Shift Networks Inc.
TSX VENTURE : SHF

Shift Networks Inc.

February 21, 2007 18:08 ET

Shift Networks Announces Closing of a $4.09 Million Financing

CALGARY, ALBERTA--(CCNMatthews - Feb. 21, 2007) - Shift Networks Inc. (TSX VENTURE:SHF) (www.shiftnetworks.com) is pleased to announce that, subject to regulatory approval, the Corporation has closed $2,390,000 in the second and final tranche of an over-subscribed, brokered private placement consisting of secured convertible debentures (the "Debentures") and share purchase warrants (the "Warrants"). The Corporation previously raised $1,700,000 on January 2, 2007, for a total of $4,090,000.

The securities issued pursuant to the private placement are subject to a four month hold period. The proceeds of the Debentures will be used to support growth in the six major urban markets Shift currently serves in Canada, following on from the launch of Shift 2.0, the Corporation's next generation hosted IP communications network. Remaining proceeds will be used for general working capital.

The interest rate on the Debentures is 12% on an annual basis, payable in advance commencing 30 days following the closing date, with a maturity date of November 30, 2009. The Debentures are convertible, in whole or in part, at any time at the option of the Debenture holders, into common shares of the Corporation at a price of $0.10 per common share from the closing date through to November 30, 2007, $0.18 per common share from December 1, 2007 through to November 30, 2008 and $0.25 per common share from December 1, 2008 through to maturity. A total of 2,390,000 Warrants were issued pursuant to the Private Placement. Each Warrant is exercisable into one common share of the Corporation at an exercise price of $0.15 for two years from the closing date.

Loewen, Ondaatje, McCutcheon Limited acted as lead agent for the Private Placement, and received a cash commission and agent's warrants. Each agent's warrant is exercisable into one common share of the Corporation at an exercise price of $0.15 for two years from the closing date.

About Shift Networks

Shift Networks Inc. (TSX VENTURE: SHF - News) is reinventing the business phone company by combining premium hosted IP communications services, a strict focus on business customers, and unmatched customer service. Visit us at www.shiftnetworks.com .

Except for historical information, this press release contains forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements. Those risks and uncertainties include, but are not limited to, changing market conditions, and other risks detailed from time-to-time in the Company's ongoing filings. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in this press release might not occur.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information