Ribbon Capital Corp.: Update On The Acquisition Of Integrated Brands Ltd. And Proposed Acquisition Of Local Fone Service Inc. And 1382285 Ontario Ltd. And Reinstatement Of Trading.

TORONTO -- Ribbon Capital Corp. (TSX VENTURE:RBN.P)("Ribbon"), a capital pool company pursuant to TSX Venture Exchange (the "Exchange") Policy 2.4 (the "Policy"), wishes to announce that further to its press releases dated September 7, 2004, November 30, 2004 and February 11, 2005, Ribbon continues to pursue its planned acquisition of Integrated Brands Ltd. ("Integrated"). In addition, Ribbon would like to announce that it has entered into a letter of intent dated November 9, 2005 (the "New Letter of Intent") with Local Fone Service Inc. ("Local Fone") and 1382285 Ontario Ltd. ("SelectComm") whereby Ribbon has agreed to acquire all of the issued and outstanding shares of Local Fone and SelectComm (collectively, the "Companies") in exchange for the issuance of an aggregate of 40,000,000 common shares in the capital of Ribbon at a value of $0.15 per share for an aggregate value of $6,000,000. In addition, Ribbon will pay cash consideration to the shareholders of SelectComm, the amount of which has yet to be determined, but in any event will not exceed an aggregate of $600,000. All of the principals of Local Fone, SelectComm and Ribbon are arm's length parties to Ribbon.

Reinstatement to Trading

On May 9, 2005 and May 11, 2005, respectively, the Ontario Securities Commission and British Columbia Securities Commission issued cease trade orders in respect of Ribbon due to Ribbon's failure to file its annual audited financial statements and failure to pay its annual participation fees. Ribbon paid the requisite fees on May 12, 2005. Subsequently the cease trade orders were revoked, however, Ribbon has not traded since May 9, 2005, pending a reinstatement review by the Exchange, which review Ribbon did not address in a timely manner. It is expected that Ribbon will be reinstated to trading on the Exchange on January 18, 2006. In addition to responding to the Exchange's reinstatement review, during the interim period between May 9, 2005 and the date of this press release, Ribbon continued to pursue the Integrated Acquisition (as hereafter defined) while at the same time pursuing the acquisition of the Companies. Management of Ribbon is confident that its efforts to improve upon and expand the Qualifying Transaction, through the additional acquisition of the Companies, creates strategic synergies that, post-Qualifying Transaction, will produce added shareholder value for Ribbon's shareholders.

About Local Fone

Local Fone was incorporated under the Business Corporations Act (Ontario) on August 31st, 1998 and commenced operations in January, 1999. Its registered office is 4510 Rhodes Drive, Suite 200 Windsor, Ontario N8W 5K5.

As the first residential dial tone reseller in Canada, Local Fone now provides home telephone, long distance and broadband services to more than three thousand credit-challenged consumers in Ontario, Quebec, Alberta and British Columbia. Local Fone has resale agreements in place with Bell Canada, Telus, Rogers and other major carriers. The company is registered with the Canada Radio-television and Telecommunications Commission and also holds an FCC-214 license with the Federal Communications Commission in the United States. Local Fone's carrier-grade network infrastructure, which includes a complete long distance and voice over internet protocol ("VoIP") platform, is located at 151 Front St. in Toronto, Ontario.

Local Fone currently has 100 common shares issued and outstanding. There are no options, warrants or other securities convertible or exercisable into Local Fone shares. The sole shareholders of Local Fone are Keith McKenzie and Sharon McKenzie.

The sole director and officer of Local Fone is Keith McKenzie (President). Mr. McKenzie is an experienced executive with extensive experience in telecom management and computer telephone technology.

On the basis of the unaudited financial statements as at and for the year ended August 31, 2005, Local Fone had total assets of $484,770, liabilities of $423,536, negative working capital of $1,870, revenues of $2,792,812 and net income of $136,686. On the basis of the unaudited financial statements as at and for the year ended August 31, 2004, Local Fone had total assets of $374,641, liabilities of $450,093, negative working capital of $158,285, revenues of $2,535,667 and net losses of $13,945.

About SelectComm

SelectComm was incorporated under the Business Corporations Act (Ontario) on December 7th, 1999, and commenced operations in January, 2000. Its registered office is 111 St. Arnaud Street, Amherstburg, Ontario N9V 2N9.

SelectComm is recognized as one of Canada's largest prepaid telecommunications distributors. The company distributes prepaid airtime to a market of nearly 3.6 million wireless subscribers on networks such as Rogers and Telus. Their distribution channel consists of thousands of independent and chain retailers including convenience stores, gas stations, supermarkets, drug stores, and electronics and telecom dealers. The company maintains close strategic relationships with Canada's major telecom carriers and most importantly, its steadfast distribution and retail partners. The Company has invested in a state-of-the-art shipping and fulfillment centre that provides quick, reliable and accurate service to its customers.

SelectComm currently has 100 common shares issued and outstanding. There are no options, warrants or other securities convertible or exercisable into SelectComm shares. The sole shareholders of SelectComm are Robert Cikalo and Ryan Deslippe.

The directors and officers of SelectComm are Robert Cikalo (President) and Ryan Deslippe (Vice President). Messieurs Cikalo and Deslippe are seasoned executives with extensive experience in telecom companies.

On the basis of the unaudited financial statements as at and for the nine month period ended September 30, 2005, SelectComm had total assets of $1,537,330, liabilities of $2,261,543, negative working capital of $391,964, revenues of $17,904,246 and net losses of $91,288. On the basis of the audited financial statements as at and for the year ended December 31, 2004 SelectComm had total assets of $1,587,587, liabilities of $2,220,511, negative working capital of $285,668, revenues of $22,265,936 and net losses of $349,847.

About the Merging of the Companies

The Companies will be merging their operations under the SelectComm banner, creating a telecommunications platform and distribution channel. Leveraging this unique infrastructure, the Companies will develop a suite of new wireless and wireline telecom services that will target the un-banked / credit challenged consumer market.

Proposed Acquisition of Local Fone and SelectComm

On November 9, 2005, Ribbon and the Companies signed the New Letter of Intent pursuant to which the acquisition of the Companies will be undertaken by way of a share exchange and purchase agreement to be entered between Ribbon and the Companies (the "Share Exchange Agreement"). Pursuant to the Share Exchange Agreement, Ribbon will issue an aggregate of 40,000,000 common shares of Ribbon valued at $0.15 per Ribbon share for an aggregate amount of $6,000,000 to the shareholders of the Companies in exchange for their common shares in the capital of the Companies. In addition, Ribbon will pay a cash consideration to the shareholders of SelectComm. The amount of the cash payment has yet to be determined, but in any event will not exceed an aggregate of $600,000.

Each shareholder of Local Fone and SelectComm will be entitled to receive Ribbon shares on a pro rata basis according to their respective shareholdings in the Companies. The number of Ribbon common shares to be issued pursuant to the terms of the Share Exchange Agreement may be increased if certain liabilities of the Companies are converted into common shares in the capital of the Companies.

Update on the Integrated Acquisition

Pursuant to a press release dated September 7, 2004, Ribbon announced that on August 24, 2004 it had signed an arm's length letter of intent (the "Integrated Agreement") with Integrated. The Integrated Agreement was subsequently amended on November 11, 2004, and such amending agreement was subsequently superseded on November 25, 2004.

On August 24, 2004, Ribbon and Integrated signed the Integrated Agreement pursuant to which the acquisition of Integrated (the "Integrated Acquisition") will be undertaken by way of a share exchange agreement dated July 1, 2005, entered between Ribbon and Integrated (the "Integrated Share Exchange Agreement"). Pursuant to the Integrated Share Exchange Agreement, Ribbon will issue to Integrated shareholders an aggregate of 10,000,000 common shares of Ribbon valued at $0.15 per Ribbon share for an aggregate value of $1,500,000 in exchange for the common shares in the capital of Integrated. Each Integrated shareholder will be entitled to receive Ribbon shares on a pro rata basis according to their respective shareholdings in Integrated.

In addition, Ribbon will issue an aggregate of 1,950,000 common share purchase warrants of Ribbon to 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc. in exchange for common share purchase warrants in the capital of Integrated held by those respective corporations. Each common share purchase warrant entitles the holder thereof to acquire one (1) Ribbon share for a period of two years from the date of the closing of the Qualifying Transaction (as hereafter defined). Of the share purchase warrants, 975,000 have an exercise price of $0.175 per common share and the remaining 975,000 have an exercise price of $0.195 per common share.

Pursuant to the Integrated Share Exchange Agreement, Ribbon will also issue an additional 2,246,735 units (the "Debt Units") at a deemed price of approximately $0.4279 per Debt Unit to 1511412 Ontario Inc., 1514007 Ontario Inc., 1514006 Ontario Inc. and Paige Capital Inc. in exchange for the cancellation of an aggregate of $961,487 of debt owed by Integrated to those four corporations. The Debt Units will be exchange for 2,246,735 units of Ribbon ("Ribbon Debt Units"). Each Debt Unit will be comprised of one (1) common share and one (1) non-transferable common share purchase warrant (a "Debt Warrant"). Each Debt Warrant entitles the holder thereof to acquire one (1) common share at an exercise price of $0.20 per common share for a period of two (2) years from the date of issuance. Upon the issuance of the Debt Units, Integrated will have no liabilities except for standard trade payables.

About Integrated

Integrated was incorporated under the Business Corporations Act (Ontario) on January 29, 2002 and commenced operations in March, 2003. Its registered office is 7676 Woodbine Avenue Unit 5, Markham, Ontario, L3R 2N2.

Integrated markets name brand personal computers and related products directly to sub-prime consumers across Canada. In recent years, the Company has implemented an effective media strategy that channels qualified prospects into the Company's advanced call center, producing a very predictable return on investment. To augment this, Integrated has developed a sophisticated lead tracking and sales generation system that facilitates high volume consumer relationship management. The company has secured valuable relationships with top tier financial institutions that underwrite the consumer financing on each sale, allowing the Company to monetize its contracts and eliminate credit risk.

Integrated currently has 5,000 common shares and 975 common share purchase warrants issued and outstanding. There are no other options, warrants or other securities convertible or exercisable into Integrated shares. The principal shareholders of Integrated are 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc. Each of 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc. was incorporated in Ontario. 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc. are controlled directly by Howard Fialkov, Gerry Fialkov and Janet Abramson, respectively, each of whom is an Ontario resident.

The sole director and officer of Integrated is Peter Burdon. Mr. Burdon is a seasoned executive with extensive experience in technology sales and marketing companies. He is a Chartered Accountant and has spent the past 15 years in executive positions with fast growth and technology-driven companies.

Private Placement

Integrated has entered into an agreement for the sale of 1,666.6667 units of Integrated at a price of $300 per unit ("Integrated Unit") for aggregate gross proceeds of $500,000 (the "Integrated Private Placement"). The Integrated Units will be exchange for 3,333,334 units of Ribbon (the "Ribbon Units"). Each Ribbon Unit will be comprised of one (1) common share and one (1) non-transferable common share purchase warrant (the "Financing Warrant"). Each Financing Warrant entitles the holder thereof to acquire one (1) common share at an exercise price of $0.20 per common share for a period of two (2) years from the date of issuance. 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc. have agreed to subscribe for an aggregate of 833.33335 Integrated Units, which will be exchanged for 1,666,668 Ribbon Units on the completion of the Integrated Acquisition.

Integrated has agreed to pay an arm's length third party a cash commission equal to 5% of the gross proceeds received under the sale of Integrated Units to individuals other that 1511412 Ontario Inc., 1514007 Ontario Inc. and 1514006 Ontario Inc.

In addition, SelectComm will issue a convertible debenture for up to $500,000 (the "Debenture"), which transaction is scheduled to close on or before January 31, 2006 (the "Company Private Placement"). The Debenture is for a term of 12 months. On the completion of the acquisition of Integrated and the Companies, the Debenture will be converted into 3,333,334 Ribbon Units at a deemed price of $0.15 per Ribbon Unit. Each Ribbon Unit will be comprised of one (1) common share and one-half (1/2) non-transferable common share purchase warrant (a "Debenture Warrant"). Each whole Debenture Warrant entitles the holder thereof to acquire one (1) common share at an exercise price of $0.22 per common share for a period of 18 months from the date of issuance. If the acquisition of Integrated and the Companies by Ribbon is not completed, an interest rate of 10% per annum will be charged on the outstanding balance of the Debenture. The Debenture will be secured by a general security agreement on all of the assets of SelectComm, such agreement to terminate upon the completion of the acquisition of SelectComm by Ribbon, and by the personal guarantees of Ryan Deslippe and Robert Cikalo aggregating 50% of the outstanding balance of the Debenture.

SelectComm has agreed to pay an arm's length third party a cash commission equal to 8% of the gross proceeds received under the Company Private Placement.

The Integrated Private Placement will close concurrently with the closing of the acquisition of Integrated and the Companies (the "Acquisition").

Finders' Fee

In connection with the acquisition of the Companies, Ribbon has agreed to pay a finder's fee of approximately 8% of the aggregate deemed value of $6,000,000 to a third party that is at arm's length to Ribbon, Integrated and the Companies (the "Finder") for services provided to the Companies including sourcing a public vehicle and providing advice on the structuring and business plan for the Companies. The finder's fee will be satisfied through the issuance of 3,200,000 common shares (the "Finder's Shares"). The Finder's Shares will be issued on the closing of the Acquisition.

Qualifying Transaction

The Acquisition is expected to constitute the "Qualifying Transaction" of Ribbon, as that term is defined in the Policy. The Qualifying Transaction is subject to approval of the shareholders of each of Integrated and the Companies, as well as regulatory approval. Completion of the Qualifying Transaction is also subject to the satisfactory completion of a due diligence review by Ribbon, the Companies and Integrated. Since the Qualifying Transaction is not non-arms length, the approval of Ribbon's shareholders is not required under the Policy. Upon execution of the Integrated Agreement, Ribbon has provided a non-refundable payment of $25,000 to Integrated.

Ribbon has also advanced a further $100,000 to Integrated in the form of a secured loan. Pursuant to the terms of the loan, the funds are secured by way of a general security agreement over the assets and receivables of Integrated and by a personal guarantee by Peter Burdon, the President of Integrated. For further information regarding the loan, please refer to Ribbon's press release dated February 11, 2005.

After completion of the Acquisition, the Integrated Private Placement, the Company Private Placement and the issuance of the Finder's Shares, an aggregate of 68,446,735 common shares of Ribbon will be issued and 78,276,804 common shares will be outstanding on a fully diluted basis, assuming the exercise of all stock options, Financing Warrants and Debt Warrants.

The current shareholders of Ribbon will own an aggregate of 6,333,332 common shares (9.25%) while the current shareholders of Integrated and the Companies will own an aggregate 53,913,403 common shares (78.77%) with the balance of the 8,200,000 common shares (11.98%) being owned by the Finder and subscribers to the Integrated Private Placement and the Company Private Placement.

After giving effect to the Acquisition, it is expected that the Board of Directors of Ribbon will be comprised of Keith McKenzie, Robert Cikalo, Ryan Deslippe, Peter Burdon, G. Michael Newman, Peter Wanner and Myra Bongard.

Keith McKenzie - Mr. McKenzie is currently a director and President of Local Fone Service and has been since 1998. Mr. McKenzie has 14 years of telecom management and computer telephony experience. Over the course of his career, Mr. McKenzie has been involved in several telecom venture start-ups, including a successful long distance company. In 1996, when deregulation of telephone services occurred in the United States, Mr. McKenzie recognized the opportunity and headed one of the first companies to offer competitive local service in Texas. In 1998 Mr. McKenzie returned to Canada to start Local Fone Service. Since then he has been involved in the deployment of a carrier grade long distance and VoIP network. It is expected that Mr. McKenzie will serve as the Chief Executive Officer and a director of Ribbon following the Acquisition.

Bob Cikalo - Mr. Cikalo is currently a director and President of SelectComm and has been since 2000. Mr. Cikalo has extensive experience in wireline and wireless telecommunication solutions both on the sales and technology side. In 1992 Mr. Cikalo started his telecom career managing wireless retail locations and an answering service call centre. His success in this sector led him to be involved in the operational management and infrastructure development of numerous telecom based projects. Over the years, Mr. Cikalo has established key relationships with major telecom carriers and distribution partners. It is expected that Mr. Cikalo will serve as the Chief Operating Officer and a director of Ribbon following the Acquisition.

Ryan Deslippe - Mr. Deslippe is currently a director and Vice President of SelectComm and has been since 2000. Mr. Deslippe is an experienced entrepreneur who has considerable experience in corporate management, strategic planning, finance, marketing and communications. Mr. Deslippe started his career at the age of 15 when he founded a successful weekly newspaper publication and marketing company. In 1998 Mr. Deslippe entered the telecom industry and has since played key roles in the successful launch of numerous projects. During this time, Mr. Deslippe has established valued relationships with key suppliers, carriers, distribution partners and national retailers. It is expected that Mr. Deslippe will serve as the President and as a director of Ribbon following the Acquisition.

Peter Burdon -Mr. Burdon is currently a director and President of Integrated and has been since 2002. After receiving his Bachelor of Commerce, Magna Cum Laude, from McMaster University, Mr. Burdon started his career at Ernst & Young during which time he received his Chartered Accountant designation. Mr. Burdon has played a senior role in a number of high tech and communication companies. Prior to joining Integrated, Mr. Burdon served as the Executive Vice President of an internet marketing company and consulted for various companies operating in the consumer sub-prime debt market. It is expected that Mr. Burdon will serve as the Chief Financial Officer and a director of Ribbon following the Acquisition.

G. Michael Newman - Mr. Newman is currently a director of Ribbon. Mr. Newman is also President and Chief Executive Officer of InterRent Properties Inc. ("InterRent") (since 1997) and has been President, Chief Executive Officer and a Director of InterRent since 1999. Mr. Newman is also Managing Director of Adevam Investments Inc. (since 1989), a Toronto based investment banking firm which assists small to medium sized firms with the raising of private equity or senior and subordinated debt capital, mergers, acquisitions and divestitures. It is expected that Mr. Newman will continue to serve as a director of Ribbon following the Acquisition.

Peter Wanner - Mr. Wanner is currently a director of Ribbon. Mr. Wanner has been a self-employed Certified General Accountant and business consultant since 1990. During this period Mr. Wanner has undertaken several interim chief financial officer assignments and has served as a consultant for clients in the airline, software, wholesale distribution, manufacturing and tour operation industries. He has assisted in going public transactions for several companies in the United States including Aviation Distributors Inc., Integrated Data Systems Inc., D'Angelo Brands Inc. and Southborough Ventures Inc., as well as several private placements for various Canadian companies. It is expected that Mr. Wanner will continue to serve as a director of Ribbon following the Acquisition.

Myra Bongard - Ms. Bongard is currently a director of Ribbon. Ms. Bongard has over 18 years of experience in real estate sales and has been a sales representative with Century 21 Heritage for the past 18 years. It is expected that Ms. Bongard will continue to serve as a director of Ribbon following the Acquisition.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. 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 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.

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

Blackmont Capital Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

THE TSX VENTURE EXCHANGE INC. HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OF THIS RELEASE.

Ribbon Capital Corp. (TSX VENTURE:RBN.P)