10 Gigabit Ethernet Company Will Use Funds to Enhance Current Sales, Marketing and Next Generation Product Development Programs

Cupertino, CA — June 28, 2004 — Neterion Inc. (formerly S2io Inc.), an emerging leader in high-speed server and storage I/O solutions, announced that it has closed a third round of funding totaling $15M.

The round was led and priced by JAFCO Ventures, a venture capital firm that seeks to invest in emerging technology-based companies that feature breakout potential and compelling business models. JAFCO Ventures invests in US-based companies out of its offices in Palo Alto and Boston. The round was oversubscribed with a substantial increase in valuation, reflecting the company's outstanding product, customer and revenue traction.

"We can clearly see a significant market emerging for 10 Gigabit Ethernet solutions to improve data center performance," stated Joe Horowitz, Managing General Partner of JAFCO Ventures. "Given the quality of Neterion's technology, products and team, we believe they have the necessary product roadmap and customer momentum to become the leading company in this sector."

Neterion's industry-standard technology enables enterprise data centers to gain exponential improvements in networked server and storage environments without having to modify existing cabling, operating systems or protocols.

Last month Neterion and Silicon Graphics, Inc. announced that SGI® would offer a new line of servers, storage appliances, workstations and visualization systems featuring Neterion's "Powered by Xframe®" 10 Gigabit Ethernet adapter. Neterion will be making further customer announcements in the coming months.

"Neterion is leading the movement to eliminate the I/O bottleneck in data centers by delivering unprecedented product performance and a product roadmap specifically based on end user requirements," said Dave Zabrowski, President and CEO of Neterion. "Savvy investors such as JAFCO Ventures recognize that 10 Gigabit Ethernet applications are exploding and Neterion has become the leader in a market that will change the fundamental I/O economics of compute/ server and storage applications."

Each of Neterion's earlier investors — Menlo Ventures, VenGrowth Capital Partners and BDC Venture Capital — participated in the C round. This latest investment is expected to take Neterion to profitability and the company does not anticipate seeking another round of funding.

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 JAFCO Ventures
JAFCO Ventures is a new venture capital firm that invests in technology-related, early expansion-stage companies. The firm is focused on companies that have the backing of top-tier venture capital firms and have true "breakout" business potential. JAFCO Ventures aids its portfolio companies with investment capital from its $100 million fund, the investment and operational experience of its venture capital professionals, and its business development capabilities throughout all of Asia. For more information about JAFCO Ventures and the JAFCO Technology Partners I fund, visit www.jafco.com

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 is a major venture capital investor in Canada, active at every stage of the company's development cycle, from seed through expansion, with a focus on technology-based businesses that have high growth potential and that are positioned to become dominant players in their markets. BDC Venture Capital has been involved in venture capital since 1975 and has to date invested in more than 400 different companies. It currently manages approximately $550 million in venture capital assets invested in the areas of Life Sciences, Telecommunications, Information Technology, Advanced Technologies and Funds Investments.

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