DEBT CANCELLATION AGREEMENT

      THIS AGREEMENT is made and entered into this 30th day of August, 2004, but
effective  for all  purposes  as of 30th day of  August,  2004,  by and  between
Nanobac Pharmaceuticals,  Inc. (the "Company"),  and E. Olavi Kajander, MD, PhD,
an individual (the "Creditor");

      WHEREAS, the Creditor is currently owed $110,815.00 by the Company; and

      WHEREAS,  the  Creditor  and the Company  desire to exchange  stock in the
Company  in  cancellation  of the debt owed by the  Company,  upon the terms and
subject to the conditions hereinafter set forth;

      NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
contained in this Agreement, and in order to consummate the exchange of stock in
cancellation of the debt aforementioned, it is hereby agreed as follows:

      1.    Stock: Subject to the terms and conditions hereinafter set forth, at
the closing of the transaction  contemplated hereby, the Comapny shall issue and
convey, transfer, and deliver to the Creditor certificates  representing 923,458
shares of the Common Stock of the Company (the "Shares"). This transaction shall
be effective for all purposes as of August 30, 2004.

      2.    Cancellation of Debt. Upon receipt of the stock described above, the
Creditor hereby cancells the debt in the amount of $110,815.00 plus any interest
thereon now owed by the Company to the Creditor.

      3.    Representation  and  Warranties of Company.  Company  represents and
warrants  to Creditor  that:  A.  Organization  and  Standing.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Florida and has the  corporate  power and  authority to carry on
its business as it is now being conducted.

            B.    The Shares when issued will be validly issued,  fully paid and
nonassessable,  and will be free of any  restrictive  legend  or other  transfer
restriction imposed by the Company;

            C.    the issuance and delivery of the Shares to Creditor under this
Agreement  does not  violate:

                  (i)   The Company's charter documents;

                  (ii)  Any agreement to which the Company is a party, including
any indenture; or

                  (iii) Any  applicable  federal  or  state  statute,   rule  or
regulation; and

                  (iv)  No filing by the Company under the  Securities  Exchange
Act of 1934 (as amended) at the time of such filing  contained a misstatement of
material  fact or  omitted  to  state a  material  fact  necessary  to make  the
statements therein not misleading.



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<PAGE>


      4.    REPRESENTATIONS  AND WARRANTIES OF SELLER AND PURCHASER.  Seller and
Purchaser hereby represent and warrant that there has been no act or omission by
Seller,  Purchaser or the  Corporation  which would give rise to any valid claim
against any of the parties hereto for a brokerage  commission,  finder's fee, or
other like payment in connection with the transactions contemplated hereby.

      5     RESTRICTED  SHARES.  The Parties to this Agreement  acknowledge  and
agree that the shares of the  Company's  Common  Stock to be issued  pursuant to
this  Agreement  will not be registered  under the  Securities Act and therefore
shall constitute  "restricted  securities"  within the meaning of the Securities
Act.

      Notwithstanding the above, the Company will file a registration  statement
on Form S-1, Form S-3 or Form SB-2 to register the Shares at the Company's  sole
expense  within  150 days  from  the date of tis  Agreement.  The  Company  will
promptly notify the Creditor of the effectiveness of the registration.

      The  Company's  obligation to register the Shares owned by the Creditor is
subject to the Creditor  providing to The Company all information,  and take all
action,  The Company  reasonably  requests with reasonable  advance  notice,  to
enable  it  to  comply  with  any  applicable  law,  rule,   regulation  or  SEC
pronouncement  or to  prepare  the  registration  statement  that will cover the
Shares that will be included in the registration statement.

      6.    GENERAL PROVISIONS

            (a)   Entire  Agreement.   This  Agreement  constitutes  the  entire
Agreement and  supersedes  all prior  agreements  and  understandings,  oral and
written, between the parties hereto with respect to the subject matter hereof.

            (b)   Sections and Other  Headings.  The section and other  headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning orinterpretation of this Agreement.

            (c)   Governing   Law.   This   agreement,   and  all   transactions
contemplated  hereby, shall be governed by, construed and enforced in accordance
with the laws of Florida.

      IN  WITNESS  WHEREOF,  this  Agreement  has been  executed  by each of the
individual parties hereto on the date first above written.


NANOBAC PHARMACEUTICALS, INCORPORATED:             E OLAVI KAJANDER, MD, PHD:

By:  /s/ H. Brady Millican                         /s/ E. Olavie Kajander
  ------------------------                         ---------------------------
Print: Brady Millican
Date:  August 30, 2004                             Date: August 30, 2004



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