Exhibit 99.1
Interleukin Genetics Restates Its
2003 and 2004 Financial Statements, Reports Restated Fourth Quarter
and Year-End Financial Results and Files 2004 Form 10-K
WALTHAM, Mass.--(BUSINESS WIRE)--April 26, 2005--Interleukin
Genetics, Inc. (OTCBB: ILGN) a leader in the development of
personalized health products, announced today that it has completed
its previously announced review of its accounting of the March 5, 2003
transactions with Alticor and its affiliates ("Alticor"). The review
resulted in a restatement of the Company's previously issued 2003 and
2004 financial statements. The Company will also file today its Form
10-K for the year ended December 31, 2004.
In connection with the restatement of its previously issued 2003
and 2004 financial statements, the Company recognized a beneficial
conversion feature associated with the March 5, 2003 transactions with
Alticor in accordance with the Financial Accounting Standard Board's
Emerging Issues Task Force Issue No. 00-27, "Application of EITF Issue
No. 98-5 to Certain Convertible Instruments." The beneficial
conversion feature resulted in an allocated discount of $8.1 million
associated with the Company's Series A Preferred Stock and $1.5
million associated with the convertible long-term debt.
In addition, the Company also reclassified all payments received
to date from Alticor as equity. All proceeds received by the Company
from Alticor for the Series A Preferred Stock and convertible
long-term debt and all payments, past and future, received from
Alticor under research and development agreements, up to the fair
market value of $23.7 million associated with the March 5, 2003
transactions, have been and will be classified to stockholder's equity
in accordance with EITF Issue 01-1. Payments received under the
Company's Distribution Agreement with Alticor are not expected to be
classified as equity.
All expenses associated with the performance of the Research and
Development agreements with Alticor have been and will be recorded as
research and development expenses in the Company's financial
statements. The Company expects to begin recording research revenue
after the fair market value of the transaction, $23.7 million, has
been fully accounted for as equity. Sale of the Company's genetic
tests associated with the market launch through Alticor's multi-level
marketing channel are expected to be recorded as product revenue.
As a result of the reclassification, the Company reported restated
revenue of $8,135 and a net loss of $1.7 million, or $0.07 per basic
and diluted common share, for the quarter ended December 31, 2004. For
the year, the Company reported restated revenue of $34,671 and a net
loss of $7.2 million, or $0.31 per basic and diluted common share. As
of December 31, 2004 the Company's total assets, as restated, were
$6.2 million and cash and cash equivalents remained unchanged at $4.5
million.
Financial Results:
Revenue for the fourth quarter was $8,135 compared to $9,473 in
the same quarter of 2003 reflecting in both periods royalties on
PST(R) sales and licensing revenue associated with one of the
company's patents. For the quarter, the Company reported a net loss of
$1.7 million, or $0.07 per basic and diluted common share, as compared
to a net loss of $1.7 million, or $0.07 per basic and diluted common
share, for the same period in the prior year.
Revenue for the year was $34,671 compared to $54,105 in 2003. Both
periods reflect royalties on PST(R) sales and licensing revenue
associated with one of the Company's patents. The 2003 revenue
included $17,000 associated with a non-recurring funded study. For
2004, the Company reported a net loss of $7.2 million, or $0.31 per
basic and diluted common share, as compared to a net loss attributable
to common stockholders of $14.7 million, or $0.63 per basic and
diluted common share, for 2003 which included $8.1 million, or $0.35
per common share for accretion of the convertible preferred stock
discount.
Research and development expenses were $1.0 million in the quarter
ended December 31, 2004 compared to $1.0 million in the quarter ended
December 31, 2003. These expenses included research and development
expenses funded by Alticor under research and development agreements.
Research and development expenses were $4.1 million for the year ended
December 31, 2004 compared to $3.5 million in 2003. The increase in
R&D expenses reflects increased subcontracted clinical studies
associated with the research projects funded by Alticor.
General and administrative expenses were $0.6 million for the
quarter ended December 31, 2004 compared to $0.5 million during the
same period in 2003. General and administrative expenses were $2.7
million for the year ended December 31, 2004 compared to $2.4 million
during the prior year. The increase is primarily the result of the
Company adding the appropriate infrastructure in its efforts to
prepare for product launch and develop other market opportunities for
its products.
As of December 31, 2004, the Company reported total assets of $6.2
million, including $4.5 million in cash and cash equivalents as
compared to total assets of $5.3 million including $4.8 million in
cash and cash equivalents as of December 31, 2003.
About Interleukin
Interleukin Genetics is a biotechnology company focused on
developing personalized health products. The company uses functional
genomics to help in the development of risk assessment tests,
pharmacogenetic tests, nutritional and therapeutic products based on
the genetic variations in people. Interleukin's current programs focus
on cardiovascular disease, osteoporosis, rheumatoid arthritis,
endometriosis, periodontal disease and weight management. Interleukin
expects that these programs will lead to products that will
personalize the selection of nutritional and therapeutic products and
enable the managed care industry to improve patient care and better
allocate resources. For more information about Interleukin and its
ongoing programs, please visit http://www.ilgenetics.com.
Certain statements contained herein are "forward-looking"
statements including statements regarding our ability to develop
diagnostic, personalized nutritional and therapeutic products to
prevent or treat diseases of inflammation and other genetic
variations, our ability to screen nutritional compounds for their
effects on inflammatory responses and other genetic variations, given
specific genetic patterns and our ability to make progress in
advancing our core technologies. Because such statements include risks
and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from those expressed
or implied by such forward-looking statements include, but are not
limited to, our ability to develop diagnostic, personalized
nutritional and therapeutic products to prevent or treat diseases of
inflammation and other genetic variations, our ability to screen
nutritional compounds for their effects on inflammatory responses and
other genetic variations, given specific genetic patterns, our ability
to construct a DNA testing laboratory, our ability to complete all of
our key milestones with regard to Alticor programs, our ability to
make progress in advancing our core technologies and our ability to
launch new commercial products and those risks and uncertainties
described in our annual report on Form 10-K for the year ended
December 31, 2004 filed with the Securities and Exchange Commission on
April 26, 2005, our quarterly reports on Form 10-Q and in other
filings made by us with the Securities and Exchange Commission. We
disclaim any obligation or intention to update these forward-looking
statements.
Interleukin Genetics, Inc.
Financial Highlights
Balance sheet data December 31, December 31,
- ------------------ 2004 2003
(As Restated) (As Restated)
(Audited) (Audited)
Cash and cash equivalents $4,528,425 $4,759,453
Total current assets 4,721,375 4,879,570
Total assets $6,185,501 $5,340,604
Total current liabilities $1,445,303 $663,104
Total liabilities 2,657,994 1,428,233
Total stockholders' equity 3,527,507 3,912,371
Total liabilities and stockholders' equity $6,185,501 $5,340,604
Three Months Ended Year Ended
December 31, December 31,
Statement of
operations data 2004 2003 2004 2003
---------------- ---- ---- ---- ----
(As Restated (As Restated
and Unaudited) and Audited)
Revenue $8,135 $9,473 $34,671 $54,105
Research and
development expense 999,588 986,039 4,078,667 3,478,519
General, and
administrative
expense 570,107 542,025 2,658,037 2,443,219
-------------------------------------------------
Total cost and
operating expenses 1,569,695 1,528,064 6,736,704 5,921,738
-------------------------------------------------
Loss from operations (1,561,560) (1,518,591) (6,702,033) (5,867,633)
Total other income
and expense (133,770) (139,059) (544,169) (691,281)
-------------------------------------------------
Net loss $(1,695,330)$(1,657,650)$(7,246,202) $(6,558,914)
=================================================
Accretion of
convertible
preferred stock -0- -0- -0- (8,094,727)
-------------------------------------------------
Net loss attributable
to common
stockholders $(1,695,330)$(1,657,650)$(7,246,202)$(14,653,641)
=================================================
Basic and diluted net
loss per common
share $(0.07) $(0.07) $(0.31) $(0.63)
Weighted average
common shares
outstanding 23,569,986 23,253,964 23,482,642 23,193,195
CONTACT: Interleukin Genetics
Fenel M. Eloi, 781-398-0700