Mr. Gary McCone reports

NOVEKO INTERNATIONAL INC. ANNOUNCES ITS RESULTS FOR THE THIRD QUARTER ENDED MARCH 31, 2013 AND UPDATES

For the third quarter ended March 31, 2013, Noveko International Inc.'s consolidated revenue totalled $380,000 considering that the operations of SARL Noveko Algerie and of SAS ECM are now being treated as discontinued operations in accordance with IFRS (international financial reporting standards) because of the corporation's decision to divest itself of these subsidiaries. This is a decrease of $600,000 compared with the revenues of the third quarter ended March 31, 2012, computed on the same basis. The net loss from continuing operations amounted to $2.2-million (two cents per basic and diluted share) for the third quarter of 2013, compared with $2.6-million (two cents per basic and diluted share) for the third quarter of 2012. The net loss (including the net loss from discontinued operations) amounted to $5.0-million (five cents per basic and diluted share), compared with $2.8-million (three cents per basic and diluted share) for the third quarter of 2012.

Although on a short-term basis, the corporation's revenues have substantially decreased because of its decision to transfer its shareholdings in Noveko Algerie and in ECM (now stated as discontinued operations), management believes that the realignment of the company's resources in the air filtration segment should have a positive impact on the corporation's financial situation, results and future prospects over the midterm to long term.

Summary

Despite a highly difficult financial situation during the last quarters, the company has multiplied its efforts on the implementation of the measures contained in the strategic plan already described in its previous MD&As (management's discussion and analysis), especially the search for and implementation of financing initiatives in order to improve this financial situation and to allow the corporation to focus its human and financial resources on the commercialization of its air filtration solutions.

This highly difficult financial situation, including the company's cash deficiencies, results from several factors, including: (i) previous quarters' sales well below anticipated levels, particularly the sale of the company's anti-microbial masks, and respirators and sanitizers, but also those of its air filtration solutions, for which the characteristics significantly differ from those of conventional air filters including their commercialization by way of lease agreements that contrast with the buildings' owners and managers' typical purchase patterns; (ii) breaches of the company's contractual undertakings toward Third Eye Capital Corp. (TEC) with respect to the Sept. 28, 2011, financing resulting, among other things, from missed sales forecasts; (iii) the failure to sell the company's shares of ECM and the ensuing opening of a procedure de sauvegarde (safeguarding procedure); and (iv) the postponement of the transfer of the company's shareholding in Noveko Algerie. As a direct consequence of these cash deficiencies, the amounts due to the company's suppliers have significantly increased, which consequently caused serious bottlenecks in the supply of raw materials.

In such circumstances, the research and execution of new financings remained during the third quarter management's utmost priority. With respect to the transfer of the company's shareholding in Noveko Algerie, it has been completed effective March 31, 2013.

Financings

Pursuant to the company's urgent need for working capital, the corporation announced on Jan. 11, 2013, a private placement of units, at a price of 12 cents per unit, for a minimum amount of $100,000 (833,333 units) and a maximum amount of $500,000 (4,166,667 units), each unit comprising one Class A share and one-half of one warrant. Each entire warrant entitles its holder to purchase one Class A share at a price of 20 cents per share during a period of 24 months after the issuance of the units. On Jan. 28, 2013, the company proceeded with a first closing of this placement whereby a total number of 1,566,667 Class A shares and 783,334 warrants were issued by the corporation for a total amount of $188,000, from which an amount of $50,000 was subscribed to by a corporation's insider. On March 22, 2013, taking into account the prevailing market conditions, the corporation announced the end of this private placement of units and approved a new private placement of Class A shares, at a price of six cents per share, for a minimum amount of $320,000 (5,333,333 Class A shares) and a maximum amount of $500,000 (8,333,333 Class A shares). A first closing occurred on March 28, 2013, whereby a total number of six million Class A shares were issued by the corporation for a total amount of $360,000, from which a total amount of $326,000 was subscribed to by corporation's insiders.

In connection with the company's search for financing, the corporation's board of directors had approved, during the second quarter of 2013, resolutions for the borrowing by the corporation of an amount between $10-million and $12-million, that was supposed to take the form of (i) the issuance of secured convertible debentures for an amount of $5-million to $7-million, bearing interest at an annual rate of 8 per cent, payable quarterly, reimbursable 36 months after their issuance and convertible into the corporation's Class A shares on the basis of one Class A share for each 31 cents in capital debenture, and (ii) a 36-month term loan of a principal amount of $5-million, bearing interest at an annual rate of 10 per cent, payable quarterly.

On May 14, 2013, the corporation's board of directors approved resolutions for the borrowing of an amount of $10-million that should take the form of a 36-month term loan, and bearing interest at an annual rate of 9 per cent payable quarterly. This term loan shall be secured by all the corporation's assets. These resolutions replace the resolutions previously adopted during the second quarter of 2013. It is now anticipated that the closing of the primary financing will occur before the end of May, 2013. Proceeds of the primary financing will be used to pay TEC the amounts due pursuant to the 2011 financing.

The corporation is in default and is not compliant with its contractual undertakings to TEC, and TEC may require at any time the full reimbursement of the credit facility and of the secured convertible debentures of the 2011 financing, and exercise all hypothecary recourses provided for in the agreements governing the 2011 financing, against the corporation's assets, including the shares of its subsidiaries, and against the assets of its Canadian subsidiaries, which will have a huge negative impact for the corporation and its shareholders. The corporation monitors its financial situation on a continuous basis with TEC. Even though management is confident that the closing of the primary financing will occur as anticipated, no assurance can be given that TEC will not exercise the aforementioned hypothecary recourses before the closing of the primary financing.

Remedial review process

Since mid-February, 2013, the listing of the corporation's Class A shares at the Toronto Stock Exchange is subject to a remedial review process by the exchange. At the corporation's request, the exchange has granted the corporation extensions ending no later than June 17, 2013, to demonstrate that the deficiencies identified have been rectified. The identified deficiencies are connected with the corporation's financial situation taking into account the continued listing criteria. The closing of the primary financing anticipated to occur before the end of May, 2013, is a key factor to maintain the listing of the corporation's Class A shares on the Toronto Stock Exchange. No guarantee can be however provided that the exchange will consider that the closing of the primary financing is sufficient to maintain such listing.

Air filtration segment

One of the main objectives of the company's strategic plan is to realign its human and financial resources in its most promising technologies, specifically the air filtration solutions, in order to ultimately optimize the corporation's value. The filtration segment also suffered as did the company's other activities segments from the difficult situation of the last quarters. However, the company is optimistic that the closing of the primary financing will allow the corporation to accelerate its commercialization approaches in that segment.

The company's business model in the air filtration market for buildings other than farm buildings is based on the signing of long-term agreements (now generally four years). This stands apart from the traditional business model associated with standard air filters, which is typically based on one-time orders, generally without a commitment to any particular supplier. The longer-term commitment of the company's filtration solutions users, which is moreover rooted in their unique attributes, ensures the company of recurring revenues and earns its clients' loyalty. However, since this business model is completely at odds from the current business model, that being a three-month sales cycle for conventional air filters, the penetration of the company's air filtration solutions is much slower than the company would like and that it had anticipated. Now that the novelty of the numerous advantages that they represent over conventional air filters is no longer an obstacle to the adoption of the company's air filtration solutions and given a closing of the primary financing before the end of May, 2013, the company is confident of being able to accelerate the commercialization of its air filtration solutions.

The Noveko filters offer superior filtration capacity and durability while putting less restriction on ventilation, thereby requiring less power from ventilation systems, thus saving substantial energy. The filters are also cleanable and recyclable, significantly reducing the number of filters used, and the labour costs associated with their replacement and the elimination of waste. It is notably the incorporation of anti-microbial agents into the company's filter fibres, protecting them against deterioration from the effects of micro-organisms, that accounts for cleanability and durability. All these positive features make them an ideal solution for users as part of a sustainable development strategy.

Helped by the results of tests conducted on the company's filters installed in excess of 36 months in the Greater Montreal Area buildings confirming their distinctive features and other conclusive tests conducted by an engineering firm, the company has demonstrated that its filters enable users to achieve ventilation systems with related energy savings of approximately 15 per cent to 25 per cent. The company has been authorized to divulge to its potential customers the results of these credible tests, which could help it convince them more easily. Also, the company is now experiencing from buildings owners and managers in Quebec and in Ontario an increasing interest in the company's air filtration solutions. In the second quarter the company renewed the first lease agreement it signed three years ago (one of the most important in terms of revenues) for an additional four-year period. This first renewal is indisputable proof of the efficiency and other advantages of the company's air filters.

 
                      SELECTED CONSOLIDATED FINANCIAL INFORMATION

                                                           Three months to     Nine months to
                                                              March 31,          March 31,
(in thousands of $, except per-share amounts)                2013     2012     2013     2012

Revenue                                                 $     376 $  1,025 $  2,023 $  3,962
Gross profit                                            $      32 $    (43)$    827 $  1,289
Operating loss before amortization, net financial
expenses, income taxes and discontinued operations      $  (1,135) $(1,825) $(3,092) $(4,118)
Net result from continuing operations                      (2,211)  (2,546)  (5,891)  (5,590)
Net result from discontinued operations (1)                (2,794)    (294)  (1,854)    (304)
Net result                                              $  (5,004) $(2,839) $(7,744) $(5,894)
Earnings per Class A share (basic and diluted)
From continuing operations                               $  (0.02) $ (0.03) $ (0.06) $ (0.06)
From discontinued operations (1)                         $  (0.03) $     -  $ (0.02) $     -
Total                                                    $  (0.05) $ (0.03) $ (0.08) $ (0.06)

(1) Related to Noveko Algerie's operation for the period from July 1, 2012, to Dec. 31, 2012,
    and ECM's operation for the three quarters of 2013, and Noveko Algerie, ECM's and Bolduc
    Leroux's operation for the three quarters of 2012.
(2) Related to Noveko Algerie and ECM as at June 30, 2012, and to ECM only as at March 31,
    2013.

We seek Safe Harbor.