NEWTON, Mass., Dec. 28, 2001 (PRIMEZONE) -- LifeFX, Inc. (OTCBB:LEFX), the leading developer of life-like virtual people for the Internet (the "Company"), announced that it has entered into an agreement with Safeguard 2001 Capital, L.P., an affiliate of Safeguard Scientifics, Inc. (collectively, "Safeguard"), the Company's largest stockholder, relating to a senior secured loan facility in the aggregate principal amount of $4,000,000 (the "Loan Agreement"). Under the terms of the Loan Agreement, the funds may be drawn by the Company at certain scheduled intervals over a one year period upon the satisfaction of certain terms and conditions. The facility bears interest at a rate of 12% per year, and is payable on January 1, 2003, or earlier in certain circumstances. The facility is secured by a perfected first priority security interest in the Company's assets.
Pursuant to the Loan Agreement, Safeguard has agreed to exchange certain of its outstanding warrants to purchase an aggregate of 15,628,295 shares of the Company's common stock in exchange for a new warrant (the "Warrant") to purchase up to an aggregate of 42,410,619 shares of the Company's common stock at an exercise price of $.094316 per share. The shares subject to the Warrant vest in accordance with the aggregate funds advanced to the Company under the Loan Agreement, and have certain registration rights attached thereto.
About LifeFX
Lifef/x, Inc., a Safeguard Scientifics (NYSE:SFE) partner company, is creating the face of the Internet by developing photo-realistic, digital human faces, or LifeFX Stand- In (tm) virtual people, that can interact in real time. LifeFX Stand-In (tm) virtual people will be used by Web businesses as life-like customer-service and sales representatives, guides, teachers and entertainers, while consumer applications will include e-mail, instant messaging and chat rooms. The LifeFX technology was originally developed for professional medical applications by the University of Auckland, with which LifeFX has an exclusive, worldwide, perpetual, paid up license. LifeFX holds three patents and has five pending. For more information about LifeFX, visit http://www.lifefx.com. For application ideas and demos, visit http://www.facemail.com
Statements made in this news release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based on management's belief as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. LifeFX Inc.'s future results may differ materially from the results anticipated in these forward-looking statements because of a variety of factors, including the ability of the company to implement its business strategy; the ability of the company to achieve the intended benefits of this strategy; the ability of the company to complete development of its technology; the ability of the company to achieve success in forging strategic relationships; adoption of the technology by major consumer and commercial Web sites; the ability of the company to commercialize the technology before competitors; the ability of the company to retain key employees; and those factors identified in Lifef/x, Inc.'s annual report on Form 10-K for the fiscal year ended December 31, 2000, and its quarterly reports on Form 10-Q and subsequent reports filed with the Securities and Exchange Commission.