CECS - CHOICES ENTERTAINMENT CORP - Private Placements of $400,000 Convertible
Subordinated Debenture - and of $2.3 Million Convertible Subordinated
Redeemable Debentures - Enters Into Agreement With Choices Entertainment
New York, New York, Jan. 26, 2000 (Market News Publishing via COMTEX)
-- PhotoChannel Networks Inc. (the "Company") of Vancouver, British
Columbia, and the developer of the PhotoChannel online photography
community at photochannel.com, is pleased to announce the
completion of a private placement of a $400,000 Convertible
Subordinated Debenture with 597924 B.C. Ltd., a privately held British
Columbia incorporated company. The debenture bears interest at 10% per
annum, and matures on April 30, 2000, after which the debenture bears
interest at 15% per annum. The debenture is convertible, at the
lender's option, to common shares of the Company, on the basis of one
common share for each $0.50 principal amount converted. As part of the
transaction, 597924 BC. Ltd. will be granted 80,000 non-transferable
share purchase options expiring June 30, 2000. Each option entitles the
holder to purchase one Common Share of PhotoChannel at the price of
$0.50 per share. The common shares issuable upon conversion of the
debentures, and upon exercise of the options, will be subject to hold
periods under applicable securities legislation.
The Company is also pleased to announce that it has entered into an
agreement with Choices Entertainment Corporation ("Choices") of
Seattle, Washington for the private placement of $2.3 million principal
amount Subordinated Convertible Redeemable Debentures. These
debentures do not bear interest and also mature on April 30, 2000.
These debentures may be converted at the option of Choices, or redeemed
at the option of the Company, at the rate of one common share for each
$0.50 principal amount converted or redeemed. The Company is also
entitled to redeem the debentures for cash.
The funds will be advanced to the Company against issuance of the
debentures as follows:
$350,000 on January 31, 2000;
$750,000 on February 29, 2000; and
$1,200,000 on April 14, 2000.
The final advance is subject to the Company obtaining a firm date
for the delivery of a Fuji-Frontier Digital Minilab and the Company
securing facilities in the U.S. for the operation of the minilab.
As consideration for the loan, the Company has agreed to issue Choices
non-transferable share purchase warrants to acquire common shares of
the Company, as follows:
(a) 140,000 Warrants on January 14, 2000 (with an exercise price
of $0.75 per share); (b) a further 300,000 Warrants on February 14,
2000 (with an
exercise price of $1.00 per share); and, (c) 480,000 Warrants on
April 14, 2000 (with an exercise price of
$1.25 per share) The warrants are exercisable until June 30, 2000.
The private placements are subject to the approval of the Montreal
Exchange and to the consent of the holders of previously issued
debentures. The common shares issuable on conversion or redemption of
the debentures, or exercise of the share purchase warrants, will be
subject to hold periods under applicable securities legislation.
The Company has filed an Annual Information Form in British Columbia
pursuant to Local Policy Statement 3-27 and BOR #98/7 of the British
Columbia Securities Commission.
ABOUT PHOTOCHANNEL NETWORKS INC. PhotoChannel is an e-commerce
company developing an online photo community at www.photochannel.com
catering to its online photofinishing customers and all photography
enthusiasts. The Company's PhotoChannel site and online photofinishing
services are being developed for both conventional film and digital
photographers.
PhotoChannel is headquartered in Vancouver, British Columbia, Canada.
The Company's shares are traded on the Montreal Exchange (ME: PNI) and
the NASD Over-the-Counter Bulletin Board (OTC-BB: PHCHF).
Certain statements in this announcement, including statements
concerning our plans, intentions and expectations, contain
"forward-looking statements" within the meaning of the Securities Act
of 1933 as amended. Forward-looking statements are based on the
opinions and estimates of management at the time the statements are
made and are subject to certain risks and uncertainties that could
cause actual results to differ materially from those anticipated in the
forward-looking statements. The words "believe," "expect," "intend,"
"anticipate," variations of such words and similar expressions identify
forward-looking statements but their absence does not mean that the
statement is not forward-looking. These statements are not guaranties
of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Readers are cautioned
not to place undue reliance on these forward-looking statements that
speak only as of the date of this announcement. Factors that could
affect our actual results, include, among others, PhotoChannel's recent
change in business focus, anticipated losses, unpredictability of
future revenues, potential fluctuations in quarterly operating results,
unproven business model, ability to make additional acquisitions, risks
related to acquisitions, achieving adequate market share, brand
awareness, competition, risks of maintaining and creating new business
relationships, management of potential growth, risks of system
interruption and risks of international operations. More information
about factors that could potentially affect our actual results is
included in PhotoChannel's filings with the Securities and Exchange
Commission including the Form 20-F related to PhotoChannel. We
undertake no obligation to update publicly any forward-looking
statements to reflect new information, events or circumstances after
the date of this release or to reflect the occurrence of unanticipated
events.
PhotoChannel(TM) is a registered trademark of PhotoChannel Networks
Inc. All products and company names mentioned are trademarks or
registered trademarks of their respective companies.
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TEL: (604) 893-8955 x 243 Michael Dake, Investor Relations.
TEL: (604) 893-8955 x 243 Michael Dake, Investor Relations
TOLL FREE: 1-888-575-4337 PhotoChannel Networks Inc.
FAX: (604) 893-8966
Website: www.photochannel.com
Email: invest@photochannel.com |
