Call Genie Inc.

Call Genie Inc.

December 12, 2007 07:30 ET

Call Genie Announces Agreement to Acquire Phonespots, Inc.

TORONTO, ONTARIO--(Marketwire - Dec. 12, 2007) -


Call Genie Inc. (TSX:GNE), a leading provider of localized, voice-enabled search solutions to Yellow Pages publishers, directory assistance providers and wireless carriers, and PhoneSpots, Inc., a leading provider of advertising exchange and mobile content delivery solutions, today announced that they have signed a definitive agreement to merge PhoneSpots with a wholly owned subsidiary of Call Genie USA, Inc.

Under the terms of the acquisition agreement, the total consideration payable to the shareholders of PhoneSpots is $5.75 million, consisting of approximately $5.093 million worth of Call Genie common shares and a net cash payment of $711,000. The acquisition agreement provides that the number of Call Genie shares to be issued in connection with the transaction will be determined based upon market conditions at the time of closing of the transaction, provided that the issue price of each Call Genie share will not be less than $0.95.

The transaction is expected to close in early January 2008 and is subject to customary closing conditions and regulatory approvals.

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.

PhoneSpots has developed an advertising exchange and mobile content delivery solution which Call Genie believes will provide it with an opportunity to expand its voice-enabled local search products to include a more robust multi-modal directory solution. PhoneSpots customers and partners include: Ahhaaa AB, Interactive Corp / HSN, LeNumero, Newsphone, Orange, Telegate, Volt Delta, and

"By combining forces with Call Genie, we believe we will be able to accelerate PhoneSpots' vision for an enhanced mobile local search experience that takes full advantage of a mobile phone's unique targeting capabilities for local advertisers" said Tom Arthur, CEO of PhoneSpots. "Adding our mobile capabilities to Call Genie's voice search solution will allow Call Genie to provide a more robust local mobile search tool."

"There are over two billion mobile phones in the world today and we see a significant opportunity for consumers to utilize these devices as the primary interface for the delivery of local mobile search results," said Michael Durance, CEO of Call Genie. "The combination of PhoneSpots local search and mobile advertising solution with Call Genie's core voice search capabilities is expected to better position Call Genie to win new business and provide us with opportunities to cross-sell our existing customer base."

Both Call Genie and PhoneSpots deliver enhanced mobile and local search solutions to yellow page publishers, directory assistance providers, and wireless carriers. Following completion of the acquisition transaction, the customer base of Call Genie and its affiliates will include:

- North America:1-800inAcity, 1800SanDiego, CellWand, HSN / IAC, Ingenio, RHDonnelley, Say Hello, Telus, Verizon, Verizon Livesource,, Yellow Pages Group

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

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

It is anticipated that the acquisition of PhoneSpots will be accretive to Call Genie. Further, it is anticipated 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 timing of closing of the acquisition transaction; (ii) anticipated benefits of the acquisition transaction from Call Genie's perspective; (iii) the customer base of Call Genie and its affiliates following completion of the acquisition transaction; and (iv) 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 voice-enabled local search products and services to Yellow Pages publishers, directory assistance providers, and wireless carriers. Offered as a turnkey or ASP solution, Call Genie's Enhanced Voice Directory (EVD™) platform enables companies to offer a comprehensive, voice-enabled business category search service to customers. EVD™ is 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

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 venture-backed and 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 completion risks associated with the PhoneSpots acquisition transaction, 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 timing of closing of the acquisition transaction is based upon the terms of the acquisition agreement between Call Genie USA Inc. and PhoneSpots Inc., advice from professional advisers with respect to the time required to complete the transaction (including to obtain any necessary regulatory and third-party approvals), and discussions between the parties with respect to the timetable for closing. Forward-looking information respecting the anticipated benefits of the transaction from the Call Genie perspective are based upon successful completion of the acquisition transaction on the terms negotiated, the existing technologies of both Call Genie and PhoneSpots, 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 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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