ExtendMedia Inc.

ExtendMedia Inc.

February 06, 2006 15:16 ET

ExtendMedia Announces Special Meeting of Shareholders and Proposed New Financing

TORONTO, ONTARIO--(CCNMatthews - Feb. 6, 2006) - ExtendMedia Inc. announced today that it has called a special meeting of its shareholders to consider a resolution to amend the articles of the company to effect a consolidation of all of the issued and outstanding common shares of the company on the basis of one post-consolidation common share for each 100,000,000 pre-consolidation common shares held. Shareholders who hold less than 100,000,000 common shares will receive $0.0017 for each common share eliminated on the consolidation. The shareholders meeting will be held on March 2, 2006.

The proposed consolidation is a condition to ExtendMedia obtaining new equity financing from two venture capital firms. The proposed new financing is subject to a number of other conditions including completion of satisfactory due diligence on the company by the investors and execution of definitive investment agreements. It is also a condition of the proposed new financing that the three lenders to ExtendMedia (MWI Nominee Company Ltd., Keith Kocho and Leland Verner) convert their existing loans into common shares and exercise all of their warrants. These lenders currently hold approximately 91% of the outstanding common shares of ExtendMedia. Following the conversion of their existing loans and the exercise of their warrants, the lenders will hold over 97% of the outstanding common shares of the company, prior to the consolidation. After giving effect to the proposed consolidation, these lenders would be the only remaining shareholders of the company. If the consolidation is approved and proceeds, ExtendMedia would cease to be a reporting issuer.

Further details with respect to the proposed consolidation and proposed new financing can be found in an information circular which was mailed to shareholders today and will be available on www.sedar.com.

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