4 December 2008: NorDiag`s Board of Directors decided today to propose a rights issue of NOK 25-60 million [...]

4 December 2008: NorDiag`s Board of Directors decided today to propose a rights issue of NOK 25-60 million by the issuance of minimum 50,000,000 and maximum 120,234,510 new shares with a subscription price of NOK 0.5 per share. Each allocated share gives the right to 0.5 warrants with duration until the end of September 2009 and 0.5 warrants with duration until the end of June 2010. Both warrants have the same strike price of NOK 0.5. In addition, it is proposed that warrants are issued to the members of the underwriting syndicate and in connection with salary reductions, that changes in the option incentive program are adopted and that changes are made in the Board composition.

An underwriting syndicate has been established for subscription of new shares for a total value of NOK 25 million in the rights issue. The underwriters` relative responsibility will be reduced only when total subscription in the rights issue reaches NOK 35 million, i.e. when the total proceeds in the rights issue reach NOK 60 million. Each syndicate member will be entitled to 0.1 warrant with duration to the end of September 2009 and 0.1 warrant with duration to the end of June 2010 respectively for each NOK 0.5 underwritten.

Furthermore, the Board of Directors proposes that warrants are issued to those employees in the Company that accept a reduction in salary. The duration of such warrants is to the end of December 2011, with a strike price of NOK 0.5.

The share capital increase will have a diluting effect on options granted under the Company`s option incentive program for employees. The Board of Directors proposes that the dilutive effect is neutralised by increasing the frame of the option incentive program from 3,770,000 to 12,252,500 share options. The strike price for the options is proposed to be changed to NOK 0.5. In connection to this, the existing Board authorization for share capital increase is proposed to be replaced by a new and wider authorisation.

The Board members Elke Holinski-Feder and Robert Allnutt have informed the Company that they will resign as board members effective as of the date of the extraordinary general meeting. The Nomination Committee proposes that Robert V. Ahlgren is appointed as a new Chairman of the Board, effective from the date and on the condition that the rights issue is completed. Mr. Ahlgren has extensive international management experience within the medical and diagnostics industry and has held numerous management positions in companies such as Fischer, Apogent Technologies, Murex Diagnostics and Baxter. He is a U.S. citizen.

The new Chairman of the Board is expected to undertake a considerable workload for the Company. The Nomination Committee consider the election of one new board member despite the fact that two board members are resigning to be proper and in accordance with the Company`s cost reduction program.

The Board of Directors will call for an Extraordinary General Meeting to be held on Friday 19 December 2008, with the purpose of voting on the proposed rights issue and the other proposals referred to above. Provided that the rights issue is approved, the subscription period is planned for 16-30 January 2009. A prospectus will be prepared for the transaction. The prospectus will be sent to the shareholders in the Company as of 19 December 2009. Orion Securities AS is acting as manager in the transaction.

Background for the rights issue

The purpose of the right issue is to secure sufficient working capital for the Company until the Company is fully financed through its own operations.

NorDiag has during the second half of 2008 reached important milestones. As previously announced, the Company has delivered successful clinical documentation within the area Sexually Transmitted Infectious (STI) for its `Bullet` instrument and sample preparation kits combined with Roche`s Taqman 48 and Becton Dickinson`s ProbeTec analysers and test kits.

This has provided a platform for strong growth in Q4 2008. The growing sales volume in Q4 2008 is a result of significantly increased sales run rate based on achieved milestones. Completion of the Company`s new desktop instrument, for which the Company expect to commence the placing of instruments at customers` locations in January 2009, will further stimulate volume growth.

Within the Cancer area there is also positive development. Clinical results for the Company`s test, which is to contribute to diagnosis of colorectal cancer, confirm the targeted combined sensitivity (80%) and specificity (90%) in combination with Hemocult FOBT test which was used in the study.

NorDiag`s future business will be more focused on sales. R&D resources will be moved to sales and the sales organisation will be strengthened. The Company will seek a strategic partner for commercialisation of its test for diagnosis of colorectal cancer, and the Company will initially focus on the German market.

As a consequence of the new priorities, the Board of Directors in NorDiag has approved a plan for further cost reductions. The research laboratory in Bergen will be closed down. The Company`s staff will be reduced by 6 employees, in addition to reduced use of external consultants. The plan will give annualized cost reductions of NOK 9.5 million, with an effect of up to NOK 7 million in 2009.

Contact person: CEO Mårten Wigstøl, phone: +47 91165775

About NorDiag:

NorDiag is a biotechnology company developing, manufacturing and
marketing automated solutions, instruments and tests, for diagnostic of infectious diseases and cancer. The Company`s core competence is isolation of bacterial and human DNA from difficult clinical samples, and the Company has established a solid market share in the Scandinavian market for sexually transmitted infections. The company has similar applications for Tuberculosis and MRSA. An application for respiratory pathogens is under development. NorDiag is also developing a test that shall contribute to early diagnosis of colorectal cancer. NorDiag was founded in 2003 and has its headquarters in Oslo - Norway. The Company has offices and laboratories in Bergen - Norway, Stockholm - Sweden and West Chester (PA) - USA. The group has 39 employees. NorDiag is listed on Oslo Stock Exchange with the ticker NORD. For further information - www.nordiag.com.

Read the notice in Norwegian here