Shift Networks Inc.
TSX VENTURE : SHF

Shift Networks Inc.

October 10, 2007 13:24 ET

Shift Networks Inc. Completes Sale of Assets of Company

CALGARY, ALBERTA--(Marketwire - Oct. 10, 2007) - Further to its press release of September 12, 2007, Shift Networks Inc. ("Shift") (TSX VENTURE:SHF) announces that on October 5, 2007, Shift completed the sale of its undertaking, property and assets to 1352741 Alberta Ltd. (the "Purchaser"), an assignee from the original purchaser Strategic Equity Corp. ("Strategic"). In connection with the completion of that transaction, Shift obtained an order of the Alberta Court of Queen's Bench ("the Court"): (a) extending Shift's creditor protection under the Companies Creditors Arrangements Act (Canada) ("CCAA") until October 19, 2007 in order to permit the assignment of Shift's key contracts to the Purchaser; (b) requiring Shift to change its name to a numbered Alberta corporation in order to permit the Purchaser to change its name to a corporate name that includes "Shift Networks"; and (c) discharging PricewaterhouseCoopers Inc., the Court appointed monitor of Shift (the "Monitor"), from its duties as Monitor effective upon the expiry of the general stay of proceedings on October 19, 2007. 1352741 Alberta Ltd. will maintain the business operations of Shift and will continue to provide VoIP (Voice Over Internet Protocol) business telephone services to Shift's new and existing customers.

As previously announced, the Court on August 29, 2007 approved a sales process pursuant to which the Monitor and Shift sought bids from prospective purchasers for its undertaking, property and assets by asset purchase and sale, plan of arrangement or other transaction (the "Sales Process"). Strategic, which has provided debtor-in-possession financing (the "DIP Financing") during the CCAA proceedings of Shift, submitted a "stalking horse bid" for a purchase price equal to the amount outstanding under the DIP Financing pursuant to an asset purchase agreement dated as of August 29, 2007 (the "Asset Purchase Agreement") between Shift and Strategic. The completion of the sale to Strategic was conditional upon no other "Superior Bid" (as such term is defined in the Asset Purchase Agreement) being received. Strategic subsequently assigned its rights under the Asset Purchase Agreement to the Purchaser.

Under the Sales Process, potential bidders had until 5:00 pm on Monday, September 24, 2007 to submit a "Superior Bid". No Superior Bid was received and therefore on October 5, 2007, Shift and the Purchaser completed the sale transaction contemplated by the Asset Purchase Agreement.

Effective Friday, June 8, 2007, trading in the shares of the company was suspended pursuant to TSX-V Policy 2.9, as Shift has less than three Directors. Mr. Trent Johnsen remains the sole Director, President and Chief Executive Officer of Shift but will be resigning as soon as practical and in any event prior to the termination of the stay of proceedings on October 19, 2007.

Given that the purchase price under the Asset Purchase Agreement was equal to the amount outstanding under the financing provided by Strategic, and that pursuant to the Asset Purchase Agreement all realizable assets of Shift were conveyed to the Purchaser, there are no remaining assets available for distribution. Management therefore believes that there will be no recovery by the secured debenture holders, the ordinary unsecured creditors or shareholders of Shift.

Additional information relating to Shift is available on the website of the Monitor at www.pwc.com/brs-shift.

Disclaimers

The forward-looking statements contained in this news release are made as of the date this news release and Shift does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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Until October 19, 2007, further information can be obtained by contacting the numbers below.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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