Engagement Labs Closes Financing for $4.3 Million

Shareholders and Debentureholders Overwhelmingly Approve Loeb Investment -- New Board Assumes Stewardship

TORONTO, ONTARIO--(Marketwired - Oct. 3, 2016) - Engagement Labs Inc. (TSX VENTURE:EL) today announced that its previously announced financing of $2.2 million was increased to $4.3 million has closed. At the Annual and Special Meeting of Shareholders held September 27, 2016, each item of business including the investment by Loeb received over a 98% favorable vote of the votes cast. At the Meeting of Debentureholders held September 26, 2016, 91% of the votes cast were in favor of the amendments to the outstanding 6% convertible debentures which were a condition of the Loeb investment. These debentures are now convertible at $0.20 per share and have become unsecured obligations like the convertible debentures issued to Loeb and other subscribers as of September 28, 2016.

Of the $4.3 million in Convertible Debenture Units issued, US $1.5 million was purchased by Loeb. The Convertible Debenture Units were priced at Cdn $1,000 per Unit, each Unit convertible into 5,000 common shares at $0.20 per share for a period of four years from closing. The Debentures bear interest of 1% per year to be paid either upon conversion or at maturity on September 28, 2020. Each Unit also consists of 5,000 common share purchase warrants ("Warrants"), with each Warrant entitling the holder to acquire an additional common share at $0.20 per share for a period of four years from closing. Loeb has previously acquired shares of Engagement Labs and as of today's date owns 4,816,753 common shares of the Corporation. The Debentures and the Warrants separated at closing. The Debentures, Warrants and common shares issuable on conversion of the Debentures or on exercise of the Warrants are subject to a four month hold period ending January 29, 2017.

Incoming Board member Gil Anderson and related family members have purchased US $1 million of the placement. In addition, The Paterson Family Trust (an entity in which Engagement Labs' Chair G. Scott Paterson is a beneficiary but not a Trustee and does not have voting control) purchased Cdn $200,000.
PowerOne Capital Markets Limited acted as a finder in connection with a portion of the Canadian participants.
Amongst other closing conditions, shareholders were asked to approve a slate of Board nominees which included current Chairman G. Scott Paterson and Ed Keller, CEO of the Company. In addition, Bruce Lev, managing director of Loeb as well as Gil Anderson and Pat LaPointe were on Management's slate of directors at the Meeting. Robert Spiegel, corporate secretary, was added to the slate of directors at the Meeting.

Shareholders approved, as a condition of Closing, Loeb's right to name a majority of Management's nominees to the Board for so long as it holds more than 50% of the Debentures that it purchases, common shares that have been issued on conversion of such Debentures, or a combination of both.
The Company has substantially re-aligned its day to day activities such that, other than technology and senior finance (currently based in Montreal), so that all sales, client service and product delivery activities are primarily based in the US and the UK.

TotalSocial is a new and innovative measurement solution for brands and marketers. It is the first tool to measure a brand's social impact encompassing both online and offline conversation, providing a scorecard ranking for 500+ US and 350+ UK brands across 18 major industry categories, plus diagnostics to guide improvement. TotalSocial combines in-depth social listening with comprehensive offline conversation measurement tools to assist marketers in identifying the differences between their online and offline conversations and areas of competitive opportunity or significant emerging threats. TotalSocial includes the power of eValue and amplifies it many times over. eValue is a component of TotalSocial estimated to represent 1/8th of the algorithm. In addition, it builds upon and extends the world's most extensive word of mouth database developed by the Keller Fay Group and acquired in 2015 when Engagement Labs acquired Keller Fay.

Engagement Labs Chair G Scott Paterson said: "We are delighted to welcome Bruce, Gil and Pat to our Board; all of whom have industry expertise that will add significant value to Engagement Labs".

"This new infusion of capital will be used to hyper-charge the development, marketing, and sales efforts of our new TotalSocialâ„¢ offering, which has received a very positive initial reception in the market," said Ed Keller CEO of Engagement Labs. "We are confident that these funds, with the support and direction of our new board, will propel Engagement Labs to achieve the success we have long anticipated."

About Engagement Labs

Engagement Labs (TSX VENTURE:EL) is the world's first TotalSocialâ„¢ company, offering intelligent data, analytics and insights for marketers. We are leaders in tracking, measuring and benchmarking the social impact of conversations happening around a brand and industry -- both online and offline. Consumer conversations are a proven driver of critical business outcomes, including sales. Engagement Labs' TotalSocial measurement solutions provides brands with unique data fueled insights and powerful analytics to understand online and offline social impact and drive business results.

Disclaimer in regards to Forward-looking Statements

Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, Engagement Labs does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

Neither 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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