NIR Diagnostics announces subscription agreement and special meeting of shareholders


    TSX Venture: NID

    CAMPBELLVILLE, ON, Nov. 8 /CNW/ - NIR Diagnostics Inc. (the "Company") 
(TSX Venture: NID), an innovator in the development of handheld healthcare
diagnostic devices, today announced that it has entered into a binding
definitive subscription agreement (the "Agreement"). Under the Agreement, the
Company intends to complete a non-brokered private placement (the "Private
Placement") for the issuance of $2,200,000 principal amount of secured
convertible redeemable debenture ("Debenture") and 11,000,000 common share
purchase warrants ("Warrants"). The Debenture and Warrants are to be placed
with Ventabren Holdings Limited ("Ventabren"), a private company wholly owned
by Mr. John H. Labatt. Upon completion 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 net proceeds from the Private Placement will be used by the Company
to repay in full certain existing indebtedness in the amount of $1,205,900,
and to fund continuing research, working capital and general corporate
    The Debenture will have a maturity date of 24 months from the closing of
the Private Placement and will bear interest at 12% compounded annually in
arrears, with interest payable monthly. The Debenture will be 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 from the
date of issuance with 60 days advance notice. The Registered Holder will have
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 will be
secured by the granting of a first priority security interest over the
Company's assets.
    As part of the Private Placement, the Company will issue 11,000,000
Warrants to Ventabren. Each Warrant will be exercisable to purchase one common
share at any time during the two year period from closing at an exercise price
of $0.20 per common share.
    Completion of the Private Placement is subject to the satisfaction of
certain customary conditions, including being conditional upon the Company
redeeming all pre-existing convertible debt in the amount of $1,205,900 that
is to mature on June 21 and July 19, 2008 (the "Existing Debentures"). On
November 2, 2007 the Company provided written notice to the debentureholder
trustee that the Existing Debentures will be redeemed on or about December 3,
2007. These Existing Debentures carry the right to convert the indebtedness
into common shares of the Company, and the debentureholders will retain this
right until the day prior to the redemption date. In connection with the
Private Placement, the Company has amended (subject to regulatory approval)
the conversion price such that, between the dates of November 2, 2007 and
December 3, 2007, the Existing Debentures may be converted at a price of
$0.20 per common share (as opposed to the current conversion price of $0.30
per common share).
    Mr. Labatt is a private investor, who currently owns, through Ventabren
and a related company, approximately 9% 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 50% (36% if only the Debenture is converted). 
Therefore, under the rules of the TSX-V, Mr. Labatt would become a new Control
Person and accordingly the Company must seek approval of shareholders to
proceed with the Private Placement. For this purpose, a special meeting of
shareholders will take place on November 29, 2007 at 10:00 am at 20 Toronto
Street, Toronto Ontario.
    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.
    The Company has received conditional approval from the TSX-V to proceed
with the Private Placement on the terms described above. The TSX-V is aware of
the amendment to the conversion price relating to the Existing Debentures, but
issuance of shares on conversion of the Existing Debentures is subject to
final TSX-V approval. 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 Placement.

    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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