Shift Networks Inc.
TSX VENTURE : SHF

Shift Networks Inc.

December 07, 2006 19:34 ET

Shift Networks Announces Terms of $4 Million Financing, Led By Loewen, Ondaatje, Mccutcheon Limited

CALGARY, ALBERTA--(CCNMatthews - Dec. 7, 2006) - Shift Networks Inc. (TSX VENTURE:SHF) (www.shiftnetworks.com) announced today that the Corporation intends to proceed with a brokered private placement (the "Private Placement"), subject to TSX Venture Exchange approval and all other necessary regulatory approvals, to raise up to $4,000,000 by issuing Secured Convertible Debentures (the "Debentures"). Loewen, Ondaatje, McCutcheon Limited will be acting as lead agent for this Private Placement on a best efforts basis.

The proceeds of the Debentures will be used to accelerate expansion into Shift's eastern Canadian markets and continue growth in western Canada, following on from the launch of Shift 2.0, the Company's next generation hosted IP communications network. Remaining proceeds will be used for general working capital.

The interest rate on the Debentures will be 12% on an annual basis, payable in advance. The term of the Debenture will be three (3) years from the closing date, which is expected to be on or about December 15, 2006, or such other date as agreed upon by the parties (the "Closing Date"). The Debentures will be 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. Share purchase warrants (the "Warrants") will be attached to the Debentures in the ratio of one Warrant for each $1.00 of principal amount of the Debentures subscribed for in the Private Placement. Each Warrant will be 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.

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