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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 10-KSB/A
    (Mark One) [X]

Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended December 31, 2003or[   ]
    Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934For the
transition period from _______ to _______
 Commission File Number 0-26778   SCOLR, INC.     Delaware
    
    91-1689591(State of Incorporation)
    
    (IRS Employer Identification No.)3625 132nd Avenue S.E. Bellevue, WA
    
    98006(Address of principal executive offices)
    
    (Zip Code)
 Issuers telephone number: (425) 373-0171 Securities registered under Section 12(b) of the Exchange Act: Title of Class
    
    Name of each exchange on which registeredCommon stock, $.001 par value
(Including Associated Preferred
Stock Purchase Rights)
    
    American Stock Exchange
 Securities registered under Section 12(g) of the Exchange Act: None   Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days. Yes [X]   
No [   ] Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [   ] The issuers revenues for the fiscal year ended December 31, 2003 were
$6,594,073 The aggregate market value of the voting common stock held by
non-affiliates computed by reference to the price at which the stock was last
sold, as reported on the American Stock Exchange, as of April 15, 2004 was
approximately $91,991,992. As of April 15, 2004, there were 30,094,880 shares outstanding of the
issuers common stock.




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TABLE OF CONTENTS  PART IIIITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 10. EXECUTIVE COMPENSATIONITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 13. EXHIBITS AND REPORTS ON FORM 8-KITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESSIGNATURESEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2    Table of Contents  EXPLANATORY NOTE This amendment to the registrants annual report on Form 10-KSB for the
fiscal year ended December 31, 2003 is being filed in order to submit the
information required to be included in Part III thereof within the period
required by General Instruction E(3) to Form 10-KSB. As used in this amendment to annual report on Form 10-KSB/A, unless the
context otherwise requires, the terms we, us, the Company, and SCOLR
refer to SCOLR, Inc., a Delaware corporation. Part III of the registrants annual report on Form 10-KSB is hereby
amended by deleting the text thereof in its entirety and substituting the
following: 
 PART III 
 ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth, for our current directors, information
with respect to their ages and background. DirectorName
    
    Position With Scolr
    
    Age
    
    SinceDaniel O. Wilds
    
    President and Chief Executive
Officer, Director
    
    
    55
    
    
    
    2003David
T. Howard(1)
    
    Chairman of the Board, Director
    
    
    54
    
    
    
    2000Herbert L. Lucas
    
    Director
    
    
    77
    
    
    
    1995Randall L-W.
Caudill, Ph.D.
    
    Director
    
    
    56
    
    
    
    2002Reza Fassihi, Ph.D.
    
    Director
    
    
    52
    
    
    
    2003Wayne L. Pines
    
    Director
    
    
    61
    
    
    
    2004Robert C. Schroeder
    
    Director
    
    
    37
    
    
    
    2003Michael Sorell, M.D.
    
    Director
    
    
    57
    
    
    
    2004Michael N. Taglich
    
    Director
    
    
    39
    
    
    
    2003
 (1) Mr. Howard served as the Companys President from May 2000 to August
2003. Daniel O. Wildswas appointed the Companys President and CEO and a
Director in August 2003. From 1998 to July 2003, Mr. Wilds served as Chairman,
President and CEO of Northwest Biotherapeutics, Inc. Prior to that position, he
was President and CEO of Shiloov Biotechnologies (USA), Inc. from 1997 to 1998.
From 1992 to 1996, Mr. Wilds was President and CEO of Adeza




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Biomedical Corporation, prior to which he served as the President and CEO of
Medisense, Inc. and President of Baxters Chemotherapy Service. Mr. Wilds has
also served as President and COO of Travenol-Genentech, Inc., a joint venture
between Baxter International and Genentech, Inc., and has held other domestic
and international senior management positions in the biomedical and
biopharmaceutical fields. Mr. Wilds currently serves on the board of Helix
BioMedix, Inc. and is a member of the Leadership Council for the Albert B.
Sabine Vaccine Institutes Cancer Vaccine Consortium. Mr. Wilds holds a BA from
California State University, Los Angeles and an MBA from Northwestern
University. David T. Howardserved as the Companys President from May 2000 to August
2003 and has provided advisory services to the Company since August 2003. He
has served on the Board since May 2000, and was appointed Chairman in September
2003. From 1997 to 2000, Mr. Howard served as President and CEO of Novopharm
International. Prior to that position, he was President of Granutec, Inc. (1995
- 1997) and President of Stanley Pharmaceuticals (1990 - 1999). Mr. Howard is
Chairman of the Board of Directors of Angiotech Pharmaceuticals, Inc. and
serves on the board of MDS Ventures Pacific. Herbert L. Lucashas been a Director since 1991. He served as President
from 1972 to 1981 of Carnation International in Los Angeles and as a director
of the Carnation Company. Since 1982, Mr. Lucas has managed his family
investment business. He has served on the boards of various financial and
business institutions including Wellington Trust Company, Arctic Alaska
Fisheries, Inc., and Sunworld International Airways, Inc. Mr. Lucas has served
as Trustee of The J. Paul Getty Trust, the Los Angeles County Museum of Art,
The Morgan Library, and Winrock International Institute for Agricultural
Research and Development. He was formerly a member of the Board of Trustees of
Princeton University. Mr. Lucas received a BA degree in History in 1950 from
Princeton University and an MBA degree in 1952 from Harvard University Graduate
School of Business Administration. Randall
Caudill, D. Phil.has served as a member of the Board since 2002. Dr.
Caudill is currently President of Dunsford Hill Capital Partners, a financial
consulting firm serving early-stage healthcare and technology companies. From
1987 to 1997, while at Prudential Securities, Dr. Caudill established and
headed the firms San Francisco investment banking practice and served as head
of the Mergers and Acquisitions Department and co-head of Prudentials
investment banking division. Dr. Caudill also served as executive director and
co-head of mergers and acquisitions at Morgan Grenfell Inc. and vice president
in the Mergers and Acquisitions Department of The First Boston Corporation. Dr.
Caudill currently serves on the boards of VaxGen, Inc., SBE Inc., RamGen Inc.,
Northwest Biotherapeutics Inc. and Helix BioMedix Inc. Dr. Caudill received a
masters degree in Public and Private Management from Yale University and
earned a doctorate of philosophy while a Rhodes Scholar at Oxford University. Michael N. Taglichwas appointed to the Board in August 2003. Mr. Taglich
has served as the President and co-founder of Taglich Brothers, Inc., a NASD
broker-dealer focused on public and private micro cap companies since 1992.
From 1987 - 1992, Mr. Taglich was Vice President at Weatherly Securities and
currently serves as the Chairman of the Board of Telenetics, Inc. Mr. Taglich
earned a BS from New York University. Reza Fassihi, Ph.D.joined the Board in November 2003. Dr. Fassihi is the
co-inventor and patent holder of three patents in SCOLRs CDT® platform and is
a consultant to the Company. He is currently Professor of Biopharmaceutics and
Industrial Pharmacy at Temple University , School of Pharmacy. Dr. Fassihi
joined Temple University in 1992 where he has served as professor, director of




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graduate programs, has chaired various committees and is Co-Chair of PPF
(Philadelphia Pharmaceutical Forum). Dr. Fassihi is widely published in more
than 100 peer-reviewed professional papers, numerous chapters in books and is
credited with more than 300 abstracts. Currently he has ongoing projects in
collaboration with various pharmaceutical laboratories. He acts as a consultant
to a number of pharmaceutical and nutritional manufacturers, government
agencies, and has served as an expert witness on issues related to
pharmaceutical products. Robert C. Schroederjoined the Board in November 2003. Mr. Schroeder is
Vice President, Investment Banking of Taglich Brothers, Inc., and specializes
in advisory services and capital raising for small, publicly traded companies.
Since joining Taglich Brothers (a NASD broker-dealer focused on public and
private micro cap companies) in 1993, Mr. Schroeder has performed securities
analysis involving many companies across a wide range of industries. Prior to
that, Mr. Schroeder served in various positions in the brokerage and public
accounting industry. Mr. Schroeder also serves on the Board of Directors of
Telenetics, Inc. and is a member of its audit committee. He is a Chartered
Financial Analyst and a member of the Association for Investment Management and
Research and a member of the New York Society of Security Analysts. He earned
his BS degree in Accounting and Economics from New York University. Wayne L. Pinesjoined the Board in April 2004. Mr. Pines is an
international consultant on FDA-related regulatory and media issues and on
corporate crisis management. Since 1993, he has been President of Regulatory
Services and Healthcare at APCO Worldwide, a public affairs firm in Washington,
D.C. Prior to that, Mr. Pines was Executive Vice President of
Burson-Martseller, an international public relations agency. Mr. Pines served
for ten years at the FDA, as Chief of Consumer Education and Information, Chief
of Press Relations and Associate Commissioner of Public Affairs. He is a
director of Northwest Biotherapeutics, Inc. and a member of its audit committee
and a director of other private biotech companies. A frequent lecturer at
educational conferences, he has authored or edited six books on FDA-related
issues, medical advertising regulation and crisis management. He is a graduate
of Rutgers University. Michael Sorell, M.D.has been a Managing Member of MS Capital Advisors, an
investment advisory service firm, for more than five years. From July 1986 to
February 1992, Dr. Sorell was associated with Morgan Stanley & Co., an
investment banking firm, in various capacities, the last being Principal. From
March 1992 to July 1994, Dr. Sorell was a partner in a joint venture with Essex
Investment Management of Boston, an investment management firm. In August
1994, Dr. Sorell rejoined Morgan Stanley as the emerging growth strategist
where he served until February 1996. Prior to March 1992, Dr. Sorell was on
the staff of Memorial Sloan-Kettering Cancer Center and worked in clinical
development of Schering Plough. Our executive officers are generally elected annually at the meeting of
our Board of Directors held in conjunction with the annual meeting of
stockholders. The following are our current executive officers and their ages
as of April 15, 2004: Name
    
    Age
    
    Office
    
    Position SinceDaniel O. Wilds
    
    
    55
    
    
    President and Chief Executive Officer
    
    
    2003Gail T. Vitulli
    
    
    48
    
    
    Director of Finance, Principal
Financial Officer
    
    
    2004Stephen J. Turner
    
    
    33
    
    
    Vice President, Chief Technical
Officer
    
    
    2003




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The following sets forth the business experience, principal occupations
and employment of each of our current executive officers who do not sit on the
board (see above for such information with respect to Daniel O. Wilds): Stephen J. Turnerhas worked for the Company since the fall of 1999 and
been responsible for the commercialization and application of the CDT®,
controlled delivery technology platform. In the winter of 2003, he was promoted
to Vice President, Chief Technical Officer of the Company. In addition to Mr.
Turners involvement in the growth and application of the Companys technology
platform, he is named on one recently issued patent, contributed to numerous
additional patent filings, has several industry related publications, and has
presented his research findings at numerous academic seminars and symposia. Mr.
Turner is an active member in scientific organizations including AAPS (American
Association of Pharmaceutical Scientists) and the Controlled Release Society.
Mr. Turner holds a BS in Biology with a minor in Geochemistry from Western
Washington University. Gail T. Vitullihas worked for the Company since the summer of 1999 as
Controller, and has been responsible for all aspects of financial reporting for
the Company. In January 2004, she was promoted to Director of Finance,
Principal Financial Officer. Ms. Vitulli has over twenty years progressive
experience in accounting in both public and private industries. She has
played a significant role in the development of several start-up companies and
has headed large systems implementations. She holds a BA in Business
Administration with a major in Accounting from Seattle University. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers, directors and persons who beneficially own more than 10% of
our common stock to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Such persons are
required by SEC regulations to furnish us with copies of all Section 16(a)
forms they file. Based solely on our review of the copies of such reports furnished to us
and written representations by certain reporting persons regarding their
compliance with the applicable reporting requirements under Section 16(a) of
the Exchange Act, we believe that, with respect to our fiscal year ended
December 31, 2003, all filing requirements applicable to our executive
officers, directors and greater-than-10% stockholders were complied with except
that Form 4 reports were not timely filed by Messrs. Caudill, Lucas, Ward and
Wilds with respect to one transaction each as a result of inadvertent
administrative delays. Code of Ethics The Company has adopted a Code of Business Conduct that applies to its
officers, directors and employees. The Code of Business Conduct is available
on the Companys website at www.scolr.com.




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ITEM 10. EXECUTIVE COMPENSATION The following table sets forth information concerning the compensation of
our chief executive officer(s) and our one other most highly compensated
executive officers during the fiscal years ended December 31, 2001, 2002 and
2003. SUMMARY COMPENSATION TABLE Long-TermCompensationAnnual Compensation
    
    AwardsSecuritiesName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Annual
    
    UnderlyingPrincipal Position
    
    Year
    
    Salary
    
    Bonus
    
    Compensation
    
    OptionsDaniel O. Wilds
    
    
    2003
    
    
    
    95,538
    (1)
    
    
    0
    
    
    
    
    
    
    
    250,000President and CEO
    
    
    2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    David T. Howard
    
    
    2003
    
    
    
    134,615
    (2)
    
    
    100,000
    
    
    
    12,251
    (3)
    
    
    2,500
    (2)President and CEO
    
    
    2002
    
    
    
    210,000
    (2)
    
    
    
    
    
    
    10,800
    (3)
    
    
    2001
    
    
    
    210,000
    (2)
    
    
    
    
    
    
    10,800
    (3)
    
    
    Steven H. Moger
    
    
    2003
    
    
    
    200,000
    (4)
    
    
    
    
    
    
    
    
    
    
    120,000Chief Financial
    
    
    2002
    
    
    
    150,000
    (4)
    
    
    
    
    
    
    
    
    
    
    60,000Officer and Vice
    
    
    2001
    
    
    
    139,583
    (4)
    
    
    
    
    
    
    
    
    
    
    110,000President of
Operations
    (1)
    
    Mr. Wilds commenced employment with the Company on August 8, 2003.
He received an annual base salary of $240,000 until December 31, 2003.
On January 1, 2004, his annual salary was increased to $300,000 with
an additional car allowance of $6,000.(2)
    
    Mr. Howards resigned as an executive officer on August 7, 2003 at
which time he became a consultant to the Company. The options were
granted as part of his director compensation.(3)
    
    Other compensation paid to Mr. Howard in 2003, consisted of the
following: $5,951 for Directors compensation and $6,300 auto
allowance.(4)
    
    Mr. Moger received an annual base salary of $110,000 until February
2001. From March 2001 to May 2001, his annual salary was $135,000. In
June 2001, his annual salary was increased to $150,000. Effective
January 1, 2003 his annual base salary was increased to $200,000. Mr.
Mogers employment with the Company terminated as of December 31, 2003.




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Stock Options Granted in Fiscal 2003 The following table provides the specified information concerning grants
of options to purchase our common stock made during the fiscal year ended
December 31, 2003, to the persons named in the Summary Compensation Table: OPTION GRANTS IN LAST FISCAL YEAR Individual GrantsPercent ofNumber of
    
    Total OptionsSecurities
    
    Granted to
    
    ExerciseUnderlying Options
    
    Employees
    
    PriceName
    
    Granted
    
    in 2003
    
    ($/Sh)Daniel O. Wilds
    
    
    250,000
    
    
    
    46
    %
    
    $
    2.10David T. Howard
    
    
    2,500
    (1)
    
    
    
    
    
    $
    2.28Steven H. Moger
    
    
    100,000
    
    
    
    19
    %
    
    $
    1.0520,000
    
    
    
    4
    %
    
    $
    1.20
  (1)
    
    Mr. Howard was granted 2,500 options on October 1, 2003 in accordance
with the Directors compensation plan described below. Option Exercises and Fiscal 2003 Year-End Values The following table provides the specified information concerning
exercises of options to purchase our common stock in the fiscal year ended
December 31, 2003, and unexercised options held as of December 31, 2003, by the
persons named in the Summary Compensation Table above. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES Number of Securities
    
    Value of UnexercisedUnderlying
    
    In-the-MoneyUnexercised
    
    Options atOptions at
    
    Fiscal Year-SharesAcquired
    
    
    
    
    
    Fiscal
Year-End(#)(1)
    
    Endon
    
    ValueName
    
    Exercise(#)
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableDaniel O. Wilds
    
    
    
    
    
    
    
    
    
    
    154,545
    
    
    
    95,455
    
    
    $
    6,181
    
    
    $
    3,819David T. Howard
    
    
    
    
    
    
    
    
    
    
    482,500
    
    
    
    
    
    
    $
    724,450
    
    
    
    Steven H. Moger
    
    
    2,500
    
    
    $
    1,775
    
    
    
    400,000
    (1)
    
    
    
    
    
    $
    520,600
    
    
    
    
  (1)
    
    Mr. Mogers employment with the Company terminated effective December 31,
2003 in connection with the sale of the Companys probiotics business
unit. A separation agreement with Mr. Moger was executed as part of the
sale. See Employment Agreements.




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Compensation of Directors The Company pays no additional remuneration to employees of the Company who
serve as directors. All directors are entitled to reimbursement for expenses
incurred in traveling to and from meetings of the Board of Directors. The
Board of Directors has adopted the following compensation plan for non-employee
directors (Eligible Directors): (a) on October 1 of each year each Eligible
Director is granted an option exercisable for 30,000 shares of the Companys
common stock at an exercise price equal to the closing price of the Companys
common stock on the date of grant, which option shall be fully vested as of the
date of grant, (b) on October 1 of the first year of service, each new Eligible
Director is granted an option for 2,500 shares for each whole month of service
prior to October 1, (c) in the event an Eligible Director resigns prior to
October 1 in any year, such eligible Director is granted an option on October 1
of the year of resignation for 2,500 shares for each whole month of service
completed prior to the date of designation, and (d) each Eligible Director
receives a quarterly cash retainer paid in arrears in the amount of $3,750 for
services as a Director. In accordance with this compensation policy, on October 1, 2003, Mr. Lucas, Dr.
Caudill (together with another non-employee director who is no longer serving)
were each granted nonqualified stock options exercisable for 30,000 shares and
Mr. Howard and Mr. Taglich were each granted 2,500 shares of the Companys
common stock at an exercise price of $2.28 per share. Employment Contracts and Termination of Employment and Change-in-Control
Agreements The Company entered into a Consulting Agreement with Dr. Fassihi dated December
22, 2000, which has been amended and supplemented by Additional Services
Agreements. Under the Consulting Agreement, the Company agreed to pay Dr.
Fassihi a monthly retainer of $4,000 and an hourly fee of $100 (which is
credited against the retainer) until December 31, 2006, subject to termination
under certain circumstances. In addition, the Company is obligated to pay Dr.
Fassihi royalties for sales of products relating to certain intellectual
property assigned to the Company by Dr. Fassihi. Dr. Fassihi devotes
approximately one day per week plus ongoing supervision of projects as
necessary to provide services to the Company. Under the terms of his
Consulting Agreement, the Company shall own any and all intellectual property
relating to the services provided under the agreements. During 2003, the
Company paid Dr. Fassihi $48,000 in consulting fees and granted Dr. Fassihi a
fully exercisable nonqualified stock option for 100,000 shares of the Companys
common stock at an exercise price of $1.05 per share on April 7, 2003. On August 7, 2003, Mr. Howard entered into Separation and Advisory Agreements
with the Company pursuant to which he resigned as an officer and agreed to
provide consulting and advisory services to the Company. In connection with
these agreements, Mr. Howard received a bonus of $100,000 and the Company
confirmed the vesting of 480,000 of the 800,000 options previously granted to
Mr. Howard. Under the terms of the Advisory Agreement, Mr. Howard assists the
Company with the development and commercialization of the Companys drug
delivery technology and provides assistance with respect to licenses, strategic
alliances and product development. The Advisory Agreement provided for
compensation of $20,000 per month and was scheduled to terminate on February 6,
2004. By letter dated December 30, 2003, Mr. Howards Advisory Agreement was
extended until July 6, 2004, subject to automatic extension until terminated by
either party on 60 days notice. In addition, subsequent to




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February 6, 2004, Mr. Howards compensation was reduced to $10,000 per month. Mr. Wilds was appointed to the Board of Directors and Chief Executive Officer
and President of the Company in August 2003. At that time, the Company
approved a termination package that would provide payment equal to six months
salary in the event his employment was terminated by the Company without cause. The Company has an Employment Agreement with Stephen Turner which provides for
an annual salary of at least $85,000 (subsequently increased to $140,000 per
year) and includes provisions for bonus, salary increases and stock options as
determined by the Board. In accordance with the terms of the agreement, Mr.
Turners employment is at will and he may be terminated at any time with or
without cause. However, in the event Mr. Turners employment is terminated
without cause (as defined), or by Mr. Turner for good reason (as defined),
the Company shall continue to pay his then current base salary for six months
following the date of termination. The Company entered a Consulting Agreement with Daniel Ward, a former director,
commencing upon his resignation as director on November 11, 2003 and terminates
on December 31, 2004. In accordance with his Consulting Agreement, Mr. Ward
receives $3,750 per calendar quarter. 
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth, as of April 15, 2004, certain information
with respect to the beneficial ownership of our common stock by (i) each
stockholder known by us to be the beneficial owner of more than 5% of our
common stock, (ii) each director (iii) each executive officer named in the
Summary Compensation Table, and (iv) all of our directors and executive
officers as a group. Number ofShares
    
    Percent ofBeneficially
    
    CommonName of Beneficial Owner
    
    Owned(1)
    
    Stock(1)Archer-Daniels-Midland Company(2)
    
    
    1,920,000
    
    
    
    5.87
    %4666 Faries Parkway
Decatur, IL 62526Daniel O. Wilds
    
    
    236,364
    
    
    
    *Randall L-W. Caudill
    
    
    92,500
    
    
    
    *David T. Howard
    
    
    480,000
    
    
    
    *Herbert L. Lucas
    
    
    887,396
    
    
    
    2.86
    %Dr. Reza Fassihi
    
    
    200,000Robert C. Schroeder
    
    
    103,207Wayne L. Pines
    
    
    0
    
    
    
    *Michael Sorell, M.D.
    
    
    0
    
    
    
    *




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Number ofShares
    
    Percent ofBeneficially
    
    CommonName of Beneficial Owner
    
    Owned(1)
    
    Stock(1)Michael N.
Taglich(3)
    
    
    341,396
    
    
    
    1.12
    %Stephen J. Turner
    
    
    105,000
    
    
    
    *Gail T. Vitulli
    
    
    40,833
    
    
    
    *All directors and executive officers as a group
(11 persons)
    
    
    2,630,576
    
    
    
    8.04
    %
   *
    
    Less than 1%.(1)
    
    Except as otherwise indicated, the persons named in this table have
sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them, subject to community
property law, where applicable, and to the information contained in the
footnotes to this table. The number of shares of common stock shown as
beneficially owned by the persons named in this table includes all
shares of common stock underlying options and warrants exercisable
within 60 days of April 15, 2004. The percentage of common stock
outstanding is calculated on the basis of 30,094,880 shares of common
stock outstanding as of April 15, 2004, except that shares of common
stock subject to options or warrants currently exercisable, or
exercisable within 60 days of April 15, 2004, are deemed outstanding
for computing the percentage ownership of the person holding the
options but are not deemed outstanding for computing the percentage
ownership of any other person.(2)
    
    Information regarding Archer-Daniels-Midland is based solely on a
Schedule 13G filed with the SEC on February 14, 2000.(3)
    
    Michael Taglich is the General Partner of a partnership that
beneficially owns 50,000 shares of common stock. Mr. Taglich disclaims
beneficial ownership of the common stock owned by such partnership.




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Equity Compensation Plan Information The Company currently maintain a stock incentive plan adopted in 1995,
approved by stockholders, that provides for the issuance of our common stock to
officers and other employees, directors and consultants. The following table
sets forth information regarding outstanding options and shares reserved for
future issuance under the foregoing plans as of December 31, 2003: Number of sharesremaining availableNumber of shares to
    
    
    
    
    
    for future issuancebe issued upon
    
    Weighted-average
    
    under equityexercise of
    
    exercise price of
    
    compensation plansoutstanding options,
    
    outstanding
    
    (excluding shareswarrants and
    
    options, warrants
    
    reflected in columnPlan Category
    
    rights(a)
    
    and rights(b)
    
    (a))(c)Equity compensation
plans approved by
stockholders
    
    
    2,502,337
    
    
    $
    .95
    
    
    
    587,604
 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On January 15, 2004, the Company completed the sale of its probiotics
development and manufacturing division to an entity formed and owned by Steven
H. Moger, the Companys former Vice President of Operations, Chief Financial
Officer and General Manager of the probiotics division. Mr. Moger resigned his
positions with the Company in connection with the sale. The assets sold
comprise substantially all of the assets and properties used in connection with
the Companys probiotics division, including equipment, inventory and
intellectual property rights. The division engaged in the business of
formulating and manufacturing probiotics-based health and dietary supplements
for the animal and human nutrition markets. The Company also granted the buyer
the right to manufacture and sell certain products utilizing SCOLRs patented
CDT® technology pursuant to a License, Manufacture, and Distribution Agreement
also dated as of December 31, 2003. The Company received $722,756 in cash at
closing and the Asset Purchase Agreement provides for deferred payments of at
least $2 million. The deferred payments are tied to the Buyers achievement of
certain sales levels and royalties. The consideration for the sale was
determined pursuant to arms-length negotiations after extensive negotiations
with a number of third parties (including industry buyers) and took into
account various factors concerning the valuation of the probiotics business,
including valuations of comparable companies, the operating results, financial
condition and prospects of the division and the opinion of the financial
advisor retained by the Companys Board of Directors. In connection with Mr.
Mogers resignation from the Company, he entered into a Separation Agreement
which provided for the vesting of all options previously granted to Mr. Moger
and extended the time for him to exercise such options until December 31, 2006. Dr. Fassihi assigned the Company all of his right, title and interest in
and to the technology known as oral extended release dosage form based on the
principle of controlled hydration pursuant to an Intellectual Property
Assignment and Assumption Agreement dated May 24, 2001. The
Company paid Dr. Fassihi $20,000 in connection with execution of this Agreement and an additional
$30,000 fee upon issuance of Patent No. 6,517,868 (CDT Patent
No. 3). In addition, Dr. Fassihi
assigned all of his right, title and interest in the technology known as
multiple compressed asymmetric composite delivery system for




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release-rate modulation of bioactives to the Company pursuant to an
Intellectual Property Assignment and Assumption Agreement dated August 1, 2002.
The Company paid Dr. Fassihi a fee upon execution of the Agreement and agreed
to pay an additional fee upon issuance of the first patent. The Company is
obligated to pay Dr. Fassihi an annual license maintenance fee, share in
upfront payments from customers and pay royalties based on product sales with
respect to the intellectual property assigned to the Company under each
agreement. Between April 30, 2003 and May 6, 2003, the Company issued $550,000 of
subordinated notes to a group of accredited investors, including Herbert L.
Lucas, a director of the Company, who purchased $75,000 of such subordinated
notes. In connection with the sale of these notes, the Company granted
warrants to purchase 235,722 shares of the Companys common stock (including
32,144 warrants granted to Mr. Lucas) at $1.11 per share exercisable for three
years. The notes were paid in full on June 25, 2003. For placement services
associated with the financing, the Company paid Taglich Brothers, Inc. a fee of
$23,750 and issued warrants to purchase 20,357 shares of common stock at $1.11
per share exercisable for three years. Michael N. Taglich and Robert
Schroeder, directors of the Company, are affiliates of Taglich Brothers, Inc. On June 25, 2003, the Company completed a private placement of $5.3
million of notes due June 25, 2006. Of the $5.3 million of notes issued,
$75,000 were issued to Herbert L. Lucas. The principal balance was converted
into shares of the Companys common stock at $1.05 per share in December 2003.
In consideration of certain placement services, the Company paid Taglich
Brothers, Inc. a cash fee of approximately $200,000, issued $300,000 of
convertible notes and issued warrants to purchase up to 476,191 shares at
$1.155 per share. In February 2004, the Company completed the private placement of 3,206,538
shares of its common stock for $3.25 per share. The purchasers also received
five year warrants to purchase 801,636 shares of common stock at an exercise
price of $4.75 per share. Rodman & Renshaw acted as the lead placement agent
for the transaction and Taglich Brothers, Inc. assisted in the financing. The
placement agents received a cash commission of $729,487 and warrants to
purchase 224,458 shares, of which Taglich Brothers, Inc. received $174,965 and
warrants to purchase 53,846 shares. In addition, Mr. Taglich purchased 49,631
shares of common stock and warrants to purchase 12,408 shares as part of the
private placement. During March 2002, the Company entered an exclusive patent license
agreement with Arthur-Daniels-Midland (ADM), the owner of approximately 6% of
the Companys common stock, which granted ADM an exclusive license and right of
first refusal to develop and market certain dietary supplement and
nutraceutical products using the Companys CDT Technology. During 2002, the
Company received $50,000 for reimbursement of research and development costs
associated with one product. The Company realized revenues of
$195,788 through sales and royalties from ADM during 2003 and will receive royalties based on a
percentage of net sales of the licensed products sold by ADM each quarter. The Company engaged Dunsford Hill Capital Partners (Dunsford Hill) in
March 2003 to provide strategic and financial advice to the Company and to
assist organizing and preparing the Company for a private equity financing. Dr.
Randall Caudill, a director, is the owner of Dunsford Hill. Under the terms of
the engagement, the Company agreed to pay Dunsford Hill $75,000 over the six
month term of the engagement and granted Dunsford Hill a five-year warrant to
purchase 100,000 shares




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##### Table of Contents



of the Companys common stock at a price of $1.00 per share. In April 2003,
Dunsford Hill and the Company agreed to reduce the cash payment to Dunsford
Hill to $25,000 and the amount of the warrant to 50,000 shares. 
 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following exhibits are filed herewith and this list is intended to
constitute the exhibit index: ExhibitNumber
    
    Notes
    
    Description2.1
    
    
    (14
    )
    
    Asset Purchase Agreement by and between SCOLR, Inc. and Nutraceutix,
Inc., dated as of December 31, 20034.1
    
    
    (5
    )
    
    SCOLR, Inc. Certificate of Incorporation, as amended4.2
    
    
    (12
    )
    
    Certificate of Designation of Series A Junior Participating Preferred
Stock of SCOLR, Inc.4.3
    
    
    (4
    )
    
    SCOLR, Inc. Bylaws, as amended10.1
    
    
    (9
    )
    
    Form of Note Purchase Agreement, Subordinated Note and Warrant dated as
of April 30, 200310.2
    
    
    (15
    )
    
    Form of 6.0% Convertible Note dated June 25, 200310.3
    
    
    (15
    )
    
    Form of Common Stock Purchase Warrant dated June 25, 200310.4
    
    
    (15
    )
    
    Convertible Note Purchase Agreement dated June 25, 200310.5
    
    
    (19
    )
    
    Securities Purchase Agreement dated February 24, 200410.6
    
    
    (19
    )
    
    Registration Rights Agreement dated February 24, 200410.7
    
    
    (19
    )
    
    Form of Common Stock Purchase Warrant dated February 24, 200410.8
    
    
    (6
    )
    
    Promissory Note to Clyde Berg in the principal amount of $1 million
together with related Security Agreement and Warrant Agreement dated
September 30, 200210.9
    
    
    (1
    )
    
    Company 1995 Stock Option Plan, together with amendment No. 1 thereto10.10
    
    
    (10
    )
    
    Amendment No. 2 to Company 1995 Stock Option Plan10.11
    
    
    (15
    )
    
    Form of Incentive Stock Option Agreement




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##### Table of Contents



ExhibitNumber
    
    Notes
    
    Description10.12
    
    
    (15
    )
    
    Form of Nonqualified Stock Option Agreement10.13
    
    
    (7
    )
    
    Exclusive Patent License Agreement dated March 8, 2002, by and between
Archer-Daniels-Midland Company and the Company10.14
    
    
    (15
    )
    
    Research and Transfer Agreement dated September 11, 1998, by and among
Temple University, Dr. Reza Fassihi, and the Company10.15
    
    
    (15
    )+
    
    License Agreement dated December 22, 1998, as amended, by and between
Temple University and the Company10.16
    
    
    (15
    )+
    
    License Agreement dated September 6, 2000, by and between Temple
University and the Company10.17
    
    
    (15
    )+
    
    Master Research and Development Agreement dated May 1, 2001, by and
between Temple University and the Company10.18
    
    
    (15
    )
    
    Consulting Agreement dated December 22, 2000, by and between Dr. Reza
Fassihi and the Company10.19
    
    
    (15
    )+
    
    Intellectual Property Assignment and Assumption Agreement dated May 24,
2001, by and between Dr. Reza Fassihi and the Company10.20
    
    
    (15
    )+
    
    License Agreement dated September 1, 2001, by and between Temple
University and the Company10.21
    
    
    (15
    )+
    
    Intellectual Property Assignment and Assumption Agreement dated August
1, 2002, by and between Dr. Reza Fassihi and the Company10.22
    
    
    (15
    )
    
    Additional Services Agreement dated August 7, 2002, by and between Dr.
Reza Fassihi and the Company10.23
    
    
    (14
    )
    
    License, Manufacture, and Distribution Agreement by and between SCOLR,
Inc. and Nutraceutix, Inc., dated as of December 31, 200310.24
    
    
    (15
    )
    
    Building Lease  3625 132nd Avenue SE, Bellevue, WA, dated April 15, 200310.25
    
    
    (11
    )
    
    Separation Agreement dated January 15, 2001, by and between William D.
St. John and the Company10.26
    
    
    (15
    )
    
    Employment Agreement dated July 2, 2003, by and between Stephen Turner
and the Company10.27
    
    
    (15
    )
    
    Separation Agreement dated August 7, 2003, by and between David T.
Howard and the Company




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##### Table of Contents



ExhibitNumber
    
    Notes
    
    Description10.28
    
    
    (15
    )
    
    Advisory Agreement dated August 7, 2003, by and between David T. Howard
and the Company10.29
    
    
    (18
    )
    
    Amendment to Advisory Agreement dated December 30, 2003, by and between
David T. Howard and the Company10.30
    
    
    (14
    )
    
    Separation Agreement dated December 31, 2003, by and between Steven H.
Moger and the Company10.31
    
    
    (6
    )
    
    Loan and Security Agreement dated April 30, 2002, by and between Access
Business Finance LLC and the Company10.32
    
    
    (8
    )
    
    Second Amendment of Loan and Security Agreement dated May 1, 2003, by
and between Access Business Finance LLC and the Company10.33
    
    
    (20
    )
    
    Letter Agreement between the Company, Michael N. Taglich and Tag Kent
Partners dated March 2, 200423.1
    
    
    (20
    )
    
    Consent of Grant Thornton LLP, Independent Certified Public Accountants31.1
    
    
    *
    
    
    Certification of Daniel O. Wilds pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    
    *
    
    
    Certification of Gail Vitulli pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    
    *
    
    
    Certification of Daniel O. Wilds pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    *
    
    
    Certification of Gail Vitulli pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 Notes +  Portions of such exhibit have been omitted pursuant to a request for
confidential treatment filed with the SEC. *  Included herewith. (1) Incorporated by reference to the Companys registration statement on Form
10-SB (File No. 000-24693), filed with the SEC on July 27, 1998. (2) Incorporated by reference to Amendment No. 1 to the Companys
registration statement on Form 10-SB (File No. 000-24693), filed with the
SEC on March 25, 1999. (3) Incorporated by reference to the Companys Form 10-KSB for the fiscal
year ended December 31, 1999. (4) Incorporated by reference to the Companys Form 10-KSB for the fiscal
year ended December 31, 2001.




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##### Table of Contents



(5)
    
    Incorporated by reference to the Companys Form 10-QSB for the quarterly
period ending June 30, 2002.(6)
    
    Incorporated by reference to the Companys Form 10-QSB for the quarterly
period ending September 30, 2002.(7)
    
    Incorporated by reference to the Companys Form 10-KSB for the fiscal
year ended December 31, 2002.(8)
    
    Incorporated by reference to the Companys Form 10-QSB for the quarterly
period ending March 31, 2003.(9)
    
    Incorporated by reference to the Companys current report on Form 8-K,
filed with the SEC on May 5, 2003.(10)
    
    Incorporated by reference to the Companys registration statement on Form
S-8 (File No. 333-40290), filed with the SEC on June 28, 2000.(11)
    
    Incorporated by reference to the Companys current report on Form 8-K,
filed with the SEC on April 6, 2001.(12)
    
    Incorporated by reference to the Companys current report on Form 8-K,
filed with the SEC on November 6, 2002.(13)
    
    Incorporated by reference to the Companys Form 10-QSB/A for the
quarterly period ending June 30, 2003.(14)
    
    Incorporated by reference to the Companys current report on Form 8-K,
filed with the SEC on January 23, 2003.(15)
    
    Incorporated by reference to the Companys registration statement on Form
S-2, File No. 333-107906, filed with the SEC on August 13, 2003.(16)
    
    Incorporated by reference to Amendment No. 1 to the Companys
registration statement on Form S-2 (File No. 333-107906), filed with the
SEC on October 3, 2003.(17)
    
    Incorporated by reference to Amendment No. 2 to the Companys
registration statement on Form S-2 (File No. 333-107906), filed with the
SEC on October 30, 2003.(18)
    
    Incorporated by reference to Post-Effective Amendment No. 1 to the
Companys S-2 registration statement on Form S-3 (File No. 333-107906),
filed with the SEC on January 29, 2004.(19)
    
    Incorporated by reference to the Companys current report on Form 8-K,
filed with the SEC on February 26, 2004.(20)
    
    Incorporated by reference to the Companys Form 10-KSB for the
fiscal year ended December 31, 2003. (b) Reports on Form 8-K A form 8-K was filed on November 12, 2003, under Item 9, relating to (i) the
appointment of Dr. Reza Fassihi and Robert C. Schroeder to its Board of
directors, (ii) the effectiveness of its Registration Statement on Form S-2,
and (iii) the conversion of $5.3 million of convertible notes into common
stock.




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES We have engaged Grant Thornton LLP as our principal accountant. The following
table summarizes fees we have paid Grant Thornton LLP for independent auditing,
tax and related services for each of the last two fiscal years: 2003
    
    2002(in thousands of US dollars)Audit fees (1)
    
    
    98,680
    
    
    
    72,595Audit-related fees (2)Tax fees (3)
    
    
    15,157All other fees (4)
    
    
    35,355
    
    
    
    9,795
 (1) Audit fees represent amounts billed for each of the years presented for
professional services rendered in connection with (i) the audit of our annual
financial statements, (ii) the review of our quarterly financial statements or
(iii) those services normally provided in connection with statutory and
regulatory filings or engagements including comfort letters, consents and other
services related to SEC matters. This information is presented as of the latest
practicable date for this annual report on Form 10-KSB. (2) Audit-related fees represent amounts we were billed in each of the years
presented for assurance and related services that are reasonably related to the
performance of the annual audit or quarterly reviews. This category primarily
includes services relating to internal control assessments and
accounting-related consulting. (3) Tax fees represent amounts we were billed in each of the years presented
for professional services rendered in connection with tax compliance, tax
advice, and tax planning. (4) All other fees represent amounts we were billed in each of the years
presented for services not classifiable under the other categories listed in
the table above. Grant Thornton LLP rendered no such services during the last
two years. The engagement of the Companys auditor is approved by the Audit Committee and
ratified by the full Board of Directors in advance of the engagement.




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##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized. SCOLR, INC.Date: April 29, 2004
    
    By:
    
    /s/ Daniel O. WildsDANIEL O. WILDSChief Executive Officer, President,(Principal Executive Officer)
 KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Daniel T. Wilds his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign
any and all amendments to this Annual Report on Form 10-KSB, and all documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. Signature
    
    Title
    
    DateRandall
L-W. Caudill
    
    DirectorReza
Fassihi
    
    Director/s/ DAVID T. HOWARD
 David
T. Howard
    
    Chairman of the Board
    
    April 29, 2004/s/ HERBERT L. LUCAS
 Herbert
L. Lucas
    
    Director
    
    April 29, 2004Director




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##### Table of Contents



Signature
    
    Title
    
    DateWayne L. Pines/s/ ROBERT C. SCHROEDER
    
    Director
    
    April 29, 2004Robert
C. SchroederDirectorMichael
Sorell, M.D./s/ MICHAEL N. TAGLICH
    
    Director
    
    April 29, 2004Michael
N. Taglich/s/ GAIL T. VITULLI
    
    Director of Finance, Controller
    
    April 29, 2004Gail
T. Vitulli
    
    (Principal Financial and
Accounting Officer)/s/ DANIEL O. WILDS
 Daniel
O. Wilds
    
    President, Chief Executive
Officer
(Principal Executive Officer)
and Director
    
    April 29, 2004