SCOLR, Inc. Announces Third Quarter and Nine-Month Results; Review of Quarterly Operational Highlights.Business Editors REDMOND, Wash.--(BUSINESS WIRE)--Nov. 15, 2002 SCOLR, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :SCLL SCLL Sandia Corporation, Livermore Laboratory ) announced financial results for the third quarter and nine months ended September 30, 2002. For the quarter, the Company reported revenues of $1,645,130, a decrease of $645,996, or 28 percent, an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $442,776 and a net loss of $522,495, or ($0.03) per share, as compared with revenues of $2,291,126, an operating loss of $150,207 and a net profit of $257,134, or $0.01 per share, in the same period last year. Revenues for the first nine months of 2002 were $5,198,402, a decrease of $1,862,472, or 26 percent. The loss from operations totaled $1,216,959 and the net loss was $1,663,738 or ($0.08) per share. These results compared with revenues of $7,060,874, operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $40,156 and a net profit of $20,253, or $0.00 per share, in the same period in 2001. Financial results during the first nine months of 2002 reflect the Company's performance after the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of several non-core business activities in 2001, including the sale of the Calcium D-glucarate business, sale of the Biotal animal nutrition business and loss of business associated with the sale of a customer to a larger company. Results also include $160,000 severance charge for the former CSO (Chief Security Officer) The person in charge of all staff members who are responsible for promulgating, enforcing and administering security policies for all systems within an enterprise or division. . Comparative revenues from the core probiotic pro·bi·ot·ic n. A dietary supplement containing live bacteria or yeast that supplements normal gastrointestinal flora, given especially after depletion of flora caused by infection or ingestion of an antibiotic drug. fermentation fermentation, process by which the living cell is able to obtain energy through the breakdown of glucose and other simple sugar molecules without requiring oxygen. Fermentation is achieved by somewhat different chemical sequences in different species of organisms. and the probiotic LiveBac(R) product lines which make up the on-going probiotic dietary supplement Noun 1. dietary supplement - something added to complete a diet or to make up for a dietary deficiency diet - a prescribed selection of foods vitamin pill - a pill containing one or more vitamins; taken as a dietary supplement and probiotic fermentation businesses showed a return to normal levels in the third quarter of 2002 following a 45 percent decrease in the fourth quarter of 2001, subsequent to September 11th, and a 15 percent decrease in the first quarter of 2002. These decreases in the core business volumes reflected both the continued general slowdown in sales in the nutraceutical nu·tra·ceu·ti·cal n. A food or naturally occurring food supplement thought to have a beneficial effect on human health. nutraceutical industry as well as the after effects of September 11th. In the third quarter, however, revenues from the Company's probiotic fermentation business and the sales of LiveBac(R) probiotic tablets increased by 19% to $1,449,870 as compared with $1,215,164 in the corresponding quarter of 2001. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. David T. Howard, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , "In order to understand our results in the most meaningful manner, it is important to note the impact of the product lines which have been sold or discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . Results for comparable probiotic fermentation and probiotic LiveBac(R) products for the third quarter would have shown a 19 percent increase in revenues over the same nine-month period in 2001 and an average annual increase of 16.1% over nine-month 1999 results. "I am pleased to note that our core business is currently operating at expected levels. For the three months ended September 30, 2002 this business showed a three-month operating profit of $35,441 as compared with an operating loss of $15,068 in the first nine months of 2002. Howard continued, "As a result of conditions discussed above, our core probiotic fermentation and probiotic LiveBac(R) business had negative cash flow instead of being able to generate cash to support our on-going CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT (TM) drug development program. During the first nine months of 2002, our probiotic and drug delivery operations required $360,279 in cash as compared with positive cash flow of $215,036 for the same period in 2001. SCOLR's main cash requirement was for R&D expenses related to the drug delivery business and the conduct of our first human clinical trial. "A key element behind our strategy to build a drug delivery business (during the period from July, 2000 through September, 2002) was to utilize the operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. generated by the probiotic fermentation and LiveBac(R) probiotic businesses and to sell the assets of businesses which were not a strategic fit to either the drug delivery or probiotic business units. The Company addressed its on-going and critical liquidity requirements by raising $1,450,000 through the sale of common stock and by obtaining a $1 million loan (which included the issuance of warrants). Because we anticipate having very limited financial resources going forward, we are constantly evaluating new strategies and opportunities to finance the two business units. Given SCOLR's significant intellectual property holdings in drug delivery, and the potential for new drug delivery systems, this strategy will entail the possible sale of the probiotic fermentation and LiveBac(R) probiotic businesses and assets as we go forward. "Operational highlights for the third quarter of 2002 were numerous and include our having achieved the following milestones," said Howard.
1. "Change of our corporate name from Nutraceutix, Inc. to SCOLR,
Inc. (pronounced scholar), an acronym for Self Correcting Oral
Linear Release, which is the Company's lead technology.
2. In September, 2002 Archer Daniels Midland introduced Novasoy Daily
Dose(R) in Europe. Novasoy, the first ADM nutraceutical product
based on our CDT(TM) technology is currently being introduced into
the U.S. market for soy products (which is estimated at over $500
million in sales in 2001). During Q3 we completed scale-up and
pre-commercialization activities in our Colorado manufacturing
facility to support the introduction of Novasoy Daily Dose and
anticipate the initial royalty stream to begin the first quarter
2003.
3. Submission and acceptance of seven new papers at the AAPS
(American Association of Pharmaceutical Scientists) Meeting in
Toronto. The presentation of these scientific papers was made this
week.
4. Initiated tech transfer of our CDT Glucosamine and CDT glucosamine
& chondroitin formulation to Sinphar Pharmaceutical's cGMP
facility in Taiwan for introduction in 11 Asian markets pursuant
to our 2001 licensing agreement with Sinphar.
5. Tech transfer of our CDT Glucosamine and CDT glucosamine &
chondroitin formulation to a U.S.-based manufacturer for supply
and distribution in the U.S. store brand markets was completed in
November, 2002 with a U.S. introduction anticipated for early
2003.
6. Completion of R&D and pre-commercialization of a new drug delivery
system, SCBioRx(TM) for room temperature stable formulations of
probiotics with targeted delivery into the GI tract for
optimization of benefits.
7. Lehigh Valley Technology's approval from the DEA to begin
pre-commercialization manufacturing activities on CDT(TM)
formulations of pseudoephedrine, as previously scheduled.
8. Development of new prototype and Proof of Concept formulation in
support of our CDT(TM) platform employing amino acids to provide
in-situ solubilization for poorly soluble pharmaceuticals
administered by the oral route. This new drug delivery platform
was the subject of presentations at the recent AAPS Meeting
(American Association of Pharmaceutical Scientists) in Toronto.
9. Commencement of the patent filing on a fourth drug delivery
platform.
"Q4 marks SCOLR's debut as a drug delivery company, beginning with notification of allowance of our amino acid amino acid (əmē`nō), any one of a class of simple organic compounds containing carbon, hydrogen, oxygen, nitrogen, and in certain cases sulfur. These compounds are the building blocks of proteins. CDT(TM) platform (first patent in SCOLR's name), and by the successful completion of the first human clinical (in collaboration with NorthWest Kinetics kinetics: see dynamics. Kinetics (classical mechanics) That part of classical mechanics which deals with the relation between the motions of material bodies and the forces acting upon them. of Tacoma, Washington) supporting pharmaceutical applications of CDT(TM). Results of the trial were presented this week at the AAPS AAPS American Association of Pharmaceutical Scientists AAPS Association of American Physicians and Surgeons AAPS Ann Arbor Public Schools AAPS American Association of Plastic Surgeons AAPS African Association of Political Science Meeting in Toronto by Dr. Reza Fassihi of Temple University and are expected to be published later this year. "We continue to take steps to take action; to move in a matter. See also: Step to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. our core probiotics Probiotics Bacteria that are beneficial to a person's health, either through protecting the body against pathogenic bacteria or assisting in recovery from an illness. Mentioned in: Colonic Irrigation, Dysentery, Gastroenteritis business in order to (1) supply the cash required to continue our CDT(TM) drug delivery development, (2) file and/or license additional patents, and actively pursue strategic alliances with OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). and multinational prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, companies in order to bring to market products based on our drug delivery intellectual property portfolio," concluded Howard. Based in Redmond, Washington Redmond is a city in King County, Washington, USA. It is situated on the eastern edge of the Seattle urban area, in what is known as the Eastside. In 2003 the Census Bureau estimated the city population was 46,391. , SCOLR, Inc. is a biopharmaceutical company leveraging specialized knowledge, proprietary and patented products and technologies, such as the patented CDT(TM) platform, to introduce distinctive and novel OTC products, prescription drugs and dietary supplements. SCOLR currently operates in two business segments -- drug delivery and a specialty ingredient business based on probiotics. Its CDT(TM) drug delivery platform provides distinctive products with tangible benefits for the consumer and competitive and commercial advantages for licensees. Established partnerships with pharmaceutical, OTC and natural products industry companies enable SCOLR to co-develop new products and to add value and protection to existing product franchises. For more information on SCOLR, please call 1.800.548.3222 or visit http://www.scolr.com or email info@scolr.com. For more information on AAPS and its Annual Meeting and Exposition in Toronto, Canada, please visit http://www.aapspharmaceutica.com. Except for any historical information, the matters discussed in this press release contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including activities, events or developments that the company expects, believes or anticipates will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the Company's ability to continue to successfully market and provide its products and services and maintain their effectiveness, the continuation of the arrangements with the Company's product development partners, the ability of the Company to meet its financial projections, and general economic conditions. Such statements are subject to a number of assumptions, risks and uncertainties. Such forward-looking statements are subject to other risks and uncertainties, which are detailed in the Company's filings with the Securities and Exchange Commission. Readers are cautioned that such statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update or revise forward-looking statements whether as a result of new information or otherwise. Novasoy(R) is a registered trademark of Archer Daniels Midland The Archer Daniels Midland Company (NYSE: ADM), is a conglomeration based in Decatur, Illinois. ADMoperates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed Company, Decatur, IL.
FINANCIAL HIGHLIGHTS
Three Months Ended September 30,
2002 2001
Revenues $1,645,130 $2,291,126
Net (Loss) from Operations ($442,776) ($150,207)
Net Income (Loss) ($522,495) $257,134
Earnings (Loss) Per Share
Basic (0.03) 0.01
Diluted (0.03) 0.01
Nine Months Ended September 30,
2002 2001
Revenues $5,198,402 $7,060,874
Net Income (Loss) from Operations ($1,216,959) $40,156
Net Income (Loss) ($1,663,738) $20,253
Earnings (Loss) Per Share
Basic (0.08) 0.00
Diluted (0.08) 0.00
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