BioSyntech Announces Filing of Final Prospectus for $3.1 Million Rights Offering



    
    /NOT FOR DISTRIBUTION TO THE UNITED STATES NEWS WIRE SERVICES OR
    DISSEMINATION IN THE UNITED STATES/
    

    LAVAL, QC, Aug. 31 /CNW/ - BioSyntech, Inc. ("BioSyntech") (TSX: BSY), a
biotechnology company developing biotherapeutic thermogels for regenerative
medicine, today announced that it has filed a final short form prospectus in
respect of the distribution to its existing shareholders of rights exercisable
to purchase 310,000 units, each comprised of $10 principal amount of
subordinated secured convertible debentures and 91 common share purchase
warrants, at a price of $10 per unit, representing gross aggregate proceeds of
up to $3,100,000 to BioSyntech.
    BioSyntech will distribute the rights to the holders of common shares of
record on September 16, 2009. Each shareholder will receive one right for each
common share held on such date. 340.1340 rights entitle the holder thereof to
purchase one unit upon payment of the subscription price therefor. No
fractional units will be issued pursuant to the rights offering. Shareholders
who exercise their rights in full are entitled to subscribe for additional
units, if available, pursuant to an additional subscription privilege
described in the final prospectus.
    The rights may be exercised commencing on September 17, 2009 and will
expire at 4:30 p.m. (Eastern time) on October 14, 2009. The rights will be
listed on the Toronto Stock Exchange under the symbol "BSY.RT" and will be
posted for trading from September 14, 2009 to 12:00 noon (Eastern time) on
October 14, 2009, subject to BioSyntech fulfilling all of the listing
requirements.
    Pursuant to stand-by purchase agreements, ProQuest Investments III, L.P.,
Fonds de Solidarité des travailleurs du Québec (F.T.Q.) and Highland Crusader
Offshore Partners, L.P. have agreed, subject to certain terms and conditions,
to exercise in full their respective rights pursuant to the basic subscription
privilege and to purchase, at the subscription price of $10 per unit, all of
the units not otherwise purchased pursuant to the exercise of rights under the
rights offering at the expiry time, so as to ensure a minimum subscription of
310,000 units, in accordance with the proportions set forth in their
respective stand-by purchase agreements.
    Laurentian Bank Securities Inc. is acting as sole dealer manager under
the rights offering.
    "It was important to BioSyntech that all shareholders have an opportunity
to participate in our current financing, which is why we carefully structured
this public offering component," said Ms. Jeanne M. Bertonis, Chief Executive
Officer of BioSyntech.
    The distribution of the rights as well as the units and underlying
debentures and warrants issuable upon the exercise of the rights are qualified
by the final prospectus in the provinces of British Columbia, Alberta,
Manitoba, Ontario, and Québec. The rights are not being distributed or offered
to holders in the other provinces and territories of Canada, the United States
or in any other jurisdiction, and the rights may be exercised by or on behalf
of a holder of rights resident in such an ineligible jurisdiction only to the
extent certain conditions described in the final prospectus are complied with.
    The final prospectus, along with rights certificates, will be mailed to
holders of rights in eligible jurisdictions on or about September 22, 2009.
Rights certificates will not be sent to holders of rights resident in
ineligible jurisdictions. Instead, the final prospectus will be mailed to such
holders along with a letter advising them that their rights certificates will
be held by the subscription agent, who will hold such rights as agent for the
benefit of all such holders. Shareholders who own their shares through an
intermediary, such as a bank, trust company, securities dealer or broker, will
receive materials and instructions from their intermediary.
    Shareholders and purchasers of rights should consult the prospectus and
their own legal and financial advisors to determine their rights and
entitlements under the rights offering. This press release should be read
together with, and is qualified in its entirety by, the more detailed
information contained in the final prospectus available on SEDAR at
www.sedar.com under BioSyntech's SEDAR profile.
    This news release does not constitute an offer to sell or the
solicitation of an offer to buy these securities nor shall there be any sale
of the securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful. Securities may not be offered or sold in the United
States absent registration or an exemption from registration under the United
States Securities Act of 1933, as amended, and any applicable State laws.
BioSyntech has not and does not intend to register any units, debentures,
warrants or underlying common shares in the United States.

    About BioSyntech

    BioSyntech is a medical device Company specialized in the development,
manufacturing and commercialization of advanced biotherapeutic thermogels for
regenerative medicine (tissue repair) and therapeutic delivery. BioSyntech's
platform technology is a family of hydrogels called BST-Gel(R), some of which
are liquid at low temperature and solid at human body temperature. These gels
can be injected or applied to a specific local site and offer beneficial
properties for the local repair of damaged tissue such as cartilage, bone and
chronic wounds and provide the benefit of avoiding invasive surgery. The
Company's lead, late-stage product, BST-CarGel(R) is currently undergoing an
international pivotal trial. For additional information, visit
www.biosyntech.com

    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 BioSyntech's products,
the availability of government and insurance reimbursements for BioSyntech's
products, the strength of our intellectual property, the success of our
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. 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
BioSyntech'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. The completion of the rights
offering is subject to receipt of all regulatory and stock exchange approvals.
In addition, the stand-by commitments of ProQuest Investments III, L.P., Fonds
de Solidarité des travailleurs du Québec (F.T.Q.) and Highland Crusader
Offshore Partners, L.P. are subject to certain terms and conditions. Failure
to obtain the contemplated financing could have a material adverse effect on
BioSyntech and the trading price of its common shares.

    %SEDAR: 00020217EF




For further information:

For further information: James Smith, The Equicom Group, (416) 815-0700
x229, Jsmith@equicomgroup.com

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BIOSYNTECH, INC.

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