April 02, 2012 06:00 ET

ePals and NeuEdu Tianjin Execute Definitive Joint Venture Contract for China Partnership

WASHINGTON, DC--(Marketwire - Apr 2, 2012) - ePals Corporation (TSX VENTURE: SLN) ("ePals"), an education media company and leading safe social learning network, today announced the signing of a definitive Joint Venture Contract (the "JVC") with NeuEdu Tianjin ("NeuEdu"), a leading group based in China building extensive education business assets and networks in China, regarding the objective to create and launch a Chinese language platform in China that enables school-safe communications including connection to the ePals Global Community™, the world's largest social learning network of more than 300,000 schools worldwide. NeuEdu is affiliated with Neusoft Holdings Co. Ltd. ("Neusoft Holdings"), which succeeded the original MOU with ePals that was announced on Oct. 3, 2011.

Pursuant to the JVC, the parties will work together to create a partnership ("NeuPals") in which ePals will hold a 49% interest that will develop and supply products and services to NeuEdu for distribution in China using the ePals digital learning platform and by fully utilizing NeuEdu's technology, market and localization resources and expertise. The JVC addresses specific issues related to capital contributions, operational matters and corporate governance of the joint venture including the establishment of a five-person board of directors. The term of the JVC is 20 years and includes certain mutual exclusivity provisions related to the Chinese market.

The parties are working to finalize ancillary agreements relating to intellectual property, stock purchase, and operational services, as outlined by the Memorandum of Understanding and described further in ePals previous press release dated Oct. 3, 2011.

The Joint Venture will become effective on approval by the Chinese Government and the JVC is subject to all necessary regulatory and government approvals.

Other Matters:
Unrelated to the NeuEdu JVC, ePals' board of directors approved a granting to certain employees of its wholly owned subsidiary, ePals, Inc., stock options to acquire a total of 182,000 restricted voting common shares. The stock options are exercisable, once vested, at a price of C$0.51 per share for a period of 10 years.

In addition, 252,875 restricted share units with various vesting terms have been granted to certain employees and consultants. The restricted share units are redeemable, once vested, for an equal number of restricted voting common shares and were granted pursuant to ePals' restricted share unit plan.

About ePals Corporation
ePals Corporation (TSX VENTURE: SLN) is an education media company and the leading provider of safe social learning networks. Focused on the K-12 market, ePals offers elementary and secondary school administrators, 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; LearningSpace®; In2Books®, a common core eMentoring program that builds reading, writing and critical thinking skills; and popular children's educational publishing brands including Cricket® and Cobblestone®. ePals customers and partners include the 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 teachers, students and parents in approximately 200 countries and territories. For the ePals Global Community, visit Corporate information is available at

Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws, including statements with respect to customers, ventures such as ePals China and Europe ("ePals Ventures"), partnerships; ePals' strategy, prospects and success in pursuing domestic or international markets and the composition of its leadership teams to be established in connection therewith; and ePals' anticipated plans to increase its subscription base, ARPU, and media and platform businesses. These statements relate to future events or future performance. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. 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 ePals. Such material factors and assumptions include, but are not limited to: ePals' ability to execute on its business plan, including the successful launch of ePals' Ventures; the acceptance of ePals' products and services by customers globally; that ePals affiliated entities will be able to secure distribution partners for sale of ePals' products and services; ePals' subjective assessment of the likelihood of success of a sales lead or opportunity; that sales will be completed at or above ePals' estimated margins; that the demand for webhosting and secure email communication, as well as education media related products domestically, in Europe and in China will continue to grow; that the demand for ePals' products and services globally will develop and grow; the receipt of all requisite regulatory approvals throughout venture territories for the sale of ePals' products and services; the availability of additional financing, if and when required and market conditions generally. Although ePals 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 ePals 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


    Chief Financial Officer
    Aric Holsinger
    ePals Corporation
    Phone: (703) 885-3400

    Investor Relations
    Cory Pala
    Phone: (416) 657-2400

    SVP, Marketing & Corporate Communications
    Will Jarred
    ePals Corporation
    Phone: (703) 885-3400