22nd Century Group, Inc. (NYSE MKT:XXII) today announced that
the Company filed its second quarter 2014 report on Form 10-Q today
with the U.S. Securities and Exchange Commission.
For the three and six months ended June 30, 2014, revenue was
$16,000 and $464,000 compared to no revenue for the three and six
months ended June 30, 2013. The second quarter 2014 revenue was
generated from the manufacture of filtered cigars and the revenue
for the first quarter 2014 was generated from the sale of SPECTRUM
research cigarettes.
For the three and six months ended June 30, 2014, 22nd Century
Group reported operating losses of $2.04 million and $3.23 million,
respectively, compared to operating losses of $1.62 million and
$3.01 million, respectively, for the three and six months ended
June 30, 2013.
The Company’s net loss for the three months ended June 30, 2014
was $1.97 million or ($0.03) per share and $7.28 million or ($0.13)
per share for the six months ended June 30, 2014, compared to a net
loss of $0.45 million or ($0.01) per share for the three months
ended June 30, 2013 and $2.96 million or ($0.08) per share for the
six months ended June 30, 2013. The results for the six months
ended June 30, 2014 included non-operating expenses from (i) a
non-cash change in the fair value of derivatives (warrant
liability) of $3.99 million, (ii) a non-cash inducement expense of
$145,000 from the amendment of certain warrants, and (iii) other
non-operating income of $82,000.
Adjusted EBITDA (as described in the paragraph and tables
below) for the three months ended June 30, 2014 was a negative
$1.28 million or $0.02 per share and a negative $2.04 million or
$0.04 per share for the six months ended June 30, 2014, compared to
Adjusted EBITDA of negative $0.59 million or $0.01 per share for
the three months ended June 30, 2013 and $0.97 million or $0.03 per
share for the six months ended June 30, 2013.
Below are tables containing information relating to the
Company’s Adjusted EBITDA for the three and six months ended June
30, 2014 and 2013, including a reconciliation of net loss to
Adjusted EBITDA for such periods.
Three Months
Ended June 30,
2014
2013
%
Change
Net loss $ (1,965,815 ) $ (445,955 ) 341 % Add back: Warrant
liability gain - net (74,117 ) (1,258,502 ) -94 % Depreciation and
amortization 124,344 56,976 118 % Interest expense and amortization
of debt discount 1,769 81,879 -98 % Stock based compensation
637,365 973,253
-35 % Adjusted EBITDA
$ (1,276,454 ) $ (592,349
) 115 %
Six Months Ended
June 30,
2014
2013
%
Change
Net loss $ (7,280,943 ) $ (2,959,158 ) 146 % Add back:
Warrant liability loss (gain) - net 3,993,153 (242,327 ) 1748 %
Warrant amendment inducement expense 144,548 - 100 % Depreciation
and amortization 195,613 109,600 78 % Interest expense and
amortization of debt discount 3,518 187,403 -98 % Stock based
compensation 994,049 1,936,931 -49 % Gain on the sale of machinery
and equipment
(85,621 )
- 100 %
Adjusted EBITDA $ (2,035,683 ) $
(967,551 ) 110 %
Adjusted EBITDA is a financial measure not prepared in
accordance with generally accepted accounting principles (“GAAP”).
In order to calculate Adjusted EBITDA, the Company added back to
net loss the non-operating expenses listed in the table above in
order to measure the Company’s operating performance. The Company
believes that Adjusted EBITDA is an important measure that
supplements discussions and analysis of its operations and enhances
an understanding of its operating performance. While management
considers Adjusted EBITDA to be important, it should be considered
in addition to, but not as a substitute for or superior to, other
measures of financial performance prepared in accordance with GAAP,
such as operating income, net income and cash flows from
operations. Adjusted EBITDA is susceptible to varying calculations
and the Company’s measurement of Adjusted EBITDA may not be
comparable to those of other companies.
For additional information, please visit:
www.xxiicentury.com
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 129 issued patents in 78 countries plus an
additional 44 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 less harmful cigarettes.
Hercules Pharmaceuticals is focused on X-22, a prescription smoking
cessation aid in development.
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, 2013, filed on January 30, 2014,
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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