January 8, 2007
PRESS RELEASE 

PEGASUS ACQUIRES WORLDWIDE MARKETING RIGHTS TO EFFECTIVE BIOLOGICAL-CONCEPT MOLD REMOVAL SYSTEM

Laboratory Tests Successfully Completed Pegasus Pharmaceuticals (PINKSHEETS: PGUZ) today announced that it has acquired the worldwide marketing rights to an innovative new biological product called the Mold Remove System, which has recently completed a series of rigorous independent laboratory tests during 2006.

The control and elimination of mold has become a multi-billion-dollar market worldwide. Molds consist of such fungi as Aspergillus sp., Cladosporium sp., Fusarium sp., Penicillum sp. and others. One of the most frequently cited fungi is Stachybotrys Chartarum, commonly known as black mold. Often referred to as mildew, molds are a subset of fungi that produce fluffy or powdery growth on surfaces such as cloth, carpets, leather, wood, sheetrock, insulation and even food. They may grow at high levels indoors in homes or buildings under ideal conditions which include moisture, proper nutrients, temperature and certain levels of light. Toxic black mold can cause severe health problems including allergic reactions, headaches, skin disease, fungal infections, sinus problems, asthma and a litany of other human diseases that are now being connected to molds.

Pegasus' new product, the Mold Remove System (MRS), is based on a new biological concept which controls the mold spores and prevents their growth. It is a multi-component mold control system which removes black mold infestation, cleans and disinfects surfaces and has long-lasting effects on the prevention of future mold growth. MRS consists of a unique combination of non-toxic, biodegradable ingredients. Other mold prevention products on the market involve chemically aggressive, hazardous and harmful compounds which are only temporarily effective. Pegasus' Mold Remove System is a new generation biological system which is not harmful to humans. It may be utilized safely in any home, school, hospital or commercial environment without any specific precautions.

The Company's MRS product performed extremely well in a series of rigorous independent laboratory tests, the most recent being performed by ECA Inc., a preeminent testing laboratory based in San Diego, California. ECA tested the product on two pieces of drywall material. Both were treated with black mold consisting of Stachybotrys Chartarum, Aspergillus sp. and Penicillum sp. Both surfaces were kept in high humidity conditions of 80-90% at +4 degrees Centigrade. After initial growth of black mold, one of the surfaces was treated with MRS. Both treated and untreated surfaces were observed for a period of sixty days. The untreated surface exhibited typical mold growth, which spread to approximately 80% of the surface. The Mold Remove System was effective in black mold cleaning, as well as its growth. After sixty days of the experiment, no mold growth was observed on the treated drywall surface. The product demonstrated 100% efficiency against growth of the black mold fungi. MRS has effectively shown that not only does it clean and disinfect surfaces, but that it kills all fungi cells and black mold spores while preventing future spore growth.

Pegasus is now implementing an integrated marketing campaign in North America and Europe for the introduction of its Mold Remove System featuring its safe, easy-to-use application, its ability to prevent future mold growth and the fact that it is environmentally friendly.

Safe Harbor :
This news release may include forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United states Securities and Exchange Act of 1934, as amended with respect to achieving corporate objectives, developing additional project interests, the Company's analysis of opportunities in the acquisition and development of various project interests and certain other matters. These statements are made under the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements herein.