Andover Medical, Inc. Anticipates Closing $2.0 Million Private... ( NORTH ANDOVER Mass. March 24 /- A...)

Andover Medical, Inc. Anticipates Closing $2.0 Million Private Financing

Date:3/24/2008

NORTH ANDOVER, Mass., March 24 /PRNewswire-FirstCall/ -- Andover Medical, Inc. (OTC Bulletin Board: ADOV), a single source provider of orthopedic durable medical equipment ("DME"), announced today that the Company anticipates closing a $2.0 million private financing with an existing institutional investor. Complete terms of the financing can be found in the Company's Form 8-K filed with the SEC on March 19, 2008 and available at http://www.sec.gov.

On March 13, 2008, Andover Medical, Inc. entered into an agreement with an existing institutional investor regarding a potential private equity financing. Under the terms of the agreement, Andover will issue Series D Convertible Preferred Stock and Series I Warrants for a purchase price of $2,000,000. The preferred stock issuance will bear an 8% per annum dividend and be redeemable by the investors in 24 months and be secured by a lien on all of the Company's assets. The preferred stock will be convertible into common stock at $.35 per share and have 300% warrant coverage, with the warrants exercisable at $.35 per share for a 10 year period.

Edwin Reilly, Chief Executive Officer of Andover Medical, Inc. stated, "Our business strategy requires capital and strong growth will depend on continued access to the capital markets. I am very encouraged by the consistent investor demand we receive in our security offerings and view this anticipated investment as another significant vote of confidence in our business."

Andover intends to use the proceeds obtained from the financing primarily to retire all existing bank debt, as well as for working capital. The financing is anticipated to close on or before March 31, 2008, after negotiation of a mutually acceptable definitive agreement. All of the underlying common stock will be included in a registration statement filed with the Securities and Exchange Commission.

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