E.S.I. Environmental Sensors Inc.

E.S.I. Environmental Sensors Inc.

March 03, 2009 14:45 ET

ESI Signs Distribution Partners and Closes Private Placement

VICTORIA, BRITISH COLUMBIA--(Marketwire - March 3, 2009) - E.S.I. Environmental Sensors Inc. ("ESI", the "Company") (TSX VENTURE:ESV) is pleased to announce the signing of three distribution partners.

ESI has entered into formal distribution agreements with AG-Tronix of Florida, Spectra Agritec of India and Beijing Channel Scientific Instrument Co., Ltd (Qudao) of China, to market, sell and service ESI's GroPoint™ and MoisturePoint™ product lines in the eastern USA, India, and China respectively.

Each partner was chosen for its strength and market presence in the geographic areas they serve. AG-Tronix is a leading Motorola Irrigation Controller distributor and has been integrating ESI equipment with the Motorola controllers for more than a year. Spectra Agritec is an existing ESI partner that has signed a new distribution agreement based on initial success with our products. Qudao is very well known in China as a leader in environmental and ecological instrument consulting and distribution and has chosen to work with ESI because of its industry leading technology and solutions.

"ESI is very pleased to have entered into formal distribution agreements with such influential regional companies," commented David Porter, ESI's Vice President of Sales and Marketing. "Our newly formed relationships are a result of ESI's continued emphasis to build global distribution, reseller and dealer networks to drive sales volumes through local experts."

As required by TSX Venture Exchange policy, the Company is also pleased to announce the closing of the first tranche of the $5.4 million placement most recently announced January 12, 2009 and originally announced on June 9, 2008. The current tranche totals $2.67 million and consists of both a unit ("Unit") offering and a three year convertible debenture (the "Debentures"). The Company anticipates it will raise up to an additional $3.0 million dollars on similar terms as financial markets stabilize.

The Company has sold 2,383,334 Units for proceeds of $715,000 with each Unit priced at $0.30 and consisting of one common share and one common share purchase warrant (a "Warrant"). Each Warrant is exercisable into an additional common share at $0.30 for a period of two years from the closing date, and $0.35 per common share during year three.

The Company has raised $1,957,000 through the issuance the Debentures which are convertible into common shares at a price of $0.30 per common share during years one and two and at a price of $0.35 per common share during year three. The Debentures will accrue interest, payable upon maturity or conversion, at 12% per annum. Interest is also convertible into common shares at the same price and upon the same terms as the Debenture principal. The Debentures have a security interest on the assets of the Company.

A portion of the current Debenture proceeds is the result of the refinancing of $438,000 of previously outstanding convertible debenture principal and accumulated interest originally issued April 3, 2007 and with a maturity date of April 3, 2009.

All of the securities issued are subject to a hold period expiring June 3, 2009. The TSX Venture Exchange (the "Exchange") has granted final acceptance of the placement.

The Company will pay finders' fees on a portion of the proceeds in connection with the private placement. The net proceeds of the offering will be used for research and development, value engineering, marketing and general working capital purposes.

About ESI

ESI is a leading manufacturer of patented and proprietary solutions for environments where understanding the presence, movement, and/or amount of water are important. Major market sectors include: Agriculture, Golf and Turf, Scientific Research, Civil Engineering and Crude Oil. ESI solutions have been successfully introduced into more than 40 countries to enable customers to optimize their operations by monitoring the presence and movement of water, managing irrigation systems, and monitoring the integrity of landfill covers. Most recently, the FloPoint™ instrument has been introduced to the Oil industry to measure the volumetric presence of water pumped during crude oil extraction for characterization and optimization of the process. ESI differentiates itself by translating the best technology and science available into practical, easy to use solutions. Irrigation managers, Reservoir Engineers, and Scientists have adopted ESI's products for their accuracy, ease of use, repeatability, and ability to operate in challenging environments. ESI is publicly traded on the TSX Venture Exchange under the symbol "ESV". Further information about ESI may be obtained through the Company's website at www.esisensors.com.

Material Copyright 2009, E.S.I. Environmental Sensors Inc. Reproduction in whole or in part in any form or medium without express written permission of E.S.I. Environmental Sensors Inc. is prohibited.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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