January 10, 2013 at 16:39 PM EST
Xylitol Canada Announces Closing of $2 Million Private Placement

TORONTO, ONTARIO--(Marketwire - Jan. 10, 2013) - Xylitol Canada Inc. ("Xylitol Canada", or the "Company") (TSX VENTURE:XYL) is pleased to announce today that it has closed a private placement of 8,888,888 units (the "Units") at a price of $0.225 per Unit for aggregate gross proceeds of $2,000,000 (the "Offering"). Each Unit is comprised of one common share and one-half of one common share purchase warrant, each whole warrant entitles the holder to acquire one additional common share at a price of $0.375 for a period of 24 months following the closing date of the Offering.

Pursuant to the Offering, BayFront Capital Partners Ltd. received 711,111 finder's warrants, each such warrant entitling the holder to acquire one common share at a price of $0.375 for a period of 24 months following the closing date of the Offering.

Proceeds from the Offering will be used (i) to purchase inventory for existing orders and to launch new product lines; (ii) for research and development; and (iii) for general working capital purposes.

All securities issued pursuant to the Offering are subject to a hold period of four months from the closing date in accordance with the rules and policies of the TSX Venture Exchange and applicable Canadian securities laws.

About Xylitol Canada Inc.

Xylitol Canada markets xylitol and xylitol based-products and is focused on becoming a major low-cost manufacturer of xylitol and related products, serving the global market from operations in North America.

Xylitol Canada's business strategy is to leverage novel proprietary technology and processes to become North America's premier manufacturer of low cost, high quality xylitol from readily available environmentally-sustainable biomass. Xylitol is an all-natural sweetener which is marketed globally including Canada and the United States and is accepted by the American Food and Drug Administration, the World Health Organization and the American Dental Association. Xylitol contains 75% less carbohydrates and 40% less calories than sugar, has a myriad of oral health benefits including the prevention of tooth decay and is safe for diabetics. To date, wider spread use of xylitol has been limited by the lack of a reliable, low cost, high quality supplier.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact:

Xylitol Canada Inc.

Andrew Reid

President and CEO

(416) 288-1019

areid@xylitolcanada.com

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