SOURCE: Health Enhancement Products, Inc.

February 21, 2007 08:30 ET

Health Enhancement Products, Inc. to Distribute Shares of Pharmaceutical Subsidiary to Shareholders

Company Has Also Entered Into Pharmaceutical Development Agreement With Its New Subsidiary

SCOTTSDALE, AZ -- (MARKET WIRE) -- February 21, 2007 -- Health Enhancement Products, Inc. (OTCBB: HEPI) announced today that on February 15, 2007, its board of directors declared a distribution in the form of shares of the common stock of its new division, HEPI Pharmaceuticals, Inc., to all shareholders of record as of March 15, 2007. Each shareholder of record on the record date will receive 1 share of the new pharmaceutical company for every 10 shares of common stock of HEPI they own on the record date. Persons who own warrants to purchase HEPI common stock will not be entitled to receive shares of the pharmaceutical subsidiary with respect to such warrants (unless such persons exercise such warrants and become record holders on or before the record date). The Company believes that the distribution of HEPI Pharmaceutical's shares will afford the Company's stockholders greater investment flexibility, among other benefits. The shares of the pharmaceutical subsidiary will be distributed promptly following compliance with applicable laws, including HEPI's delivering an information statement to its stockholders pursuant to the requirements of the Securities Exchange Act of 1934 ("Exchange Act") and the effectiveness of the pharmaceutical subsidiary's registration under the Exchange Act. The number of shares to be distributed will at the time of distribution represent 10% of the total outstanding shares of the new company. It is anticipated that the remaining 90% of the equity of the subsidiary will be owned by Health Enhancement Products, Inc., the parent company.

The Company also announced that it has entered into a Pharmaceutical Development Agreement with its new subsidiary, HEPI Pharmaceuticals, Inc. Under the Development Agreement, HEPI is granting the subsidiary the right to develop the potential pharmaceutical applications of PAZ and its derivatives. In exchange for these rights, HEPI became the sole stockholder of HEPI Pharmaceuticals and is entitled to certain payments based on the attainment of specified development milestones and sales revenues. As previously announced, the pharmaceutical division's objective is to develop potential pharmaceutical applications for HEPI's primary product, ProAlgaZyme (PAZ).

About Health Enhancement Products, Inc. and ProAlgaZyme

Health Enhancement Products, Inc. is a nutraceutical company engaged in the development of a supplementary health-enhancing product using only pure, all-natural ingredients. The company's sole product is ProAlgaZyme, a liquid product produced from algae grown in 100% distilled water. The liquid in which the algae are grown is drawn off, filtered, tested and bottled as ProAlgaZyme.

Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including future clinical trial results being different than the results the company has obtained to date, our inability to obtain regulatory approvals necessary to market and sell PAZ as a pharmaceutical, and the company's ability to secure funding, including for the subsidiary's pharmaceutical development of PAZ. Such statements are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that such statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information or otherwise.

For more information, please visit www.heponline.com.

Contact Information

  • Contact information:

    Thomas D. Ingolia
    CEO
    Email Contact: Email Contact
    480-385-3800