iMarketing Solutions Group Inc. Completes $3.5 Million Convertible Debt Financing


TORONTO, Dec. 4, 2012 /CNW/ - iMarketing Solutions Group Inc. (CNSX: IMR) (the "Company"), a North American relationship marketing company, announced today that it has completed a previously announced private placement offering (the "Offering") of a secured convertible promissory note (the "Note") for aggregate gross proceeds of $3,500,000.  The sole subscriber (the "Subscriber") to the Offering is 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 matures three years after issuance and bears interest at a rate of 20% per annum, payable annually in arrears. The Note is 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 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) is 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.

A portion of the net proceeds of the Offering was 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. The balance of the net proceeds will be used for general working capital purposes. Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("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 as set out in 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. The Company has not filed a material change report less than 21 days prior to the closing of the Offering because the terms of the Note were not settled until shortly before the closing of the Offering.

The CNSX does not accept responsibility for the adequacy or accuracy of this release.

SOURCE: iMarketing Solutions Group Inc.

For further information:

iMarketing Solutions Group Inc.,
Upkar Arora, Chief Financial Officer,
416-921-6595 ext. 270

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iMarketing Solutions Group Inc.

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