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EXHIBIT 99.1
ETOYS RAISES ADDITIONAL $100 MILLION
OF CASH THROUGH PRIVATE PLACEMENT
SANTA MONICA, Calif., June 13, 2000 - eToys Inc. (Nasdaq: ETYS) today announced
it has completed a private placement of $100 million of Series D convertible
preferred stock and related warrants with a select group of institutional
investors led by Promethean Asset Management.
The preferred stock is convertible into eToys Inc. common stock at a rate based
on market prices, subject to certain limits and conditions, over the three-year
term of the securities. eToys has the right to redeem any or all of the
preferred stock for cash, subject to a premium and certain conditions, at any
time over the next three years.
The preferred stock carries a 7% dividend yield, payable in either cash or eToys
common stock. The holders of the preferred stock have also received warrants to
purchase up to approximately 5.0 million shares of eToys common stock at $7.17
per share over the next three years, subject to adjustment.
The company expects the proceeds, along with existing cash balances, to be used
primarily to fund working capital and other general corporate needs. Cash
balances at the end of the most recently reported quarter, ended March 31, 2000,
were $140 million.
Neither the preferred stock nor the warrants have been or will be registered for
sale under the Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration under such act or an applicable
exemption from the registration requirements of such act.
FORWARD-LOOKING STATEMENTS
Statements herein that are forward-looking involve risks and uncertainties that
could cause results to differ materially from those expressed. Such risks and
uncertainties include, but are not limited to, the company's expectation of
operating losses and negative cash flow for the foreseeable future. Other risk
factors include the company's limited operating history, unpredictability of
operating results, seasonality, inventory risk, reliance on key vendors and
distributors as well as the competitive marketplace. Other risks are set forth
in the company's Form 424B4 Prospectus dated May 19, 1999, under the heading
"Risk Factors" and in the company's other filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the fiscal
year ended March 31, 2000.
