SOURCE: Proxity Inc.

October 25, 2007 14:23 ET

Proxity, Inc. Announces Letter of Intent to Merge With Proxity Financial Group, Inc.

NEW ORLEANS, LA--(Marketwire - October 25, 2007) - Proxity, Inc. (PINKSHEETS: PRXT), announced today that it has entered into a letter of intent to merge with Proxity Financial Group, Inc., (PFGI) a newly formed Delaware corporation. Proxity Financial Group, Inc. was formed in anticipation of this merger and there is no prior affiliation between the companies. PFGI, a project funding and acquisitions company, partners with project owners, through the creation of Joint Ventures, to bring capital projects to completion. PFGI has entered into Letters of Intent for such projects that will bring significant collateralized assets into the PFGI portfolio.

The terms of the agreement call for Proxity, Inc. to affect an 80 to 1 reverse split and issue 96,250,000 new shares to PFGI. Additional conditions are that PFGI, at the time of Closing, provide a statement of valuation in the new company per Balance Sheet calculation using one of the following three methods: (1) Discounted Forecasted Revenues, (2) Earnings Before Interest, Depreciation and Taxation ("EBITDA") or (3) Assets Net of Short Term Liabilities. Definition of these terms is provided under the guidelines of United States Generally Accepted Accounting Guidelines ("GAAP"). The minimum acceptable valuation to complete this merger is $200,000,000. The current management and Board of Proxity, Inc. will resign, however Billy Robinson will stay on as the interim CFO and will receive stock options and shares under a vesting schedule.

The recently announced distribution of shares of Cyber Defense Systems, Inc. (CYDF) and the proposed spin out of Techsphere Systems International Systems, Inc. will go forward as planned. Proxity Electronic Commerce System, Inc. will be evaluated to determine if additional funds will be invested and or the company will be sold at a later date.

Sabra Dabbs, the Founder, Chief Executive Officer, and Chairman of Proxity Financial Group said, "This is an exciting time for the shareholders of both Proxity Financial Group and Proxity, Inc. We have assembled an outstanding team of senior professionals that allows us to engage with project owners and move selected projects from the drawing board to reality. We have already entered into Letters of Intent with seven owners of high profile projects both in the U.S., and internationally and anticipate that this number will increase in the very near future."

"The Proxity shareholders have been very loyal and patient with the progress of the company. The proposed distributions and announced merger when approved by the shareholders should reward them for their wait. I am very please to offer this opportunity to our shareholders." Stated Billy Robinson, CEO.

About Proxity Financial Group, Inc. (PFGI)

PFGI, a project funding and acquisitions company, specializes in providing equity capital and financial, strategic, and operational expertise to assist owners and management teams in providing liquidity for shareholders, making strategic acquisitions, and financing major capital expenditures or growth programs.

The primary requirement is that each project or acquisition has Equity, Collateral Assets, or current revenue streams that facilitate such funding through one or more sources. PFGI primary sources of funding include (but are not limited) to the following:

--  Partnering with Local, State, National, or International Government
    Development agencies relating to the issuance of Investment Grade
    Industrial Revenue Bonds
--  Secondary Offerings of Common Stock
--  Origination of Investment Grade Corporate Bonds
--  Capital provided by Joint Venture or Third Party Sources
    

PFGI utilizes an extensive network of U.S. and International Banks to facilitate the complex process of monetizing these financing instruments and will use its unique position as both the financing organization and majority owner of the projects to provide outstanding potential for its shareholders.

About Proxity

Proxity, Inc. (PINKSHEETS: PRXT) is a developmental holding company specializing in the deployment and marketing of security protection technology and government contract fulfillment. Proxity formed Proxity Electronic Commerce Systems, LLC and owns approximately 35%. The company also owns and controls approximately 15,300,000 shares of Cyber Defense Systems, Inc. (OTCBB: CYDF). Proxity seeks to acquire and develop both internet based business opportunities and security technology. The Company plans to enter into developmental, teaming and exclusive and nonexclusive marketing and distribution agreements with products developed for Government, commercial, military and homeland defense areas. http://www.proxity.com.

About Proxity Electronic Commerce Systems, LLC (Proxity-EC)

Proxity-EC was founded in 2005 with the goal of becoming the leader in providing information systems dealing with Government logistics databases and vendor awareness of business opportunities in selling both to the Government as well as industry. The founders of Proxity-EC, developers of the PECS Database, are the originators of the current systems of logistics used by industry and the Military including FEDLOGS, Haystack and the ILI Logicom parts database.

The PECS Database provides information on 12 million parts, their suppliers, Government specs and standards as well as non-Government standards, which are linked from the database to the cited standards. The system also provides an alert service on sales opportunities to the Government's 400,000 contractors as well as requisite data used by the Military. For more on Proxity-EC, go to: http://www.proxity-ec.com/

Forward-Looking Statements:

This release contains statements that constitute forward-looking statements. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control and those actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

Contact Information