Call Genie Inc.
TSX : GNE

Call Genie Inc.

January 03, 2008 07:30 ET

Call Genie Completes Acquisition of PhoneSpots

Acquisition Expands Call Genie's Mobile Advertising and Mobile Content Delivery Capabilities in North America, Europe and Asia-Pacific

TORONTO, ONTARIO and OAKLAND, CALIFORNIA--(Marketwire - Jan. 3, 2008) -

NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Call Genie Inc. (TSX:GNE), a leading provider of local search solutions today announced that it has completed the acquisition of PhoneSpots, Inc., a leading provider of advertising and mobile content delivery solutions.

PhoneSpots expands Call Genie's voice-enabled local search capabilities to include mobile advertising and mobile content delivery specifically focused on consumers who access Call Genie's solutions via a mobile device.

The combined capabilities of PhoneSpots and Call Genie include a single, comprehensive advertising solution for both local and mobile media. This includes a complete mobile local search solution including: search (category / name), location refinement, ad placement, mobile advertising creation, and mobile content delivery as well as a complete operator workstation solution.

In addition, this acquisition allows Call Genie to offer a complete AdExchange (with pay per call tracking) that can be used with multiple media types and multiple services as part of an integrated solution or as a stand-alone ad exchange platform.

Call Genie's customers and partners now include:

- North America: 1-800inAcity, 1800SanDiego, AT&T, CellWand, HSN / IAC, Ingenio, RHDonnelley, Say Hello, Telus, Verizon, Verizon Livesource, Volt Delta, Yellowpages.com, Yellow Pages Group

- Europe: Ahhaaa AB, Eniro, Le Numero Opplysningen, Orange, SNT Trefzeker, Telegate, TeleGreenland, Volt Delta

- Rest of World: Batelco, Du, Etisalat, Newsphone, Omantel, Telecom Egypt

Under the terms of the acquisition agreement, the total consideration payable to the shareholders of PhoneSpots was $5.75 million, consisting of 4,551,325 shares of Call Genie Inc. Common Shares issued at $1.10 and a net cash payment of $711,000. The common shares issued to the PhoneSpots shareholders will vest over a 12 month period with 12.5% of the shares vesting after the first 4 months and the remaining 87.5% vesting on an equal monthly basis over the remaining 8 months.

Per Call Genie's previous press release dated December 12, 2007 announcing the PhoneSpots acquisition:

Management of Call Genie views the transaction as a means to expand Call Genie's presence in its core Yellow Pages and Directory Assistance markets as well as accelerate its market penetration in North America, Europe and Asia-Pacific. By combining the advertising capabilities and customer relationships of PhoneSpots and Call Genie, Call Genie will offer a single, comprehensive advertising solution for all types of local and mobile media. This provides advertisers with access to a larger, consolidated inventory of advertising opportunities and service providers with access to a large network of advertisers.

It is anticipated that the acquisition of PhoneSpots will be accretive to Call Genie and that revenues generated directly by PhoneSpots and through cross selling into Call Genie's customer base will be incremental to previously announced guidance provided by the Company on future financial performance.

Certain information set out in this News Release constitutes forward-looking information, including information relating to (i) anticipated benefits of the acquisition transaction from Call Genie's perspective; (ii) the customer base of Call Genie and its affiliates following completion of the acquisition transaction; and (iii) the accretive nature of the transaction to Call Genie. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.

About Call Genie Inc.

Call Genie Inc. is a leading provider of enhanced local search products and services to Yellow Pages publishers, directory assistance providers, and wireless carriers. Offered as a turnkey or ASP solution, Call Genie enables companies to offer a comprehensive local search and delivery solution to their customers. These solutions are network, handset and location independent, and can be incorporated into any existing directory assistance service or deployed as a stand-alone offering. Call Genie won the 2006 Yellow Page Association Industry Excellence Award for Marketing Innovation in North America, the 2006 Whitaker Innovation Award in Europe, and the 2006 118 Tracker Award for Technology Innovation in the UK. For more information, visit www.callgenie.com.

About PhoneSpots

PhoneSpots is a leading provider of mobile local search and advertising solutions. The PhoneSpots technology enables directory assistance and yellow pages providers to deliver local search results along with contextual advertising to users of mobile phones. PhoneSpots is headquartered in Oakland, California.

Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "hope", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are based upon the opinions, expectations and estimates of Call Genie's management as at the date the statements are made and, in some cases, information received from or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include such things as the Company's current stage of development, its reliance on third parties and third party technology, the existence of competition, its ability to effectively integrate acquired businesses and organizations, and the ability of the Company to effectively respond to advancements in technology and technological threats. Accordingly, readers should not place undue reliance upon forward-looking information contained herein and the forward-looking statements contained in this News Release should not be considered or interpreted as guarantees of future outcomes or results. Forward-looking information respecting the anticipated benefits of the transaction from the Call Genie perspective are based upon Call Genie's analysis of the compatibility of the Call Genie technology and the PhoneSpots technology, the ability of Call Genie to integrate the PhoneSpots technology with Call Genie's existing mobile search products, continued use of the PhoneSpots technology by its customers following completion of the acquisition transaction, and discussions with existing customers and others with respect to the demand for a search product that combines the existing Call Genie technology and technology of the nature developed by PhoneSpots. Forward-looking information respecting the customer base of Call Genie and its affiliates following completion of the acquisition transaction is based upon the current customers of both Call Genie and PhoneSpots, the ability of the Company to retain the PhoneSpots employees and the retention of the PhoneSpots customers post-closing.
Forward-looking information respecting the accretive nature of the acquisition to Call Genie is based upon management's estimates of revenues to be derived from existing Company and PhoneSpots' customer arrangements, the terms of the agreements entered into with those customers, business plan assumptions respecting the number of additional customers who will enter into commercial arrangements with the Company to utilize the Call Genie and PhoneSpots technology and the timing of execution and delivery of commercial agreements with those customers, and the Company's ability to maintain a revenue share model consistent with recently executed contracts in any agreements entered into with new customers. In addition, profitability expectations are based on estimates of the expenses incurred. Expense estimates are based on business plan assumptions related to the number of staff required to carry out the business plan objectives, the rate at which staff are paid, the timing of when new staff are required to be hired, the ability to train and provide facilities to the staff, and the ability to maintain the planned ratio of staff costs to other costs. The forward-looking statements of the Company contained in this News Release are expressly qualified, in their entirety, by this cautionary statement. Various risks to which the Company is exposed in the conduct of its business are described in detail in the Company's MD&A for the year ending December 31, 2006, which was filed on SEDAR on March 2, 2007, and in the Company's Management's Discussion and Analysis for the financial quarter ended September 30, 2007, which was filed on SEDAR on November 19, 2007. Those documents are available under the Company's profile at www.SEDAR.com. Subject to applicable securities laws, the Company does not undertake any obligation to publicly revise the forward-looking statements included in this News Release to reflect subsequent events or circumstances.

The securities to be issued have not been and will not be, registered under the United States Securities Act of 1933. This does not constitute an offer to buy or sell any of the securities referred to herein.

The TSX Exchange has neither approved nor disapproved the contents of this News Release.

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