KidsFutures Inc.

KidsFutures Inc.

February 19, 2007 09:01 ET

KidsFutures Announces Second Closing of Equity and Convertible Debenture Private Placement

TORONTO, ONTARIO--(CCNMatthews - Feb. 19, 2007) -


KidsFutures Inc. (TSX VENTURE:FUT)(the "Company") today announced that it has completed the second and final closing of its previously announced private placement. The Company was successful in raising an additional $3 million for total gross proceeds of just over $6.6 million (the "Financing"). The second closing consisted of 16,768,634 units (the "Equity Units") at a subscription price of $0.12 per Equity Unit and $1 million in convertible debenture units (the "Convertible Debenture Units").

"The Company is thrilled with the results of this financing" says Mark Farrell, CEO of KidsFutures Inc. "We set an original goal of $6 million to implement our business plan and to streamline our capital structure. We surpassed our targets through strong institutional and retail support and were pleased with the momentum that developed. With the financing in place, management can now focus its entire effort on building our coalition and adding scale to our infrastructure".

Each Equity Unit consists of one common share of the Company (a "Common Share") and one half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Common Share Warrant"). Each Common Share Warrant will give the holder the right to purchase one Common Share at a price of $0.20 for a period of 18 months from the second closing date of the Financing (the "Closing Date").

Each Convertible Debenture Unit consists of $1,000 principal amount of convertible debenture (the "Debentures") and 833 Common Share purchase warrants (each, a "Debenture Warrant"). The Debentures mature on February 16, 2010 (the "Maturity Date") and are convertible at any time at a conversion price of $0.20 per Common Share during the first 24 months following the Closing Date and at a conversion price of $0.22 per Common Share if the conversion occurs on a date which is more than 24 months following the Closing Date but prior to the Maturity Date. Each Debenture Warrant will give the holder the right to purchase one Common Share at a price of $0.30 for a period of 24 months from the Closing Date.

Wellington West Capital Markets Inc. ("Wellington West") acted as the Company's agent on a best efforts basis in connection with the Financing. A cash commission of 7% of the gross proceeds of the Financing on orders raised by Wellington West, and a reduced commission of 3% on proceeds from investors sourced by the Company, has been paid to Wellington West. In addition, Wellington West has been granted 580,880 broker warrants giving it the right to purchase Equity Units at an exercise price of $0.12 per Equity Unit. The broker warrants will be exercisable for a period of 18 months from the Closing Date. All of the securities issued on the Closing Date are subject to restrictions on resale until June 17, 2007 as prescribed under applicable securities laws and the policies of the TSX Venture Exchange.

A portion of the proceeds from the Financing was used by the Company to repay all of its pre-existing debt. The convertible debenture holders that invested in the summer of 2006 agreed to have their debts retired and reinvested those funds into the current Financing. As a result, additional proceeds of approximately $1,314,350 were reinvested into Equity Units and $147,000 into Convertible Debenture Units. In addition, the Company's pre-existing secured debt was either repaid and retired or repaid and reinvested by the lenders into the current Financing of Equity Units. An additional 12,936,216 Equity Units were issued as a result of these investments by the Company's former creditors.

As previously announced, the Company will use a portion of the proceeds to redeem the existing Series 2 Class C Preference shares (the "Series 2 Shares") that are currently issued and outstanding. The Company currently has sufficient funds to meet all its redemption requirements and intends to redeem all Series 2 Shares prior to the end of February. Approximately 42% of the holders of Series 2 Shares have chosen to receive $0.25 in cash and the equivalent of $0.65 in Convertible Debenture Units and approximately 58% of the holders of Series 2 Shares have chosen to receive $0.62 in cash. As a result of this series of transactions, the capital structure will consist solely of Common Shares and approximately $2 million in Debentures.

About KidsFutures Inc. and Futura Rewards

Operated by Toronto-based KidsFutures Inc., the Futura Rewards Program helps Canadians save money by purchasing a wide variety of consumer products and services from a broad array of some of Canada's best-known retailers, service companies and brands. Members earn rewards that are cash-equivalent and can be directed into any financial product -- mutual funds in a RRSP, Registered Education Savings Plans (RESPs), GICs, etc. -- at any financial institution in Canada. Members can also direct their rewards to registered charities of their choice.

The Futura Rewards Program has in excess of 340,000 members who benefit from numerous opportunities to earn Futura Rewards through a coalition of over 60 Program Partners representing over 100 well-known brands, services and hundreds of individual products. The program is also available in more than 1,100 retail locations and more than 50 grocery locations across Canada. For more information, visit

Forward-Looking Statements

This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend" and similar expressions to the extent they relate to the Company or its management. The forward looking statements are not historical facts, but reflect KidsFutures' current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including any risks and uncertainties described herein, as well as the risks and uncertainties detailed in our final long form prospectus dated November 29, 2005 filed with the regulatory authorities.

TM Trademark of KidsFutures Inc.

The TSX-Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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