SOURCE: Rheologics Technologies, Inc.

February 01, 2007 20:49 ET

Rheologics Technologies, Inc. Sends Letter to Stockholders

EXTON, PA -- (MARKET WIRE) -- February 1, 2007 -- Rheologics Technologies, Inc. (PINKSHEETS: RTGI) ("Rheologics"), announced today that it has sent a general update letter to its stockholders. The following is the full text of the letter:

Dear Valued Shareholders:

We would like to take this opportunity to bring you up-to-date regarding the status of our Company, Rheologics Technologies, Inc. (previously Ostara Corporation), during a very exciting time in the development of our business. This is our first shareholder letter, and it is our intention to establish clear and frequent lines of communication between the executive committee here at Rheologics and you, our shareholders. This letter summarizes the fundamentals of our business and how we got here. In addition, we identify our market opportunities and the future goals we have set for the Company.

Business Plan Overview

Our focus at Rheologics is to ensure a better quality of life by providing innovative diagnostic technologies and novel treatments that identify and counteract the underlying causes of cardiovascular disease (heart attacks, strokes and related conditions). Rheologics is committed to creating next-generation diagnostic technologies and treatments that will not only extend life but also improve the quality of the lives we live. We are working to accomplish our mission by monitoring an overlooked basic physiological parameter -- whole blood viscosity ("WBV") or the thickness of blood. We believe that our proprietary innovations will ultimately enable the preventive diagnosis of cardiovascular disease and the development of new cost-effective therapies addressing some of today's most difficult medical problems.

Rheologics' current diagnostic offering, called the Rheolog®, is an FDA IDE-exempt device that measures whole blood viscosity across a complete cardiac cycle. The Rheolog® currently is being used for clinical research at certain research hospitals and in medical care settings to aid physicians in the interpretation of disease. The Rheolog® is also being used for research in the development of therapeutic interventions that address the root causes of cardiovascular disease. We believe that the Rheolog® can establish a standard for blood viscosity measurement and become an early diagnostic test for cardiovascular disease.

A Publicly Traded Company

Rheologics Technologies, Inc.'s common stock is currently trading on the OTC Pink Sheet system under the symbol "RTGI." Rheologics, Inc. was founded in 1997 by world-renown cardiologist, author and inventor Kenneth R. Kensey, MD, founder of Kensey-Nash Corporation. While serving as CEO of Kensey-Nash, Dr. Kensey developed the theory that the root cause of cardiovascular disease was elevated blood viscosity. However, because there was no easy way to measure blood viscosity across a complete cardiac cycle and no established standards for measurement, blood viscosity had not yet gained mainstream acceptance. He left Kensey-Nash to start Rheologics, Inc. in 1997 for the purpose of developing the diagnostic technology to capitalize on this theory. Funded through direct investments by Dr. Kensey of approximately $20 million from 1997 to 2005, Rheologics, Inc. succeeded in developing the Rheolog®. In August 2005, Rheologics Technologies, Inc. gained control of Rheologics, Inc. by acquiring 89% of its outstanding shares. Today, Dr. Kensey continues as Chairman and Chief Scientific Officer of Rheologics and is a member of the executive committee.

A Revolutionary Blood Test

The Rheolog® whole blood viscosity test is a quick, safe, highly accurate and repeatable test that requires 3 cc specimens of blood in standard vacutainers. Blood is drawn at a physician's office and shipped overnight cold-packed to our laboratory facility in Exton, Pennsylvania. The test results include a graph of the WBV Profile for a patient's blood against benchmarks and are delivered to the doctor's office immediately via email or fax.

The research version of the Rheolog® diagnostic device has been leased to a number of clinical research facilities including the University of Chicago, the Canadian Centre for Advanced Eye Therapeutics, and HeartWare Ltd., a manufacturer of artificial heart pumps. The device is also being used for clinical studies at the Cleveland Clinic, Northwestern University, the University of Southern California, the University of California at Davis and at a number of other private research organizations. Disposable kits are required for each WBV measurement and are currently sold to the above research facilities with a lease of the device.

Market Opportunities

Cardiovascular disease, the patients that have this disease, and the physicians that diagnose and treat it together represent a large market opportunity for Rheologics. Life expectancy in the U.S. has risen from under 50 years in 1900 to almost 80 years today, marking the success of modern medicine in the fight against infectious diseases through the development of antibiotics, vaccines and other pharmaceuticals. Cardiovascular disease ("CVD") however remains an unsolved and still poorly understood problem. CVD is the leading cause of death in the U.S., affecting more than 62 million people and claiming the lives of nearly one million in the U.S. per year. Globally, over 17 million people die each year from vascular diseases, mostly heart attacks and strokes. The statistics reveal that, despite numerous medical advances in recent decades, the scientific community has not yet grasped the root cause, or etiology, of CVD and therefore is still unable to present a viable cure.

   Rheologics believes that through its new diagnostic technology, it has
   developed a fundamentally superior understanding of the root cause of
   CVD and is at the forefront of the advancement of cardiovascular
   medicine.

We currently believe that the market for the Rheolog® will be comparable to the market for cholesterol testing. According to the American Heart Association, nearly 107 million Americans have elevated LDL cholesterol levels and are at risk for heart attacks or strokes. The U.S. market for the LDL testing is estimated at 65 million tests per year, while the U.S. market for HDL tests is estimated at 100 million tests per year. Although cholesterol testing is understood only to provide a risk factor for CVD and is not necessarily related to any root cause, cholesterol has gained mainstream acceptance as a biomarker for the disease. Rheologics' diagnostic test offering is similar to cholesterol insofar as it can be performed using a simple blood draw in a vacutainer from any physician's office. The test is also comparable in its expected cost structure. However, because our new test is designed to quantify the root cause of CVD rather than merely a risk factor, it has the potential to exceed cholesterol testing in terms of commercial reach and clinical impact.

Recent Developments & Studies

Rheologics recently initiated a new clinical study at the Seoul Veterans Hospital in Seoul, South Korea, where a team of researchers is examining WBV in conjunction with end-stage peripheral arterial disease, vascular disease that occurs in the arteries of the legs of 8-12 million in the U.S., resulting in limb amputation for over 100,000 people per year. The team at Seoul Veterans Hospital is studying the use of WBV to monitor a new therapeutic intervention and as a predictor for limb salvage rate. Rheologics has also begun to perform studies examining the effects of pharmaceutical agents on blood viscosity and cardiovascular disease.

Our Priorities Moving Forward

Our current priority is the distribution of whole blood viscosity testing to physicians in the interpretation of CVD, which is expected to be a primary revenue driver for 2007-2008, as well as ongoing clinical research. Additionally, Rheologics is seeking to expand its pharmaceutical research efforts for the purpose of establishing strategic partnerships for co-development with major pharmaceutical companies. From the corporate perspective, the Company is focused on becoming a fully reporting company and trading on the OTC Bulletin Board. For more information on Rheologics, please visit www.rheologics.com. We invite you to contact us anytime, should you have any questions or wish to speak with us further on our corporate developments. Please feel free to let us know if you prefer to receive information from the Company by email.

We believe in our science and our ability to commercialize innovations in the biomedical industry, and as we move into 2007, we will continue to focus on providing value to our shareholders.

Rheologics Technologies, Inc.

Contact Information
Corporate:                             Investor Relations:
Mr. Daniel J. Cho                      Mr. Jody M. Janson
President                              ISD, Inc.
Tel: (800) 969-2585                    Tel: (585) 232-5440
Fax: (610) 524-9440                    Fax: (585) 232-5457
Email: dcho@rheologics.com             Email: jody@istockdaily.com

Cautionary Note Regarding Forward-Looking Statements

This letter contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to statements regarding (i) expectations about the performance and benefits of Rheologics' technology in enabling improved diagnosis and treatment of disease, (ii) marketing activities, (iii) market and clinical acceptance of our technology, (iv) beliefs regarding the establishment of new diagnostic standards, (v) research and development efforts, and (vi) financial expectations. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ. Such factors include (i) the failure of the Company in obtaining sufficient financing to fund its growth, (ii) reluctance on the part of clinicians in accepting the merits of our diagnostic or therapeutic technologies, (iii) failure of present and future clinical studies in demonstrating the performance and benefits of Rheologics' technology. All forward-looking statements herein are based on information available to us as of the date hereof, and we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after this date.

Additional information about Rheologics Technologies, Inc.

Rheologics is committed to developing and commercializing innovative medical technologies that improve the diagnosis and treatment of human disease. The Company is accomplishing its mission by monitoring an overlooked basic physiological parameter -- whole blood viscosity. Rheologics believes that its innovations will ultimately enable the preventive diagnosis of diseases and the development of new cost-effective therapies that conquer today's most difficult medical problems, thereby improving the quality of life for millions of people worldwide. Further information on Rheologics may be found at www.rheologics.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding the following: the Company's beliefs about the benefits of its technology; the Company's expectations of its technology; the Company's beliefs about the performance capabilities of its technology; the Company's ability to commercially license its technology; the ability of the Company to hire employees sufficient to accelerate engineering and testing; and the Company's beliefs regarding its research and development efforts. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, our inability to achieve commercial acceptance of our technology, our inability to compete effectively in the marketplace, our inability to improve or implement effective systems, procedures and controls, the strength of our patent and pending patents and other intellectual property and those of our competitors, our inability to protect our intellectual property, our inability to attract, train and retain key personnel, and such other risks. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Contact Information

  • Contact:

    Mr. Dan Cho
    Rheologics Technologies, Inc.
    800-969-2585
    Fax: (610) 524-9440
    Email: Email Contact or

    Jody Janson
    ISD, Inc.
    585-232-5440
    Fax: (585) 232-5457
    Email Contact