Call Genie Inc.

Call Genie Inc.

May 11, 2009 08:30 ET

Call Genie Inc. Announces Convertible Debenture Financing With a $0.50 Conversion Privilege

TORONTO, ONTARIO--(Marketwire - May 11, 2009) -


Call Genie Inc. (TSX:GNE) announced today that it has signed a term sheet (the "Term Sheet") with an arms length third-party relating to a $1.5 million debt financing. The Term Sheet contemplates that the single third party investor will purchase from the Company 1,500 Convertible Debentures at a price of $1,000 per debenture. In the Term Sheet, the Company reserved the right to place up to an additional $2 million of debentures with other accredited investors.

The Term Sheet provides that the principal amount of the debentures will bear interest at a rate of 10% per annum, payable semi-annually, and that the debentures will mature on May 30, 2012. Principal and accrued interest under the debentures will be convertible into common shares of the Company based on a conversion price of $0.50 per share. The debentures will be subject to anti-dilution protection requested by the third-party and, among other potential adjustments, the conversion price of principal and interest outstanding under the debenture may be reduced to $0.25/share in the event of an unsolicited takeover for the Company.

In the Term Sheet, the Company agreed that the debenture holder will receive 240 common share purchase warrants per debenture (360,000 warrants in the aggregate). Each warrant will entitle the holder to purchase one common share of the Company, at an exercise price of $0.225 (subject to anti-dilution protection), at any time and from time to time until the date that is two years following the date of issue of the warrants.

The Term Sheet contemplates that the Company will grant a security interest to the debenture holder to secure the performance by the Company of its obligations under the debentures.

Completion of the debenture financing is subject to a number of conditions, including the receipt of all necessary regulatory approvals.

The proceeds of the private placement are to be used for working capital and general corporate purposes and to establish a 10% reserve for future interest obligations under the debentures, with funding scheduled to occur within 15 days after the receipt of all regulatory approvals.

"We are very pleased to have lined up a financing for the Company," noted Michael Durance, CEO of Call Genie Inc. "Proceeds from the financing will be used, among other things, to support the growing number of customer projects for which the Company is being engaged."

The debentures have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This News Release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Call Genie Inc.

Call Genie is a leading international provider of local mobile search and advertising solutions that connect ready to transact consumers directly with local merchants for local directory businesses, directory assistance services and local media publishers. Call Genie solutions offer an exceptional experience for both advertisers and consumers and are deployed in 11 countries around the world. Call Genie has been awarded the Excellence in Integrated Ad Management award by the Pelorus Group, has won the Yellow Page Association Industry Excellence Award for Marketing Innovation, the Whitaker Innovation Award, and the 118 Tracker Award for both Technology Innovation in the UK and most recently, Outstanding Contribution to the Industry.

The TSX Exchange has neither approved nor disapproved the contents of this news release.

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