Special Situation Report:

Date: September 13, 2004

Our Feature Profile:

Star Scientific, Inc.

(NasdaqNM: STSI)

Company Profile

Star Scientific, Inc. and its wholly owned subsidiary, Star Tobacco, Inc., engage in the manufacture and sale of tobacco products in the United States. It involves in the development, implementation, and licensing of scientific technology for the curing of tobacco to reduce the formation of carcinogenic toxins present in tobacco and tobacco smoke, primarily the tobacco specific nitrosamines. The company offers tobacco products that expose adult tobacco users to lower levels of carcinogenic toxins. It also provides nitrosamine smokeless tobacco products, including Stonewall moist and dry snuffs; ARIVA compressed powdered tobacco cigalett pieces; and STONEWALL Hard Snuff; as well as Interval product, which is in test market. Star Scientific is headquartered in Chester, Virginia.

About The Company:

• Their corporate mission is centered on reducing toxins in tobacco so that adult consumers can have access to products that expose them to sharply reduced toxin levels. The company was founded on the belief that is technologically possible to lessen the health risks associated with long-term tobacco use, and particularly smoking.
• Company goals, initiatives and strategies all flow from the harsh realities of widespread national and global tobacco use. Tobacco-related disease is the single most preventable cause of premature death in the United States. The global realities are even more troubling. Worldwide, more than 1.2 billion people use tobacco daily, and about 4 million of those users will die prematurely this year.
• The Company is different from other tobacco companies because we have always accept the numerous U.S. Surgeon General Reports that detail the risk to human life that are associated with smoking. These comprehensive reports are based on research spanning multiple disciplines in medical and behavioral science. It is their position that good science should drive tobacco product manufacturing and marketing, and that technologies aimed at toxin reduction ought to be the standards for measurement in the 21st century.
• Star Scientific’s Board of Directors unanimously adopted a core Policy Statement in 1999 that reflects the company’s belief that it has a corporate responsibility to continue to expand research and development efforts that result in the manufacture of tobacco products that contain as few toxins as is technologically feasible.
• The Company have scaled-up a non-chemical tobacco curing technology, StarCured™, that interferes with the formation of tobacco specific nitrosamines (TSNAs) that occurs in traditional curing methods.
• They market dissolvable hard smokeless tobacco products made with tobacco that is 100% Virginia StarCured® tobacco, with TSNA levels that they believe are the lowest anywhere in the world. These products were the first dissolvable smokeless products in the commercial marketplace: Stonewall Hard Snuff®, developed for traditional moist snuff users, and Ariva®, which was developed for adult smokers.
• Star Scientific believes these products hold great promise in two ways. Each has TSNA levels that are extremely low, even when measured in “parts per billion”. In addition, these products are not combusted, so that smoke is not inhaled into the lungs (tobacco smoke produces at least 43 compounds that are known to be carcinogens).
• The labeling and packaging of their products gives adult consumers candid and accurate information about the products they purchase. The packaging clearly articulates that the products contain nicotine, which is an addictive substance, that the best option is to quit or not to start using tobacco, and that there is no proof that reducing TSNAs equates to a reduction in health risk.
• They applaud and fully support all efforts to prevent tobacco initiation and use by young people, and to promote cessation among current users. At the same time, STSI believes they can contribute to lessening the harm caused by conventional smoked and smokeless tobacco products to those adults who continue to use them.

Key Management:

• Mr. Paul L. Perito, Chairman, Pres and Chief Operating Officer
• Mr. Jonnie R. Williams, Chief Exec. Officer
• Mr. Christopher G. Miller, Chief Financial Officer and Principal Accounting Officer
• Mr. Paul H. Lamb III, President of Star Tobacco and Chief Exec. Officer of Star Tobacco
• Mr. Robert E. Pokusa, Gen. Counsel and Sec.

SEC Filings:

SEC filings for Star Scientific, Inc., can be reviewed at: http://finance.yahoo.com/q/sec?s=STSI

Company Competitors:

Company competitors for Star Scientific, Inc., can be reviewed at: http://finance.yahoo.com/q/co?s=STSI

Share Structure:

Latest Press Releases:

Company press releases for Star Scientific, Inc., can be reviewed at: http://www.hardsnuff.com/www/stsi101005a/Pressreleases/pressreleases2004.html

Contact Information:

Technical Analysis

Conclusion

Company fundamentals and chart analysis present a stock that could do well over the next few months! The scientific technology it has developed for reducing the formation of carcinogenic toxins present in tobacco and tobacco smoke shows great potential of future growth for the company. We believe the stock will be a winner for our subscribers.

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