ZipLocal Inc.
TSX VENTURE : ZIP

ZipLocal Inc.

July 23, 2009 08:00 ET

ZipLocal Completes Sale of Assets

TORONTO, ONTARIO--(Marketwire - July 22, 2009) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE DISTRIBUTION SERVICES

ZIPLOCAL INC. (TSX VENTURE:ZIP) ("ZipLocal" or the "Company"), is pleased to announce the completion of the previously announced sale (the "Sale Transaction") of substantially all of its assets, and those of its wholly owned subsidiary, Zip411 Enterprises Inc. ("Zip411") to JLA CP Holdings Inc. ("JLACP"). The assets sold by the Company and Zip411 included all customer contracts, customer lists, accounts receivable, certain supply contracts, certain leased equipment, and all intellectual property, internet and other rights. The purchase price of approximately $2.383 million was paid by the application and cancellation of approximately $1.933 million of indebtedness (including interest) owed by the Company to JLACP and $450,000 in cash.

The Sale Transaction was required to accommodate material conditions of an acquisition proposal made by Canpages Inc. ("Canpages") in early 2009, including that the shares to be issued as payment for the assets of ZipLocal be held by one person and that business and financial information relating to Canpages be kept confidential and not be subject to disclosure under applicable securities laws. Further information regarding the subsequent sale of assets to Canpages (the "Canpages Transaction") is provided below.

With completion of the Sale Transaction, the Company does not have an operating business and has no assets other than approximately $150,000 in cash that it intends to use to make regulatory filings required under applicable securities laws and required tax filings and to explore new business opportunities with a view to utilizing its tax losses and listing.

Canpages Transaction

Immediately following closing of the Sale Transaction, JLACP sold all of the assets acquired from ZipLocal and Zip411 to Canpages. The purchase price was satisfied by the issuance of shares of Canadian Phone Directories Holding Inc. ("Holdings"), the parent of Canpages. JLACP and the J.L. Albright Venture group of funds, as covenantors, provided an additional $1 million cash indemnity to Canpages and Holdings to facilitate the sale to Canpages.

JLACP, the Company and Zip411 have entered into a transitional services agreement with Canpages. Under this agreement, JLACP, the Company and Zip411 will provide to Canpages certain transitional services to permit Canpages to operate the purchased business post-closing. This agreement is intended to terminate no later than October 31, 2009.

Shareholder Approval

The Sale Transaction received approval from ZipLocal's shareholders at the annual and special meeting held on July 20, 2009. The special resolution approving the Sale Transaction was passed by votes representing more than 99% of the shares represented at the meeting and 98.22% of votes cast by disinterested shareholders.

TSX Venture Approval and Listing

The TSXV granted its final acceptance of the Sale Transaction on July 22, 2009. Effective Friday, July 24, 2009, the Company's listing will transfer and resume trading on NEX and its trading symbol will change to ZIP.H.

Changes to Management

Immediately following closing of the Sale Transaction, John Albright and Peter Schwartz stepped down as directors of the Company. Elaine Kunda stepped down as President and Chief Executive Officer and Stephen McDonald stepped down as Chief Financial Officer and Corporate Secretary. The remaining directors are Timothy M. Gould, Elaine Kunda and Owen B. Menzel. Mr. Menzel has been appointed Chairman, President and Chief Executive Officer and Jeffrey R.G. Jackson has rejoined the Company as Chief Financial Officer and Corporate Secretary.

FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this news release. Actual results could differ materially from those anticipated in the statements due to risks and uncertainties which affect the Company's business and operations. Reference should be made to the Company's continuous disclosure documents filed from time to time with Canadian securities regulatory authorities for a detailed description of such risks and uncertainties. The Company takes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change.

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

Contact Information

  • ZipLocal Inc.
    Owen Menzel
    Chairman and CEO
    (416) 919-5735
    Email: omenzel@pwm.ca