Good day and welcome to the 22nd Century Third Quarter 2017 Business Update. Today’s conference is being recorded. At this time, I would like to turn the conference over to General Counsel of 22nd Century Group, Mr. Tom James. Please go ahead, sir..

Thank you very much. And thank you everyone for joining us on the call today. You bear with me. I'm going to read the obligatory legal Safe Harbor text.

The statements made on today’s call that are not based on historical information are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward statements include, but are not limited to, statements regarding our company’s business strategy, future plans and objectives, and future results of operations or that may predict, forecast, indicate or imply future results performance or achievements.

The words estimate, project, intend, forecast, anticipate, plan, expect, believe, will, will likely, should, may or the negative of such words, or words or expressions of similar meanings are intended to all identify forward-looking statements.

These forward-looking statements are not guarantees of future performance and all such forward-looking statements involve risk and uncertainties, many of which are beyond our company’s ability to control. Actual results may differ materially from those expressed or implied by such forward-looking statements.

As a result of various factors, including but not limited to the risk factors disclosed in our company’s most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 8, 2017.

22nd Century does not undertake and it disclaims any obligation to update any forward-looking statements or to announce revisions to any of the forward-looking statements.

During this conference call, we will also disclose certain non-GAAP financial measures including adjusted EBITDA, which we define as earnings before interest, taxes, depreciation and amortization as adjusted by 22nd Century for certain non-cash and non-operating expenses as described in our company’s earnings press release for the quarter-end September 30, 2017 as publicly issued yesterday on November 9, 2017, and which is also available on our company’s website.

And with that, I’ll turn it over to our Chief Financial Officer, John Brodfuehrer..

Thank you, Tom. Good afternoon everyone, and thank you for calling into the 22nd Century’s third quarter 2017 business update. This afternoon I will provide you with the summary of the Company’s financial results for the third quarter of 2017 and year-to-date through September 30, 2017.

As mentioned in yesterday's press release, net sales revenues for the third quarter of 2017 was approximately 4.5 million representing 46.3% increase over net sales revenues of approximately 3.1 million for the third quarter of 2016, and was the highest quarterly sales revenue in the Company's history.

This increase is primarily due to continued net sales revenue from the new contract manufacturing job that commenced in mid May of 2017.

Net sales revenues for the nine months ended September 30, '17 were approximately 10.66 million an increase of 1.7 million or 19.2% over net sales revenues of approximately 8.94 million for the nine months ended September 30, 2016.

Our gross loss on product sales for the three months ended September 30, '17 was $340,000 as compared to the gross loss of 185,000 for the three months ended September 30, 2016, an increase in the loss of $155,000.

But we began fulfillment in the second and third quarter of a very substantial new manufacturing contract for third party because we added workers in anticipation of the new contract, our manufacturing operations in North Carolina were still not running at full capacity throughout the three and nine months ended September 30, 2017.

The increase in our gross loss was the result of cost associated with the increased capacity expansion at our Mocksville, North Carolina factory. Our gross loss on product sales for the nine months ended September 30, 2017 was 779,000 as compared to the gross loss of 202,000 for the nine months ended September 30 of 2016 an increase of $577,000.

This increase in the gross loss is primarily attributable to the capacity expansion at our factor as mentioned above, a $95,000 increase in our inventory reserve during the second quarter of 2017, and the decrease in gross profit realized on the sale of SPECTRUM research cigarettes because they were low sales SPECTRUM research cigarettes during the three or nine months ended September 30, 2017, as compared to the same period of 2016.

These numbers do not reflect the new purchase order of 2.4 million SPECTRUM research cigarettes that were received at the end of second quarter of 2017 and that are expected to shift in the third quarter of 2017.

Our net cash operating expenses that exclude non-cash equity based compensation, amortization and depreciation increased during the three months ended September 30, 2017 by 445,000 or 22.3% from 1.995 million to 2,440,000 for the third quarter of ’17.

The increase in our non-cash, in our net cash operating expenses of approximately 445,000 during the three months ended September 30, 2017 consisted primarily of an increased in research and development expenses approximately 101,000 mainly related to sponsored research and paid maintenance costs.

And then overall net increase in our general and administrative expenses of approximately 368,000 and were partially offset by a decrease in sales and marketing costs of approximately in the 24,000 during the third quarter of ’17 as compared to the third quarter of ’16.

Our net cash operating expenses again excluding non-cash equity based compensation, amortization and depreciation increased during the nine months ended September 30th by $348,000 or 4.9% from 7 million, 122,000 for the nine months ended September 30, 2016 to 7,470,000 for the nine months ended September 30, 2017.

This increase in our net cash operating expenses of approximately 348,000 during those nine months ended September 30, 2017, consisted primarily of an increase in our research and development expenses mainly related to sponsored research, modified risks and debt maintenance costs of approximately 409,000.

Our net overall increased in our general and administrative expenses of approximately 394,000 that will partially offset by a decrease in our sales and marketing costs relating to our advertising and promotional efforts of approximately $455,000.

Our net loss for the three months ended September 30, 2017 was 3,370,000 or negative $0.03 per share, as compared to net loss of 2,680,000 or negative $0.03 per share for the three months ended September 30, 2016 an increase in the net loss of 637,000 or 23.8%.

The increase in the net loss was primarily result an increase in our operating expenses of 523,000, an increase in the gross loss on product loss of 156,000 those partially offset by a net decrease in other expenses in the amount of $42,000.

Our net loss for the nine months ended September 30, 2017 was $9,294,000 or negative $0.10 per share, as compared to a net loss of $8,835,000 or negative $0.11 per share for the nine months ended September 30, 2016 an increase in the net loss of $459,000 or 5.2%.

The increase in net loss was primarily results of an increase in operating expenses of $294,000 and an increase in our gross loss in product sales of 577,000 partially offset by an increase in other income and expense of $412,000.

Our adjusted EBITDA non-GAAP financial metric that was previously defined by Tom in his open statement, for the three months ended September 30, 2017 was a negative 2,780,000 or negative $0.03 per share as compared to a negative 2.18 million or negative $0.03 per share for the three months ended September 30, 2016, an increase in the negative adjusted EBITDA of $600,000.

Our adjusted EBITDA for the nine months ended September 30th was a negative $8,249,000 or a negative $0.09 per share as compared to a negative $7,323,000 or negative $0.10 per share for the nine months ended September 30th of '16 an increase in the negative adjusted EBITDA of $926,000.

Finally, our cash balance reported on our consolidated balance sheet at September 30th 2017 was $15,220,570. On October 10th 2017 we closed our registered direct offering with institutional investors that generated net cash proceeds to the Company of approximately $50.7 million after deducting expenses associated with such offering.

As such our current cash balance is more than $64 million easily the highest in the Company's history. We believe this cash amount will be adequate to sustain normal monthly operating expenses of approximately $900,000 and to meet all current obligations as they can do for a period of at least five years. That concludes my remarks.

Thank you for your time, consideration and interest in 22nd Century. I will now turn the remainder of the call over to our President and CEO, Henry Sicignano, who will provide you with a business review and update, thank you very much..

Thank you, John. Good afternoon and thank you to all our conference call participants for joining us today. As you know this past summer the FDA announced a ground breaking plan to dramatically lower nicotine in cigarettes to non-addictive levels. According to Stanford professor and public health advocate Dr.

Robert Proctor, the FDA's plan could save more lives than any other act of a government agency in all of human history.

As a result of 22nd Century's remarkable Very Low Nicotine tobacco technology, we are in the enviable position of serving as the industry leader for the technology and plants that will facilitate the most fundamental change the tobacco industry has ever seen.

Our company's Very Low Nicotine technology likely represents the future of what all combustible cigarettes sold in the United States will look like. And we agree with Dr. Proctor, limiting cigarettes to non-addictive levels of nicotine will completely change the tobacco industry landscape, starting here in the U.S.

but thereafter spreading around the globe as well. The future of combustible cigarettes is likely a world where adult consumers will have a real choice of if and how much they smoke, rather than a blind addiction, smokers will have choice. Dr. Proctor explained the change succinctly.

In a market where only non-addictive Very Low Nicotine cigarettes are sold, "smokers would be able to start or to quit at will, without suffering the robbery of choice that defines addiction". Public health advocates have called for a nicotine reduction mandate in cigarettes for years.

For example, in 2015 the World Health Organization study group on tobacco product regulation published a global nicotine reduction strategy that stated, 'mandated reductions in nicotine to minimally addictive levels should be supported by comprehensive regulation of all nicotine and tobacco containing products'.

The World Health Organization made this recommendation to all 168 WHO member nations. At the same time Dr.

Natalie Walker and her colleagues in New Zealand have long advocated a broad nicotine reduction mandate, and following FDA's historic July 20th announcement many other countries have indicated that they too are considering similar nicotine reduction mandates. The FDA's plan to limit nicotine in all cigarettes sold in the U.S.

to non-addictive levels has had a tremendous impact on our company. While big tobacco companies lost more than $30 billion in market cap this summer 22nd Century's value has doubled.

Though our small company is still well below the radar of much of Wall Street several big bank analysts have begun to follow 22nd Century and public health advocates have started to realize how powerful our Very Low Nicotine technology really is.

We're working with the public health community and with scientists around the world to ensure that the FDA's plan is enacted with the urgency it deserves.

A recent Washington Post editorial board article concluded that "the sooner the FDA makes good on its long term vision, low nicotine cigarettes along with the well regulated e-cigarette industry the better". Congress gave the agency wide authority over tobacco products nearly a decade ago. The FDA should move with determination now.

Fortunately, FDA shares the sense of urgency and FDA Commissioner, Gottlieb's July 28th remarks announcing the agency's intention to regulate nicotine.

He gives a hint to the agency's timetable when he explained that the process of limiting nicotine and cigarettes will be one of a series of new rule makings on which the FDA will begin work immediately. Later in the piece published in the August 2017 edition of the New England General Medicine, Dr.

Gottlieb together with Mitch Zeller, Director for the FDA's Center for Tobacco Products explained why addressing nicotine levels in cigarettes is widely important. He wrote, we're at a crossroads in efforts to reduce tobacco use with the lives of 10s of millions of currently addicted cigarette smokers and future generations hanging in the balance.

According to the Center for Disease Control every day in the U.S. nearly 2,500 youth under age 18 smoke their first cigarette, this means more than 900,000 underage smokers begin their addiction to combustible cigarette each and every year in the United States alone.

To put this figure into perspective, the population of Buffalo, New York is approximately 250,000 people, that means statistically every year the equivalent of four cities the size of Buffalo begin their lifelong addiction to combustible cigarettes, this is precisely the nicotine addiction cycle that the FDA plans to halt.

By mandating the all cigarettes sold in the United States be minimally or non-addictive the FDA will give smokers the ability to quit or to continue smoking as they chose but without chemical dependency. The FDA considered various approaches before actually announcing its policy.

The FDA wanted to determine the best overall strategy for reducing nicotine in cigarettes. Ultimately it seemed the choice came down to, one, an immediate reduction in nicotine to non-addictive levels or two, a gradual reduction in the nicotine content in cigarettes. To answer this question Dr.

Dorothy Hatsukami, Professor of Psychiatry and Director of the Tobacco Research Programs at the University of Minnesota has been engaged in a highly anticipated multiyear Phase III clinical study. They're still examining the behaviors of 1,250 patients over 20 week period.

Participants were provided with either cigarettes that yielded an immediate reduction in nicotine to non-addictive levels or with cigarettes with gradually reduced nicotine contents. Dr. Hatsukami study used exclusively 22nd Century's SPECTRUM research cigarettes for the duration of the trial.

Those details of this new completed seminal study are still under peer review, Dr. Hatsukami has already debouched the answer to the study's core question. During her presentation about a month ago at the Vermont Center on Behavior, and Health's Tobacco Regulatory Science Conference Dr.

Hatsukami revealed that an immediate approach to nicotine reduction in cigarettes is most beneficial to public health. We're pleased that the results of Dr. Hatsukami study so conclusively paved the way for FDA to move aggressively to mandate minimally or non-addictive levels of nicotine in all cigarettes sold in our country.

Indeed FDA Commissioner Gottlieb has called reducing the nicotine content in cigarettes a top priority of the FDA. Accordingly and as reported in the Wall Street Journal, it is our expectation that the FDA will begin this December it's rule making process for the nicotine reduction plan.

22nd Century stands ready to assist in any way possible this historic initiative. And we intend to license our Very Low Nicotine technology to any company with a serious interest in improving public health.

Precisely because the FDA is so enthusiastic and committed to the implementation of its reduced nicotine plan, we believe our prospects to achieve a modified risk tobacco products or MRTP marketing order for our BRAND A Very Low Nicotine content cigarettes are extremely strong.

Very Low Nicotine tobacco is now recognized at the FDA and in the broad scientific community as the key ingredient in reducing the addictiveness of cigarettes.

Thus with our MRTP application we are in essence asking FDA to authorize a Very Low Nicotine cigarette that is designed to exactly answer the FDA's call for minimally or non-addictive cigarettes.

Given the FDA's commitment to mandate that all cigarettes contained greatly reduced levels of nicotine, the more time that passes the more interest there will be for BRAND A to earn the marketing order and to enter the U.S.

market, the importance and value to our company and to our shareholders of having an FDA authorized, Very Low Nicotine modifiers risk cigarette cannot be overstated.

A modified risk tobacco product could represent enormous market share and market cap for 22nd Century, and indeed as the minimally or non-addictive product are proprietary Very Low Nicotine cigarettes would represent a classic opportunity for 22nd Century to do exceedingly well by doing good.

With the goal of realizing the vast potential represented by our Very Low Nicotine cigarettes we recently announced the hiring of Dr. Jean Swauger to serve as a Senior Vice President of Science and Regulatory Affairs. Dr. Swauger is one of the country's foremost tobacco regulatory experts.

He previously served as the Vice President of Regulatory Oversight at RAI Services Company a wholly owned subsidiary of Reynolds American Inc., where he developed and implemented Reynolds overall scientific and regulatory strategies. At 22nd Century among other duties Dr.

Swauger will lead our efforts to revise and resubmit to the FDA our MRTP application for BRAND A. I'm confident that his regulatory expertise will prove invaluable and that though doctors through Dr. Swauger's efforts will have the first successful MRTP application for a combustible cigarette.

We're planning to file our completed revised MRTP application for BRAND A in 2018. 22nd Century enjoyed a strong first mover position on Very Low Nicotine tobacco. We're the only company to of supplying Very Low Nicotine research cigarettes to the National Institute on Drug Abuse which is part of the National Institutes of Health.

Today we have received and fulfilled orders from agencies of the U.S. federal government for more than 24 million SPECTRUM research cigarettes, and since 2011 SPECTRUM research cigarettes have been a part of dozens of independent clinical trials investigating the effects of Very Low Nicotine content cigarettes on the behaviors of smokers.

Indeed our Very Low Nicotine cigarettes have been instrumental in making possible the FDA's nicotine reduction plan. 22nd Century is proud to be the only company in the world to be growing whole crops of minimally or non-addictive tobacco that could meet the FDA's new cigarette standard.

Accordingly in anticipation of very substantial increases and demand for Very Low Nicotine tobacco as a result of becoming FDA mandate, 22nd Century will plant multiple Very Low Nicotine seed plots next spring and will subsequently expect to have enough seed by the fall to grow enough tobacco to supply nearly the entire U.S. cigarette industry.

Now let's turn to finances and operations. Reflecting the confidence held by our management team and by many of our institutional investors, this October we were able to complete a capital raise for more than $50 million.

We conducted decidable financing to provide the Company with enough cash to fund business operations for more than five years, giving us the needed runway to ensure that important projects like our MRTP application are completed and make it through FDA's review process.

In addition the sizable cash balance also serves as a bulwark in negotiations with larger tobacco companies and international pharmaceutical companies.

As we enter due diligence for potential joint venture licensing agreements and other business partnerships, we will now have sufficient staying power to command the best terms possible for our company for our shareholders.

At our North Carolina-based factory in order to meet demands, we have expanded our equipment to include seven manufacturing lines and we have doubled our workforce. This quarter alone accounted for $4.5 million in revenue the largest product sales revenue in our company's history.

As a result of already signed manufacturing agreements, we're projecting sales revenue of $16 million in 2017. While much of the recent news about 22nd Century has been focused on our tobacco technologies, we're also making commendable progress with our hemp biotechnology.

In partnership with the University of Virginia this summer we grew several fields of experimental hemp varieties are well suited for use in Virginia, North Carolina and other areas of the tobacco belts. Since hemp has not been grown commercially in these areas for decades, we are essentially starting over in crafting region specific hemp plants.

We are already in the process of expanding our hemp research and hemp growing activities with the University of Virginia. We will plant more hemp for phytoremediation. We will plant more hemp for commercial industrial purposes and we will plant more hemp for medically focused cannabinoid extraction research.

Each of these projects has the potential to result in immediately marketable hemp plant lines and unique cannabinoid extracts. In addition we just signed an industrial hemp research partner agreement with the New York State Department of Agriculture and Markets.

As a result of partnering with New York State, we will be able to greatly expand our hemp research at our company-owned laboratories in Buffalo, New York.

22nd Century is uniquely positioned as the nexus to combine the efforts and capabilities of our hemp partners including our experienced hemp growers, our biotech partner and the India Labs in Vancouver Canada and our academic partners at the University of Virginia.

Our hemp research objectives for the next year are to protect hemp varieties for use of Virginia, North Carolina, and other areas of the tobacco belts. To expand our hemp activities in New York and to further develop our zero THC and other hemp plants with unique cannabinoid profiles for medical and industrial purposes.

Nearly everything surrounding the tobacco industry has changes since the last quarter. We are excited to play such a central role in the very future of tobacco. And true it all, 22nd Century remains firmly committed to our important mission to reduce the harm caused by smoking.

We are pursuing our mission with target determination and a keen sense of urgency. Given the FDA’s plan to mandate dramatically reduced levels of nicotine and given our rapidly expanding hemp science and capabilities, I think you will agree, 22nd Century’s future has never been brighter.

Thank you so much for joining us today and for your continued interest in our extraordinary company. At this time, I will open up the call to questions..

[Operator Instructions] Our first question comes from James McIlree with Chardan Capital. Your line is open..

Hey, thank you, and good afternoon, Henry, and Tom and John.

Can you help us understand what alternatives big tobacco would have other than going to you? And I know some of them are expensive in long-term, but if you can just try to map out what you think the relevant alternatives are to your technology?.

Sure. Let’s talk about denic. Since the 1940s many tobacco companies have invested considerable resources into plant breeding and research and reducing the nicotine content of cigarettes. And I guess as a result of that many tobacco companies now have the ability to grow tobacco with unremarkable reductions in nicotine.

But these efforts haven’t matched what we’ve accomplished and I think in contrast 22nd Century is the only company to have grown commercially viable Very Low Nicotine tobacco with nicotine as low as 0.4 milligrams per gram of dry tobacco filler.

Past efforts to actually remove the nicotine from already grown tobacco have proven equally disappointing for tobacco companies. In the late 1980s, Philip Morris the multinational owner of Marlboro invested more than I think $200 million into developing plusses to "denicotinize" conventional tobacco leaf.

Phil Morris succeeded with this process but it yielded a much altered tobacco that had poor taste and aroma characteristics. Nevertheless in the late 1980s I think 1987 Philip Morris test marketed his extracted nicotine tobacco cigarette under the brand name Next. The results, Next cigarettes were shortly a commercial failure.

In addition to the product’s poor centric characteristics, the cost to extract the nicotine from tobacco proved high and was unsustainable at scale. But nonetheless Philip Morris has in fact come up with this system to denicotinize tobacco.

Then in terms of growing reduced nicotine tobacco, we have heard that some companies have "substantially reduced nicotine levels". But any big tobacco company that’s made this claim has not to this point to my knowledge publicly announced how low is substantially reduced.

It’s our understanding and belief especially as shown in the 2015 New England Journal of Medicine study that levels are below 85%, last nicotine at a conventional cigarette are required to make a cigarette minimally or non-addictive, and to our knowledge no company in the world has been successful growing crops of Very Low Nicotine tobacco at this level except for 2nd Century.

That’s a long winded answer but is that helpful?.

That’s very helpful thank you. And then secondly I think the FDA also indicated that they are looking a way to allow people but allow companies to generate or to introduce new products that potentially are combustible and that would reduce the harm from smoking. And I think Altria in their analyst meeting was highlighting this technology.

Can you compare -- well first of all in the heat-not-burn is there an opportunity for you in that market? And then secondly what do you think of that path, it seems to me that that’s an alternative that tobacco companies might look at as recognized that some people are going to try quit smoking, so why not move to another technology that will allow people to save the nicotine but also allow them to comply with FDA regulations?.

Well I think that’s exactly FDA’s stated plan. I think the plan is to mandate very low contained tobacco at minimally or non-addictive levels in all combustible cigarettes sold in the U.S.

And then at the same time to allow for electronic cigarettes vape products, snus, heat-not-burn products, all of those products to be allowed for smokers who still seek nicotine and those products are I wouldn’t call them safe but those products are presumably less bad than combustible products.

So that’s FDA’s strategy in a nutshell is to reduce nicotine content in combustible cigarettes but then to allow for non-combustible tobacco products to be in the market for those smokers who still seek nicotine. So and I guess just statistically the U.S. cigarette market is somewhere between $80 billion and $90 billion, that’s just U.S. cigarettes.

I am pretty sure that all those alternative products are somewhere less than $5 billion. So in the near term that’s obviously a tremendous opportunity for 22nd Century to participate in or supply perhaps as much as all the low nicotine tobacco to those two manufacture combustible cigarettes in the $80 billion plus U.S.

cigarette market but you would expect overtime if those products are non-addictive that folks would either quit smoking or would migrate to those non-combustible products..

We will take our next question from Robert Branciforte with Morgan Stanley. Your line is open..

A couple of follow-up questions related to the prior questioning.

To you knowledge, have any other companies provided VLN cigarettes to the FDA or any other research operation in all these years of testing? And then follow-up to that, if Big Tobacco or somebody else were to come out with a VLN cigarette that being tested and compared comparatively with yours, how would you know if there was patent infringement, I mean it sounds like a simple question but just legally run down how could you prove that there was patent infringement?.

Okay well let’s start with, we have the exclusive contract to supply Very Low Nicotine cigarettes to a sub-contractors who supplies them to NIDA the National Institute on Drug Abuse, and pretty much -- well not pretty much all of the clinical trials that you'll read about the dozens of studies that have already been completed all of them have used our cigarettes exclusively, the SPECTRUM research cigarettes, so I can say that definitively to my knowledge there's no company that's grown a crop of Very Low Nicotine tobacco at minimally or non-addictive levels except for 22nd Century.

So others are boasting of the ability to grow "reduced nicotine" but they've gone out of their way not to define what reduced nicotine is, so I believe that we're the only company in the world that has grown crops of Very Low Nicotine tobacco at non-addictive levels.

But of course as I mentioned Big Tobacco has had success with this denicotinization process, where they strip the nicotine out of tobacco. My understanding is that actually a Phillips Morris' representative was quoted in last year or so, as saying that that process is very-very expensive. I think the quote was something like.

If the nicotine reduction mandate were find its way to Europe, it would cost Phillip Morris $10 billion to $12 billion a year to chemically strip the nicotine out of tobacco in the European Union alone.

So, that's my understanding of the competitive landscape and we stand ready as I've said many times before to co-operate partner with or license to any companies selling cigarettes in the United States who wish to comply with the FDA's planned mandate.

Now in terms of policing all of this, I know a simple lab test is all that's needed to prove a certain tobacco strain comes from our proprietary tobacco, but I have -- our General Counsel here who might give you a little more color on that..

Thanks Henry. Robert, this is Tom James, the General Counsel of the Company.

Without getting into details as Henry was alluding to there's diagnostics that we've that we can tell exactly if someone has any lineage from any of our plans whatsoever, for those of you that don't know in the history of the Company, I've been involved for 15 years with the Company.

And more than a decade ago we had a Big Tobacco company trying to clean that they had something, we immediately went to grips with them legally and proved immediately that they didn't have it, it was ours and they fold it quickly because they don't want to be involved with, you may or may not know things called treble damage is another big-big-big penalties that come into violating people's IP.

So, it's much easier and makes better business sense to do a licensing transaction and it would be the violator IP, but in summary we have diagnostic capability that tells immediately if something has anything to do with our plans..

Is that helpful?.

Just one other question if I might ask. I was very happy to see that Bonnie Herzog did a very good overall summary of the state of the situation, as it was at that time. And she is a respected analyst that I've known for years at our prior company. I was just wondering, if there was any indication that you got from her.

What would it take for her to recommend the Company because that would have tremendous impact obviously?.

Well, I can't speak for Bonnie. I can't say that several analysts at Big Banks have been talking with us and are interested in our company and our technology, and our modified risk application. And so, we've -- the dialogue has increased dramatically in the last couple of months.

At the end of the day what triggers analyst coverage, I think market cap is probably important, and I think at the end of the day if and when we're successful with the modified risk application, especially if it's the first successful modified risk application or perhaps the first combustible products modified risk application, I think an event like that would make it almost mandatory that the major analysts would start to cover us or write on us..

[Operator Instructions] We'll move onto our next question from Ryan Warner. He's a Private Investor. Your line is open..

If heat-not-burn gains traction, what role do you see XXII having in that segment of the market?.

Well, that's a complicated question, we don't plan to enter that segment of the market directly, but we could participate in that segment by one, supplying likely our nicotine tobacco to any company that does have a heat-not-burn product in the market that's one way we could participate indirectly.

But the other way again the combustible cigarette market in the U.S. is in excess of $80 billion. I do not think that there's going to be a flip of a switch one day and that $80 billion plus cigarette market is going to turn into a heat-not-burn market.

I suspect as does FDA that an important part of encouraging smokers to go to heat-not-burn products and other non-combustible products is going to be to make all combustible cigarettes sold in the United States Very Low Nicotine tobacco.

So that's how we plan to participate in that movement directly is by being a very important player in the Very Low Nicotine cigarette sphere, by selling our own product and through licensing other products and in so doing that will facilitate I believe and FDA believes the migration of smokers who still are looking for a higher nicotine content product into the heat-not-burn world.

Does that make sense?.

Our next question comes from Armand Ohi. He's also a Private Investor, your line is open..

I'm wondering, are we only waiting on the FDA to approve our Very Low Nicotine? Or can we go ahead and put some pressure on private tobacco, I'm sorry the large tobacco industries? You know what I'm saying put some pressure on them to take our product rather than waiting on the FDA to get us going.

Can I get the ball rolling ourselves?.

Well, that's complicated. In order to be able to explain to consumers the benefit of a Very Low Nicotine cigarette we would need a marketing order from the FDA under the Modified Risk Tobacco Product program.

So without that marketing order under the MRTP program we would not be allowed to convey to consumers the benefits of a Very Low Nicotine cigarette. As a matter of fact we are not even allowed to label the product as a Very Low Nicotine cigarette. So that's the great importance of the MRTP labeling and marketing orders.

We need to do that to be able to label the products. We need to be able to do that to be able to convey what differentiates that product from a conventional cigarette. And then in terms of other tobacco companies, well that's the linchpin.

With that regulatory marketing order then not only would we have an avenue to market that would be a good one but I think there would be other tobacco companies that would have that same interest..

Okay, okay..

I mean so right now we could sell our product on the market, but we can't explain the benefit to that product without going through the MRTP process.

So that's why I guess I should say before we wrap this up, the two most important initiatives this company has right now, are one, the planned FDA mandate, that mandate that all cigarettes in the United States to be Very Low Nicotine would obviously be incredibly positive for public health and outstanding for 22nd Century shareholders.

And then at the same time if that Modified Risk Tobacco Product review process takes too long or excuse if that mandate is taking too long we have the Modified Risk Tobacco Product that will likely get us to market, in I don't know, a couple of years.

Hope, that's helpful?.

We're definitely long, yes. Not for sale, Henry, not for sale..

Alright, outstanding, thank you..

We will take our next question from James Schue. He's also a Private Investor. Your line is open..

With regards to the Phase III trials, I'm curious as to whether there would be a new drug application for X-22 as well as MRTP for BRAND A? Because it looks like the Phase III trials would allow both to occur, I'd like your opinions to whether that's true and then what your strategy would be going forward in terms of applying for MRTP for every single nicotine reduction point of your cigarettes?.

Okay let's start with X 22, X-22 it if we talk six months ago I would've likely told you the X-22 was the Company's top priority. We did have guidance meeting with the FDA in June around the X-22 product and the FDA -- while the FDA basically indicated that we were ready to conduct two Phase III trials.

Now the FDA mandate they came about the plan mandate they came about at the end of July essentially replaced the need for X-22 with every single cigarettes sold in the United States is Very Low Nicotine that minimally or non-addictive levels. We don't think that it makes sense to have a prescription product its Very Low Nicotine.

So unless and until the FDA were change course on the plan mandate right now our Phase III trials are way, way, way on the back burner. We had -- there is no reason for us to go spend $30 million $40 million on Phase III trial when FDA already has announced its plans to mandate the product across the industry.

So but in the meantime while the FDA is working through the regulatory process we do -- as I mentioned earlier we do think it's an absolute top priority to have a Very Low Nicotine modified risk product.

Now I'm not sure I guess we could submit different applications at different nicotine levels but our plan right now is to submit to resubmit one application for a nicotine level that we believe is optimal for being a minimally or non-addictive product and also being consumer acceptable.

So that's exactly our plan, we are going to facilitate and cooperate with the FDA the plan mandate and we are going to push forward as aggressively as possible with our MRTP application for one particular Very Low Nicotine cigarettes..

I have a follow up question.

What are the status of the clearly view of this Phase III results? And do you expect to have a publication within the next three months and one of the major medical appearance?.

So that question -- that trial is an independent clinical trial.

We didn’t sponsor we didn’t fund it, we didn’t conduct that trial, the only thing we did is we supply the cigarette that were used in that trial that you are speaking of I think the trial you are speaking of is cold strategies for reducing nicotine content in cigarettes and had 1,250 patient in the trial ended last March.

So that trial -- to my understanding is in peer-review that process is not a public process and I have no more information than you might. We have contacted clinical trials.gov once or twice and they have given us the response that that study is in fact still in peer-review.

I had the guess I would guess that that hopefully that that trial will be published in a peer-reviewed journal sometime in the next three months I think that's a pretty good guess..

[Operator Instructions] We will take our next question from Andrew Brownlee with the University of Toledo. Your line is open..

I noticed that you have had a growing interest on institutional investors with large ads being post and I was wondering, if you had any words of Wisdom to those institutions that where quite sold on 22ns Century and the future of the Company not yet.

What would you say little guide to take them on board?.

Well, that’s a good question and it is an important question. Our company does not have a majority of shares owned by institutions, which makes us I guess somewhat unusual in the realm of public companies out there.

But the reason for that the primary reason for that is because we are a microcap company I think our market cap today is about I don’t know $250 million and our share price today I think is around to 2.10 a share.

Typically, look many of those institutions have minimum share price some of them are $3 many more of them are $4 and even more $5 so that's one of the largest reason that more institutions haven't bought our stock.

I actually met a Chief Investment Officer of a fund in Boston not long ago and he -- well we spent some time and at the end of the presentation he said that 22nd Century was the most compelling presentation he has heard in a decade and he was going to bring the opportunity to his committee at the Company and he is the Chairman of the investment community.

But again I think the caution there is that we are a $2 stock with a $250 million market cap. I think when we are a $5 stock I think you will see institutional ownership expand dramatically.

Does that make sense?.

Yes that makes sense and thank you guys very much..

Our next question comes from Marianne Green, a Private Investor. Your line is open..

We’ve strictly been talking about the United States right now. Now I know that there is a major, major problem in China. The Japanese bought the natural cigarette for $5 billion.

Have they been selling in interest in 22nd Century?.

Well as you know we have to be very careful with material amount public information so I can’t talk specifically about any of those things. I can -- I agree with you that smoking in China is a growing problem, it’s a tremendous problem. I think there is tremendous opportunity in terms of public health for our products in China.

The Japanese typically show great interest in new technology and novel products. I think they’ve shown tremendous interest in Philip Morris’ products. So I think we have bright future internationally. We do have folks talking with tobacco companies all over the world like Zercher in particular spends a lot of his time on international trips.

As you may or may not know, he came from Santa Fe Natural Tobacco Company and ran the international business for Santa Fe Natural Tobacco Company under RJR and did quite nicely. As you correctly point out Japan Tobacco paid more than $5 billion for the international rights to the American Spirit brand.

I think that was may be a dozen countries with about $150 million in sales. So Japan Tobacco paid on the order of 33 to 34 times sales for the American Spirit in those 12 countries.

So we are pretty excited to have Mike Zercher on Board and he is certainly working hard in talking with folks in Europe and in Asia and I think you will be pleased when we sign a deal..

Our next question comes from Gerald Stanwick. Your line is open..

The guy that from the University of Toledo that asked about investing in the tobacco business, tobacco and alcohol are great tough for a lot of funds to get into. So it’s not easy sell even though you might like the idea for some institutions. I have a question.

The only thing is I am assuming the FDA must have seen in that period you, data that came out, I am assuming it did, but assume we get the application in and they have a great deal of clinical information $100 million of trials have been done using our cigarettes.

What do you expect the timeline to be from application to approval for our brand, BRAND A?.

Yes that’s a good question. It’s one I would like to answer precisely but it’s one I am going to have to answer generally. We took a little bit of pause I mean we had our FDA guidance meeting in June not only for X-22 but we had separate guidance meaning for our BRAND A products and it was a very productive meeting.

And I should say definitively at that meeting there we were given the instructions that at this time FDA’s sees absolutely no reason for us to submit any or to conduct any additional clinical trials on BRAND A. So that’s important that we are not -- we don’t have to begin additional clinical trials for BRAND A.

So the things that we have to do without application are far less extensive than with the clinical trial. But now we have Dr. Swauger coming on-board and he has extensive experience. And now we have FDA, who is actually publicly equated Very Low Nicotine tobacco with minimally or non-addictive products.

So in that mindset, we will revise our application and frankly, I like that application much better the application that equates Very Low Nicotine cigarettes with minimally or non-addictive levels of tobacco. So we will revise that application, we will submit that application in 2018 and if I had to guess the review period will all of a year..

Our next question comes from Kevin Merrell [ph] with 22nd Century Group. Your line is open..

I just want to thank you for hosting the conference call today. And I just had a question, you've talked a lot about how like the FDA is attempting to lower nicotine within these cigarettes.

But I was wondering like its general knowledge I guess that, it’s not necessarily nicotine that make cigarette so harmful, but a lot of the other products that go into cigarettes. And I was wondering what about low nicotine to that going cigarette is not harm self-destructive to company like 22nd Century Group..

I’m sorry, the last part of your question. You’re right nicotine is not the disease causing agent I guess and tobacco, tar and smoke are the really bad things. But I didn’t understand the last part of what you said..

Well, I’m just wondering like with this low nicotine cigarette. What about that it’s going to be like to smokers or the majorities of smokers that are absolutely just trying to quite here I saw together.

And what about that isn’t like pushing in agenda to remove to that industry?.

Okay. That’s interesting question. We’ll let’s start off of this. The majority of smokers actually do want to quite 68% of American smokers wish to quit and approximately 50% of smokers attempt to quit each year. And my understanding is reported by the CDC and others. I believe takes smokers typically between 8 and 11 quit attempts to quit successfully.

So those are just statistics, but starting with 68% of Americans smokers do wish to quit. And my theses would be that the vast majority of smokers, perhaps all smokers might enjoy smoker, but they don’t necessarily want to be addicted to the product.

So I think the important thing and at Stanford Professor Robert Proctor mentioned what in the beginning of my remarks. I think it’s pretty important what he says.

Smokers will be able to start or to clear that will without suffering the robbery of choice that find addiction, so that’s what it’s all about nicotine Rob’s one choice, because then you are addicted to the product. So I think the FDA it’s a plan mandate, I mean they’re not considering it, they’re planning it.

It is a plan action that FDA has already made. So the plan mandate is to reduce that nicotine and maybe we want to keep smoking that’s fine. But at least end of the day, you won’t be addicted to the product and if you still try nicotine and you won’t higher level in nicotine.

Well that FDA thought about that and they believe the non-tobacco products will be the much better alternative for smokers who still desire nicotine.

Is that helpful?.

Yes. But I think with a little nicotine cigarette.

How is that more attractive or people are trying to quit compared to like other products that are intended to make individual quit smoking all together?.

Okay. Well, that’s a good question. I originally invested in this company in 2010 and I invested in this company. As a result primarily of one particular study that was published in the General of Addiction in 2010, Dorothy Hatsukami, was the lead research around that study as well.

And what that study show, it was, one harm in the trial, which was very important to me was the smokers who hadn’t intend to quit.

A Very Low Nicotine cigarette for six weeks were able to quit, 47% of the time as measured six weeks after treatment, so I mean a 47% quit rate, now that was a Phase II, I think was a 165 patients but a 47% quit rate is extraordinary.

There's no smoking cessation product on the market or sold anywhere in the world with any kind of fixation rate anywhere near that level.

So that's what got me pretty excited about the product and then the Big Study published in the New England Journal of Medicine in October 2015 basically said that smokers who smoke Very Low Nicotine cigarettes increase their quit attempts, decrease their cigarettes smoked, do not exhibit withdrawal symptoms and do not exhibit compensatory smoking behavior, so all those things are just good, nicotine replacement therapies like patches, lozenges and gums don't really work any better than quitting cold turkey which is why smokers typically take between eight and 11 quit attempts to ultimately become successful.

We could talk about Chantix quit rates, Chantix quit rates are just above 40% when you look at quit rates while they are still on the drug, but four weeks after treatment the efficacy decay substantially and eight weeks after treatment I believe Chantix is effective less than 25% of the time, so I guess in a nutshell, Very Low Nicotine cigarettes are extraordinary, and that they increase people's quit attempts and they decrease cigarettes smoked and there's no product on the market or in development that has results anywhere near the efficacy of Very Low Nicotine cigarettes..

Our next question comes from Michael Brcic with National Securities. Your line is open..

Real quick questions on that last -- you mentioned the safety study that got you into it, and that was after six weeks, the quit rate was 47% or whatever.

Just like with the Chantix thing though, is there any follow-up to what it was 12 weeks after the nine -- did people come back after nine months or a year?.

That's a very good question. And that quit rate measured six weeks after treatments, so that's a good news, Chantix I believe eight weeks after treatment is effective again less than 25% of the time, that Phase II study that excited me, that our product was 47% effective I believe, six weeks after treatment.

But is there six months follow-up data? Not that I know off, I believe there will be six month follow-up data on some of these larger Phase III trials that our independent trails again not sponsored by the Company.

So those are the important things, but in the world where the FDA mandates every single cigarette sold in the United States to be Very Low Nicotine at minimally or non-addictive levels, that's the beautiful thing.

So if someone achieves cessation after smoking a cigarette for a month or two months and they quit for a while and then I don't know something happens next year, and they pick up a cigarette in a moment of weakness, and they smoke cigarette or a pack of cigarettes, the great news is they won't be re-addicted to the products.

They will have smoked a non-addictive or minimally addictive product and it won't be very-very difficult for them to stop again, so that's the beauty of mandating that every cigarette sold in the United States be Very Low Nicotine, there won't be a high nicotine for somebody to fall off the wagon on..

Just on that -- has there been any price test comparisons between your Very Low Nicotine cigarettes versus the low cigarettes marketed by the tobacco companies?.

Well, the tobacco company don't market any low nicotine cigarettes but...

Or whatever they're called you know -- and I don't mean anywhere near as lows, but what they were implying in lower nicotine cigarettes?.

I appreciate the question, I'm going to answer but they don't even imply what maybe we're talking about as a light cigarette. And a light cigarette is a light cigarette because of the ventilation holes and the filter, and I don't want to get into a computing characterization.

But tobacco companies are not even allowed to label their products light, ultra-light or low tar anymore because that labeling is misleading. 70% of U.S.

smokers smoke those products because they think somehow they're getting less tar, or less nicotine, or less of something and in reality the smokers compensate when they smoke those products and they typically take more puffs on a cigarette and they typically inhale more deeply and they're getting more of all the bad things which is why the FDA won't allow those to be marketed or labeled that way.

But anyway….

But typically what they give up is taste, and I was just wondering, if there has been any taste comparisons between your low nicotine cigarettes versus their air hole cigarettes..

That's a good way to put it. We don't have any trial data but we have had lots of people smoke them here and in other countries and at the end of the day they taste the same as a regular cigarette and they smell the same as a regular cigarette.

What might be different is sometimes people call it throat impact from the nicotine typically what you have is a throat impact and a Very Low Nicotine cigarette does not give that throat impact but they taste and smell just like a conventional cigarette..

Okay, finally what do you think? You mentioned something about an order for the research cigarettes that's going to get filled in Q4.

Have you got any sort of revenue guidance for Q4 in the light of that or at least in the sense that do you expect it to be higher than Q3 etc?.

Well, you know, I guess we'll use deductive reasoning here. So we've achieved about $10.5 million a little over $10.5 million in sales in the first three quarters and we've publically announced that we plan to achieve at least 16 million in sales for the year.

So if we do the math there that would suggest that our fourth quarter will be another record quarter for the Company, and that record quarter would in fact include those SPECTRUM research cigarette sales as well..

Got it, wasn't aware of that figure. Finally can you maybe look at, you just gave me one, but maybe some other milestones or highlights you're expecting for Q4..

Well, you know your guess is as good as mine, when the Phase III trial will be published in a peer reviewed journal, that's going to be very-very exciting for us here, and I think that our investors will be pretty interested to see that peer reviewed study on the Phase III trial strategies for reducing nicotine content in cigarettes, so that's one that everybody knows we're waiting for.

I think we have work on hemp that we're planning on announcing, and I have to, my General Counsel's making me nuts over here waving around. So we have to be carefully, not pre-announcing things and giving the folks on the call a heads up when the other 30,000 shareholders might not be listening. So I guess that's all he's going to allow me to say.

But I should mention you said there were a lot of people on the call waiting to ask questions. It's very gratifying to us, we used to have conference calls where we get a 100 people or a 150 people, we have well over 500 people that joined us on the call today and I think interest is growing tremendously in our company and in our stock..

[Operator Instructions] Our next question comes from Tim Seek, a Private Investor. Your line is open..

My question is along the lines of what you just hinted on, but what do you think we can expect on the hemp marijuana side with more and more states legalizing and you're seeing the benefits of hemp and CBD or else?.

Tim, Tom James is going to answer your question..

Hi, Tim. We clearly see the hemp market is broadly expanding throughout the country, as you know there's harmony between the federal and state law regarding legal hemp and that's all we touch, we don't go above the THC limit. And so you've heard Henry talk about our expanding activities in Virginia, our expanding activities in New York.

Those things take a lot of time to happen, I can share with you historical for example it took over a year for the state of Virginia and the University of Virginia to vet us, to pick us above all other companies to work with to revitalize hemp throughout the entire tobacco region.

So these things take time but we're making great progress and we see wonderful opportunities ahead of us in helm..

To follow-up with that with the focus primarily on the FDA mandate coming into effect.

Do you think that the as a company the primary focus will be on that where will be upside continue to just as strongly?.

We are simultaneously on all things, Tim..

Our next question comes from Eric Gomes, a Private Investor. Your line is open..

Good afternoon gentlemen a great opportunity to speak with you guys I'm fairly new to the Company I invested originally back in July and I enjoy reading about you guys weekly and the new developments that have been coming out recently.

I got a couple of statistics that I would like to talk about the first one is there is about $1.5 billion spent annually by the Department of Defense for tobacco cessation from military members, and tobacco sales on DOD installations are generally more than three times that of their civilian commercial sales out in town so to speak.

Do you think that there is maybe a potential for you to look at maybe getting into that for a market I guess not necessarily a market but I'm fairly interesting that basically because tobacco you smoking as well as smokeless tobacco to get chewing tobacco that sort of thing is a big problem in the Department of Defense and spend the government spend a ton of money on that using you know nicotine patches gum and that kind of stuff.

You are already working with the FDA and I understand you sold millions of cigarettes and that sort of stuff to do research and stuff like that working with the FDA but do you think that that might be a potential avenue to get your company going in the different direction?.

We were selling any unregulated product I would jump on that tomorrow. It's just -- the same regulatory rules apply when selling our military bases as one selling off base. So in order to explain to the soldiers and military folks on those basis, the benefits of the product we need an MRTP authorization, a marketing order for MRTP product.

Barring that if -- of course if the FDA mandate that all cigarettes sold in the U.S. have a Very Low Nicotine content that would work just as well. But in this country in order to communicate the benefits of the product we need to go through the regulatory process first I'm afraid..

Have you guys also -- I have another question if you don't mind have you thought about potentially looking into the smokeless tobacco market I know there's a lot of talk about cigarettes and FDA is hot on cigarettes.

But I see that your technology should also potentially be able to acquire the smokeless products like gift and smokeless tobacco basically.

What are your thoughts on that?.

To be honest it hasn’t been at the top of the priority list. But we have had some discussions with the tobacco companies who have some desire in exploring a way to use our higher nicotine tobacco and their heat-not-burn devices.

So that’s "smokeless devices" that we are dipping our toe in the water on, but we haven't gotten yet it to dip or any other product like that, not yet..

I would love that opportunity if you choose to do that. I would take you up on harpy. One other also kind of on the hemp subject and this is another reason why I really enjoy this company because there's multiple avenues here, you guys are going in the million different directions and I just see a lot of potential right now.

From my understanding from what I have read there is about $500 million annually spent on imports of hemp from Canada correct me if I'm wrong on those numbers I'm not entirely sure. And I understand you guys grew your first products of hemp working with the University of Virginia earlier this year.

What potential revenues do you expect in the long term that you know you could see from this, are you trying to break into the U.S.

market for that and kind of cutting on those imports from Canada because obviously the farmers here in the United States don’t have a whole lot of incentive to grow hemp because of the dangers of having too high THC content. And if they go with that content then they have burn their entire crop because they’re legal.

And so if you guys can market your products and even get into generate farmers’ interest in using that here, you could potentially up set $500 -- $500 million imports from neighborhoods of north.

Just kind of looking at what the potential is and what the future plan for the growth in that area of your market is?.

Sure. Eric, this is Tom James. I will answer that. As a matter of background you may not know that we consult with state agriculture departments, research universities in the states, growers, farmers, processors, retailers, consumers, extractors, et cetera, the full value chain.

And what we do is de-risk it for the farmers, exactly the risk if you identified we eliminate. How do we do that? We have farmers grow our specialized plants by contract for us, we eliminate the risk. They give us the harvest, we pay them a guarantee profit, rains too much, rains not at all, grows too hot, too much TNC et cetera, our risk not theirs.

They are flocking to us, can I please grow your non-risk crop? We then take our unique crops and extract from them unique cannabinoid profiles and then fractionate them down into single cannabinoids to be able to then make mixtures with our medical partners.

In this case the University of Virginia’s medical school wants to do psychiatric testing with cannabinoids. So we are providing that as well as in other states that we have not yet announced.

So we have a plan, it’s set forth and we talk to everybody up and down the value chain, everyone loves it, everyone agrees with and everyone is looking forward to what we are going to be able to provide in a unique way.

So we are looking provide our unique plants to be able to be the basis of the revitalization of the entire tobacco belt region, all those farmers in there as well as now in the New England state with a unique and different plant to be grown up in New York and other Northern states. And of course we haven’t forgotten our activity outwest.

So as we accomplish things we will publicly announce them. We will not talk about them in great detail beforehand. Ones do not tip our strategies but at the same time we rather announce accomplishments and not talk about we’re working on things.

So rest assured we are going to do great things in the market and for right now would be the providing of unique active pharmaceutical ingredient API from those cannabinoids for third parties to do their medical testing or included in their products or whatever else might be permissibly legal at both the federal and state level which is the only reason that we are the only company on the New York Stock Exchange American market that directly touches the plant..

Our next question comes from Rob Ramirez, a Private Investor. Your line is open..

Do you expect anything before the FDA trial in December like a tie-end or a partnership when it goes to?.

Well the good news is we are constantly filing provisionals and updating our patent portfolio and we do that lot of time. We don’t always press release those things but we are doing those things all the time and our patent portfolio has been increasing.

In terms of a strategic partnership, I guess I could tell you that we are always talking to lots of other companies in the industry. We have spent well several over the last few weeks in conferences with many of the world’s largest tobacco companies. So that’s pretty exciting too.

But I guess we can’t tell you any more than that on the call today otherwise you would know how much of the stock to buy yourself before everybody else knew..

But should we be expecting that first or you can’t tell that?.

It could be a big surprise. It’s going to be a surprise..

Another question.

Past target of levels that came out in October, does that still remain the same?.

Yes I think sure Dan came out with a price target of $11.50 and to my knowledge that is still the price target that they have on our stock. So that’s about the confidence and yes, I mean more can I say..

Last question. So and is of course that you had the most cash you got to hand-on-hand.

What do you plan on doing first with that cash?.

We’re going to guard it very carefully because what that cash does is gives us five years of operating money. So, if things take too long or if things drag on, we’ve got that cash cushion in the bank. That also helps us tremendously in our negotiating position with other companies if we are to strike-up a license or a partnership with another company.

It’s much better for us to negotiated deal like that from a position of strength with lots of cash in the bank rather than negotiating from a position of weakness where that potential partner could wait until we had no cash left and we’re despot to do a deal. So having that cash from the bank is strategically very important for the Company.

We plan to safe that cash and we don’t have any plans to go up stronger than any particularly projects..

Okay.

So has there been any progress with partnership or you just have this breakout?.

You’re tough, you want to know everything. I can only say that we’re in lots conversations and when we have something to announce, the press release will announce to all shareholders at the same time..

Our next question comes from Robert Goh, a Private Investor. Your line is open..

My question comes from the standpoint of heat-not-burn. So I understand that 22nd Century has high nicotine tobacco that they can offer for the heat-not-burn. Now the question is for BRAND B will be able to use BRAND B at the tobacco or heat-not-burn as well. So not only the higher nicotine, but you also have the low tar.

Is -- are there any plans for allowing that type of use for anyone that would like it?.

Okay. Well, so that product is actually, it’s a low tar-to-nicotine ratio cigarette. The high nicotine BRAND B products, which is different from saying low tar, so what that means is for every part nicotine there is less tar than say conventional cigarette.

So where a conventional cigarette might have, I don’t know 12 parts tar to 1 part nicotine, our product 5.5 or 6 parts tar to 1 part nicotine. So that’s how that product works. And we did conduct an exposure study with for BRAND B last summer and we were pleased with the results there.

But really since July 28th announcement, our focus has dramatically shifted to our low nicotine products, at least in the United States.

Given the FDA's current regulatory stands on cigarettes and given they intend now to mandate that every cigarette sold in the country be very low nicotine, our plan for the United States to take to focus on low nicotine. Internationally, that’s not necessarily the case.

Internationally, we continue to believe that there is an important place for a very low target nicotine ratio cigarette like BRAND B. So we’re still in product development for product that might make sense in Europe or Asia..

Now, I have one more question. This question is in regards to the claims Altria made about their own strems of very low nicotine tobacco.

Now, I did a little bit of research and it looks like all that they can do really is modify nor-nicotine, which is different from nicotine and the total nicotine content and classes about 90%, where is no nicotine excellent 10%. So it looks like it may only be able to modify as well as 10%. So the question is this.

Let’s say they did and they were able to bring it down lower than that.

Now what they have to start over with the Phase I to Phase III trial situation, like I guess start from scratch from Phase I to Phase III in order to get modified risk tobacco product application in for their product?.

I mean, you certainly well read and thank you for your thoughtful question. There are no trials necessarily -- clinical trials required in the modified risk program.

The trials are more pertinent to the drug side of the FDA but you are right there are no studies -- there will have been no studies done with whatever tobacco they develop I guess and it's not clear to me either that they have substantially reduced nicotine in their tobacco.

So I guess you're right, once they have developed an appropriate plan which is not clear they have, there would need to be all kinds of studies, not typically - they're not the same kinds of studies that one would do for a drug trial though.

There're exposure studies and they might be perception studies but they're not -- they're not the same kinds of studies with the same vigor that you might expect in a drug trial.

But at the end of the day you are exactly right they're way behind -- they're way behind it and we've really been the leader in this segment of the market for quite some time..

Our next question comes from John Teller, Private Investor, your line is open..

Questions, since we've been working pretty candidly with the FDA, and you've actually used the term kind of partnered with the FDA, on this mandate that's coming, from what I gather, and then you can really clarify this a little more, they are going to come out and let everyone know about this mandate before the 1st of the year, is that your understanding?.

Well they've already press released their intention to their plan to mandate that every cigarette sold in the United States have reduced nicotine levels that minimally are non-addictive levels, so that's already publicly announced. I read in the Wall Street Journal just a few weeks ago that Dr.

Gottlieb intends to start the regulatory rulemaking process by the end of the year. So, sometime in December I guess, and I also understand that Dr. Gottlieb has made this program a top priority of the agency.

So I get that as much as I know and that's publicly available information, they have announced their planned mandate and they have announced -- Commission of Gottlieb has announced that the process will start by the end of the year..

With that said any -- have they -- and with our partnership with the FDA, any idea from you on the timeline this might be, and with the hiring of professor Swauger, and once again our timeline on all of this?.

I can't give you a timeline as much as I'd like to be that close to the FDA, we're not that close, where we would have a timeline, they're going to at the end of the day they're going to make the timeline that makes sense for FDA, and for public health, so what I do know is lots and lots of people are encouraging FDA to move quickly.

I do know that David Kessler announced in 2010 that the ultimate harm reduction strategy would be to reduce nicotine to non-addictive levels. So the FDA knows what to do, and everyone is applauding their decision to do it, so let's all just hope that it happens sooner rather than later..

Okay great, and so us as investors and people that seem to want to forward this policy we would continually bombard the FDA with our desires to see this happen as quickly as possible?.

Well, I'm not going to use the word bombard but if you were to write letters in support of the planned mandate that, I think that would be helpful and at some point there will be -- once the FDA publishes the proposed rule, there'll be a 60 day comment period, where all stakeholders and anyone with an opinion would be welcomed and invited to send in their opinions.

So, yes, I would encourage you, if you believe this mandate is a good thing for public health, I would encourage you to make your opinion known..

My other question is with this recent $50 million capital raised by XXII, and the stock seems to be rising in price quite well, kind of up until that point and with your comment earlier this afternoon about larger investment brokerages not wanting to get involved with the stock, it’s down around $2.

The stock had gained gone to about 3.50 in price a lot more attractive for some big institutions and we're back down around $2 again, I'm just if you want to really clarify your position on doing that..

Sure, I have a little price history in front of me actually. So 10 days before we did the raise, we did the raise at $2.62 I believe or $2.625 I think. 10 days before we did that raise our stock was trading it closed at $2.49 right.

$2.49 10 days prior to the raise, so certainly we touched $3.50 that's definitely true I mean we weren't there for very long but we touched $3.50 and the longer we're up there and the higher we go the more attractive we'll be to institutions without question. Institutions also though are interested in the Company's cash position.

And I've had conversations with institutions on more than occasion where they would say you know we would have a much higher comfort level if the Company were to have four or five years of cash, which is yet another reason for us to raise the money.

So not only does it put us in a better negotiating position with industry players, not only does it give us a long runway to achieve all our goals but it also makes us more attractive to these industry players. So for all those reasons you know on September 25th our stock closed at 2.49, October 9th we did our deal at 2.625.

The question you should ask yourself is if sophisticated funds invested over $50 million in 22nd Century at $2.62 why would anyone sell the stock under 2.62, that's the question I've been asking myself over the past couple of weeks.

I don't really understand it but you know some folks must think that they're smarter than the funds that paid $2.62 to purchase our stock you know in the beginning of October..

Great, okay, I'm glad you addressed that, your strategy on that. My last question would be we have patents on genetically modified tobacco and hemp plants. We also have apparently a patent on non-genetically modified low nicotine tobacco plants.

With that said how would you be able to tell if somebody had infringed it seems to me like, if somebody infringes on a genetically modified plant it would be much easier to tell than if somebody infringed on a non-genetically modified plant and how would we, how can we be assured that big tobacco wouldn't march in on the non-genetically modified side and claim that for their own as well..

Okay, I'm going to let Tommy answer this one and I'm going to just say there's still at least a dozen folks on the question list so I'm going to limit this one to our last question here and then we're going to try to move down the question list because I want to make sure everybody gets a chance. Tom I'll let you go ahead..

Yes, John the short of it is that we have diagnostic capabilities that tell whether it’s genetically or not genetically modified, we do certain things to the plant where we can tell whether that plant and any progeny meaning children of that plant or have origins within our genetics so not a problem..

As far as non-genetically modified, we can protect that as well?.

Correct..

Our next question comes from David Winthrop, a Private Investor. Your line is open..

Good afternoon, Henry, John and Tom. Listen guys number one I do appreciate you know all the hard work you guys are putting this last quarter, I completely agree with your capital raise I think it positions the Company much stronger moving forward.

In that regard what when do you, do you still expect the manufacturing facility to be profitable in the first quarter of '18 is that what you were anticipating?.

That’s what I'm projecting, so we did have to substantially increase our workforce in anticipation of the new contract that we have signed. And so you can't get the contract and then train people and hire people so we had to hire folks in anticipation of.

So our plan going forward now is to be as efficient as we can on these contract jobs and make the place profitable. So yes that is exactly our plan..

Them I'm just going to move directly to hemp question. I see the commercial viability of that you know the hemp moving forward and I see it really is an earlier revenue driver for the Company.

My understanding is we've always had to import our hemp and anticipating that all hemp that we imported was grown commercially and then THC stripped from the hemp to be used commercially here in U.S.

So I'm wondering you know with the modifications that we made genetically to the hemp plant the commercial viability of that moving forward are we going aside from the United States which I understand will moving on pretty rapidly is there anticipation that we would also export this technology to Canada and to Europe?.

David I'll say -- this is Tom James General Counsel for the Company. We will not limit ourselves to the United States market alone. We're sourcing genetics and plants from around the world and we will be doing activity in those plants around the world. So we are not going to limit ourselves to the U.S.

I wanted you to know also that we don't strip out TAC rather we develop plans that naturally don't develop THC. We know how to regulate the plants capability producing the active ingredient, the cannabinoids, same period we publicly announced zero THC hemp.

We are working on super high other cannabinoids, you may or may not know that CBDV is exponentially stronger than CBD medicinally.

THCV is a medicinal use for weight loss on your metabolism but it won't get you high there is more than 100 known cannabinoids THCs one of the 100 CBDs one of 100 these under expressed cannabinoids these other ones exponentially very, very interesting, from a pharmaceutical and medical point of view.

So we look forward for our extraction processes to be the unique provider of those active pharmaceutical ingredients were testing by third parties or inclusion by third parties and their products if permissible..

Last quick question in last conference call you mentioned that you were in the works of hiring bringing on board another 67 additional scientists to help Dr.

Rushton and I'm assuming in doing so was the main focus for those folks you know more towards the hemp industry than or just general scientists for?.

Actually hemp and tobacco, so you know Dr. Swauger's his experience is primarily in tobacco and overlap is for the regulatory role quite a bit.

We brought on another -- he is a consultant right now formerly with BAT, so he's high-level science guy, primarily in tobacco, and then we have couple of other scientists who've been brought into work on the hemp. So I guess the answer is both..

I'd like to just tell you guys how excited I am to be an investor with the with your company and that look forward to a lot of exciting things that happen in the next 12 to 24 months. Thanks guys..

Our next question comes from Derrick Gregory, a Private Investor. Your line is open..

My questions given the regarding the commercial license in the research agreement we get with British-American tobacco that recently concluded, then on understanding prior calls and you said that they were doing a lot of work on the research side with proper high nicotine and low nicotine products.

And yet none of the research milestones however met in the agreement as well as we’re quite familiar with how restrictive the commercial license was but yet from BAT standpoint the minimal loyalties were still minimum and yet post July 28th they denied to pick up the commercial option.

Just curious if you could shed a little more light on how that all unfolded?.

Sure let me say a few things there’s a couple of different questions here.

One thing I have mentioned in this call towards the reasons for us raising so much money in the last month or so and the BAT example is sort of underlying the importance of having a lot of money in the bank when you negotiate a major licensing deal with the Big Tobacco Company.

When we negotiated the BAT deal it was four years ago we were learning in fumes. We had substantially less than $1 million in the bank and matter of fact I think at some point we had less than $100,000 in the bank when we negotiated that deal. So that would suggest the reason for the terms that were negotiated.

And I never want to be in that place again. So the next time we are going to negotiate one of those deals we intend to negotiate from a position of strength where we have substantial monies in the bank. So that’s one thing I should say.

The other thing I should say is that it’s my understanding that BAT’s focus has changed from the leaf division and leaf technologies to devices, to heat-not-burn in particular it’s my understanding, and again I don’t work for BAT and I don’t have any inside information that you might not have.

But from my understanding of the public domain, BAT is significantly behind where Philip Morris is in the heat-not-burn product development and distribution, and so BAT has moved lots and lots of resources into heat-not-burn division let’s call it. And that got the expense of other divisions and other products.

And so I am going to call it a happy coincidence for us that we were neglected. That’s a good thing for us. Why is it a good thing for us because we are backing control of our technology and because the deal we had with BAT in terms of the commercial license simply wasn’t as lucrative as the deal we could strike today..

I’ve got a follow-up to that is would you consider British American Tobacco off the table at this point in time or is there a chance to yet we could work with them on a combustible strategy?.

I wouldn’t be surprised if we went up working with BAT in some way perform in the future especially since they purchased Reynolds American and if in fact the FDA mandate comes to pass anytime soon, we have contained tobacco at minimally or non-addictive levels and we would be more than happy to license that technology to Reynolds..

Our next question comes from Michael Lew with Custom Culture, Inc. Your line is open..

Hi Henry, great color there.

A question to kind of piggyback of that, recent PR indicating that your negotiations with Big Tobacco international pharmaceutical companies can you color these negotiations, can you tell me about levels of interest, who are you negotiating with, who is expressing interest, who is reaching out to you, anything you can tell me I would love to hear?.

Tom has history over here. I can’t say any of those things. First of all we don’t say negotiations that we are in discussions right now which may lead to negotiations but we can’t publicly disclose any of the detail behind any of those discussions unless its broadly to the entire market all at once..

Okay so that means in the same way you probably can’t go into the type of investor who is involved in that secondary round for $50 million, I know you can’t say exactly who but may be the round?.

They were funds, they were not individuals they were funds. And I guess they were sophisticated enough to be able to invest $50 million some..

Our next question comes from Collin Tong with 22nd Group Century..

Hi. I’m a Private Investor, not from your company. I have a question, suppose the question MRTP app group and you get your VLN product on the shell.

What marketing strategy view plan on using to get smoker to switch to get product and why do you think that strategy will work?.

And I think that some experience with premiums cigarette sales in the past. I am work a Santa Fe Natural Tobacco Company from 1997 to 2002 and grew the American Spirit brand during my 10-year there and we were very effective doing that by marketing the product initially at least to tobacconist and to independent grosser and smoke shops.

Folk sort of at the top of the peer in the tobacco industry and with market American Spirit as a premium cigarette at a higher price point. And the sole proprietors in many cases grew who manage those stores took an interest in the products.

Because why? Because they earned a little bit more profit on the product and because it was an available at every single convenient store in the country. So they have some degree of exclusivity. So they incentive another words to convert smokers from other premium brands that we’re sold at many other stores for stores.

For example, say Marlboro, which is available everywhere.

So smoke shop owner converted to Marlboro or smoker to American Spirit, not only would it be converting that smoker to a higher margin products, but he would be gaining an exclusive customer, because that customer, that American Spirit products was an available in every single store in that person’s community.

So we would likely go to market with the similar strategy. We would go to market with the premium product in the high-end smoke shops to back and independent grosser.

Those type of stores and then from there the product with spread and then ultimately at some period of time, after the initial launch, we would wind up at convenient stores and in all the outlets where the majority of cigarettes are so United States. That would be our attention.

But at least is important to selling our own brand would be our potential to license, the Very Low Nicotine product to our competitors. We think that obviously those competitors have tremendous distribution and they have a sales force and they have -- the ability to really push that product out to the market.

Now in terms of marketing, the positioning up the product, as I mentioned during the call 70% of U.S. smokers smoke a like ultra light or low tar cigarette. And 68% of American smokers stated they like to quit smoking. So if we’re able to label our packs as Very Low Nicotine and perhaps non-addictive 95% less nicotine at a conventional cigarette.

We think that’s pretty much all the market will need to do to pursuit customers to give it try, especially if the registry decreasing or smoking or perhaps liquidity..

And do you see yourself licensing as well as marketing own product alongside each other or is it one or the other?.

No, both. Yes, that’s exactly right. We attend to market our own brand and to license our products and our technology to our competitors..

Our next question comes from Ryan Hamilton with Black Gold. Your line is open..

Yes, gentlemen. Thank you for the call. I really appreciate your answers. One of the earlier callers asked about the interest from big tobacco, international pharmaceutical companies and the idea of potential negotiation.

And you've clearly answered that nothing is in kind of -- it's been negotiation quite yet that your talks are kind of like maybe early stage.

Can you talk a little bit more about kind of the level of interest from some of these companies in particular? And then also, if you’re kind of a big tobacco international pharmaceutical company, would you kind of spin your efforts kind of retaliating, kind of combating the FDA or would you kind of reckon with the Company like 22nd Century?.

That’s interesting. I mean publicly, all the big tobacco companies are applauding the FDA's plan. I’ve got -- so I’ve been here them all say what a good idea this is and will be great to migrate smokers to noncombustible products.

Then at the same time they're saying well let's not be hasty, maybe they should take place over -- over many years and we don't want to go to quick. Obviously they're going to say that, they've lost $30 billion in market cap, when the FDA made its announcement.

So, I can't pretend to know the minds of Big Tobacco, but obviously they're going to continue to sell the products that are their bread and butter, and they're going to work feverishly internally to be able to have solutions to the FDA planned mandate which I'd be surprised if those solutions didn't include 22nd Century..

And I guess kind of a follow-up question, it seems that, if you were a Big Tobacco company, you would want to know -- and you've companies like Altria coming out and saying, hey, yes, we've a reduced nicotine to -- cigarette in the making which may or may not be compliant with the FDA potential mandate, would -- Altria, and some of these other kind of Big Tobacco companies say alright we'll just -- and rather kind of work with 22nd Century and just know that this company is with the FDA, they've had the scientific evidence come out in favor of their products, let's just work with them and in fact with maybe be in a little bit more of a kind of reckon more with them and be in control of -- like would they want to kind of buy it up in as opposed to kind of like doing a licensing deal, a real Big Tobacco company, wouldn't you want to like own that and kind of be way ahead of the curve?.

I mean you're asking me leaning questions, you're trying to get me in trouble, my General Counsel here is going to kick me, if I say anything here, so all I can is….

I'd love to hear from Tom as well..

Yes, he'll tell you less than I do.

But at the end of the day all of those options are on the table and Big Tobacco is going to do what Big Tobacco is going to do, and at the end of the day we're going to develop our own products, we're going to be -- we're open for business in terms of licensing and that's why this is so exciting, that's why I've never sold a share or stock in the Company, because I think we've got really-really-really considerable upside..

Our next question comes from Chris Mild. He's a Private Investor as well..

First, well I want to give you a kudos for that $54 million you raised because it does gives us the strength of negotiations. I've got two questions, one with tobacco and one with hemp.

Are you familiar with the four laws that have been submitted to the Congress to take -- camp up the control substance list?.

There's quite a number of initiatives.

What's your point Chris?.

Are you guys doing anything to help, the Congressmen and sellers that are pushing out through to give them the information they need, with your….

We can't comment directly on what we do politically Chris, but rest assured we're not sitting idly by..

And as far as the tobacco industry goes, we know that Phillip Morris and Altria are both still the same company even though they're divided, so is Phillip Morris going out to pay their burden by trying $10 billion to $12 billion to remove nicotine and 15 years or so to come up with the genetic technology or is Altria both smokes and they have something?.

Well both -- I think Phillip Morris has 20 years for them to genetically modify the product or $10 billion to $12 billion a year to denicotinize the tobacco, and then Altria, I guess that's something about having some sobriety with substantially reduced nicotine levels but they're carefully word is assertion didn't specify any nicotine level.

So again, publicly they're all saying -- the FDA's planned mandate is important and it's the right direction and non-combustible products are the future but they want that future to be further out into the future than anyone else does.

So I guess that's the game and the faster FDA goes I think the better for public health and certainly the better for 22nd Century shareholders and we're working very hard. I've been in Washington for most of the last several weeks and we're working very hard to push all this stuff forward..

Yes, I mean the faster FDA moves on this the more beneficial it will be for your products in hitting the market..

Exactly right..

And then last question is, [indiscernible] had mentioned a $0.15 or $0.20 royalty per pack of cigarettes, during license agreements there is usually a payment upfront for the licensing deal. We would be talking hundreds of million dollars or a billion or two for that initial licensing..

I think that they were making you know projections based on I believe if you do the math the Phillip Morris cost of denicotinizing tobacco if you take $10 billion to $12 billion a year and you divided it by cigarettes sold and what not, I think that winds up being about a $1.10 a pack. So we know that they could comply for a $1.10 a pack.

If we were to charge $0.10 a pack in the U.S. and we were the sole solution, it wouldn't be hundreds of millions of dollars but at $0.10 a pack it would be about a $1.4 billion a year..

No I mean normally on the license agreement there's an initial upfront payment..

Sure, but at the end of the day running royalty of $0.10 a pack equates to a $1.4 billion that's the important number to know..

Right, I appreciate it gentlemen I think you're doing a fantastic job..

Well thank you very much, we appreciate you joining us today, thank you..

Our next question comes from Glenn Timberlake. He's also a Private Investor. Your line is open..

I am going to ask some questions on CBD oil [indiscernible] and that is when might 22nd Century be able to properly sell the CBD oil? And in what kind of quantities and also will 22nd Century be partnering with any companies other companies who might be using CBD oil for medical purposes some kind of partnering venture.

Also will there be assurances for buyers for CBD oil that they will not sell an employer's drug test when they buy it for some medical purpose.

And last, is it possible you guys might put out a blog or some kind of informative information from your website that informs and explains specifics that you touched on about the various forms of CBD oil and THC and they're complications in what they do?.

Hi Glenn, this is Tom James the General Counsel of the Company. I'll answer that question for you. A couple of factors one we do not and will never unless and until the FDA changes its position we do not make any kind of claims as to what anything in the plant will or won't do from a medical or other point of impact point of view.

That's exactly what the FDA has gone against many companies for making such medical claims, we don't do that. We're not going to do that.

What we do is as I explained earlier is to grow the plant, our unique plants, keep control of them and then extract those unique cannabinoids to provide them to third parties that have DEA licenses to be able to do medical studies or pharmaceutical studies or psychiatric or anything else they want to do and or inclusion of their products.

We're not here to make representations as to what the stuff does or doesn't do, because we're not in charge of the final product.

We're here to provide an active ingredient to the entire industry and then other people can do front facing consumer products so that's as far as we can share with you as far as what we do and how we’re going to do it, it's very proprietary in what we're doing, we don't talk about relationships until we have to announce them when they're material.

Because we're not here to tip off anybody else as to what we’re doing and how we’re doing it until we have to. But rest assured we're at the tip of the spear and we’re moving forward in a great advantage way..

And regarding when you might be able to properly sell CBD oil? And also would you be able to put out a blog explaining just from a scientific basis the different specifics about various form of THC versus CBD oil what they or claim to do don't do..

We appreciate that Glenn, we specifically don't do blogs or do other things of this nature because we don't want to tip off what we're doing and where we're going or how we're doing it, to competitors nor do we want the regulators to think that we're here trying to advocate any kind of medical or other positions as to the product, rather we're happy to be behind the scenes doing what we do you can recognition from the quality of the partners that we're dealing with and the major states that are looking for our advice and our involvement that we'll be very actively involved.

We will not do projections or give guidance as to when these things are going to happen because they have a lot of moving parts. Just rest assured we're working very diligently and very hard and doing very-very well in what we're doing..

We will take our next question from Greg Neumann, a Private Investor, your line is open..

Thank you, congratulations on everything gentlemen, I have two questions, one's on tobacco the other is on cannabis your cannabinoid opportunity. Quick question on tobacco is what is your manufacturing facilities capacity and what percentage of that are you using at this time and your ability to expand that facility..

That's a question I'm not sure I'm prepared to answer. I can say that we have seven lines now up and running at the factory, it's a 61,000 square foot facility and we have run two shifts on occasion five days but the idea the plan is to not be on a continuous two shift basis.

So I actually don't know our total capacity in that factory right now so I'm embarrassed to say I don't know that, and when we do have plenty of capacity and especially if we have the opportunity to make proprietary branded cigarettes with an MRTP marketing order, we've got plenty of capacity to do that and that's really that's the factory is for, is to make our own proprietary products and we would be happy to fill our capacity with products that are Modified Risk Tobacco Products with a marketing order from the FDA.

Is that helpful or is that too broad?.

Yes, yes, that's a great answer thank you, I didn't mean to put you on the spot, I know you're taking advantage of that facility and I just want to hear on it. On the cannabis you have a partner in Canada, Anandia Laboratories, you own 25% of it and you have a license with them granting exclusive rights in the U.S.

to those four genes, unless it’s changed any and then you've got the co-exclusive rights with them outside of the U.S. and Canada. And I've got a large position in a Canadian company that they do clinical trials in cannabis, it’s I guess I could say a Tetra Bio-Pharma.

And would you consider them as a Canadian partner to conduct clinical trials your cannabis, possibly a cannabis blend that you could produce with your patents and licenses, because right now they're doing a Phase I and a Phase IV on the cannabis oils.

And you generally have to have a great production of that just produce it and get it test Phase I, Phase IV, they're really well known for that. And they're doing that for Altria right now, so another well known company, but you thoughts on that if that opens a door for you or..

Greg, we've very active. Greg. this is Tom, we're very active around the world with a lot of partners and so we're always happy to be introduced to somebody new. Please feel free to email them to us any time, we'll talk to anybody, whether we will or won’t do business depends on the results of discussions but we're certainly happy to talk to anybody..

Be open to doing that, I'll go ahead and get that to you. Thanks, that's my questions, thank you..

Thank you very much. We appreciate you joining this afternoon..

And there are no further questions. That does conclude today's conference. Thank you everyone for your participation. You may now disconnect..