On July 31, PacificHealth Laboratories, Inc. (NASDAQ:PHLI) distributed a press release on the Business Wire announcing an offer of free Endurox R4 to all US Olympians. Endurox R4 is a new nutritional sports drink shown in clinical trials to improve muscle recovery. The offer was to be included in an ad appearing in USA Today on Thursday, August 3. However, last evening at 6:00 PM, USA Today, responding to pressure from the United States Olympic Committee, pulled the ad. The following is a letter from Dr. Robert Portman, Chairman and CEO of PacificHealth Laboratories, Inc.:

I am enraged by the strong-arm tactics of the USOC. The facts are as follows:

1. The copy for the ad was consistent with copy guidelines regarding product advertising and the Olympics. Prior to publication the ad was submitted for pre-review to USA Today to ensure that it was consistent with published criteria. The ad was approved by USA Today's legal counsel.

2. Endurox R4 is a new sports drink that was developed by exercise physiologists and contains a combination of nutritional ingredients specifically designed to replenish muscle nutrition stores and accelerate recovery following exercise. The product does not contain any substances banned by the USOC for use in competitions. This was reconfirmed today in discussion with the USOC drug hotline. Endurox R4 has been tested and the results presented at the American College of Sports Medicine's National Meeting.

3. The actions of the USOC are inconsistent with the purported mission of this body. Among their goals, is to provide nutritional services to their athletes and coaches as outlined on the official
USOC website:

"Optimum nutrition is essential to success in sports, however, many athletes give little thought to their eating patterns." The USOC serves as a resource for athletes, coaches and National Governing Bodies (NGBs) by providing nutritional information through educational materials, diet analysis, consultations, lectures and seminars aimed at the individual needs of different sports. This information can help the athletes optimize their training and performance as well as determine existing or potential nutritional problems. Common areas of interest include weight loss and gain, pre-competition meals, recovery, hydration and foreign travel.

There is a disturbing inconsistency between the desire of the USOC to ensure that athletes practice optimal nutrition and their unofficial position in using the Olympics as a massive fund raising operation. There is little doubt in my mind that an official sponsor who paid handsomely for that right would not have had similar pressure placed on the media to withdraw advertising even if the "official drink" was a nutritionally inferior product.

Although we are disappointed by the USOC actions, we will make every effort to ensure that any US Olympic athletes, who are interested in using the product, receive a free supply of Endurox R4. I would hope in the future that the USOC's "money policy" becomes more consistent with their "nutritional policy."

Sincerely yours, Dr. Robert Portman