Shift Networks Inc.

Shift Networks Inc.

June 12, 2007 19:29 ET

Shift Networks Obtains Extension to CCAA Order, Establishes a Creditor Claims Procedure, and Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - June 12, 2007) - Further to its press release of May 11, 2007 - Shift Networks Inc. ("Shift") (TSX VENTURE:SHF) announces that on June 7, 2007 the Alberta Court of Queen's Bench ("the Court") extended Shift's creditor protection under the Companies Creditors Arrangements Act (Canada) ("CCAA") for an additional period expiring on September 7, 2007. If by September 7, 2007 Shift has not filed a Plan of Arrangement it will, if considered appropriate, apply for a further Extension Order. Shift will issue a press release in the early part of September to provide an update on its situation.

As previously announced Shift obtained debtor-in-possession financing (the "DIP Loan") subject to terms and conditions, in order to finance its working capital needs and the continued growth of its customer base while under CCAA protection. If further financing is required by Shift the Court has authorized Shift, subject to the approval of the Court appointed Monitor, PricewaterhouseCoopers Inc., to negotiate with its lender an increase in the principal amount of the DIP Loan from the previously authorized $1,500,000 to $1,650,000.

Effective Friday, June 8, 2007, trading in the shares of the company were suspended pursuant to TSX-V Policy 2.9, as the company has less than three Directors. Mr. Trent Johnsen remains the sole Director, President and Chief Executive Officer of Shift.

Under CCAA protection, Shift continues with its day-to-day operations, including the provisioning and delivery of voice over IP ("VoIP") business telephone services to small-to-medium business customers in Calgary, Edmonton, Vancouver, Victoria, Toronto and Ottawa and reports continued adoption of its unique hosted VoIP services.

Since the Initial Order on May 8, 2007, Shift reports:

- Combined activations and new sales of over 600 new Shift subscribers

- Reduction of operating expenditures by approximately $230,000 per month

- Key suppliers and vendors continued support of Shift's ongoing operations

- Significant network software upgrades to add enhanced system management features

- Development of a new simplified Shift service bundle including enhanced feature set and free long distance to an additional 50 countries

- The hiring of a Senior Manager, Accounting and Finance, with financial restructuring experience

For the benefit of all creditors, a claims procedure and a claims bar date of July 31, 2007 has been established via a Claims Procedure Order granted on June 7, 2007. Information on the claims procedure, court filings and other information relating to Shift is available on the website of the Monitor at


Certain information regarding Shift in this news release including management's assessment of future plans and operations and the timing thereof, may constitute forward-looking statements under applicable securities laws and may necessarily involve risks including, without limitation, credit risks of accounts receivable from its customers, currency risk as a result of its purchases, some of which are denominated in foreign currencies, competition from the potential for major cable and phone companies entering into the business, the ability to access sufficient capital from internal and external sources and the uncertainty involved in Court proceedings and the implementation of the Plan under the CCAA. As a consequence, Shift's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or, if any of them do so, what benefits Shift will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Furthermore, the forward-looking statements contained in this news release are made as of the date this news release and Shift does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

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