iFabric Corp. Increases Borrowings to Fund Its Expansion

MARKHAM, ONTARIO--(Marketwired - Feb. 27, 2017) - iFabric Corp. (TSX:IFA), hereinafter referred to as "iFabric" or the "Company", today announced that its subsidiary companies, Coconut Grove Pads Inc., Intelligent Fabric Technologies (North America) Inc. and 2074160 Ontario Inc., have entered into agreement with the Bank of Montreal ("BMO") for the provision of certain debt facilities. The facility with 2074160 Ontario Inc. is a secured $1.75 million facility, $1.415 million of which will be used to repay the indebtedness owing to the Business Development Bank of Canada and the remainder of which will be used for working capital. The facility with Coconut Grove Pads Inc. and Intelligent Fabric Technologies (North America) Inc. is a secured $3.5 million facility that will be used to fund the day to day expenses of the Company.

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

The loan with Coconut Grove Pads Inc. and Intelligent Fabric Technologies (North America) Inc. is secured by a general security agreement from each borrower as well as a guarantee and security from the Company, 2074160 Ontario Inc. and Coconut Grove Textiles Inc. The first $1,250,000 under the loan will be un-margined and the remaining $2,250,000 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 USD Base rate plus 0.75% 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 CEO 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.