Intertainment Media Inc.
TSX VENTURE : INT

Intertainment Media Inc.

May 05, 2009 09:00 ET

Intertainment's Itibiti Systems Financing Increased

Company reviewing $9 Million confirmed interest for increased $4 Million Offering

TORONTO, ONTARIO--(Marketwire - May 5, 2009) - Intertainment Media Inc. ("Intertainment" or the "Company") (TSX VENTURE:INT) announced today that its wholly owned subsidiary Itibiti Systems Inc. ("Itibiti Systems") has received confirmed investment interest and subscription agreements which exceeds by 300% the $3 Million CDN maximum offering previously approved by the TSX Venture Exchange (the "Exchange") and announced March 4, 2009 (the "Offering").

Pursuant to this investment interest, the Company has now increased the maximum amount of the Offering to $4 Million CDN. Itibiti Systems is evaluating the offers that will be used to accelerate the live launch of its voice powered social networking platform ("itiBiti") for its showcase brands. Itibiti Systems has not yet closed or filed any subscription agreements received pursuant to the Offering.

"We are extremely pleased to receive the ongoing support of itiBiti's technology and marketing partners as this has resulted in showcase opportunities with some of the world's largest and most influential brands," stated Mr. David Lucatch, President of Itibiti Systems Inc. and CEO of Intertainment Media Inc. "Although it has taken time for the investment community to appreciate itiBiti and its revenue generating, next generation social media application, the confirmed investment interest which exceeds the original offering, given recent market conditions, is a significant achievement."

The $4 Million Offering will consist of Itibiti Systems convertible debentures ("Debentures") at a subscription price of $50,000 CDN per Debenture which, unless otherwise authorized, will be payable at 15% interest per year, paid semi-annually. Each Debenture will be convertible into the Debenture holder's choice of either (a) units of Intertainment ("Units") at a conversion price of $0.11 per Unit with each Unit consisting of one common share of Intertainment ("Intertainment Shares") and one Intertainment Share purchase warrant ("Warrant"), such Warrant having an exercise price of $0.16 and being valid for two (2) years from the date of conversion of the debenture into Intertainment Shares, or (b) common shares of Itibiti Systems ("Itibiti Shares") upon the occurrence of a Liquidity Event (as defined below) whereby each $0.70 of principal amount outstanding under the Debentures can be converted into one Itibiti Share. A "Liquidity Event" is the occurrence of an event whereby Itibiti Systems is listed for trading on a public stock exchange or whereby substantially all of the assets or securities of Itibiti Systems are sold or amalgamated.

The Offering will be led by Toronto based D&D Securities Company. The Company will pay eligible parties 8% commission in cash and provide an option to purchase up to 8% of the Debentures sold at the subscription price of the Offering for a period of 18 months from the date of completion of the Offering.

Further to the announcement of March 3, 2009, the Company wishes to provide an update on the proposed offer to purchase all the outstanding legacy assets and intellectual property of its business partner, Itibiti Inc. (the "Offer"). The Offer is in the stages of final negotiations and is expected to close concurrently with, or shortly after, the closing of the Offering. Under the terms of the Offer extended and as negotiated, Itibiti Systems would receive the exclusive right to purchase all outstanding legacy systems, assets, technology rights and intellectual property of Itibiti Inc. Such right shall be purchased over a maximum period of 10 months (the "Interim Period"). The consideration issued to Itibiti Inc. shall be $1,200,000 CDN (the "Cash Payment") and 8,000,000 units of Intertainment ("Offer Units"). $400,000 of the Cash Payment is to be paid upon the closing of the Offer and the remainder is to be paid in stages over 10 months. The Offer Units will be issued at a deemed price of $0.10 per Offer Unit with each Offer Unit consisting of one Intertainment Share and one Intertainment Share purchase warrant ("Offer Warrant"), such Offer Warrant having an exercise price of $0.10 and being valid for two (2) years from the date of issuance. The Offer Units will be subject to a voluntary escrow agreement to be entered into between the parties allowing for the release of the Offer Units to Itibiti Inc. in increments over a period of 16 months. In addition, Itibiti Inc. shall receive a percentage of revenues from the operations of Itibiti Systems for a period of five years from the date of the closing of the Offer (the "Revenue Sharing Payments"), such Revenue Sharing Payments equating to 25.88% of revenue until the later of either the full completion of the Cash Payment or the full completion of the Interim Period, 5.75% in the year following such, 2.88% over the subsequent three years and 1.44% in the final year.

In addition, concurrent with the closing of the Offer, Michael McLaughlin will be appointed as a director of Intertainment, subject to board and Exchange approval.

About Itibiti Systems Inc.

Itibiti Systems' platform, itiBiti, is a revolutionary, instant revenue driven, Rich Internet Application (RIA) providing entertainment, communications and social networking initiatives displayed directly onto a user's computer desktop - providing major global brands with the unprecedented ability to power their marketing efforts within a unique, private label loyalty and revenue platform. itiBiti offers users a rich suite of services in combination with brand client initiatives. Itibiti Systems is currently in the planning stage for a mobile version of its product offerings.

About Intertainment

Intertainment Media Inc. (www.intertainmentmedia.com) 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.

Additionally, Intertainment owns, operates and invests in high value content, traffic management, advertising and social networking solutions including, Eye Rock Digital (www.eyerockdigital.com), No Good TV (www.ngtv.com), Trooker Inc. (www.trooker.com), Itibiti Systems Inc. (www.itibitisystems.com) and Magnum Fine Commercial Printing Limited (www.magnumprinting.com).

Headquartered in Richmond Hill, Ontario, Canada Intertainment Media Inc. is listed on the Toronto Venture Exchange (symbol: INT).

This news release may contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. 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. We do not undertake any duty to update any forward-looking statements.

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