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CALL GENIE INC. ANNOUNCES AGGREGATE $2,500,000 OF FINANCINGS INCLUDING CONVERTIBLE DEBENTURE FINANCING TO BE UNDERTAKEN WITH THE ASSISTANCE OF WOLVERTON SECURITIES LTD.
July 23, 2010
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN
Toronto, Ontario - July 23, 2010 - Call Genie Inc. (the "Company") (TSX: GNE) today announced that it has engaged Wolverton Securities Ltd. ("Wolverton") to act as agent on a commercially reasonable efforts basis, in connection with a proposed brokered private placement offering of up to $1,625,000 of secured convertible debentures (the "Debentures"). The Company also proposes to raise up to $875,000 through the issuance of debt under a non-brokered private placement for total gross proceeds of $2,500,000. The Company anticipates closing these financings shortly, subject to regulatory approval.
The Debenture financing provides that the principal amount of the Debentures will bear interest at a rate of 15% per annum, payable semi-annually, and that the Debentures will mature two years from the closing date. At the option of the Debenture holder, principal under the Debentures will be convertible into common shares of the Company based on a conversion price of $0.10 per share.
In addition, each Debenture holder will receive 2,000 warrants per $1,000 principal amount of Debentures. Each warrant will entitle the holder to purchase one common share of the Company, at an exercise price of $0.12, at any time and from time to time until the date that is four years following the date of issue of the warrants.
The Company will provide the Debenture holders a General Security Agreement over the assets of the Company, as well as a secured interest in certain other assets not related to the Company made available from the Company's Chairman of the Board or companies controlled by same.
The Company also contemplates completing a non-brokered private placement of debt for proceeds of up to $875,000. Such debt financing anticipates participation by certain insiders of the Company including the Chairman of the Board and will bear interest at 15%. At the option of the Company, repayment may be made via interest only payments where the principal is repaid at the end of the two year term for an additional 2.5% interest. The Company will reserve the right to pre-pay such debt prior to maturity and without penalty. This debt will share in the security with the Debenture holders above on a pari passu basis.
Completion of the Debenture and debt financings are subject to a number of conditions, including the receipt of all necessary regulatory approvals. The proceeds of the private placements are to be used for working capital and general corporate purposes. Subject to the receipt of commitments from potential investors, the Company plans to close the proposed private placements at its earliest opportunity, so as to reduce market risk associated with the financing transactions and augment its working capital position in anticipation of planned operational expenditures.
"We are very pleased to be working with Wolverton to secure additional financing for the Company," noted Michael Durance, CEO of Call Genie Inc. "Proceeds from the financing will be used, among other things, to support the commercialization of a number of our key customer implementations."
The Debentures and the debt have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This News Release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
About Call Genie Inc.
Call Genie is a leading global provider of local mobile search and advertising solutions that connect ready to transact consumers directly with local merchants for local directory businesses, directory assistance services and local media publishers. Call Genie solutions offer an exceptional experience for both advertisers and consumers and are deployed in 11 countries around the world. Call Genie has been awarded the Excellence in Integrated Ad Management award by the Pelorus Group, has won the Yellow Page Association Industry Excellence Award for Marketing Innovation, the Whitaker Innovation Award, and the 118 Tracker Award for both Technology Innovation in the UK and most recently, Outstanding Contribution to the Industry. www.callgenie.com.
For More Information
Alex Blodgett, Investor Relations
Tel: +1 403 410 6875
mail: alex.blodgett@callgenie.com
The TSX Exchange has neither approved nor disapproved the contents of this news release.