08.14.2008

PharmaGap Files Final Prospectus for Issue of Equity Units and announces $1,555,395 Private Placement to SC Stormont Holdings

Ottawa, Ontario/August 14, 2008 – PharmaGap Inc. (TSX-V: GAP) (“PharmaGap” or “the Company”) today announced that it has filed a final short form prospectus qualifying for sale a minimum of 6,666,667 and a maximum of 20,000,000 equity units (the “Units”) at a price of $0.15 per Unit (the “Offering”), for total proceeds of between $1,000,000 and $3,000,000 in connection with an Agency Agreement entered into with Dundee Securities Corporation and Wellington West Capital Inc. (the “Agents”). Each Unit consists of one (1) common share and one (1) warrant to purchase a common share at an exercise price of $0.20 for a two year term.

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 has agreed to pay the Agents a selling concession consisting of 10% of proceeds raised, along with broker warrants equal to 10% of the Units issued.

The Company has granted the Agents an option to purchase additional Units, equal to 15% of the Offering, for purposes of covering over-allotments 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. The Company anticipates closing of the Offering as soon as practicable subject to receipt of all necessary regulatory and TSX-Venture Exchange (“TSXV”) approvals.

The Company intends to apply proceeds of the Offering to continue progression of its lead drug, PhG-alpha-1 toward filing for clinical trial approval, to continued development of its pipeline of products, to generation of partnering and licensing opportunities for its lead product and pipeline products, and to general corporate purposes.

TThe final prospectus is available on SEDAR (www.sedar.com). Copies of the final prospectus are also available from Dundee Securities Corporation and Wellington West Capital Inc.

The Company also announces its intention to issue 10,369,300 Units to SC Stormont Holdings Inc. (“Stormont”), for aggregate gross proceeds of $1,555,395 on the same terms and conditions as for the Offering (the “Private Placement”), subject to approval by the TSXV. Following the Private Placement, Stormont will hold 13,232,163 Common Shares, 10,369,300 warrants to purchase common shares at an exercise price of $0.20 with a two (2) year term, and Convertible Secured Debentures convertible into a total of 29,363,418 common shares and 6,631,030 warrants to purchase common shares at exercise prices of between $0.195 and $0.2625 with terms of up to two (2) years. Stormont also holds options to acquire 3,193,811 common shares from the founders of the Company (1,836,667 at $0.30 per share and 1,357,144 at $0.50 per share). Prior to conversion of the Convertible Secured Debentures, exercise of warrants arising from the Private Placement, and exercise of options on founder’s shares, Stormont will hold a 24% interest in the Company assuming the minimum Offering and 19.3% assuming the maximum Offering. On a fully diluted basis, assuming full conversion of all Convertible Secured Debentures, exercise of all warrants outstanding and exercise of options on founder’s shares, Stormont will hold a 55.9% interest in the Company assuming the minimum Offering and 45.2% assuming the maximum Offering. Stormont is controlled by Roderick M. Bryden, Chairman of PharmaGap. Neither the Corporation nor, to the knowledge of the Corporation after reasonable inquiry, Mr. Bryden has knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed.

PharmaGap’s Board of directors (the “Board”) has considered the connected related transactions between PharmaGap and Stormont and the Board, except for Mr. Bryden, who abstained from voting, unanimously determined that the related transaction is exempt from the valuation and minority voting requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders (“MI 61-101”) pursuant to section 5.5(c) and section 5.7(1)(b) of MI 61-101 since the connected transactions are a distribution of securities for cash and the connected transactions have a fair market value of less than $2,500,000. The Board has further determined a disclosure period of less than twenty-one (21) days is necessary with respect to the connected transactions in order to meet critical funding requirements.

The Units being offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent regulation or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale 0f the securities in any State in which the offer, solicitation or sale would be unlawful.

About PharmaGap Inc.
PharmaGap Inc. (TSX-V: 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 and targets PKC alpha. The Company's strategy is to out-license drug compounds to larger life sciences companies at the preclinical stage. For more information on PharmaGap please visit the Company's website at www.pharmagap.com.

For information relating to this Release, please contact:
Robert McInnis, President & CEO
(613) 990-9551 bmcinnis@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.