Raleigh, N.C., July 26, 2005 - Inlet Technologies, a provider of professional encoding solutions for next-generation content creation and distribution, today announced that it has closed a $5 million round of venture financing. Inlet's Series B investors include Technology Venture Partners (TVP), Telecommunications Development Fund (TDF) and North Carolina-based Capitol Broadcasting Company (CBC).

Inlet intends to use this capital to extend the market reach and penetration of its advanced encoding technology in the fast-growing digital media market. This patent-pending technology provides significant productivity benefits to customers who create content for distribution via video on demand, and next generation DVDs. Inlet will build upon its existing sales and marketing success in the post production market and accelerate its entry into the broadcast and cable markets where the benefits of its advanced encoding deliver significant bandwidth and cost savings.

"Inlet has already achieved significant milestones in a relatively short period of time, including a solid product pipeline, customer success and a top-notch management team," stated Bryson Hollimon, managing general partner of Technology Venture Partners. "We are very excited about the market potential and the opportunity to help Inlet deliver high-value products and create a high-value company."

"The transition to digital television is inevitable and is in fact, progressing rapidly," explained Jim Pastoriza, managing partner, TDF. "We are also seeing increasing amounts of content created in High Definition. However, there are still missing pieces of the value chain and Inlet solves the crucial problem of 'time to quality output.'"

"For years we had been looking for an application to ease the bandwidth bottleneck that HD content creates, especially in electronic news gathering and mobile production," said Jimmy Goodmon, vice president and general manager, CBC New Media Group LLC. "It was obvious to us early on that HD would cause similar problems for other companies throughout various levels of the industry. Television is the business we know best, and when the Inlet team approached us, we were confident that they had the capability to produce a rock solid product that could solve our bottleneck problems and also generate interest throughout the marketplace."

The funding follows on the heels of strong momentum for Inlet. The company recently released the second generation of its Fathom advanced encoding solution, secured key industry validation as one of millimeter magazine's NAB 2005 Pick Hits. Inlet has also built a solid customer foundation with customers including Akimbo, CinemaNow, Microsoft Studios and others.

"Inlet has come a long way in a short period of time, and we are truly excited about moving ahead more rapidly with 'smart money' behind us," explained Neal Page, Inlet CEO. "It was important for us to add financial partners to the team who have a strong national network of business leaders, a solid grasp of the market opportunity and the depth and breadth of experience to help guide the company to the next level. It is a real privilege to have Technology Venture Partners, Telecommunications Development Fund, and Capitol Broadcasting as financial partners."