Osta Biotechnologies Announces $2.5 Million Private Placement Led by Sherbrooke Street Capital

THE ISSUE OF THIS PRESS RELEASE IS LIMITED TO CANADA ONLY. THIS PRESS RELEASE
SHOULD NOT BE ISSUED IN THE UNITED STATES THROUGH U.S. NEWS WIRE AGENCIES.


Osta Biotechnologies Inc. (TSX VENTURE:OBI) is pleased to announce that it has
engaged Sherbrooke Street Capital Inc. (SSC) as its exclusive agent for a
best-efforts private placement of a maximum of 17,857,143 units at a price of
$0.14 per unit, for maximum gross proceeds to Osta of $2.5 million. Each unit
will consist of one common share and one-half of a common share purchase
warrant. Each whole warrant will entitle the holder to acquire one additional
common share at a price of $0.22 for a period of two years from the closing of
the private placement. The issue price of $0.14 was negotiated by Osta and (SSC)
in the context of the market.


The units will be sold to "accredited investors" in Canada and the United States
on a prospectus-exempt basis. Closing of a first tranche of the private
placement is expected to occur shortly.


In connection with the private placement, (SSC) will receive a fee equal to up
to 7% of the gross proceeds of the offering. In addition, Osta will issue a
non-transferable broker warrant to (SSC), entitling it to purchase a number of
common shares of Osta equal to up to 7% of the number of common shares sold in
the private placement. The broker warrant will be exercisable at a price of
$0.22 per common share for a period of two years from the closing of the private
placement. 


The private placement is subject to regulatory approval, including that of the
TSX Venture Exchange, and the signing of a definitive Agency Agreement between
Osta and (SSC).


The securities issued in connection with the private placement will be subject
to a four-month hold period under the policies of the TSX Venture Exchange and
applicable securities legislation.


The net proceeds from the private placement will be used by Osta for research
and development, as well as for working capital and general corporate purposes. 


About Osta Biotechnologies Inc. 

Osta is a biopharmaceutical company listed on the TSX Venture Exchange currently
focusing on developing therapeutics for Cancer and Alzheimer's disease.