22nd Century Eliminates $2.3 million of Debt

22nd Century Group has entered into a binding letter of agreement to eliminate an additional $2.3 million in outstanding debt with JGB Capital.

Under the terms of the agreement, the company and JGB Capital will exchange an aggregate of $2.3 million in principal, fees and expenses owed to JGB Capital for consideration of approximately 1.375 million shares of the company’s common stock and prefunded warrants. Additionally, the company will defer monthly amortization payments for an additional two months, resulting in no required further principal repayment until August 2024.

“This agreement with JGB is another significant step in restoring strength to our balance sheet as we work toward becoming debt-free,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

“This transaction also preserves our cash resources for commercial use as we work to become cash flow positive by the first quarter of 2025. We have made substantial progress on our commercial programs, including refining our revenue mix, implementing a lean operating cost profile and positioning the company to win new contracts, including the new CMO and distribution agreements announced recently, which are already advancing our sales in the second quarter.”