KidsFutures Inc.

KidsFutures Inc.

August 04, 2006 13:09 ET

KidsFutures Inc. Completes Debenture Financing

TORONTO, ONTARIO--(CCNMatthews - Aug. 4, 2006) - KidsFutures Inc. (TSX VENTURE:FUT), a national loyalty rewards and financial services company that helps families save money for their children's post-secondary education, announced that it has completed a first closing of a convertible debenture financing in the amount of $1,400,000. Additional closings may occur subject to investor interest.

The Company has issued a series of discounted convertible debentures with a 10% yield in the aggregate principal amount of $1,849,000 maturing on August 3, 2009 for gross cash proceeds of $1,400,000. The debentures are convertible at any time after August 3, 2007 at a price equal to the average closing price of the Company's common shares over the 20 trading days prior to the conversion date, less the applicable market discount permitted by the TSX Venture Exchange. The Company has also issued 751 common share purchase warrants (the "Warrants") per $1,000 principal amount of debentures issued. Each Warrant is exercisable at any time after August 3, 2007 and prior to 5:00 p.m. (Toronto time) on August 3, 2008 at a price equal to the lesser of: (i) $1.00 per Common Share; and (ii) the greater of (a) the market price per common share on the exercise date and (b) $0.35. In the event that a debenture holder elects to convert its debenture to common shares prior to the maturity date, the debenture holder will receive a bonus interest of 10% per annum on the original amount invested (to be added to the amount converted) and 500 bonus shares per $1,000 of debenture.

The hold period for the debentures and the warrants expires on December 4, 2006. The hold periods, if any, on the underlying common shares issuable upon conversion or exercise of the debentures and warrants, as the case may be, are subject to the TSX Venture Exchange's applicable policies. The Company has paid a commission of 4% on $785,056 of the amount invested pursuant to the first closing.

"We are pleased to be involved in this round of financing and as children's futures are bright and exciting, so is the Company's." said Richard Stone of Stone Asset Management Limited, the lead investor in this debenture financing.

About KidsFutures

KidsFutures Inc., a Toronto-based company, operates the KidsFutures Rewards Program. The KidsFutures Rewards Program helps members earn rewards which can be easily converted to cash and directed into an existing or new education savings plan, such as an RESP, at any financial institution. Members can also purchase a range of financial products (such as mutual funds or GICs) from KidsFutures' subsidiary, KidsFutures Investments Inc.

KidsFutures Rewards that are transferred to an RESP are eligible to be topped up by 20 to 40 per cent through the Federal Government's Canada Education Savings Grant and may also qualify for certain provincial grants such as the Alberta Centennial Bond. The program has in excess of 320,000 members who are offered numerous opportunities to earn KidsFutures Rewards through a coalition of over 60 Program Partners representing over 100 well-known brands. Members can also earn rewards at over 1,400 retail locations participating in the program.

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

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