders and professional decoders / analyzers targeted at the broadcast, narrowcast and video-on-demand markets. Each product provides significantly greater efficiency over legacy MPEG-2 systems, while working seamlessly within that existing transport infrastructure. Modulus provides long-term, cost-effective solutions for meeting the increased demand for bandwidth confronting market segments including: contribution / distribution; digital television delivered via satellite, cable, terrestrial, or DSL; DVD mastering; and enterprise networks. Modulus is based in Sunnyvale, California and was founded in 2002. For more information, please visit www.modulusvideo.com.

SAFE HARBOR STATEMENT: This news release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected in the forward-looking statements, including the risks that we will require future financing, that our products may not achieve customer or market acceptance, or that they will not perform as expected, that customer trials may not lead to future sales, that our sales may fluctuate between reporting periods and other risks identified in our annual report on Form 10-K and other filings with the SEC. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof and Path 1 undertakes no obligation to update such statements.