Vitalstate Inc.

Vitalstate Inc.

October 03, 2005 14:16 ET

Vitalstate Update - October 2005

BOYNTON BEACH, FLORIDA--(CCNMatthews - Oct. 3, 2005) - Vitalstate Inc. (PINK SHEETS:VTST) (the "company") continues to work diligently towards the issuance of its pending patents associated with the Actijube delivery technology developed by the company for use in OTC, pharmaceutical, and pet applications. Additionally, the company's trial of the Actijube delivery form in the sports nutrition channel continues to give the company valuable insights into the potential of this intellectual property.

The company hopes to receive a final, definitive response to its patent application from the U.S. Patent Office by the end of 2005. Such information, positive or negative, will be shared with the investor community when it becomes final and available.

Sales on retail products year to date have been $250,000. The company continues to eliminate non-core products and focus on products based on Actijube delivery technology. The company has eliminated non-core distributors of such products, but anticipates to continue working with one significant retailer (The Vitamin Shoppe) and select distributors managed directly by the company's sales department. The company continues to distribute its Wolverines product nationwide. (Wolverines is not an Actijube product.)

During 2005, the company has begun to liquidate products that were discontinued in 2004 and 2005. The company still has a material amount of inventory on hand and intends to continue to market these items to discounters worldwide in an effort to convert such inventories to cash for the on-going operations of the business.

The company continues to rely for its funding solely on the security agreement between the company and Scepter Holdings, dated January 1, 2005. Without the funds available to the company under the agreement, the company's operations could not continue. The agreement expires on December 31, 2005, and all amounts received by the company pursuant to the agreement will become due and payable upon such expiration. Without significant positive information from the U.S. Patent Office, all of the intellectual property and non-operating assets of Vitalstate will become wholly owned by Scepter Holdings on January 1, 2006. If our U.S. patent is granted by the U.S. Patent Office prior to expiration of the agreement, Scepter Holdings has indicated that it would be willing to extend such deadline to sometime in 2006, and to fund Vitalstate until an outside investor is found in early 2006.

The management team of Vitalstate continues to have an optimistic opinion that the U.S. Patent Office will return a favorable review of its patents in 2005 and the company will continue to market its technology to various firms associated with delivery of active ingredients complementary to the Actijube technology. Until such time, the company continues to manage its development, overhead, and overall spending in order to continue as a going concern.

ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - Certain statements contained in this news release, including, without limitation, those regarding the company's business strategy, the status of the company's pending patent applications, Scepter's future intentions and the sources of the company's future funding, are forward-looking statements within the meaning of the United States federal securities laws. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: product supply and demand; market competition; risks inherent in the company's marketing operations, including credit risks; the company's ability to generate sufficient cash flow from operations to meet its current and future obligations; its ability to access external sources of debt and equity capital; changes in Scepter's business plans and strategy; political and economic conditions; risks associated with future lawsuits and regulatory actions made against the company; and the uncertainty of the U.S. Patent Office's determination process. Although the company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list of important factors is not exhaustive.

Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and the company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

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