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.”
That didn’t take very long. The global vaping company Plxsur reached its goal of reaching $1 billion in consolidated revenues from its partners in just two years. The company has now successfully partnered with 12 of the world’s leading vaping companies to form what may be the largest and fastest-growing group of independent vaping companies in the world. According to Nigel Hardy, CEO and founder of Plxsur, the company accomplished this with a focus on compliance, governance and reporting, with responsibility at its core.
“We believe having a portfolio of multiple brands is crucial for building a successful reduced-risk product (RRP) business at scale. Our retail sales across the group reflect the impact of Plxsur, which supports adult smokers who have switched to vaping,” explains Hardy. “We have sold products to about 4 million consumers, with retail sales by value of units sold at $1.835 billion. Additionally, our three North Star owned brands, Salt, Allo, and Flavour Beast, are expected to generate retail sales of more than $400 million in 2024.”
Plxsur also has 10 e-liquid manufacturing facilities in six different markets. With that comes the quality management systems to ensure the quality of the raw materials that are coming in and what’s going out. It’s not only about quality control (QC), but also about quality assurance. All e-liquids are manufactured in a minimum ISO 9001-certified facility. Plxsur’s QC program ensures that all products manufactured and distributed meet or exceed all regulatory and legislative requirements in the markets where the products are produced.
ISO 9001 is an international standard specifying quality management system requirements. Organizations use it to demonstrate their ability to consistently provide products and services that meet customer and regulatory requirements. Plxsur only produces its brands of e-liquids. The company does not do third-party manufacturing because the company’s focus is on its products.
Plxsur leadership says its partners have a combined market share representing an estimated 10 percent of the global $19.34 billion vaping market. Hardy said the company is targeting a 20 percent market share in the next five years. The companies include Hale Vaping (Ireland), UEG Holland (Netherlands), DampShop (Belgium), Pro Vape (Latvia), Puff Store (Italy), Nobacco (Greece), Ritchy Group (Czech Republic), Vape Empire (Malaysia), Pacific Smoke (Canada) and CK Complex (Poland).
“The past two years have seen a huge amount of financial and operational progress for Plxsur, and we have grown to become the world’s largest and fastest-growing group of independent vaping companies with consolidated revenues of over $1 billion,” said Hardy.
In 2021, Plxsur was founded by David Newns, Charlie Yates, and Nigel Hardy. The three entrepreneurs shared a vision for the vaping industry and discussed how they could work together to achieve their goals. They believed the key to success was respecting and supporting entrepreneurship while empowering local management teams. They planned to create a global network of independent vaping companies that were both the largest and the most responsible in the industry.
Plxsur, under Hardy’s leadership, believes in improving the businesses it brings on board by focusing on three key aspects of business strategy: governance, compliance, and reporting. Compliance involves adhering to various rules and regulations in the countries and communities where Plxsur businesses operate. This includes regulatory, communication, and marketing compliance, as well as legal compliance related to finance and jurisdiction.
“We’re at a very important and exciting stage in our journey. The companies in that group are not only the best at what they do in their respective markets, but importantly, they share our values.
“They put the consumers first, think big, and take responsibility seriously. All our companies want to make a real difference in the lives of adult smokers by contributing to a smokeless society. We now have a presence in Europe, Asia, and North America, covering the full vaping value chain from manufacturing, wholesale, distribution, and direct-to-consumer, both online and through our global network of over 800 specialist vaping stores.”
In 2023, group revenues increased 40 percent on the previous year to more than $1 billion, with an adjusted EBITDA of over $200 million. The outlook for the global vaping market is strong, and last year, Plxsur commissioned an independent research report that Hardy said is the “most comprehensive consumer study conducted on vaping to date”, using data from an online panel of over 30,000 consumers in six of Plxsur’s markets.
“The opportunity available for RRP across our 12 markets is significant, and I am pleased that our Global Vaping Market Snapshot vindicates the belief that not only will this sector continue to grow at pace, but that vaping is quickly becoming the most popular form of RRP in the market, with adult smokers who switch to vaping likely to remain loyal by navigating the regulatory framework,” he explained. “Our team has established a center of excellence leading a program of capability development to ensure management teams at a local level of the skills to deliver sustained value growth.”
Plxsur and its partners continue raising the bar as a responsible vaping group. All its companies have now committed to the six Plxsur standards (product compliance, manufacturing safety, responsible marketing, youth access, child protection and third-party product compliance) that address the biggest issues the vaping industry faces today. The company has also supported local teams across the group and guided companies in engaging with governments on policy development, particularly around preventing youth access.
“We’re focused on migrating consumers from disposable vapes to rechargeable pod and open systems. This is a key priority for Plxsur and our companies are already delivering huge results. In Q3 of 2023, I’m delighted that our Italian business, Puff, successfully migrated many of their consumers to pod and open devices through its launch as an exclusive distributor of new-to-market pods and e-liquids,” said Hardy. “To keep the momentum going, our portfolio companies have exciting plans to expand their range of pod systems in the first half of this year.”
Unlike traditional business acquisitions, Hardy explained that the company’s partners are not selected based on their financial worth. Plxsur is highly selective in its choice of partners, and financial size is not the only factor determining whether a company is suitable to join the Plxsur team. Hardy cited the example of Pro Vape, a company headquartered in Riga, Latvia, which started its business in late 2016 and met all the necessary criteria to become a Plxsur partner.
“The Baltic market is not particularly a huge market for vaping. What Pro Vape has is a significant presence in Europe,” said Hardy. “Only 40 percent of their business is domestic, and 60 percent is across the rest of Europe.”
Plxsur has specific criteria that businesses must meet before partnering with them. Firstly, the company must be a leader in its channel, whether it is business-to-business or business-to-consumer, or a leading player in its market. Currently, all of Plxsur’s partners meet this benchmark. Secondly, having a healthy balance of company-owned brands within the portfolio is essential, with Plxsur aiming for at least 50 percent of its revenues to be driven by such brands. Thirdly, the most crucial criterion is people.
“Our ability to retain our unique entrepreneurial spirit while growing at a rapid pace has been pivotal to our success over the past two years,” said Hardy. “We remain committed to achieving long-term value for all stakeholders, with responsibility at the core of everything we do. Supported by several tailwinds, including evolving market dynamics and customer preferences, we remain confident in Plxsur’s medium-term prospects and our ability to continue our trajectory to promote responsibility in the sector, achieve our target of over $15 billion in revenues by 2033.”
To achieve the lofty goal, Hardy said Plxsur is well placed to capitalize on the growing trend of vaping across the globe, unlock future value, and play a leading role in shaping the sector’s future on a platform of responsibility. He said Plxsur excels at creating a distinctive, innovative business leadership environment while growing at a pace pivotal to the company’s success over the past two years.
“We continue to see increasing regulation around vaping, particularly disposables, flavors, and marketing,” said Hardy. “At Plxsur, we see regulation as a force for good and encourage appropriate regulation and enforcement to tackle illicit and irresponsible trading behaviors. Last year, we submitted Plxsur’s response to the UK government’s open consultation on creating a smoke-free generation, and we continue to engage with regulators worldwide.
“This engagement with responsibility at the core of everything we do places Plxsur in a prime position to continue to grow, lead the industry, and shape the future of vaping.”
BAT’s wholly owned subsidiary Tobacco Manufacturers (India) intends to sell up to 436,851,457 ordinary shares in ITC to institutional investors. The trade shares represent up to approximately 3.5 percent of ITC’s issued ordinary share capital.
Following completion of the proposed block trade, BAT’s shareholding in ITC will be approximately 25.5 percent.
BAT intends to use the net proceeds of the trade to buy back BAT shares over a period ending December 2025, starting with £700 million ($892.9 million) in 2024. BAT will continue to allocate operating cashflow to fund investment in its transformation and to further deleverage.
Going forward, the key elements of capital allocation at BAT will include continued investment in its transformation; progressive dividends; continued deleverage to a new range of 2 times to 2.5 times adjusted net debt/adjusted EBITDA; and sustainable share buybacks, according to the company.
“I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders,” said BAT CEO Tadeu Marroco in a statement. “We look forward to remaining important shareholders in ITC as it continues its journey of growth. With this transaction, BAT can accelerate the start of a sustainable buyback while enabling us to continue to deleverage toward a new target range of 2 [times] to 2.5 times adjusted net debt/adjusted EBITDA.”
Chinese liquor company Luzhou Laojiao and Cuban cigar company Habanos SA have signed a strategic agreement to jointly expand their markets.
During the 24th Habano Festival in Havana, Cuba, Zhang Biao, general manager of Luzhou Laojiao, highlighted the similarities between Luzhou Laojiao’s liquor and Cuban cigars, noting that the cooperation will strengthen the commercial ties between China and Cuba.
The agreement includes a joint product through co-branding, with the Chinese company handling the marketing. José María López, vice president of development at Habanos, said that this partnership is based on shared values such as craftsmanship, quality and leadership, highlighting the “perfect match” between Chinese liquors and Cuban cigars.
Habanos executives reported that China is one of the most dynamic markets for Cuban cigar sales. The country contributed heavily to a 31 percent increase in Cuban cigar sales in 2023, reaching a total of $721 million.
The signing of the Memorandum of Understanding aims to explore new avenues of cooperation for both companies. Luzhou Laojiao, one of China’s oldest liquors, has been produced in the National Treasure Cellars since 1573, with distillation technology dating back 700 years.
The collaboration will focus specifically on Luzhou Laojiao’s “Guojiao 1573” brand and Habanos Corporation’s Cohiba Atmosphere brand. In addition, seven Guojiao 1573 brand liqueurs were auctioned along with during the festival’s humidor auction, with the funds raised going to public health initiatives in Cuba.
“This strategic agreement strengthens commercial ties between China and Cuba in the liquor and cigar industries,” according to a press release.
Ispire Technology Inc. has partnered with Touchpoint World Wide Inc. dba Berify, a platform specializing in linking physical products to the digital world, digital engagement and brand protection, and Chemular International Inc., a multidisciplinary regulatory consulting firm, to form a joint venture.
The joint venture will look to expedite innovation in the e-cigarette technology space, including the development of secure, user-friendly solutions for age verification and age-gating nicotine vapor devices.
Leveraging Berify’s multi-patented technology, Chemular’s regulatory consulting and premarket tobacco product application (PMTA) knowhow and Ispire’s hardware expertise, the joint venture will introduce an industry-standard age verification solution for vapor devices as well as the submission of PMTAs that incorporate technologies across the U.S. e-cigarette market, such as: next-generation e-cigarette hardware with a user-friendly point-of-use age verification and geo fencing capability that eliminates use of hardware in certain designated areas such as schools and sensitive areas; e-cigarettes with end-to-end a range of dynamic features such as authentication, direct-to-consumer engagements and exclusive offerings built on the foundations of blockchain technology; and a real-time biometric identity platform for user access controls, creating added security and reliability that deters counterfeiting.
“By combining our collective expertise in hardware, blockchain and regulatory consulting, we aim to set a new standard for age verification, security and overall quality in the e-cigarette space,” said Ispire Technology Co-CEO Michael Wang in a statement. “Our hope is that this JV [joint venture] will be a large step forward in innovative device control, safety, counterfeit prevention and enhanced user experiences that increase overall market and consumer satisfaction.”
“The U.S. market is ripe for technological disruption that addresses age verification, safety and counterfeit issues,” said Berify founder and CEO Dan Kang. “Our mission is also to create smart products that generate a new level of consumer satisfaction. We plan to achieve this by leveraging our blockchain authentication, tokenized rewards and creating true decentralization while keeping companies in control of their products and data.”
Kevin Burd, CEO of Chemular, added, “Our commitment is not only to create next-gen vapor devices but also to elevate market education. This venture includes additional partnerships that will bring together biometric identity and access control, ensure the solution is embedded into vapor devices during manufacturing and provide safety, security and privacy for consumers. It is also a testament to our dedication to positively shaping the future of vape hardware innovation.”
KT&G has been selected as a leading company (Leadership Grade) in the climate change response and water resource management sectors by the global environmental assessment organization CDP (Carbon Disclosure Project).
Following last year, KT&G has achieved the top grade in the Leadership category in both climate change response and water resource management. In particular, in the water resource management sector, it has risen from Leadership A- last year to the highest grade, A, with only three domestic companies in South Korea receiving an A grade out of the 100 winning companies worldwide. The climate change response sector maintained its Leadership A- grade from last year.
KT&G established its medium-term to long-term environmental management vision, 2030 Green Impact, in 2021 and has been practicing ESG management to achieve carbon neutrality throughout its value chain. It has set greenhouse gas reduction targets contributing to limiting the rise in global temperatures to within 1.5 degrees Celsius and achieved a 7.5 percent reduction in greenhouse gas emissions from domestic and overseas facilities as of 2022 (compared to the base year of 2020). Additionally, it has enhanced the reliability and objectivity of greenhouse gas emission data by undergoing third-party verification for the emissions in its supply chain.
In the water resource management sector, KT&G has set a goal to reduce water usage in domestic and overseas manufacturing facilities by 20 percent by 2030 compared to 2020 and is implementing measures to achieve this target. KT&G plans to systematically practice environmental management in the future through the expansion of renewable energy use, water recycling and energy efficiency enhancement.
CDP, founded in the U.K. in 2000 as a nonprofit organization, requests environmental management information disclosure from over 23,000 companies worldwide and conducts analysis and evaluation of this information. It is also recognized as a credible sustainability assessment organization along with Morgan Stanley International.
“We have been recognized as an excellent company by CDP for our climate change response and systematic water resource management capabilities in line with global standards,” said a KT&G representative in a statement. “We will continue to promote genuine ESG management, including leading the acceleration of the transition to a circular economy.”
Chemular and IGEN have formed a strategic alliance to create a new Compliance as a Service (CaaS) platform focused on streamlining the burden of compliance to small-sized and medium-sized companies who need turnkey solutions for Prevent All Cigarette Trafficking (PACT) Act, excise tax reporting and registration services.
“The time and effort required to stay compliant with federal, state and local laws is increasingly burdensome for small-[sized] to mid-sized companies in regulated categories,” said Jason Carignan, chief commercial officer of Chemular, in a statement. “Except for larger players, most companies don’t have a dedicated compliance officer who can ensure every regulatory detail is addressed so their products can stay on the market—especially in industries like ours, where the rules change rapidly. Chemular, now powered by the IGEN backbone, will be able to significantly scale its turnkey compliance service offering to a growing portfolio of tobacco manufacturers and distributors.”
In addition to saving time, utilizing the new CaaS platform can provide regulated companies with many other benefits, according to a company press release, including: streamlined remittance and reporting for excise tax, PACT Act, state registrations, and license capture; optimized growth opportunities by allowing employees and leadership to focus on what they do best: developing products and services; avoiding penalties with scaled compliance efforts that easily adapt to new markets with potentially different laws and regulations as the company grows; and reducing risk by monitoring real-time data and evolving regulations while establishing automated procedures that can minimize errors and detect fraud.
Failure to adhere to compliance guidelines can be costly for companies, leading to large fines and expensive sanctions, regulatory scrutiny and loss of trust in the marketplace. In some cases, noncompliant companies can have their products removed from store shelves, giving space to competitors who were able to better adjust to changing regulations.
“Compliance can be a long-term strategic advantage, yet most emerging businesses don’t have the resources and expertise to keep up with the growing complexity in regulatory requirements,” said Ryan Padget, president of IGEN. “We’re excited to bring our technology to Chemular, whose clients are regularly faced with regulatory hurdles, like PACT and excise tax reporting. This is just the beginning for our partnership—one that we see as a win for the industry as a whole.”
Along with this announcement, the Chemular and IGEN teams will be appearing at the tobacco industry’s largest trade show, TPE24, providing resources and education to the show’s retail attendees. Chemular will be hosting the “Fortify Your Future” educational sessions of the show from Jan. 30, 2024, to Jan. 31, 2024, and will be available to speak with attendees at their second-floor meeting room located next to the educational session.
Companies interested in becoming compliant or streamlining their current processes can visit www.chemular.com for more information.
Kaival Brands Innovation Group, the parent to Bidi Stick vaping products, announced a 1-for-21 reverse stock split that became effective at the opening of trading Jan. 25.
It’s not the first time the company has made such a move. In 2021, when the company applied to list on NASDAQ, the company implemented a 1-for-12 reverse split of its common stock, effective before the opening of the market on July 20. As a result of that reverse split every 12 shares were exchanged for one share of the common stock.
Kaival Brands’ Common Stock will continue to trade on the Nasdaq Capital Market under the symbol KAVL. The new CUSIP number for the Common Stock following the Reverse Stock Split will be 483104402.
The company’s board approved the Reverse Stock Split. The material effects of the Reverse Stock Split are:
Every 21 shares of the issued and outstanding Common Stock has been combined into one (1) share of Common Stock.
The number of outstanding shares of Common Stock has been proportionally reduced from 58,661,090 shares to approximately 2,793,386 shares.
The Reverse Stock Split will not reduce the total number of Kaival Brands’ authorized shares of Common Stock.
The ownership percentage of each Kaival Brands stockholder will remain unchanged, other than as a result of fractional shares. No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. Stockholders that would hold a fractional share of Common Stock as a result of the Reverse Stock Split will have such fractional shares of Common Stock rounded up to the nearest whole share of Common Stock.
The number of shares of Common Stock available for issuance under the Company’s equity incentive plans and the Common Stock issuable pursuant to outstanding equity awards and common stock purchase warrants immediately prior to the Reverse Stock Split will be proportionately adjusted by the ratio of the Reverse Stock Split. The exercise prices of such outstanding options and warrants will also be adjusted in accordance with their respective terms.
“Among other considerations, the Reverse Stock Split is intended to assist in bringing Kaival Brands into compliance with the $1.00 minimum bid price requirement for maintaining the listing of its Common Stock on the Nasdaq Capital Market, and to make the prevailing prices of the Common Stock more attractive to a broader group of institutional investors,” the company wrote in a press release.
Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to such broker’s particular processes. Such stockholders will not be required to take any action in connection with the Reverse Stock Split.
KT&G is implementing early cash payments of settlement amounts to small and medium-sized partner companies to alleviate their burdens and strengthen cooperative management ahead of the Lunar New Year.
Among the partner companies that supply raw materials, components and consumables, KT&G is expediting the payment of a total of KRW664 billion to 41 companies more than a month earlier than the regular payment date.
To ease the financial burden on small and medium-sized partner companies, which face increased capital demands before major holidays such as Lunar New Year and Chuseok each year, KT&G has been executing early payments of settlement amounts. Last Chuseok, they made advance payments totaling KRW917 billion ($497.5 million) to support the liquidity of partner companies.
Furthermore, KT&G is actively participating in the “Settlement Amount Linked Company” program, which reflects the increase in raw material prices in supplier payments, reducing the burden on small and medium-sized partner companies. This initiative aims to establish a cooperative trading culture and lead the way in the development of a fair market economy.
In addition to these efforts, KT&G is operating various support systems for mutual growth, such as monthly full cash payments of settlement amounts to alleviate financial difficulties for partner companies.
“Amidst ongoing global inflation and interest rate hikes, we decided to expedite the payment of settlement amounts to partner companies facing high capital demand ahead of the Lunar New Year,” said a KT&G representative in a statement. “We will continue to explore various support measures to realize the values of mutual growth with partners and enhance sustainability across the entire value chain.”
Philip Morris Global Chief Communications Officer Moira Gilchrist has clarified in a video presentation PMI’s marketing practices and facts relating to Zyn nicotine pouches, which recently came under fire by Senate Majority Leader Chuck Schumer.
Schumer asked the U.S. Food and Drug Administration and the Federal Trade Commission to take action on PMI’s marketing practices and the health effects of Zyn, calling the product the next “trend in addiction for teens.”
22nd Century Group has entered into a binding letter of agreement to eliminate an additional $2.3 million in outstanding debt with JGB Capital.
