Human Pheromone Sciences Announces Third Quarter Results Signs Research and Development Pact SAN JOSE, Calif., Nov. 12 /PRNewswire-FirstCall/ -- Human Pheromone Sciences, Inc. (NASD: EROX) ("HPS" or "the Company") today announced results for the third quarter ended September 30, 2004 and that it had entered into an agreement with the University of Utah to conduct research and development programs on a series of compounds previously identified and isolated by scientists working on behalf of the Company. As a result of the April 14, 2003 sale of its REALM(R) and innerREALM(R) trademarks and related assets, the reported financial data for the periods include information for on-going operations, disposed operations and net gain on sale of assets. Net revenues of $300,000, represented a 32% increase from the sales of $227,000 in the prior year period, and resulted in an operating loss from on-going operations of $131,000 ($.03 per share) as compared with an operating loss from on-going operations of $108,000 ($.03 per share) for the same period of 2003. For the nine months ended September 30, 2004, net revenues were $708,000, a 40% increase from the revenues of $506,000 in the prior year period, and resulted in an operating loss from on-going operations of $494,000 ($.12 per share) as compared with an operating loss from on-going operations of $406,000 ($.11 per share) for the same period of 2003. The Company indicated that is was very pleased by the increase in revenue for the period, with the growth attributable to increased pheromone sales domestically, higher private label business outside the United States and to the launch of its new Demeter Natural Attraction line in the U.S. in April 2004. Gross margin improved over the prior year in both the quarter and six months as a result of lower product costs. Product development, package development and introduction expenses for these new products were the primary factors in the increase in selling, general and administrative expenses in both periods of 2004. The Company noted that these figures were in line with its plans. The Company has already established dedicated laboratories at the University, staffed by its own scientists who have been involved in the research of mood enhancing compounds for many years, and have published their results in peer-reviewed scientific journals. "For the past fifteen years, these scientists have been conducting basic research to identify naturally-occurring mood-enhancing compounds, and the Company has invested millions of dollars to conduct this basic research. We are now focused on testing these products on humans to validate the efficacy of these proprietary compounds," a Company spokesperson indicated. The Company noted that it will seek the broadest patent protection available for any of the compounds whose efficacy is validated in these human studies. Human Pheromone Sciences, Inc. is a technology-based company, whose proof-of concept products included prestige-priced fragrances and toiletries and environmental products sold under the REALM(R), innerREALM(R), EROX(R) and Natural Attraction(R) trademarks. These products contain synthesized human pheromones covered under U.S. and foreign patents. Scientific and consumer studies have shown that the Company's human pheromones positively impact on the moods, attitudes and emotions of wearers. Further information is available on line at http://www.naturalattraction.com/. The statements in this news release may contain forward-looking statements that involve risks and uncertainties that could cause results to differ from predicted results. Further information on factors that could affect the Company's results is detailed in the Company's annual report to shareholders on Form 10-KSB for the year ended December 31, 2003 and quarterly report on Form 10-QSB for the quarter and nine months ended September 30, 2004 as filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. HUMAN PHEROMONE SCIENCES, INC. Condensed Balance Sheets (Unaudited) (Dollars in thousands) September 30, December 31, 2004 2003 Assets Cash and cash equivalents $1,363 $1,950 Accounts receivable, net 93 38 Inventories 83 52 Other current assets 44 19 Property and equipment, net 20 9 Total $1,603 $2,068 Liabilities, convertible redeemable preferred stock and shareholders' deficit Accounts payable $66 $23 Other current liabilities 114 150 Convertible redeemable preferred stock -- 150 Common stock 20,809 20,659 Accumulated deficit (19,386) (18,914) Total $1,603 $2,068 HUMAN PHEROMONE SCIENCES, INC. Condensed Statements of Operations (Unaudited) (Dollars in thousands, except per-share data) Three months Nine months ended September 30, ended September 30, 2004 2003 2004 2003 Net sales and revenues $300 $227 $708 $506 Cost of goods sold 44 73 117 157 Research and development 27 11 43 18 Selling, general and administrative 364 276 1,053 803 (Loss) from operations (135) (133) (505) (472) Other income 4 24 11 32 Tax benefit from ongoing operations -- 1 -- 34 (Loss) from continuing operations (131) (108) (494) (406) Net income from disposed operations -- -- -- 79 Net gain on sale of assets 21 (8) 22 1,218 Net income (loss) $(110) $(116) $(472) $891 Basic earnings (loss) per share: From on-going operations $(0.03) $(0.03) $(0.12) $(0.11) From disposed operations $0.00 $0.00 $0.00 $0.02 From assets to be sold $0.01 $0.00 $0.01 $0.33 Net income (loss) $(0.02) $(0 .03) $(0.11) $0.24 Diluted earnings (loss) per share: From on-going operations $(0.03) $(0.03) $(0.12) $ (0.09) From disposed operations $0.00 $0.00 $0.00 $0.02 From assets to be sold $0.01 $0.00 $0.01 $0.26 Net income (loss) $(0.02) $(0.03) $(0.11) $0.19 Weighted average number of shares outstanding - Basic 4,152 4,028 4,121 3,717 Weighted average number of shares outstanding - Assuming dilution 4,152 4,028 4,121 4,731 Net income (loss) per share is based on the weighted average number of common shares and common equivalents outstanding during each period. Certain common stock equivalents are excluded when their effect would be anti-dilutive. DATASOURCE: Human Pheromone Sciences, Inc. CONTACT: William P. Horgan, Chairman, CEO of Human Pheromone Sciences, Inc., +1-408-938-3030 Web site: http://www.realmfragrances.com/

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