SOURCE: ePals

ePals

February 10, 2014 16:28 ET

ePals Announces Shares for Debt Transaction and Grants Stock Options and Restricted Share Units

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

WASHINGTON, DC--(Marketwired - Feb 10, 2014) - ePals Corporation (TSX VENTURE: SLN) ("ePals" or the "Company") announces that it has entered into an agreement with an arm's length party to satisfy certain earnout payments payable by ePals pursuant to an agreement and plan of merger entered into in connection with the Company's November 2011 acquisition of Carus Publishing Company. The Company will pay US$253,135.74 in cash and issue an aggregate of 3,166,336 restricted voting common shares at a deemed price of C$0.05244 per share to satisfy an aggregate earnout payment of approximately US$403,136. The issuance of the restricted voting common shares is subject to the approval of the TSX Venture Exchange. The restricted voting common shares to be issued in connection with the earnout payment will be subject to resale restrictions for a period of four months from the issue date.

The Company also announces that its board of directors has approved the grant of stock options and restricted share units to certain directors, officers, employees and consultants. The board approved the grant of stock options to acquire an aggregate of 10,990,000 common shares, comprised of options to acquire 10,905,270 restricted voting common shares and 84,730 voting common shares, and awarded restricted share units which are redeemable for 1,050,000 common shares, consisting of 580,000 restricted voting common shares and 470,000 voting common shares. The stock options are subject to shareholder approval as well as annual approval by shareholders of the Company's incentive stock option plan at its next annual meeting of shareholders. All stock options are exercisable, once vested and approved by shareholders, at a price of C$0.05 per share for a period of 10 years from the date of grant. The common shares issuable upon redemption of the restricted share units and the exercise of certain stock options will be subject to resale restrictions for a period of four months from the grant date.

About ePals Corporation

ePals Corporation (TSX VENTURE: SLN) is an education media company and Global Learning Network. Focused on the K-12 market, ePals offers school administrators, teachers, students and parents worldwide trusted content, interactive learning experiences, and a collaborative learning community. ePals' award-winning products include: popular children's educational publishing brands from toddlers to teens, including Cricket® and Cobblestone®; the ePals Global Community®; and In2Books®, a Common Core eMentoring program that builds reading, writing and critical thinking skills. ePals also offers a content-licensing, clearance and production service for education publishers. ePals serves approximately one million classrooms and reaches millions of teachers, students and parents in over 200 countries and territories. Product websites include: www.ePals.com; www.Cricketmag.com; and In2Books.com.

Neither the TSX Venture Exchange nor 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.

Forward Looking Statements

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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