Company Poised to Catalyze Data Center Market with Industry's First 10 Gbps Ethernet I/O Technology

OTTAWA, On. — January 6, 2003 — Neterion Inc. (formerly S2io Inc.), Inc., an emerging company developing the industry's first 10 Gigabit per second (Gbps) Ethernet connectivity technology, today said it has closed additional equity financing in an up round raising (U.S.) $18 million. With this additional financing, Neterion's total funding to date is approximately (U.S.) $27 million.

The Series B round of funding will be used to support the rapid expansion of the Company's product and sales development. The round was priced and led by Menlo Ventures along with existing investors VenGrowth Capital Partners Inc. and the Business Development Bank of Canada. Hal Calhoun of Menlo Ventures has joined Neterion's Board of Directors.

"There is a huge and accelerating pain point in data centers that needs high-speed Ethernet connectivity and practical TCP/IP offload manageability" said Hal Calhoun, managing director at Menlo Ventures. "Menlo invests in pioneers in rapid growth markets and there's no question that Neterion is leading the next phase of ultra-high speed I/O (input output) with a proven world class management and technical team."

Neterion is leading the development of the industry's first Ethernet I/O technology that enables high-speed access of servers, server clusters and storage area networks at 10 Gbps. Neterion is developing groundbreaking I/O products that offload processing-intensive functions from servers and data storage devices leaving them free to better process applications' data. Data centers can drive lower total cost of ownership with Neterion's 10 Gbps technology by utilizing far fewer I/O interfaces than is possible with 1 Gbps technology, whose performance quickly erodes while scaling. The first products will be delivered in the first quarter of this year.

"Our technology lets enterprises change the fundamental economics within their data centers by radically reducing capital costs via increased data throughput into and out of their servers. This is very attractive to OEMs as well as end customers, all of whom are seeking better returns on their technology investments" said Dave Zabrowski, president and CEO of Neterion, Inc.

"Adding a top flight VC partner like Menlo Ventures to our existing investors gives us the necessary strength to become the number one player in the space" Zabrowski noted. "The second round of funding will also take the company through profitability".

About Neterion, Inc.
Founded in 2001, Neterion Inc. has locations in Cupertino, California and Ottawa, Canada. Neterion delivers 10 Gigabit Ethernet hardware & software solutions that enable OEMs to solve their customers' high-end networking problems. The company's line of Xframe® products is based on Neterion-developed technologies that deliver new levels of performance, availability and reliability in the datacenter. Xframe and Xframe II include full IPv4 and IPv6 support, and comprehensive stateless offloads that preserve the integrity of current TCP/IP implementations without "breaking the stack." Xframe drivers are available for all major Operating Systems, including Microsoft Windows, Linux, Hewlett-Packard's HP-UX, IBM's AIX, Sun's Solaris and SGI's Irix. Formerly known as S2io, the company changed its name to Neterion in January 2005.

Further information on the company can be found at http://www.neterion.com/

The Neterion, Xframe, Xframe II names and logos and combinations thereof, are trademarks of Neterion, Inc. Other names are for informational purposes only and may be trademarks of their respective owners.

About Menlo Ventures
Menlo Ventures has spent the past 27 years helping visionary leaders turn technical innovations into world-class companies. Menlo has over $2.7 billion under management in nine venture capital funds, and currently focuses their investments in the areas of communications, software, Internet, semiconductors and computer hardware. The Menlo Ventures team is a group of investment professionals with hundreds of years of collective experience in technology, marketing, sales and general management. Their combined knowledge and expertise support emerging growth companies in achieving their maximum potential. For more information, please visit www.menloventures.com.

About VenGrowth Capital Partners Inc.
With over $1 billion in assets under management, VenGrowth Capital Partners Inc. is a Tier One Canadian venture capital management group, widely known and respected in the industry. Since it began operations in 1982, VenGrowth's accomplished team of seasoned venture capitalists has invested over $860 million in more than 145 companies. These investments have been made on behalf of over 150,000 investors including leading pension funds, insurance companies, family foundations, and individual investors. Investee companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters), Ottawa and Boston, Massachusetts. For more information, please visit www.vengrowth.com.

About BDC Venture Capital
BDC Venture Capital has been involved in venture capital since 1975 and has invested in more than 400 different companies. It currently manages over $400 million in venture capital assets. BDC is active at every stage of a company's development cycle, from start-up through expansion and invests in companies in the life sciences, telecommunications, information technology, and electronics sectors. For more information, please visit www.bdc.ca.

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