GLEN ALLEN, Va., March 15, 2012 /PRNewswire/ -- Star Scientific, Inc. (NASDAQ: CIGX) today filed its annual financial report on Form 10-K with the Securities & Exchange Commission (SEC). The company reported that net sales for 2011 totaled $1.73 million, a 100% increase over 2010 net sales of $.848 million. Fourth-quarter 2011 net sales totaled $0.91 million compared with $0.15 million in fourth-quarter 2011. Net sales of the company's dietary supplements constituted 71.8% of gross sales for 2011, and dietary supplement sales continued to increase month over month in both January and February, 2012. In a parallel development, Rock Creek Pharmaceuticals, the company's wholly-owned subsidiary, is preparing for a national launch of Anatabloc at GNC retail stores.
Total operating expenses for 2011 increased to $36.0 million from $26.9 million for 2010. The company reported a net loss of $38.0 million for 2011, which includes a non-cash, stock-based compensation charge of approximately $17.3 million, attributable primarily to stock option grants that were approved by the company's stockholders at Star Scientific's Annual Meeting in December. Star reported 2011 year-end cash and cash equivalents of $10.19 million. The company also reported that on February 28, 2012 it entered into two Securities Purchase Agreements that resulted in gross proceeds of $12.0 million to Star Scientific. The company previously announced that on December 28th, 2011 it had entered into a Securities Purchase Agreement that resulted in gross proceeds of $6.3 million. That transaction, along with the February 28th transactions, resulted in a total of $18.3 million in gross proceeds to Star.
The company also reported that in February, 2012 PGA Tour professional Fred Couples entered into an agreement with Rock Creek Pharmaceuticals, under which Mr. Couples agreed to be a brand ambassador for Anatabloc® at tournaments and related events. Mr. Couples held a press conference during the Northern Trust Open in February during which he commented that he has been using Anatabloc®, the company's dietary supplement that was developed to provide anti-inflammatory support, for several months. He commented further that, "There has been a difference in how I feel, both when I wake up in the morning and throughout my day." Anatabloc® has been marketed since August, 2011 via a dedicated product website. The product also has been available for purchase via the GNC Internet storefront since February 1, 2012, and has been listed in recent weeks as "top-selling" product.
Anatabloc® contains the dietary ingredient anatabine citrate, which has been the subject of a number of research protocols undertaken both by Rock Creek Pharmaceuticals and by independent researchers. Anatabloc® is being tested for potential effects in lowering inflammation and markers of inflammatory cardiovascular risk (C - reactive protein and interleukins) in a multi-site dietary intervention study based in Flint, Michigan, and in a multi-site dietary intervention study of thyroid health that the company announced in a February 9, 2012 press release. Both of these studies, which bear the acronym ASAP (Anatabloc Supplementation Autoimmune Prevention) are ongoing and enrolling, with plans for interim looks in mid-2012. Studies proposed for later in 2012 include controlled investigations into the ability of Anatabloc to prevent post-exercise soreness (ASAP DOMS, or delayed-onset muscle soreness) and the effects of dietary intervention on joint health (ASAP Arthritis Study). Individuals interested in enrolling in the trials should contact the designated party listed on ClinicalTrials.gov.
Certain statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. The statements in this release are based upon the current beliefs and expectations of our company's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including, but not limited to, the challenges inherent in new product development initiatives, including the continued development and market acceptance of our nutraceutical and low-TSNA tobacco products, our ability to license and protect our intellectual property, our ability to raise additional capital in the future that is necessary to maintain our business, changes in government policy and/or regulation, including with respect to our nutraceutical and low-TSNA tobacco products, as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the fiscal year ended December 31, 2011. We undertake no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.
About Star Scientific
Star Scientific is a technology-oriented company with a mission to reduce the harm associated with tobacco at every level. It is engaged in the development of dissolvable smokeless tobacco products that deliver fewer carcinogenic toxins, principally through the utilization of the innovative StarCured® tobacco curing technology. Its subsidiary, Rock Creek Pharmaceuticals, Inc., is involved in the development of nutraceuticals as well as products to address neurological and mood disorders. Rock Creek Pharmaceuticals has scientific and research offices in Gloucester, MA, and a regulatory office in Washington, D.C. Star Scientific has a Corporate and Sales Office in Glen Allen, VA, an Executive, Scientific & Regulatory Affairs office in Bethesda, MD, and a manufacturing facility in Chase City, VA.
Sara Troy Machir
Vice President, Communications & Investor Relations
SOURCE Star Scientific, Inc.