22nd Century Secures $3.2 Million to Date in Warrant Exchange Transaction

Rhea-AI Summary

22nd Century Group, Inc. (Nasdaq: XXII) announced the exercise of warrants by certain holders, resulting in aggregate gross proceeds of approximately $3.2 million. The company plans to use the net proceeds for general corporate purposes. Newly appointed CEO Larry Firestone is leading restructuring efforts to focus on tobacco industry operations and reduce costs, aiming to enhance value for shareholders.

Newly Appointed CEO Leading Restructuring to Focus on Tobacco Industry Operations, Reduce Costs

BUFFALO, N.Y., Dec. 04, 2023 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII) (the “Company”), a biotechnology company focused on utilizing advanced plant technologies to improve health and wellness, today announced the exercise of warrants by certain holders pursuant to its previously announced warrant inducement offering. During the inducement period, certain holders of the Company’s existing warrants acquired an aggregate of 14,767,386 shares of common stock upon exercise of their existing warrants at a reduced exercise price of $0.215. To date, the Company has received aggregate gross proceeds of approximately $3.2 million from the exercise of the existing warrants, before deducting placement agent’s fees and other offering expenses payable by the Company. The Company expects to use the net proceeds of the offering for general corporate purposes.

“This warrant transaction provides important operating capital for 22nd Century which, in conjunction with our ongoing restructuring activities, will support our tobacco operations into next year,” said Larry Firestone, newly appointed Chairman and Chief Executive Officer. “The team is already working to swiftly improve the performance of our conventional tobacco manufacturing business, FDA authorized tobacco harm reduction products and extensive IP portfolio, with a goal of substantially reducing operating costs and putting the business on a new path to sustainable revenue performance and cash positive operations. We believe that our strategies for the core tobacco business will enhance value for shareholders.”

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

In consideration for the immediate exercise of the existing warrants for cash, the exercising holders received new unregistered warrants to purchase up to an aggregate of 29,534,772 shares (equal to 200% of the shares of common stock issued in connection with the exercise) of the company’s common stock at an exercise price of $0.215 per warrant, which was equal to the Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)) on the date of exercise (the “Inducement Warrants”). The Inducement Warrants will be issued on substantially the same terms as the existing warrants, except that the Inducement Warrants will be exercisable at any time on or after the Stockholder Approval Date, have an expiration date of five years from the Stockholder Approval Date, and have an exercise price equal to the Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)). In addition, subject to Stockholder Approval, the Inducement Warrants will contain anti-dilution protection provisions relating to subsequent equity sales of shares of the Company’s common stock or common stock equivalents at an effective price per share lower than the then effective exercise price of such Inducement Warrants.

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 or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

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. 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, including but not limited to our full year business outlook. 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. Forward-looking statements include, but are not limited to, statements regarding (i) our expectations regarding our future operating expenses and cash flow, (ii) the warrant inducement offering, (iii) our belief that the proceeds of the warrant inducement offering will support our operations into next year, and (iv) our restructuring activities and strategies for our tobacco business. 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, Quarterly Reports on Form 10-Q filed May 9, 2023, August 14, 2023 and November 6, 2023 and Current Report on Form 8-K filed on November 29, 2023. All information provided in this press 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 Contact

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

 

FAQ

What did 22nd Century Group announce?

22nd Century Group, Inc. (Nasdaq: XXII) announced the exercise of warrants by certain holders, resulting in aggregate gross proceeds of approximately $3.2 million.

How much did the exercise of warrants result in?

The exercise of warrants resulted in aggregate gross proceeds of approximately $3.2 million.

What are the plans for the net proceeds?

The company plans to use the net proceeds for general corporate purposes.

Who is leading the restructuring efforts at 22nd Century Group?

Newly appointed CEO Larry Firestone is leading the restructuring efforts to focus on tobacco industry operations and reduce costs.

What is the goal of the restructuring efforts?

The goal of the restructuring efforts is to substantially reduce operating costs and put the business on a new path to sustainable revenue performance and cash positive operations, aiming to enhance value for shareholders.