LAB Research enters into $10 million equity line facility agreement

Agreement provides financial flexibility, allowing company to access capital at its discretion

    
    www.labresearch.com
    Toronto Stock Exchange Symbol: LRI
    

LAVAL, QC, June 28 /CNW Telbec/ - LAB Research Inc. ("LAB Research" or the "Company") (TSX: LRI), a Canadian-based global non-clinical contract research organization, today announced it has entered into an agreement providing for an Equity Line Facility (ELF) with Dutchess Opportunity Cayman Fund Ltd., a fund managed by Dutchess Capital Management, II LLC. Under the terms of the ELF, Dutchess has committed to provide up to $10 million of capital during the next two years, at LAB Research's discretion, through the subscription of newly issued common shares.

"This new equity line facility gives us a flexible and inexpensive access to capital to support our growth initiatives." said Luc Mainville, President and Chief Executive Officer of the Company. "By demonstrating access to capital and the sequential improvement of our financial performance we are sending a clear and positive message to our clients and financial stakeholders".

The Company can draw on Dutchess' commitment by sending draw down notices from time to time. Each draw down notice is subject to a maximum amount, as well as a minimum price, below which the Company will not issue shares to Dutchess. Subject to the applicable minimum price, the common shares will be issued at a predetermined discount of 3% to the prevailing share price. The Company is restricted from issuing shares under a draw down to the extent such shares would result in Dutchess and its affiliates owning more than 9.9% of the issued and outstanding shares of the Company. The maximum number of shares that the Company can issue under the agreement is limited to the lower of 13,177,686 of the Company common shares and 25% of the Company's issued and outstanding common shares at any given time.

The ELF remains subject to certain conditions precedent, including the filing of a base shelf prospectus with the Canadian securities authorities. The agreement can be terminated at any time by the Company without the payment of any additional fees.

In connection with the ELF, the Company will file a preliminary short form base shelf prospectus with the securities authorities in each of the provinces of Canada. This filing will allow the Company to qualify the shares issued under the ELF and make offerings of common shares, preferred shares, debt securities, warrants, units or combinations thereof for an amount of up to $25 million during the next 25 months.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

This news release is not for distribution to United States newswire services or for dissemination in the United States.

About Dutchess Capital

Dutchess Capital is an investment manager which provides creative financing for public companies. Founded in 2000, funds managed by Dutchess have made over $200 million in direct investments in companies throughout North America, Europe and Asia.

For almost a decade, Dutchess has been a global leader in Equity Line Facilities (ELFs) and has transacted in excess of $1.6 billion in such financings worldwide. The ELF is a flexible financing structure by which publicly traded companies can raise capital quickly, efficiently and with less dilution than most traditional offerings. For more information, please visit: www.dutchessopportunity.com, a fund managed by www.dutchesscapital.com.

About LAB Research Inc.:

LAB Research is a Canadian global non-clinical contract research organization that provides contract research services to the pharmaceutical, biotechnology, agro-chemical, petro-chemical and industrial markets. LAB Research supports the development of its customers' products from three state-of-the-art facilities located in Canada, Denmark and Hungary.

LAB Research's common shares trade on the TSX under the symbol "LRI", with 52.7 million common shares outstanding.

This news release contains certain forward-looking information that reflect the current views and/or expectations of LAB Research with respect to its performance, business and future events. Such information is subject to a number of risks, uncertainties and assumptions, which are contained in LAB Research's annual information form. Actual results and events may vary significantly. LAB Research specifically disclaims any obligation to update this forward-looking information, unless obligated to do so by applicable securities laws.

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For further information: visit LAB Research's website at www.labresearch.com, or contact: Luc Mainville, Chief Executive Officer, Tél.: [phone] (ext. 1206), [email protected]; Frédéric Dumais, Partner, Jasmin-Dumais Financial Communications, Tel: [phone], [email protected]