Immersive Media Corp.
TSX VENTURE : IMC

Immersive Media Corp.

October 18, 2006 06:00 ET

Immersive Media Corp. Signs Letter of Intent to Acquire Freestone Systems, Inc.

CALGARY, ALBERTA--(CCNMatthews - Oct. 18, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISTRIBUTION IN THE U.S.

Immersive Media Corp. (TSX VENTURE:IMC) ("IMC", or the "Company") announces that it has signed a non-binding Letter of Intent ("LOI") to acquire Freestone Systems, Inc. ("Freestone Systems"), parent company of Light Speed Labs, L.P. and Light Speed Mobile, LLC, for an aggregate amount of 650,000 IMC shares, subject to adjustment, and the payment of cash consideration in the aggregate amount calculated as US$2,000,000 minus the amount of Freestone Systems debt outstanding at closing.

Based in Addison, Texas, Freestone Systems, one of IMC's current technology partners, is a leader in specialized imaging product design for the security/asset management, mobile display, and video conferencing industries. The acquisition strengthens IMC's supply-chain initiatives, expands its product offerings and brings together two leaders within the advanced digital video industry that are changing the way people engage with visual information. Freestone Systems' engineers come from a wide variety of backgrounds with experience ranging from military systems to consumer digital camera chip design. Freestone Systems' technical strength in sensors, displays, networking, video recording, and video processor design have established it as a leading innovator in digital video markets.

"We believe in IMC's vision and see the benefits of leveraging its proven spherical video platform into our existing mobile data acquisition and security solutions," commented Neal Cooper, managing director of Freestone Systems. "Together we can continue to change peoples' perspective and revolutionize the visual communications market worldwide. We are excited about increasing our level of contribution to the success of Immersive Media."

"We are very enthused about the acquisition of Freestone Systems," stated Myles M. McGovern, president & CEO of Immersive Media Corp. "Freestone Systems is a valued contributor to our technology platform. This enhances our production efficiencies and enables us to pursue new product and market opportunities."

The transaction will be conditional upon IMC closing the private placement of 2,000,000 units, for aggregate gross proceed of $3.5 million. Each unit will be offered at a price of $1.75, and will consist of one common share and one-half of one common share purchase warrant, each whole common share purchase warrant entitling the holder thereof to purchase one common share at a price of $2.50 for a period of 24 months.

The specific terms of the transactions, if completed, are subject to customary conditions, including finalization of definitive agreements, due diligence, respective board and other approvals, stock exchange and regulatory approvals and satisfactory completion of a financing by IMC.

For more information on immersive video and the IMC's other product offerings, please visit www.immersivemedia.com

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About Freestone Systems, Inc.

Freestone Systems, Inc. is a leader in specialized imaging product design for the security/asset management, mobile display, and video conferencing industries. From design and development to marketing integrated, specialty video imaging, and display products and solutions, Freestone Systems, Inc.'s technologies and designs support a progressive range of visual solutions from ultra high resolution image capture (digital sensors and cameras), audio & video signal high-speed transmission protocols and microprocessor programming to digital image recording and storage, and digital video displays (LCDs.) For more information, please visit www.lsmobile.com

About Immersive Media Corp.

Immersive Media Corp. ("IMC") is an advanced digital video imaging company. Using eleven video streams arranged according to geodesic geometry, immersive video captures an almost complete spherical image; a high-resolution 360 degree view of surroundings that is seamlessly stitched together. The imagery can also be integrated with relevant metadata and industry-specific database information to enhance content and provide viewers with greater visual detail in multiple layers. Details such as GIS coordinates, tags and other vital information, are simply incorporated which provides a complete picture for timely, fact-based decision making. Immersive video can be experienced live or recorded through a variety of display options. Applications include: urban planning, oil and gas resource management, emergency response and first responder operations, and commercial media. IMC is a publicly traded company that is listed under the symbol "IMC" on the TSX Venture Exchange. For more information on IMC and immersive video, go to: www.immersivemedia.com

ADVISORY: Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the closing of the acquisition of Freestone Systems, Inc. and the unit financing and the use of proceed of the financing. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; inability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factor is not exhaustive.

Readers are cautioned not to be place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Additional information on these and other factors that could affect Immersive Media Corp.'s operations or financials results are included in the Company's reports on file with Canadian Securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), Immersive Media Corp.'s website (www.immersivemedia.com) or by contacting the Immersive Media Corp. Furthermore, the forward-looking statements contained in this new release are made as of the date of this news release, and Immersive Media Corp. does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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