Cynapsus Therapeutics investor decision delays C$10 million placement

Investor opting to wait until phase 1 milestone is complete

By Jennifer Chiou and Devika Patel

New York, June 21 - Cynapsus Therapeutics Inc. said it received word that the lead investor in its previously announced C$10 million private placement of units has decided to delay its investment decision until after the company's phase 1 milestone is reached, which is expected to occur by the first quarter of 2012.

As a result, the previously signed term sheet with the investor is no longer in effect. The company is in discussions with other institutional investors who have expressed an interest in participating in the offering based on the terms outlined in the original term sheet. Summer Street Research Partners will continue to act as the agent.

When the plans for the placement were announced on May 25, the company said it would sell units of one common share and two half-share warrants at a price that is between C$0.80 and C$1.00 and equal to the lower of the arithmetic average of the prior 10-day volume-weighted average trading prices of the common shares on the date of the term sheet and the arithmetic average of the prior 10-day volume-weighted average trading prices of the common shares on the settlement date.

Each whole A warrant was to be exercisable at C$1.25 for five years and each whole B warrant at C$1.50 for a period equal to the lesser of five years and 30 days after the company announces it has completed its phase 1 milestone, the company's first healthy volunteer single ascending dose study of APL-130277, a sublingual thin film strip using Apomorphine as the active pharmaceutical ingredient.

Settlement was originally anticipated for June 25.

Proceeds were to be used for research and development of the APL-130277 drug candidate, working capital, debt repayment and general corporate purposes.

Toronto-based Cynapsus Therapeutics is a research company focused on discovering the therapeutic benefits of cannabis and on the development of cannabis-based pharmaceutical products.

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