LSL Pharma closes $2.27-million private placement

Mr. Francois Roberge reports LSL PHARMA GROUP CLOSES A $2.275M NON-BROKERED PRIVATE PLACEMENT LSL PHARMA GROUP INC. has closed a non-brokered private placement for gross proceeds of $2,275,000. Pursuant to the financing, the corporation has issued 5,687,500 units at a price of 40 cents per unit. Each unit consists of one Class A share of the corporation and one common share purchase warrant. Each warrant entitles the holder, subject to adjustments in certain cases, to purchase one common share at a price of 70 cents for a period of 24 months following the closing of the financing. The proceeds of the financing will be used (i) to accelerate the development of the eye-care product portfolio for the Canadian and international markets, (ii) to complete the installation and validation of the second ointment production line at Steri-Med, (ii) to acquire additional manufacturing equipment for the CMO division to support increased demand, (iv) for potential M&A (merger and acquisition) opportunities, and (v) for general working capital purposes. In connection with this financing, LSL Pharma paid to a finder dealing at arm's length with the corporation, finders' fees for a total of $23,750 in cash and issued 59,375 finders' warrants. Each finder's warrant entitles the holder to purchase one common share at a price of 70 cents for a period of 12 months following the closing of the financing. Each unit, common share, warrant, warrant share, finder's warrant and common share issued upon the exercise of the finder's warrant will be subject to a four-month hold period under the applicable securities laws. The financing is subject to the regulatory approval of the TSX Venture Exchange. Francois Roberge, president and chief executive officer, and Mario Paradis, a director of the corporation, have subscribed for 187,500 units and 125,000 units, respectively, pursuant to the financing. The board of directors of the corporation has considered the issuance of the units to the insiders as a related party transaction subject to Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions and has unanimously approved the issuance, with the abstention of the insiders. This transaction is exempt from the formal valuation and minority shareholder approval requirements of Regulation 61-101 as the corporation is listed on the TSX Venture Exchange and the fair market value of any security issued to, or the consideration paid, does not exceed 25 per cent of the corporation's market capitalization. LSL Pharma did not file a material change report pertaining to the insider's interest more than 21 days prior to the date of the closing of the financing, as such interest was not determined at that time. The board members of the corporation, but excluding insiders, reviewed its financial conditions and the state of the financial market and unanimously determined that the terms and conditions of the financing, including the issuance to the insider, were fair and equitable and represented the best strategic option available. In addition, neither the corporation nor the insider have knowledge of any material information concerning the corporation or its securities that has not been generally disclosed. About LSL Pharma Group Inc. LSL Pharma Group is a Canadian integrated pharmaceutical company specializing in the development, manufacturing and commercialization of high-quality sterile ophthalmic pharmaceutical products, as well as pharmaceutical, cosmetic and natural health products in solid, semi-solid and liquid dosage forms. Companies forming part of LSL Pharma Group include Steri-Med Pharma Inc., LSL Laboratory Inc., Virage Sante Inc. and Dermolab Pharma Ltd.