Acquisition of Securities of Covalon Technologies Ltd.

June 29, 2004

TORONTO, ONTARIO--(CCNMatthews - Dec. 29, 2004) - In connection with the
qualifying transaction (the "Qualifying Transaction") of Seder Capital
Corp. completed on December 21, 2004, Biodel Systems Inc., Durimport
Marine Limited and Smith, Vincent & Co. Ltd., security holders of Covalon
Technologies Inc.(TSX VENTURE:COV)("CTI") were issued securities in the
capital of Covalon Technologies Ltd. ("CTL") in exchange for their
securities of CTI. The terms of the Qualifying Transaction were
described in the filing statement of Seder Capital Corp. dated December
9, 2004 and filed on SEDAR.

As a result of the completion of the Qualifying Transaction, Biodel
Systems Inc. of Toronto, Ontario, beneficially owns 5,118,058 common
shares of CTL and 110,780 warrants to purchase up to 243,716 common
shares of CTL (representing, respectively, approximately 13.83% of the
issued and outstanding common shares of CTL and 0.65% of the issued and
outstanding common shares of CTL assuming no other warrants are
exercised), Durimport Marine Limited of Whitby, Ontario, beneficially
owns 4,874,342 common shares of CTL (representing approximately 13.17%
of the issued and outstanding common shares of CTL) and Smith, Vincent &
Co. Ltd. of Toronto, Ontario, beneficially owns 3,806,002 common shares
of CTL and 615,385 warrants to purchase up to 1,353,847 common shares of
CTL (representing, respectively, approximately 10.28% of the issued and
outstanding common shares of CTL and 3.53% of the issued and outstanding
common shares of CTL assuming no other warrants are exercised). The
principals of Biodel, being Dr. Frank DiCosmo, Dr. Valerio DiTizio and
three other individuals also beneficially own an aggregate of 530,000
common shares of CTL, an aggregate of 11,538 warrants to purchase up to
25,384 commons shares of CTL and an aggregate of 674,760 options to
acquire common shares of CTL (representing respectively, approximately
1.43% of the issued and outstanding common shares of CTL, .07% of the
issued and outstanding common shares of CTL assuming no other warrants
are exercised and 1.79 % of the issued and outstanding common shares of
CTL assuming no other options are exercised). One of the principals of
Durimport, Mr. J. Robert Allan, beneficially owns 66,000 common shares
of CTL representing approximately .18 % of the issued and outstanding
common shares of CTL.

Biodel Systems Inc., Durimport Marine Limited and Smith, Vincent & Co.
Ltd. do not act jointly or in concert. Each of Biodel Systems Inc.,
Durimport Marine Limited and Smith, Vincent & Co. Ltd. acquired the
securities for investment purposes and reserves the right to acquire
further securities of CTL depending on market conditions and other
relevant factors.

Early warning reports in respect of the above-noted transactions will be
filed on SEDAR.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. The TSX
Venture Exchange has in no way passed upon the merits of the transaction
and has neither approved nor disapproved of the contents of this release.

The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. The TSX
Venture Exchange has in no way passed upon the merits of the proposed
transaction and has neither approved nor disapproved of the contents of
this release.

For further information please contact: William Jackson
Chief Financial Officer
Covalon Technologies Ltd.
T: (905) 568-8400
F: (905) 568-5200
www.covalon.com