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Alphinat announces debenture offering

MONTREAL (Quebec), August 6, 2013

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Alphinat Inc. (“Alphinat”) (TSX-V: NPA), a leader in innovative Software for the Smart Enterprise™, announces that it has closed the first tranche of a non-brokered Debenture Offering, maximum of $3,000,000, consisting of Class A Units, each comprising a Class A Debenture accompanied by one Bonus Common Share per dollar of Class A Debenture subscribed and Class B Units, each comprising a Class B Debenture accompanied by one Bonus Common Share per dollar of Class B Debenture subscribed.

The Class A Debentures bear interest at 10% annually with interest payable quarterly and mature on September 30, 2017. They are redeemable by the Corporation on or after September 30, 2015. They are being offered at their face value. The Class A and Class B Debenture holders have the right to convert the debentures at the principal amount plus any unpaid accrued interest into the next equity issue of the Corporation. In the event that the issue was offered at a discount to market the Class B Debenture holders shall not be entitled to any discount. Conversion of debentures will be conditional to prior TSX Venture Exchange’s approval. and the conversion price will be based market price at the time of conversion.

The Class B Units, including a Class B Debenture substantially identical to the Class A Debenture, are being offered exclusively to Alphinat secured lenders (the “Secured Lenders”) who advanced $500,000 (the “Secured Indebtedness”) to the Corporation in October 2011. The Units are offered in the context of a Debt Settlement whereby in consideration of the cancellation of the Secured Indebtedness which bears interest at a substantially higher rate than the Class B Debenture, and the removal of the security for the Secured Indebtedness, the Corporation will issue Class B Debentures having a value of 120% of the Secured Indebtedness being settled. In addition, the Secured Lenders will be entitled to receive one Bonus Common Share per dollar of Class B Debenture subscribed, of which 154,761 Bonus Common Shares were issued at closing and the remaining 345,249 Bonus Common Shares will be issued if and only upon approval by the shareholders at the next Special Shareholders Meeting.

The Corporation has sought, and continues to seek, investors for this placement. The Corporation is pleased to announce that holders of $353,750 of Secured Indebtedness have converted into Class B Units at the first closing. In addition, to date, the Corporation has closed for additional funds in the amount of $202,500 and conversion of subordinated debt of $183,358 into Class “A” Units at the first closing. Final closing will be held on or before September 30, 2013.

With respect to the Secured Indebtedness debt settlement, the Chief Executive Officer, Philippe Lecoq, stated: “We are very pleased with the progress of the debt conversion. The terms of the conversion were fair for both parties and this further reflects the ongoing confidence of the Secured Lenders and other debt holders in the Corporation. The completed conversion diminishes the Corporation’s debt servicing load and eliminates the risk of debt obligations as well as freeing up additional capital which can be used towards further development. The elimination of the charge of on Alphinat’s assets will open the way to new investment and permit further growth.

The Units, Debentures and Shares purchased in this first closing are subject to a four-month hold period ending four months after issuance of the Units, in accordance with applicable securities laws.

Of the $353,750 of Secured Indebtedness referred to above, $278,750 of Secured Indebtedness being converted is held by Insiders who received, subject to the other conditions stated above, 278,750 Class B Units. The holders of the $183,358 of unsecured indebtedness referred to above are also Insiders and received 183,358 Class A Units.

No finder’s fee was paid for the first closing, however the Corporation is authorized to pay fees of 6% in cash and such number of shares equal to 6% of shares issued pursuant to the offering with qualified intermediaries accepted in writing by the Corporation.

The net proceeds from the Debenture Offering will be used to refund the non-converted portion of the Secured Indebtedness which comes to maturity on September 30, 2013 and to fund working capital.

About Alphinat

At Alphinat, we are driven by the passion to make application development easy for everyone. It always struck us as odd that the people with the vision of how a finished application should look and behave would only be involved at the start of the process. After all, what better way to ensure a favourable outcome than to provide those closest to an application’s end-users with a vested interest in its success throughout its development?

That’s why we bring you new ways to empower the right people at the right time in the application development process. At the same time, we’re constantly working to reduce the need to code in order to make application development and maintenance simpler and less error-prone.

So whether you choose to develop your applications with the help of our low-code platform SmartGuide®, kickstart your project using one of our pre-built apps or engage us or one of our partners to do the work for you, we’re here to help you deploy better applications in record time. Visit https://www.alphinat.com for more information. We look forward to hearing from you.

Forward-looking statements

Certain statements in this document, including those which express management's expectations or estimations with regard to the Company's future performance, constitute "forward-looking statements" as understood by applicable securities laws. Forward-looking statements are, of necessity, based on a certain number of estimates and hypotheses; while management considers these to be accurate at the time they are expressed, they are inherently subject to significant uncertainties and risks on the commercial, economic and competitive levels. We advise readers that these forward-looking statements are subject to risks, uncertainties, and other known and unknown factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. A number of factors could cause significant differences between actual results and those described in forward-looking statements. Investors are advised to not rely unduly on the forward-looking statements. This advisory applies to all forward-looking statements, whether expressed orally or in writing, attributed to Alphinat or to any individual expressing them in the name of the Company. Unless required by law, the Company is under no obligation to publicly update these forward-looking statements, whether to reflect new information, future events, or other circumstances. Risks and uncertainties that bear on the Company are described in greater detail in the Company's Annual Report.

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