Innovative Composites International Inc.

Innovative Composites International Inc.

September 05, 2013 16:57 ET

Innovative Composites International Inc. Announces Closing of Tranche 1 of Debenture Offering, and Entering Into of Commitment Letter With mBank

Material Insider Participation in Debenture Offering

TORONTO, ONTARIO--(Marketwired - Sept. 5, 2013) - Innovative Composites International Inc. (CNSX:IC) (OTCQX:ICIZF) ("ICI", or the "Company") is pleased to announce that it has closed the first tranche of its previously announced convertible debenture offering for gross proceeds of $2,016,875 (the "Offering").

The convertible debentures (the "Debentures") bear interest at a rate of 10% per annum and are convertible into common shares of the Company at a conversion price of $0.03. Debenture holders have been provided with a first priority security interest over all of the assets of the Company, while agreeing to subordinate for accounts receivable and inventory financings. The Company has the right to prepay the Debentures upon payment of an additional three month's interest, although Debenture holders will have the right to convert should the Company seek to exercise its prepayment rights. The Debentures were issued pursuant to a trust indenture with Olympia Transfer Services Inc. acting as trustee thereunder. Subscribers received 1,600 share purchase warrants for every $1,000 of principal subscribed for, each such warrant entitling the holder to purchase one additional share at a purchase price of $0.05 for a period of two years. A total of 3,227,000 warrants were issued in connection with the closing of this first tranche. The Offering was non-brokered. Proceeds of the Offering have been used to repay KS Centoco Ltd., a previous debenture holder, in full. The Company is seeking to complete a subsequent tranche of Debentures closing up to an additional maximum of $983,125 before the end of September.

The Company is also pleased to announce today that it has signed a commitment letter with mBank of Michigan for a line of credit in the amount of $1.5 million (the "Line of Credit"), to be secured by the Company's inventory and accounts receivable. The Line of Credit is subject to completion of formal documentation and is expected to close and become available to the Company by the end of September.

"We are pleased to have completed this private placement in difficult market conditions which will provide us with necessary financial resources as we move through the next stages of our business plan execution. The significant insider participation in this Offering is reflective of the confidence of the board in a successful outcome and a strong future for Innovative Composites", said the Company's CEO, Mark Rivers. "We look forward to closing on the next tranche of this Offering in the coming weeks, and are targeting a closing on our receivables and inventory financing with mBank by the end of the month. The Company has completed its best revenue quarter (June 30, 2013) to date, which, combined with these financing efforts, will serve to provide further liquidity for the Company's ramped up sales initiatives".

Insiders of the Company purchased $350,000 of the Offering. The Offering is considered to be a related party transaction as defined under Multilateral Instrument 61-101 ("MI 61-101"). The Offering is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of securities being issued to insiders nor the consideration being paid by insiders will exceed 25% of the Company's market capitalization. The Company has not filed a material change report 21 days prior to the closing of the Offering as details of participation of the insiders had not been established at that time. There can be no guarantees that the Line of Credit will close or be made available to the Company, or that a subsequent tranche of the Debentures will be issued.

About Innovative Composites International Inc.

Headquartered in Toronto, Canada, Innovative Composites International Inc. is a high-tech engineering and manufacturing company whose goal is to utilize its proprietary "green" composite materials and building systems to provide innovative, engineered product solutions to markets that include automotive and transportation, shelters and containers, construction and housing, and industrial applications.

To find out more about ICI please visit our website at:

Statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for ICI's products and the availability of funding. These forward-looking statements are made as of the date hereof and ICI does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from ICI's expectations and projections.

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

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