Capital Entertainment Merges With First Look Media to Become First Look Studios

Capital Entertainment Merges With First Look Media to Become First Look Studios

LOS ANGELES, Aug. 2 /PRNewswire-FirstCall/ -- Henry D. Winterstern, founder of Capital Entertainment Corporation, announced today that Capital Entertainment has merged with First Look Media, Inc. . The combined Company will be called First Look Studios and Mr. Winterstern has been named the CEO and co-Chairman. Bill Lischak, President and COO of First Look Media, will continue to serve in that capacity of the combined enterprise overseeing day-to-day operations. Chris Cooney, CEO of First Look prior to the merger, will serve as co-Chairman of First look Studios and President of the Branded Entertainment Division. The merger combines each Company's unique entertainment assets to create a strong studio platform focusing on home entertainment, film development, production and distribution, and foreign sales. The combined Company received a $20 million capital infusion of convertible debt from Prentice Capital Management, a New York-based hedge fund, at the closing of the merger. These funds will be used in part to refinance existing indebtedness and help fund future growth. The merger and funding closed on July 29, 2005.

Mr. Winterstern commented: "This is the perfect marriage of two companies who bring unique strengths and assets to form a highly competitive business. First Look's strong home entertainment operations, foreign sales arm, significant library and position in the marketplace is enhanced by Capital Entertainment's high profile DVD properties such as 'American Idol' and 'Baywatch'. In addition, Capital Entertainment's Glass Key production operation will add an important strategic operational asset as the combined company will be positioned to develop, produce and distribute theatrical films at an accelerated pace. The result is a balanced theatrical, home entertainment, television and foreign distribution company with the capital base and management depth to grow significantly."

Mr. Lischak added: "We are very excited about the merger with Capital Entertainment. And we believe with Henry's leadership we can bring the combined company to the next level."

First Look Media, in business now for twenty-five years with a library of over 400 titles, has recently been known for its fast growing U.S. video/DVD distribution operation, its highly respected international sales operations, its ability to access and structure production financing and for releasing films theatrically in the U.S. The company recently entered into a distribution joint venture with DEJ (a wholly owned subsidiary of Blockbuster), has had such previous successes as "Waking Ned Devine," "The Prophecy," John Sayles "The Secret of Roan Inish," and "Chopper"; is currently in post production with Wes Craven's "The Breed" and is releasing Jenny McCarthy's "Dirty Love" theatrically in September.

Capital Entertainment brings a very strong slate of DVD properties to the combined Company including "American Idol," "Baywatch," "Thirtysomething," "Flipper" and others. On the theatrical side, Capital Entertainment purchased the rights to Ira Sachs "Forty Shades of Blue," a 2005 Sundance Film Festival winner. "Forty Shades of Blue" will be distributed through First Look Studios in September. In addition, Capital Entertainment has operated Glass Key, which has completed production of the Larry Clark Film "Wassup Rockers" and has two other films in pre-production.

Mr. Winterstern is currently Chairman of the Board of The Wet Seal, a mall-based 400 store retail clothing chain, with which he has played a significant role in refinancing and business turnaround. He also served on the boards of Metro-Goldwyn-Mayer Inc. and Dick Clark Productions, Inc. and was co-Chairman of Lakeshore Entertainment.

Caution Concerning Forward Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of the Company. These risks and uncertainties include: audience acceptance of our entertainment products, piracy of motion picture and DVDs, the effect of rapid technological change or alternative forms of entertainment and our need to protect our proprietary technology and enhance or develop new technology. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

Source: First Look Studios

CONTACT: Ann Garrett, +1-818-501-8499, anngarrett@earthlink.net, for First Look Studios

------- Profile: Ent