DemoGraFX announces new strategic focus

Known for its high-end professional and proprietary video technology, DemoGraFX has shifted its focus to the improvement of standards-based compression products and to consumer digital video applications.

Marina Del Rey, Calif., - September 03, 2002 - DemoGraFX, Inc. (DGFX), a leading developer of digital video processing and compression technology, today announced that it has refocused its product development strategy. The company has begun developing new products based on its Precision Video Architecture PVA ^TM, which includes video preprocessing, noise reduction, encoding and post processing technologies. Historically DGFX applied its PVA tools and technology exclusively to its proprietary compression solution. DGFX will now focus on applications and systems based on international compression standards, specifically MPEG-2 and the emerging Advanced Video Coding standard (H.264, MPEG-4 Part 10) being developed by the Joint Video Team of MPEG/ITU. The company is also moving its primary focus from high-definition television and digital cinema to standard definition broadcast and consumer video applications.

"This is an important shift for DGFX - away from bleeding-edge technology exploration and toward applying the unique knowledge that we gained from that process," said Tom McMahon, Chief Architect. "We have made a number of important discoveries about the right ways to acquire, process and compress video - now we intend to apply that knowledge to making competitive products for mainstream markets."

DGFX has consistently demonstrated implementations of its unique intellectual property in the fields of image preprocessing, noise reduction, video compression, post processing and video display. In one public demonstration after another, at trade shows and in private demonstrations for leaders of the film and television industry, DGFX has established a reputation for having leading-edge technology, knowledge and expertise. This technology is essential to the process of significantly reducing the bit rate of compressed digital video while preserving image quality and is therefore integral to the future of digital video production and distribution.

About DemoGraFX, Inc.
DemoGraFX, Inc. is a pioneer in a new class of advanced video architecture which delivers bit rate efficient video processing software yielding unparalleled picture quality for the television, cable, satellite and IP video delivery markets. For more information, please visit http://www.demografx.com DemoGraFX, DGFX, Precision Video Architecture and PVA are trademarks of DemoGraFX, Inc.