Cannasat Therapeutics Inc. Announces Debt for Shares Settlement

TORONTO, ONTARIO--(Marketwire - December 22, 2009) - Cannasat Therapeutics Inc. (the “Corporation”) (TSX VENTURE: CTH), a specialty clinical development pharmaceutical company targeting diseases of the brain, today announced that it has agreed to settle $185,287 in debt by issuing 1,852,870 common shares at a deemed price of $0.10 per share. Of the total share issuance, 1,250,000 common shares are to be issued to settle $125,000 in debt with a third party holding two promissory notes. The remaining 629,870 common shares are to be issued to directors, officers and employees to settle $60,287 in fees and wages owing in 2009.

The debts being converted have all been previously accrued and reported on the financial statements of Cannasat.

This transaction constitutes a “related party transaction” as defined in Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions (“MI 61-101") as the settlement of $52,200 in debts owed to non-arms length parties of Cannasat (the “Related Parties”) resulted in the issuance of an aggregate of 522,000 common shares to the Related Parties. However, the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the common shares issued to the Related Parties nor the fair market value of the consideration for the transaction exceeded 25% of Cannasat’s market capitalization, as per section 5.5 and 5.7 of MI 61-101. A material change report in respect of this transaction was not filed at least 21 days in advance of the closing of this transaction. Cannasat believes a shorter period between this disclosure and the issuance of common shares is reasonable, in light of its need to satisfy its outstanding debts in a timely manner and the relatively small size of the related party transactions.

The common shares are subject to a four month hold period expiring on April 22, 2010.

Further to the TSX Venture Exchange Inc. (the “Exchange”) bulletin dated as of today’s date, the amount of the indebtedness settled by the Corporation by the issuance of common shares is $185,287, which amount has been reduced by $3,000 from the amount originally provided in the Exchange bulletin dated December 21, 2009 of $188,287.

About Cannasat Therapeutics Inc.

Cannasat is a specialty clinical development pharmaceutical company targeting diseases of the brain. Cannasat has a proprietary formulation technology for cannabinoid drug candidates, which may be used to treat neuropathic pain associated with multiple sclerosis and cancer, as well as for nausea/vomiting and appetite stimulation. Cannasat’s strategy is to grow its portfolio of drug candidates through in-licensing and acquisitions, and to advance projects to Phase 2 proof-of-concept clinical studies. Once the drug candidates are sufficiently derisked, Cannasat intends to out-license the programs to the appropriate Pharma marketing partners for a combination of upfront, milestone, and royalty payments. More information about Cannasat (TSX VENTURE: CTH) is available at www.cannasat.com.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.