Star Scientific Files Second-Quarter Financials for 2013

           Star Scientific Files Second-Quarter Financials for 2013

PR Newswire

GLEN ALLEN, Va., Aug. 9, 2013

GLEN ALLEN, Va., Aug.9, 2013 /PRNewswire/ --Star Scientific, Inc., (NASDAQ:
STSI) today filed with the Securities and Exchange Commission its Form 10-Q
for the quarter ended June 30, 2013.

(Logo:http://photos.prnewswire.com/prnh/20130319/PH79245LOGO)

The Company reported net sales totaling $2.5 million for the three months
ending June 30, 2013, compared with net sales of $1.4 million for the same
period in 2012. The increase of 74% was attributable exclusively to increased
Anatabloc® sales volume. Net sales for the six months ending June 30, 2013,
totaled $5.0 million, a 100% increase compared with $2.5 million for the same
period in 2012. During the second quarter 2013, the Company began to further
align its marketing and distribution efforts with GNC as its primary strategic
partner for growth. The Company believes that as a result of this shift in
advertising and marketing expenditures to focus on sales at GNC stores, the
Company's internet sales, which have higher margins, decreased, while sales at
GNC increased by approximately 20%. The Company further believes that this
strategic shift should result in lower customer acquisition cost and overall
increased net sales due to higher sales volume.

Gross profits totaled $1.0 million for the three months ending June 30, 2013,
compared with gross profits of $0.7 million for the same period in 2012. The
improved gross profit is attributable exclusively to increased Anatabloc®
sales volume. Gross profits totaled $2.1 million for the six months ending
June 30, 2013, compared with gross profits of $1.2 million for the same period
in 2012. The Company has reported positive gross profits for the past six
quarters. The net loss for the second quarter of 2013 was ($8.7) million
compared with a net loss of ($8.0) million for the same period in 2012. The
net loss for the six months ending June 30, 2013, totaled ($16.9) million
compared with a net loss of ($13.2) million for the same period in 2012. The
increase in net loss was attributable primarily to increased legal costs
relating to the previously reported government investigation and the Company's
internal investigation, as well as increased sales and marketing expenses.

As reflected in the 10-Q report, the Company has been cooperating fully with
the government investigation being conducted by the United States Attorney's
Office for the Eastern District of Virginia. Based on the results of the
Company's internal investigation, the cooperation with the United States
Attorney's Office, and discussions and communications between the Company's
outside counsel and the United States Attorney's Office, the Company does not
believe that it will be prosecuted for any of the matters that the United
States Attorney's Office has been investigating. Also, the Company's
internal investigation conducted by the international law firm of Chadbourne &
Parke LLP was substantially completed as of late June. Based on those
developments, costs relating to the investigations are expected to be
significantly lower on a going forward basis. Following the close of the
second quarter, the Company completed transactions relating to previously
issued warrants, which resulted in the exercise of the warrants and gross
proceeds to the Company of approximately $4 million.

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, results of clinical trials and/or other studies, the
challenges inherent in new product development initiatives, including the
continued development and market acceptance of our nutraceutical dietary
supplements products, the effect of any competitive 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, potential litigation by or against us,
any governmental review of our products or practices and the outcome of the
ongoing investigations 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, 2012 and our quarterly report on Form 10-Q for the quarter ended March 31,
2013. 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, Inc. is a technology-oriented company with a mission to
promote maintenance of a healthy metabolism and lifestyle. Through its wholly
owned subsidiary, Rock Creek Pharmaceuticals, Star Scientific has been engaged
in the manufacturing, sale, and marketing of two nutraceutical dietary
supplements, a cosmetic facial cream and facial serum, as well as the
development of other nutraceuticals and pharmaceuticals. The company also
continues to pursue the licensing of the technology behind its proprietary
StarCured® curing process and its related products. Rock Creek Pharmaceuticals
has scientific and research offices in Gloucester, MA, and a regulatory office
in Washington, DC. Star Scientific has a Corporate and Sales Office in Glen
Allen, VA, and an Executive, Scientific & Regulatory Affairs office in
Washington, DC.

Contact:
Talhia T. Tuck
Vice President, Communications and Investor Relations
Star Scientific, Inc.
(202)887-5100
ttuck@starscientific.com

SOURCE Star Scientific, Inc.

Website: http://www.starscientific.com
 
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