Xylitol Canada Inc.

Xylitol Canada Inc.

December 15, 2011 07:00 ET

Following 1,149% Increase in Year-Over-Year Sales, Xylitol Canada Launches Xyla™ Brand Name for Extended Product Line

Development Work Continues on Xylitol Manufacturing Plant


- Nine month product sales increase of 1,149% over prior year to $1.31 million

- Gross profit increase of 1,011% during same period to $0.6 million

- Products now include raw sweetener, mints, jams, chewing gums and lollipops

- 10,000 metric tonne-per-year plant under development in Western Canada

- New line of products to launch January, 2012

TORONTO, ONTARIO--(Marketwire - Dec. 15, 2011) - Xylitol Canada Inc. (TSX VENTURE:XYL) ("XC" or the "Company") is pleased to announce that following its recent distribution of financial statements confirming significant sales growth during the past year, the Company is launching a branding strategy whereby all products will be sold under the name XYLA™. The sales increase has been realized through a combination of both acquisition and organic growth and has led to the Company achieving its highest sales month ever. This growth is expected to continue as demand for products containing xylitol continues to climb and as XC launches new products in the coming quarters. The Company expects to expand its marketing channels in the near future as well.

Xylitol is a natural sugar substitute that provides excellent health and nutritional benefits for use in diabetic, dental, weight-loss, and health-and-wellness products. It is highly regarded because xylitol has 40% fewer calories and 75% fewer carbohydrates than sugar, it has numerous dental-health benefits, and is diabetic-friendly. Xylitol Canada only uses xylitol derived naturally from 100% North American hardwoods.

The Company is working toward dramatically expanding its retail line of products manufactured at its Denver, Colorado facility where base xylitol is purchased in bulk and converted to XC's line of products. XC plans to use this platform to grow its sales across a wide variety of market applications to capture a share of the $3.2 billion North American sugar-substitute market and a portion of the $47 billion sugar market.

Xylitol Production Plant Development

Following the completion of a multi-year $2 million R&D study, development work continues on the Company's xylitol manufacturing plant whereby XC will produce its own xylose/xylitol from hardwoods in North America. XC is partnering in this project with a company experienced in biomass conversion. This 10,000 tonne commercial manufacturing plant will provide low-cost, high-quality xylitol in North America derived from sustainable biomass.

"We will continue to develop the process with new innovations to give consumers and manufacturers the highest quality xylitol at the most competitive price," stated Andrew Reid, Chief Executive Officer of Xylitol Canada.

About Xylitol Canada

Xylitol Canada is an innovator in eco-friendly xylose/xylitol production technology. Using sustainable biomass from North American hardwood, the Company's innovative technology realizes an 80% reduction in its carbon footprint compared to methods used by traditional wood-based xylitol manufacturers and those using corn cobs as their feedstock. The company has also become a leader in xylitol product manufacturing and has entered the traditional grocery market with numerous products that are usually seen only in the health-food industry. The company continues to reformulate and develop products using xylitol to replace sugars and artificial sweeteners, offering consumers great taste without the health concerns often associated with sugar consumption.

Forward Looking Statements

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xylitol Canada to be materially different from any future anticipated results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Xylitol Canada to obtain necessary financing; the development of and demand for xylitol products; production of a commercial scale production facility; the economy generally; consumer interest in the services and products of Xylitol Canada; competition; and anticipated and unanticipated costs. While Xylitol Canada anticipate that subsequent events and developments may cause its views to change, Xylitol Canada specifically disclaim any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing Xylitol Canada's views as of any date subsequent to the date of this press release. Although the Xylitol Canada has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect Xylitol Canada. Additional factors are noted under "Risk Factors" Xylitol Canada's financial statements and related management's discussion and analysis.

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