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PHLCE B: Phlo Corporation Announces Distribution of Future Net Revenue
nterest to Shareholders
B: Phlo Corporation Announces Distribution of Future Net Revenue Interest to Sha
eholders

JACKSONVILLE, Fla., Sep 18, 2003 (BUSINESS WIRE) -- Phlo Corporation
(OTCBB:PHLC)("Phlo") announced today that the necessary actions have been
authorized for the payment by one of the operating companies in Phlo's corporate
group of a cash dividend to Phlo shareholders in the form of a pro rata interest
in five percent (5%) of any qualifying net revenues generated by the future
sales of Phlo's oral rehydration solution products (the "Products") to the
United States Military (the "Net Revenue Interest"). Phlo is taking this action
as a result of the excellent progress of the pilot use of the Products within
the U.S. military establishment. Phlo is currently in production to meet the
initial requirements of anticipated orders and is acting at this time to give
Phlo shareholders sufficient time to avail themselves of this opportunity, as
set forth in more detail below. However, no assurances can be made with respect
to whether such orders will actually materialize and with respect to the size or
value of any such orders which are actually received.

The Net Revenue Interest shall be payable to the beneficial owners of record of
Phlo common stock as of October 17, 2003, (the "Record Date"), on a quarterly
basis, during a period of five years from the date of the initial cash
distribution. The pro rata share of the Net Revenue Interest of Phlo
shareholders shall be based on their beneficial ownership of Phlo common stock
as of November 7, 2003, (the "Certificate Exchange Date"). The dividend shall be
paid out of funds that are legally available therefor in accordance with all
applicable law.

Phlo's actions with regard to this dividend are being taken in addition to
Phlo's planned spin-off transaction first set forth in the Form 8-K filed by
Phlo on July 10, 2003.

Tests recently conducted by a team of top scientists in the rehydration field at
the International Center for Diarrheal Disease Research, Bangladesh, demonstrate
that the use of the Products result in significantly superior and faster
absorption of both electrolytes and water as compared with the use of other
leading oral rehydration solutions in the world, including those based on the
World Health Organization's most advanced specifications.

The technology contained in the Products was internally generated and is not
licensed from third-party inventors. As a result, Phlo is not obligated to pay a
royalty or percentage of revenue that would normally be associated with the sale
of such technology-based products. Phlo desires, at this point, to give its
shareholders the benefit of Phlo's capability to internally generate
leading-edge technology, particularly related to liquids, by passing on to
shareholders a material portion of what normally would be paid in licensing fees
pertaining to the sale of the Products.

Phlo believes that this dividend will significantly improve shareholders'
capability to realize value from their stock ownership and the assessment of
Phlo's securities in the public market. Phlo anticipates that there will be
future opportunities of this nature to be made available to Phlo's shareholders.

The procedures for carrying out the payment of this dividend generally require
the shareholders to present to Phlo, on or before the Certificate Exchange Date,
the certificate(s) representing their shares of Phlo common stock registered in
such beneficial owner's name. In exchange therefor, such holders shall be issued
new common stock certificates ("NRI Certificates") which shall indicate such
holders' eligibility to receive a pro rata share of the Net Revenue Interest so
long as the holder owns such shares. The Net Revenue Interest will not be
transferable by transfer or sale of the Phlo shares. When shares represented by
the NRI Certificates are sold, such certificates shall be cancelled and replaced
with new certificates to be transferred to the purchaser which do not represent
shares affording the holder thereof the right to the Net Revenue Interest.

Consistent with the nature of the Net Revenue Interest, Phlo is requiring the
exchange of certificates to ensure that the contemplated dividend does not
violate any applicable federal law, taking into account the source of the funds
(the U.S. Military) from which such dividend shall be paid. In addition, such
exchange of certificates is consistent with the right to the Net Revenue
Interest being granted, on a one-time basis, only to shareholders of record on
the Record Date. The Net Revenue Interest shall be allocated pro rata to the
total number of beneficial owners of Phlo common stock of record as of the
Record Date who exchange their certificates for NRI Certificates (such pro rata
allocation to be based on the number of shares of Phlo common stock beneficially
owned as of the Certificate Exchange Date) and shall be proportionately reduced
as and if such shareholders sell the shares represented by the NRI Certificates.

Phlo strongly recommends that, to the extent they have not already done so, all
shareholders request physical delivery of stock certificates registered in their
own name representing their holdings in Phlo, both with respect to current
holdings and with respect to shares which are newly acquired. Phlo shall, as
expeditiously as possible, provide more definitive information to shareholders
regarding the dividend and certain limitations and adjustments related thereto
and the certificate exchange procedures.

Phlo is a biotechnology company and a manufacturer and marketer of products
(primarily liquids) containing patented and patents-pending biotechnologies
which are sold on a commercial basis to governmental and institutional
purchasers and to high volume chain stores, such as supermarkets and drug and
convenience stores. Phlo is focusing its technology generation and acquisition
efforts on those technologies related to enhancing cognition and personal
performance, reducing the effects of aging, and preventing or ameliorating
cancer.

Certain statements made herein that are not historical constitute
"forward-looking" statements within the meaning of the Private Litigation Reform
Act of 1995 and may contain words such as "anticipate," "believe," "expect,"
"future," "may," "will," "should," "plan," "projected," "intend," and similar
expressions to identify such forward-looking statements. Such statements are
based on a number of assumptions and on information and estimates supplied to
Phlo Corporation by sources currently available to it. Such assumptions and
estimates are subject to uncertainties, contingencies, and other factors, many
of which are beyond Phlo Corporation's control. Actual results may differ
materially from the statements set forth above.

SOURCE: Phlo Corporation


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KEYWORD: FLORIDA
INDUSTRY KEYWORD: BIOTECHNOLOGY
GOVERNMENT

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