BLSI Boston Life Sciences (MM)

HOPKINTON, Mass., March 26 /PRNewswire-FirstCall/ -- Boston Life Sciences, Inc. (NASDAQ:BLSI) today announced that on March 22, 2007, it entered a into Convertible Promissory Note Purchase Agreement (the "Purchase Agreement"), with Robert L. Gipson, Thomas Gipson and Arthur Koenig, existing stockholders of the Company (collectively, the "Lenders"), pursuant to which the Company may borrow at any time prior to December 31, 2007, up to an aggregate principal amount of $15,000,000. Borrowings under the Purchase Agreement will be made pursuant to the issuance of unsecured promissory notes bearing interest at the rate of 5% per annum. The outstanding principal amount borrowed under the notes including any accrued interest thereon shall be due and payable upon the earliest to occur of: (i) December 31, 2010; and (ii) the date on which a Lender declares an event of default (as defined in the Purchase Agreement), the first of these events to occur referred to as the "Maturity Date". After December 31, 2007, and subject to applicable law, each Lender may elect to convert all or a portion of the outstanding principal and accrued interest under any outstanding notes (the "Total Converted Balance") held by such Lender into (i) shares of the Company's common stock at a conversion price of $2.50 per share or (ii) into the right to receive from the Company the following payments related to the Company's molecular imaging products: for each $1,000,000 of Total Converted Balance, (A) 2% of Pre- Commercial Income; plus (B) a royalty at a rate of 0.5% of Net Sales of Molecular Imaging Products (each as defined in the Purchase Agreement). Also, on March 22, 2007, the Company amended and restated its outstanding second amended and restated unsecured promissory note in favor of Robert L. Gipson and its collectively, the "Amended Notes"). The Amended Notes (i) eliminate all outstanding and accrued interest due and payable under the Amended Notes, (ii) do not bear interest and (iii) are mandatorily convertible into shares of the Company's common stock. On or after June 15, 2007, each of Messrs. Gipson and Gipson (collectively, the "Original Lenders") are required, subject to stockholder approval, to effect the conversion of all of the outstanding principal and accrued interest under the Amended Notes into shares of the Company's common stock at a conversion price of $2.50 per share. The Original Lender's will be prohibited from effecting a conversion pursuant to the Amended Notes if at the time of such conversion (i) the common stock issuable to such Original Lender, when taken together with all shares of common stock then held or otherwise beneficially owned by such Original Lender exceeds 19.9% of the total number of issued and outstanding shares of the Company's common stock immediately prior to such conversion, or (ii) the common stock issuable to such Original Lender, exceeds 19.9% of the total number of issued and outstanding shares of the Company's common stock immediately prior to such conversion, in each case unless and until the stockholders of the Company approve the conversion of all of the shares of common stock issuable thereunder. As of the date hereof, stockholder approval will be required prior to the conversion of the Amended Notes into shares of the Company's common stock. Kenneth Rice, the Company's Executive Vice President & Chief Financial Officer commented, "We are pleased to obtain this new financing. The $15 million loan will enable us to satisfy our obligations to BioAxone regarding our Cethrin(R) program in the near term and to continue to support our operations well into this year as we pursue our other fundraising activities. The conversion of our existing $10 million debt, if approved by our shareholders, will eliminate this debt from our balance sheet which otherwise becomes due and payable on June 30, 2007. We are grateful to the Gipsons and Mr. Koenig for their continued support of our mission and programs". According to a Schedule 13G/A filed with the Securities and Exchange Commission (the "SEC") on February 12, 2007, Robert L. Gipson beneficially owned approximately 18.7% of the outstanding common stock of the Company on December 31, 2006. Robert L. Gipson, who serves as a Senior Director of Ingalls & Snyder LLC and a General Partner of Ingalls and Snyder Value Partners, L.P., served as a director of the Company from June 15, 2004 until October 28, 2004. According to a Schedule 13G/A filed with the SEC on February 12, 2007, Thomas L. Gipson beneficially owned approximately 19.2% of the outstanding common stock of the Company on December 31, 2006. According to a Schedule 13G/A filed with the SEC on February 17, 2007, Arthur Koeing beneficially owned approximately 5.6% of the outstanding common stock of the Company on December 31, 2006. About Boston Life Sciences, Inc. Boston Life Sciences, Inc. (BLSI) is engaged in the research and clinical development of diagnostic and therapeutic products for central nervous system (CNS) disorders. ALTROPANE(R) molecular imaging agent is in Phase III clinical trials for the diagnosis of Parkinson's Disease (PD) and Phase II clinical trials for the diagnosis of Attention Deficit Hyperactivity Disorder (ADHD). Cethrin(R), a recombinant-protein-based drug designed to promote nerve repair after acute spinal cord injury, has reported positive interim results in a North American Phase I/IIa clinical trial. The company's research and pre- clinical CNS programs include Inosine for the treatment of spinal cord injury and stroke, a DAT blocker for the treatment of Parkinson's disease, and a second generation technetium-based molecular imaging agent for PD and ADHD. BLSI's current research collaborations include Harvard Medical School and Children's Hospital Boston. Safe Harbor The foregoing release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements regarding Boston Life Sciences' future expectations, beliefs, intentions, goals, strategies, plans or prospects regarding the future, including the development and commercialization of ALTROPANE and Cethrin, the prospects of the Company's CNS therapeutics program, the Company's strategies to develop and commercialize axon regeneration technologies and the breadth of the Company's technologies and intellectual property portfolio. Forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "could increase the likelihood," "estimate," "expect," "intend," "is planned," "may," "should," "will," "will enable," "would be expected," "look forward," "may provide," "would" or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 filed with the Securities and Exchange Commission under the section "Risk Factors," as well as other documents that may be filed by Boston Life Sciences from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, the Company's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. Boston Life Sciences is providing the information in this press release as of this date and assumes no obligations to update the information in this press release. Contact: Meredith Patin -- 508-497-2360 ext 239 Boston Life Sciences, Inc. DATASOURCE: Boston Life Sciences, Inc. CONTACT: Meredith Patin of Boston Life Sciences, Inc., +1-508-497-2360 ext 239, Web site: http://www.bostonlifesciences.com/

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