22nd Century Eliminates Debt

22nd Century Group has entered into a binding letter of agreement to redeem $5.2 million in outstanding principal and interest associated with the Omnia subordinated note and outstanding warrants.

The agreement will exchange consideration of approximately $248,000 in cash, 1.15 million shares of common stock priced at $2.14 per share and 1.15 million shares of prefunded warrants priced at $2.14 per share as consideration of the debt. Additionally, the company will issue to Omnia 460,000 warrants with a term of five years and an exercise price of $2.14 per share.

“Paying Omnia at maturity with equity greatly improves our balance sheet, preserves cash for growing our operating business and significantly increases shareholder equity,” said Chairman and CEO Larry Firestone in a statement. “This transaction also reduces our monthly interest expense and adds to the progress made on increasing sales and margin while reducing operating costs. This is a key milestone toward reaching our goal of being cash positive in the first quarter of 2025.”