22nd Century Group (Nasdaq: XXII) strengthens its balance sheet
- Announces $35 Million Above Market Funding
- Strengthens the company’s position with ongoing strategic discussions
BUFFALO, NY, July 21, 2022 (GLOBE NEWSWIRE) — 22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company dedicated to improving human health through advanced reduced-nicotine, hemp/cannabis and hops plant technologies, announced that it has entered into definitive agreements with several institutional investors for the purchase and sale of 17,073,175 shares of its common stock at a purchase price of $2.05 per share in a registered direct offer at an above-market price under the rules of the Nasdaq. The Company has also agreed to issue to investors unregistered warrants to purchase up to 17,073,175 common shares. The warrants have an exercise price of $2.05 per share, are exercisable immediately and will expire five years from the date of issue. The offering is expected to close on or about July 25, 2022, subject to the satisfaction of customary closing conditions.
The Company intends to use the proceeds of the capital increase to accelerate and expand the launch of its reduced nicotine VLN® cigarettes in other US markets. 22nd Century VLN King and VLN Menthol King cigarettes contain 95% less nicotine than conventional cigarettes and are FDA-cleared as Modified Risk Tobacco Products (MRTPs) that “help you smoke less.” The Company is also evaluating accretive strategic actions to further develop its business.
“The results of our Chicago VLN® pilot project with Circle K have been very positive. We are currently testing specific incentive programs, including coupons designed to encourage adult smokers to try VLN as a way to help them smoke less,” said John Miller, president of tobacco products at 22nd Century Group. “Based on the initial results of our pilot project, in addition to expanding availability with our existing partners, we are now engaged with several parties who have approached us to launch our disruptive VLN® products in additional markets and channels. “
“Just as an example, we are in discussions with a large distribution partner in Colorado with extensive coverage of convenience stores, supermarkets and pharmacies throughout the state. This potential partner is eager to integrate our VLN® products in its distribution network.The combination of a favorable MRTP tax policy and a proactive partner makes it an attractive state to launch even before the pilot is completed.
Additionally, the company provided an update on its integration of GVB Biopharma, which the company acquired in May 2022. The integration process is moving ahead of schedule, with steady market activity in growing business areas from GVB. The proceeds of this transaction are not intended for the GVB activity. “The integration of GVB – which doubled our revenue in a single transaction – continues to advance ahead of schedule,” said James A. Mish, President and CEO. “We now offer the most comprehensive hemp/cannabis solution in the world, from 22nd Century’s core expertise in receptor science and transformative plant genetics to GVB’s leadership position in finished ingredients and CDMO formulated products. Customers and potential new customers are taking notice, driving real growth in this business as our combined capabilities reinvigorate several key opportunities, including the ramp-up of new revenue opportunities.
The Special Equities Group (SEG), a division of Dawson James Securities, Inc., acted as sole placement agent for the transaction. Roth Capital Partners acted as financial advisor.
The complete terms of the financing agreement can be viewed in the company’s current report on Form 8-K on file with the United States Securities and Exchange Commission.
About 22n/a CenturyGroup, Inc.
22n/a Century Group, Inc. (Nasdaq: XXII) is a leading agricultural biotechnology company focused on reducing tobacco harm, reducing tobacco nicotine, and improving health and well-being through the phytology. With dozens of patents enabling it to regulate the biosynthesis of nicotine in the tobacco plant, the company has developed proprietary reduced nicotine (RNC) tobacco plants and cigarettes, which have become the cornerstone of the overall plan. of the FDA to combat widespread deaths and illnesses caused by smoking. The company received the first and only MRTP clearance from the FDA for a combustible cigarette in December 2021. In tobacco, hemp/cannabis and hops plants, 22nd Century uses modern plant breeding technologies including genetic engineering , gene editing and molecular breeding to provide solutions for the life science and consumer product industries by creating new proprietary plants with optimized alkaloid and flavonoid profiles, as well as improved yields and other valuable agronomic traits.
Learn more at xxiicentury.com, on Twitter, on LinkedIn and on YouTube.
Caution Regarding Forward-Looking Statements
Except for historical information, all statements, expectations and assumptions in this press release are forward-looking statements. Forward-looking statements generally contain words such as “anticipate”, “believe”, “consider”, “continue”, “could”, “estimate”, “expect”, “explore”, “anticipate”, “objective ‘, ‘advice’, ‘intend’, ‘likely’, ‘may’, ‘plan’, ‘potential’, ‘predict’, ‘preliminary’, ‘probable’, ‘project’, ‘promising’, “seek”, “should”, “steal”, “would” and similar expressions. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially are discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed March 1, 2022. All information provided in this release is the date hereof, and the The Company undertakes no obligation and does not intend to update these forward-looking statements, except as required by law.
Investor Relations and Media Contact:
22nd Century Group, Inc.
Director, Communications and Investor Relations
Such. : 716-300-1221
Darrow Associates Investor Relations
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