22nd Century Announces $3.0 Million Registered Direct Offering Priced Above Market

Rhea-AI Summary

22nd Century Group, Inc. announces registered direct offering of common stock and warrants for $3.0 million

Positive

• Investors show confidence in the company's path forward through participation in the offering
• Strengthened capital position and continued operational momentum
• Steps taken towards regaining compliance with Nasdaq listing standards

Negative

• None.

BUFFALO, N.Y., July 06, 2023 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a leading biotechnology company dedicated to improving health with reduced nicotine tobacco, hemp/cannabis and hops advanced plant technologies, today announced that it has entered into definitive agreements with certain investors for the purchase and sale of 778,634 shares of common stock and warrants at a price of $3.80 per share in a registered direct offering priced above market. Gross proceeds to the Company from the registered direct offering are expected to be $3.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from this offering for the continued commercial expansion of its VLN^® reduced nicotine content tobacco cigarettes in additional markets, working capital related to its commercial activities and general corporate purposes. 

“We are encouraged by the confidence investors have demonstrated in our path forward through the participation in our latest offering of securities which corresponds with the inflection point we are experiencing in critical aspects of the business,” said James A. Mish, Chief Executive Officer. “In turn, we are pleased to have strengthened our capital position, deliver continued operational momentum, and taken successful steps toward regaining compliance with Nasdaq listing standards.”

The Special Equities Group, a division of Dawson James Securities Inc., acted as the sole placement agent for this transaction.

As part of the transaction, the Company agreed to issue to the investors warrants to purchase up to 1,557,268 shares of common stock. The warrants have an exercise price of $3.80 per share and are exercisable six months from the date of issuance. The closing of the offering is expected to occur on or about July 10, 2023, subject to the satisfaction of customary closing conditions.

The securities are being offered by the Company pursuant to a “shelf” registration statement on Form S-3 previously filed with the Securities and Exchange Commission, or the SEC, and declared effective by the SEC. The offering will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the securities being offered will be filed with the SEC. Copies of the final prospectus supplement and accompanying base prospectus may be obtained, when available, for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, you may contact investorrelations@xxiicentury.com for a copy of these documents or contact our principal executive offices at 500 Seneca Street, Suite 507, Buffalo, New York 14204, c/o Corporate Secretary, (716) 270-1523.

This press release shall not constitute an offer to sell or the solicitation of any offer to buy the securities discussed herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About 22nd Century Group, Inc.

22nd Century Group, Inc. (Nasdaq: XXII) is a leading agricultural biotechnology company focused on tobacco harm reduction, reduced nicotine tobacco and improving health and wellness through plant science. With dozens of patents allowing it to control nicotine biosynthesis in the tobacco plant, the Company has developed proprietary reduced nicotine content (RNC) tobacco plants and cigarettes, which have become the cornerstone of the FDA’s Comprehensive Plan to address the widespread death and disease caused by smoking. The Company received the first and only FDA Modified Risk Tobacco Product (MRTP) authorization for a combustible cigarette in December 2021. In tobacco, hemp/cannabis and hop plants, 22nd Century uses modern plant breeding technologies, including genetic engineering, gene-editing, and molecular breeding to deliver solutions for the life science and consumer products industries by creating new, proprietary plants with optimized alkaloid and flavonoid profiles as well as improved yields and valuable agronomic traits.

Learn more at xxiicentury.com, on Twitter, on LinkedIn, and on YouTube.

Learn more about VLN^® at tryvln.com.

Cautionary Note Regarding Forward-Looking Statements

Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” in the Company’s Annual Report on Form 10-K filed on March 9, 2023. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law.

Investor Relations & Media Contacts

Matt Kreps
Investor Relations
22nd Century Group
mkreps@xxiicentury.com
214-597-8200

Jordan Darrow
jdarrow@darrowir.com
631-766-4528

FAQ

What is the purpose of the offering?

The net proceeds from the offering will be used for the commercial expansion of VLN reduced nicotine content tobacco cigarettes, working capital related to commercial activities, and general corporate purposes.

Who acted as the sole placement agent for the transaction?

The Special Equities Group, a division of Dawson James Securities Inc., acted as the sole placement agent for this transaction.

When is the closing of the offering expected?

The closing of the offering is expected to occur on or about July 10, 2023, subject to customary closing conditions.

Where can I obtain copies of the prospectus?

Copies of the final prospectus supplement and accompanying base prospectus may be obtained for free by visiting EDGAR on the SEC's website or by contacting investorrelations@xxiicentury.com.

Will there be any unlawful offers or sales of the securities?

No, there will be no offer, solicitation, or sale of the securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.