Response Biomedical Announces $5.5 Million Financing

Each whole warrant will entitle the holder thereof to purchase one common share of the Company at a price of $0.25 per share for a period of 36 months from the closing date of the offering. As a percentage of the total number of issued and outstanding common shares prior to this transaction, the common shares being issued in this transaction represent approximately 22.5% (excluding any warrant shares) and approximately 33% (including all warrant shares).

Under the rules of the Toronto Stock Exchange (TSX), the private placement financing would ordinarily require that the Company seek and obtain shareholder approval prior to completion of the transaction as a result of the fact that the transaction will result in the issuance of common shares representing more than 25% of the number of common shares issued prior to closing. However, pursuant to Section 604(3) of the TSX Company Manual, the Company will be making an application to the TSX for an exemption from this requirement on the basis that the Company is in serious financial difficulty, the transaction is designed to improve the Company's financial situation and the transaction is reasonable in the circumstances. An independent directors' committee has determined that the Company meets the requirements of this exemption. As a consequence of relying upon this financial hardship exemption, the TSX has informed the Company that it will, in the ordinary course, commence a delisting review. The Company believes that, upon completion of the offering, it will be in compliance with TSX listing requirements.

Certain insiders of the Company, comprised of some members of the Board and senior management, are expected to participate in the offering for an aggregate of approximately 20% of the offering. The common shares and warrant shares potentially issuable to such insiders represent approximately 6.5% of the total number of issued and outstanding shares prior to completion of the transaction. Completion of the transaction will not materially affect control of the Company.

Completion of the offering is subject to a number of customary closing conditions, and receipt of all necessary regulatory approvals, including the approval of the TSX.

"As is clear from our financial disclosures and as we discussed at the annual shareholder meeting, we have been in need of additional funding and for the last few months we have been working diligently to secure it. Although we have been historically successful in turning to the equity markets to finance our operations, the current state of the financial markets has caused unprecedented challenges for many companies, including Response Biomedical. This has been especially frustrating because we have made such great strides in our business. This current financing is critical to our Company's ability to continue as a going concern and to provide the means to move our enviable breadth of point-of-care (POC) products toward an expanded and market leading global presence," said S. Wayne Kay, Chief Executive Officer. "3M is preparing for the launch of our Flu A+B test in the U.S. beginning later this month, and has invested to capture a meaningful share of this growing market. Roche is actively preparing for the launch of the cardiovascular test line in the first quarter of 2009. We are very excited about the financial commitments made by both companies. 3M has taken receipt during the third quarter of RAMP Readers and Flu test kits that are needed to prime the front-end of the flu distribution channel. We expect to ship against firm product orders from 3M throughout the next two quarters. As we approach the first quarter of 2009, current cumulative firm product orders and test development program funding from 3M and Roche is approximately $4.0 million. This and the net proceeds of the offering are expected to carry us through the first quarter of 2009."

"We have achieved many strategic goals recently that we believe have positioned our company for success and the completion of this financing will permit us to move forward as we focus on our primary goal of successfully commercializing our two lead product candidates, our POC Flu A+B test and our POC NT-proBNP test as an aid to the rapid diagnosis of heart failure," continued Mr. Kay. "Importantly, in addition to the infectious diseases and cardiovascular test areas, we are also evaluating additional large market opportunities for RAMP POC system."

Haywood Securities Inc. will be paid a commission of seven percent of the gross proceeds of the offering, paid in cash on the closing date. The securities issued under the offering will have a hold period under Canadian law of four months from the closing.

Net proceeds of the offering will be used to manufacture product for the launch of the flu test partnered with 3M Medical and the cardiovascular line partnered with Roche Diagnostics, as well as the day-to-day operations of the Company. -- www.cnxmarketlink.com