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Miles
Km80.5

   

Isolagen, Inc. (ILE) Announces Receipt of Interim Order from Bankruptcy Court Approving DIP Motion


6/22/2009 10:28:52 AM

EXTON, Pa., June 19 /PRNewswire/ -- Isolagen(TM), Inc. announced on June 16, 2009, that the Company and Isolagen Technologies, Inc., the Company's wholly owned subsidiary, each filed a voluntary petition for reorganization under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington. The Company and Isolagen Technologies intend to continue to manage and operate their business as debtors in possession pursuant to the Bankruptcy Code.

On June 17, 2009, the Bankruptcy Court approved a motion for an interim order for debtor-in-possession financing with certain lenders (the "DIP Lenders") composed of a loan facility in an aggregate principal amount of up to $2,750,000 (subject to increase at the discretion of the DIP Lenders) (the "DIP Facility"), of which up to $1,000,000 will be available to the Debtors from the date of the interim order until the entry of a final order. The proceeds from the DIP Facility will be used, among other things, to provide the Debtors with working capital for general corporate purposes and for expenses associated with the bankruptcy proceeding. The DIP Facility will accrue interest at the rate of 10% per annum (with a default rate of 18%) and will mature on the date a plan of reorganization is approved by the Bankruptcy Court, subject to acceleration upon certain event of defaults set forth in the DIP Facility agreement. The maturity date of the DIP Facility will also accelerate if a final order of the Bankruptcy Court has not been entered within 30 days of the interim order date. As indicated in the interim order, through the final DIP order process the DIP Lenders will seek "priming" liens to the extent that any parties possess secured claims against the Debtors.

In connection with the Debtor's initial bankruptcy filing, the Debtors have entered into a restructuring agreement with (a) a large majority of the holders (the "Note Holders") of the Company's 3.5% convertible subordinated notes (the "Notes"), which were issued in November 2004, (b) the holders of approximately $500,000 of secured notes issued in April 2009 (the "Pre-Petition Lenders"), and (c) the agent for the DIP Lenders. The Company filed a Form 8-K on June 19, 2009 disclosing the material terms of the Restructuring Agreement. The restructuring plan is subject to the submission and approval of a plan of reorganization for the Company, and the occurrence of the effective date of any such plan. The effective date will be subject to the conditions set forth in the plan, and as outlined in a disclosure statement which will be prepared by the Company and disseminated to all parties who are entitled to vote on the plan. It is anticipated that the effective date of the plan will be conditioned upon the provision of exit financing in an amount not to exceed $2.0 million to be raised upon exit from bankruptcy.

Any parties wishing to object to the Company's entry into the DIP Facility must file an objection on or before June 29, 2009 at 4:00 p.m. (Eastern Time). A hearing on "final" approval of the DIP Facility will be held on July 6, 2009 at 10:30 a.m.

About Isolagen, Inc.

Isolagen(TM), Inc. is an aesthetic and therapeutic company committed to developing and commercializing scientific advances and innovative technologies. The company's technology platform includes the Isolagen Process(TM), a cell processing system for skin and tissue rejuvenation which is currently in development. Isolagen also commercializes a scientifically-advanced line of skincare systems through its majority-owned subsidiary, Agera(R) Laboratories, Inc. For additional information, please visit www.isolagen.com.

Isolagen Forward Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this press release, include, without limitation, the approval of the interim order by the Bankruptcy Court and the timely occurrence of the final hearing date. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, as updated in "Item 1A. Risk Factors" in the Company's Quarterly Reports on Form 10-Q filed since the annual report. We operate in a highly competitive and rapidly changing environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statements. Readers are also urged to carefully review and consider the other various disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, as well as other public filings with the SEC since such date.

CONTACT: Sue White, +1-484-713-6023

Web site: http://www.isolagen.com/



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