ZG Ventures, LLC Acquires Shares of ePals Corporation

TORONTO, ONTARIO--(Marketwired - Aug. 28, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA OR THROUGH U.S. NEWSWIRE SERVICES

ZG Ventures, LLC ("ZG"), a venture capital firm located at 400 7^th Street N.W., Washington, DC, acquired ownership of 24,801,600 restricted voting common shares of ePals Corporation ("ePals") on August 27, 2013.

ZG now directly holds 39,495,665 (or approximately 43.5%) of the outstanding restricted voting common shares of ePals. In addition, ZG holds (i) 412,918 warrants, each of which may be exercised for either one voting common share or one restricted voting common share (as determined by the board of directors of ePals) at a price of US$0.495 per share as to 343,434 warrants and at a price of US$4.87 per share as to 69,484 warrants; and (ii) convertible debentures in the aggregate principal amount of $2,250,000, which debentures are convertible into voting common shares of ePals at a price of $0.40 per share.

ZG II, LLC ("ZG II"), an affiliate of ZG, directly holds 2,222,977 voting common shares of ePals and 6,668,937 restricted voting common shares of ePals. Zolt-Gilburne 2012 Family Trust (the "ZG Trust"), an affiliate of ZG, directly holds convertible debentures in the aggregate principal amount of $4,000,000, which debentures are convertible into voting common shares of ePals at a price of $0.40 per share. Shaman III, LLC ("Shaman"), a company which is 50% indirectly owned by ZG, directly holds 4,580,259 voting common shares of ePals and 3,538,434 restricted voting common shares of ePals. In addition, Shaman holds 931,310 warrants, each of which may be exercised for either one voting common share of ePals or one restricted voting common share of ePals (as determined by the board of directors of ePals) at a price of US$0.495 per share.

Each of the restricted voting common shares of ePals is convertible into one voting common share of ePals. If all of the restricted voting common shares, convertible debentures and warrants held by ZG, ZG II, ZG Trust and Shaman described above were converted into or exercised for voting common shares of ePals, ZG and its affiliates would hold or control a total of 73,475,500 voting common shares of ePals, representing approximately 44.6% of the then issued and outstanding voting common shares of ePals.

The restricted voting common shares of ePals were issued to ZG as consideration for the assignment by ZG to ePals of the outstanding debt owed to ZG by ePals, Inc., a wholly-owned subsidiary of ePals, in the aggregate amount of US$3,000,000 (CDN$3,100,200). Each restricted voting common share of ePals was issued from treasury at a price of $0.125 per share. ZG acquired the restricted voting common shares of ePals for the purpose of satisfying the debt owed to it as described above. ZG's holding of securities of ePals is for investment purposes. ZG may from time to time increase or decrease its investments in securities of ePals depending on market conditions and other relevant factors.