PhotoChannel Networks Inc. Announces Warrants Exercised, New Cash Totals $2.3 Million

TELUS and Discovery Capital Increase Investment

 

VANCOUVER, BC - June 30, 2004 - 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 $2,315,000 from the exercise of common share purchase warrants and the completion of a non-brokered private placement.

Proceeds of $1,315,000 have been received from the exercise of common share purchase warrants resulting from the exercise of the call option associated with the PhotoChannel Limited Partnership ("PhotoChannel LP"), as previously announced on May 13, 2004. The common share purchase warrants were exercisable at a price of $0.10 and resulted in the issue of 13,150,000 common shares of the Company. Investors in the PhotoChannel LP were lead by TELUS Corp, Discovery Capital Corp and Peter Scarth, PhotoChannel's CEO.

In addition, the Company has completed a private placement for gross proceeds of $1,000,000 under which it has sold 8,000,000 units at a price of $0.125 per unit. Each unit consists of one common share and one common share purchase warrant, each of which, and the shares underlying the warrants, will be subject to a four month hold period from the date of issuance of the units. The common share purchase warrant will entitle the holder to purchase one additional common share of PhotoChannel at a price of $0.15 for a period of one year from closing.

"This further investment by TELUS and Discovery Capital demonstrates their confidence in our business model and their recognition of our business growth during the past year," stated Peter Scarth, PhotoChannel CEO. "By completing the small private placement, the Company has strengthened its balance sheet, while it continues discussions with large photofinishing retailers in the United States. We are very pleased that the investors have recognized our continued growth."

As per the Company's last quarterly results:

  • Online transactional revenue grew by 700% from the end of Q2 2003 to Q2 2004; and
  • Quarterly transactional revenues at March 31, 2004 increased 66% over the previous quarter.
  • The Company paid a 10% cash finder's fee to a third party in connection with the private placement.

Investor Information: (866) 345 0115


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.

 



 

  
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