IPICO announces proposed $3.5 million bridge funding

TORONTO, Aug. 26 /CNW/ - IPICO Inc. (TSX-V: RFD.V) announced today its intention to issue on a non-brokered private placement basis convertible secured debentures (the "Debentures") for $1,000 per Debenture for gross proceeds of $3,500,000. IPICO anticipates closing on or about September 10, 2009, subject to satisfaction of customary conditions including execution of subscription agreements and other documentation, and receipt of all necessary approvals.

Proceeds will be used for working capital purposes and to commence the immediate ramp-up of the manufacture and supply of products required to meet IPICO's recently announced sales commitments in China, India and Japan, among others. This additional working capital is required pending completion of the $10,000,000 private placement of common shares to CATS LUHAI (Beijing) Investment Co., Ltd. (see IPICO release dated August 25, 2009), which remains subject to regulatory approvals in China, among other conditions. The proceeds of that larger private placement will also be used for the same purposes and to repay the Debentures, to the extent they are not converted.

Each purchaser of Debentures will receive on closing a commitment fee of $60 together with 1,000 common share warrants for each Debenture purchased. The Debentures will mature on the 24th month anniversary of closing and will be convertible at the option of the holder into common shares of IPICO at a conversion price of $0.25 per share. The Debentures will bear interest at a rate of 12% per annum, payable upon maturity or earlier repayment. The Debentures will be secured by a general security interest over all of the assets and undertaking of IPICO. Each warrant will entitle the holder to purchase one common share of IPICO for a period of 24 months from closing at a price of $0.25 per share. Finder's fees in cash, shares or warrants may be paid to the extent permitted by regulatory authorities.

It is a condition of the offering that at least $500,000 of debentures be subscribed for by directors or other insiders. IPICO has received indications of interest from a number of directors and senior officers sufficient to meet that minimum.

Interested parties may contact Gordon Westwater by email at gordon.westwater@ipico.com or by phone at (905) 631-6310. This news release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The Debentures being offered have not been and will not be registered under the United States Securities Act of 1933 and state securities laws. Accordingly, the Debentures may not be offered or sold in the United States except pursuant to applicable exemptions from registration.

ABOUT IPICO Inc.: IPICO Inc. is an RFID solution supplier with operations in Canada, USA, South Africa, Europe, Asia and Australia. IPICO produces smart labels and tags based on the IP-X communication protocol. IPICO's low interference readers are designed to meet regulatory requirements in many major markets, and allow for multi-reader rollout in close proximity. IPICO's low cost RFID products excel at long read range, fast multi-read anti-collision and high thru-beam read-speeds of dynamic tag populations. These products are used to optimize the management of items, people, animals and processes within the logistic supply chain and other value chains. For further information, go to www.ipico.com

This news release contains certain forward-looking statements pertaining to IPICO's proposed private placement, including statements as to the anticipated time of closing. Any statements in this news release that are not statements of historical fact may be considered to be forward-looking statements. Written words such as "may", "will", "expect", "believe", "anticipate", "estimate", "intends", "goal", "objective", "seek", "attempt", or variations of these or similar words, identify forward-looking statements. These statements by their nature are estimates of future results only and involve substantial risks and uncertainties, including those detailed from time to time. Actual results could differ materially from those contained in the forward-looking statements and are based on current expectations that involve a number of risks and uncertainties, including, but not limited to, the inability to close the offering as a result of the failure to settle and enter into definitive documentation or the failure to receive regulatory or other approvals on terms acceptable to IPICO and the subscribers. These and other risks may be detailed from time to time in IPICO's periodic reports filed on SEDAR.

    
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Contacts

Gordon Westwater
President & CEO
IPICO Inc.
Tel: (905) 631-6310
E: gordon.westwater@ipico.com