Phlo Corporation announced today the successful commercialization of one of its biotechnologies through the introduction of the new "ZO - Vital Cell Defense" line of beverages which features its proprietary (patent pending) composition consisting of Vitamin E phosphate combined with a delivery system (with sustained-release capability).

Phlo's delivery system protects the active payload from destruction by enzymes in the body and allows the actives to reach their intended target tissue and to penetrate cell membranes for maximum beneficial effect.

"As a result of our tests, we believe that the same composition that is contained in our Vital Cell Defense line of beverages, and which stimulates the membrane repair function of cells and helps protect cells from oxidative stress associated with aging and exposure to toxins, can also be used for major medical applications. As an example, we believe that this composition can be introduced intravenously to reduce or prevent permanent heart damage associated with heart attacks, and can be used in topical applications, such as cosmetics to dramatically improve the condition and appearance of the skin," Phlo President and Chief Executive Officer, James B. Hovis, said today.

"Phlo has the benefit of controlling under one corporate roof biotechnologies and the means of their commercialization on a relatively quick basis in products through the largest distribution systems in the country serving supermarket chains," Mr. Hovis added. "Additionally, these biotechnologies provide the basis for tremendous sublicensing opportunities and returns during the longer term related to the development and sale of pharmaceutical products used in the treatment of major disorders associated with damage to the liver, heart, and brain."

Phlo's Vital Cell Defense beverage line under the brand name ZO will be offered in 20 ounce glass bottles, initially in seven flavors: Cranberry Berry, Orange Carrot, Pink Lemonade, Tropical Punch, Kiwi Strawberry, Raspberry Vanilla, and Blackberry Cherry. The Vital Cell Defense line will later be expanded to include at least four flavors of iced tea. The Company is in the process of presenting the new beverage line to certain of its existing distributors, such as Haddon House and Gourmet Awards, and the supermarket chains which carry the McCoy's beverage brand, such as A&P, Grand Union, Stop & Shop and Super Fresh. Phlo's beverages are currently sold in 2,577 chain supermarkets, not including independent supermarkets and "up and down the street" retail outlets.

Phlo has exclusively licensed the Vitamin E phosphate composition for uses including, among other things, pharmaceuticals, biotechnologicals, nutraceuticals, dietary supplements, food and beverage products and topical preparations (for therapeutic or cosmetic use) and believes, as a result of its tests, that its Vitamin E phosphate composition could support pharmaceutical products for the treatment of disorders such as Alzheimer's disease, alcoholic liver disease, cancer, heart disease, and emphysema. Phlo also believes that the composition could be added to solutions used for storage and transport of tissues for transplant which would address one of the major problems in the transport of organs, the damage to cells between the time the organ is harvested and the time the organ is connected to the recipient's blood supply.

Phlo just recently announced the execution of an agreement providing for the exclusive license, for all uses, worldwide, of a proprietary (patent pending) composition which has demonstrated potent memory and cognition-enhancing capabilities, based on tests involving the composition. Results of tests also indicate that the composition acts as a strong appetite suppressant, and acts as a novel stimulant which prevents the secondary depression associated with stimulant intake. Phlo is in the process of developing a liquid formulation containing this technology for introduction into the marketplace later this year.

Phlo features the use of the beverage medium to convey health benefits to the consuming public. Phlo's McCoy's Green Tea beverage line is available in seven different flavors and is the first and only new age beverage that delivers a truly functional level (250 mg) of powerful green tea catechins, including the super anti-oxidant EGCg. Studies show that a high daily intake of EGCg aids in the protection against cancer and cardiovascular disease. McCoy's Green Teas also feature Vitamin C and Siberian ginseng for sustained energy and concentration. All natural fruit juices, iced teas and lemonades are also available under the McCoy's brand name. Phlo is based in New York City at 475 Park Avenue South, Seventh Floor, New York, New York 10016 and can be reached at (212) 447-1322.

Certain statements made herein constitute "forward-looking" statements within the meaning of the Private Litigation Reform Act of 1995. Such statements are based on a number of assumptions and on information and estimates supplied to Phlo Corporation by its distributors. Such assumptions and estimates are subject to uncertainties, contingencies, and other factors, many of which are beyond Phlo's control. Actual results may differ materially from the statements set forth above.