22nd Century Group, Inc. (NYSE
MKT: XXII), a plant biotechnology company
that is a leader in tobacco harm reduction, announced today that
the Company filed its 2015 Annual Report on Form 10-K with the U.S.
Securities and Exchange Commission. The Company will provide a
business update for investors on a conference call to be held
Friday, February 19th, at 10:00 AM (EST).
Henry Sicignano, III, President and Chief Executive Officer of
22nd Century Group, together with John T. Brodfuehrer, Chief
Financial Officer, will conduct the call. Interested parties are
invited to participate in the call by dialing: 888-204-6674 and
using Conference ID 4581359.
The conference call will consist of an overview of recent
business highlights and a summary of the financials presented in
the Company's 2015 Annual Report. Immediately thereafter, there
will be a question and answer segment open to all callers.
2015 was the first year in which the Company began to actively
commercialize its significant intellectual property portfolio.
Total revenues for 2014 were less than $530,000. In contrast,
revenues for 2015 were more than $8.5 million, which exceeds prior
financial projections and is the highest revenue in the Company’s
history.
Recent Business Highlights
- The Company submitted a Modified Risk
Tobacco Product application to the FDA seeking a reduced exposure
order so that our BRAND A Very Low Nicotine cigarettes, which
contain 95% less nicotine than conventional cigarettes, may be
introduced into commerce in the United States.
- The New England Journal of Medicine
published two different articles related to our proprietary
SPECTRUM research cigarettes. The first article reported on the
results of a landmark, double-blind, parallel, randomized clinical
trial involving 840 smokers. Funded by the FDA and the National
Institute on Drug Abuse (“NIDA”), the study found that smokers of
our SPECTRUM Very Low Nicotine cigarettes consumed far fewer
cigarettes per day and doubled their quit attempts versus smokers
of cigarettes with conventional nicotine content.
- The Company completed and shipped a
substantial portion of the most recent purchase order from NIDA of
approximately 5 million SPECTRUM research cigarettes for use in
further independent clinical studies on smoking cessation and the
nicotine addictive threshold in cigarettes. New clinical trials
using 22nd Century’s SPECTRUM cigarettes are already underway. Most
notably, a Phase III study featuring 1,250 participants and
sponsored by the University of Pittsburgh, in collaboration with
NIDA, is comparing two different approaches to help smokers lose
their addiction to nicotine: an immediate reduction in nicotine
content in cigarettes to non-addictive levels versus a gradual
reduction in nicotine content in cigarettes to non-addictive
levels.
- The Company hired Dr. Paul Rushton as
our new Vice President of Plant Biotechnology. Dr. Rushton has
extensive experience in tobacco biotechnology, including work at
the University of Virginia on our sponsored research projects, as
well as nearly a decade working at the world-renowned Max Planck
Institute for Plant Breeding in Germany.
- The Company entered into a new cannabis
research collaboration with strategic partner Anandia. As a part of
this research collaboration, Anandia will develop and grow, under
its licenses in Canada, proprietary cannabis strains that express
highly desirable characteristics that we expect will lead to
exciting commercialization opportunities.
- The Company hired a full-time FDA
expert, Gregg Gellman, as our new Director of Business Development
and Regulatory Affairs. Mr. Gellman was a key member of our team of
professionals who worked diligently on creating, completing and
submitting our Modified Risk Tobacco Product application with the
FDA for BRAND A Very Low Nicotine cigarettes.
- The Company exported varieties of its
proprietary tobacco seeds to Central America for testing and
expanded agricultural production of its tobacco plants for the
purpose of making additional seeds for future plantings.
- The Company committed to opening
specialized laboratory space at universities in Western New York in
order to conduct research at substantially lower costs than
sponsored research projects at third-party universities. The new
laboratories are intended to accelerate the development of new
nicotine-free tobacco varieties as well as the invention of other
important tobacco products.
2015 Financial Summary
For the year ended December 31, 2015, revenue was $8,522,000
compared to revenue of $529,000 for the year ended December 31,
2014, an increase of nearly $8,000,000. Revenues for the year ended
December 31, 2015 consisted primarily of sales of RED SUN and MAGIC
cigarettes, as well as contract manufactured cigarettes and
filtered cigars, and the sale of a portion of the SPECTRUM research
cigarette order we received in September 2015. The revenues for the
year ended December 31, 2014 consisted primarily of the sale of
SPECTRUM research cigarettes in the amount of approximately
$448,000.
For the year ended December 31, 2015, the Company reported an
operating loss of approximately $12.0 million as compared to
operating loss of approximately $11.7 million for the year ended
December 31, 2014, an increase in the operating loss of
approximately $300,000. The increase in the operating loss is
primarily due to a decrease in gross profit in the amount of
$600,000 and an increase in operating expenses of $300,000
(excluding equity based compensation and depreciation and
amortization), and an increase in depreciation and amortization in
the amount of $300,000, offset by a decrease in equity based
compensation of $900,000.
The Company’s net loss for the year ended December 31, 2015 was
approximately $11.0 million, or ($0.16) per share, as compared to a
net loss of approximately $15.6 million, or ($0.26) per share, for
the year ended December 31, 2014. The results for the year ended
December 31, 2015 included non-cash expenses consisting of (i)
equity based compensation totaling $3.6 million which includes
equity compensation to Crede Capital under a consulting agreement,
and (ii) depreciation and amortization in the amount of
$800,000.
Adjusted EBITDA (as described in the paragraph and table below)
for the year ended December 31, 2015 was a negative $7.7 million,
or ($0.11) per share, and a negative $6.1 million, or ($0.10) per
share, for the year ended December 31, 2014.
Below is a table containing information relating to the
Company’s Adjusted EBITDA for the years ended December 31, 2015 and
2014, including a reconciliation of net loss to Adjusted EBITDA for
such periods.
Years Ended December 31, 2015
2014 % Change Net loss $ (11,031,931 )
$ (15,595,358 ) -29 % Adjustments: Warrant liability (gain)
loss - net (144,550) 3,676,691 -104 % Warrant amendment inducement
expense - 144,548 -100 % Depreciation and amortization 774,311
495,296 56 % Loss on equity investment 95,684 101,165 -5 % Interest
expense 52,982 7,094 647 % Interest income (31,198 ) (30,383 ) 3 %
Equity based compensation - Crede consulting agreement 1,978,785
2,091,215 -5 % Third-party service providers 280,362 140,170 100 %
Officers, directors and employees 1,326,393 2,293,083 -42 %
Litigation proceeds (1,000,000 ) - 100 % Severance costs - 637,301
-100 % Loss (gain) on the disposal of machinery and equipment
15,130 (71,121 ) -121 %
Adjusted EBITDA $ (7,684,032 ) $
(6,110,299 ) 26 %
Adjusted EBITDA is a financial measure not prepared in
accordance with generally accepted accounting principles (“GAAP”).
In order to calculate Adjusted EBITDA, the Company adjusts the net
loss for certain non-cash and non-operating income and expenses
items 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
(loss) income, net loss 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.
Summary of Anticipated Events in 2016
Moving forward, 22nd Century’s management team remains focused
on monetizing the Company’s vast intellectual property portfolio
and has identified the following priorities for 2016: (i) working
diligently to ensure that the Company receives a marketing order
from the FDA in response to our Modified Risk Tobacco Product
application for BRAND A Very Low Nicotine cigarettes, (ii)
continuing to identify potential strategic partners in our on-going
efforts to establish a joint venture to fund Phase III clinical
trials for our X-22 smoking cessation aid in development, (iii)
initiating “proof of concept” exposure studies for BRAND B low
tar-to-nicotine ratio cigarettes in advance of submitting a
Modified Risk Tobacco Product application to the FDA for BRAND B,
(iv) expanding the Company’s RED SUN sales in the United States and
MAGIC sales in Europe while continuing to explore opportunities for
22nd Century’s proprietary products and tobaccos in Asia, and (v)
growing further our base of third-party cigarette and filtered
cigar contract manufacturing business at the Company’s NASCO
manufacturing facility in Mocksville, North Carolina to better
utilize total factory capacity.
About 22nd Century Group, Inc.
22nd Century is a plant biotechnology company focused on
technology which allows it to increase or decrease the level of
nicotine in tobacco plants and the level of cannabinoids in
cannabis plants through genetic engineering and plant breeding. The
Company’s primary mission is to reduce the harm caused by smoking.
22nd Century currently owns or exclusively controls more than 200
issued patents and more than 50 pending patent applications around
the world. The Company’s strong IP position led to a licensing
agreement with British American Tobacco (“BAT”), the world’s second
largest tobacco company. Visit www.xxiicentury.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, 2015, filed on February 18, 2016,
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160218005909/en/
Investor Relations:IRTH CommunicationsAndrew Haag,
866-976-4784xxii@irthcommunications.comorRedington, Inc.Tom
Redington, 203-222-7399
22nd Century (AMEX:XXII)
Historical Stock Chart
From Mar 2024 to Apr 2024
22nd Century (AMEX:XXII)
Historical Stock Chart
From Apr 2023 to Apr 2024