22nd Century Group Secures Financing

22nd Century Group announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN and GVB business lines. The new three-year financing was issued at a 5 percent original issuance discount, will bear cash interest at a rate of 7 percent per year and commence principal amortization in the second year at a rate of 2 percent of the original balance per month. The company has the option to redeem the facility early starting in the second year.

“We anticipate significant revenue growth in both of our core business lines and believe this financing will provide the appropriate working capital for the year ahead,” said Hugh Kinsman, chief financial officer, in a statement. “New retail partners already in talks to launch VLN in additional states as part of our national-scale distribution capabilities are expected to increase our manufacturing and inventory requirements. Additionally, the continued growth in customer demand at GVB has increased our capital needs for bulk ingredients and inventory going forward.”

In conjunction with the new credit facility, 22nd Century has also extended the maturity of $2.7 million in legacy seller notes assumed with its acquisition of GVB Biopharma to mid-2024. The company will file a Form 8-K with the Securities and Exchange Commission with complete details of the new debt facility and the terms of the refinanced legacy seller notes.