CLARENCE, N.Y.--(BUSINESS WIRE)-- 22nd Century Group, Inc. (NYSE:XXII), a plant biotechnology company focused on tobacco harm reduction, announced today that the Company has closed a registered direct common stock offering with institutional investors to receive approximately $54 million in gross proceeds through the sale of 20.57 million shares of common stock at a price of $2.625 per share.
The net proceeds of the financing will be used for general corporate purposes, including working capital, as the Company enters licensing and strategic partnership discussions with major tobacco companies around the world.
In recent weeks and months, several milestone events have highlighted the value of 22nd Century’s proprietary technology and have captured the attention of “Big Tobacco,” Wall Street analysts, and public health officials around the world:
The United States Food and Drug Administration (“FDA”) announced that the FDA is exercising its authority under the Family Smoking Prevention and Tobacco Control Act to mandate minimally or non-addictive levels of nicotine in all combustible cigarettes sold in the United States. 22nd Century is the only company in the world capable of growing tobacco with nicotine levels of just 0.4mg per gram of tobacco, which is more than a 95% reduction in nicotine as compared to tobacco in conventional cigarettes.
Dr. Dorothy Hatsukami, Co-Director of the Center for the Evaluation of Nicotine in Cigarettes, Professor of Psychiatry and Director of the Tobacco Research Program at the University of Minnesota, revealed the fundamental findings of a highly anticipated Phase III study using 22nd Century’s SPECTRUM® research cigarettes. The seminal 1,250-patient study demonstrates an immediate reduction to Very Low Nicotine levels is most likely to lead to less harm.
22nd Century met in June with the FDA to review the Company’s Modified Risk Tobacco Product (MRTP) application for 22nd Century’s Very Low Nicotine Content cigarettes – the world’s lowest nicotine tobacco cigarettes. Based on written and in-person feedback received from the FDA, the Company announced it will move forward in 2018 with a significantly expanded MRTP application for the Company’s BRAND “A” Very Low Nicotine Content cigarettes.
Public health advocates predict that the FDA mandate of Very Low Nicotine Content tobacco in all cigarettes sold in the United States will save millions of lives and could prevent a new generation of young people from becoming addicted to cigarettes. Dozens of independent studies that have been conducted with 22nd Century’s proprietary Very Low Nicotine cigarettes demonstrate that the FDA’s plan is both scientifically sound and readily achievable. For the Company’s potential to affect tremendous public health benefits while also significantly disrupting the tobacco industry, 22nd Century has captured the attention of many investors.
“To close the largest capital raise – at the highest price per share – in the history of 22nd Century speaks to the strong institutional interest that has emerged around 22nd Century; we are especially pleased to have negotiated a no-warrant financing,” explained Henry Sicignano, III, President and CEO of 22nd Century Group. “Our cash balance is now well over $60 million and will be more than sufficient to enable 22nd Century to bring the Company’s proprietary non-addictive Very Low Nicotine Content cigarettes to market.”
Chardan acted as the sole placement agent for this transaction.
The offering was made pursuant to a shelf registration statement (Registration No. 333-215391) previously filed and declared effective by the Securities and Exchange Commission (the “SEC”). The final prospectus supplement relating to the offering has been filed with the SEC and is available at the SEC’s website at www.sec.gov. Alternatively, copies of the final prospectus supplement and accompanying base prospectus may be obtained, once available, by contacting Chardan, 150 East 58th Street, 28th Floor, New York, NY 10155; telephone number (646) 465-9028.
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About 22nd Century Group, Inc.
22nd Century is a plant biotechnology company focused on genetic engineering and modern plant breeding which allows the increase or decrease of the level of nicotine in tobacco plants and the level of cannabinoids in cannabis plants. The Company’s primary mission in tobacco is to reduce the harm caused by smoking. The Company’s primary mission in cannabis is to develop proprietary hemp/cannabis strains for important new medicines and agricultural crops. Visit www.xxiicentury.com and www.botanicalgenetics.com for more information.
Cautionary Note Regarding Forward-Looking Statements: This press release contains forward-looking information, including all statements that are not statements of historical fact regarding the intent, belief or current expectations of 22nd Century Group, Inc., its directors or its officers with respect to the contents of this press release, including but not limited to our future revenue expectations. The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. We cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these forward-looking statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances, or to reflect the occurrence of unanticipated events. You should carefully review and consider the various disclosures made by us in our annual report on Form 10-K for the fiscal year ended December 31, 2016, filed on March 8, 2017, including the section entitled “Risk Factors,” and our other reports filed with the U.S. Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.