PharmaGap fka GAP

[Tackler]

PharmaGap files prospectus for $4.5-million offering

2008-06-19 09:51 MT - News Release

Mr. Robert McInnis reports

PHARMAGAP TO RAISE APPROXIMATELY $4.5 MILLION IN PUBLIC OFFERING OF EQUITY SECURITIES

PharmaGap Inc. has filed a preliminary short form prospectus in connection with an agreement entered into with Dundee Securities Corp. and Wellington West Capital Inc. to raise gross proceeds of approximately $4.5-million. The agents, acting as co-leads, have invited Capital Street Group, of Vancouver, a limited market dealer, to join as special selling group member.

The company is selling equity units consisting of common shares plus common share purchase warrants. The company has agreed to pay the agents a selling concession consisting of 10 per cent of proceeds raised, along with broker warrants equal to 10 per cent of the units issued.

The company has granted the agents an option to purchase additional units, equal to 15 per cent of the offering, for purposes of covering overallotments and for market stabilization purposes. The option can be exercised in whole or in part at any time over a period of 30 days following the closing of the offering, which is expected to occur on or before July 18, 2008. Closing of the offering is also subject to receipt of all necessary regulatory and TSX Venture Exchange approvals.

Net proceeds from the offering will be used primarily to complete studies required to garner regulatory approval in the United States and Canada to begin human clinical trials of the company's lead drug for cancer treatment, PhG-alpha-1, a novel peptide inhibitor of protein kinase C alpha. In addition, proceeds will also finance continued development of the company's drug pipeline, for development of licensing and partnering relationships, and for general corporate and working capital purposes.

The preliminary prospectus is available on SEDAR. Copies of the preliminary prospectus are also available from Dundee Securities and Wellington West Capital.