ENTL Entelos Regs

RNS Number:7265K
Entelos Inc.
28 December 2007


For immediate release                                           28 December 2007



                                  ENTELOS, Inc


                          ("Entelos" or "the Company")


            Entelos executes $6,500,000 debt facility with Imperium


Foster City, CA, December 28, 2007 - Entelos, Inc. (LSE: ENTL) announces that it
has entered into a debt financing agreement with Imperium Master Fund, LTD
("Imperium") in which Imperium will provide $6.5 million in total cash loan
proceeds to the Company. Entelos intends to use $1.5 million of the proceeds to
repay certain debt of Iconix Biosciences resulting from the acquisition by
Entelos of Iconix, and $5 million as long-term working capital.

Transaction details


The financing provides for Imperium to provide Entelos with $1.5 million under a
secured bridge note and $5 million under secured convertible debentures. At the
closing of the financing on December 21, 2007, the bridge note and the initial
debenture, and warrant, each described below, were issued by Entelos to
Imperium, and Entelos received a total of $4,423,887.90, representing the $4.5
million total proceeds from the bridge note and the initial debenture less
certain expenses of Imperium agreed to be paid by Entelos in connection with the
transaction.

The bridge note will mature 15 months from issuance. The principal amount of the
bridge note will accrete and compound each month at the rate of 0.833% per
month, such that the principal amount at maturity will be $1,698,843. The bridge
note may be repaid by the Company at any time at 101% of the outstanding
principal amount, including accreted principal, upon 30 days notice.

In connection with the bridge note, Entelos issued to Imperium a five year-term
warrant to purchase up to 943,576 shares of Entelos common stock at an exercise
price per share of $0.4501073 per share.

The convertible debenture totaling $5 million is available in two separate
tranches. At the closing, Imperium purchased the initial convertible debenture
from Entelos for an issuance purchase price of $3 million in principal amount,
which debenture will have a repayment amount of $3,314,139. On or before 9 April
2008, Imperium will purchase a $2 million principal amount convertible debenture
from Entelos, which will have a repayment amount of $2,209,426. The initial
principal amounts of the debentures will accrete and compound each month at the
rate of 0.833% per month for 12 months from their respective dates of issuance.
After one year, the outstanding principal amounts will accrue interest at 8% per
annum.

The initial and deferred convertible debentures will be identical In all
respects other than the issue and amortization dates, and will each mature 5
years from their respective issuance dates. They will amortize in 24 equal
monthly payments beginning 3 years from the date of their respective issuance.
If the debentures are partially converted, the monthly amortization payments
will be reduced proportionately. Entelos will not have the ability to redeem or
call either debenture prior to its maturity.

Imperium may call the debentures upon a change of control of Entelos, including
a sale of 50% or more of its assets or a merger in which the pre-merger Entelos
stockholders do not hold at least 75% of the surviving entity, and certain other
mergers of Entelos, or an event of default by Entelos under the debentures. In
the event of such a call, Entelos would be required to repay to Imperium the
greater of (a) 120% of the unpaid principal amount of the debentures being
redeemed plus all accrued and unpaid interest thereon, or (b) an amount
calculated pursuant a formula based upon Entelos' stock price at the time of
such call. Imperium also may call the bridge note upon a change of control of
Entelos or an event of default by Entelos; in such case Entelos would be
required to repay 101% of the then-outstanding principal plus accrued interest
and default interest, under the bridge note.

Payment of the note and the debentures is secured by a security interest in the
assets of Entelos, except for certain excluded intellectual property assets.

The principal of the initial and deferred convertible debentures will be
convertible at any time at the option of the holder into common stock of Entelos
at a price per share of $0.4688618 per share, a price which was set by the
parties at the time of signing of the financing agreements. Entelos will not
have the ability to require or force Imperium to convert either debenture,
provide that the holder will not convert if such conversion would result in the
holder holding more than 9.9% of Entelos' then-outstanding shares of common
stock.

Entelos is obligated to use its commercially reasonable best efforts to cause
the shares issued on any conversion of the debentures and upon any exercise of
the warrant to be admitted to trading on AIM as soon as practicable, but in no
event more than ten (10) days after the issuance of the relevant shares.

All of the shares to be issued under any conversion of the debentures and any
exercise of the warrant will be subject to an orderly market agreement to be
executed by Imperium upon issuance of such shares, which provides that, subject
to certain limited exemptions, the new shares cannot be disposed of except
through the Company's broker and nominated advisor, so as to ensure an orderly
market for the issued share capital of the Company.



For further information please contact:

Entelos, Inc.                                             Tel: +1 650 572 5400

Alan Blazei, CFO

Jill Fujisaki, VP, Investor
Relations

Evolution Securities
Tim Worlledge, Director                               Tel +44 (0) 20 7071 4300
Bobbie Hilliam, Associate Director

Buchanan Communications
Lisa Baderoon                                         Tel +44 (0) 20 7466 5000

Mary-Jane Johnson


Notes for Editors

About Entelos

Entelos, Inc. (www.entelos.com) is a US-based life sciences company applying
next-generation predictive technologies to revolutionize the way medicines are
discovered, developed, and utilized. The Company leverages its proprietary in
silico disease models, "virtual patients", and toxicology reference systems to
develop safer and more effective drugs and support pharmaceutical R&D and
commercialization. In addition to internal drug programs in rheumatoid arthritis
and women's health, Entelos provides customized technology and research services
to global pharmaceutical and health-care companies in cardiovascular diseases,
asthma, obesity, diabetes, hematopoeisis (anemia), cholesterol metabolism, and
skin sensitization. The company is also developing a model in oncology and is
collaborating with the FDA to build a model of drug-induced liver toxicity.
Entelos also offers cost-effective drug development capabilities through its
strategic alliance with India-based Jubilant Biosys.


SV 2324463 v2
12/28/07 7:26 AM (07482.0002)



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