22nd Century Purchases Manufacturing Facility Out of Bankruptcy
22nd Century Group, Inc. (OTCBB:XXII) today announced that it has purchased all of the equipment at a cigarette manufacturing facility in Mocksville, North Carolina. Until now, 22nd Century Group’s subsidiary, Goodrich Tobacco Company, had produced all of its products through contract manufacturers.
22nd Century Group and NASCO Products, LLC entered into a lease agreement for the 61,500 square foot manufacturing facility this past October. “This turnkey facility will speed up our own production and distribution of our brands by at least 6 months,” stated Joseph Pandolfino, Founder and CEO of 22nd Century Group. 22nd Century plans to first manufacture SPECTRUM research cigarettes within the next 30 days and shortly thereafter begin production of its RED SUN and MAGIC super-premium brands. The Company also expects to enter into a manufacturing agreement with a strategic partner and to begin exporting its products later in 2014.
As reported last September, 22nd Century Group and NASCO Products entered into a binding agreement for 22nd Century Group to purchase NASCO Products. NASCO Products, a federally licensed tobacco product manufacturer, is also a participating member of the Tobacco Master Settlement Agreement known as the MSA, an agreement among 46 U.S. states and the tobacco industry administered by the National Association of Attorneys General (NAAG). Mr. Pandolfino added, “22nd Century is working with NAAG to obtain the consent of the attorneys general for our acquisition of NASCO Products and we have made great progress over the last few weeks.”
22nd Century Group will immediately start hiring key personnel formerly employed at the factory, which was producing cigarettes up until August 2013. The Company believes that having its own factory will create tremendous shareholder value since control and production of its differentiated tobacco products will be greatly facilitated and costs will be reduced. (continued on next post)
(continued) Terry Bralley, President of Davie County Economic Development Commission, stated, “We welcome 22nd Century Group to North Carolina. As a growing and innovative publicly-traded company, 22nd Century will rejuvenate one of North Carolina’s important manufacturing enterprises. This is exceedingly good news and will assist us in restoring jobs to Davie County.”
22nd Century Group’s legal team was led by William F. Savino of Damon Morey LLP. The Company’s winning bid in the Chapter 7 bankruptcy proceeding was $3.22 million, $50,000 more than the losing bid. The Order was signed by the Honorable William L. Stocks on December 2, 2013. Approximately one-third of the manufacturing equipment purchased will not be needed and is expected to be sold to other parties that have already expressed interest.