IRI Separation Technologies Inc.
TSX VENTURE : IRI

IRI Separation Technologies Inc.

May 19, 2009 09:30 ET

IRI Separation Technologies Inc.: Update and Restructuring Plan

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2009) - IRI Separation Technologies Inc. (TSX VENTURE:IRI) - Announces that it has entered into negotiations to Re-structure and Merge its Operations with an Equity Investor - Marketing Group.

IRI, has entered into negotiations with a Toronto Group to provide $3,000,000 of equity funding together with Marketing expertise.

In June of 2008 the Company was unsuccessful in raising new equity capital, required to launch a Marketing Program for its MUNO BOOST - antibody product line. This resulted in the closing of the Alberta processing facilities and the laying off of its employee work force.

The Company has continued to negotiate with potential customers for Specific Antibody production contracts - namely its signing of a Letter of Intent with PharmaFoods International of Kyoto, Japan, to use their Vaccine to produce Helicobacter Pylori antibodies to service their existing market and to jointly develop and market an Avian Influenza specific antibody.

The Letter of Intent also includes Sceti K.K. as a partner to market and distribute IRI products in Japan. Sceti K.K. provides market entry for foreign companies that offer innovative solutions to problems in the fields of medical diagnostic and industrial manufacturing. - News Release of 12 February 2009.

To meet its obligations under the Japanese and other potential supply contracts, to perform clinical trials on its C.Difficile antibody program, to launch a Marketing Program for its MUNO BOOST, and make a formal arrangement with its creditors, the Company needs the additional equity funding.

The assets of the egg breaking facility have been removed from the previously leased egg breaking premises and are currently being stored at the antibody processing facility. When the assets of the egg breaking facility were acquired, they were charge with an encumbrance in favour of Farm Credit Canada and part of the share purchase price paid by IRI to the vendor was hypothecated pending discharge of such encumbrance. A guarantor of the vendor, the Alberta Egg Producers Coop (Coop), are currently making payments to Farm Credit Canada and the processing facility landlord, relative to the storage of the egg breaking equipment, and have entered into discussions with that landlord to rent adjacent facilities, for the re-installation of the egg breaking equipment and re-starting an egg breaking operation.

In order to effect the re-structure of IRI and consolidate the company debts, a portion of the equity funding contemplated by the "Toronto Group" will be made available to the Trustee under the formal restructuring program and negotiations will continue with the Coop for the supply of "Specific Antibody Egg Yolk" for antibody production.

The filing of a Formal Proposal is a legal document that results in a "Stay of Proceedings" of all and any actions against the Company and provides for the court approved Trustee to review the validity of creditor claims. If the Proposal is accepted by two thirds of the Company's creditors with proven claims to the Trustee, the terms are binding on all creditors. The purpose of a Proposal is to protect the Company's assets, resolve wage disputes, ascertain the relative positions of the landlords and Farm Credit Canada/Coop as Guarantor and allow the Company to consolidate its debts and arrange funding to continue its operations.

The negotiations with the Toronto Group will provide for some of the proposed equity funding to be made available through the Trustee to the IRI Separation Technologies Inc. creditors and an exchange of IRI shares for shares of the Toronto Group. The intent is to provide $3,000,000 of equity funding, to consolidate the company's liabilities to its creditors and continue the marketing and development of the Company's antibody program.

Under the restructuring program, Dr. Brian Simmons, has resigned as a Director but will remain as an advisor to the Company on antibody technical matters.

The terms of the Formal Proposal and the Share exchange arrangements are currently being developed by the lawyers for the respective parties and will be forwarded to creditors and shareholders in due course.

It is proposed that the transaction, subject to TSX Venture Exchange and appropriate creditor and regulatory approvals, will be concluded by the 31st July, 2009.

About IRI Separation Technologies Inc.

IRI Separation Technologies Inc. (TSX VENTURE:IRI) is a biotechnology company that specializes in the extraction development and commercialization of monoclonal and polyclonal immunoglobulin antibodies for virus and bacteria related health issues. Intended for use as a Nutraceutical for human consumption, the antibodies are derived from bovine whey and chicken eggs. The immunoglobulin antibodies are intended for both the general and specific antibody market.

Submitted on behalf of the Board of Directors of IRI

Forward Looking Statements: The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world markets for Nutraceuticals, equity market conditions, costs and supply of materials relevant to the Nutraceutical industry, change in government and changes to regulations affecting the Nutraceutical industry. Forward-looking statements in this release include statements and the potential financing. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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