Intertainment Media Inc.
OTC Bulletin Board : ITMTF

Intertainment Media Inc.

May 13, 2011 14:52 ET

Intertainment Announces Closing of First Tranche of Special Warrant Financing

TORONTO, CANADA--(Marketwire - May 13, 2011) -


Intertainment Media Inc. ("Intertainment" or the "Company") (TSX VENTURE:INT)(OTCBB:ITMTF)(FRAKFURT:I4T) is pleased to announce that it has completed the first tranche of its previously announced non-brokered private placement (the "Offering") of special warrants (each a "Special Warrant"). The Company issued 19,760,271 Special Warrants at a price of $1.20 per Special Warrant for gross proceeds of $23,712,326.60 in this first closing. Each Special Warrant is exchangeable, for no additional consideration, for one common share in the capital of Intertainment (each a "Common Share") and one-half of one common share purchase warrant (each a "Warrant").

It is anticipated that the net proceeds of the Offering will be used to accelerate the Company's core new media offering, including Ortsbo, Ad Taffy and itiBiti (KNCTR), potential acquisition opportunities and for working capital purposes.

Directors and officers of the Company acquired 1,024,090 Special Warrants for gross proceeds of approximately $1,228,908 pursuant to this first tranche of the Offering. The Company has determined that exemptions are available for the various requirements of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 for the issuance of the Special Warrants to insiders of the Company.

"This first tranche comes at a very strategic time for the Company as its products and program have fully commercialized. Today's closing shows the strength of our investor's commitment to Intertainment," said David Lucatch, CEO of Intertainment Media Inc. "The Company received over $4.7 Million in excess commitments from the originally announced first tranche round of $28 Million, but chose to only close on the announced proceeds, as we have a strong commitment to close an additional $20 Million from a US based fund, should we choose to do so. The additional capital infusion gives the Company the ability to assess and review potential merger and acquisition opportunities."

The Special Warrants issued pursuant to this first tranche will expire on the earlier of (i) the date of issuance of a receipt being issued in respect of a final prospectus filed in certain Canadian jurisdictions (the "Prospectus") qualifying the securities issuable upon exchange of the Special Warrants; and (ii) September 14, 2011. Each Special Warrant is subject to statutory resale restrictions and, absent the clearing of the Prospectus in Canada, neither the Special Warrants nor the underlying securities may be traded in Canada during the period ending on September 14, 2011 except in accordance with applicable securities legislation and TSX Venture Exchange policies.

Each whole Warrant will entitle its holder to purchase one additional Common Share for $2.00, expiring on May 13, 2013. In the event that the Common Shares trade at a closing price on the TSX Venture Exchange of $4.00 or higher for a period of 15 consecutive trading days at any time after September 14, 2011, the Company may accelerate the expiry date of the Warrants by giving notice to holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is given by the Company.

Finders acting in connection with this first closing of the Offering received a finder's fee in the total aggregate amount of approximately $356,991 and 297,493 finder's options ("Finder's Options"). The Finder's Options are exercisable into units ("Finder's Units") at a price of $1.20 per Finder's Unit, and expire on May 13, 2013. Each Finder's Unit will consist of one Common Share ("Finder's Share") and one-half of one common share purchase warrant of the Company ("Finder's Warrant"), with each whole Finder's Warrant exercisable into one Finder's Share at a price of $2.00 per Finder's Share at any time prior to 4:30 p.m. (Calgary time) on May 13, 2013.

Completion of the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including TSX Venture Exchange acceptance.

About Intertainment -

Connecting people with brands, Intertainment Media Inc. is a Rich Media Applications leader, focused on delivering leading edge technology and marketing solutions enabling clients to power enhanced branding, loyalty initiatives and consumer engagement. Selected as a Microsoft Global Agency Initiative partner, Intertainment has joined an elite group of interactive agencies worldwide that Microsoft recommends to its Partners and Customers.

Intertainment owns a number of key properties including Ortsbo, Ad Taffy, itiBiti and Magnum Fine Commercial Printing Limited.

Headquartered in Richmond Hill, ON, with offices in New York, Los Angeles and San Mateo, CA, Intertainment Media Inc. is listed on the TSX Venture Exchange under the symbol "INT", in the US under the symbol "ITMTF" and on the Frankfurt Exchange under the symbol "I4T".

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The offered securities mentioned in this press release will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Forward Looking Information

This news release contains certain "forward-looking information" within the meaning of such statements under applicable securities law including statements relating to the Offering.

Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Actual timelines associated may vary from those anticipated in this news release and such variations may be material. Actual results could differ materially because of factors discussed in the management discussion and analysis section of our interim and most recent annual financial statements or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on this forward-looking information.

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

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