NIR Diagnostics announces private placement and appointment of John Labatt to Board of Directors

    TSX Venture: NID

    CAMPBELLVILLE, ON, Dec. 7 /CNW/ - NIR Diagnostics Inc. (the "Company")
(TSX Venture: NID), an innovator in the development of handheld healthcare
diagnostic devices, today announced that it has completed its previously
announced non-brokered private placement (the "Private Placement"). On
December 6, 2007, the Company issued a secured convertible redeemable
debenture ("Debenture") in the amount of $2,200,000 and 11,000,000 common
share purchase warrants ("Warrants") to Ventabren Holdings Limited
("Ventabren"), a private company wholly owned by Mr. John H. Labatt. As a
result of the financing, Mr. Labatt will become a "Control Person" of the
Company under the rules of the TSX Venture Exchange (the "TSX-V").
    The Debenture matures on December 6, 2009 and bears interest at 12%
compounded annually in arrears, with interest payable monthly. The Debenture
is convertible into common shares of the Company, at the option of the holder,
at any time prior to the maturity date at the conversion price of $0.15 per
common share. The Debenture may be redeemed at the option of the Company at
any time with 60 days advance notice. Ventabren has 30 days after the Company
provides notice of redemption to convert all or part of the Debenture into
common shares of the Company. The Debenture is secured by the granting of a
first priority security interest over the Company's assets.
    As part of the Private Placement, the Company issued 11,000,000 Warrants
to Ventabren. Each Warrant is exercisable to purchase one common share at any
time on or before December 6, 2009 at an exercise price of $0.20 per common
    The common shares issuable on conversion of the Debenture and Warrants
are subject to a four-month hold period from the date of closing the Private
    Concurrent with closing of the Private Placement, the Company redeemed
for cash all pre-existing convertible debt in the amount of $1,205,900 that
was to mature on June 21 and July 19, 2008. The remaining funds will be used
by the Company to fund continuing research, working capital and general
corporate requirements.
    Mr. Labatt is a private investor, who currently owns, through Ventabren
and a related company, 4,412,634 common shares representing approximately
12.71% of the outstanding common shares of the Company. In addition, Mr.
Labatt, through a related company, owns 3,000,000 common share purchase
warrants of the Company, 50% of which are exercisable at $0.30 per share, and
50% of which are exercisable at $0.45 per share. In the event that the
Debenture is converted into common shares, the Warrants and all other warrants
held indirectly by Mr. Labatt are exercised to acquire common shares, Mr.
Labatt's shareholdings in the Company would increase to approximately 52% (39%
if only the Debenture is converted). Therefore, under the rules of the TSX-V,
Mr. Labatt has become a new Control Person and accordingly the Company sought
and obtained approval of shareholders at a special meeting of shareholders on
November 29, 2007.
    John H. Labatt has advised that he has agreed to acquire the Debenture
and the Warrants for investment purposes and that he has a present intention
to increase his direct or indirect holdings in the Company through market
transactions, private agreements, exercise of warrants or otherwise.
    In related news, the Company announced that, effective December 6, 2007,
Mr. Labatt has been appointed a Director of the Company.
    Also, the Chief Executive Officer of the Company, Duncan J. MacIntyre,
entered into an Amending Agreement effective December 6, 2007 which amended
his existing employment agreement entered into with the Company on October 28,
1998 to provide updated employment conditions which are customary for a Chief
Executive Officer of a public company of similar size operating in the life
sciences industry in Canada. These updated conditions include a termination
provision which provides a severance package equivalent to twenty four months
of compensation and benefits. Consistent with Mr. MacIntyre's original
employment agreement, this severance package increases to thirty six months in
the event Mr. MacIntyre's employment is terminated without cause within two
years of a change of control of the Company as defined therein. The Amending
Agreement also provides for other customary provisions, including a six month
non-competition provision and a twelve month non-solicitation provision and
the assignment of intellectual property.
    The Company also entered into standard forms of employment agreements for
officers of a Canadian public life sciences company of similar size with
Ashwani Kaushal and Stephen Curtis, the Vice President Technology and Chief
Financial Officer, respectively. The relevant terms include customary
provisions for termination without cause and if the individual has good reason
(as defined therein) in which case, the individual will be entitled to a
severance package equivalent to twenty four months of compensation and
benefits. The employment agreements also provide for standard provisions
regarding confidentiality, assignment of intellectual property and
non-competition and non-solicitation covenants.

    About NIR Diagnostics

    NIR Diagnostics is a leader in the development of near-infrared
spectroscopic medical diagnostics. The Company has an extensive portfolio of
optical, electronic and algorithm related patents in the field of in-vitro and
in-vivo blood analysis.

    Forward-looking Statements

    This press release contains information that is forward-looking
information within the meaning of applicable securities laws. In some cases,
forward-looking information can be identified by the use of terms such as
"may", "will", "should", "expect", "plan", "anticipate", "believe", "intend",
"estimate", "predict", "potential", "continue" or the negative of these terms
or other similar expressions concerning matters that are not historical facts.
Particularly, statements about the planned development of diagnostic devices
and the sufficiency of funds available to finance ongoing operations are
forward-looking information.
    Forward-looking information, by its nature necessarily involves risks and
uncertainties including, without limitation, the difficulty of predicting
regulatory approvals, market acceptance and demand for new products, the
protection of intellectual property connected with devices, the impact of
competitive products, and other similar or related risks and uncertainties.
Additional risks and uncertainties affecting the Company are discussed in the
Risks and Uncertainties section of the MD&A for the year ended December 31,
2006 available on SEDAR at If any of these risks or
uncertainties were to materialize or if the factors and assumptions underlying
the forward-looking information were to prove incorrect, actual results could
vary materially from those that are expressed or implied by the
forward-looking information contained herein. The Company disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.

For further information:

For further information: Duncan MacIntyre, President, CEO and Executive
Vice Chairman, NIR Diagnostics Inc., (905) 854-5727, (905) 854-5729 Fax,
E-mail:, Internet:; Ross
Marshall, Investor Relations, (416) 815-0700 ext. 238, (416) 815-0080 Fax,
E-mail:, Internet:

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