Star Scientific Reports on Second Quarter

Source from:  PETERSBURG, Va.--(BUSINESS WIRE) 08/14/2008

Star Scientific, Inc. (NASDAQ:STSI) announced that it has filed its second-quarter financial report on Form 10-Q today with the Securities & Exchange Commission. Gross sales for the quarter ended June 30, 2008 totaled $167,483 compared with gross sales of $219,242 during the same period in 2007. Net sales for the second quarter totaled $52,176 as compared with $196,168 for second quarter 2007. Net sales were impacted in part by a decrease in unit sales volume and an increase in product discounts (placement fees) during the second quarter. The company reported an operating loss of $6.29 million compared with $3.85 million for second quarter 2007. The net loss for the quarter totaled $6.4 million as compared with a net loss for second-quarter 2007 of $3.2 million. The second-quarter 2008 net loss reflected a non-cash stock option expense of $2.2 million; the second-quarter 2007 net loss reflected a $1.0 million gain on the disposition of Star Tobacco's cigarette operations. Excluding both of these non-cash events, net losses for the second quarters of 2007 and 2008 would have been equivalent at approximately $4.2 million. The company awaits a ruling on its appeal to the US Court of Appeals for the Federal Circuit in its patent infringement lawsuit against RJ Reynolds Tobacco Company, and expects that the Court will issue its opinion at any time in the near future. As it has stated in previous releases, the company is confident that it ultimately will be successful in the judicial process. The Federal Circuit issues opinions on pending cases on the Court's website each morning at approximately 11:00 AM EDT, with hyperlinks to each opinion. The website can be accessed at the following URL: http://www.cafc.uscourts.gov/dailylog.html. This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "anticipates", "believes", "estimates", "expects", "plans", "intends" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties and contingencies include, without limitation, the challenges inherent in new product development initiatives, particularly in the smokeless tobacco area, the uncertainties inherent in the progress of scientific research, the Company's ability to raise additional capital in the future necessary to maintain its business, potential disputes concerning the Company's intellectual property, risks associated with litigation regarding such intellectual property, potential delays in obtaining any necessary government approvals of the Company's low-TSNA tobacco products, market acceptance of the Company's new smokeless tobacco products, competition from companies with greater resources than the Company, the Company's decision not to join the Master Settlement Agreement ("MSA"), the effect of state statutes adopted under the MSA, and the Company's dependence on key employees and on its strategic relationships with Brown & Williamson Tobacco Corporation in light of its combination with RJ Reynolds Tobacco Company, Inc. The impact of potential litigation, if initiated against or by individual states that have adopted the MSA, could be materially adverse to the Company. See additional discussion under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC on March 17, 2008, and other factors detailed from time to time in the Company's other filings with the SEC, available at www.sec.gov. The Company undertakes no obligation to update or advise upon any such forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. About Star Scientific Star Scientific is a technology-oriented tobacco company with a toxin reduction mission. It is engaged in the development of dissolvable smokeless tobacco products that deliver fewer carcinogenic toxins (principally tobacco specific nitrosamines, or TSNAs), through the utilization of the innovative StarCured® tobacco curing technology, and in sublicensing that technology to others. Star Scientific has a Corporate and Sales Office in Petersburg, VA, an Executive, Scientific & Regulatory Affairs office in Bethesda, MD, and manufacturing and tobacco processing facilities in Chase City, VA and in Petersburg, VA. Enditem