Raptor Pharmaceuticals raises funds to execute its corporate strategy

Aug 25 2009

Raptor Pharmaceuticals Corp. ("Raptor" or the "Company") (OTC Bulletin Board: RPTP), today announced that it has raised an aggregate $5 million of gross proceeds through a private placement of units ("August 2009 Private Placement") and through the exercise of warrants (the "Warrant Exchange") originally issued in connection with its May/June 2008 private placement. The August 2009 Private Placement resulted in gross proceeds to Raptor of approximately $2.4 million or $2.3 million after placement agent fees and other expenses. The Warrant Exchange raised approximately $2.6 million in net proceeds for Raptor.

Raptor intends to use the net proceeds to fund programs for its late-stage drug product candidates and to execute its corporate strategy, including closing the proposed merger with TorreyPines Therapeutics, Inc. ("TorreyPines") (Nasdaq: TPTX), which is expected to close in the fourth quarter of 2009.

The August 2009 Private Placement consisted of the sale of an aggregate 7,456,250 units, with each unit priced at $0.32. Each unit consists of one share of the Company's common stock and a two-year warrant to purchase one-half of one share of the Company's common stock. The units sold represent an aggregate of 7,456,250 shares of the Company's common stock and warrants ("Warrants") to purchase up to 3,728,125 shares of the Company's common stock. The Warrants are exercisable for up to two years from the date of issuance at $0.60 per share and $0.75 per share during the first and second years following issuance, respectively.

The Warrant Exchange commenced in April 2009, when investors from Raptor's May/June 2008 private placement were offered the right to exchange outstanding warrants (the "Original Warrants") and subscribe for New Warrants (the "New Warrants") to purchase an aggregate of 10 million shares of common stock, or the same number of shares underlying the outstanding Original Warrants. New Warrants were priced at $0.30 per share, reflecting the market price of one share of Raptor common stock on April 29, 2009, compared to the Original Warrants, exercisable at $0.75 and $0.90 per share during the first and second years following issuance, respectively. Original Warrants could be exchanged for New Warrants on the condition that investors exercised the New Warrants on or before July 17, 2009. Except for the exercise price, the terms of the New and Original Warrants are identical. Pursuant to the Warrant Exchange, New Warrants were exercised for an aggregate amount of 8,715,000 shares of the Company's common stock, which resulted in aggregate gross proceeds of $2,614,500 and aggregate net proceeds of $2,587,852.

Neither the common stock nor Warrants offered and sold in the August 2009 Private Placement, the common stock issuable upon exercise of the Warrants sold in the August 2009 Private Placement, nor the New Warrants or the common stock issued upon the exercise of the New Warrants have been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission and with applicable state regulatory authorities or an exemption from the applicable registration requirements.