CAUTIONARY STATEMENTS FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Private Securities Litigation Reform Act of 1995 provides public companies with a “safe harbor” from
liability for forward-looking statements if those statements are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ materially from those contained in the
forward-looking statements. The Company hereby identifies the following important factors which could cause
the Company’s actual results to differ materially from those contained in any forward-looking statements made by
the Company from time to time in any report, proxy statement, registration statement, or other written
communication or in oral forward-looking statements made from time to time by the Company’s officers,
directors, employees, or agents.
THE COMPANY HAS A DEPENDENCE ON A MAJOR CUSTOMER
The Company depends on adequate royalty income from Novartis to fund continuing operations. Currently
the Company has no other licensing arrangements in place. The Company was without an income stream as a
result of Novartis making a voluntary product recall of the Company’s licensed products in June 2006.
Subsequently, the Company has rejuvenated its revenue stream with the launch by Novartis of an adult vapor
patch during the last half of 2007. Royalties resulting from the launch of the new adult vapor patch are uncertain
because of the acceptance of the product in the market place, severity of the cough, cold, flu season, marketing
efforts by Novartis, and other factors that Company is unable to control.
PATENTS AND OTHER PROPRIETARY RIGHTS PROVIDE UNCERTAIN PROTECTION OF OUR
PROPRIETARY INFORMATION AND OUR INABILITY TO PROTECT A PATENT OR OTHER
PROPRIETARY RIGHT MAY ADVERSELY AFFECT OUR BUSINESS
The patent position of companies engaged in the sale of products such as ours is uncertain and involves