New University Holdings Corp.
TSX VENTURE : NUH.P

July 05, 2011 18:57 ET

New University Holdings Corp. Provides Update on Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - July 5, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

New University Holdings Corp. (TSX VENTURE:NUH.P) (the "Corporation") is pleased to announce that it has entered into a definitive merger agreement (the "Merger Agreement") in respect of its previously announced proposed merger with ePals, Inc. ("ePals"), which transaction (the "Transaction") is intended to constitute the Corporation's "qualifying transaction" under the applicable policies of the TSX Venture Exchange (the "TSX-V"). The Merger Agreement and the Transaction are described in greater detail below. Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Information Concerning ePals

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 K-12 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.

ePals is a widely held private company with approximately 130 shareholders. There is currently no public market for the securities of ePals.

Information Concerning the Corporation

The Corporation is a "capital pool company" under the policies of the TSX-V. The common shares of the Corporation (the "New University Shares") were listed for trading on the TSX-V on November 22, 2010 upon completion of the Corporation's initial public offering. On March 21, 2011, the Corporation entered into a letter of intent with ePals with respect to the proposed Transaction. Trading of the New University Shares was halted on March 22, 2011 in connection with the announcement of the proposed Transaction and trading of the New University Shares may not resume until after the filing statement to be prepared in connection with the Transaction is accepted by the TSX-V and filed on SEDAR.

At an annual and special meeting of the shareholders of the Corporation held on June 20, 2011 (the "Meeting"), the shareholders of the Corporation approved certain matters in contemplation of the Transaction which included: (a) approval of an increase in the number of directors of the Corporation from four to eight; (b) the election of eight directors of the Corporation; (c) conditional upon the Transaction being completed, approval of a new stock option plan of the Corporation; (d) conditional upon the Transaction being completed, approval of a restricted share unit plan of the Corporation; (e) approval for the Corporation's current stock option plan for use in the event the Transaction is not completed; and (f) approval of the continuance (the "Continuance") of the Corporation into the Province of Ontario pursuant to the provisions of the Business Corporations Act (Ontario) ("OBCA").

In connection with the Continuance, the Corporation will file articles of continuance immediately prior to the completion of the Transaction. The articles of continuance will (i) effect a name change of the Corporation to "ePals Corporation"; (ii) effect a consolidation of the Corporation's issued and outstanding New University Shares on the basis of one post-consolidation New University Share for up to every 2.3877 pre-consolidation New University Shares; (iii) create a new class of restricted voting common shares (having no votes in respect of the election of directors) ("Restricted Voting Shares"); (iv) amend the terms of the New University Shares to provide for cumulative voting in respect of the election of directors, redesignate the New University Shares as "Voting Common Shares" (together with the Restricted Voting Shares, "Resulting Issuer Shares"), and further amend the terms of the New University Shares to provide that holders of Voting Common Shares shall be entitled to receive dividends only if an equivalent dividend is also declared on the Restricted Voting Shares, and that holders of Voting Common Shares and Restricted Voting Shares shall share equally in any distribution of the remaining property of the Corporation upon its dissolution, liquidation or winding-up; and (v) amend the terms of the authorized preferred shares of the Corporation (none of which are issued and outstanding) to conform to the provisions of the OBCA. Upon giving effect to the Continuance, the existing by-law of the Corporation will be repealed and a new by-law conforming to the provisions of the OBCA will come into effect.

For further details with respect to the matters approved at the Meeting, please see the Corporation's management information circular dated May 20, 2011 prepared in connection with Meeting which is available for review under the Corporation's SEDAR profile at www.sedar.com.

Information Concerning the Transaction and the Merger Agreement

The Corporation, NU Merger Sub, Inc., a wholly-owned subsidiary of the Corporation ("NU Subco"), ePals and ePals Finance Corp., a special purpose entity created in contemplation of the Transaction ("Finco"), entered into the Merger Agreement on June 29, 2011 in order to implement the Transaction. The Corporation, on a post-Transaction basis, is hereinafter referred to for convenience as the "Resulting Issuer".

Pursuant to the terms and conditions of the Merger Agreement, NU Subco, a wholly-owned subsidiary of the Corporation, will, pursuant to the applicable provisions of the Delaware General Corporation Law, as amended (the "DGCL"), be merged with and into ePals, and the separate corporate existence of NU Subco will thereupon cease in accordance with the provisions of the DCGL. ePals will be the surviving corporation in the Transaction, will continue to exist as the surviving corporation under its present name pursuant to the provisions of the DGCL and will continue to exist as the same legal entity as existed before the Transaction. Upon completion of the Transaction, ePals will be a wholly-owned subsidiary of the Resulting Issuer (to be renamed "ePals Corporation" pursuant to the Continuance) and it will continue to carry on the business currently conducted by it.

Pursuant to the Merger Agreement, among other things: (i) all of the issued and outstanding shares of common stock of ePals ("ePals Shares") held by U.S. residents will be converted to the right to receive Voting Common Shares and Restricted Voting Shares on the basis of approximately 0.377 Voting Common Shares and approximately 0.623 Restricted Voting Shares for every one ePals Share; (ii) all of the issued and outstanding ePals Shares held by non-U.S. residents will be converted into the right to receive Voting Common Shares on the basis of one Voting Common Share for each such ePals Share; and (iii) any ePals Shares held by U.S. residents who are not "accredited investors" will be converted into the right to receive a cash payment of C$0.64 for each ePals Share held.

It is currently anticipated that upon completion of the Transaction there will be approximately 67,000,000 Voting Common Shares and approximately 43,672,725 Restricted Voting Shares issued and outstanding. Former shareholders of the Corporation will hold 3,925,823 of the outstanding Voting Common Shares; purchasers of the Subscription Receipts (as defined below) will hold 35,937,500 of the outstanding Voting Common Shares and, based on current estimates, it is anticipated that former shareholders of ePals will hold approximately 27,136,677 of the outstanding Voting Common Shares. Former shareholders of ePals will hold all of the outstanding Restricted Voting Shares. In the event ePals issues ePals Shares prior to the completion of the Transaction (including pursuant to the exercise of any convertible securities of ePals by the holders thereof) that results in an increase in the number of ePals Shares currently anticipated to be outstanding immediately prior to the completion of the Transaction, the number of outstanding Voting Common Shares and Restricted Voting Shares on a post-Transaction basis will increase and former shareholders of ePals will hold such additional shares. The Restricted Voting Shares will not be listed on the TSX-V.

ePals has been advised by Global Silicon Valley Advisors (formerly NeXtAdvisors, LLC) ("GSV") with respect to the Transaction.

Financing

On April 28, 2011, Finco completed a brokered private placement of 35,937,500 subscription receipts (the "Subscription Receipts"), at a price of C$0.64 per Subscription Receipt, for aggregate gross proceeds of C$23,000,000 (the "Private Placement"). The Private Placement was completed pursuant to the terms of an agency agreement dated April 28, 2011 between ePals, Finco, Cormark Securities Inc. (the "Agent") and the Corporation.

The gross proceeds of the Private Placement, less certain expenses of the Agent incurred in connection with the Private Placement, are being held in escrow pending the satisfaction of certain release conditions (the "Release Conditions"). The Release Conditions include the receipt of all necessary regulatory approvals (including the conditional approval of the TSX-V for the Transaction) and the satisfaction of certain conditions to the completion of the Transaction.

If the Release Conditions are satisfied on or prior to July 27, 2011 (the "Release Deadline"), each Subscription Receipt will be automatically converted, without payment of any additional consideration or any further action by the holder thereof, into one special share of Finco (a "Special Share"). Each Special Share will ultimately entitle the holder thereof to acquire one Voting Common Share, concurrently with the closing of the Transaction, pursuant to the Securities Exchange Agreement (as defined below). If the Release Conditions are not satisfied on or prior to the Release Deadline, the Subscription Receipts will be cancelled and the holders thereof will be entitled to an amount equal to C$0.64, being the original purchase price per Subscription Receipt.

For its services in connection with the Private Placement, the Agent is entitled to receive a cash commission equal to 6% of the gross proceeds of the Private Placement, being C$1,380,000, which commission is being held in escrow and will be released to the Agent upon satisfaction of the Release Conditions. As additional compensation, the Agent and Macquarie Private Wealth Inc. received upon closing of the Private Placement an aggregate of 2,875,000 compensation options of Finco (the "Compensation Options"). Each Compensation Option is exercisable to acquire one common share of Finco at a price of C$0.64 any time on or prior to April 28, 2014 and will ultimately be exchanged for one NU Compensation Option (as defined below), concurrently with the closing of the Transaction pursuant to the Securities Exchange Agreement.

The Resulting Issuer intends to use its available funds (including the net proceeds from the Private Placement) for, among other things, growing ePals' platform and media businesses as well as ePals' international operations, funding ePals' 2011 shortfall in its current operating plan and for the repayment of certain bank indebtedness.

Finco Securities Exchange Transaction

Concurrently with the closing of the Transaction, the Corporation will acquire all of the issued and outstanding securities of Finco pursuant to the terms of a securities exchange agreement dated April 28, 2011 (the "Securities Exchange Agreement") between the Corporation, the holder of the outstanding common share of Finco, the Agent (on behalf of certain securityholders of Finco), Finco and the holders of the Compensation Options. Pursuant to the Securities Exchange Agreement, the securityholders of Finco will become securityholders of the Corporation by way of an exchange of securities. Specifically: (i) each outstanding common share and Special Share of Finco will be transferred by the holder thereof to the Corporation in exchange for one Voting Common Share (on a post-Consolidation basis); and (ii) each Compensation Option will be transferred by the holder thereof to the Corporation in exchange for one compensation option exercisable to acquire one Voting Common Share (on a post-Consolidation basis) at a price of C$0.64 any time on or prior to April 28, 2014 (a "NU Compensation Option"), in each case, upon the terms and conditions contained in the Securities Exchange Agreement.

Selected ePals Financial Information

The following table sets forth selected historical financial information for ePals for the financial years ended December 31, 2010, December 31, 2009 and December 31, 2008 and the three-month period ended March 31, 2011.

Income Statement Data (US$) Year Ended
December 31
2010
(unaudited
(1)(2
,

)
)
Year Ended
December 31
2009
(unaudited)
(1

,

)
Year Ended
December 31
2008
(unaudited)
(3
,

)
Three Months Ended
March 31
2011
(unaudited)
(1
,

)
Total Revenues $1,423,149 $703,683 $333,241 $494,710
Loss from Operations ($8,560,959 ) ($9,810,124 ) ($11,725,071 ) ($1,948,152 )
Net Loss ($8,769,668 ) ($9,957,339 ) ($11,922,555 ) ($2,000,393 )
Cash Dividends Declared Nil Nil Nil Nil
Balance Sheet Data (US$) As at
December 31
2010
(unaudited
(1)(2
,

)
)
As at
December 31
2009
(unaudited)
(1
,

)
As at
December 31
2008
(unaudited)
(3
,

)
As at
March 31
2011
(unaudited)
(1
,

)
Total Assets $3,730,431 $3,589,754 $5,091,971 $4,008,008
Total Liabilities $7,380,764 $6,589,956 $6,229,197 $9,552,944
Working Capital ($6,459,839 ) ($6,261,149 ) ($5,858,042 ) ($8,753,349 )
Notes:
  1. Prepared in accordance with International Financial Reporting Standards.
  2. ePals' financial statements for the year ended December 31, 2010 are currently unaudited. Audited financial statements for such year will be included in the filing statement to be prepared in connection with the Transaction.
  3. Prepared in accordance with United States generally accepted accounting principles.

Management and Board of Directors of the Resulting Issuer

The following is a brief description and jurisdiction of residence of each of the proposed members of management and directors for the Resulting Issuer.

Miles Gilburne (Washington, DC) – Chief Executive Officer and Director: Mr. Gilburne has been active for more than 25 years as a venture capitalist, corporate strategist and technology lawyer in the media, communications and technology industries. He is currently a managing member of ZG Ventures, LLC ("ZG Ventures"), an early stage venture capital firm focused on media, information technology and bioinformatics. Prior to forming ZG Ventures in 2000, Mr. Gilburne served for five years as Senior Vice President of Corporate Development for America Online, Inc. ("AOL"), stepping down from those duties in December 1999. At AOL, Mr. Gilburne was responsible for strategic planning and for major corporate acquisitions, joint ventures and alliances. He was elected to the board of directors of AOL in 1999 and continued to serve on the board of directors of Time Warner, Inc. until stepping down in May 2006. Prior to joining AOL, Mr. Gilburne was a founding partner of The Cole Gilburne Fund, an early stage venture capital fund focused on information and communications technology, and was a founding partner of technology and media law offices in both San Francisco and Los Angeles.

Mr. Gilburne is currently a member of the board of directors of SRA International, Inc., a publicly traded government services company; the Chairman of BrainScope Company, Inc., a medical device company focused on diagnosing concussion in sports and the military; a member of the Board of National Geographic Ventures (dating to National Geographic's investment in ePals); and a founding investor and member of the boards of various privately held venture capital backed companies, including ePals and SnagFilms, Inc., a distribution company which aggregates and distributes documentary films over the Internet. Mr. Gilburne is a member of the Board of Trustees of The Shakespeare Theatre in Washington, D.C. and the Foundation for the National Institutes of Health. He received a B.A. from Princeton University and a J.D. from Harvard Law School. Mr. Gilburne will hold the positions of Chairman of the Board and Chief Executive Officer of the Resulting Issuer.

Edmund (Ed) Fish (Great Falls, Virginia) – President and Director: Mr. Fish is currently the President of ePals (2006-Present). Prior to joining ePals in 2006, Mr. Fish was Senior Vice President and General Manager of Premium and Subscription Services at AOL, responsible for creating, building businesses for, and launching more than a dozen subscription and free consumer products, including online education products for students and parents. He also served as the Senior Vice President and General Manager for AOL Desktop Messaging, with responsibility for AOL Instant Messenger and ICQ. Previously, Mr. Fish was a director and the President of InterTrust Technologies Corp. ("InterTrust"), a leading digital rights management firm. Together with the founder, Mr. Fish took InterTrust from start-up phase to a market-leading NASDAQ-traded company. Mr. Fish will be a director and the President of the Resulting Issuer.

Nina Zolt (Washington, DC) – Director: Nina Zolt is the Co-Chair and a Co-Founder of ePals. Her work in education has focused on improving learning opportunities for all students in a digital age. She has extensive experience as an entertainment lawyer, digital media executive and designer of digital learning products. In 1998, Ms. Zolt created In2Books®, ePals' flagship common core e-Mentoring program. She served as a member of the Washington D.C. Advisory Board of Directors for Teach for America (2000-2011) and the Board of Trustees of the Carnegie Foundation for the Advancement of Teaching (2004-2010). Ms. Zolt also served as an Advisory Board Member for the International Reading Association (2008-2010). She is the lead author of the In2Books® Genre Guides and a co-author of "Getting Children In2Books®: Engagement in Authentic Reading, Writing and Thinking" (Phi Delta Kappan, 2007). Ms. Zolt received an honorary doctorate from National-Louis University in 2004, has a B.A. from the University of Pennsylvania and a J.D. from Boston University School of Law. Ms. Zolt will be a Director of the Resulting Issuer.

William Campbell (Pawleys Island, South Carolina) – Director: William Campbell is the President of Akoo International, Inc., the largest out-of-home television network in the United States, serving over 180 locations nationally (in shopping centers and college campuses). He is also the former President of Discovery Networks, U.S. ("Discovery") and Miramax Television ("Miramax"). As the President of Discovery from May 2002 to 2007, he was responsible for all aspects of the domestic television division, including programming, production, affiliate sales and marketing, advertising sales, consumer marketing, research, business development and communications.

Prior to joining Discovery, Mr. Campbell served from 1998 as president of Miramax, where he was responsible for all aspects of television, including development, marketing, legal affairs and production. Previously, Mr. Campbell was executive vice president, CBS Entertainment ("CBS"). Before joining CBS, Mr. Campbell served as senior vice president, drama development at Warner Brothers Television. Prior to this, he worked as an analyst in the mergers and acquisitions department of Smith Barney, Harris Upham & Co. in New York. A native of Greenville, South Carolina, Mr. Campbell is a 1982 graduate of Harvard and a 1987 graduate of the Harvard Business School (M.B.A.). He was a Rotary International Scholar.

William Raduchel (Hancock, Michigan) – Director: William Raduchel is strategic advisor at Daily Mail and General Trust PLC. Besides ePals, he is a director of Silicon Image, Inc. as well as LiveIntent, Inc., moka5, Inc. and Virident Systems Inc. He is strategic advisor to Naspers Ltd. Mr. Raduchel teaches corporate strategy at the McDonough School of Business, Georgetown University. He is the chair of the Committee on Copyright and Innovation in the Digital Era for the National Academy of Sciences.

From March of 2004 through June 2006, Mr. Raduchel was the Chairman of the Board of Ruckus Network, Inc., a digital entertainment network for students at colleges and universities over the university network, and from May 2004 through January 2006 he also served as chief executive officer. Through 2002 Mr. Raduchel was executive vice president and chief technology officer of AOL Time Warner, Inc. ("AOLTW"), after earlier being senior vice president and chief technology officer of AOL, where he also served as a strategic advisor after leaving AOLTW. Infoworld named Mr. Raduchel Chief Technology Officer of the year in 2001.

Mr. Raduchel joined AOL in September 1999 from Sun Microsystems, Inc. ("Sun"), where he was chief strategy officer and a member of Sun's executive committee. In his eleven years at Sun, he also served as chief information officer, chief financial officer, acting vice president of human resources and vice president of corporate planning and development and oversaw relationships with the major Japanese partners. He was recognized by CIO magazine as Chief Information Officer of the year and by Wall Street Transcript as best Chief Financial Officer in the computer industry. In addition, Mr. Raduchel has held senior executive roles at Xerox Corporation and McGraw-Hill, Inc.

Mr. Raduchel is a member of the Conference of Business Economists and the Board on Science, Technology and Economic Policy of the National Academy of Sciences. He was a member of the National Academy Committee on Internet Navigation and Domain Name Services and the STEP committee which produced A Patent System for the 21st Century. He served from 2000 to 2009 on the National Advisory Board for the Salvation Army, ending as vice chairman and chairman of its Committee on Business Administration, and rejoined the Board in 2010. He holds eight issued patents and has several pending patents.

After attending Michigan Technological University, where he received an honorary doctorate in business in 2002, Mr. Raduchel received his B.A. in economics from Michigan State University in 1966,and earned his M.A. (1968) and Ph.D. (1972) degrees in economics at Harvard University. At Harvard, Mr. Raduchel taught economics, econometrics and public policy for 10 years and was assistant dean of admissions and financial aid for Harvard University and Radcliffe College. In both the fall and spring of 2003 he was the Castle Lecturer on Computer Science at the U.S. Military Academy at West Point.

Perry Dellelce (Toronto, Ontario) – Director: Perry Dellelce is a founder and managing partner of Wildeboer Dellelce LLP, a corporate finance law firm focusing on securities, debt products and tax matters. Mr. Dellelce has a B.A. from the University of Western Ontario, an M.B.A. from the University of Notre Dame and an LL.B. from the University of Ottawa. He is a member of the President's Council of the University of Western Ontario, the Board of Governors of the University of Ottawa and the Business Advisory Council and the Executive Education Advisory Council of the Mendoza College of Business at the University of Notre Dame. In addition, Mr. Dellelce is the Chairman of the Board of Directors of the Sunnybrook Foundation of the Sunnybrook Health Science Centre in Toronto, Ontario, and is a member of the board of directors of The Power Plant Contemporary Art Gallery, Merry Go Round Children's Foundation and Canada's Walk of Fame. Mr. Dellelce has served as an officer or a director of a number of public corporations listed on the Toronto Stock Exchange and the TSX-V.

Michael Moe (Atherton, California) – Director: Michael Moe, CFA, is currently the Chief Executive Officer of Global Silicon Valley Asset Management and also the Chief Executive Officer of GSV Capital Corp. (NASDAQ-GSVC). In 2001, Mr. Moe co-founded and was Chief Executive Officer of ThinkEquity Partners, which was sold to Panmure Gordon in 2007. Mr. Moe served as a director of Panmure Gordon from April 2007 until September 2008. Prior to that, Mr. Moe was head of Global Growth Research at Merrill Lynch from July 1998 to January 2001, and before that operated as head of Growth Research and Strategy at Montgomery Securities. Mr. Moe serves on the Board of Directors of the National Football Foundation / College Football Hall of Fame, the Center for Education Reform and Sharespost, a private stock exchange. Mr. Moe is also a member of the Advisory Board of Institutional Venture Partners and National Advisory Board for Communities in Schools. In 1996, he published The Dawn of the Age of Knowledge, which relates to the emergence of knowledge based services and the for-profit education industry. Following that, he published two additional white papers, The Book of Knowledge and The Knowledge Web, which relate to the impact of the Internet on Education and the potential for online learning. In 2006, he published the book, Finding the Next Starbucks, which went through three printings and was published in six languages. Mr. Moe graduated from the University of Minnesota with a B.A. in Political Science and Economics and was a Williams Scholar.

David Lowenstein (Mississauga, Ontario) – Director: David Lowenstein is a co-founder and currently the President of Federated Networks, a start-up cyber-security company whose objective is to enable users to "Connect Securely™ to all things digital". Additionally, Mr. Lowenstein is currently Chairman of the board of directors and the chair of the compensation committee and the nominating committee of The Princeton Review, Inc. a company offering private tutoring and classroom and online test preparation to help students improve their scores in college and graduate school admission tests, and also works with school districts around the U.S. to measurably strengthen students' academic skills. Mr. Lowenstein was a co-founder, director and consultant at SOURCECORP, Incorporated ("SOURCECORP"), a document centric business process outsourcing and consulting company with approximately 5,000 employees operating from approximately 90 locations in 40 U.S. states, the Caribbean, the Philippines, Mexico and India, and has served in various senior management positions with SOURCECORP, including Executive Vice-President Corporate Development, Chief Financial Officer and Treasurer, from SOURCECORP'S 1994 inception, through its 1996 initial public offering and until the sale of SOURCECORP to Apollo Partners LP in August 2006 for approximately $500 million. Concurrent with the latter part of his SOURCECORP tenure, Mr. Lowenstein was an officer and director of The Learning Library Inc., an internet e-learning application software services business focused on the licensing and certification of professionals, from November 1998 until December, 2004. Mr. Lowenstein was also a board member of Capital Environmental Services Inc. ("Capital Environment") from June 1999 to October 2001 and served on Capital Environment's audit and compensation committees. Additionally, Mr. Lowenstein has been and continues to be an active investor, advisor and board member of several private companies primarily providing business outsourcing and/or internet software application services. Mr. Lowenstein graduated with a Master of Science of Public Policy and Business Administration (Merit Scholar) from Carnegie Mellon University and received an Honors Bachelor of Arts in Economics from Sir Wilfred Laurier University.

Aric Holsinger (Great Falls, Virginia) – Chief Financial Officer: Mr. Holsinger brings 20 years of chief financial officer experience from the telecommunications, technology and professional sports industries. Prior to joining ePals, Mr. Holsinger was CFO for Critical RF, Inc., a provider of interoperability solutions linking smartphones, computers and two-way radio systems. Prior to that, Mr. Holsinger was CFO for MCT Corp. ("MCT"), a wireless communications provider with operations in Russian and Central Asia where he led the growth from its start-up phase to a US$300 million sale to TeliaSonera AB. Mr. Holsinger joined MCT following CFO positions with the Baltimore Orioles and the Baltimore Stallions, a Canadian Football League team. He began his career with Arthur Andersen, specializing in the high tech and emerging growth companies. Mr. Holsinger holds a BS in Accounting and Management Information Systems from the University of Virginia.

Andrew Berman (Mill Valley, California) – Executive Vice President and General Manager: Andrew Berman is a versatile executive with a unique background and skill set. He brings to ePals proven success in turning early stage technology businesses into multi-million dollar companies. His experience includes launching and commercializing products, leading international expansion, creating and executing corporate strategy, executing mergers and acquisitions, and driving profitability. Prior to joining ePals, Mr. Berman was a Senior Vice President & General Manager at Sierra Wireless, Inc. ("Sierra Wireless"), a public company in the wireless communications segment. At Sierra Wireless Mr. Berman led all facets of the AirLink business unit, including its growth in North America and expansion into EMEA, Asia Pacific, and Latin America. Prior to Sierra Wireless, Mr. Berman was CEO of AirLink Communications, Inc., an early stage wireless data company. In three years Mr. Berman led AirLink's growth to a US$35 million dollar, high margin business, culminating in its merger into Sierra Wireless. Prior to AirLink, Mr. Berman was Executive Director in the Business Affairs unit at AOL where he had broad responsibility for client development, deal structuring and negotiation and managing strategic alliances. Prior to AOL, Mr. Berman practiced law for 11 years in San Francisco, California. Mr. Berman is deeply involved in building communities, and has broad community service experience. He was twice elected to the City Council for Mill Valley, CA (where he still serves), including terms as Mayor and Vice Mayor; he is also Chair of the Marin Telecommunications Agency. Mr. Berman holds a J.D. degree from The University of Miami School of Law, and a B.A. in Psychology from the University of Michigan.

Linda Dozier (Great Falls, Virginia) – Chief Technology Officer: Linda Dozier has been with ePals since its inception, playing a critical role in managing the day-to-day build-out of the organization. Ms. Dozier has over 20 years of experience in operations management, systems integration, technology development, and building early-stage businesses. Previously, she was Co-Founder, COO and Product Architect for Navisoft Inc. ("Navisoft"), the first web server and web authoring system, which was acquired by AOL in 1995. At AOL, Ms. Dozier was a senior executive responsible for the AOL Internet Services technology platform. Subsequent to the integration of Navisoft's technologies into AOL's core service, Ms. Dozier focused on evaluation of technology as Vice President of Corporate Development. Prior to her work with Navisoft and AOL, Ms. Dozier led the design, development, and release of dozens of software applications at TRW, Inc., as principal investigator for research and development, the senior member of the technical staff and project manager. She also served as director for the Advanced Systems division at SRA International, Inc.

Ted Brodheim (New York, New York) – Chief Operating Officer: Mr. Brodheim recently joined ePals as the Chief Operating Officer. Immediately prior to such appointment Mr. Brodheim was Chief Information Officer at the New York City Department of Education ("NYC DOE"). In this position, Mr. Brodheim oversaw the introduction of multiple instructional technology projects, as well as upgrading the core infrastructure. Prior to joining the NYC DOE, Mr. Brodheim had a distinguished career in financial services holding senior roles in both the US and overseas. Immediately prior to joining the NYC DOE Mr. Brodheim was a Managing Director at JP Morgan. Prior to that he held senior positions at Donaldson, Lufkin and Jenrette and Goldman Sachs & Co.

Interests of Insiders

Upon completion of the Transaction and the exercise of the Subscription Receipts issued pursuant to the Financing, no Person will beneficially own, directly or indirectly, or exercise control or direction over more than 10% of the Resulting Issuer Shares except as held by ZG Ventures, LLC. It is currently anticipated that upon completion of the Transaction ZG Ventures, LLC will directly hold approximately 10,438,744 (15.6%) Voting Common Shares and approximately 16,799,762 (38.5%) Restricted Voting Shares and will indirectly hold approximately 776,307 (1.2%) Voting Common Shares and approximately 1,249,358 (2.9%) Restricted Voting Shares. ZG Ventures, LLC is 50% owned by Nina Zolt and 50% owned by Miles Gilburne, both proposed directors of the Resulting Issuer.

Sponsorship

The Corporation has applied for an exemption from the sponsorship requirement of the TSX-V in connection with the Transaction. There is no assurance that an exemption from this requirement will be obtained and the Corporation may be required to obtain a Sponsor (as such term is defined within the policies of the TSX-V) if the requested exemption is not granted.

Arm's Length Transaction

The Transaction will not constitute a Non-Arm's Length Qualifying Transaction under the applicable policies of the TSX-V. The approval of the shareholders of the Corporation is not required for the Transaction.

Michael Moe, Chief Executive Officer and a director of the Corporation and a proposed director of the Resulting Issuer, is an advisor to GSV and receives fees for projects in which he is involved, but has no ownership interest in GSV. GSV and ePals are party to an advisory agreement dated March 14, 2011 pursuant to which GSV may receive certain advisory fees. Mr. Moe will not receive any compensation from GSV in connection with the Transaction, whether or not completed.

Further information concerning ePals, the Corporation and the Transaction will be contained in a filing statement, to be prepared in accordance with the policies of the TSX-V, and filed on the Corporation's SEDAR profile at www.sedar.com prior to the completion of the Transaction.

Cautionary Statements

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. Actual future results may differ materially. In particular, this press release contains forward-looking information relating to the satisfaction of the Release Conditions and the entering into of the agreements underlying the Transaction. The Release Conditions may not be met if the Corporation is not able to obtain the requisite approvals, including the approval of the TSX-V. The Release Conditions will not be satisfied if these approvals are not obtained or some other condition to satisfying the Release Conditions is not met. Accordingly, there is a risk that the Release Conditions will not be satisfied at all. This press release also contains forward-looking information relating to the intention of the parties to, among other things, enter into and complete the Transaction. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include the parties to the agreements underlying the Transaction being able to obtain the necessary director, shareholder and regulatory approvals; TSX-V policies not changing; and completion of satisfactory due diligence. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the TSX-V, the failure to obtain the required directors' and shareholders' approvals in respect of the Transaction and related matters; changes in tax laws, general economic and business conditions; and changes in the regulatory environment. The Corporation cautions the reader that the above list of risk factors is not exhaustive. 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.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained.

There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Neither the TSX-V, nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) 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.

Contact Information

  • New University Holdings Corp.
    Paul Lapping
    Chief Financial Officer
    (212) 409-2434