Silver Fern Financial Ltd.
TSX VENTURE : SFL.P

EMedia Networks International Corporation
TSX VENTURE : EMM

EMedia Networks International Corporation

March 08, 2007 19:14 ET

Silver Fern Financial Ltd. and Emedia Networks International Corporation: Letter of Intent to Merge

CALGARY, ALBERTA--(CCNMatthews - March 8, 2007) - Silver Fern Financial Ltd. ("Silver Fern") (TSX VENTURE:SFL.P), an Alberta capital pool company, and Emedia Networks International Corporation ("Emedia") (TSX VENTURE:EMM), a public British Columbia company engaged in the business of providing licensed foreground music played in public places, are pleased to announce that they have entered into a letter of intent (the "LOI") dated February 27, 2007 whereunder the parties have agreed to negotiate a definitive agreement relating to a proposed merger transaction (the "Transaction") pursuant to which Silver Fern and Emedia will complete a business combination by way of amalgamation, arrangement, takeover bid or other form of transaction (the combined entity hereinafter referred to as the "Resulting Issuer"). The arm's length Transaction will constitute Silver Fern's "Qualifying Transaction" under the applicable policies of the TSX Venture Exchange (the "TSXV").

Pursuant to the Transaction holders of all of the issued and outstanding common shares of Emedia (the "Emedia Shares") will receive common shares of the Resulting Issuer ("Resulting Issuer Shares") on the basis of one Resulting Issuer Share for each Emedia Share held. Holders of all of the issued and outstanding common shares of Silver Fern ("Silver Fern Shares") will receive Resulting Issuer Shares on the basis of one Resulting Issuer Share for each Silver Fern Share held. All convertible securities of Emedia and Silver Fern shall, pursuant to the Transaction, be exchanged for equivalent securities of the Resulting Issuer with the appropriate adjustment to their respective exercise prices; however, all options to acquire Emedia Shares currently outstanding with an exercise price of $0.10 per Emedia Share will be exchanged on a one for one basis for options to purchase Resulting Issuer Shares with an exercise price of $0.25 per Resulting Issuer Share.

Concurrently with completion of the Transaction, the Resulting Issuer will acquire 25% of the issued and outstanding voting securities of Stripe Mobile Inc. ("Stripe"), a private Alberta corporation engaged in the mobile music industry, from current shareholders of Stripe in exchange for the issuance of 2,500,000 Resulting Issuer Shares to such shareholders. Further, the Resulting Issuer will be granted, by current shareholders of Stripe, a six month option to acquire additional voting securities of Stripe equal to 40% of the issued and outstanding voting securities of Stripe in exchange for issuing 5,000,000 Resulting Issuer Shares to shareholders of Stripe. Due to the Transaction, the private placement of 3,000,000 units of Emedia to Stripe announced by Emedia on December 1, 2006 will not proceed.

A deposit of $125,000 is to be paid by Silver Fern to Emedia pursuant to the LOI, $100,000 of that deposit is refundable and will be secured by a general security agreement. The payment of this deposit is subject to TSXV approval.

The Transaction is subject to shareholder approval of Silver Fern.

Upon completion of the Transaction, it is anticipated that the Resulting Issuer will grant an aggregate of 2,100,000 stock options to purchase Resulting Issuer Shares, having an exercise price of $0.25 per share to directors and officers of the Resulting Issuer.

If the Transaction is completed, the Resulting Issuer will have 21,566,895 Resulting Issuer Shares issued and outstanding (on a non-diluted basis).

About Emedia

Emedia is a British Columbia incorporated company, listed on the TSXV, and is in the business of supplying licensed foreground music played in public spaces. EMedia's client base includes many national Canadian retail chains including Le Chateau, Body Shop and International Clothiers. Foreground music consists of CD quality artist recordings that are played in retail and restaurant establishments to enhance and define a client's brand image and as a sales enhancement tool. EMedia delivers fully custom-tailored music programming through its proprietary "EMplayer" platform. EMedia has recently launched an aggressive marketing program targeting major US & Canadian retail chains. Emedia has annual recurring revenue of 1.2 million dollars and 13,066,895 common shares currently issued and outstanding. Further information regarding Emedia is available on www.sedar.com.

The Resulting Issuer will carry on the business of Emedia upon completion of the Transaction and will be a 25% holder of Stripe.

Financial Information Concerning Emedia

The following information is derived from Emedia's audited annual financial statements as at and for the twelve month period ended March 31, 2006 and its management-prepared unaudited interim financial statements for the three-month period ended September 30, 2006. Such information is qualified in its entirety by the related notes and other information contained in the relevant financial statements, which are available at www.sedar.com:



12 Month 3 Month
Period Ended Period Ended
March 31, 2006 September 30, 2006
$ $
------------------- -------------------
Revenues 1,226,612 321,979
Operating Expenses 1,411,209 327,512
Net Loss for the Period (199,650) (5,533)
Loss per Share (basic and diluted) (0.02) -

Total Assets 768,844 713,355
Total Liabilities 556,296 519,812
Share Capital 1,478,549 1,478,549
Deficit (1,310,604) (1,329,609)


Management

The board of directors of Emedia currently consists of Darren Reiter, Jasvir Athwal, Daniel Fraser and Gilbert Murray. Each of the current directors of Emedia will be on the board of the Resulting Issuer following the Transaction and Mr. David Mears and Mr. Gordon Anderson will be appointed to the Resulting Issuer's board of directors upon completion of the Transaction.

The municipalities of residence and biographies of the Resulting Issuer's proposed directors and key officers are as follows:

Darren Reiter - Chief Executive Officer, Secretary and Director (Vancouver, British Columbia)

Mr. Reiter was appointed Chief Executive Officer of Emedia in September 2003 and prior thereto was Vice-President, Operations and a Director of Emedia since August 2000. Mr. Reiter obtained a Bachelor of Arts degree from the University of British Columbia in 1993, a Masters degree in English Literature from the University of Edinburgh in 1995 and a Certificate in Journalism from Langara College in 1998.

Jasvir Athwal - President, Chief Financial Officer and Chairman of Board (Vancouver, British Columbia)

Mr. Athwal was a founder of Emedia and has been a principal of Emedia since October 1991, President and Director since September 2000 and Chief Financial Officer since September 2003 . Mr. Athwal graduated from the University of British Columbia's faculty of Pharmaceutical Sciences in 1988 (BSc. Pharm.) and practiced pharmacy for 5 yearsi n British Columbia.

Daniel Fraser, Vice-President, Technology and Director (Orange, California)

Mr. Fraser is currently Senior Engineer at Reinkus-Heinz Inc., a leading professional speaker and amplifier manufacturing company and Mr. Fraser has been Vice-President, Technology and a Director of Emedia since September 2000. From 1991 to 2000, Mr. Fraser was manager of the computer hardware maintenance department for the Surrey School District in British Columbia.

Gilbert Murray, Director (Vancouver, British Columbia)

Mr. Murray has been a Director of Emedia Networks since October 2001. He is the founder and former sole owner of Black Knight Sales, one of North America's leading importers of sporting goods.

David Mears, Proposed Director (Calgary, Alberta)

Mr. Mears is the Chief Executive Officer of BrazAlta Resources Corp. Mr. Mears has over a decade of capital markets experience with a number of securities firms in Calgary. Mr. Mears was past President of Semper Energy which merged with Val Vista Energy and remained as a director until its sale to Avenir Income Trust. Chairman of Sierra Vista Energy Ltd. and also serves as a director and officer on a number of other TSXV listed companies.

Gordon Anderson, Proposed Director (Calgary, Alberta)

Mr. Anderson holds a Bachelor of Education degree from the University of Regina (1975). Mr. Anderson has been employed with London Life in a variety of management positions since 1975. He presently owns an estate-planning firm, Anderson & Associates Financial Corp., which is associated with London Life. Mr. Anderson is also President of Freestyle Holdings Corp. and affiliated private companies involved in real estate development and other investments. Since 1995 to the present, Mr. Anderson has also served as a director and officer of a number of publicly traded companies.

About Stripe

Stripe, based in Calgary, Alberta, provides mobile content service across North America. Stripe sells ringtones, wallpapers and is the premier provider of "phony messages" to consumers through its mobile storefront www.stripemobile.com. Stripe is connected to major U.S. carriers which connection provides Stripe with access to nearly 200 million mobile subscribers. Under the tag line "What's your Stripe?" Stripe promotes and develops a wide range of new mobile personalization services.

Conditions

The proposed qualifying transaction is subject to a number of conditions including the following:

(a) approval by the board of directors and shareholders of both Silver Fern and Emedia;

(b) satisfactory due diligence by both Silver Fern and Emedia;

(c) repayment of short term loans and equipment debt by Emedia of up to $300,000;

(d) completion of the purchase of 25% interest in Stripe by the Resulting Issuer;

(e) negotiation and execution of a definitive agreement;

(f) satisfactory termination by Emedia of a financial advisory agreement; and

(g) regulatory approvals.

It is anticipated that trading of the common shares of both Emedia and Silver Fern will re-commence on Monday, March 12, 2007.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange 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 management information circular or 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.

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Emedia Networks International Corporation
    Darren Reiter
    Chief Executive Officer and Director
    (604) 742-3344
    or
    Silver Fern Financial Ltd.
    Gordon Anderson
    Chief Executive Officer
    (403) 265-3733