22nd Century Announces Expiration of 2,250,000 Crede Warrants
October 04 2016 - 9:55AM
Business Wire
Aggregate of 4,250,000 shares of potential
dilution from the Crede warrants will be avoided entirely
22nd Century Group, Inc. (NYSE MKT: XXII), a plant biotechnology
company that is a leader in tobacco harm reduction, announced today
that warrants previously issued by the Company to Crede CG III,
Ltd. to purchase an aggregate of 2,250,000 shares of common stock
of the Company expired on September 29, 2016, which resulted in a
decrease of approximately 19.1% of the total number of shares of
Company common stock purchasable by warrants. Further, as
previously reported, two separate Crede Warrants to purchase an
aggregate of 2,000,000 additional shares of the Company’s common
stock will expire without exercise due to Crede’s non-performance
in a prior joint venture with the Company.
On September 29, 2014, the Company issued to Crede the
now-expired Tranche 1A Warrant to purchase 1,250,000 shares of
Company common stock at an exercise price of $3.36 per share and
the now-expired Tranche 1B Warrant to purchase 1,000,000 shares of
Company common stock at an exercise price of $2.5951 per share
pursuant to the terms of a now-expired consulting agreement and
subsequently terminated joint venture agreement with Crede. As
previously disclosed, the Company remains in litigation with Crede
in the United States District Court for the Southern District of
New York (“SDNY”) regarding Crede’s claim for the issuance of
shares of the Company’s common stock under an exchange provision of
the Tranche 1A Warrant. On June 14, 2016, after hearing evidence on
Crede’s claim, the SDNY Court denied Crede’s request for
preliminary relief in the case to allow Crede to exercise its
exchange rights, with the SDNY Court determining, among other
things, that Crede had not proven a reasonable likelihood that it
will prevail on its claims under the Tranche 1A Warrant. In
addition, the Company has filed motions to dismiss certain of
Crede’s claims and to transfer certain claims to the United States
District Court for the Western District of New York located in
Buffalo, where the Company’s headquarters are located. The Company
intends to continue to vigorously defend itself in this case and is
confident that it will prevail against Crede. If the case
continues, the Company also intends to file counterclaims against
Crede, against its principal, Terren Peizer, and against several
Peizer affiliates, personally.
On September 29, 2014, the Company also issued to Crede a
Tranche 2 Warrant and a Tranche 3 Warrant to purchase an aggregate
total of 2,000,000 additional shares of Company common stock at an
exercise price of $3.3736 per share. Although the Tranche 2 and
Tranche 3 Warrants do not expire until September 29, 2019, these
warrants are subject to certain vesting conditions related to the
Company’s prior joint venture agreement with Crede. Since the
Company terminated the joint venture agreement with Crede on June
22, 2015 due to non-performance by Crede, the vesting conditions
for the Tranche 2 and Tranche 3 Warrants will never be satisfied
and, for that reason, the Company no longer recognizes the Tranche
2 and Tranche 3 Warrants in the Company’s financial statements.
“The expiration of the Tranche 1A and Tranche 1B Warrants is
very positive news for our other shareholders,” explained Henry
Sicignano, III, President and Chief Executive Officer of 22nd
Century Group. “Furthermore, because the Tranche 2 and Tranche 3
Warrants will never become exercisable, an aggregate of 4,250,000
shares of potential dilution from the exercise of all the Crede
warrants will be avoided entirely.”
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. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20161004006040/en/
Investor Relations:IRTH CommunicationsAndrew Haag,
866-976-4784xxii@irthcommunications.comorRedington, Inc.Tom
Redington, 203-222-7399
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