announcement just out

The Directors are pleased to release the following announcement.
Settlement of Account through Issue of Shares
At 30 June, 2008 the Solagran Audited accounts would have included an amount of
$2,430,000 owing to Solana Co.Ltd. (OOO “Solana”), a company that has been
supplying Solagran with raw materials and finished goods since 2003.
At 30 June, 2007 the amount of $1,734,204 for Trade and Other Payables was included
in the Balance Sheet and this included the amount owing to Solana.
Solana operates a production facility which is connected to the St. Petersburg Forest
Technical Academy. The output from that facility has been used by Solagran in the
processing and manufacture of finished goods to be sold or used in trials. This includes
the Bioeffective® R capsules used in the Swinburne University trials that were
manufactured in Australia using raw materials purchased from Solana.
The Directors wish to reduce amounts owing to external creditors and have resolved to
settle the Solana account of $2,430.000 with the issue of 9,000,000 shares at $0.27 per
share.
Solana is a non-related party to Solagran and also to Solamind Pty Ltd.
As part the agreement reached for the settlement of this account, Solagran will assist in
the refurbishment and upgrading of the production facility at Lisino near St Petersburg.
It will then have exclusive perpetual access to that facility.
The Lisino facility will be used primarily to manufacture Bioeffective® V, the essential
input into the Bioeffective® R production process. This will be of significant benefit to
Solagran as it builds towards a production of 40 kilograms of Bioeffective® R per month
from its facility in Tomsk.
The Appendix 3B to cover the issue of shares is attached.
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Activities in Russia
Solagran’s Executive Chairman Dr Vagif Soultanov has been in Russia since mid May
and will return to Melbourne on July 7. He is expected to return to the offices of
Solagran on July 11. His trip has focussed on five main activities:
 Participation in an international infectious diseases conference co-ordinated by The
Pasteur Institute. Dr Soultanov and associates presented a total of eight papers
related to the use of Bioeffective® A and Bioeffective® R (Ropren®) in combating a
range viral, bacterial, fungal and protozoan pathogens – including the results of
studies conducted in conjunction with The Pasteur Institute
 Supervision of the commencement of commercial scale production of polyprenols
from the Tomsk production facility
 Securing access to additional production facilities, including final stage negotiations
in relation to Solagran’s application for participation in the Tomsk Special Economic
Zone
 Activating Solagran’s sales and marketing function under Dr Victoria Gorbacheva,
including final stage negotiations in relation to Ropren® pricing in Russia
 Securing the ongoing services of key scientists whose holdings in the company are in
dispute following the collapse of Opes Prime Stockbroking Limited.
Solagran expects to provide an update to the market on each of these matters after Dr
Soultanov returns to the office.
Ongoing Involvement of Key Scientists
The Board is keenly aware of the importance to Solagran of the ongoing involvement of
key scientists and certain other founders whose shareholding in the company (held in
Solamind Pty Ltd) is in dispute with ANZ Bank following the collapse of Opes Prime
Stockbroking Limited.
The involvement of the key scientists is particularly important over the next three years.
The Board has been working to devise a path forward that is both acceptable to all
parties and has sufficient flexibility to accommodate a range of positive outcomes in
regard to the disputed shareholding.
Further details will be provided to the market in due course.
Peter Stedwell
Company Secretary
On behalf of the Board of Directors
Solagran Limited