Wait for the Smoke to Clear at SmokeFree Innotec
SmokeFree Innotec Inc. [[SFIO.PK]] shares surged more than 100 percent after it announced plans to market its products in Argentina. The company entered into a letter of intent with LTI News Industries to market and distribute the world’s first completely smoke-free cigarette in Argentina. The move marks an entry into the huge Latin American market.
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The news comes shortly after SFI announced a partnership with German firm CG Trade Solutions GmbH to market and distribute its smoke-free cigarette in Austria, Germany and Switzerland. The company is a major player with respect to selling through big box outlets and major grocery chains like Metro, Kaufland and Aldi.
SFI’s smokeless cigarettes provide the same benefits of a regular cigarette without smoldering tobacco and therefore without irritating bystanders or loved ones with second-hand smoke. A sensor signals a mini processor whenever a drag is taken and a spiral is instantly heated up. The heated air then evaporates the tobacco solution and aroma at exactly the right temperature.
Last year, SFI reported a net loss of $1,022,422 with no revenues as its product was in the development stages. In March 2009, the company began pre-production of its smoke-free cigarette for delivery in July, when it will then initiate test-marketing in selected regions. It is after the company begins production and selling that it will start to see revenues.
In the end, SmokeFree Innotec remains a development-stage company until it executes its first sales transaction. The company certainly has a unique product and strong distribution partners abroad, but prudent investors may want to at least wait for some clarity from test-marketing results before taking a large stake in this potentially strong investment.
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