Ondine Biopharma Corporation

Ondine Biopharma Corporation

June 29, 2009 09:03 ET

Ondine Completes $0.9 Million Private Placement

Placements for $2.7 Million Completed in the Past Month

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2009) -


Ondine Biopharma Corporation (the "Company" or "Ondine") (TSX:OBP)(AIM:OBP), a medical technology company developing photodisinfection based products, today announced it has completed a C$0.92 million private placement (the "Placement"), consisting of 8,395,275 units issued at a price of $0.11 per unit (a "Unit") to qualified investors pursuant to applicable exemptions. Each Unit consists of one common share of the Company and one share purchase warrant (a "Warrant") entitling the holder to acquire one common share of the Company at an exercise price of $0.15 until June 26, 2011.

The proceeds from this financing will be used for the continued research and development of the Company's platform photodisinfection technology, including the Company's MRSAid™ nasal decolonization system, and for working capital and general corporate purposes. In the past month Ondine has raised gross proceeds in excess of $2.7 million taking together this Placement and the $1.78 million private placement share exchange with Grafton Resources Investments Ltd. that the Company closed on June 2, 2009.

Ms. Carolyn Cross, Ondine's Chairman and CEO and therefore an insider of the Company, participated in the Placement, purchasing 1,959,091 Units (23.3%) of the total units subscribed for in the Placement. Subsequent to the closing of the Placement, Ms. Cross and members of her immediate family have a beneficial interest in an aggregate of 15,387,799 common shares, which represents 16.9% of the Company's 93,225,869 currently issued and outstanding common shares (18.6% assuming exercise of the Warrants issued to Ms. Cross in the Placement). The Company has repaid to Ms. Cross $400,000 in full settlement of her interest free loan to Ondine.

The sale of the Units to an insider constitutes a "related party transaction" pursuant to securities regulation. However, the transaction is exempt from applicable formal valuation and minority shareholder approval requirements as neither the fair market value of the Units nor the consideration paid by such insider for the Units exceeds 25% of the market capitalization of the Company. The material change report in respect of this transaction was not filed at least 21 days in advance of the closing of the Placement as the Company was in need of the funds. The Company considers the shortened timeframe to be reasonable under these circumstances. Ms. Cross' participation in the Placement constitutes a related party transaction for the purposes of the AIM Rules for Companies (the "Related Party Transaction"). Accordingly, the directors of the Company (excluding Ms. Cross), having consulted with its nominated adviser, consider the terms of the Related Party Transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

An application has been made for the 8,395,275 common shares issued under the Placement to be admitted to trading on AIM, and admission is expected to occur on or about July 2, 2009.

The common shares issued as part of the Units and the common shares issuable on exercise of the Warrants are subject to a hold period in Canada expiring October 27, 2009.

This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Ondine Biopharma Corporation

Ondine Biopharma develops non-antibiotic therapies to treat a broad spectrum of bacterial, fungal and viral infections. The Company is focused on developing leading-edge products that utilize its patented light-activated technology to kill microbes without encouraging the formation and spread of antibiotic resistance. Ondine is a publicly-traded company listed on the Toronto and AIM stock exchanges under the symbol OBP. Ondine is headquartered in Vancouver, British Columbia, Canada, and has a research and development facility in Bothell, Washington, USA and an international office in St. Michael, Barbados. For additional information, please visit the Company's website at: www.ondinebiopharma.com.

Forward-Looking Statements:

Certain statements contained in this release containing words like "believe", "intend", "may", "expect" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products and other risk factors identified from time to time in the Company's public filings.

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

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