Trading in and settlement of Common Shares

25 May 2006 07:00

25 May, 2006 121 Media, Inc. ("the Company" or "121 Media") Trading in and settlement of restricted common shares ("Restricted Shares") on AIM The Company and its advisers are aware that some shareholders have experienceddifficulty with delivery and settlement of trades when they have sold theirshares in the Company, due mainly to their share certificates still bearing aRegulation S legend even though this restriction may have lapsed.The purpose of this announcement is to explain the background to the issue ofRestricted Shares, to provide guidance as to the settlement of trades on theAlternative Investment Market of the London Stock Exchange ("AIM") and tooutline the arrangements that are to be made for the lifting of therestriction.BackgroundAs a US Corporation, 121 Media has issued shares to raise new equity for theCompany without being required to file a US prospectus with the US Securitiesand Exchange Commission ("SEC") under the exemption from registration affordedby Regulation S of the SEC. Regulation S, among other things prohibits the saleof shares to US Persons (including investment funds in the US or US individualsliving abroad) until the one year restriction has expired. Accordingly, afterthe 12 months period has lapsed the shares may be resold to US Persons. Theymay be sold to non-US persons at any time.In order to ensure that Restricted Shares (when sold in the London market)cannot be purchased by US persons, the shares carry a legend imprinted on theshare certificate which sets out details of the restriction.Due to the requirement for this legend, Restricted Shares are in certificatedform and settled on a residual basis in the London market; they cannot besettled through the CREST electronic system. To date there has been nomechanism for removing the legend after any particular shares have been inissue for the required 12 month period and therefore are no longer subject tothe restriction.The Company has now decided to create a mechanism whereby restricted shares andunrestricted shares can now be more readily identified and each group of shareswill be held on a separate ISIN. It is important to note however, that both therestricted and unrestricted shares are identical in terms of their rights, andthey will only differ in that they should not be acquired by US persons whilethis temporary restriction is in effect.Current Position and Creation of New ISINAs of 24th May 2006, the Company has 9,839,927 Common Shares in issue andwhilst the share certificates for all issued shares currently bear theRegulation S legend, this restriction only applies to the 2,336,689 shareswhich have been issued within the last 12 months.The Company will shortly be writing to all Shareholders, inviting those whoappear to hold Common Shares which are no longer restricted under Regulation Sof the US Securities Act, to return their current legend bearing certificateand receive a "clean" (without legend) certificate.To allow trades in Restricted Shares and Unrestricted Shares (once newcertificates are issued) the Company has made an application to the AIM Marketof the London Stock Exchange for a new ISIN: US68241U1097 SEDOL: B155HF0(Ticker: OTOM). Such new shares will trade under the new ISIN and will becapable of settlement within the CREST System.As shareholders whose shares have been in issue for more than 12 months applyfor the new non legend bearing certificates, the Company will notify the LondonStock Exchange accordingly, in order that the market can be aware of the numberof shares trading under both the new ISIN and the old ISIN. The company alsointends to update shareholders with the same information by way of anannouncement each quarter.A further announcement as to the date when dealings in the Common Sharesdesignated by the new ISIN are expected to commence will be made in due coursetogether with the number of shares initially being transferred.For enquiries:121Media, Inc. 0870 405 7727 Tim Bowen, CFO John East & Partners Limited 020 7628 2200 David Worlidge/Simon Clements END121 MEDIA INC