Using a proprietary high nicotine tobacco blend in conjunction with specialty cigarette components, BRAND B allows the smoker to achieve a satisfactory amount of nicotine per cigarette while inhaling less “tar” and carbon monoxide. At the same time, we do not expect exposure to nicotine from  BRAND B  to be significantly higher than some commercially available full flavor cigarette brands. We believe smokers who desire to reduce smoke exposure but are less concerned about nicotine will find  BRAND B  beneficial.  BRAND B  has a “tar” yield between cigarettes that were formerly known as “light” and “ultra-light” cigarettes, but a nicotine yield of typical full flavor cigarettes.

In a 2001 report, entitled Clearing the Smoke, Assessing the Science Base for Tobacco Harm Reduction, the Institute of Medicine notes that a low “tar”/moderate nicotine cigarette is a viable strategy for reducing the harm caused by smoking. The report states: “Retaining nicotine at pleasurable or addictive levels while reducing the more toxic components of tobacco is another general strategy for harm reduction.” We believe that evaluation of  BRAND B  in short-term human exposure studies will confirm that exposure to smoke, including certain tobacco smoke toxins and carbon monoxide, will be significantly reduced when smoking  BRAND B  as compared to smoking the leading brands of cigarettes.

Our Company has engaged a major contract research organization (“CRO”) with extensive experience in tobacco exposure studies to assist us in certain regulatory activities at the Center for Tobacco Products (“CTP”) of the FDA related to the Company’s research to support the development of potentially less harmful or modified risk cigarettes. The Company and the CRO met with the CTP on November 12, 2014 to discuss the development plan and proof of concept study for  BRAND B, a cigarette that produces smoke containing an extraordinarily low amount of “tar” per milligram of nicotine.

We believe results from this and other exposure studies will warrant a modified risk claim for BRAND B. There is, however, no guarantee that  BRAND B  will be classified as a Modified Risk Cigarette by the FDA.