Vancouver, BC, March 22, 2007--(T-Net)--Chromos Molecular Systems (TSX: CHR) announced today that it has entered into an agreement with a syndicate of underwriters led by Dundee Securities Corporation and including Canaccord Capital Corporation pursuant to which the Underwriters have agreed to buy 40,000,000 Units from Chromos on a bought deal basis at a price of $0.10 per Unit. Each Unit consists of one common share of Chromos and one common share purchase warrant, each whole warrant being exercisable to acquire an additional common share of Chromos at a price of $0.15 per share for 60 months from closing of the offering.
The gross proceeds raised from the bought deal private placement will be $4,000,000. Units will be offered in Canada by private placement, and in such other jurisdictions, including the United States and Europe, where the Units can also be offered and sold in accordance with applicable exemptions from any prospectus, registration or other similar requirements.
Chromos intends to use the net proceeds principally to fund the commercialization and expansion of its cell line engineering business, the repayment of Chromos’ bridge loan financing, and for the shared development of its lead product, CHR-1103. The balance will be allocated to working capital and other general corporate purposes.
The offering is scheduled to close on or about April 6, 2007. The closing of this offering is subject to certain conditions including all necessary regulatory, stock exchange and shareholders approvals. Chromos intends to apply for an exemption from the Toronto Stock Exchange from the requirement to seek shareholders approval in connection with the financing pursuant to Section 604(e) of the TSX Company Manual on the basis of financial hardship. A special committee of the Board of Directors of Chromos (the “Boardâ€) composed of Darrell Elliott and Roger Flowerdew, each of whom is free from any interest in this offering and is unrelated to any of the parties involved in the offering, has determined that Chromos is in financial difficulty and recommended that Chromos proceed with the offering. Based on this recommendation, the Board has determined that Chromos is in serious financial difficulty, that the offering is designed to improve its financial position and is reasonable in the circumstances, and the Board has approved the offering.
Upon closing Chromos will pay customary commissions and issue up to 4,000,000 warrants to the Underwriters. These warrants will entitle the holder to purchase one Unit within 2 years of the date of closing at a price of $0.10 per Unit.
Up to 88,000,000 common shares are issuable under this transaction, representing 99% of the currently issued and outstanding common shares. All securities issued as part of this Unit offering are subject to a four-month hold period. This transaction is not expected to have a material affect on control.
The securities offered have not been and will not be 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 nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Chromos
Chromos is a biopharmaceutical company with two drug development programs focused on inflammatory diseases and thrombotic disorders. The Company's lead product, CHR-1103, is a humanized monoclonal antibody being developed as an acute treatment for relapses associated with multiple sclerosis (MS). Chromos generates revenue from its proprietary ACE System technology to engineer production quality cell lines to manufacture biopharmaceutical products including monoclonal antibodies. For more information, please visit www.chromos.com.
Forward-Looking Statements
This release may contain forward-looking statements which involve known and unknown risks, uncertainties and other factors beyond management’s control which may cause the actual results, performance or achievements of Chromos (the “Companyâ€), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
To the extent possible, management implements strategies to reduce or mitigate the risks and uncertainties associated with the Company’s operations. Operating risks include (i) the continued availability of capital to finance the Company’s activities; (ii) the Company’s limited cash position, (iii) the ability to successfully obtain proof of the effectiveness of the Company’s technology (iv) the ability to complete and maintain corporate alliances, including the proposed CHR-1103 collaboration, relating to the development and commercialization of the Company’s technology; (v) the ability to obtain and enforce patent and other intellectual property protection for the Company’s technology; (vi) market acceptance of the Company’s technology; (vii) the competitive environment and impact of technological change; (viii) the Company’s ability to attract and retain employees to carry out its business plans; (ix) the timely development and commercialization of any technology or products that are contingent on the completion and maintenance of corporate alliances with third parties; (x) the demand for repayment of the outstanding notes by the note holders and (xi) regulatory approval of the conversion of the outstanding notes. Further details on Chromos’ operating risks can be found in the Company’s annual information form. The Company undertakes no obligation to revise forward-looking statements in light of future events.
For more information, please contact:
Jeff Charpentier, CA
Vice President and CFO
Tel: (604) 415-7132
e-mail: jcharpentier@chromos.com