Jackson River (JKRI)

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JKRI Jackson Rivers Company, Inc. Enters Into $2 Million Financing
PR Newswire - April 25, 2006 9:03 AM (EDT)
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SAN DIEGO, April 25, 2006 /PRNewswire-FirstCall via COMTEX/ -- The Jackson Rivers Company, Inc. (OTC Bulletin Board: JKRI), a developer of Machine to Machine (M2M) services, network engineering and data management services, announced today that it has entered into an agreement to receive up to two million dollars in financing from a group of accredited investors in return for 6% convertible notes of the Company and warrants to purchase 50,000,000 shares of the Company's common stock at an exercise price of $0.07 per share.

Stated Jeffrey Flannery, CEO of Jackson Rivers Company, "We appreciate the confidence the investors have in Jackson Rivers to provide us with this level of financing. These funds are critical to jumpstart our marketing program in the M2M marketplace and to move forward with potential acquisitions. Upon receipt of the total funding, we believe Jackson Rivers will be in a much stronger position to carry out its business plan over the next twelve months."

The funding consists of three tranches. The first tranche of $700,000 was received by the company on March 31, 2006. The second tranche of $600,000 will be funded within 5 days of filing of a registration statement with the Securities and Exchange Commission relating to the resale of common stock issuable upon conversion or exercise of the warrants, and third tranche of $700,000 will be funded within 5 days of effectiveness of the registration statement.

Subject to certain terms and conditions, the notes are redeemable by the Company at a rate of between 120% to 140% of the outstanding principal amount of the notes plus interest. In addition, under certain conditions, the Company may prepay the monthly portion due on the outstanding notes and no conversions will take place during such month where this option is exercised. The notes are secured by a first lien on all of our assets, including our intellectual property.

Otherwise, once the shares are registered the note holders will have the right to convert their notes according to certain terms and conditions. The conversion is based on a percentage of the average of the lowest three trading prices during the twenty trading day period prior to conversion. This percentage applied to the conversion will be based on the Company's ability to meet certain requirements in a timely manner. For example, if we are able to achieve effectiveness of the Registration Statement within 120 days, the percentage will be 60%. If we are not able to achieve effectiveness and/or are not able to file the Registration Statement within 30 days of the Note, the percentage could be as low as 50%.

"We evaluated a number of options for funding our growth," added Mr. Flannery, "and chose a program that we feel will best benefit the company, allow us to meet the goals of our business plan and ultimately create greater value for our shareholders. Our focus is on bringing business and revenues into Jackson Rivers as well as putting the Company into a position to compete aggressively in the M2M marketplace. We needed this funding to do that."

The documents contain certain limitations on conversion of the notes and/or exercise of the warrants. For example, at no time can the conversion (or exercise) result in ownership that would exceed 4.9% of the issued and outstanding shares of the company's stock. In addition, the Holder agrees that it will limit its conversions to no more than $60,000 per calendar month or the average daily dollar volume calculated during the ten (10) business days prior to a conversion, whichever is greater. Further, the purchasers of our convertible notes have agreed that so long as the notes are outstanding, they will not enter into or effect any "short sales" or other hedging transactions which establish a net short position in our common stock.

The Company is required to file an SB2 registration with the Securities and Exchange Commission to register 150% of shares required to cover the notes based on the current market price of the Company's stock. The actual number of shares that the note holders will convert will depend on the share prices during conversions and could be less than the registered amount if the share price appreciates, or could be more than the registered amount if the share price falls from current market value.

For a more complete review of the funding documents please refer to the Company's filings with the Securities Exchange Commission.

More information on the company can be found at www.jacksonrivers.com and at www.diversenet.com.

Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of JKRI and Diverse officials are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "believes," "anticipates," "intends," "plans," "expects," and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future JKRI and Diverse actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and JKRI has no specific intention to update these statements.

SOURCE The Jackson Rivers Company, Inc.

Janet Whitehead of The Jackson Rivers Company, Inc., [phone]

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