Blue Zone Announces Financing and Restructuring

Plan designed to streamline business and position company for new markets



Apr 18, 2001, 01:00 ET from Blue Zone, Inc.

    VANCOUVER, April 18 /PRNewswire/ - Interactive software leader Blue Zone,
 Inc. (Nasdaq:   BLZN), today announced two key initiatives to optimize its
 business plan: a financing of up to US$1 million and an organizational
 restructuring. Blue Zone will channel its resources into its core technology
 solution MediaBZ(TM), in particular in the areas of sales, client fulfillment
 and product evolution.
     Blue Zone's principal shareholder has agreed to make available funding of
 up to US$1 million in exchange for Secured Convertible Debentures. To meet
 anticipated short-term working capital requirements, Blue Zone may draw upon
 this funding from time to time by authority of its Board of Directors.
 Debentures will be secured by certain of Blue Zone's assets and will carry an
 interest rate of prime plus two percent. Each Debenture will be convertible at
 the option of the investor into common shares of the company at a price per
 share equal to the prevailing price on the date of issue. The company and the
 lender have entered into a term sheet setting forth the principal terms of the
 funding and Debentures under a Secured Convertible Loan Agreement.
     This financing puts the company in a stronger position to work towards
 achieving its new business goals. Whereas to date Blue Zone has sold its
 solutions exclusively to broadcasters, the company now plans to broaden its
 MediaBZ customer base to telcos, web portals and corporate clients that want
 to take advantage of interactive video. "There are a number of sectors that
 are 'convergence-ready' today and we are gearing up to provide them with our
 software," said CEO Bruce Warren. "While broadcasters will remain a core focus
 for Blue Zone, we are widening the net to other verticals. This makes good
 business sense at a time when broadcasters are going through their own
 reorganizations and, in many cases, joining forces with telcos and portals
 themselves."
     With the restructuring, Blue Zone's objective is to reinforce its core
 technology and sales focus. Blue Zone will eliminate 14 positions in
 administration and production, while maintaining its core competency as a
 software solutions company. To further focus the new company structure, Mr.
 Bruce Warren will continue as CEO and will assume the role of President, while
 Mr. Jamie Ollivier moves from President to Executive Creative Director. This
 will enable Blue Zone to support client fulfillment more effectively --
 including MediaBZ evolution and integration -- and is designed to have a
 positive impact on the company's existing and future clients. Other cost
 savings measures include significant reductions in general and administrative
 expenses. "Blue Zone is adapting to the general economic climate by optimizing
 the team," said Warren. "We have positioned the company for future revenue and
 product growth with the combination of our current cash reserves, existing
 sales contracts, capital injection and cost control."
     Over the past two years Blue Zone has successfully shifted its business
 model from supplying clients with interactive services to developing,
 integrating and supporting its MediaBZ software. "MediaBZ remains a great
 technology that provides tremendous benefits to all companies that want to
 enrich their content and extend their distribution channels," said Warren.
 "Today, more than ever, the MediaBZ value proposition makes sense to our
 target markets; potential clients can maintain a high-quality interactive
 content offering with fewer staff, allowing them to reduce costs."
 
     About Blue Zone
     Blue Zone makes you interactive. Blue Zone's MediaBZ software is the
 world's first convergence solution that enables broadcasters to create, manage
 and cross-publish interactive content to multiple platforms from a Web-based
 interface. Blue Zone's clients use customized MediaBZ software to unite and
 enhance TV, Web, radio and print content, together with interactive
 advertising and e-commerce. MediaBZ enables Blue Zone clients to
 simultaneously broadcast to traditional broadcast televisions, interactive
 televisions with set-top boxes, the Web, handheld digital devices, cell phones
 and other WAP-enabled devices. Blue Zone has applied for patents for the
 MediaBZ suite of products. Convergence is here.(TM) www.bluezone.net
 
     The Private Securities Litigation Reform Act of 1995 provides a "safe
 harbor" for forward-looking statements. Certain information included in this
 press release (as well as information included in oral statements or other
 written statements made or to be made by the company) contains statements that
 are forward-looking, such as statements relating to anticipated consequences
 of the company's announced restructuring, anticipated future revenues of the
 company and success of current product offerings. Such forward-looking
 information involves important risks and uncertainties that could
 significantly affect anticipated results in the future and, accordingly, such
 results may differ materially from those expressed in any forward-looking
 statements made by or on behalf of the company. For a description of
 additional risks and uncertainties, please refer to the company's filings with
 the Securities and Exchange Commission.
 
 

SOURCE Blue Zone, Inc.
    VANCOUVER, April 18 /PRNewswire/ - Interactive software leader Blue Zone,
 Inc. (Nasdaq:   BLZN), today announced two key initiatives to optimize its
 business plan: a financing of up to US$1 million and an organizational
 restructuring. Blue Zone will channel its resources into its core technology
 solution MediaBZ(TM), in particular in the areas of sales, client fulfillment
 and product evolution.
     Blue Zone's principal shareholder has agreed to make available funding of
 up to US$1 million in exchange for Secured Convertible Debentures. To meet
 anticipated short-term working capital requirements, Blue Zone may draw upon
 this funding from time to time by authority of its Board of Directors.
 Debentures will be secured by certain of Blue Zone's assets and will carry an
 interest rate of prime plus two percent. Each Debenture will be convertible at
 the option of the investor into common shares of the company at a price per
 share equal to the prevailing price on the date of issue. The company and the
 lender have entered into a term sheet setting forth the principal terms of the
 funding and Debentures under a Secured Convertible Loan Agreement.
     This financing puts the company in a stronger position to work towards
 achieving its new business goals. Whereas to date Blue Zone has sold its
 solutions exclusively to broadcasters, the company now plans to broaden its
 MediaBZ customer base to telcos, web portals and corporate clients that want
 to take advantage of interactive video. "There are a number of sectors that
 are 'convergence-ready' today and we are gearing up to provide them with our
 software," said CEO Bruce Warren. "While broadcasters will remain a core focus
 for Blue Zone, we are widening the net to other verticals. This makes good
 business sense at a time when broadcasters are going through their own
 reorganizations and, in many cases, joining forces with telcos and portals
 themselves."
     With the restructuring, Blue Zone's objective is to reinforce its core
 technology and sales focus. Blue Zone will eliminate 14 positions in
 administration and production, while maintaining its core competency as a
 software solutions company. To further focus the new company structure, Mr.
 Bruce Warren will continue as CEO and will assume the role of President, while
 Mr. Jamie Ollivier moves from President to Executive Creative Director. This
 will enable Blue Zone to support client fulfillment more effectively --
 including MediaBZ evolution and integration -- and is designed to have a
 positive impact on the company's existing and future clients. Other cost
 savings measures include significant reductions in general and administrative
 expenses. "Blue Zone is adapting to the general economic climate by optimizing
 the team," said Warren. "We have positioned the company for future revenue and
 product growth with the combination of our current cash reserves, existing
 sales contracts, capital injection and cost control."
     Over the past two years Blue Zone has successfully shifted its business
 model from supplying clients with interactive services to developing,
 integrating and supporting its MediaBZ software. "MediaBZ remains a great
 technology that provides tremendous benefits to all companies that want to
 enrich their content and extend their distribution channels," said Warren.
 "Today, more than ever, the MediaBZ value proposition makes sense to our
 target markets; potential clients can maintain a high-quality interactive
 content offering with fewer staff, allowing them to reduce costs."
 
     About Blue Zone
     Blue Zone makes you interactive. Blue Zone's MediaBZ software is the
 world's first convergence solution that enables broadcasters to create, manage
 and cross-publish interactive content to multiple platforms from a Web-based
 interface. Blue Zone's clients use customized MediaBZ software to unite and
 enhance TV, Web, radio and print content, together with interactive
 advertising and e-commerce. MediaBZ enables Blue Zone clients to
 simultaneously broadcast to traditional broadcast televisions, interactive
 televisions with set-top boxes, the Web, handheld digital devices, cell phones
 and other WAP-enabled devices. Blue Zone has applied for patents for the
 MediaBZ suite of products. Convergence is here.(TM) www.bluezone.net
 
     The Private Securities Litigation Reform Act of 1995 provides a "safe
 harbor" for forward-looking statements. Certain information included in this
 press release (as well as information included in oral statements or other
 written statements made or to be made by the company) contains statements that
 are forward-looking, such as statements relating to anticipated consequences
 of the company's announced restructuring, anticipated future revenues of the
 company and success of current product offerings. Such forward-looking
 information involves important risks and uncertainties that could
 significantly affect anticipated results in the future and, accordingly, such
 results may differ materially from those expressed in any forward-looking
 statements made by or on behalf of the company. For a description of
 additional risks and uncertainties, please refer to the company's filings with
 the Securities and Exchange Commission.
 
 SOURCE Blue Zone, Inc.