SOURCE: ePals

July 27, 2011 09:45 ET

ePals, Inc. and New University Holdings Corp. Complete Business Combination

HERNDON, VA--(Marketwire - Jul 27, 2011) - ePals Corporation (formerly New University Holdings Corp.) (the "Corporation" or "New University") (TSX-V: NUH.P) is pleased to announce that it has completed its previously announced merger (the "Transaction") with ePals, Inc. ("ePals") pursuant to which New University acquired all of the issued and outstanding shares of common stock of ePals ("ePals Shares") and all of the issued and outstanding shares of ePals Finance Corp. ("ePals Finco"), a special purpose entity created in order to facilitate the Transaction. The Corporation and its subsidiaries will carry on the business of ePals.

ePals is a leading K12 social learning network (SLN) and education technology company with its business primarily based in the United States. At the effective time of the Transaction, Miles Gilburne became the chairman and chief executive officer of the Corporation. Mr. Gilburne has been involved in the creation of many successful digital media companies, including as a senior executive at AOL and as an AOL Time Warner board member.

In connection with the closing of the Transaction, the voting common shares of the Corporation will be listed on Tier 1 of the TSX Venture Exchange ("TSXV") under the trading symbol "SLN," subject to final acceptance of the Transaction by the TSXV. The Corporation will issue a further press release advising when final acceptance of the Transaction by the TSXV has been received and the expected date for the voting common shares of the Corporation to recommence trading on the TSXV.

Prior to the effective time of the Transaction, New University completed a consolidation of its issued and outstanding common shares on the basis of one new common share for every 2.3877 existing common shares of New University, continued into the Province of Ontario under the Business Corporations Act (Ontario) and changed its name to "ePals Corporation."

Prior to the completion of the Transaction, ePals Finco completed a private placement (the "Offering") of an aggregate of 35,937,500 subscription receipts (each, a "Subscription Receipt") at a price of C$0.64 per Subscription Receipt for gross proceeds of C$23 million. The Offering was completed pursuant to the terms of an agency agreement dated April 28, 2011 between ePals, ePals Finco, Cormark Securities Inc. and New University. The Subscription Receipts converted to special shares of ePals Finco immediately prior to the completion of the Transaction.

At the effective time of the Transaction, (i) former shareholders of ePals who were U.S. residents and were "accredited investors" received a combination of voting common shares and restricted voting common shares of the Corporation for their ePals Shares; (ii) former shareholders of ePals who were not U.S. residents received voting common shares of the Corporation for their ePals Shares; (iii) former shareholders of ePals who were U.S. residents that were not "accredited investors" are entitled to receive a cash payment of C$0.64 for each ePals Share held; and (iv) holders of special shares of ePals Finco and the holder of the one common share of ePals Finco received common shares of the Corporation in exchange for their shares. As at July 26, 2011, following completion of the Transaction, there were 67,391,502 voting common shares of the Corporation outstanding, of which 3,925,945 shares are held by continuing shareholders of the Corporation, 27,528,056 shares are held by former shareholders of ePals and 35,937,501 shares are held by former shareholders of ePals Finco. Former shareholders of ePals hold all of the outstanding 43,646,730 restricted voting common shares of the Corporation. The restricted voting common shares of the Corporation were issued as part of the Transaction in order to help preserve the ability of the Corporation to qualify as a "foreign private issuer" under U.S. Securities laws and will not trade on the TSXV. Each such restricted voting common share is convertible by the holder into one voting common share of the Corporation for no additional consideration, subject to certain conditions.

Effective as of the completion of the Transaction, Murray Goldberg, Mark Klein and Daniel Pianko resigned from their positions as directors of New University and Michael Moe (Chief Executive Officer), Ryan Craig (President), Paul Lapping (Chief Financial Officer) and George Weiss (Secretary) resigned from their positions as officers of New University.

Effective as of the completion of the Transaction the following individuals are the directors and officers of the Corporation:

Miles Gilburne -- Chief Executive Officer and Director
Edmund Fish -- President and Director
Aric Holsinger -- Chief Financial Officer and Corporate Secretary
Andrew Berman -- Executive Vice President and General Manager
Linda Dozier -- Chief Technology Officer
Ted Brodheim -- Chief Operating Officer
Nina Zolt -- Director
William Campbell -- Director
William Raduchel -- Director
Perry Dellelce -- Director
David Lowenstein -- Director
Michael Moe -- Director

For biographies of the current directors and management team of the Corporation, please see the Corporation's filing statement dated July 19, 2011 relating to the Transaction (the "Filing Statement") filed under the Corporation's SEDAR profile at www.sedar.com.

ePals was advised by Global Silicon Valley Advisors (formerly NeXtAdvisors, LLC) with respect to the Transaction. Borden Ladner Gervais LLP and Dorsey Whitney LLP acted as counsel to the Corporation and Wildeboer Dellelce LLP and Hodgson Russ LLP acted as counsel to ePals. Cassels Brock & Blackwell LLP acted as counsel to Cormark Securities Inc. in connection with the Offering.

About ePals, Inc.

ePals is a privately-held education company existing under the laws of the State of Delaware with its headquarters in Herndon, Virginia. ePals has created a leading global K12 social learning network and offers primary and secondary schools, teachers, students and parents worldwide a safe and secure platform for building educational communities, providing quality digital content and facilitating collaboration for effective 21st century learning. ePals' award winning products include: the ePals Global Community™;SchoolMail®365, a safe and secure communications solution for schools and districts; Learning Space™, a protected virtual workspace for learning collaboration; and In2books®, a curriculum based e-mentoring program that builds reading, writing and critical thinking skills. ePals customers and partners include International Baccalaureate, Microsoft Corporation, Dell, Inc., IBM Corp., National Geographic and leading school districts across the United States and globally. ePals serves approximately 700,000 educators and reaches millions of educators, students and parents in approximately 200 countries and territories.

Investors are cautioned that, except as disclosed in the Filing Statement, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.

Neither the TSX-V, nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in any way passed upon the merits of the Transaction and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Cautionary Statement Regarding Forward-Looking Information:

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Forward-looking information is necessarily based upon a number of assumptions and factors that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. Such material factors and assumptions include, but are not limited to: the Corporation's ability to execute on its business plan; the acceptance of the Corporation's products and services by its customers, including renewals; the timing of execution of outstanding or potential customer contracts by the Corporation; the sales opportunities available to the Corporation; the Corporation's subjective assessment of the likelihood of success of a sales lead or opportunity; that sales will be completed at or above the Corporation's estimated margins; availability of government subsidies; the continued success of business development activities; new products and services will continue to be added to the Corporation's portfolio; demand for webhosting and secure email communication will continue to grow; that the global economy will continue to recover and the demand for our products and services globally will develop and grow; that the regulatory environment continues to develop concerning students, both as to collecting information and narrow casting; and, to the extent needed, that additional financing is available. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. The forward-looking information contained in this press release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Contact Information

  • Further Information
    For further information regarding the Transaction, please contact:

    Miles Gilburne
    Chairman and CEO
    ePals Corporation
    Tel: 703.885.3400