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22nd Century Group Paving the Way for Up-Listing to a National Securities Exchange



  22nd Century Group Paving the Way for Up-Listing to a National Securities
  Exchange

  Company Initiates Warrant Exchange to Improve Balance Sheet and Cap Table

Business Wire

CLARENCE, N.Y. -- November 18, 2013

22nd Century Group, Inc. (OTCQB:XXII) announced today that the company sent
notices to all its warrant holders encouraging the exercise or amendment of
the company’s warrants. 22nd Century Group’s management believes the company
will have sufficient stockholders equity to up-list its common stock to a
national securities exchange – such as NASDAQ or NYSE – if the company’s
“derivative warrant liability” is reduced through the exercise or amendment of
the outstanding warrants.

“Derivative warrant liability” is not an actual cash obligation (or cash
expense) and is classified and reported as a derivative liability for
accounting purposes and marked-to-market at the balance sheet date. Upon the
exercise of a warrant or elimination of the anti-dilution feature of a
warrant, the warrant liability is reduced and equity (capital in excess of par
value) is increased accordingly.

“Since British American Tobacco’s strategic $7 million investment in 22nd
Century Group last month, we have been contacted by several institutional
investors and retail brokers looking to build a position in 22nd Century Group
stock. Many of these funds and brokers cannot buy OTC Bulletin Board stocks,”
said Joseph Pandolfino, Founder and CEO of the company. “In order to deliver
maximum benefit and value for our shareholders, we concluded that listing our
common stock on a national securities exchange is very important.”

Reducing the number of outstanding company warrants has two purposes. First,
investors will have greater clarification of the potential number of company
shares of common stock that are issued and outstanding. 22nd Century Group
does not have any outstanding preferred stock and currently has 50,112,180
shares of common stock and 18,518,615 warrants issued and outstanding. Second,
reducing the derivative warrant liability on the company’s balance sheet will
greatly facilitate 22nd Century Group listing its common stock on a national
securities exchange.

The company warrants currently outstanding are primarily the result of the
company’s private placements over the last three years. Of the 18,518,615
outstanding warrants, 6,248,699 or 34 percent, have an exercise price of
$2.4005. Management does not expect more than 5.5 million common shares to be
issued under this warrant exchange. John Brodfuehrer, 22nd Century’s Group’s
CFO, stated, “Approximately 80 percent of our warrant holders have not sold
any of their related shares of our common stock demonstrating that these are
fundamental investors with long-term time horizons.”

22nd Century Group’s warrant exchange includes inducements for certain warrant
classes and will be completed at 5:00 p.m., EST, on Thursday, December 12,
2013. 22nd Century Group expects to submit its application to NASDAQ and the
NYSE in January 2014, with the goal of up-listing as quickly as possible. As
of October 31, 2013, 22nd Century Group had total assets of approximately $9.4
million, including approximately $6.5 million in cash and only $700 thousand
in current liabilities. The company’s only long-term liability is its
derivative warrant liability, which the company expects will be significantly
reduced through this warrant exchange.

About 22nd Century Group, Inc.

22nd Century is a plant biotechnology company whose proprietary technology
allows for the levels of nicotine and other nicotinic alkaloids (e.g.,
nornicotine, anatabine and anabasine) in the tobacco plant to be decreased or
increased through genetic engineering and plant breeding. 22nd Century owns or
is the exclusive licensee of 113 issued patents in 78 countries plus an
additional 37 pending patent applications. Goodrich Tobacco Company, LLC and
Hercules Pharmaceuticals, LLC are wholly-owned subsidiaries of 22nd Century.
Goodrich Tobacco is focused on commercial tobacco products and potential
modified risk cigarettes. Hercules Pharmaceuticals is focused on X-22, a
prescription smoking cessation aid in development.

For additional information, please visit: www.xxiicentury.com

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. 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, 2012, filed on March 18, 2013,
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.

Contact:

Redington, Inc.
Tom Redington, 203-222-7399
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