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Call Genie Appoints New Chief Executive Officer and Announces Private Placement
June 9, 2005
Call Genie Inc. (TSX-V: GNE) is pleased to announce it has appointed a new Chief Executive Officer and plans to undertake a private placement of up to 5 million common shares.
Chief Executive Officer
Neil D. Frizzell, Chief Executive Officer of Call Genie Inc. ("Call Genie" or "the Corporation"), is pleased to announce that Michael E. Durance has agreed to assume the role of Chief Executive Officer effective June 27, 2005 and to serve as a member of the Board of Directors.
Mike Durance is a proven executive leader in the software and telecommunications industries with demonstrated general management capabilities and over 23 years of industry specific experience, including interactive voice recognition applications. Most recently, Mr. Durance was Vice President and General Manager at Toshiba America Information Systems in Irvine , California , where he was group executive responsible for up to six Toshiba divisions. While at Toshiba, he led the largest division, Telecom Systems, from 7 th position and under 8% market share to the number 2 spot and over 19% market share in the U.S. Key Telephone System Industry.
Mr. Durance has also held senior positions, including international assignments, at ADC Telecommunications and Nortel Networks, and was an officer at Saville Systems.
"Call Genie is extremely pleased to have attracted an executive of Mike's caliber to drive us through the implementation phase of our growth" noted Neil Frizzell. "He brings extensive operational expertise to support the commercialization of HelloYellow, and will be a significant contributor to the development and execution of Call Genie's strategic roadmap as we stretch the possibilities of our technology and migrate our application into new geographic markets."
Mr. Durance is also expected to join the Board of Directors. It is proposed that he will be put forward as an additional director nominee at the Annual Meeting of the shareholders of Call Genie, to be held on Friday, June 17, 2005. The appointment of Mr. Durance as Chief Executive Officer and director is subject to the approval of the TSX Venture Exchange and closing of the private placement.
Mr. Frizzell will be appointed Executive Chairman of Call Genie upon Mr. Durance becoming Chief Executive Officer.
Private Placement
Call Genie plans to undertake a private placement of up to 5 million common shares, at a sale price of $0.50 per share, for aggregate gross proceeds of up to $2.5 million. The board resolution relating to the private placement was passed on May 18, 2005. The closing price of the Corporation's common shares on that date was $0.38 and the proposed sale price of the private placement shares represented a 25% premium to the market price of the shares at that time. The private placement is being undertaken in conjunction with the appointment of Mr. Durance. The Corporation does not anticipate engaging a broker for purposes of the private placement. All shares issued in connection with the private placement will be subject to a four-month hold period under applicable securities legislation in Canada . The Corporation has been advised that its new Chief Executive Officer, Mr. Durance, proposes to participate in the private placement and to subscribe for 320,000 common shares ($160,000). The Corporation also expects that certain insiders (or their associates) will participate in the private placement. Owing to the anticipated participation in the private placement transaction of the spouse of one of the Corporation's directors, the relevant director absented himself from that portion of the Board meeting at which the private placement was discussed and approved and did not vote on the resolution relating to the private placement. In total, anticipated subscriptions from insiders are expected to represent approximately 26% (32.5% including Mr. Durance) of the total number of shares issued in connection with the private placement financing. Having regard to the participation of certain insiders (or their associates), the private placement may, in part, be considered to be a "related party transaction" for purposes of Policy 5.9 of the TSX Venture Exchange. However, as neither the fair market value of the shares to be distributed in connection with the private placement nor the consideration to be received by the Corporation for those shares will exceed 25% of the market capitalization of Call Genie, the Corporation is exempt from the requirements to obtain a formal valuation in relation to the private placement and to seek shareholder approval of the transaction.Representatives of the Corporation have been in discussions with regulatory authorities since May 18, 2005 respecting certain elements of the private placement. As those discussions have focused on certain matters fundamental to the private placement (including pricing), the Corporation has not been in a position to announce the private placement prior to today's date or to provide additional notice of the anticipated closing of the transaction, which is expected to close as soon as practical.
In recommending that the Corporation undertake a financing transaction and in approving the private placement, management and the Board of Directors, respectively, have been motivated by a desire to access additional working capital to continue the rollout of the EVD Service, which has been launched, on a commercial basis, in the Greater Toronto Area. In addition, management and the Board of Directors wish to ensure that the Corporation has sufficient funds on hand to pursue other business opportunities, including the ongoing effort to expand the EVD Service to urban areas outside the Greater Toronto Area.
Other News
Call Genie expects to disseminate a further news release later today announcing an additional corporate development.About Call Genie
Call Genie's HelloYellow™ service is operational in the Greater Toronto Area by dialing 310-YELO. The service is the first of its kind in the world. Call Genie partnered with the Yellow Pages Group in 2004 and began the commercialization of the service in September of 2005.
Call Genie is a provider of enhanced voice directory services. Call Genie's services include: the development of interactive voice recognition applications; marketing and sales planning; operational support; and the management of related technologies and network operations center components. Call Genie is a leader in the voice sector of the interactive, local directory services market - the business of bringing together consumers and merchants. Please visit our website at www.callgenie.com.
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The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.
Certain statements regarding Call Genie Inc. and its business contained herein are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "anticipate" or "will" and similar expressions) may include estimates, plans, expectations, opinions, guidance or other statements that are not statements of fact. Although Call Genie Inc. believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties that could cause actual results or outcomes to differ materially from those anticipated or implied in the forward-looking statements. Call Genie Inc. does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Call Genie Inc.'s forward-looking statements are expressly qualified in their entirety by this cautionary statement. Certain risk factors to which Call Genie is exposed in the conduct of its business (and which may affect the expectations or outcomes reflected in the forward-looking statements contained in this news release) are described in the 2004 Annual Information Form filed by Call Genie