MACAU, China, Feb. 10 /Xinhua-PRNewswire/ -- PacificNet, Inc.
(Nasdaq: PACT), a leading provider of Customer Relationship Management (CRM),
mobile internet, e-commerce and gaming technology in China, announced today
that its subsidiary, PacificNet Games Limited (PacGames) has entered into a
definitive agreement for a $5 million financing in the form of a convertible
secured note from Pope Asset Management, LLC (Pope), an institutional
investor. Proceeds from the financing will be used to provide PacGames with
additional working capital to expand its gaming technology operations, to make
further synergistic acquisitions in China and for general corporate purposes.
The $5 million financing, evidenced by a convertible secured note issued
by PacGames to Pope, matures on February 6, 2010, and may be converted into
26% to 32% ownership interest in PacGames based on reaching certain net income
milestones during fiscal year 2007. The interest rate on the convertible note
will initially be set at 8%, and shall increase to 15% if the note is not
converted prior to maturity.
WR Hambrecht ( http://www.wrhambrecht.com/ ) advised PacGames in this
transaction.
"We are delighted to receive the first institutional investment for
PacGames which should help us further accelerate our product development and
sales marketing for our gaming products in Macau and the rest of Asia and
expand our market share in Asia's high growth gaming market," said Victor
Tong, President of PacificNet, and CEO of PacGames. "After achieving early
success in the Macau gaming market we believe that PacGames is ready to expand
into other parts of Asia as we see strong demand and opportunities for growth
in other Asian gaming markets. We are satisfied with PacGames success in Macau
as we have quickly become one of the leading local suppliers of gaming
machines to some of the most famous casinos in Macau, including Hotel Casino
Lisboa, Holiday Inn Casino Macau, Jai Alai Casino, etc. The selection of
PacGame's electronic gaming machines by leading hotel casinos in Macau marks a
huge win for PacGames and further enhances PacificNet's strong position in
Macau's gaming market. With our new focus on the rapidly growing gaming market
in greater China, Macau and Asia we will continue the pursuit of becoming a
leading technology and service provider to the casino operators and gaming
industry in Asia. This additional capital will allow us to continue our
expansion in the rapidly growing Asian gaming markets. We believe the
investment will further our current initiatives in gaming technology and
greatly enhance our customer base, revenue, profit, and our shareholder
value."
"As Macau's gaming market undergoes growing competition, casino operators
in Macau have to quickly adapt to the latest demands and trends by installing
the most popular and profitable gaming machines catering to the Asian gamers,"
said Tony Tong, Chairman of PacificNet. "PacGames multi-play electronic gaming
machines have quickly proven to be one of the best performing gaming machines
designed for Asian players. Macau has become the fastest growing part of China
and we are very excited to be moving forward in our pursuit of the Macau
gaming technology business. We believe that the Asian gaming market has huge
growth potential and that we are well positioned to win more hotel casino
clients and capture a growing market share as a leading gaming technology
provider in the region."
According to recent statistics provided by the Macau government, Macau is
the fastest-growing gaming market in the world and has just surpassed Las
Vegas as the largest gaming market in the world at the end of 2006 as Macau's
gaming revenue reached US$7.16 billion. Macao's casinos offer the largest
variety of casino games anywhere in the world, combining both established
western favorites with popular eastern games such as Blackjack, Baccarat, Pai
Kao, Roulette, Boulette, Boule, "Big and small" Fantan and Pacapio. A vast
assortment of slot machines and a growing number of electronic table games are
also available, often computer-linked for progressive jackpot payouts. The
number of hotel-casinos in operation and in development in Macau continues to
grow, including well-known Chinese names such as Galaxy and Melco and famous
Las Vegas names such as the Sands, the Venetian, and the newly opened Wynn
Resort. With the disposable income of the average Chinese on the rise, Macau's
gaming and entertainment market is expected to grow for years to come. Macau
is the only area in China where gambling is legal.
The securities have not been registered under the Securities Act of 1933,
as amended, and may not be offered or sold in the United States absent
registration under such act and applicable state securities laws or an
applicable exemption from those registration requirements.
About Investor: Pope Asset Management, LLC (www.PopeAsset.com)
Pope Investments LLC is headquartered in Memphis, Tennessee, U.S.A. and is
a pooled investment company that seeks to directly invest in attractive
business opportunities across the globe. Pope Investments' desire is to
invest in companies that are in high growth industries in countries that are
showing above average growth. Pope Investments has concentrated much of its
investments in China and has historically made significant investments in both
public and private Chinese-based companies.
About WR Hambrecht ( http://www.wrhambrecht.com )
WR Hambrecht + Co (www.wrhambrecht.com) is an investment bank committed to
using technology and auction processes to provide open and fair access to
financial markets for all its clients. The firm's impartial Internet-based
auctions, which allow the market to determine pricing and allocation, have
dramatically changed the financial services landscape. WR Hambrecht + Co
provides underwriting and advisory services for technology and emerging growth
companies, as well as equity research, sales and trading, full-service and
online brokerage and private equity offerings for institutions and
individuals. WR Hambrecht + Co is headquartered in San Francisco with offices
in Boston, Chicago, Montreal, New York and Philadelphia. The firm has
financial backing from industry leaders including American Century, Crimson
Ventures, epartners, Fidelity Ventures, Instinet Corporation, Novell, Park
Avenue Equity Capital Partners, LP, Scudder Kemper, Texas Pacific Group, and W
Capital Partners.
About PacificNet
PacificNet, Inc. (http://www.PacificNet.com) is a leading provider of
Customer Relationship Management (CRM), mobile internet, e-commerce and gaming
technology in China. PacificNet's clients include the leading telecom
companies, banks, insurance, travel, marketing and business services companies
and telecom consumers in Greater China. PacificNet's corporate clients include
China Telecom, China Mobile, Unicom, PCCW, Hutchison Telecom, Bell24,
Motorola, Nokia, SONY, TCL, Huawei, American Express, Citibank, HSBC, Bank of
China, Bank of East Asia, DBS, TNT, Hong Kong Government, and leading hotel-
casinos in Macau and Asia. PacificNet employs over 1,600 staff in its various
subsidiaries throughout China with offices in Hong Kong, Beijing, Shenzhen,
Guangzhou, Macau, and branch offices in 28 provinces in China and is
headquartered in Beijing and Hong Kong.
PacificNet Games Limited (PacGames), is a leading provider of Asian multi-
player electronic gaming machines, gaming technology solutions, gaming related
maintenance, IT and distribution services for the leading hotel, casino and
slot hall operators based in Macau, China and other Asian gaming markets.
PacGames is a leading developer of electronic versions of popular table games
which are less expensive to run resulting in higher casino profits with great
appeal to the mass market players. The growing market in Macau is for Asian
table games such as Baccarat, Roulette, Fan Tan, Fish-Prawn-Crab and Sic-Bo
Cussec as these games have wider acceptance in the Asian market than Western
games such as poker or slots. The development, manufacturing, maintenance, and
service of electronic Asian table games are underserved areas which are
predicted to grow considerably as Macau's gaming market matures. PacGames
products include multi-play electronic gaming machines such as Baccarat, Fish-
Prawn-Crab, Sib-Bo Cussec, Roulette, and Video Lottery Terminals (VLT) such as
Keno and Bingo, as well as other traditional slot machines.
Safe Harbor Statement
This Company's announcement contains forward-looking statements.
Statements that are not historical facts, including statements about our
beliefs and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. Potential risks and
uncertainties include, but are not limited to, PacificNet's possible future
losses, uncertain regulatory landscape in China, and fluctuations in quarterly
operating results. Further information regarding these and other risks is
included in PacificNet's Form 10K and other filings with the SEC.
Contact:
PacificNet USA office: Jacob Lakhany, Tel: +1-605-229-6678
PacificNet Beijing office: Ada Yu, Tel: +86 (10) 59225000
23rd Floor, Building A, TimeCourt, No.6 Shuguang Xili, Chaoyang District,
Beijing, China 100028
PacificNet Games Shenzhen Office: Room 4203, JinZhongHuan Business
Center,Futian District, Shenzhen, China 518040
