PHOTOLOFT ANNOUNCES ACQUISITION OF EXTREME VELOCITY GROUP TO FORM BRIGHTCUBE,
INC.
ACQUISITION MAKES PRINT ON DEMAND A REALITY FOR COMBINED $12 BILLION WHOLESALE
ART AND PROFESSIONAL PHOTOGRAPHY MARKETS; ACQUISITION PROMOTES ACCELERATED
REVENUE GROWTH
CAMPBELL, Calif.--(BUSINESS WIRE)--Dec. 8, 2000-- PhotoLoft, Inc. (OTCBB:BRCU -
news; formerly OTCBB:LOFT) today announced that it has signed a definitive
agreement to acquire privately held, Los Angeles based Extreme Velocity Group
(EVG), a provider of Internet and imaging solutions to the art market.
Simultaneously, PhotoLoft announced that it would change its name to Brightcube,
Inc. The Company will begin to trade under the new symbol BRCU (OTCBB) today,
December 8, 2000.
The combination of PhotoLoft and EVG under the Brightcube name makes Print on
Demand, or the ability to select an individual image, have it delivered to a
remote location digitally, and printed at that location on high quality,
archival papers and inks, a reality for retailers, photographers, and individual
consumers. The acquisition will blend PhotoLoft's online Internet imaging
infrastructure technology with EVG's first mover advantage in the art market and
its rapidly growing nationwide network of offline brick and mortar art galleries
and frame shops, and its proprietary line of inks and paper for digital
applications. This combination will provide one of the most comprehensive
business-to-business (``B2B'') solutions to the estimated combined $12 billion
wholesale art and professional photography markets.
In connection with the acquisition, PhotoLoft will issue, in aggregate,
approximately 18 million shares of its Common Stock for all of the outstanding
capital stock of EVG. In addition, PhotoLoft agreed to pay an $800,000 payable
of EVG and assume lines of credit in the aggregate of $690,000. EVG's innovative
business model will provide Brightcube with a platform to rapidly increase
revenues through multiple revenue streams. ``At EVG I have emphasized revenue
and cash flow and will apply the same focus at Brightcube in order to rapidly
achieve cash flow breakeven and profitability,'' comments Al Marco founder and
President of EVG.
Subject to certain customary closing conditions, the acquisition is expected to
close by December 31, 2000. Al Marco will be appointed as the Chief Executive
Officer of Brightcube following the closing. The acquisition will be accounted
for under purchase accounting.
Brightcube will focus on eliminating the inefficiencies associated with standard
business practices in the art and photography industry, such as limited
distribution resulting in limited choices to consumers, high cost of production
and distribution and inventory risks. PhotoLoft has created a world-class
digital imaging technology while EVG has successfully penetrated the fragmented
fine art market by offering to its offline commercial clientele maximized
efficiencies using the Internet. Brightcube represents a synergistic blending of
both companies' online and offline resources to create multi-dimensional,
one-stop-shop convenience that is expected to affect a paradigm shift in the way
that professional photographers, art galleries and frame shops traditionally
operate.
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``The Internet is changing the digital imaging environment at light speed, with
the change being led by the rapid growth in digital camera use and the
technological advances in inkjet printing. While the greatest growth to date has
been in the consumer arena, the professional photographic and art markets are
the next frontier. On-demand delivery and printing of images will be a natural
result of this,'' said Terren S. Peizer, Chairman of PhotoLoft. ``PhotoLoft was
a early participant in the digital imaging infrastructure market, and EVG
revolutionized the art world through the creation of an offline brick and mortar
network tied together by the Internet. Now, Brightcube - for the first time -
will bring together archival quality inks and papers by EVG, extensive
photography and art image banks, color/quality management and delivery
infrastructure required for Print On Demand to become an industry-preferred
method of conducting real-world business.''
Fusion Of Resources
The acquisition with EVG by PhotoLoft represents a natural extension of
PhotoLoft's online Internet imaging infrastructure strategy and positions
Brightcube to facilitate the true realization of Print On Demand for the art and
photography markets. With the new generation of ink jet printers available on
the market coupled with Brightcube's superior quality inks and paper, extremely
high quality prints can be quickly produced. Brightcube envisions deploying a
network of these printers to its brick and mortar dealer network where consumers
can choose a print and have it produced on demand, or to professional
photography studios where digital technology supplants ``dark room'' production
facilities to produce on-the-spot, superior quality photos - all on Brightcube's
own line of high quality papers and using Brightcube's proprietary line of inks
and all distributed via Brightcube's Internet imaging infrastructure.
As a leader in the delivery of Internet and imaging solutions that lower costs
and increase distribution for the highly fragmented brick and mortar art dealer
and frame shop industries, EVG currently has a paying dealer membership network
covering approximately 1,000 zip codes, which it developed in less than one
year. Consolidated under its recently launched business-based art portal
(www.allartportal.com), EVG provides network members with an on-line retail art
presence (www.FrameYourArt.com), an electronic exchange that allows members to
purchase art and framing supplies from multiple vendors in one place, Web sites
for Company dealers, and educational and business content specific to the
industry. EVG earns revenues from network membership fees, electronic exchange
fees and the sales of various products, including its own proprietary,
award-winning ink jet papers and inks designed exclusively for use by the
premium art and photography markets.
Expanding Market Opportunity
A 1999 Digital Imaging Marketing Association (DIMA) Report records that the
photo printing market is one of the largest service segments of the U.S.
economy, generating sales of over $140 billion in three main categories: paper
and allied products ($50.6 billion), publishing ($5.5 billion) and printing
($84.6 billion). All segments of this market and that of the art market are
rapidly going digital, thus dramatically changing how images are distributed and
printed. For instance, Brightcube clients, including galleries, artists and
photographers, will no longer be subjected to pre-printing/pre-press, handling,
shipping or the physical stocking of inventory. Rather professionals will be
afforded the opportunity to immediately upload hi-resolution images hosted on
Brightcube Web sites from which these images, along with a vast array of
products, will be made available for printing on demand and immediate framing
consideration - without the customer ever leaving the premises. This, alone,
creates a value-added proposition for photographers and art dealers seeking to
establish the ways and means to enhance in-store revenue opportunities while
significantly increasing customer convenience.
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``By intimately understanding the industry space and rapidly securing a
first-to-market position, Brightcube will move to capture markets that produce
over 950 million images annually,'' continued Al Marco. ``Furthermore, we intend
to dramatically expand our dealer network by yearend 2001 to encompass over
5,000 storefronts. With multiple Web sites, proprietary software infrastructure,
comprehensive artist and photography image bank and the control of a dynamic
recurring revenue source in our consumables, Brightcube intends to emerge as the
industry acknowledged, full-service leader in the business-to-business digital
imaging and Print On Demand markets.''
About PhotoLoft, Inc.
Launched in 1999, PhotoLoft has firmly established itself as a leading developer
and provider of digital-imaging Internet infrastructure technology, and has
focused on three primary segments - the traditional retail photo-finishing
market, professional photographers with image assets and the online
photo-sharing market. PhotoLoft solutions power leading customers such as Canon
USA, FutureShop and Pakon. Please see www.brightcube.com for further
information.
About Extreme Velocity Group
EVG was formed in March 2000 to maximize and leverage the rapid growth and
success of multiple sites previously operating under the banner of
Frameyourart.com. EVG sites includes allartportal.com, FrameyourArt.com,
AllArtBiz.com, Xtremegamut.com, and PhotoInkjet.com, representing a consortium
of industry leaders that provide the means to continue successfully serving the
needs of bricks-and-mortar galleries while capturing market share in emerging
online markets and new technologies. Each EVG site has a clear vision, a history
of successful operations and has experienced tremendous growth through the
experienced leadership and sound execution of founder Albert Marco. Please see
www.ev-g.com for additional information.
For more information, contact Roger Fortier (media relations) at McGrath/Power
PR (408) 727-0351) e-mail: [email protected]; Loren Brown or Jill Stephenson
(investor relations) at Continental Capital Equity Corp, (407) 486-2001 e-mail:
[email protected] or mailto:[email protected].
Safe Harbor Statement of PhotoLoft, Inc. under the Private Securities Litigation
Reform Act of 1995
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This press release may contain forward-looking statements based on our current
expectations, estimates and projections about our industry, management's
beliefs, and certain assumptions made by us. Any estimates that refer to
expectations, projections or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, our actual results could differ materially and adversely
from those expressed in any forward-looking statements as a result of various
factors. Such risk factors include, but are not limited to, the company expects
to incur operating losses for the foreseeable future and quarterly results may
vary considerably based upon many factors including its ability to: continue to
develop, protect and commercialize its technology, attract and retain key
management and technical personnel, delays or cost increases with respect to
product and service introductions. Competition, growth of the web-based digital
imaging, photo-sharing, art and e-commerce market will impact results. PhotoLoft
will be dependent on raising capital and forming strategic alliances that could
be highly dilutive to shareholders and there is no guarantee it will be able to
raise capital on favorable terms if at all. Our Annual Report on Form 10-KSB,
recent and forthcoming Quarterly Reports on Form 10-QSB, and other Securities
and Exchange Commission filings discuss some of the important risk factors that
may affect our business, results of operations and financial condition. We
undertake no obligation to revise or update publicly any forward-looking
statements for any reasons.
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Contact:
McGrath/Power PR, Santa Clara, Calif
Roger Fortier (media), 408/727-0351
[email protected]
or
Continental Capital & Equity Corp.
Loren Brown (investor relations), 407/682-2001
[email protected]
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