Press

Press Releases 2001

Pethealth Inc. Announces Proposed Rights Offering.

OAKVILLE, Ontario, November 8, 2001 – PETHEALTH INC. (“Pethealth” or the “Company”) (CDNX: PTZ), is pleased to announce that it has applied to the Canadian Venture Exchange Inc. (“CDNX”) and applicable securities commissions to conduct a rights offering (the “Rights Offering”) by way of rights offering circular for the sale of up to 42,647,594 common shares of Pethealth. Pethealth anticipates receiving minimum gross proceeds of $4.26-million if the Rights Offering is fully subscribed, to be applied towards Pethealth’s general working capital and investment in marketing and advertising with its current and future strategic alliance partners.

Under the terms of the Rights Offering, shareholders of Pethealth as at a record date (“Record Date”) to be determined, will receive one (1) right for each common share held and the rights will be evidenced by Rights Certificates which will be fully transferable and divisible. Four (4) Rights will entitle the holder to subscribe for one common share at a price to be determined once all regulatory approvals have been obtained. It is expected that the Rights Certificate and Rights Offering circular will be mailed to shareholders shortly after the Record Date and the Rights Offering will be completed prior to December 31, 2001. Subject to certain exceptions, Rights will only be delivered to, and subscriptions for common shares will only be accepted from, residents of the Provinces of Ontario, Quebec, B.C. and Alberta. Under the Rights Offering, holders will also be entitled to an additional subscription privilege under which holders may subscribe for additional common shares to the extent any remain available. Pethealth has received indications from insiders and members of the board of directors collectively holding approximately 35% of the issued and outstanding common shares of Pethealth, including Richard J. Renaud and E. Mark Warren, of their intention to participate in the Rights Offering.

Founded in February 1998, Pethealth is the leading provider of pet insurance in Canada and one of the fastest growing providers of pet insurance in North America, currently offering its PetCare Pet Insurance Programs in 9 provinces, 35 states and Washington, D.C. As at October 31 2001, the Company had in excess of 20,000 net policies outstanding. In Canada, the Company’s pet insurance is offered to owners of dogs and cats through its wholly owned subsidiary, Pet Care Insurance Brokers Ltd. ING Wellington, a member of the ING Group, and CGU Elite Insurance Company, a member of CGU Group Canada Ltd., underwrite PetCare products in Canada.

The PetCare programs also carry the exclusive endorsements of a number of industry leaders, including veterinary medical associations representing approximately four out of five practising veterinarians in Canada. In the United States, the PetCare Pet Insurance Programs are underwritten by Lincoln General Insurance Company, York, PA, through Avalon Risk Management Inc. Pethealth is based in Oakville, Ontario. Institutional investors include the VC Advantage Fund and Dynamic Mutual Funds, through its Dynamic Venture Opportunities Fund. The Canadian Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

2 Statements contained in this news release, if not historical, are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the results described in forward-looking statements.
Not for dissemination in the United States of America or to United States news wire services.

For further information: contact E. Mark Warren, President and Chief Executive Officer of Pethealth or Glen H. Tennison, Chief Financial Officer of Pethealth, at (905) 842 2615 or visit the Web site www.petcareinsurance.com.

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