PhotoChannel PNWIF announces agreement with Kodak China :: PhotoChannel Networks, Inc. (PNWIF)

Newsletter

May 28, 2008

Volume IX, Issue 38

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To OTC Journal Members:

PhotoChannel (OTC BB: PNWIF) Game Changer

If you read my BLOG yesterday afternoon, you know PNWIF had perked up a bit during the trading session, and now we know why. PNWIF announced an absolute game changerpre open today, and if the market recognizes the magnitude of today's news, we could be in for a fun ride. Those who have had the patience to ride out these many months of sideways trading could be in for a big move to the upside.

PNWIF has been grinding in a range between $3 and $4 since last September. That's about 9 months within that territory. If there's isn't a big pent up demand to sell into volume, today's news could free the company from that range, and send it solidly above the $4 threshold. If so, many believe a NASDAQ SC listing is near at hand, which would be further good news for shareholders.

So- what's the big news? Glad you asked. Today, just before the market opened, PNWIF announced it has entered into an agreement with Kodak China to provide the online interface for Kodak's 4,000 retail outlets all over China. The Chinese citizens will now be able to upload their photos online, order prints, and pick them up at 1 of 4,000 retail outlets. PNWIF will get a little piece of all those orders.

Despite landing both Sam's Club and Costco in the US, business in South America and Australia, and Hallmark, the stock has gotten little mileage out of those achievements. However, China is a different story. China is a real growth story. If the right funds find out about this development, I am quite certain they will have an appetite for the stock.

Furthermore, the news release goes on to state PhotoChannel and Kodak plan to implement and be in place for the coming Summer Olympics. This could be some major market moving stuff, and is heaven sent for current shareholders.

The number I am going to be watching on this news is just north of $5- the previous all time high established in February of 2007. The chart I have here is the Canadian quote, which is now pretty much in step with the US quote as the dollar has dropped significantly in the past 15 months. For some reason, my US chart is corrupted.

No doubt, by the time you read this, the stock will already be trading somewhat higher. How much? I can't say. Here's what I do know- if the stock gaps up in a big way at the open, I would hold off jumping into a new position or adding to an existing one. Most stocks come back and try to fill those gaps in fairly short order. Therefore, if you place a limit order pretty close to yesterday's close ($3.74), you are going into a pretty low risk trade in my view- if you get filled over the next couple of days.

If the stock does not gap up, but powers higher after opening at a reasonable level, you just have to hold your nose and jump in the water. That's the really short term picture.

Longer term, this news could spark a chain of very positive events for shareholders. For starters, if the darn thing can finally hold over $4, the word is a NASDAQ SC listing should be coming their way.

This should bring in a bunch of institutional research reports and institutional buyers. You need to be in ahead of them.

Technically, the LPO (logical profit objective) is $5.77. This is derived from a Fibonacci Extension. However, if you consider they are now in Sam's Club US, just starting with Costco US, expanding to both Australia and South America, and are now partnering with Kodak in China, you can easily visualize far higher levels than $5.77 out in the future.

There are anemic economies in North America, but China is cranking out the growth. The whole story has changed. It was probably worth waiting for. Our faith and patience has been rewarded. Now, let's hope it's recognized in the stock price.

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Here is the complete text of the news for your review. By the time you read this, I might have a BLOG posted with some thoughts on how to trade into this one without paying too much.

Press Release Source: PhotoChannel Networks Inc.

PhotoChannel Signs Agreement with Kodak China

Wednesday May 28, 9:12 am ET

PhotoChannel to Provide and Operate Imaging Network for Kodak in China

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--May 28, 2008 -- PhotoChannel Networks Inc. (CDNX:PN.V - News)(OTC BB:PNWIF.OB - News) ("PhotoChannel" or "PNI") the leading innovator in online digital media solutions for retailers announces it has signed an agreement with Kodak (China) Investment Company Limited to provide and operate Kodak's imaging network in China.

PhotoChannel's network and software expertise will enable Kodak Express stores in China to transmit digital versions of personalized photo products created in the store, such as PhotoBooks, to a Kodak production facility. The products, created on Kodak Software, are delivered by the PNI software solution through direct connection with the Kodak Software in the store for transaction, credit clearance and transport of the digital copy to the Kodak production facility whereby the physical product is created and shipped back to the store. There will be 800 Kodak Express stores connected to the platform in 2008.

"With this agreement PhotoChannel is now truly the worldwide leader in delivering image processing transactions," says Peter Fitzgerald, Chairman and CEO of PhotoChannel. "We are now operational in five continents with dominant positions in all. The versatility of our platform is showcased here as Kodak's software solution is the front end of this system and PNI is delivering the back end transaction clearing and image transport capabilities, all under our enterprise class monitoring, tracking and financial reporting systems. We are very pleased to partner with Kodak in offering this new and unique solution for the Chinese marketplace."

"PhotoChannel's software has complemented our solution and helped us deliver a unique, state-of-the-art solution with the capabilities we need to capitalize on an emerging and immense opportunity in China," says Kodak Retail Printing Director - Asia Pacific, Terence Chiu. "The PNI platform will allow the Kodak Express stores in China to sell new revenue generating products by providing the operational and transactional workflow for our business. We look forward to realizing this significant opportunity with our partner PhotoChannel."

About PhotoChannel - Founded in 1995, PhotoChannel operates PNI Digital Media to provide services for major retailers, wireless carriers and content providers. The PNI Digital Media Platform connects consumer ordered digital content with retailers that have on-demand manufacturing capabilities for the production of merchandise. PNI Digital Media generates millions of transactions for major retailers around the world.

For more information please visit www.photochannel.com.

About Eastman Kodak - Kodak is the world's foremost imaging innovator. With sales of $10.7 billion in 2006, the company is committed to a digitally oriented growth strategy focused on helping people better use meaningful images and information in their life and work. Consumers use Kodak's system of digital and traditional products and services to take, print and share their pictures anytime, anywhere; Businesses effectively communicate with customers worldwide using Kodak solutions for prepress, conventional and digital printing and document imaging; and Creative Professionals rely on Kodak technology to uniquely tell their story through moving or still images.

More information about Kodak (NYSE:EK - News) is available at www.kodak.com.

Contact:

     Contacts:
     PhotoChannel Networks Inc.
     Mr. Kyle Hall
     (604) 893-8955 ext. 313

     PhotoChannel Networks Inc.
     Ms. Niti Maini
     (604) 893-8955 ext. 313
     Email: nmaini@PhotoChannel.com

     PhotoChannel Networks Inc.
     Investor Information
     1-800-261-6796
     Website: http://www.photochannel.com

Source: PhotoChannel Networks Inc.

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