Star Scientific, Inc. Announces New Standards for Its Starcure Barn Allocation Program
PETERSBURG, Va.--(BUSINESS WIRE)--Nov. 30, 1999
For Flue-cured and Burley Tobacco Farmers to Respond to Continued
Multi-state Demand for Starcure Novel Curing Barns
Star Reports Independent Analytical Verification That the Levels of
Carcinogenic TSNA Content in Its Recently Processed Burley and
Dark-Fired Tobacco Were Exceedingly Low
Star Board Realigns Senior Management Team to Enhance Focus Upon its
Primary Missions of Reducing the Health Hazards Associated with Tobacco Use and Expanding Its Market for StarCure(TM) Low TSNA Tobacco
Star Scientific, Inc. (OTC-BB: STSI) announced that, after active consultation with key flue-cured and burley tobacco farmers, representatives of the Tobacco Stabilization Corporations, and representatives of the public health and scientific communities in order to fairly and objectively allocate new StarCure(TM) curing barns for the 2000 growing season and beyond to meet escalating demands by tobacco farmers for new barns, Star has promulgated written standards and criteria for allocating the StarCure(TM)curing barns.
(See detailed Standards and Criteria for Allocating StarCure(TM)/Curing Barns to Flue-Cured and Burley Tobacco Farmers set forth on Star's website, STARSCIENTIFIC.COM.). These new standards are aimed at achieving even-handed, non-discriminatory and objective allocation for all flue-cured and burley farmers requesting new StarCure(TM) barns. Professor Robert J. DeLorenzo, M.D., Ph.D., MPH, Star's Chairman, said that "Star anticipates allocating an additional 1,000 curing barns within the next 12-15 months beyond the approximate 250 curing barns which have been erected on tobacco farms in the Commonwealth of Virginia, North and South Carolina, Georgia, Florida and Ontario, Canada." Dr. DeLorenzo noted that since most burley farmers in Kentucky and other burley tobacco farming states have production capabilities that are smaller than many Virginia flue-cured farmers, Star has met with and advised the Burley Tobacco Growers Cooperative Association in Lexington, Kentucky recently that it will establish at least two pilot operations located in Kentucky next year, where Star will work with burley farmers in order to explore the development of a smaller StarCure(TM) burley "compact" barn for wider distribution in Kentucky and other burley growing states.
Mr. Williams stated that he planned to work closely with Star's exclusive barn manufacturer, Powell Manufacturing Company of Bennettsville, South Carolina (the largest barn manufacturer in the United States), to design a smaller "compact" StarCure(TM) barn, which would have the capability of producing approximately 10,000 pounds of tobacco, as opposed to approximately 20,000 pounds of cured tobacco, during a particular growing season. Mr. Williams stated that, "based upon his discussions with burley farmers in Kentucky and elsewhere, this type of smaller "compact" StarCure(TM) barn would be more responsive to the needs of smaller farmers in Kentucky and other states that cultivate burley tobacco."
Jonnie R. Williams, Star's founder and principal inventor of the StarCure(TM) process for producing low nitrosamine tobacco, with virtually undetectable levels of tobacco specific nitrosamines (measured in parts per billion), stated that "as soon as the compact barn is perfected (assuming it is technologically and economically feasible) , Star will start the process of contracting with smaller burley tobacco growers in Kentucky and elsewhere." Mr. Williams said that Star has achieved record processing and delivery of approximately 3.5 million pounds of low nitrosamine tobacco this growing season at its Chase City processing facility. "Star recently announced plans to double the size of that facility for next year given its escalating demand for StarCure(TM) processed tobacco," Williams said. Mr. Williams noted that he anticipates that with the expected addition of 1,000 new barns designed to be responsive to the continuous demand by farmers in multiple tobacco growing states, Star expects to be in a position to produce in excess of 20 million pounds of StarCure(TM) tobacco (both flue-cured and burley), so that it can not only fulfill its contractual obligations to Brown & Williamson Tobacco Corporation (the third largest tobacco company in the United States), but also have sufficient low TSNA tobacco to accelerate the integration its StarCure(TM) tobacco into its existing brands, Sport(R), Main Street(R), Vegas(R) and G Smoke(R) (formerly Gunsmoke(R)). Mr. Williams said that "all of Star's brands now have activated charcoal filters, which many respected scientists believe can be helpful in reducing several toxic substances in the vapor phase of tobacco smoke."
Dr. DeLorenzo said that "Star is ever mindful that it needs to retain the capability to manufacture and produce Star's own brand/or brands of low TSNA tobacco products, until such time as the major tobacco producers throughout the world and relevant government regulators either mandate or agree that low TSNA tobacco is a standard which must be embraced by the worldwide tobacco industry." In this respect, Dr. DeLorenzo commented that he was pleased and encouraged that an array of respected international scientists and clinicians who produced the Framework Convention on Tobacco Control (Technical Briefing Series Paper 2, Spring, 1999) noted that "... there are a number of potential opportunities to make products less dangerous than they are now." For example, an international committee of experts under the supervision of the World Health Organization "could ... set a ceiling for yields of toxic ingredients, such as tobacco specific nitrosamines and specify progressive reduction."
Professor DeLorenzo who, in addition to his duties as Star's Chairman, is also Chairman of the Department of Neurology at Virginia Commonwealth University, stated that he was reassured by the continuing responsible approach taken by Star and B&W in their recent long-term contract which provides that neither company will make any health claims regarding low TSNA tobacco until there is sufficient good science to support these claims as interpreted by Star's independent Scientific Advisory Board, which will be composed of highly credentialed scientists, physicians, clinicians, epidemiologists and public health experts. (See Star's Oct. 12, 1999 Press Release on its website). Dr. DeLorenzo said that Star may well be the first company in the tobacco industry that openly, unequivocally and unconditionally acknowledges as its central focus the reduction of known health hazards associated with long-term tobacco use by addicted users of tobacco products.
Dr. DeLorenzo said that "Star believes it has a corporate responsibility to expand its low TSNA tobacco production capacity beyond flue-cured tobacco." Consequently, Star processed small amounts of both burley and dark-fired tobacco during this growing season. Dr. DeLorenzo further noted that "Star is currently exploring further reduction of TSNAs in dark-fired tobacco (the type of tobacco used in smokeless tobacco products), since there is considerable scientific evidence that the carcinogenic TSNAs may be the only carcinogens in smokeless tobacco. Accordingly, Star is mindful that it has a responsibility to provide the millions of customers of conventional smokeless tobacco with a potential alternative, namely, with low TSNA smokeless products in the not-too-distant future." "At the same time, Star's significantly increased revenues during the third quarter will better enable the Company to expand its scientific research agenda, as well as its technical staff capabilities since the Company has a committed interest in reducing the carcinogenic risks of smokeless tobacco, as well as developing other products that could facilitate smoking cessation," Professor DeLorenzo commented.
Dr. Harold R. Burton, Associate Professor of Agronomy at the University of Kentucky's Department of Agronomy (UKDA), who has published prolifically in the scientific literature on tobacco leaf composition, tobacco specific nitrosamines (TSNAs), and other allied tobacco issues has been independently testing StarCure(TM) processed tobacco at his UKDA laboratories, which included burley and dark-fired tobacco, as well as Virginia flue-cured tobacco. Professor Burton has reported that his laboratories' independent testing of burley and dark-fired tobacco (the tobacco used in manufacturing smokeless products), which had been processed by using the StarCure(TM) 2-step curing/microwaving treatment, "produced a burley and dark-fired product that was exceedingly low in its carcinogenic TSNA content."
At a Board of Directors' meeting held in Washington, D.C. on November 20, Star's Board accepted the resignation of Malcolm "Mac" Bailey as Star's President. Mr. Bailey will continue as a Director and Senior Tobacco Advisor to the Company. Dr. DeLorenzo said that Mac Bailey had devoted an enormous amount of time and demonstrated great creativity in moving Star's initial R&D low nitrosamine tobacco program into broad scale commercial production, resulting in delivery of millions of pounds of StarCure(TM) tobacco during this growing season." "Mac had originally wanted to resign this past January to return to his family businesses, but acceded to the Board's request to remain as Star's President and chief liaison with the tobacco growers through the end of this growing season", Dr. DeLorenzo said. In commenting on his resignation, Mr. Bailey said that "now that I have completed my primary mission of assisting Star in moving its novel StarCure(TM) barn/microwave treatment process from the research and development phase into full-scale production whereby it anticipates the ability to produce in excess of 20 million pounds of low nitrosamine tobacco in the year 2000 growing season, I can return to my family tobacco businesses which I have sadly neglected because of the overwhelming demands on my time and energy as a result of Star's rapid growth."
Mac Bailey said that he was delighted that James "Jim" Jennings, who is Secretary to the Virginia Agricultural Growers Association (of which Mac is President), and recently elected Selectman in Mecklenburg County, as well as a highly regarded tobacco farmer in Chase City, has agreed to accept the new position of Vice President for Growers Relations in order to effect an orderly transition. Dr. DeLorenzo further said that Mac Bailey, a fifth generation Virginia farmer who is also President of the Virginia Agricultural Growers Association, "gave unflinchingly of his time, his knowledge and his understanding of the farming community to assist Star in moving forward to become the leader in the development and processing of low TSNA tobacco."
Dr. DeLorenzo said that he believed the time has come where Star needed to expand the roles of the two most pivotal members of its senior management team, namely Paul L. Perito, Esquire, and Jonnie R. Williams. Dr. DeLorenzo commented that Star's rapid growth has increased demands on the positions of President, Chief Operating Officer and Chief Executive Officer. Accordingly, Dr. DeLorenzo said he could not continue to serve as both Chairman and CEO, and at the same time fulfill his responsibilities as Chairman of the Department of Neurology at Virginia Commonwealth University, plus his research and teaching responsibilities as a medical school Professor. In tendering his resignation as CEO, Dr. DeLorenzo said he was honored to continue to serve as Star Scientific's Chairman.
Dr. DeLorenzo said that Paul L. Perito, Esquire, Star's present Executive Vice President, General Counsel, and Chief Ethics Officer has been elected as Star's new President and Chief Operating Officer by the Board. "Mr. Perito", Dr. DeLorenzo said, "has a wealth of institutional knowledge about the continuing congressional and executive agency interests in tobacco regulation and the implications of such anticipated regulation for the development of Star's less hazardous reduced risk tobacco products".
Dr. DeLorenzo noted that given Mr. Perito's former positions as Chief Counsel and Staff Director of the House Select Committee on Drugs and Crime of the U.S. Congress, as well as his prior executive leadership roles at the White House Drug Czar's Office where he was Deputy Director and General Counsel (and responsible for approximately 150 employees, and a multi-million dollar budget), he is well equipped to assume broader executive roles at Star. Mr. Perito, who has been Star's lead outside counsel at the international law firm of Paul, Hastings, Janofsky & Walker, LLP, "knows the Company well and shares its vision for the future", Dr. DeLorenzo said. Dr. DeLorenzo stated that he and the Board thought it appropriate that Mr. Perito assume the positions of both President and Chief Operating Officer to properly correlate with Mr. Perito's enlarged areas of operating responsibilities, and his deep understanding of the future regulatory climate. Further, Dr. DeLorenzo said, Mr. Perito's 35 plus years of experience as a nationally recognized trial lawyer will be of immense value to our growing innovative company, particularly since Mr. Perito is dedicated to carefully policing Star's intellectual property portfolio."(1)
Further, at its Board meeting, Star elected Jonnie R. Williams, Star's founder and principal inventor of its low TSNA StarCure(TM) barn/microwave process, to the office of Chief Executive Officer, now that Star has expanded its sales and marketing capabilities with the addition of David M. Dean as Vice President of Sales and Marketing and Sheldon Bogaz as Vice President for Trade Operations. As previously announced, Mr. Dean formerly was Vice President of Sales/Account Management at Trigon Blue Cross/Blue Shield, a $2.5 billion public company in Richmond, Virginia, involved in health care insurance. Dr. DeLorenzo noted that Mr. Williams and Mr. Perito represented a well coordinated and insightful senior management team who have demonstrated a record of high energy and high results since both began working together in forging Star's mission and articulating Star's corporate purposes. Mr. Williams said that "he was pleased with Star's committed efforts to enlarge both its senior management team, as well as its sales and marketing force. Mr. Williams commented that "the sales and marketing know-how of Messrs. Dean and Bogaz are an ideal combination of seasoned sales talent, tested field experience and demonstrated effective performance in the sales and marketing area."
This press release reflects certain information previously included in Star's Forms 10-QSB and 10-KSB, as well as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, wherever possible, to identify these forward-looking statements using words such as "anticipates", "believes", "estimates", "expects", "plans", "intends" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties and contingencies include, without limitation, the continued development and commercialization of the Company's proprietary patented process for reducing and/or virtually eliminating TSNAs in the processing of tobacco leaf, potential disputes concerning the Company's intellectual property, potential delays in obtaining any necessary government approvals of the Company's proposed reduced risk tobacco products, market acceptance of the Company's products, the effect of Year 2000 issues on customer ordering patterns, competition from companies with greater resources than Star, the Company's decision not to join the Master Settlement Agreement ("MSA"), the adoption of required state statutes and any subsequent modification of the Master Settlement Agreement. The impact of potential litigation, if initiated against or by individual states that have adopted the MSA, could be materially adverse to the Company. The Company undertakes no obligation to update or advise upon any such forward-looking statements to reflect events or circumstances after the date of the filing of its most recent 10-KSB and 10-QSB or to reflect the occurrence of unanticipated events.
(1)For further information on Mr. Perito's educational and professional qualifications, see STARSCIENTIFIC.COM and Press Release of July 21, 1999.
CONTACT:
Star Scientific, Inc.
James A. McNulty, 804/861-0681
Website: starscientific.com |
