BURNABY, BC, Oct. 20 /PRNewswire-FirstCall/ - Chromos Molecular Systems Inc. (“Chromos”) has entered into a bridge loan financing arrangement for $2,000,000 with a syndicate including Pender NDI Life Sciences (VCC) Inc., Pender Growth Fund (VCC) Inc., NeuroDiscovery Limited Partnership and Rix Professional Medical Corporation. The proceeds of the loan will be used to fund operations of Chromos as it seeks additional equity financing.
“This financing allows us to continue to maximize the potential we have recently shown in our cell line engineering business”, said Alistair Duncan, President and CEO of Chromos. “Additional equity financing will permit us to continue to develop our lead product, CHR-1103, towards an Investigational New Drug filing in the second half of 2007.”
Chromos has issued $2,000,000 of principal amount of secured promissory notes. The notes will, subject to regulatory approval, automatically convert into the type and class of securities of Chromos issued in connection with an equity financing that satisfies certain conditions at a conversion price equal to 90% of the issue price of such securities.
If not otherwise already converted, the noteholders may demand repayment of the notes together with any accrued interest on 10 days notice anytime after February 19, 2007. Otherwise, the principal is repayable at maturity on October 18, 2008. The notes will bear interest at a rate of 10% per annum calculated and paid quarterly in cash.
“We see this financing assisting the Company towards it’s strategic goals including building upon the significant progress being made in the cell line engineering business.” said Mr. David Barr, the CFO and Investment Manager of PenderFund Capital Management Ltd. “Recent achievements, including first in class productivity data and signing Y’s Therapeutics, Inc. as a new customer, provides Chromos with the foundation to build near term shareholder value by securing additional engineering cell lines contracts and licensing agreements for the manufacture of biopharmaceuticals including monoclonal antibodies.
Chromos’ current funds on hand, anticipated revenues from existing licensing contracts and funds available from the bridge loan financing are expected to be sufficient to fund its operations into the first quarter of 2007. There can be no assurance that additional financing will be available at all or on acceptable terms to permit Chromos’ current operations to continue. If Chromos is unsuccessful in raising additional financing it may be required to scale back or terminate certain or all of its operations.
About Chromos
Chromos is a biopharmaceutical company with two drug development programs focused on inflammatory diseases and thrombotic disorders. The Company’s lead program, CHR-1103, is a humanized monoclonal antibody being developed as a treatment for acute relapses associated with multiple sclerosis. 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 visit our website at www.chromos.com.
Risks and Uncertainties
Certain of the statements contained in this press release are forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Chromos 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 Chromos’ operations. Operating risks include (i) the continued availability of capital to finance Chromos’ activities; (ii) Chromos’ limited cash position, (iii) the ability to successfully obtain proof of the effectiveness of the Chromos’ technology (iv) the ability to complete and maintain corporate alliances relating to the development and commercialization of Chromos’ technology; (v) the ability to obtain and enforce patent and other intellectual property protection for Chromos’ technology; (vi) market acceptance of Chromos’ technology; (vii) the competitive environment and impact of technological change; (viii) Chromos’ 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 ability to complete an additional financing; and (xi) regulatory approval for the conversion of the notes. Further details on Chromos’ operating risks can be found in Chromos’ Quarterly and Annual Reports to Shareholders.
CONTACT: Jeff Charpentier, Vice President, Finance and CFO, Tel: (604) 415-7132, Email:jcharpentier@chromos.com, Website: www.chromos.com
Chromos Molecular Systems Inc.
CONTACT: Jeff Charpentier, Vice President, Finance and CFO, Tel: (604)415-7132, Email:jcharpentier@chromos.com, Website: www.chromos.com
