PharmaGap Inc.
OTC Bulletin Board : PHRGF

PharmaGap Inc.

December 29, 2009 17:00 ET

PharmaGap Announces $608,800 Private Placement

OTTAWA, ONTARIO--(Marketwire - Dec. 29, 2009) - PharmaGap Inc. (TSX VENTURE:GAP)(OTCBB:PHRGF)("PharmaGap" or "the Company") announces the completion of a second non-brokered private placement of equity units ("Units") on December 29, 2009 with arm's length accredited investors in the amount of $608,800. Purchasers acquired 3,805,000 Units at a price of $0.16 per Unit. Each Unit consists of one (1) common share and one (1) warrant to acquire an additional common share with an exercise price of $0.20 per common share and a two year term, which commences on the closing date. The private placement has been filed as an expedited private placement with the TSX Venture Exchange ("TSX-V") and the common shares issued will be subject to a restriction from trading on the TSX-V for four months from the closing date in accordance with TSX-V rules and regulations for private placements. Proceeds will be applied to fund the Company's drug development program, for business development, and to working capital.

This private placement was undertaken to meet demand for Units from the Company's existing shareholder base following the announcement of a private placement on December 2, 2009. The Company does not anticipate further issuances at these terms. Following the financing, the Company will have 95.6 million shares outstanding. The total amount raised by the Company in the two placements in December 2009 is $942,080.

In connection with this private placement, cash finders fees and broker warrants will be paid to Capital Street Group ($40,944 cash fees and 255,900 broker warrants), and to Northern Securities (($17,696 cash fees and 110,600 broker warrants). Broker warrants are issued on the same terms and conditions as the warrants included in the Units.

PharmaGap's largest shareholder, SC Stormont Holdings Inc., ("Stormont"), has entered into common share lending agreements with certain purchasers of the Units whereby Stormont will loan freely tradable shares to those purchasers for a four month period. Stormont has not disposed or sold any of its shareholdings under these agreements and all shares loaned will be returned to Stormont after four months. Similar share lending arrangements were agreed to by Stormont to support the Company's private placements of Units in June and July 2009, and most recently on December 2, 2009. The lending of shares required the filing by Stormont of Form 45-102F1 (available at

About PharmaGap Inc.

PharmaGap Inc. (TSX VENTURE:GAP)(OTCBB:PHRGF), based in Ottawa, ON, is a biotechnology company with a core focus on developing novel peptide therapeutics for the treatment of cancer. PharmaGap's GAP-107B8 is a novel peptide drug designed to inhibit the activity of protein kinase C (PKC), a cell signalling enzyme implicated in certain types and stages of cancer. Independent peer-reviewed research has demonstrated that over-expression of PKC plays a role in the development of many cancer types. For more information please visit

Note: Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No Securities Commission or other regulatory authority having jurisdiction over PharmaGap has approved or disapproved of the information contained herein. This release contains forward looking statements that may not occur or may change materially.

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