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New York Health Care, Inc. (OTC Pink Sheets: BBAL) announced today that it has entered into an agreement with an investment banking firm to act as exclusive placement agent with respect to a private offering of its common stock and warrants to accredited investors. Under the terms of the proposed offering, the Company will seek to raise up to $6 million through an offering of common stock and warrants at a minimum per unit price of $1.00. The net proceeds of the offering would be used to fund the capital requirements of The BioBalance Corporation, a wholly-owned subsidiary of the Company. The proposed offering is subject to the satisfaction of a number of conditions, including the execution by the Company a definitive agreement for the divestiture of its home healthcare business.

The Company also announced that it has executed a letter of intent with executive officers of New York Health Care for the acquisition of its home healthcare business, subject to corporate and regulatory approval, including stockholder approval, obtaining an acceptable fairness opinion and receipt by the Company of at least $4 million to finance its remaining operations.

In discussions with various funding sources, the Company determined that it needed to move forward as an independent entity and a pure play in the pharmaceutical space. Since the January 2003 merger, the Company's BioBalance subsidiary continues to make progress in the regulatory and clinical areas.

BioBalance's President, Mr. Dennis O'Donnell stated, "Since the Company's future is based on developing the patented technologies owned by BioBalance, we are making these changes to better focus on the potential of PROBACTRIX(TM) and other products in our pipeline." He added, "We are obviously pleased with this proposed financing which would allow us to move forward on achieving the key milestones that we previously announced."

The engagement agreement is subject to the satisfactory completion of a due diligence review by the placement agent and is terminable by either party on 30 days notice. There can be no assurance that the engagement letter will not be terminated by the placement agent, or that the Company will make the proposed private offering, or that if the offering is made the Company will be able raise sufficient funds to finance its ongoing operations. There can be no assurance that a definitive agreement to divest the home healthcare business will be entered into or that any such transaction will be consummated.

# posted by Medical Information : 3:28 AM