OTTAWA, ONTARIO--(Marketwire - May 10, 2011) - PharmaGap Inc. (TSX VENTURE:GAP) (OTCBB:PHRGF) ("PharmaGap" or "the Company") today announced that it has reached agreement with Dr. Jenny Phipps, Mr. Robert Letellier, and Mr. Daniel Larkin, (the "Subscribers") each of whom is a director and founder of the Company, to convert an aggregate amount of $170,834 owed by the Company to the Subscribers in respect of outstanding amounts originating in the years 2001 through 2003 into common shares at a price of $0.0945 per common share. Pursuant to the agreements a total of 1,807,766 common shares will be issued to the Subscribers in settlement of the debt owing to them. Following the conversion, the Subscribers will own an aggregate total of 6,568,958 common shares, being approximately 5.3% of the 124,643,299 common shares then outstanding.
The common shares will be issued pursuant to TSX Venture Exchange ("TSX-V") Policy 4.3, "Shares for Debt", and the issuance is subject to approval by the TSX-V. The common shares, when issued, will be subject to a hold period of four months and one day from the date of issue.
In its consideration and approval of this transaction, the company's board of directors (the "Board") took note of the fact that the agreements with the Subscribers are related party transactions, as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") and that it is in the best interests of the Company to conclude the agreements expeditiously. The Board determined that the transactions are exempt from the formal valuation and minority approval requirements of MI 61-101 under sections 5.5(a) and 5.7(a) of MI 61-101 respectively. Individual directors with an interest in the transactions complied with the requirements of s. 120 of the Canada Business Corporations Act in respect of the transactions.
About PharmaGap Inc.
PharmaGap Inc. (TSX VENTURE:GAP), based in Ottawa, ON, is a biotechnology company with a core focus on developing novel therapeutic compounds for the treatment of cancer. PharmaGap's research platform targets cellular signalling pathways controlled by Protein Kinase C (PKC) isoforms. PharmaGap's lead drug compound, PhG-alpha-1, is in preclinical development. The Company's strategy is to out-license drug compounds to larger life sciences companies at the preclinical stage. For more information please visit www.pharmagap.com.
Note: The TSX-Venture Exchange does not accept 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.