Mr. Hylton Karon reports

IFABRIC CORP. INCREASES BORROWINGS TO FUND ITS EXPANSION

iFabric Corp.'s subsidiary companies, Coconut Grove Pads Inc., Intelligent Fabric Technologies (North America) Inc. and 2074160 Ontario Inc., have entered into agreement with Bank of Montreal for the provision of certain debt facilities. The facility with 2074160 Ontario is a secured $1.75-million facility, $1,415,000 of which will be used to repay the indebtedness owing to Business Development Bank of Canada and the remainder of which will be used for working capital. The facility with Coconut Grove Pads and Intelligent Fabric Technologies (North America) is a secured $3.5-million facility that will be used to finance the day-to-day expenses of the company.

The loan with 2074160 Ontario is secured by a first mortgage over land and buildings located at 525 Denison St., Markham, Ont., a general security agreement from 2074160 Ontario, an assignment of rents, as well as a guarantee and security from the company, Coconut Grove Pads, Intelligent Fabric Technologies (North America) and Coconut Grove Textiles Inc. The loan is repayable on demand and bears interest at the BMO prime rate, plus 0.75 per cent.

The loan with Coconut Grove Pads and Intelligent Fabric Technologies (North America) is secured by a general security agreement from each borrower, as well as a guarantee and security from the company, 2074160 Ontario and Coconut Grove Textiles. The first $1.25-million under the loan will be unmargined, and the remaining $2.25-million will be governed by a margin of the borrowers' accounts receivable and inventory. Advances are available under the loan either by way of Canadian-prime-rate-based advances or U.S.-base-rate advances. The loan bears interest at the BMO prime rate or U.S.-dollar base rate, plus 0.75 per cent in each case. The loan is repayable in full on demand.

"I am extremely pleased to have concluded these new banking agreements with the Bank of Montreal for a number of reasons," stated Hylton Karon, president and chief executive officer of iFabric. "Firstly, the strength of our balance sheet has allowed us to provide expansion funding for iFabric on a non-dilutive basis. Further, based on our current net cash position, the full amount of $3.8-million in additional borrowings is currently available to us to fund the anticipated strong growth in both of our divisions. Finally, the favourable pricing of the new loans will result in substantial interest savings to iFabric," concluded Mr. Karon.

About iFabric Corp.

iFabric is a manufacturer, distributor, licensor and licensee of ladies intimate apparel products, sleepwear and accessories, and also is a developer and distributor of proprietary innovative products and treatments that are suitable for application to textiles, plastics, liquids and hard surfaces.

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