Microfluidics International Corporation Announces $5.0 Million Convertible Debt Financing

NEWTON, MA, November 14, 2008-- Microfluidics International Corporation (OTCBB: MFLU) announced today that the Company has secured $5.0 million of financing via a convertible debenture from a strategic investor.

“This financing provides significant working capital to support the Company’s strategic plan for growth, including research and development initiatives to bring new products and services to the market for our customers,” said Michael C. Ferrara, President and Chief Executive Officer of Microfluidics.

The convertible debenture has a seven-year term with an annual interest rate of 9%. The holder of the debenture, at its option, may elect to convert the debt into Microfluidics common stock at a price per share of $1.25. In addition to the debt, warrants were issued to the holder to purchase additional common stock of the Company. The warrants are in two tranches which, if exercised, could provide approximately $20.0 million in additional financing to Microfluidics. The first tranche is exercisable in whole or in part at $2.00 per share for up to a 40% equity stake in the Company and the second tranche is exercisable in whole or in part at $3.00 per share for up to a 50% equity stake in the Company, assuming full conversion of the convertible debenture. As part of the agreement, the holder is entitled to a seat on the Microfluidics Board of Directors.

“In these economic times, we believe securing our financial future is a required step on behalf of all our stakeholders,” said Brian E. LeClair, Executive Vice President and Chief Financial Officer of Microfluidics.

“Obtaining additional financing through this convertible debenture was the next step in building our capital structure and meets our working capital requirements to finance the growth of the Company.”

Microfluidics was advised by Covington Associates, a specialty investment banking firm serving consumer, business service, industrial, healthcare and technology companies throughout the country.

About Microfluidics International Corporation:

Microfluidics International Corporation, through its Microfluidics Division, designs, manufactures and distributes patented and proprietary high performance Microfluidizer® materials processing and formulation equipment to the biotechnology, pharmaceutical, chemical, cosmetics and ink jet ink industries. Microfluidics International Corporation applies its 20 years of high pressure processing experience to produce the most uniform and smallest liquid and suspended solid particles available and has provided manufacturing systems for nanoparticle products for more than 15 years.

The Company is a leader in advanced materials processing equipment for laboratory, pilot scale and manufacturing applications, offering innovative technology and comprehensive solutions for nanoparticles and other materials processing and production. More than 3,000 systems are in use and afford significant competitive and economic advantages to Microfluidics International Corporation equipment customers.

Safe Harbor for Forward-Looking Statements:

Certain statements in this press release contain “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including the section of this press release entitled “Outlook”; any projections of earnings, revenue or other financial items relating to the Company, any statement of the plans, strategies and objectives of management for future operations; any statements concerning proposed future growth rates in the markets we serve; any statements of belief; any haracterization of and the Company’s ability to control contingent liabilities; anticipated trends in the Company’s businesses; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “estimate,” “intend,” “continue,” “believe,” “expect,”  anticipate,” and other similar words. Although the Company believes that the expectations reflected in any forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties beyond the control of the Company. These risks and uncertainties include, but are not limited to, risks and uncertainties relating to general economic conditions, geopolitical factors, future levels of general industrial manufacturing activity, future financial performance, market acceptance of new or enhanced versions of the Company’s products, the pricing of raw materials, changes in the competitive environments in which the Company’s businesses operate, the outcome of pending or future litigation and governmental proceedings and approvals, estimated legal costs, increases in interest rates, the Company’s ability to meet its debt obligations, and risks and uncertainties listed or disclosed in the Company’s reports filed with the Securities and Exchange Commission, including, without limitation, the risks identified under the heading “Risk Factors” set forth in the Company’s Annual Report filed on Form 10-K. The Company does not intend, and undertakes no obligation, to update or alter any forward-looking statements.