JM Capital II Corp. Announces Letter of Intent to Complete a Qualifying Transaction With SociaLabra Inc.

TORONTO, ONTARIO--(Marketwired - May 8, 2014) -

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JM Capital II Corp. ("JMC") (TSX VENTURE:JCI.P), a capital pool company, is pleased to announce it has entered into a letter of intent (the "LOI") dated April 21, 2014 with SociaLabra Inc. ("SociaLabra") to complete a business combination (the "Transaction") whereby all of the issued and outstanding securities of SociaLabra will be exchanged for securities of JMC. If completed, the Transaction will constitute the qualifying transaction of JMC pursuant to the policies of the TSX Venture Exchange (the "Exchange").

About JMC

JMC was incorporated on January 20, 2012 under the Business Corporations Act (Ontario) (the "OBCA") and is a reporting issuer in British Columbia, Alberta and Ontario. JMC currently has 5,700,000 common shares ("JMC Shares") issued and outstanding, of which 2,200,000 are currently held in escrow pursuant to the policies of the Exchange. JMC also has 570,000 options to acquire JMC Shares and an agent's option to acquire 350,000 JMC Shares outstanding

JMC has granted stock options to purchase up to an aggregate of 570,000 JMC Shares at a price of $0.10 per share (the "JMC Options") to its directors and officers. JMC has also granted options (the "Agent Options") to purchase up to 350,000 JMC Shares at a price of $0.10 per share as part of compensation paid to the agent in connection with its initial public offering. Other than the JMC Shares, the JMC Options and the Agent Options, no other securities of JMC are issued and outstanding.

Further information concerning JMC can be found in the prospectus of JMC dated April 5, 2012, which is available on SEDAR at www.sedar.com.

About SociaLabra

SociaLabra is currently a privately held company incorporated under the OBCA based in Toronto, Ontario. The firm provides advanced technology to build, manage and aggregate online audiences which brands and agencies can interact with for insights to achieve greater marketing ROI and revenue.

SociaLabra has undertaken several years' research in niche social networks with more than a dozen organizations representing more than 25,000 users. The effort has resulted in the development of new software to more effectively engage brands with consumers. In April 2014 SociaLabra acquired the rights to several complementary software technologies to enhance its core audience building and engagement capability.

SociaLabra's strategy is to position itself as a pivotal player in online market research solutions that enable clients to gain quick and simple feedback, directly from target customers. SociaLabra is collaborating with leading industry partners to commercialize a powerful on-demand market research service for brands, agencies, and market research firms. For more information on SociaLabra, please visit www.socialabra.com.

SociaLabra has only produced nominal revenue through operations since incorporation.

Principal Shareholders, Directors and Officers

There is currently one common share of SociaLabra (the "SociaLabra Shares") issued and outstanding, which is held in trust on behalf of the following principal shareholders:

Stewart Davis of Brampton, Ontario;

Ken Killin of Toronto, Ontario;

JT Associates Inc., a company incorporated under the laws of Ontario whose principal shareholder is Josef Zankowicz, of Toronto, Ontario;

John Lennie of Toronto, Ontario;

Ryan Pinto of Toronto, Ontario; and

Jeffrey Chong of Toronto, Ontario.

The current directors and officers of SociaLabra are as follows:

Stewart Davis, Chairman, of Brampton, Ontario;

Josef Zankowicz, Chief Executive Officer, of Toronto, Ontario;

Ken Killin, Director, of Toronto, Ontario; and

John Lennie, Director, of Toronto, Ontario.

The Transaction

Subject to regulatory approval, JMC and SociaLabra will enter into an agreement pursuant to which JMC will acquire all of the outstanding SociaLabra Shares in exchange for JMC Shares. The number of JMC Shares issuable to the shareholders of SociaLabra will be equal to the higher of: (i) a valuation of $10 million; and (ii) the post-money valuation of SociaLabra based on its last financing prior to the date of completion of the Transaction, up to a maximum valuation of $12 million.

As a result of the issuance of the JMC Shares, on the closing of the Transaction: (i) SociaLabra will become a wholly owned subsidiary of JMC; and (ii) the SociaLabra Shareholders will become shareholders of JMC. For greater clarity, assuming the issuance of JMC Shares to the SociaLabra shareholders is based on a valuation of $10 million, the current shareholders of JMC shall retain an interest of approximately 6.4% in JMC following the completion of the Transaction.

Proposed Concurrent Financing

Concurrently with, or immediately prior to, the closing of the Transaction, a private placement (the "Private Placement") will be completed by SociaLabra with gross proceeds intended to be between $2.5 million and $5 million to accredited investors and other exempt purchasers under Canadian securities laws. The terms of the Private Placement will be announced as soon as finalized and will be disclosed in the filing statement to be prepared by JMC in respect of the Transaction. The net proceeds of the Private Placement will be used to assist in SociaLabra growth strategy through acquisition or otherwise, as well as working capital.

Conditions of Closing

The Transaction is conditional upon, among other things:

1. receiving all necessary regulatory and third party approvals and authorizations;
2. within 60 days of the date of the LOI, SociaLabra shall complete a financing, through its own efforts and expense, of minimum gross proceeds of $400,000;
3. the absence of any material adverse change in the business, financial condition, prospects, assets or operations, as applicable, of SociaLabra and JMC;
4. approval of the Transaction by the board of directors of SociaLabra and JMC;
5. conditional acceptance of the Transaction by the Exchange (including acceptance for filing of a definitive agreement giving effect to the Transaction (the "Definitive Agreement") and the filing statement completed pursuant to the policies of the Exchange), subject only to conditions customary of a transaction of this nature; provided, however, that if the Transaction is rejected by the Exchange as the qualifying transaction of JMC, (i) all recourse or rights of appeal to complete the Transaction as contemplated hereby will have been exhausted, and (ii) the party wishing to terminate the Definitive Agreement on this basis will have first used commercially reasonable efforts to renegotiate the terms of the Transaction objectionable to the Exchange on terms acceptable to the parties to the Definitive Agreement, acting reasonably;
6. approval of a name change of JMC by the shareholders of JMC at a special meeting to "SociaLabra Inc." or such other name as may be acceptable to SociaLabra and the Exchange;
7. the maintenance of JMC's current listing on the Exchange;
8. accuracy of the parties' respective representations and warranties in the Definitive Agreement as at Closing;
9. the availability of prospectus and registration exemptions for the Transaction under applicable securities law;
10. completion of due diligence satisfactory to each party; and
11. completion of a sponsorship report satisfactory to the Exchange (or waiver by the Exchange of that requirement).

Halt on Trading

Trading in the JMC Shares will remain halted pending the review of the proposed Transaction by the Exchange. There can be no assurance that trading in the JMC Shares will resume prior to the completion of the proposed Transaction.

Arm's Length Transaction

The proposed Transaction constitutes an arm's length transaction in accordance with the policies of the Exchange, and as such, it is not anticipated to require approval by the shareholders of JMC.

Sponsor

The proposed Transaction is subject to the sponsorship requirements of the Exchange. JMC intends to apply for an exemption from the sponsorship requirements of the Exchange on the basis that the Private Placement will be a brokered private placement. In the event that an exemption is not available, a sponsor will be identified at a later date and will be announced in a subsequent press release of JMC. An agreement to sponsor should not be construed as an assurance with respect to the merits of the proposed Transaction or the likelihood of its completion.

Board of Directors

The Board of Directors and Management of SociaLabra upon completion of the Transaction will be announced by SociaLabra and JMC at a future date once these positions have been confirmed.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Caution Regarding Forward-Looking Information

Certain statements made in this press release, including, but not limited to, the proposed Transaction and the Private Placement, and the closing of the proposed Transaction and the Private Placement, and other statements that are not historical facts, are forward-looking statements and are subject to important risks, uncertainties and assumptions. In particular, in making these statements, JMC has assumed, among other things, that the proposed Transaction and the Private Placement will receive the required regulatory and securityholder approvals and that the other conditions to the proposed Transaction can be satisfied in accordance with their terms. The results or events predicted in these forward-looking statements may differ materially from actual results or events. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. For additional information with respect to certain of these and other assumptions and risk factors, please refer to JMC's prospectus dated April 5, 2012 and available under JMC's profile on SEDAR at www.sedar.com. The forward-looking information contained in this press release represents JMC's current expectations. JMC disclaims any intention and assumes no obligation to update or revise any forward-looking information, except if required by applicable securities laws.

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