Investor Contact:
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lillian@lhai-sf.com/david@lhai-sf.com
Lippert/Heilshorn & Associates
Investor Relations/San Francisco
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Keith Lippert 212/838-3777
PhotoWorks, Inc. Closes $15 Million Preferred Stock Financing
PhotoWorks Online Archive Now Hosts 80 Million Customer Photos
Company Closes $15 Million Capital Infusion from Orca Bay Partners and its
Affiliates and Madrona Venture Group
SEATTLE - February 14, 2000 - Enhancing its leadership position in the online
Internet based image management space, PhotoWorks, Inc. (Nasdaq NM: FOTO) today
announced the closing of its $15 million preferred stock and warrant financing
previously announced on February 1, 2000.
Orca Bay Partners and its affiliates, a private equity investment firm
affiliated with John McCaw (a co-founder of McCaw Cellular) led the $15 million
round of financing, with Madrona Venture Group. The investment, which closed
today, is intended to allow PhotoWorks to leverage its leading technology, photo
processing capabilities and customer base to capitalize on the expected
explosive growth in the digital image management and Internet photo processing
market. The Company intends to use the proceeds to expand the Company's
marketing presence, enhance its branding campaign, leverage its Internet
position through additional strategic alliances and add senior management
resources.
Ross Chapin from Orca Bay Partners and Paul Goodrich from Madrona Venture Group
are expected to join the Board of Directors, increasing the number of Board
members from five to seven.
"Ross Chapin and Paul Goodrich will add new dimensions to our Board," stated
Gary Christophersen, President and CEO of PhotoWorks. "Their experience with a
variety of technology and Internet companies will help us mold our emerging web
centric business. Their investment is very timely-- we have just confirmed the
market's expectations for rapid growth in the demand for online photo services
at the recent Photo Marketing Association annual meeting. Our customers seem to
be noticing as well, our PhotoWorks archive now hosts over 80 million customer
images."
About Orca Bay Partners
Orca Bay Partners is a private equity investment firm providing equity capital
for transactions ranging from recapitalizations of mature businesses to growth
capital for emerging companies. Founded in 1998, and based in Seattle, Orca Bay
Partners makes investments in companies that are uniquely positioned to benefit
from growing or changing markets.
About Madrona Venture Group
Madrona Venture Group (http://www.madronagroup.com) is an early-stage investor
focused on the Internet Economy in the Northwest. The firm recently closed a
$250 million venture fund directed at emerging Internet, software and
telecommunication businesses. Some of Madrona's early-stage investments include
Amazon.com, Homegrocer.com, and Nordstrom.com.
About PhotoWorks
PhotoWorks, Inc. (formerly Seattle FilmWorks, Inc.) is a photofinishing and
online image management company and a leader in providing digital images over
the Internet. PhotoWorks online is an increasingly popular way for people to
share photos over the Internet. With more than 80 million images archived,
PhotoWorks online is the largest online consumer photo archive site on the Web.
The PhotoWorks online service includes free scanning of every photograph (with
normal film processing fees), Web posting to a private site and lifetime
archiving, as long as the consumer remains an active customer of PhotoWorks. The
online archive is expanding the way people can enjoy their photos by enabling
the growing popularity of photo e-mails and the ability to order photographic
reprints online without the need for negatives. To get started, customers can
request a free film processing starter kit at www.photoworks.com.
Based in Seattle, PhotoWorks (Nasdaq NM: FOTO) was founded in 1978.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Statements in this news release concerning, leadership in the provision of
digital images over the Internet, the market's expectations for rapid growth in
the digital image management and Internet photo processing market or the demand
for online photo services and the Company's ability to capitalize on that
growth, the growing popularity of online photos and photo e-mails and any other
statement which may be construed as a prediction of future capabilities,
performance or events are forward-looking statements, the occurrence of which
are subject to a number of known and unknown risks and uncertainties which might
cause actual performance to differ materially from those expressed or implied by
such statements. These risks and uncertainties include the possibility of delays
in the expansion of image storage capacity due to delays in deliveries from
suppliers or technical problems; system performance problems due to technical
difficulties, system malfunctions, Internet interruptions or other factors;
pricing and other activities by competitors; and other risks including those
described in the Company's Annual Report on Form 10-K and those described from
time to time in the Company's other filings with the Securities and Exchange
Commission, press releases and other communications.
All companies and product names are trademarks of their respective owners. For
more information, e-mail info@photoworks.com or call 800.PHOTOWORKS
(800.746.8696). Copyright 2000 PhotoWorks, Inc.