CALCOL To Make and Sell ZER Quick AIDS Test Kits.

Business Editors and Health/Medical Writers

CLEVELAND & BEIJING--(BW HealthWire)--July 23, 2001

CALCOL INC. (OTC:CLCL)

-- CALCOL INC. & ZER HITECH LTD. To Make, Sell and Distribute Quick AIDS Test
Kits At Low Cost for High Impact AIDS Areas

-- Offers Test Kits to Major Relief Agencies: Mass Screening Could Lead to
Disease Prevention, Treatment, and Control

CALCOL INC. (OTC:CLCL) a development stage U.S. holding company for China manufacturing companies in pharmaceuticals (Calcol Changbaishan Pharmaceutical Ltd. Shenzhen, China) and soft drinks (Sanhe Meile Soft Drinks Ltd. Beijing, China), announced today that it has signed a binding letter of intent effective July 19, 2001, with ZER HITECH LTD Jerusalem, Israel, to immediately commence to make, sell, and distribute Quick AIDS Test Kits at a low cost on a large scale for high impact AIDS areas (especially Africa, the Caribbean, and South Asia and certain countries of the former Soviet Union). The Quick Aids Test Kits manufactured by ZER are currently sold in the following countries: Kenya, Nigeria, Brazil, Lithuania and certain countries of the former Soviet Union.

The companies, which have been associated since l995, announced that their new high intensity effort to mass market the test kits at a low cost was urgently prompted by recent announcements of major efforts by the UNAIDS organization, Global Business Council, the Coca-Cola Company (NYSE:KO) and the Pfizer Foundation (NYSE:PFE) and other major international organizations and corporations to raise $7-$10 billion dollars per year for mass distribution of information, prophylactics, diagnostics (including test kits), and pharmaceuticals in high impact AIDS areas especially in Africa where HIV has infected an estimated 25 million people. CALCOL confirms it has conveyed an offer to supply the low-cost Quick AIDS Test Kits in large quantities to the companies and organizations involved and has received some preliminary indications of interest.

Commercial tests retail for $20.00 per test, and tests of whole blood for HIV1+2 or Hepatitis B in a clinic or medical testing laboratory may cost much more, mass production in China may enable the Companies to produce and distribute large quantities (potentially tens of millions of units per year) of the Zer Quick AIDS Test Kits for mass screening for the low sales price to international agencies of approximately US$1.95 (one dollar ninety five cents) per unit.

Initially Zer will make samples and initial production runs available for purchase from their manufacturing facilities in Israel where Zer currently has the capability to produce 5 million units per year. Calcol will receive 50% of net profits both out of new sales generated through these agreements from production at the Israeli facilities and subsequent production which is anticipated in China. Initial sales are projected by Calcol at approximately $5-$10 million U.S.$ in the first year for the first five million units with initial net profits to CaIcol projected at between $1.25 million-$2.50 million U.S.$ in the first year or earnings of $0.02-$0.04 U.S. cents (two to four cents) per common share of Calcol predicated on sales to the relief agencies and companies involved in the relief efforts which are subject to final purchase agreements.

The companies believe their new cooperative venture will make possible mass screening of tens of millions of people throughout the world under the humanitarian relief organizations. If pregnant mothers can be diagnosed in time, for example, they can possibly then be treated with low doses of AZT and other drugs which have been proven to prevent transmission of HIV/AIDS to the next generation. The possible impact of such a program on world health, control of the spread of disease, treatment, and prevention of disease transmission could be very significant, in the belief of the companies.

Norman C. Kaplan, Chairman and President of CALCOL INC. states:

"We are grateful to have such a highly recognized company such as ZER as our partner in dealing with this major international health emergency. Headed by two great partners, Dr. Avi Zer and Dr. Tami Zer, both holding Ph.D. degree in medical sciences and life sciences respectively from the highly prestigious Hebrew University of Jerusalem. Under the new agreement, ZER HITECH LTD. ("ZER") has agreed to be responsible for patent and trademark registration and health agency registration (the expense of registrations is included in the budget of the project), product licensing, R&D, know-how, technical support, quality control, and manufacturing set up (in terms of the high tech aspects of the products such as the testing strips, antibodies and so forth). We, CALCOL INC. ("CALCOL") have agreed to be responsible for the funding and financial arrangements, large scale manufacturing, marketing and distribution agreements with the major customers. Sales prices of the products and distribution agreements shall be negotiated by CALCOL and ZER working together. Sales prices shall be kept to as low-cost as feasible while earning a reasonable profit.

"Both parties promised best efforts in moving as expeditiously as possible to `close the loop' in all aspects of the project. Both parties promised confidentiality in all aspects of the technology, manufacturing process, costs (other than necessary disclosures to customers and/or government agencies), and marketing agreements. Both parties promised non-circumvention of the other in new manufacturing, marketing, and distribution arrangements.

"Both parties have agreed to share 50-50 (fifty percent each) net profits on all sales of products to the international relief organizations such as Global Business Council, UNAIDS, and others made through this agreement (including sales of products initially wholly manufactured in Israel and distributed through the agreements negotiated by CALCOL in cooperation with ZER while the manufacture, marketing and distribution of larger scale production of the products in China is in development). Excluded from this agreement are ZER's pre-existing business arrangements for marketing and sales of the products on a proprietary basis.

ABOUT ZER HITECH LTD.

The ZER GROUP, a leading biotechnology company, was founded in 1976 by Avraham Zer Ph.D. (Medical Sciences, Hebrew University of Jerusalem) and Tami Zer Ph.D. (Life Sciences, Hebrew University of Jerusalem). ZER concentrates on fertility related and infectious disease products - research, development and manufacture of Diagnostic assays (ZER HITECH), and also has a network of medical service laboratories servicing hospitals, private laboratories and medical institutions in Israel (ZER LABORATORIES). The companies comprising the Zer Group, although separate and independent entities, work closely together to provide complementary services and products through close knit cooperation on quality control, clinical testing and information feedback. ZER HITECH LTD. develops, manufactures and markets One step assays. ZER has on staff 60 personnel of whom 48 have scientific qualifications.

ZER HITECH LTD. develops, manufactures and markets One step assays: PREGNANCY tests, Dipstrip, Card and Midstream formats. LH-OVULATION tests, Card and Midstream formats FSH-MENOPAUSE tests, Card and Midstream formats AMNIOTEST MONOLINE pregnancy test In addition, ZER has developed and manufactures Innovative HIV 1+ 2 for Serum,Plasma and Whole Blood, as well as Hepatitis B; Drugs of Abuse; Chlamydia; Strep A and B; H. pylori; Occult blood and other assays. Core business In-vitro and one-step diagnostics kits Market regions: Europe, Far East, South America.

ABOUT CALCOL INC.

CALCOL INC. (OTC:CLCL) (Delaware), a development stage company, was originally a holding company for pharmaceutical patents and products. Based upon research by Mr. Kaplan at the University of California San Diego (Biology Department), the Salk Institute for Biological Studies in La Jolla, California (Autoimmune and Neoplastic Disease Laboratory), and Harvard University (Physics Department), the Company pioneered the pharmaceutical development of Delta-9-Tetrahydrocannabinol (THC), the active ingredient in medicinal marijuana, for the treatment of nausea associated with cancer chemotherapy and loss of appetite associated with AIDS.

The Company also developed and tested (in vitro at the Salk Institute, and in vivo in mouse models in conjunction with the National Cancer Institute) a derivative of THC (THC-mustard) as potential site-specific alkylating agent (anti-tumor drug) with antinausea properties. Mr. Kaplan received one patent, and published two abstracts and two scientific papers on this research. CALCOL INC. sold non-exclusive distribution rights in its THC/dronabinol product to BARR LABORATORIES (NYSE:BRL) in l988 on a 15 year agreement. CALCOL INC. retains some rights in the THC/dronabinol product.

In l994, CALCOL INC. invested in the purchase of 60% interest in a pharmaceutical factory in Shenzhen, China, CALCOL CHANGBAISHAN PHARMACEUTICAL CO. LTD. and an 80% interest in a soft drink concentrate and bottling factory in Beijing, China, SANHE MEILE SOFT DRINKS CO. LTD. (photographs of the finished soft drink concentrate plant and bottling plant under construction and information about the Company appear on CALCOL's website http://www.calcol.com). CALCOL INC. common stock (par value $.001) trades OTC under the symbol "CLCL" (Cusip no. 128699) on the Pink Sheets (www.pinksheets.com) with marketmakers.

This announcement, which is not an offer to buy or sell securities, may contain certain forward looking statements regarding anticipated manufacturing, marketing, sales, and distribution agreements of medical diagnostic test kits and pharmaceutical products with anticipated manufacturing and sales arrangements, and projected sales figures which may or may not be achieved, anticipated soft drink franchises, trademark, and license agreements, business licenses which may or may not be issued or renewed in the future by the Chinese government or other governments, medical device approvals and licenses which may or may not be issued or approved by various governments and international health agencies, potential sales projections of certain quantities of units of products to humanitarian agencies governments and non-profit organizations and pharmaceutical companies for mass low-cost or free distribution which may or may not be achieved, potential business opportunities in medical device and pharmaceutical manufacture, marketing and distribution and/or other speculative areas in China businesses and business in other high risk countries (such as Africa, the Caribbean, South Asia and the former Soviet Union) which may or may not materialize, construction projects which may or may not be successfully completed, factory production and potential profits market share for goods and services which may or may not be achieved, and financings which may or may not attain successful completion or commercial success, and should not be relied upon by any person to make an investment decision, and is for information only. CALCOL INC. (Delaware) common stock (par value $.001) cusip no. 128699 trades OTC in the United States, involves a high degree of risk and is a suitable investment only for accredited, institutional, and overseas investors, who are able to assess the risk, and can afford to lose their entire investment, and should consult a registered investment advisor or licensed stockbroker.