RNS Number:1510R
Imagestate PLC
21 October 2003

PRESS RELEASE



21 October 2003



ImageState PLC



Additional funding







ImageState PLC (the "Company") has agreed terms for additional funding of up to
#700,000 to be provided by OVP2 Limited (a subsidiary of Pacific Investments
PLC, a company ultimately controlled by Sir John Beckwith, a Director of the
Company) which holds approximately 29 per cent. of the Company.



On 17 June 2003 the Company announced that it had arranged an increased finance
facility of #5,025,000 which was to be provided by OVP2 Limited.  The additional
funding will be advanced in tranches provided that no event of default is
subsisting.  The terms of the facility remain unchanged.



Under the terms of the agreement the loan is repayable in cash or, at OVP2
Limited's behest may be converted into ordinary shares in the Company at a
conversion rate of 1p per share which is a premium of 56 per cent. to the
Company's closing mid-market price on 20 October 2003.



The purpose of the additional funding is to provide the Company with additional
working capital.  While the strengthened senior executive management team has
made progress in further reducing costs, the Company remains loss making in an
uncertain business climate.



The Independent Director (being Chris Adamson) has reviewed the potential
sources of funding for the Company's immediate needs.  That review concluded
that currently there are no other sources of acceptable finance available to the
Company.   In reviewing the terms of the loan the Independent Director has
considered the immediate needs of the business for further funding and the
implications of not receiving such funding in the short term, together with the
recent share price trading range.



The Independent Director, who has consulted with the Company's nominated
adviser, has concluded that the terms of the transaction are fair and reasonable
and in the best interests of all shareholders and the Company.







Enquiries:



Chris Adamson

ImageState PLC                                   0207 734 7344



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