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Lumera Corporation (LMRA) Secures the Private Investment Group Kingsbridge Capital Limited at $25 Million

Lumera Corporation is a leader in the field of photonic communications and announced today that is has entered into a Committed Equity Financing Facility or CEFF. Kingsbridge has committed to provide up to $25 million over the next three years through the purchase of newly issued shares of Lumera common stock. Lumera will determine the exact timing and amount of any CEFF financing, under the terms of agreement and subject to certain conditions. The CEFF will allow Lumera to raise capital, at its discretion, to provide support to Lumera’s corporate research and development.

Lumera’s Senior Vice President, Peter Biere and Chief Financial Officer said, “Lumera is pleased to begin its relationship with Kingsbridge. This new facility, which adds a strategic financing dimension of Lumera, gives us the potential to access up to $25 million in capital over the next three years. The new CEFF will be a less expensive, and therefore less dilutive, source of capital than that of more traditional capital market financings. Lumera currently has enough cash to cover our needs at least into the second quarter of 2009. We will continue to evaluate our capital needs as each of our businesses develops.”

Lumera may access capital under the CEFF in structured financing between 2% and 3% of its market capitalization at the time of the draw down of such tranche and subject to certain conditions. Over an eight day pricing period, each tranche will be issued and priced. During the eight day pricing period, Kingsbridge will purchase shares of common stock following to the CEFF at discounts ranging from 6% to 12% and depending on the average market price. This will depend on the average market price during the eight day period and provided the minimum acceptable purchase price for any shares by the higher of $1.25 or 90% of Lumera’s common stock closing price the day before the beginning of each draw down.

Kingsbridge is restricted from engaging in shorting transactions of Lumera’s common stock during the term of the agreement.

The agreement allows Lumera to have complete control over all draw downs and is not obligated to utilize any of the $25 million available under the CEFF with no minimum commitments or use penalties. The CEFF agreement does not contain any restrictions on Lumera’s operating actions and does not prohibit Lumera from conducting any additional debt or equity financing, other than financings similar to the CEFF.

At an exercise price of $3.01 per share, Lumera issued a warrant (exercisable after the six month anniversary of the date of the agreement and will remain so subject to certain exceptions, until five years after the date it becomes put into action) to Kingsbridge to purchase up to 180,000 shares of common stock. This represents a 125% premium over the average of the closing bid prices of Lumera common stock during the 5 days preceding the signing of the agreement.

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