Newly Appointed CEO Leading Restructuring to Focus on Tobacco Industry Operations, Reduce Costs
BUFFALO, N.Y., December 04, 2023 — 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.