Icefloe Technologies Inc.
TSX VENTURE : ICY

Icefloe Technologies Inc.

January 20, 2006 09:18 ET

icefloe Announces $2Million Financing

MISSISSAUGA, ONTARIO--(CCNMatthews - Jan. 20, 2006) - Icefloe Technologies Inc. ("Icefloe") (TSX VENTURE:ICY) today announced it is undertaking a brokered private placement of 10 % Senior Secured Convertible Debentures (the "Debentures") in the amount of $2,025,000 (the "Private Placement"). The Debentures have a term of three years and are secured against the assets of Icefloe and rank ahead of all existing and future debt of Icefloe except for certain existing debt/lease arrangements.

The Debentures will be issued in minimum amounts of $25,000 (a "Debenture Unit") and bear interest at a rate of ten percent (10%) annually, payable by way of an annual cash payment. For the first year of the Debenture, at the option of Icefloe, Icefloe may provide interest payment in kind by way of the issuance of common shares, at the lower of $0.60 per share or the Market Price (as defined by TSX Venture Exchange ("Exchange") policies). In no event will the conversion price on the common shares issued as interest be less than the Market Price reserved for the Private Placement. In the second and third years, interest payments will be in cash only.

Icefloe will have the right to fully redeem the Debentures any time prior to maturity for a cash payment in the amount of the principal plus accrued interest and a maturity premium in the amount of $6,250 (the "Maturity Premium") for each Debenture Unit redeemed. If the Debentures are held to maturity, the Maturity Premium for each Debenture Unit will be paid to the Debenture holder in addition to the interest rate of ten percent (10%) previously described. Twenty-five percent (25%) of the aggregate gross proceeds of the Private Placement will be placed in escrow and will released either as payment of the Maturity Premium if and when required or upon the attainment of certain escrow release conditions by Icefloe.

The Debenture Units are convertible into Icefloe common shares at any time, at the option of the Debenture holder, at a conversion price of $0.60 per Icefloe common share over the first year of the term, $0.65 per Icefloe common share in the second year of the term and at $0.70 per Icefloe common share in the third year of the term. The conversion prices are subject to anti-dilution provisions that may reduce the previously mentioned conversion prices in certain restricted circumstances; however in no case shall the conversion price be less than the Market Price reserved for the Private Placement.

Wingate Investment Management Ltd. ("Wingate") will act as broker for the Private Placement. Wingate will receive a cash commission in the amount of $148,000. Wingate will also receive an Agent's Warrant with a term of two years from the date of the issuance of the Agent's Warrant for 270,000 warrants each entitling Wingate to purchase one common share of Icefloe at an exercise price of $0.60 per common share in the first year of the term and thereafter reducing to 249,030 warrants each entitling Wingate to purchase one common share of Icefloe at an exercise price of $0.65 per common share in the second year of the term of the Agent's Warrant.

The number of common shares of Icefloe issued and outstanding is currently 7,249,592 common shares. In addition, there are 1,028,300 options and 3,283,318 warrants outstanding, which if exercised would increase the amount of common shares outstanding by an equal amount. If the first year of Debenture interest is paid in common shares and the Debentures are converted in the second year of the term (which is the maximum number of shares expected to be issued pursuant to the Debentures, excluding the anti-dilution provisions applicable under certain restricted circumstances previously mentioned), a total of 3,825,873 further common shares would be issued. The Debentures and the common shares issuable pursuant to the Debentures will be subject to a hold period of at least four months from the date of distribution of the Debentures, pursuant to Exchange policies and to Multilateral Instrument 45-102 - Resale of Securities. The Exchange may also require a further holding period for some or all of the Debentures. The Private Placement is subject to completion of closing conditions and to the approval of the Exchange.

Five related parties and insiders of Icefloe have indicated an intention to purchase Debentures in the Private Placement. YMG Private Wealth Opportunities Fund ("YMG") will purchase Debentures in the principal amount of $300,000. If YMG converted all of these Debentures it would beneficially own, directly or indirectly, or exercise control or direction over 1,450,596 common shares of Icefloe or approximately 13.10% of the then outstanding common shares of Icefloe. Mr. Whit Tucker will purchase Debentures in the principal amount of $50,000. If Mr. Tucker converted all of these Debentures he would beneficially own, directly or indirectly, or exercise control or direction over 388,466 common shares of Icefloe or approximately 3.51% of the then outstanding common shares of Icefloe. Mr. David Elliott will purchase Debentures in the principal amount of $25,000. If Mr. Elliott converted all of these Debentures he would beneficially own, directly or indirectly, or exercise control or direction over 47,233 common shares of Icefloe or approximately 0.43% of the then outstanding common shares of Icefloe. Mr. Wayne Newson will purchase Debentures in the principal amount of $75,000. If Mr. Newson converted all of these Debentures he would beneficially own, directly or indirectly, or exercise control or direction over 314,247 common shares of Icefloe or approximately 2.84% of the then outstanding common shares of Icefloe. Mr. J. Robert Furse will purchase Debentures in the principal amount of $25,000. If Mr. Furse converted all of these Debentures he would beneficially own, directly or indirectly, or exercise control or direction over 332,701 common shares of Icefloe or approximately 3.00% of the then outstanding common shares of Icefloe. In addition, Fallbrook Holding Limited ("Fallbrook") will purchase Debentures in the principal amount of $625,000. If Fallbrook converted all of these Debentures it would beneficially own, directly or indirectly, or exercise control or direction over 1,180,825 common shares of Icefloe or approximately 10.66% of the then outstanding common shares of Icefloe. All share ownership data in this paragraph is based on the assumption that interest in the first year of the Debentures is paid in common shares and that all of the Debentures are converted in the second year of the term.

Further details regarding the Private Placement may be found in the documents filed by Icefloe from time to time on SEDAR at www.sedar.com.

ABOUT ICEFLOE TECHNOLOGIES INC.

Founded in March 2001, Icefloe (TSX VENTURE:ICY) is a Canadian-based company dedicated to the development and commercialization of its proprietary chilling technology which brings flash chilling capability in a portable form and enables the beverage industry to serve ice cold draft beer without excessive foam loss, anytime and anywhere. Since April 2001, Icefloe has focused its efforts on securing patents for its platform technologies, while developing, field-testing, manufacturing and marketing commercial products using its unique technologies. Its wholly owned subsidiary, Draught Guys Inc., provides installation, sales and service for both traditional draft systems and Icefloe's proprietary products in the Ontario market. For more information about Icefloe, please visit Icefloe's website at www.icefloe.com.

Icefloe commenced trading on Tier 2 of the TSX Venture Exchange on April 14, 2004 under the symbol "ICY".

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. No Securities Commission or other regulatory authority having jurisdiction over Icefloe has approved or disapproved of the information contained herein.

Certain information included in this press release is forward-looking and may involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors that might cause a difference include, but are not limited to, competitive developments, risks associated with Icefloe's growth, the development of the beverage market, regulatory risks, intellectual property infringement and other factors. Unless otherwise required by applicable securities laws, Icefloe disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about potential factors that could affect Icefloe's financial and business results is included in public documents Icefloe files from time to time with Canadian securities regulatory authorities.

Contact Information

  • Icefloe Technologies Inc.
    Wayne Newson
    President and CEO
    (905) 712-7777
    (905) 712-2826 (FAX)
    or
    Icefloe Technologies Inc.
    David Elliott
    Executive Vice President and CFO
    (905) 712-7777
    (905) 712-2826 (FAX)
    email: wnewson@icefloe.com
    5855 Kennedy Road, Mississauga, ON, L4Z 2G3