We have to date exploited our IM Technology in five

markets: media packaging, returnable transport packaging,

food packaging, automotive and consumer electronics

packaging. The roll-out of our IM Technology

started in 2001 as a joint operation based on a cooperation

agreement for media packaging with Cheng

Meng (also known as Founders), a contract manufacturer

in the People's Republic of China. In 2005, we licensed

our IM Technology for use in returnable transport

packaging (e.g. pallets and crates) to Schoeller Arca

Systems N.V. Subsequently, we licensed our IM

Technology to various parties in the food packaging

markets, most importantly Waddington North America

Inc. In 2007, we granted an exploratory license for our

IM Technology to International Automotive

Components Group for the automotive industry.

Finally, in 2008 we granted a license to Hoogerman

Holding B.V. to explore the potential for our IM

Technology in the consumer electronics packaging area.

In the near future we expect revenues related to our IM

Technology from the media packaging and returnable

transport packaging segment to be limited and we will

therefore primarily focus on food packaging and automotive.

In addition, we continue to explore possibilities

in returnable transport packaging and consumer electronics

packaging on a case-by-case basis. The current

stage of commercialisation of our IM Technology in

each of these five markets differs, but in none of these

markets have we yet reached the stage of achieving

multiple IM Technology mould sales to specific customers

on an ongoing basis.

With respect to commercialising our technology, initially

we aimed at (i) licensing of our IM Technology to converters,

often in consideration for an equity participation,

and (ii) marketing, product development and production

of packaging products for multinational producers

of food and beverage products. Although this strategy

held the promise of significant value creation in

the long term, it did not allow the operational costs of

our business to be covered by cash income in the short

term (as illustrated by the complete lack of license income

in 2009), thus creating a negative cash flow and

resulting in the necessity to obtain additional debt or

equity financing on a regular basis.

Following the appointment of our new CEO, Mr N.

Mehra, in June 2009, we decided to adopt a cash-focused

strategy in order to be less dependent on the availability

of additional financing and to improve our

financial performance in a sustainable way. This new

strategy is primarily aimed at exploiting our IM

Technology by selling moulds to converters with an

implied license fee per individual mould and in certain

cases ongoing royalties. Nevertheless, I-Pac

Technologies N.V. could still decide to license the IM

Technology on an exclusive basis for a specific market

segment if and when appropriate. By implementing

this new strategy, we expect our business to generate

more cash on a short term and create fewer hurdles for

potential business partners to start using the technology.

In addition, we expect that we can implement our

new strategy with a more streamlined organisation and thereby reduce our costs.