PhotoChannel Networks Inc.
OTC Bulletin Board : PNWIF

PhotoChannel Networks Inc.

March 28, 2007 08:00 ET

PhotoChannel Announces US$15 Million Financing

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 28, 2007) - PhotoChannel Networks Inc. (TSX VENTURE:PN)(OTCBB:PNWIF) ("PhotoChannel" or "Company") has received and accepted binding term sheets for a private placement of 4.4 million units at a price of US$3.40 per unit. The private placement is being conducted partly through placement agents and is expected to close within the next several days. Completion of the private placement is subject to the approval of the TSX Venture Exchange and to the execution of definitive documentation with the investors. The Company will pay its placement agents commissions in cash and in warrants in amounts permitted by the TSX Venture Exchange. The proceeds will be used for general corporate purposes and to take advantage of potential corporate opportunities as they may arise.

Each unit will consist of one common share of the Company and one common share purchase warrant. Each share purchase warrant (a "Warrant") will entitle the holder to purchase one additional common share (a "Warrant Share") at a price of US$4.00 per share for a period of two years from the closing of the private placement. The Warrants include an acceleration provision pursuant to which, if the volume weighted average price of the common shares over a period of 30 consecutive trading days exceeds US$6.00 per share, the Company will have the right to accelerate the expiry date of the Warrants to a date which is 20 business days after the date the Company provides written notice to the warrantholders (the "Accelerated Expiry Date"). This right to accelerate the expiry of the Warrants is only exercisable by the Company if on the date of providing notice of the acceleration the Warrants and on the Accelerated Expiry Date (i) the Warrants have been outstanding for at least four months and (ii) the Warrant Shares are the subject of a valid registration statement under the Securities Act of 1933 (the "U.S. Securities Act").

The securities offered have not been and will not be registered under the Securities Act of 1933 (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States absent registration under the U.S. Securities Act and applicable state securities laws unless an exemption from such registration requirements is available. The Company has limited sales of the securities to institutional accredited investors who will purchase on a private placement basis pursuant to an exemption from registration provided by Rule 506 of Regulation D under the U.S. Securities Act and to persons who are outside of the United States. The Company has agreed to qualify the resale of the common shares and Warrant Shares issued to the investors by filing a prospectus in certain provinces in Canada and to register such securities under the U.S. Securities Act.

No regulatory authority has approved or disapproved the content of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States.

Contact Information

  • PhotoChannel Networks Inc.
    Mr. Robert Chisholm
    Chief Financial Officer
    (604) 893-8955 ext. 224


    PhotoChannel Networks Inc.
    Investor Information
    Toll Free: 1-800-261-6796