The Company expects to use the net proceeds of the private placement to meet future working capital requirements and implement its commercialization plan.

The convertible debentures will be guaranteed by a first mortgage on the Company's moveable assets, bear an annual interest rate of 15% and mature on November 15, 2009. The debentures are convertible into units of the Company after November 15, 2008 at a price of $0.10 per unit or automatically in accordance with certain conditions described in the debentures. Each unit will consist of one common share in the Company and one purchase warrant granting the bearer the right to purchase one common share at an exercise price of $0.20 any time during the 24 months following the private placement.

Canaccord Capital Inc. will act as a sole agent for the placement and will receive a commission of up to 10% of the gross proceeds. Canaccord will also receive compensation options entitling it to purchase up to 10% of the total number of units sold under the private placement at a price of $0.20 per unit, exercisable within two years of the closing of the offering.

The closing of the placement is subject to certain customary conditions, including the approval of the TSX Venture Exchange.

A number of company insiders may participate in this private placement by subscribing to debentures. Participation of these insiders would constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions (the Instrument). However, the transaction is not subject to evaluation and approval by minority shareholders, because, at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25% of the issuer's market capitalization, as per sections 5.5 and 5.7 of the Instrument. The Company was not able to provide a notice of material change a minimum of 21 days before the closing of the placement, as stipulated in the Instrument, given the timelines specified for moving forward with the placement. -- www.cnxmarketlink.com