Xylitol Canada Inc. Issues $477,000 Secured Convertible Debentures and Releases Third Quarter Results

TORONTO, ONTARIO--(Marketwired - Nov. 28, 2016) - Xylitol Canada Inc. (TSX VENTURE:XYL) ("Xylitol") is pleased to announce the completion of a secured convertible debenture financing (the "Financing") in the principal amount of $477,000 and was completed as an additional tranche to the secured convertible debentures issued on July 29, 2016 and October 3, 2016 (the "Initial Financings"). The net proceeds of the Financing shall be used as working capital for Xylitol to increase their product sales within the North American natural foods market.

The Financing was completed on principally the same terms as the Initial Financings, and included the issuance of debentures (the "Debentures") maturing four years from the effective closing date of November 28, 2016, and bearing interest at a rate equal to the greater of (a) an annual interest rate of 15% payable per annum (b) a pro rata royalty equal to 3% of net sales per annum, subject to an annualized combined effective interest of a maximum of 24%. The Debentures are convertible into common shares of Xylitol at a price per share equal to the lesser of (i) $0.10, and (ii) if converted within 12 months from the date issuance of the Debentures, the price set by Xylitol, on a per share basis, of an offering of equity securities on or after the date the Debentures are issued. Xylitol may redeem the Debentures at any time by repaying the principal amount of the Debenture then outstanding plus all accrued but unpaid interest thereon. The Financing also included the issuance of 4,770,000 common share purchase warrants (the "Warrants"), each such Warrant being exercisable for one common share of Xylitol for a period of 2 years and an exercise price of $0.08 per share. All Debentures and Warrants will be subject to a four month hold period from the date of issuance.

In connection with the Financing, Xylitol has paid $23,850 in finders' fees and issued 238,500 finders' warrants to Fountain Asset Corp., each such warrant being exercisable for one common share of Xylitol for a period of 2 years and an exercise price of $0.08 per share.

Xylitol also announces that it has released its financial and operating results for the three and nine months September 30, 2016.

Highlights of the results include:

Three months ended September 30, 2016		2016			2015
Revenue	$	1,587,923		$	2,428,349
Gross Profit	$	320,981		$	563,084
Net Loss	$	(604,571	)	$	(562,345	)
Loss per share	$	(0.006	)	$	(0.007	)
Nine months ended September 30, 2016		2016			2015
Revenue	$	5,414,015		$	6,774,743
Gross Profit	$	964,915		$	1,263,319
Net Loss	$	(2,718,678	)	$	(2,412,108	)
Loss per share	$	(0.029	)	$	(0.026	)

The full text of the Company's interim consolidated financial statements and related management's discussion and analysis ("MD&A") can be found at: www.sedar.com.