Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

March 30, 2006 16:42 ET

Mistral Pharma Closes a First Tranche of its Previously Announced Private Placement

MONTREAL, QUEBEC--(CCNMatthews - March 30, 2006) - Mistral Pharma Inc. ("Mistral") (TSX VENTURE:MIP) is pleased to announce today that is has closed a first tranche of its private placement announced by way of press release on March 15, 2006 with three investors, Dynex Capital Limited Partnership ("Dynex"), Palos Capital Pool LP and Grovest Investments Inc., an affiliate of Notre-Dame Capital Inc. ("Notre-Dame"), for gross proceeds of $500,000. The 10,000,000 common shares issued at a price of $0.05 per share pursuant to this first tranche of the private placement have a four-month resale restriction which expires on July 29, 2006. Dynex, an insider of Mistral, has purchased 4,000,000 common shares of the 10,000,000 common shares issued pursuant to the first tranche of the private placement, which raises its shareholding to an aggregate of 28,012,738 common shares of Mistral, being 36,8% of the currently issued and outstanding shares of Mistral (37% before the closing of the first tranche of the private placement).

Notre-Dame, the exclusive agent for the private placement, has received, as compensation for the first tranche, a cash commission of $ 35,000 and 1,000,000 common share purchase warrants exercisable at a price of $ 0.10 per share until March 29, 2008.

The net proceeds from the private placement will be used for general working capital purposes.

As a result of this financing, Oxford Finance Corporation has released an amount of US $ 100,000 from escrow as part of the loan agreement announced on May 31, 2005.

About Mistral Pharma Inc.

Mistral is a pharmaceutical product oriented drug delivery company and its first branded product MIST-B01 showed positive results at its first pilot clinical trial. Mistral is also working on three control delivery generic products. Mistral positions itself as a development partner for generic and specialty pharmaceutical companies. Additional information about Mistral can be obtained on Mistral's website at www.mistralpharma.com

Forward-looking Statements

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Mistral Pharma. These statements are based on assumptions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for Mistral Pharma's products, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Mistral Pharma Inc.
    Bertrand F. Bolduc, B.Pharm., MBA
    President & Chief Executive Officer
    (514) 920-0909, ext. 24
    bbolduc@mistralpharma.com
    or
    Mistral Pharma Inc.
    Alain Provencher, CA
    Vice-president, Finance & Chief Financial Officer
    (514) 920-0909, ext. 22
    aprovencher@mistralpharma.com