Inverpower Controls Enters Into 21-Day Exclusivity Arrangement

May 15, 2001 by Jeff Shepard

Inverpower Controls Ltd. (Canada) announced that it has entered into a 21-day exclusivity arrangement with a publicly-traded company to permit exclusive negotiations towards a possible sale of assets of the business and assumption of agreed-upon trade payables based upon a value of $6.0 million. Terms of any sale will be negotiated by Inverpower, its secured creditors and the buyer during the exclusivity period and, should a definitive sale agreement be finalized, the sale will proceed subject to any regulatory approval and approval of Inverpower's shareholders.

Holders of existing secured convertible debentures have agreed to convert a sufficient amount of their debentures into common shares of Inverpower and to vote all their common shares to pass a special resolution approving the transaction if a sale agreement is successfully concluded.

Existing venture capital funders of Inverpower have agreed to provide further bridge funding to the extent of approximately $195,000 during this exclusivity period.

The secured creditors hold more than $5.5 million of convertible debentures and over $3.2 million of term and bridge loans. The accrued interest on this secured debt is currently approximately $714,000.