BioSyntech Announces $10 Million Bought Deal Financing



    /THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT
    INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR
    DISSEMINATION IN THE UNITED STATES./

    LAVAL, QC, June 16 /CNW/ - BioSyntech, Inc. (TSX:BSY) today announced
that it has entered into a bought deal agreement with Dundee Securities
Corporation as lead underwriter pursuant to which Dundee has agreed to
purchase 10,000 Units, each comprised of $1,000 principal amount of
convertible debentures and 2,500 warrants, representing gross aggregate
proceeds of $10,000,000 to the Company. The 12.00% subordinated secured
convertible debentures mature on December 31, 2009 (the "Debentures") and are
convertible into common shares at any time prior to maturity at a conversion
price of $0.20 per share (the "Conversion Price"). For every share issuable on
conversion of the Debentures, the holder will receive 1/2 of a common share
purchase warrant (the "Warrants"), being 2,500 Warrants per $1,000 principal
amount of Debentures. Each whole Warrant is exercisable for a period of 5
years from the closing of the offering at a purchase price of $0.22 per share.
BioSyntech has granted Dundee an over-allotment option, exercisable from time
to time in the 60 days following closing of the offering, to purchase up to an
additional 1,500 Units to cover over-allotments, for gross proceeds of up to
$1,500,000.
    A preliminary short form prospectus will be filed with the securities
regulatory authorities in the provinces of Alberta, British Columbia,
Manitoba, Ontario and Quebec by June 20, 2008. The offering is expected to
close on or about July 4, 2008 and is subject to certain conditions, including
the receipt of the acceptance of the Toronto Stock Exchange and any other
required regulatory approvals.
    The net proceeds of the offering will be used to (i) implement a
streamlined business plan focused on maximizing value for all shareholders;
(ii) complete the pivotal European and Canadian clinical trials for
BST-Cargel(R); (iii) hire a consultant to augment the management team in their
exploration of strategic alternatives, such as partnerships and M&A
transactions; and (iv) support working capital and general corporate purposes.
    BioSyntech has agreed to increase its board of directors to nine members
and will grant Dundee the right to nominate four out of nine members.
    Assuming the conversion of all debentures and the exercise of all
warrants, the bought deal financing of $10,000,000 would represent the
issuance of an additional 75,000,000 common shares. In the event that the
underwriters exercise the over-allotment option in full, the conversion of all
debentures and exercise of all warrants would represent in the aggregate the
issuance of an additional 86,250,000 common shares. No shareholder currently
owns or exercises control over a number of common shares of BioSyntech
representing a "control block" (ie. a holding of more than 20% of the voting
securities by one security holder or combination of security holders acting
together).

    The Toronto Stock Exchange (the "TSX") may apply certain rules of the TSX
Company Manual to the prospectus offering where there is potential for a
change of control or involvement of insiders, which rules normally require
shareholder approval. BioSyntech has applied to the TSX for and expects to
obtain an exemption from the TSX from the requirement to seek shareholder
approval pursuant to Section 604(e) of the TSX Company Manual on the basis of
its financial hardship. A special committee of the Board of Directors of
BioSyntech composed entirely of independent directors, free from any interest
in the offering and unrelated to any of the parties involved in the offering,
has recommended the proposed financing and the application to the TSX for an
exemption from the requirement to seek shareholder approval based on a
determination of financial hardship. Based on this recommendation, the Board
has approved the offering on the basis that BioSyntech is currently in serious
financial difficulty, that the offering is designed to improve its financial
position and is reasonable in the circumstances.

    THE SECURITIES OFFERED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS. THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY THE SECURITIES, NOR SHALL THERE BE ANY SALE OF
THE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL.

    FORWARD-LOOKING STATEMENTS

    This press release contains forward-looking statements and information
which are subject to material risks and uncertainties. Such statements are not
historical facts and are based on the current expectations of management. You
are cautioned that such statements are subject to a multitude of risks and
uncertainties that could cause actual results, future circumstances, or events
to differ materially from those projected in the forward-looking information.
These risks include, but are not limited to, those associated with our
capacity to finance our activities, the adequacy, timing, and results of our
clinical trials, the regulatory approval process, competition, securing and
maintaining corporate alliances, market acceptance of the Company's products,
the availability of government and insurance reimbursements for the Company's
products, the strength of intellectual property, the success of research and
development programs, reliance on subcontractors and key personnel, and other
risks and uncertainties detailed from time-to-time in our filings with the
Canadian securities commissions. There is no guarantee that the proposed
financing will be completed and that the Company will be in a position to meet
its obligations as they become due.
    Readers should not place undue reliance on the forward-looking
information, given that (i) our actual results could differ materially from a
conclusion, forecast or projection in the forward-looking information, and
(ii) certain material factors or assumptions which were applied in drawing a
conclusion or making a forecast or projection as reflected in the
forward-looking information, could prove to be inaccurate. Additional
information about (i) the material factors that could cause actual results to
differ materially from the conclusion, forecast or projection in the
forward-looking information, and (ii) the material factors or assumptions that
were applied in drawing a conclusion or making a forecast or projection as
reflected in the forward-looking information, is contained in the Company's
annual report and other documents filed from time to time with the Canadian
securities commissions which are available at www.sedar.com. These statements
speak only as of the date they are made, and we assume no obligation to revise
such statements as a result of any event, circumstance or otherwise, except in
accordance with law.





For further information:

For further information: BioSyntech, Inc., Yvonne Kramer Ph.D., Sr.
Director Corporate & Business Development, (450) 686-2437, ext. 315, Email:
Yvonne.Kramer@biosyntech.com; or The Equicom Group, Arianna Vanin, Investor
Relations, (514) 844-4680, Email: avanin@equicomgroup.com

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BIOSYNTECH, INC.

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