22nd Century Group, Inc. (OTCQB: XXII)
today announced that its wholly owned subsidiary, Goodrich Tobacco
Company, has been granted a federal permit to produce tobacco products
by the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department
of the Treasury (“TTB Permit”).
As previously reported,
22nd Century Group entered into an Agreement to purchase all of the
issued and outstanding membership interests of NASCO Products, LLC
(“NASCO”), a North Carolina limited liability company (the “NASCO
Acquisition”). NASCO has its own TTB permit to manufacture tobacco
products and is a participating member of the tobacco Master Settlement
Agreement (“MSA”), an agreement among 46 U.S. states and the tobacco
industry administered by the National Association of Attorneys General
(“NAAG”).
The NASCO Acquisition will close immediately upon the settling states of
the MSA consenting to the transaction; such consent consisting of a
modified Adherence Agreement for NASCO. At this date, the terms of
NASCO’s modified Adherence Agreement, as negotiated among NAAG, NASCO
and 22nd Century Group, are very close to final.
Upon the closing of the NASCO Acquisition, NASCO will become a
wholly-owned subsidiary of 22nd Century Group and Goodrich Tobacco will
surrender its TTB Permit. Joseph Pandolfino, Founder and CEO of 22nd
Century Group, stated, “We look forward to closing the NASCO
Acquisition, becoming a member of the MSA, and marketing our proprietary
brands, RED SUN® and MAGIC® nationwide, with all
the advantages afforded to MSA brands.” Goodrich Tobacco’s brands were
previously contract manufactured by companies that were not members of
the MSA.
Separately, Goodrich Tobacco engaged the Ettin Group of Northbrook,
Illinois and generated approximately $640,000 of net proceeds from an
auction of cigarette manufacturing equipment and other items not
required for operations at the Company’s factory in Mocksville, North
Carolina. As previously reported
on January 31, 2014, 22nd Century Group purchased approximately $3.4
million of cigarette manufacturing equipment from two bankruptcy estates
and leased the manufacturing facility that houses the equipment.
The Company sold a small portion of the equipment it originally
purchased out of bankruptcy, which confirms management’s assertion that
the $3.4 million of assets purchased is only a fraction of their actual
market value. “The strategic sale of excess equipment benefits 22nd
Century Group by reducing the net costs associated with the acquisition
of the turnkey Mocksville factory,” stated John T. Brodfuehrer, 22nd
Century Group’s CFO.
For additional information, please visit: www.xxiicentury.com.
About 22nd Century Group, Inc.
22nd Century is a plant biotechnology company whose proprietary
technology allows for the levels of nicotine and other nicotinic
alkaloids (e.g., nornicotine, anatabine and anabasine) in the tobacco
plant to be decreased or increased through genetic engineering and plant
breeding. 22nd Century owns or is the exclusive licensee of 114 issued
patents in 78 countries plus an additional 38 pending patent
applications. Goodrich Tobacco Company, LLC and Hercules
Pharmaceuticals, LLC are wholly-owned subsidiaries of 22nd Century.
Goodrich Tobacco is focused on premium commercial tobacco products and
potentially less harmful cigarettes. Hercules Pharmaceuticals is focused
on X-22, a prescription smoking cessation aid in development.
Cautionary Note Regarding Forward-Looking Statements: This
press release contains forward-looking information, including all
statements that are not statements of historical fact regarding the
intent, belief or current expectations of 22nd Century Group, Inc., its
directors or its officers with respect to the contents of this press
release. The words “may,” “would,” “will,” “expect,” “estimate,”
“anticipate,” “believe,” “intend” and similar expressions and variations
thereof are intended to identify forward-looking statements. We cannot
guarantee future results, levels of activity or performance. You should
not place undue reliance on these forward-looking statements, which
speak only as of the date that they were made. These cautionary
statements should be considered with any written or oral forward-looking
statements that we issue in the future. Except as required by applicable
law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to reflect actual results, later events or circumstances, or
to reflect the occurrence of unanticipated events. You should carefully
review and consider disclosures made by us in our annual report on Form
10-K for the fiscal year ended December 31, 2013, filed on January 30,
2014, including the section entitled “Risk Factors,” filed with the U.S.
Securities and Exchange Commission which attempt to advise interested
parties of the risks that may affect our business, financial condition
and results of operation. If one or more of these risks or uncertainties
materialize, or if the underlying assumptions prove incorrect, our
actual results may vary materially from those expected or projected.
Copyright Business Wire 2014