Goodrich Tobacco Sells Excess Equipment at North Carolina Factory
CLARENCE, N.Y. - Monday, March 10th 2014 [ME NewsWire]
(BUSINESS WIRE) 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.
Tom Redington, 203-222-7399