Star Concentrates on Dissolvable Tobacco

Source from:  tr.itsmyiq.com Aug 10, 2007 08/13/2007

Star Scientific reported yesterday a $4.0 million loss from continuing operations for its second quarter, which ended on June 30, compared with a $2.9 million loss from continuing operations for the same period of last year. A net loss to the end of June 2007 of $3.0 million, which compares with a £2.3 million loss during the second quarter of 2006, included a loss of $1.4 million from discontinued operations relating to the May, 2007, licensing agreement with Tantus Tobacco LLC, and a $2.4 million gain on the sale of licensing rights from the Tantus agreement. Star reported that, under the Tantus agreement, it continues to have legal ownership of the licensed trademarks (Main Street®, Sport® and GSmoke®). However, since the license granted cannot be cancelled and includes a fixed fee for trademark rights, and since Star is not obliged to provide services beyond maintenance of the trademarks, the company has classified the discount cigarette business as a discontinued operation beginning in the second quarter of 2007, so results of operations and cash flows are reported separately. 'The licensing agreement also has provided Star the opportunity to fulfill its publicly stated goal of transitioning from cigarette sales to a singular focus on distribution and sales of its very low-TSNA dissolvable smokeless tobacco products,' Star reported. '… The revenues generated by sales of Ariva® and Stonewall® have been minimal when compared to total company revenue. However, the company is pleased with steadily increasing shipments to wholesalers on a quarter-to-quarter basis, and net sales of dissolvable tobacco for the second quarter increased roughly 109 per cent over sales for the same period in 2006.' Enditem