Securities Law & Instruments

Headnote

Subsection 83.1(1) -- issuer deemed to be areporting issuer in Ontario -- issuer has been a reporting issuerin Alberta and British Columbia since 1997 and in Quebec since2002 -- issuer's securities listed and posted for trading onthe TSX Venture Exchange -- continuous disclosure requirementsof British Columbia and Alberta substantially identical to thoseof Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 83.1(1).

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5,AS AMENDED (the "Act")

AND

IN THE MATTER OF

PHARMAGAP INC.

 

ORDER

(Subsection 83.1(1))

UPON the application of PharmaGap Inc.(the "Company") for an order pursuant to subsection83.1(1) of the Act deeming the Company to be a reporting issuerfor the purposes of Ontario securities law;

AND UPON considering the applicationand the recommendation of the staff of the Ontario SecuritiesCommission (the "Commission");

AND UPON the Company representing tothe Commission as follows:

1. The Company was incorporated under theBusiness Corporations Act (Alberta) on February 4,1997.

2. The Company was continued under the CanadaBusiness Corporations Act on March 28, 2002.

3. The principal and head office of the Companyis located at 100 Sussex Drive, Ottawa, Ontario, K1A 0R6.

4. Pursuant to the terms of a Share PurchaseAgreement made as of the 11th day of February,2002 between the Company and all of the securityholders ofPharmaGap Inc. (as it existed prior to the acquisition, "Privateco"),the Company acquired all of the issued and outstanding securitiesof Privateco in exchange for common shares and warrants ofthe Company, and the Company changed its name from "SebringResources Ltd." to "PharmaGap Inc." (the "ReverseTakeover Transaction").

5. The authorized capital of the Company consistsof an unlimited number of common shares, an unlimited numberof first preferred shares and an unlimited number of secondpreferred shares of which 16,542,198 common shares were issuedand outstanding as of August 13, 2003.

6. The Company has a significant connectionto Ontario as:

(a) its principal and head office is locatedin Ontario;

(b) one of the Company's three officersand one of its five directors is resident in Ontario; and

(c) 1,642,870 common shares of the Company,or approximately 10% of the total issued common shares ofthe Company, are registered to residents of Ontario.

7. The Company has been a reporting issuerunder the Securities Act (British Columbia) (the "BCAct") and under the Securities Act (Alberta) (the"Alberta Act") since 1997. As well, the Companyhas been a reporting issuer under the Securities Act(Quebec) (the "Quebec Act") since March 27, 2002.The Company is not in default of any requirements of the BCAct, the Alberta Act or the Quebec Act.

8. The Company is not a reporting issuer inOntario, and is not a reporting issuer, or equivalent, inany other jurisdiction, except British Columbia, Alberta andQuebec.

9. The continuous disclosure requirementsof the BC Act and the Alberta Act are substantially the sameas the requirements under the Act.

10. The continuous disclosure materials filedby the Company under the BC Act and the Alberta Act sinceMay 1998 are available on the System for Electronic DocumentAnalysis and Retrieval.

11. The common shares of the Company are listedon the TSX Venture Exchange (the "Exchange") underthe symbol "GAP", and the Company is in compliancewith all requirements of the Exchange. Prior to the closingof the Reverse Takeover Transaction the common shares of theCompany were listed on the Exchange under the symbol "SEB".

12. The Company is not designated a capitalpool company under the policies of the Exchange.

13. The Company has not been subject to anypenalties or sanctions imposed against the Company by a courtrelating to Canadian securities legislation or by a Canadiansecurities regulatory authority, and has not entered intoany settlement agreement with any Canadian securities regulatoryauthority.

14. Neither the Company, any of its officers,directors nor, to the knowledge of the Company and its officersand directors, any of its controlling shareholders, has: (i)been the subject of any penalties or sanctions imposed bya court relating to Canadian securities legislation or bya Canadian securities regulatory authority, (ii) entered intoa settlement agreement with a Canadian securities regulatoryauthority, or (iii) been subject to any other penalties orsanctions imposed by a court or regulatory body that wouldbe likely to be considered important to a reasonable investormaking an investment decision.

15. Neither the Company, any of its officers,directors nor, to the knowledge of the Company and its officersand directors, any of its controlling shareholders, is orhas been subject to: (i) any known ongoing or concluded investigationsby: (a) a Canadian securities regulatory authority; or (b)a court or regulatory body, other than a Canadian securitiesregulatory authority, that would be likely to be consideredimportant to a reasonable investor making an investment decision;or (ii) any bankruptcy or insolvency proceedings, or otherproceedings, arrangements or compromises with creditors, orthe appointment of a receiver, receiver-manager or trustee,within the preceding 10 years.

16. None of the officers or directors of theCompany nor, to the knowledge of the Company and its officersand directors, any of its controlling shareholders, is orhas been at the time of such event an officer or directorof any other issuer which is or has been subject to: (i) anycease trade or similar order, or order that denied accessto any exemptions under Ontario securities law, for a periodof more than 30 consecutive days, within the preceding 10years; or (ii) any bankruptcy or insolvency proceedings, orother proceedings, arrangements or compromises with creditors,or the appointment of a receiver, receiver-manager or trustee,within the preceding 10 years.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to subsection83.1(1) of the Act that the Company is deemed to be a reportingissuer for the purposes of Ontario securities law.

August 25, 2003.

"Cameron McInnis"