Replies to post #2934 on Spencer Pharmaceutical (SPPH)

[bigtuna177]

This all was stated in a PR Nov 9th... Nothing new IMO..

Spencer Pharmaceutical Provides Supplemental Information to Shareholders
4:03p ET November 9, 2010 (Market Wire)
Spencer Pharmaceutical Inc. (PINKSHEETS: SPPH) provided supplemental information to its shareholders today further numerous questions.

According to the company, several shareholders have requested more information and or clarification on the offices of the company, its research, its Regulatory approval, the unsolicited offer, the accounting, cash balance and many other elements of the company.

"We have decided that in order to be truly transparent with our shareholders and stakeholders that several items and issues needed to be addressed," said Dr. Max Arella, President of Spencer Pharmaceutical Inc. "We want to build a long-term partnership with our shareholders and it is the only way we will build a sustainable business," further added Dr. Arella.

Offices The company received numerous questions regarding its corporate offices. The company has a lease with a business center at 8 Faneuil Hall Marketplace, in Boston. This address is the legal U.S. address for the company and may eventually become its permanent and physical address in the future. It should be noted that the management of the company does not work out of this legal address, but in the laboratory of the University of Quebec in Montreal as well as in Ottawa, Canada. This is therefore keeping the operating cost to a minimum.

The company needed a US address since the company is a Delaware corporation as well as being listed on a US exchange. Boston was chosen because of its concentration of bio-technology companies and related investment funds.

Shareholders are welcome to call the company to schedule a visit of the Montreal Laboratories where the research is being conducted. In addition, the company will setup a separate hotline to answer any and all questions from shareholders and the media as it relates to publicly released information and or common knowledge information about the company and its products.

Research / Partnership The company has entered into a research agreement with a University in Montreal, whereby $50,000 is funded every quarter. The facilities provided as well as the research staff would normally cost several hundred of thousands every month and therefore the company has been able to significantly operate with limited resources. The company has had several delays in paying the quarterly fee on 2 separate occasions but has since rectified the situation and is fully paid and up-to-date in all its payment to the University. However, it should be noted that the partnership with INSA requires a payment of approximately $150,000 every quarter and the company has not yet provided the said payment and the partnership is on hold until such time as the payment can be made. The partnership with National Pharmaceutical will be used to raise the necessary funds to pay for the research with INSA and the finalization of the announced agreement will enable the company to achieve its goal with little or no dilution to its shareholders.

Currently, the value of the company is solely based on the MET4 and the slow release Ibuprofen as well as the delivery technology, which can be applied to several hundred medications.

The company has announced several licensing candidates without announcing the names of said company. The confidentiality of potential licensors will remain as it is a main concern for these fortune 500 companies but will be release once the definitive agreements are effective.

Regulatory Approval Process We have received several comments regarding our timeline for regulatory approval as aggressive and not realistic. The first step in the process of regulatory approval for our MET4 was the hiring of a regulatory affairs specialist, which was announced on November 2, 2010. The company will seek Special Access Program (SAP) from Health Canada for the fast-track approval of the MET4 product since Metformin is already approved as well as most of the substance included in our formulation of the MET4 product. We have hired the services of an independent laboratory to perform the necessary animal testing of the MET4, which can be completed within approximately 1 month. We believe that the positive results of these tests should be sufficient to provide Health Canada the necessary data to approve the MET4 for (SAP). It should be noted that it is not guaranteed that MET4 will be approved for SAP in Canada, and that the company may only be permitted to begin its commercialization outside of Canada and the USA. Further, in the event SAP was denied, the time for approval is still relatively short since metformin has been approved for well over 30 years and the MET4 is a slow release version of the drug making it more effective and therefore it is very unlikely that the approval of the MET4 be denied. The same can be said for the slow release Ibuprofen under development.

Financials / Financing The company is currently being funded by a small independent fund located in Canada. Thus far, a total of $300,000 has been funded to the company in the form of a convertible loan, at a very low interest rate of 4% and the loan is convertible into shares of the company at a discount of 10% to the market with a floor price of $0.25. The fund has not converted any part of the loan at this time.

In addition, for accounting purposes, the company has opted to include the patents at a minimum amount to prevent depreciation expenses since there is no current revenue to offset these non-cash expenses. In addition, the cash balance as at the last statements are very low, since the financing provided by the fund is against expenses and therefore funding is received and expenses paid and therefore no cash balance remains at the end of each payment period.

The company does not seek any financing at this time beyond the current arrangements since its cash requirements are very low. The cash requirements may increase over the commercialization period but the company does not seek any other arrangements for that phase since the commercialization of the MET4 will be done in partnership under licensing agreements. The company expects to begin its MET4 commercialization outside of Canada and the USA in 2011 and in Canada and the USA pending approval from regulatory authorities.

Pinksheets / OTCBB listing We have also received comments over our listing on the Pinksheets. The objective of the company as it relates to a listing on the Pinksheets was to obtain visibility to world market with the issuance of press releases and other related scientific and non-scientific material. We have achieved this and we continue to receive request for licensing of our MET4 and Ibuprofen further to our communication strategy. The second objective of the company was to set a value for the company in order to enable an eventual exit strategy for all shareholders. The company is in the process of being upgraded to the OTCBB and eventually it is the objective to be listed on the NASDAQ and or the NYSE. The company has also been reviewing the possibilities of listing on a European exchange to address the demand from this market.

Unsolicited Offer The company has received an unsolicited all-cash offer on November 4, 2010 by a private equity fund. Although the offer is considerable, the company has opted to keep the information confidential until we receive further information from the purchasing party as well as retain an investment banking firm that can assist in said transaction. The company expects to release the information on the offer on or before November 12, 2010. The final terms and conditions of this transaction will be determined in a definitive agreement, although no assurance can be provided that a definitive agreement will be executed. The execution of a definitive agreement is subject to but not limited to due-diligence, and regulatory approval.