PhotoChannel Networks Inc. Raises $1.5 Million
VANCOUVER, BC – June 27, 2005 – PhotoChannel
Networks Inc. (TSX – V: PNI; OTCBB: PHCHF) (“PhotoChannel”
or the “Company”), one of North America’s leading
digital imaging technology providers, today announced the Company
has received gross proceeds of $1,500,000 in connection with its non-brokered
private placement of 18,750,000 units.
Each unit is being sold at a price of $0.08 per unit. Each unit consists
of one common share and one half of one common share purchase warrant.
Each whole common share purchase warrant will entitle the holder to
purchase an additional common share at an exercise price of $0.12
for a period of one year from the date of closing. The common shares
and the common shares underlying the common share purchase warrants,
will each be subject to a four month hold period from the date of
issuance of the units.
Insiders participating in this financing were:
- Peter Fitzgerald, Chairman and CEO of PhotoChannel 2,885,000 units
- Peter Scarth, Director of PhotoChannel 1,500,000 units
- Kyle Hall, EVP Business Development of PhotoChannel 1,233,000
units
“This small financing strengthens the Company’s balance
sheet, as it continues discussions with world class retailers for
the use of its online solution. The funds will be used to accelerate
sales and marketing, launch PhotoChannel’s new Digital Media
platform and for general working capital”, stated Peter Fitzgerald,
Chairman and CEO of PhotoChannel. “We would like to thank Discovery
Capital for their continued support and belief in PhotoChannel.”
As per the Company’s last quarterly results:
For the six months ended March 31, 2005 the Company recorded record
revenue of $995,356 up 153% over the corresponding period of 2004.
Major increases in network transactional and membership fees, which
increased by 188% and 546%, respectively, from second quarter of 2004.
Reported its strongest revenue quarter in its history with record
quarterly revenue of $554,742 exceeding its previous record quarter
(Q1 – 2005) of $440,614 by 26%.
The Company will pay a 10% cash finder’s fee to a third party
in connection with a portion of the proceeds of this private placement.
The closing of this transaction is subject to regulatory approval.
The TSX Venture Exchange has neither approved nor disapproved the
information contained in this release. The Securities offered have
not been and will not be registered under the Securities Act of 1933
(as amended) (United States) and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.
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. 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.
