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Wherify Wireless and Lightyear Network Solutions Sign Definitive Merger Agreement

2008-08-13 15:48:00

  Combined entity to target the fast-growing Location Based Services (LBS)

                            and GPS marketplaces

    SAN MATEO, Calif., Aug. 13 /EMWNews/ -- Wherify Wireless,

Inc. (OTC Bulletin Board: WFYW) ("Wherify") home of the Springboard

location based services (LBS) platform, today announced it has entered into

a definitive merger agreement with Lightyear Network Solutions, LLC and its

affiliates ("Lightyear") to combine Lightyear's and Wherify Wireless,

Inc.'s businesses.

    The proposed business combination of Wherify and Lightyear creates a

public entity that will target the rapidly growing markets for location

based services and network service solutions. Upon closing of the merger

existing Lightyear members and note-holders will own 51% of Wherify's fully

diluted shares. Sherman Henderson will be named Chairman and CEO of

Wherify. For the year ended December 31, 2007, Lightyear generated

approximately $65 million in revenue, $2.8 million in EBITDA.(1)

    The initial Board of Directors of the combined company at the closing

will consist of seven persons -- five new directors chosen by Lightyear

(one of which will be approved by Wherify), one director chosen by Wherify,

and one director chosen by GPS Associates LLC.

    Wherify's proprietary Springboard location based services platform

enables mobile carriers, mobile application providers and mobile device

manufacturers to develop a wide variety of location based services

applications for their products. This platform will provide the combined

organization with several additional potential avenues of growth including

markets for enterprise employee mobility service management, mobile social

networking, personal safety, mobile community search and mobile shopping.

    "We believe the combined efforts of these two companies will enhance

the service offering to prospective customers and our more than 84,000

existing small and mid-sized business and residential customers," commented

Sherman Henderson, President and CEO of Lightyear. "Our strong distribution

base and long-term partnerships combined with Wherify's leading LBS

platform and GPS technologies will allow the combined organization to

introduce a variety of new products to the marketplace over the coming

months and years."

    The merger is conditioned on, among other things, obtaining a minimum

of $15 million in new equity capital, the restructuring of existing debt,

and the conversion of Wherify's Series A and Series B preferred stock. The

parties have retained Seven Hill Partners, LLC to assist with the

financing. Under the agreement, $2.5 million of the new equity capital is

anticipated to be used to retire approximately $18 million of Wherify's

current unsecured liabilities. An additional $2.5 million of the new

capital is anticipated to be used to restructure Wherify's secured debt

with Yorkville Associates. Upon completion of the merger and financing,

Wherify and its subsidiaries will collectively retain approximately $2.5

million of secured debt with Yorkville and approximately $17.5 million of

existing long-term Lightyear debt. In addition, Yorkville shall no longer

retain any conversion features but will remain secured by certain current

Wherify assets. Wherify anticipates that net working capital from the

financing will be approximately $6.5 million.

    Vince Sheeran, Wherify's chief executive officer, commented, "Wherify's

proprietary location based service platform and Lightyear's established

leadership in customer support, multi-channel distribution and

telecommunications carrier presence are an excellent fit. The combination

of Wherify's and Lightyear's businesses can unlock the potential that

location based services has represented for the wireless industry. All of

us on the Wherify Wireless team look forward to addressing the many

opportunities that will be available to the combined organization."

    About Lightyear Network Solutions, LLC

    Lightyear Network Solutions, LLC, provides voice, data, and video

telecommunications services to small and medium-sized businesses and

residential customers through a network of 3,300 independent agents and

representatives throughout the United States. CEO Sherman Henderson has

been named one of the top 25 Most Influential People in Telecommunications

and has been elected for six consecutive terms as Chairman of COMPTEL, the

leading industry association representing communication service providers.

In delivering its services, Lightyear partners with major carriers and

telecommunications companies such as Verizon, AT&T, Level 3, Qwest, Sprint,

Embarq, PAETEC, Sylantro, Cisco, Adtran, Voicecom, Iperia and Acme Packet.

Lightyear is based in Louisville, Kentucky.

    About Wherify Wireless, Inc.

    Wherify Wireless, Inc. (OTC Bulletin Board: WFYW), through its

proprietary Springboard platform, provides location based services for

enterprise and consumer applications such as field and sales management,

mobile social networking, personal safety, mobile search and mobile

shopping. Springboard supports GPS and non-GPS equipped devices and is

compatible with GSM and CDMA technologies. Wherify was founded in 1998, and

is based in San Mateo, California.

    Note Regarding Forward-Looking Statements

    Any statements that are not statements of historical fact (including

statements containing the words "believes," "plans," "anticipates,"

"expects," "estimates" and similar expressions) should be considered to be

forward-looking statements. Forward-looking statements include statements

regarding our ability to complete the recapitalization financing or

alternative fundraising, and the benefits of the proposed merger with

Lightyear. There are a number of factors that could cause actual results or

events to differ materially from those indicated by such forward-looking

statements, including difficulties encountered in integrating the merged

businesses, uncertainties as to the timing of the merger, the satisfaction

of closing conditions to the transaction, the ability to raise financing at

expected levels or at all, general conditions in the relevant industries

and markets, the impact of competitive products, intellectual property

issues, availability, terms and use of capital to continue to grow the

companies' business, and the other factors described in Wherify Wireless'

periodic filings with the SEC. The company disclaims any intention or

obligation to update any forward-looking statements as a result of

developments occurring after the date of this press release.

    Wherify and Wherify Wireless are registered trademarks of Wherify

Wireless, Inc. Wherifone is a trademark of Wherify Wireless, Inc. All other

trademarks are the property of their respective owners.

    (1) Lightyear generated a $3.5 million net loss for 2007 which included

a one time non-cash charge of $3.2 million related to the write-off of

goodwill, a non-cash charge of $900,000 for depreciation and amortization

and $2.2 million in interest and financing fees.

    Contact: Joe Noel

Wherify Investor Relations Tel: 1.925.922.2560

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