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Press release from Marketwire

Rainmaker Entertainment Announces Filing of Final Prospectus for Rights Offering and Receipt of Majority Shareholder Consent for Concurrent Private Placement

Friday, March 01, 2013

Rainmaker Entertainment Announces Filing of Final Prospectus for Rights Offering and Receipt of Majority Shareholder Consent for Concurrent Private Placement16:05 EST Friday, March 01, 2013VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2013) -NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATESRainmaker Entertainment Inc. (TSX:RNK) announces that it has filed and obtained a receipt for a final prospectus in respect of a rights offering of unsecured convertible debentures ("Debentures") for aggregate gross proceeds of up to $5,828,392 (the "Rights Offering"). Concurrent with the Rights Offering, Rainmaker has also agreed to issue up to an additional $2,000,000 principal amount of Debentures on a private placement basis (the "Private Placement"). The Rights Offering and the Private Placement remain subject to the final approval of the Toronto Stock Exchange ("TSX").Rights Offering The record date for the Rights Offering will be March 13, 2013. The rights will expire at 4:30 p.m. (Eastern time) on April 9, 2013 with closing of the offering expected to occur on or about April 11, 2013. The Debentures will accrue interest at a rate of 8% per annum payable quarterly in arrears and are convertible into common shares of Rainmaker at a price of $0.20 per share. The Debentures will mature on March 31, 2016 and will be governed by the terms of an indenture between Rainmaker and Computershare Trust Company of Canada. Further details regarding the rights and the Debentures are available in the prospectus filed on SEDAR (www.sedar.com) and in the press release issued by Rainmaker on February 19, 2013. Private Placement Concurrent with the issue of Debentures under the Rights Offering, Rainmaker proposes to issue up to an additional $2,000,000 principal amount of Debentures on a private placement basis. The Debentures issued under the Private Placement will have the same attributes as the Debentures issued under the Rights Offering, subject to applicable statutory hold periods. In the event the Private Placement is fully subscribed, the conversion of the Debentures issued under the Private Placement could result in the issuance of 10,000,000 common shares of Rainmaker, which represents approximately 57.2% of the currently outstanding number of common shares. As disclosed in the prospectus, Cavan Consulting Limited (or an affiliate thereof) ("Cavan") has agreed to purchase $300,000 principal amount of Debentures under the Private Placement. Such Debentures will be convertible into 1,500,000 common shares of Rainmaker representing approximately 8.6% of the currently outstanding number of common shares. Craig Graham, the Chief Executive Officer and Chairman of Rainmaker, is a director, officer and shareholder of Cavan. Cavan has also agreed to purchase up to $100,000 principal amount of Debentures pursuant a standby commitment as described in the prospectus. Assuming the conversion by Cavan of $400,000 principal amount of Debentures and assuming no additional common shares are issued by Rainmaker (pursuant to the conversion of Debentures or otherwise), Cavan would hold approximately 10.26% of Rainmaker's then outstanding common shares. The Private Placement will not materially affect control of Rainmaker. As a result of the number of securities issuable under the Private Placement being in excess of 25% of Rainmaker's currently outstanding common shares and in order to retain the conversion price of $0.20 per share for Debentures issued in connection with the Private Placement (which falls outside the applicable maximum discount permitted by the policies of the Toronto Stock Exchange), Rainmaker is required to obtain security holder approval from a majority of holders of Rainmaker's common shares excluding shareholders participating in the Private Placement. Rainmaker has obtained such shareholder approval via written consent of shareholders owning more than 50% of the common shares of Rainmaker in accordance with section 604(d) of the Toronto Stock Exchange Company Manual. U.S. Sales This news release is not an offer of securities for sale in the United States. The rights and the Debentures will not be registered under the U.S. Securities Act of 1933, or the securities laws of any state, and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. person or person in the United States without registration unless an exemption from registration is available. Forward-Looking StatementsCertain information set forth in this press release contains "forward-looking statements", and "forward-looking information" under applicable securities laws. These statements relate to future events or future performance and include, but are not limited to, statements regarding the timing of the Rights Offering. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", and similar expressions are often used to identify forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. In evaluating these statements, readers should specifically consider risks which may cause actual results to differ materially from any forward-looking statement. These risks include, but are not limited to, risks relating to the possibility that the Rights Offering may not be completed. The forward-looking statements contained herein are based upon certain assumptions considered reasonable at the time they were prepared. Such assumptions include, but are not limited to, assumptions regarding: (i) general economic conditions, (ii) Rainmaker's future business prospects and opportunities, (iii) Rainmaker's ability to complete any or all of its proposed production work, and (iv) the outcome of the Rights Offering and Private Placement. Should one or more of the risks or uncertainties identified herein materialize, or should the assumptions underlying the forward-looking statements prove to be incorrect, then actual results may vary materially from those described herein. In respect of Rainmakers business generally, readers should also refer to Forward-looking Statements in the Management Discussion & Analysis for the third quarter of 2012. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by applicable securities laws, Rainmaker does not assume any obligation to update the forward-looking statements contained herein.About Rainmaker Entertainment Rainmaker Entertainment Inc., a multifaceted animation studio, is one of Canada's largest producers of CG animation. Rainmaker's first feature film, Escape from Planet Earth, distributed by The Weinstein Company, enjoyed its theatrical release on February 15, 2013. For more information, go to www.rainmaker.com. FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Rainmaker Entertainment Inc.Shawn Turkington(604) 714-2600(604) 714-5990 (FAX)investor@rainmaker.comwww.rainmaker.com