iMarketing Solutions Group Inc. Announces Proposed $3.5 Million Convertible Debt Financing and Formal Approval of CNSX Listing

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TORONTO, Nov. 30, 2012 /CNW/ - iMarketing Solutions Group Inc. (TSX Venture Exchange: XDM) (the "Company"), a North American relationship marketing company, announced today that it is proposing to complete a private placement offering (the "Offering") of a secured convertible promissory note (the "Note") for aggregate gross proceeds of $3,500,000.  It is anticipated that the sole subscriber (the "Subscriber") to the Offering will be a significant shareholder of the Company who, together with its affiliates, owns approximately 27.95% of the currently issued and outstanding common shares ("Common Shares") of the Company.

The Note will mature three years after issuance and will bear interest at a rate of 20% per annum, payable annually in arrears. The Note will be secured by a general security agreement in favour of the holder of the Note granting security over all of the Company's assets together with a pledge of the shares of certain of the Company's significant subsidiaries.  Additionally, two of the Company's US subsidiaries will guarantee the indebtedness and grant security over their respective assets in support of such guarantees.

The principal amount of the Note (and any accrued interest) will be convertible at any time and from time to time, at the election of the holder thereof, into Common Shares, at a conversion price of $0.035 per Common Share.

It is anticipated that a portion of the net proceeds of the Offering will be used to repay the principal amount (together with any interest accrued thereon) of a $1,500,000 secured grid promissory note issued by the Company on October 10, 2012 to the Subscriber, as agent on behalf of itself and another lender. The balance of the net proceeds will be used for general working capital purposes.

As previously announced, the Common Shares will be delisted from the TSX Venture Exchange effective December 3, 2012.  The Company has received final approval to list its Common Shares on the Canadian National Stock Exchange (the "CNSX"). It is anticipated that the Common Shares will commence trading on the CNSX on December 4, 2012 under the ticker symbol "IMR".

The Offering is expected to be completed on or about December 4, 2012 and remains conditional upon receipt of CNSX approval and the opening of the trading on the CNSX.

Multilateral Instrument 61-101 (MI "61-101")

Pursuant to MI 61-101, the Offering is a "related party transaction." The Company is exempt from the formal valuation requirement of MI 61-101 in connection with the Offering in reliance on section 5.5(b) of MI 61-101, as no securities of the Company are listed or quoted for trading on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market or a stock exchange outside of Canada and the United States. Additionally, the Company is relying on the financial hardship exemption from the "majority of minority approval" requirement in connection with the Offering in reliance on section 5.7(e) of MI 61-101 as (i) the Company is in serious financial difficulty, (ii) the Offering is being undertaken to improve the financial position of the Company, (iii) the Offering is not subject to court approval or a court order that the Offering be conducted under bankruptcy or insolvency proceedings or section 192 of the Business Corporations Act (Alberta), (iv) the Company has one or more independent directors in respect of the Offering, and (v) the board of directors of the Company, acting in good faith, and all of the independent directors of the Company, acting in good faith, have determined that items (i) and (ii) above apply, and that the terms of the Offering are reasonable in the circumstances of the Company.

There will be less than 21 days between the date of filing of the Company's material change report in respect of the Offering and the closing date of the Offering.  The Company considers this is reasonable and necessary in order to address the Company's immediate funding requirements and corporate operations.

Neither the CNSX nor the TSX Venture Exchange (or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange)), accepts responsibility for the adequacy or accuracy of this release.

Certain statements in this press release may constitute "forward looking statements" reflecting our current beliefs, plans, estimates and expectations including with respect to the use of proceeds from the Offering, the completion of the Offering and the timing thereof, the timing of the delisting of the Common Shares from the TSX Venture Exchange and the timing of the listing of the Common Shares on the CNSX. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or the combined companies to be materially different from any performance or achievement expressed or implied by such "forward looking statements". Except as required by applicable securities laws, the Company undertakes no obligation to update any forward looking statements for any reason after the date hereof to conform these statements to actual results or to changes in its expectations. 

SOURCE: iMarketing Solutions Group Inc.

For further information:

iMarketing Solutions Group Inc.
Upkar Arora, Chief Financial Officer
416-921-6595 x270