22nd Century Group Paving the Way for Up-Listing to a National Securities Exchange
November 18 2013 - 10:56AM
Business Wire
Company Initiates Warrant Exchange to
Improve Balance Sheet and Cap Table
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.
Redington, Inc.Tom Redington, 203-222-7399
22nd Century (AMEX:XXII)
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