CalciTech Files Annual Financial Statements; Net Loss Reduced Significantly.

Business Editors

HAMILTON, Bermuda--(BUSINESS WIRE)--Aug. 29, 2002

CalciTech Ltd-, (OTC BB: CLKTF; CDNX: CLK, FREIVERKEHR: XCH) announces the filing of its financial statements for the year ended February 28, 2002.

-- The accounts for the year show a net loss of $ 1.809 mill. as compared with $2.455 mill. for 2001.

-- Due to reduced R&D expenses, the operating loss has been further reduced to $ 1.385 mill ($ 2.183 in 2001).

-- Net loss per share has decreased by 34 % from $ 0.062 in 2001 to $ 0.041.

-- Interest expense was reduced, from $ 263,000 to $ 142,000, as a result of the conversion of $ 500,000 of the credit facility by Epsom Investment Services N.V. "Epsom" in February 2001 and additional convertible debentures raised during the year.

Highlights of the Year

Overall the "burn rate" for the year shows a significant decrease in line with managements stated objectives and expectations. Expenses would have been lower had it not been necessary to settle an outstanding dispute with a former Kemgas customer to avoid a lengthy and expensive arbitration process. This settlement was previously reported on 9th October, 2001.

During the year the pilot plant for Precipitated Calcium Carbonate "PCC" production was transferred from CalciTech Odda in Norway to the Company's new wholly-owned subsidiary, CalciTech Deutschland GmbH based in Leuna, Germany. A suitable building was leased on the high security Leuna site where a small scale production plant has been built and a well equipped laboratory facility is installed. On 8th July 2002, CalciTech announced that it had successfully commissioned this plant. The plant will supply bulk samples, particularly for paper trialing. The plant up-cycles carbide lime from the nearby Hochhalde Deposit at Schkopau using on-site CO2. These material sources will feed the first 40,000 ton per annum plant planned at Leuna.

This development enables CalciTech to start its paper testing program and is headed up by Francois Roux. He joined CalciTech on 1st January 2002 as technical paper services manager. Francois was the global service technical manager with Huber Engineered Minerals and worked closely with paper manufacturers.

During the year under review, as part of the on-going re-organisation of CalciTech, and following shareholder approval at the Annual General Meeting held on 22nd September 1999, the Company's authorised share capital was increased to 120,000,000 ordinary shares with a par value of CDN$ 0.001.

This was effected on 23rd September 2001. On 15th May 2002, CalciTech's shares were listed on the Third Segment of the Frankfurt Stock Exchange under the symbol "XCH". The web page has been upgraded in the German language recently.

Patent Development

CalciTech also announced during the year that it had received the International Preliminary report from the European Patent Office ("EPO") in Munich on the PCT Patent Application No. PCT/EP99/09567 "Lime Treatment". The EPO examiner concluded that the amended claims all define subject matter that is novel and inventive having regard to the cited prior art and that the citations and explanations also support the industrial applicability of the lime treatment process and the production of Precipitated Calcium Carbonate "PCC" from impure lime sources. This has allowed CalciTech to file the European Patent Application and enter into the "National Phase" of applications.

Also during the year under review, CalciTech reported in October 2001, that the EPO had granted European Patent No. 0912338 in favour of the Company. This patent, "Production of Powders", covers the unique technology of a powder precipitation reaction in a segmented flow tubular reactor, the so called Bubbletube(TM). Different powders, with extremely uniform particle size distribution, can be produced by the Bubbletube(TM) apparatus.

Financials in Detail

R&D costs expensed have decreased to $ 88,000 as compared with $1,640 mill. for the previous year. This is largely due to the full amortization of acetylene patents at the end of the previous financial year. Development costs have been deferred since the financial year 2001, when the joint venture agreement with Odda demonstrated the technical value of the Company's PCC process. As a result of the significant advances made on CalciTech's patented PCC process, we have been able to demonstrate it's commercial value.

General and administrative expenses increased from $ 543,000 to $897,000. Whilst the majority of these expenses remained at or below last years levels, legal and consulting expenses rose due to increased professional advice required in the settling of the above mentioned long standing legal dispute, the raising of $ 2.5 mill. convertible debentures during the period, and on-going development of potential new projects.

Interest expense was also reduced, from $ 263,000 to $ 142,000, as a result of the conversion of $ 500,000 of the credit facility by Epsom in February 2001 and the additional convertible debentures raised during the year, the interest of which has been charged directly to equity in accordance with International Accounting Standards. Epsom continued to support CalciTech during the year. Under the terms of the working capital convertible credit facility, Epsom agreed to convert $ 450,000 of its loan into CalciTech common stock during February 2002 and indicated that the investors are medium to long term investors in the company.

During the same month a private placement of mixed securities was announced to raise $2 mill. by way of 7.5% convertible debentures, with the same terms and conditions as previous issues, and by the issue of common stock at a discount of 10% to the market average price, with the issue for each share taken down of a twelve month warrant for one additional share at a price of 20% to the strike price. The placing, which was completed in April 2002, consisted of 4,933,091 common shares, priced at CDN$0.55 with a twelve month warrant to purchase an additional common share for each share taken down at CDN$0.66, and $300,000 7.5% convertible debentures. Thus providing the necessary capital for our project development in Germany.

CalciTech Group Services SARL, a subsidiary of the Company operating in France, received in September 2001, a preliminary notice of reassessment from the French tax authorities, for an amount of EUR 357,000 ($325,000) for which a provision has been made. This claim will be vigorously contested

Outlook

With the commercialisation of CalciTech Technology underway and the launch of the first PCC products, anticipated "burn rate" is predicted to rise in the current year. Negotiations for the funding of the first commercial scale plant will shortly commence.

The annual general meeting of shareholders will be held on Friday, 13th September 2002.

For More Information, visit www.CalciTech.com or contact:

Claire Homburg Investor Relations Officer Tel: [phone] Fax: [phone] Email: [e-mail]

This press release contains forward-looking statements which are subject to a number of contingencies and uncertainties, including but not limited to, market acceptance for CalciTech products, manufacturing of CalciTech products in a commercial setting, obtaining adequate financing and construction management for products and obtaining appropriate permits. Such forward-looking statements are not guarantees of future performance, and are based on numerous assumptions about future conditions that could change.

No Stock Exchange has reviewed or accepted responsibility for the adequacy or accuracy of this press release.