Filed by Epitope, Inc.
pursuant to Rule 425
under the Securities Act
of 1933, as amended
Subject Company: STC Technologies, Inc.
Commission File No.132-01850
[Logo] EPITOPE
COMPANY CONTACT: INVESTOR RELATIONS CONTACTS:
Epitope, Inc. Lippert/Heilshorn & Associates
Charles E. Bergeron Bruce Voss 310-575-4848 [email protected]
Chief Financial Officer Kim Sutton Golodetz 212-838-3777 [email protected]
503-641-6115 Keith Lippert 212-838-3777 [email protected]
www.epitope.com MEDIA CONTACT:
Pamela Rigler 212-838-3777 [email protected]
www.lhai.com
EPITOPE REPORTS THIRD QUARTER FINANCIAL RESULTS
REVENUES UP 26%
QUARTER HIGHLIGHTED BY ANNOUNCEMENT OF MERGER WITH STC TECHNOLOGIES
ORAQUICK RAPID HIV TEST LAUNCHED IN JULY
BEAVERTON, ORE. (JULY 31, 2000) - EPITOPE, INC. (NASDAQ NM: EPTO) today
announced financial results for the three and nine months ended June 30, 2000.
Revenues for the three months ended June 30, 2000 increased 26% to $3.4 million,
compared with $2.7 million in the third quarter of fiscal year 1999. For the
nine months ended June 30, 2000, Epitope reported a 30% rise in revenues to $9.1
million, up from $7.0 million in the prior year nine months.
The third quarter 2000 net loss was $217,000, or $0.01 per share, compared with
a net loss of $764,000, or $0.05 per share, in the prior-year third quarter.
Higher research and development expenses, international clinical studies and
market development related to OraQuick(R), the Company's new rapid HIV test,
contributed to the loss. Gross margins of 63% in the most recent quarter were up
from 60% a year ago due to higher production levels of OraSure(R), the Company's
oral fluid collection device.
Results for the third quarter included in other income a one-time $600,000 gain
on the sale of preferred stock received as part of the Company's settlement with
Andrew and Williamson Sales Co. (A&W) in 1997. This preferred stock had been
carried by the Company at a value of zero.
The nine-month net loss was $1.6 million, or $0.11 per share, compared with a
nine-month net loss of $2.3 million, or $0.17 per share, in the prior year.
The Company's cash position has increased by $4.1 million to $15.6 million at
June 30, 2000. During the quarter, the Company received $3.6 million from the
exercise of warrants and stock options and $0.6 million from the sale of A&W
preferred stock. The cash position was also affected by capital equipment
expenditures for OraQuick manufacturing automation of $0.6 million for the
quarter.
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"Recent months have seen watershed events in Epitope's history," commented
Robert D. Thompson, president and chief executive officer. "We announced our
intent to merge with STC Technologies and are in the process of finalizing our
registration statement with the SEC. We anticipate that the special meeting of
shareholders, for the purpose of voting on this merger, will occur around
mid-September." Financial results for both Epitope and STC Technologies through
June 30, 2000, will be included in the updated version of the registration
statement expected to be mailed to shareholders in August after SEC review.
At the International AIDS conference in South Africa in July, the Company
announced that it had launched the new OraQuick oral fluid rapid test for HIV-1
and 2. "Interest in the OraQuick HIV1/2 product was phenomenal. Its unique
combination of accuracy, rapid resuts and non-invasive methodology makes it the
right product at the right time. As increased funding for HIV screening becomes
available through international organizations, health officials are looking for
solutions to get more people tested and counseled," Mr. Thompson noted. The
company has ongoing studies with OraQuick in several countries with more
expected in the coming months. In addition, the OraQuick clinical studies in
the United States in support of a submission to the U.S. Food and Drug
Administration (FDA) expected in early 2001, will be conducted at about 20
separate sites beginning in August 2000.
"We are continuing to emphasize control of product costs, the measures
introduced thus far have resulted in the gross profit increase to 63% this
quarter," Mr. Thompson continued. "Also, our focus on revenue growth in the life
insurance market, where more companies are moving to a broader use of our
product, is clearly paying off. We plan to bring even more tests to this core
market to encourage companies to expand their use of oral fluid testing even
further. In the public health markets, more customers are discovering the
benefits of OraSure testing for HIV in less conventional outreach settings where
its non-invasive nature assists in the ability to test increased numbers of
people.
The Company will hold a conference call to discuss these results beginning at
11:00 a.m. Eastern Time today. Individual investors are invited to listen to the
conference call over the Internet through Vcall, a service of the Investor
Broadcast Network, at www.vcall.com. To listen to the live call, please go to
the Web site at least 15 minutes prior to the start of the call to register,
download and install any necessary audio software. In addition, a replay will
begin shortly after the call has ended and will be available for 90 days.
Epitope, Inc. develops, manufactures and markets medical devices and diagnostic
products utilizing its proprietary oral fluid technologies for sale to public-
and private-sector clients worldwide. The Company's primary focus is on the
detection of HIV antibodies, with emphasis in the U.S. life insurance and global
public health markets, and on the use of oral fluid testing for the detection of
drugs of abuse and other analytes. In May 2000, the Company announced its
intention to merge with the privately held STC Technologies, Inc. Epitope has
filed an S-4 Registration statement related to this merger with the Securities
and Exchange Commission (SEC) under the name OraSure Technologies, Inc. Copies
of this document may be obtained at no charge from the SEC website at
www.sec.gov.
Statements in this press release about future sales levels or other future
events or performance are forward-looking statements. The Company's actual
results could be significantly different. Factors that could affect results
include loss of key personnel; failure to comply with regulations of the FDA or
other regulatory agencies; obstacles to international marketing of the Company's
products; loss or impairment of sources of capital; ability of the Company to
develop product distribution channels; ability of the Company to develop new
products; development of competing products; market acceptance of oral fluid
testing products; and changes in international, federal or state laws or
regulations. Although forward-looking
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statements help to provide complete information about the Company, readers
should keep in mind that forward-looking statements are much less reliable than
historical information.
ADDITIONAL INFORMATION AND WHERE TO FIND IT:
EPITOPE HAS FILED A REGISTRATION STATEMENT ON FORM S-4 UNDER THE NAME ORASURE
TECHNOLOGIES, INC., IN CONNECTION WITH THE PROPOSED MERGER WITH STC
TECHNOLOGIES, INC., AND PLANS TO MAIL A PROXY STATEMENT/PROSPECTUS TO EPITOPE
AND STC SHAREHOLDERS CONTAINING INFORMATION ABOUT THE MERGER. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/PROSPECTUS CAREFULLY WHEN THEY ARE AVAILABLE BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. YOU MAY OBTAIN FREE COPIES OF THESE DOCUMENTS THROUGH THE
WEB SITE MAINTAINED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION AT
HTTP//WWW.SEC.GOV.
EPITOPE FILES ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. YOU MAY OBTAIN FREE
COPIES AT THE WEB SITE MAINTAINED BY THE SEC AT HTTP//WWW.SEC.GOV, OR BY WRITING
EPITOPE AT: EPITOPE INVESTOR RELATIONS, 8505 SW CREEKSIDE PLACE, BEAVERTON,
OREGON 97008.
EPITOPE, ITS DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN MEMBERS OF MANAGEMENT AND
EMPLOYEES MAY BE SOLICITING PROXIES FROM EPITOPE SHAREHOLDERS IN FAVOR OF
APPROVAL OF THE MERGER. A DESCRIPTION OF ANY INTERESTS, DIRECT OR INDIRECT, THAT
EPITOPE'S DIRECTORS AND EXECUTIVE OFFICERS HAVE IN THE MERGER WILL BE INCLUDED
IN THE PROXY STATEMENT/PROSPECTUS.
Financial Tables Follow
EPITOPE, INC.
CONDENSED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<TABLE>
QUARTER ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
2000 1999 2000 1999
---- ---- ---- ----
OPERATING RESULTS
<S> <C> <C> <C> <C>
Revenues....................................$ 3,398 $ 2,688 $ 9,102 $ 7,005
Operating costs and expenses................ 4,429 3,517 11,727 9,496
Other income, net........................... 814 65 986 194
Net loss.................................... (217) (764) (1,639) (2,297)
Basic/diluted net loss per share*........... (0.01) (0.05) (0.11) (0.17)
Shares used in per share
calculations............................... 16,444 14,066 15,249 13,888
SELECTED BALANCE SHEET DATA 6/30/00 9/30/99
Cash and marketable securities.............. $ 15,564 5,609
Working capital............................. 17,490 6,887
Total assets................................ 21,887 10,694
Shareholders' equity........................ 19,740 8,576
*Basic and diluted per share amounts are the same due to losses.
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