West Kelowna, British Columbia / TheNewswire / January 15, 2018 – Capha Pharmaceuticals Inc. ("Capha" or the "Corporation") announces that it has entered into a shares for debt agreement, pursuant to which, it will issue 10,000,000 common shares in the capital of the Corporation (the "Issued Shares") in satisfaction of C$500,000 of indebtedness currently owed to a director of the Corporation, Janice Brown (the "Lender"). Immediately following the issuance of the Issued Shares, the Lender will own 51,500,000 common shares in the capital of the Corporation representing 79.93% of the issued and outstanding shares. The Corporation determined to satisfy the indebtedness with the Issued Shares in order to preserve its cash in connection with the previously announced proposed transaction and for working capital. The Issued Shares will be subject to a hold period of four months and a day from the date of issuance.

The issuance of Issued Shares to the Lender, pursuant to the shares for debt agreement, constitutes a "related party transaction" as this term is defined in Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The Corporation relies on the exemption from valuation requirement pursuant to subsection 5.5(b) of MI 61-101, as the securities of the Company are not listed or quoted on an enumerated stock exchange, and the Corporation relies on the exemption from minority approval under subsection 5.7(b) of MI 61-101, as the securities of the Company are not listed or quoted on an enumerated stock exchange; neither consideration received, nor the fair value of the securities distributed exceeds $2,500,000; and at least two thirds of independent directors of the Company, voted in favour of the related party transaction.

The Lender is an insider of the Corporation, as this term is defined in applicable securities laws and in satisfaction of the requirements of the National Instrument 62-104 – Take-Over Bids And Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, an early warning report respecting the acquisition of Issued Shares by the Lender will be filed under the Corporation's SEDAR Profile at www.sedar.com.

For more information, please contact:

 

James R. Brown, President

Capha Pharmaceuticals Inc.

Tel. +1 (778) 754-3000

info@capha.ca

Forward Looking Information

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Corporation's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.  The forward-looking statements and information in this press release includes information relating to the Corporation's cash position and the timing of the issuance of the Shares. Such statements and information reflect the current view of the Corporation.

Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Capha to control or predict, that may cause Capha's actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein. The Corporation undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

 

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.