Calypte Biomedical Raises up to $1.1 Million in Debenture Issuance.

Business Editors, Health/Medical Writers

ALAMEDA, Calif.--(BUSINESS WIRE)--Jan. 22, 2001

Calypte Biomedical Corporation (NASDAQ: CALY) announced today that it has signed an agreement to place up to $1.1 million in convertible short-term debentures.

Calypte expects to issue the first debenture as soon as practicable and may issue the second debenture, at its sole discretion, 30 days following the initial issuance. If Calypte issues both debentures, it expects to receive aggregate net proceeds under the two debentures of approximately $925,000.

In connection with this financing arrangement, on January 19, 2001, Calypte withdrew a registration statement that it had filed with the SEC for a $25 million equity line of credit. Calypte expects to refile a new registration statement with respect to the equity line as soon as practicable.

"We are pleased to have obtained this kind of debenture financing," said Nancy Katz, Calypte's President, CEO and CFO. "It provides us with additional time to investigate alternative financing arrangements that will support our current and future operating plans."

Under this arrangement, Calypte has the right to issue two convertible debentures to the debentureholder with a principal amount of $550,000 each at a 6% interest rate. Each debenture will be issued at an original issue discount of 9.1% and will mature 90 days from the date of issue. Under the terms of the debentures, the debentureholder can elect at any time prior to maturity to convert the balance outstanding on the debentures into shares of Calypte common stock at a fixed price that represents a 5% discount to the average trading price of the shares for the 10 trading days preceding the issuance of each debenture. If Calypte chooses not to redeem the debentures upon maturity, the conversion discount to the debentureholder increases to 15% of the average low bid price for Calypte common stock for any three of the 22 trading days prior to the date of conversion. Calypte will also issue a warrant for 200,000 shares of common stock at an exercise price of $1.50 with the first debenture. Calypte is obligated to file a registration statement for the shares issuable upon conversion of the debentures and warrants with the Securities and Exchange Commission (SEC) prior to April 15, 2001.

Calypte Biomedical Corporation (NASDAQ: CALY), headquartered in Alameda, California, is a public healthcare company dedicated to the development and commercialization of urine-based diagnostic products and services for Human Immunodeficiency Virus Type 1 (HIV-1), sexually transmitted diseases and other chronic illnesses. Calypte's tests include the screening EIA and supplemental Western Blot tests, the only two FDA-licensed HIV-1 antibody tests that can be used on urine samples. The company believes that accurate, non-invasive urine-based testing methods for HIV and other chronic diseases may make important contributions to public health by helping to foster an environment in which testing may be done safely, economically, and painlessly. Calypte sells its products in over 40 countries worldwide through international distributors and strategic partners.

Statements in this press release that are not historical facts are forward-looking statements, including statements regarding insurance company adoption of the urine testing products and statements regarding marketing and distribution arrangements and plans. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, the Company's ability, directly or through third parties, to successfully manufacture and market the urine testing products and the ability of the Company to continue to finance its operations and to enter into distribution and marketing arrangements. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in the company's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors which may impact the Company's success are more fully disclosed in the Company's most public filings with the U.S. Securities and Exchange Commission.