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Press Press Releases 2004 Pethealth Announces Completion of $10-million Private Placement OAKVILLE, ON, January 21, 2004. Pethealth Inc. (TSX VE: PTZ) announced today that it completed a private placement financing of 5,000,000 Series 1 Convertible Preference Shares of Pethealth ( Preferred Shares ) at a price of $2.00 per Preferred Share for aggregate gross proceeds to Pethealth of $10,000,000. Each Preferred Share is entitled to cumulative dividends at the fixed rate of 6% payable annually. Each Preferred Share is convertible into ten (10) common shares in the capital of the company at any time at the option of the holder. Pethealth engaged Loewen & Partners Corporate Services Inc. (the Agent ) to act as agent, on a best efforts basis, in respect of the offering. In consideration for its services, Pethealth paid the Agent a commission in the amount of $452,900. Pethealth also issued broker warrants to the Agent entitling the Agent to acquire up to 360,784 Preferred Shares at any time for a period of two years following the completion of the offering, at a price of $2.00 per Preferred Share. All of the securities issued in connection with the offering are subject to a four-month hold period expiring May 21 , 2004. The financing is subject to the final approval of the TSX Venture Exchange. Immediately following the closing of the private placement, Pethealth repaid the $1,000,000 it had drawn down in respect of the loan agreements entered into with certain existing investors on November 28, 2003, providing for a maximum loan amount of $4,000,000 and as previously announced by Pethealth. We are very pleased to have concluded this transaction, said Glen Tennison, Chief Financial Officer of Pethealth. This financing will allow us to move forward with the next stage of our business plan. Additionally, we are delighted that several new institutional investors have participated in this financing, thus providing us with a more diverse institutional shareholder base. Pethealth intends to apply the balance of the net proceeds to the establishment of a reinsurance operation, to facilitate the full rollout of the 24PetWatch microchipping and pet recovery program, and for general working capital purposes. About Pethealth Founded in February 1998, Pethealth is Canada's number one provider of pet insurance and is number two in North America, currently offering its PetCare pet insurance programs in 10 provinces, 45 states and Washington, D.C. In addition to the ShelterCare Pet Insurance programs, Pethealth offers its pet insurance programs under a variety of names, including QuickCare, the PetCare Pet Insurance Programs, ShelterCare and Union Plus Pet Insurance. In the United States, the PetCare Pet Insurance Programs are underwritten by Lincoln General Insurance Company, York, PA, through Avalon Risk Management Inc. In Canada, the Company's pet insurance is offered to owners of dogs and cats through its wholly owned subsidiary, PetCare Insurance Brokers Ltd. ING Novex, a member of ING Group, and Kingsway General Insurance Company 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 practicing veterinarians in Canada. In addition, Pethealth, through its wholly owned subsidiaries Pethealth Services Inc. and Pethealth Services (USA) Inc., sells and distributes Allflex pet microchip supplies to the companion animal market in North America and operates the related pet recovery registry under the trade name 24PetWatch. Pethealth is based in Oakville, Ontario. The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release . Not for dissemination in the United States of America or to United States news wire services. For further information
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