Synbiotics Corporation Restructuring of Debt.

SAN DIEGO -- Synbiotics Corporation (Pink Sheets:SBIO) today announced that it restructured its unsecured contractual obligations which arose in conjunction with the 1998 patent litigation settlement with Barnes-Jewish Hospital ("BJH"), and also restructured $500,000 of its bank loan.

The unsecured contractual obligations to BJH consisted of $1,000,000 due in July 2005, and $1,500,000 due in July 2006. The Company did not make the July 2005 payment when it came due, and the $1,000,000 obligation began to bear interest at 10.5% per annum. The nonpayment also gave BJH the right to terminate the settlement agreement; if they had done so, the $1,500,000 would have become immediately due, and the entire $2,500,000 would have begun bearing interest at 10.5%. In August 2005, the Company paid BJH $50,000 of principal in cash against the July 2005 contractual obligation, leaving a total outstanding principal balance immediately prior to the restructuring of $2,450,000.

In conjunction with the restructuring, the Company issued an unsecured promissory note to BJH in the amount of $600,000 (the "BJH Note") for a portion of the July 2005 contractual obligation, and BJH sold the remaining July 2005 contractual obligation principal balance of $350,000 and the $1,500,000 July 2006 contractual obligation to Remington Capital, LLC ("Remington"). The Company simultaneously issued an unsecured promissory note to Remington in the amount of $350,000 (the "Remington Note") in exchange for the transferred $350,000 obligation. These transfers were deemed effective as of July 29, 2005, thereby eliminating any payment default and any accrual of interest at 10.5%.

Pursuant to the BJH Note, the Company made an immediate principal payment of $100,000 to BJH on August 30, 2005, and the remaining $500,000 of the BJH Note bears interest at a fixed rate of 6% per annum, and is payable in blended quarterly installments of principal and interest, from October 28, 2005 to January 28, 2008, of $54,000. The Remington Note bears interest at a fixed rate of 6% per annum, and is payable in quarterly payments of interest only, from October 28, 2005 to January 28, 2008, of $5,000, and blended quarterly installments of principal and interest, from April 28, 2008 to January 28, 2015, of $15,000. The $1,500,000 July 2006 contractual obligation sold by BJH to Remington remains unchanged and has a stated due date of July 2006. However, Remington has agreed not to receive or demand any payments of principal or to apply any default interest rate on the July 2006 obligation before the earlier of January 28, 2008 or when the BJH Note is paid in full. The July 2006 contractual obligation bears no interest before July 2006.

On August 30, 2005, in an unrelated transaction, Comerica Bank sold to Jerry L. Ruyan the remaining $500,000 of principal under a secured promissory note issued by the Company. As part of this transaction, Comerica Bank assigned to Mr. Ruyan its entire remaining interest in the Credit Agreement and related security documents pertaining to the Company's bank lending relationship. The Company simultaneously restructured this $500,000 obligation by amending its credit agreement and issuing a revised promissory note to Mr. Ruyan with a principal amount of $500,000 (the "Ruyan Note"). The Ruyan Note bears interest at a fixed rate of 7.25% per annum, and is payable in blended monthly installments of principal and interest, from September 1, 2005 to August 1, 2011, of $9,000. The Ruyan Note is secured by substantially all of the Company's assets.

Remington is indirectly owned 100% by Jerry L. Ruyan, Thomas A. Donelan and Christopher P. Hendy (collectively "Redwood "). Redwood is the Company's controlling shareholder, controlling 48% of the Company's common stock currently outstanding and 87% of the Company's Series C preferred stock currently outstanding (which in total represents 58% of the voting power of the Company's currently outstanding voting securities). Mr. Donelan and Mr. Hendy constitute two of the three members of the Company's board of directors.

With the exception of historical matters, the issues discussed in this press release are forward-looking statements that are subject to the risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements, including competition from larger companies, reliance on third-party manufacturers and distributors, possible technology improvements by others, the effects of Synbiotics Corporation's announced intention to "go private" and other risks set forth in Synbiotics Corporation's filings with the Securities and Exchange Commission, particularly Form 10-K for the year ended December 31, 2004 and Form 10-Q for the quarter ended June 30, 2005. These forward-looking statements represent Synbiotics Corporation's judgment as of the date of the release. Synbiotics Corporation disclaims, however, any intent or obligation to update these forward-looking statements.