Lorus Therapeutics Inc.

TSX : LOR


Lorus Therapeutics Inc.

September 26, 2013 18:00 ET

Lorus Therapeutics Closes Private Placement

TORONTO, ONTARIO--(Marketwired - Sept. 26, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Lorus Therapeutics Inc. (TSX:LOR) ("Lorus" or the "Company") a biopharmaceutical company specializing in the discovery, research and development of pharmaceutical products announces that it has completed a private placement of convertible promissory notes (the "Notes") for aggregate gross proceeds of $600,000 (the "Private Placement"). The proceeds of the Private Placement will be used to maintain the current research and development activities of the Company while the Special Committee composed of independent directors of the Company continues to review strategic alternatives available to the Company. Pursuant to this strategic review, which was announced by the Company on September 12, 2013, the Special Committee is currently analyzing all options in order to secure the long-term financial and operational sustainability of Lorus, with a view to enhancing shareholder value.

The Notes bear interest at a rate of 10% per annum, payable quarterly and are due September 26, 2015, subject to the right of the Company to repay the Notes at any time. The principal amount of each Note is convertible at the option of the holder thereof into common shares of the Company at a conversion price of $0.30 per common share. The Notes are subject to a statutory hold period of four months from the date of issuance in accordance with applicable securities law.

Certain insiders of the Company, being Sprott Asset Management LP and Mr. Sheldon Inwentash, holders of more than 10% of the Common Shares of the Company, participated in the Private Placement and purchased Notes in the aggregate amount of $262,500. Participation of insiders of the Company in the Private Placement constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Private Placement is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of securities being issued to insiders nor the consideration being paid by insiders will exceed 25% of the Company's market capitalization. The Company did not file a material change report 21 days prior to the closing of the Private Placement as the details of the participation of insiders of the Company had not been confirmed at that time.

The maximum number of common shares issuable in connection with the Private Placement, assuming the conversion of the total principal amount of the Notes, is 2,000,000 common shares. The Toronto Stock Exchange has conditionally approved the issuance of such common shares.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any of these securities in any jurisdiction.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Canadian and U.S. securities laws. Such statements include, but are not limited to, statements relating to the private placement and the purposes for which the proceeds from the private placement will be used, our ability to complete the private placement, our ability to obtain the necessary shareholder and TSX approvals, that the TSX will accept written evidence of shareholder approval and not require a shareholder meeting and other statements including words such as "continue", "expect", "intend", "will", "should", "would", "may", and other similar expressions. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements described in this press release. Such expressed or implied risk factors and assumptions could include, among others: the actual proceeds of the private placement; our use of proceeds from the private placement; our ability to complete the private placement, our ability to obtain the necessary shareholder and TSX approvals, that the TSX will accept written evidence of shareholder approval and not require a shareholder meeting, our ability to obtain the capital required for research and operations; the possible adverse effect of continuing negative market conditions; our ability to continue as a going concern, and other risks detailed from time-to-time in our ongoing quarterly filings, annual information forms, annual reports and annual filings with Canadian securities regulators and the United States Securities and Exchange Commission.

Should one or more of these risks or uncertainties materialize, or should the assumptions set out in the section entitled "Risk Factors" in our filings with Canadian securities regulators and the United States Securities and Exchange Commission underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this press release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. We cannot assure you that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

Lorus Therapeutics Inc.'s recent press releases are available through its website at www.lorusthera.com. For Lorus' regulatory filings on SEDAR, please go to www.sedar.com.

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