Pacific Biometrics Completes $4 Million Debt Financing Loan

SEATTLE, Sept. 2 /PRNewswire-FirstCall/ -- Pacific Biometrics, Inc. , a leading provider of specialized reference laboratory and contract research services, today announced the Company's entry into a Loan and Security Agreement with Terry M. Giles, providing for a $4 million loan (the "Loan") to the Company. In connection with, and as required by the Loan, on August 31, 2009, the Company also repurchased 2,391,906 shares of common stock from certain stockholders at a price of $0.70 per share. These shares will be retired to the Company's treasury. The Company received net Loan proceeds of approximately $2,325,666, after payment for the stock repurchase but excluding legal and other expenses for the transaction. Also effective August 31, 2009, Mr. Giles resigned from the Company's Board of Directors.

The four-year Loan, which bears interest at a fixed rate of 12% per annum, provides for eight monthly interest-only payments, followed by 40 monthly payments comprised of interest plus the amortization of principal. The Company is also obligated to pay a quarterly finance fee of $12,000 to Mr. Giles during the term of the Loan. The Company has the right, at its sole discretion, to obtain an additional $500,000 loan from Mr. Giles during the first 12 months of the Loan.

"We believe this debt financing is in the best interest of our stockholders when compared with equity-based financing, for a number of reasons," continued Helm. "The Loan results in no dilution of our current stockholders, we issued no warrants to Mr. Giles, loan fees were modest, and there is no prepayment penalty. In addition, we were able to repurchase approximately 13% of our outstanding common stock at $0.70 per share, thereby improving the percentage ownership position of our remaining stockholders by approximately 14%. The reduction in number of shares outstanding also has the potential to increase the Company's future earnings per share."

The Company also announced that Mario Ehlers, M.D., Ph.D., has been appointed to PBI's Board of Directors to fill the vacancy created by Mr. Giles' resignation. Dr. Ehlers previously served as the Company's Chief Medical Officer (September 2002 to August 2008). Dr. Ehlers is currently Deputy Director of the Clinical Trials Group at the Immune Tolerance Network (ITN), a federally funded research organization affiliated with the University of California, San Francisco. ITN's drug development projects rely heavily on the discovery and implementation of novel biomarkers.

About Pacific Biometrics, Inc. (PBI)

Pacific Biomarkers, a wholly-owned subsidiary of PBI, focuses specifically on the emerging field of biomarker assay development and testing. Services include validating and performing ligand-binding assays for novel clinical biomarkers, immunogenicity testing, and multiplex testing.

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Pacific Biometrics, Inc.