Interactive Television Networks, Inc. Closes $4 million Convertible Debt Placement

Interactive Television Networks, Inc. Closes $4 million Convertible Debt Placement

LAGUNA NIGUEL, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Interactive Television Networks, Inc. (BULLETIN BOARD: ITTV) announced that the Company has completed a $4 million convertible debenture private placement to an undisclosed investor, an institutional investor. Pursuant to the terms of the investment agreements, the Company received $4 million in exchange for a 17 percent convertible debenture, and warrants to purchase 1,000,000 shares of additional common stock.

The debenture is convertible at a price of $2.00 per share and the warrants are exercisable for a period of five years at a price of $3.00 per share. The Company may, at its discretion, pay up to 50 percent of the interest by issuing additional debentures in accordance with the same terms as the 17 percent convertible debenture.

The Company used $2.4 million of the offering proceeds to fully repay an outstanding letter of credit issued to the Company from Manufacturer's Bank. ITVN also repaid a $1.6 million short-term working capital loan from Mercator Momentum Fund III, LP.

"We are pleased that our debt financing has received such quality institutional support," said Charles Prast, CEO of ITVN. "These funds will go towards funding accelerated growth and the elimination of short-term debt used to acquire our existing inventory."

The Company has agreed to file within 60 days a registration statement with the SEC for the resale of the common stock underlying the convertible debenture and warrants.

What is IPTV?

IPTV stands for Internet Protocol TV, which is broadcast-quality television delivered over standard home broadband Internet. While offering the same quality as satellite or cable, IPTV has many advantages, such as virtually limitless programming and on-demand content because only channels selected by consumers are delivered over home broadband networks. All content-including HDTV-can be distributed on a subscription or pay-per-view basis with content promotion integrated into the user experience. Best of all, IPTV offers true interactivity for the customer, allowing two-way communication with services comparable to the Web, creating a better environment for users, programmers and advertisers.

About ITVN

Interactive Television Networks Inc. is a vertically integrated provider of interactive content networks delivered to the television over home broadband. ITVN owns or controls all aspects of its business from content licenses, management, billing, and streaming software to the set-top-box installed in the consumer's home. Determined to remain the leader in IPTV, ITVN has invested heavily into making this a global product for people around the world. With its versatility and portability, ITVN will remain the customers' choice for IPTV entertainment. For more information visit www.itvn.com.

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the release of ITVN's network and products, the market acceptance of its products and services, competition from companies that provide, or have announced an intention to provide IPTV, the need for subsequent substantial additional financing, and the company's ability to successfully market ITVN's products and services. Additional uncertainties and risks are described in the Company's most recently filed SEC documents, such as its most recent current reports on Form 8-K. All forward-looking statements are based upon information available to the Company on the date the statements are first published. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Source: Interactive Television Networks, Inc.

CONTACT: Amy Orebaugh of Terpin Communications Group, +1-310-821-6100,
ext. 107, amy@terpin.com, for Interactive Television Networks, Inc.

Web site: http://www.itvn.com/

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