Nutra Pharma Corp., a biotechnology holding company that owns rights to intellectual property related to the development of drugs for HIV and Multiple Sclerosis has announced the settlement of a significant debt to one of its shareholders. Accordingly, the Board of Directors has been restructured as part of the Company's efforts to maintain focus on their core initiatives.
As reported in the Company's last quarterly report, on or about August 9, 2004, a Managing Member of Opus International, LLC made a formal demand for repayment of the loan made to the Company in the amount of $1,384,931. On September 28, 2004, the Company entered into a settlement agreement with Opus International, LLC to satisfy the demand loan in its entirety.
Under the terms of the settlement, 6,000,000 common shares of Infectech, Inc. were transferred to Opus International as payment in full for the outstanding debt. This transaction places a value on Infectech of $.23 per share. Infectech (Pink Sheets: IFEC - News) was trading at a range of $.09 - $.10 during the negotiation of this settlement.
Infectech currently has 15,537,030 common shares outstanding. The 6,000,000 shares in this transaction represent approximately 38.6% of Infectech's outstanding common stock, and represents a change in control of Infectech. Nutra Pharma retains approximately 4,529,570 shares of Infectech, representing a 29.2% position and will seek to increase this position with further acquisition of Infectech's outstanding stock.
Nutra Pharma's Chief Executive Officer, Rik Deitsch, will remain on the board of directors of Infectech. Because of this divestiture, Nutra Pharma will no longer be responsible for the ongoing financing of Infectech's business plan. This represents a cost-savings of the $400,000 funding commitment to Infectech as reported in the last quarter.
"This settlement effectively eliminates over ninety percent of Company debt, as well as eliminating the funding obligations that Nutra Pharma has made to Infectech in the amount of $400,000 over the next twelve months," commented Rik Deitsch, CEO of Nutra Pharma. "We will continue to help in the management of Infectech and we consider them to be an important part of the Nutra Pharma family," he added.
The Company has also announced a restructuring of the Board of Directors and has accepted the resignations of Dr. Mitchell Felder, David C. McClelland and Dr. Soram Singh Khalsa. Stanley J Cherelstein has accepted a position on the Board effective September 28, 2004.
Stanley J. Cherelstein is currently the CEO and President of Waiora, a company that develops and distributes Healthy Aging products. Mr. Cherelstein was the past President and Chief Operating Officer of Unicity, Inc., a $300 million nutritional supplement company with offices in thirteen countries in North America, Asia and Europe. Prior to serving as President, he was the Chief Operating Officer of Unicity where he was responsible for global operations including supply chain, distribution, information technology, customer service, human resources and finance. From May 1999 to June 2002 Mr. Cherelstein served as the Senior Vice President of Finance and Operations at Rexall Showcase International (RSI), a division of Rexall Sundown. RSI was a $180 million nutritional supplement company that operated in the USA, Japan, Korea, Taiwan and Hong Kong. Mr. Cherelstein began his career in public accounting at the firm of Cooper's and Lybrand where he worked for a total of five years including three years in auditing and two years in management consulting. After public accounting he worked as a Corporate Controller for six years in the wholesale distribution and retail industries. Mr. Cherelstein is a graduate of the University of Pittsburgh where he obtained a B.S. in Business and Accounting.
"I am very excited to be part of Nutra Pharma," remarked Stanley J Cherelstein. "This is a great time for the Company and I hope to be able to make a strong, positive contribution as Nutra Pharma grows into the future," he concluded.
"Stan's background in accounting, sales and marketing adds necessary experience to the Board that will allow Nutra Pharma to move from its development stage into near-term revenues," added Rik Deitsch.
This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Actual results could differ materially from those projected in Nutra Pharma's ("the Company") business plan. The Company's business is subject to various risks, which are discussed in the Company's filings with the Securities and Exchange Commission ("SEC"). The settlement of the shareholder debt should not be construed as an indication in any way whatsoever of the value of the Company or its common stock. The Company's filings may be accessed at the SEC's Edgar system at www.sec.gov. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.