Tag: 22nd Century Group

  • Firestone to Lead 22nd Century Group

    Firestone to Lead 22nd Century Group

    Photo: Gajus

    22nd Century Group has appointed Lawrence Firestone as its chairman and CEO.

    Firestone brings over 40 years of enterprise, operations and financial management experience in both public and private companies, including tenures as CEO, chief financial officer and chief operating officer across multiple industry sectors. He most recently served as chief financial officer of Oakland Manager, a privately held purveyor of cannabis with both retail and wholesale market penetration, and as chairman of FirePower Technology, a privately held manufacturer of ATX power supplies for the IT and instrumentation markets.

    “Larry is a seasoned executive known for his ‘hands-on’ leadership style emphasizing teamwork, business alignment, continuous improvement, cost control and process optimization. His track record of success with fast growing public companies will serve 22nd Century well as it continues to execute the strategic business plan and work to drive shareholder value,” said Nora Sullivan, former chair of the board, in a statement.

    “I am excited to lead 22nd Century Group as we refocus our current strategic plans built around innovative plant technologies for tobacco harm reduction and new consumer focused health and wellness products,” said Firestone.

    “The team at 22nd Century has created one of the industry’s most innovative integrated tobacco platforms, from plant genetics to fully commercialized disruptive consumer products. I am confident we can build upon the success the company has had to date while developing strategies that can enhance value for shareholders.”

  • 22nd Century Sells Cannabis Operations

    22nd Century Sells Cannabis Operations

    22nd Century Group will sell most of its GVB Biopharma hemp/cannabis operations to Specialty Acquisition Corp., an entity affiliated with GVB employees.

    Terms of the transaction include a cash payment to the company of $1 million at closing of the sale and a 12 percent secured promissory note for $1.25 million issued by the buyer. The company plans to use the proceeds from the sale to further deleverage its balance sheet.

    22nd Century is also entitled to retain any insurance proceeds received in connection with the fire at the company’s Grass Valley manufacturing facility, a portion of which will be used to offset the buyer’s portion of the shared liabilities.

    The sale is expected to close in early December 2023, subject to customary closing conditions, including approval by 22nd Century’s board of directors.

    “The sale of our hemp/cannabis franchise will immediately and materially further reduce the cash and operating demands within our business,” said John Miller, interim CEO of 22nd Century, in a statement.

    “We expect this transaction will substantially lower 22nd Century’s operating expenses beyond the previously announced $15 million in cost savings initiatives on an annual basis. Additionally, we will retain rights to the insurance proceeds, subject to certain offsets, effectively recouping cash that was invested into the continuity of the hemp/cannabis business.

  • 22nd Century Continues VLN Expansion

    22nd Century Continues VLN Expansion

    Photo: 22nd Century Group

    22nd Century Group has expanded its VLN retail presence with more than 500 additional locations across 11 U.S. states.

    With these latest additions, 22nd Century Group’s FDA-authorized VLN reduced nicotine content cigarettes can now be found at more than 5,100 store locations spanning 23 states, including the addition of Washington, Oregon, Kentucky and Louisiana.

    “The addition of over 500 new VLN sales locations has propelled us beyond the noteworthy milestone of 5,100 stores. Our VLN sales presence now extends to 23 states, making VLN available in many of the top markets where smokers reside,” said 22nd Century Group interim CEO John Miller in a statement.

    “VLN is purposefully crafted to offer adult smokers a clinically documented tool to gradually reduce their smoking frequency and mitigate the associated health risks over time. We are pleased that an increasing number of adult smokers now have access to this important product if they are seeking new ways to reduce their smoking habit,” said Miller.

  • Revenues Down, Loss Up for 22nd Century

    Revenues Down, Loss Up for 22nd Century

    Image: Tobacco Reporter archive

    22nd Century Group reported net revenues of $17.81 million in the three months that ended Sept. 30, 2023, down from $19.38 million in the comparable 2022 quarter. Net loss was $72.72 million against a net loss of $13.1 million in the third quarter of 2022.

    “In the third quarter, our VLN footprint expanded from approximately 1,100 stores in 14 states as of June 30, 2023, to over 4,550 stores spanning 19 states. This includes the recent expansion of more than 400 stores in Florida with a leading national convenience store chain that has prior experience in VLN sales across other states,” said 22nd Century Group CEO John Miller in a statement.

    “We also initiated sales in our first nationwide drug store chain, thereby conducting sales trials in five states and diversifying the range of channels through which our products are accessible. However, our dynamic store count growth did not translate into immediate revenue. Sales of VLN were modest in the quarter as the brand is still largely unknown to our target market, and our marketing capabilities are limited given our current financial condition.”

    On Sept. 5, 2023, the company announced its intent to explore strategic alternatives in an effort to maximize shareholder value. While the initial focus was primarily on 22nd Century’s tobacco portfolio, the company subsequently received indications of interest regarding its other assets in addition to tobacco.

    In October, the company reduced the outstanding principal of its senior secured credit facility from approximately $22.1 million to approximately $14 million.

  • 22nd Century Group Reduces Debt

    22nd Century Group Reduces Debt

    Photo: mrmohock

    22nd Century Group has reduced the outstanding principal of its senior secured credit facility from approximately $22.1 million to approximately $14 million as part of an amendment and waiver process with its lenders.

    The reduction reflects a waiver and repayment of the $7.5 million minimum cash balance required under terms of the original debenture agreements, which was held in an escrow account. The company also assigned an existing promissory note pertaining to the company’s previous holdings in Panacea Life Science Holdings as additional consideration in the debt reduction transaction.

    In a nonmonetary exchange, the assigned value of the promissory note was allocated as $600,000 to further principal reduction and $2 million to a reduction in the put price associated with the lender’s outstanding warrants, which portion was subsequently cancelled.

    The remaining principal loan balance of $14 million and the remaining $500,000 of the put price will be due at maturity in 2026 in accordance with the original terms of the debenture agreements. The company was not required to pay any cash to the lenders in connection with this transaction.

    “We continue to actively manage our balance sheet, with a focus on executing our cost reduction initiatives. The reduction in principal amounts owed under the senior secured credit facility as a result of the amendment and waiver will provide for annual cash interest savings of approximately $0.5 million per year,” said Hugh Kinsman, chief financial officer of 22nd Century Group, in a statement.

    Subsequent to the debt reduction, the company announced the consummation of a public offering with $5.25 million in gross proceeds, which will be used for general operating purposes.

  • 22nd Century Launches Public Offering

    22nd Century Launches Public Offering

    22nd Century Group is offering 10 million shares of its common stock and warrants to purchase up to 20 million shares of common stock at a combined public offering price of $0.525 per share and accompanying warrants.

    The warrants have an exercise price of $0.525 per share, are immediately exercisable and will expire five years following the date of issuance. The offering is expected to close on or about Oct. 19, 2023, subject to the satisfaction of customary closing conditions.

    In an announcement, 22nd Century Group said it expects the offering to generate approximately $5.25 million before deducting placement agent’s fees and other offering expenses. The company expects to use the net proceeds of the offering for general corporate purposes.

  • 22nd Century Increases VLN Availability

    22nd Century Increases VLN Availability

    22nd Century Group’s VLN reduced-nicotine content cigarettes are now available at more than 1,200 drug store locations across Texas, Florida, Illinois, North Carolina and Georgia. With this most recent addition, VLN is available in more than 4,000 stores across 16 states compared with approximately 1,100 stores on July 1.

    “We are excited to launch the first drug store chain selling our FDA [Food and Drug Administration]-authorized VLN tobacco harm reduction products, adding 1,200 stores across five key state markets to our growing roster of convenience store points of sale,” said John Miller, interim CEO of 22nd Century Group, in a statement. “VLN offers a new, clinically researched solution helping adult smokers reduce their smoking rate and the associated harms of smoking over time.”

    “VLN users continue to report an overwhelmingly positive experience in our market research, and most say it has helped them reduce consumption of their regular cigarette brand,” said Miller. “Research with VLN users indicates that while most nonprescription methods of quitting or reducing smoking are strongly disliked, more than 75 percent of VLN users say they like their experience with the product. As a result of using VLN, 80 percent of adult consumers report a reduction in usage of their regular brand, and many want to share their positive experience with other adult smokers.”

    VLN is the first and only FDA-authorized combustible cigarette labeled as a tobacco harm reduction product.

  • 22nd Century Reports Second Quarter Results

    22nd Century Reports Second Quarter Results

    Photo: chechotkin

    22nd Century Group’ second quarter 2023 net revenues increased 62 percent to $23.4 million. Revenue from tobacco-related products was $8.1 million, reflecting the company’s transition away from low margin filtered cigar products to focus production and capacity on higher margin products, such as VLN and Pinnacle. Revenue from hemp/cannabis-related products was $15.4 million, as volumes continued to increase on share gains.

    Gross profit for the second quarter of 2023 was minus $2.3 million as compared to $0.9 million in the prior year period. Gross profit from tobacco-related products was minus $1 million, reflecting a lower margin product mix.

    Gross profit from hemp/cannabis-related products was minus $1.4 million, reflecting the final quarter of primarily ingredient trading activity due to a November 2022 plant fire. 22nd Century says it is restarting production of its ingredients at new facilities.

    Our focus remains transformation from a primary emphasis on R&D to a fully commercial enterprise providing innovative harm reduction and consumer health and wellness products.

    John Miller, interim CEO, 22nd Century

    “Our focus in 2023 remains 22nd Century’s transformation from a primary emphasis on research and development to a fully commercial enterprise providing innovative harm reduction and consumer health and wellness products to key end markets,” said interim CEO John Miller in a statement.”

    “We have now significantly advanced our commercialization plan for VLN sales across targeted states, 14 of which are now in place and two more states scheduled in September with a new drug store customer, a diversified hemp/cannabis ingredients and distribution business and a robust license and distribution business in both tobacco and hemp/cannabis.

    “Following an initial delay in our commercial plans earlier this year, which are common on retail launches, we have now substantially expanded the availability of our FDA-authorized, reduced nicotine- content cigarettes VLN—a tobacco harm reduction product unlike any other.

    “We are also implementing programs intended to reduce our operating costs by at least $15 million on an annualized basis.”

  • VLN Launched in California

    VLN Launched in California

    Image: Tobacco Reporter archive

    22nd Century Group launched VLN King cigarettes in the California market. Starting July 17, VLN cigarettes will be available in California at more than 275 sites of the No. 1 convenience store in the U.S. in addition to numerous other convenience stores across California.

    “We see our VLN product offering Californians who smoke a tremendous new option because VLN cigarettes are specifically designed to help smokers smoke less, increase their number of smoke-free days and reduce their nicotine exposure and dependence,” said John Miller, 22nd Century Group president of the tobacco division, in a statement. “Our goal with VLN is to meet California consumers where they are with a combustible product that helps people smoke less.”

  • Investors Buy 22nd Shares ‘Above Market’

    Investors Buy 22nd Shares ‘Above Market’

    Image: Tobacco Reporter archive

    22nd Century Group has entered into definitive agreements with certain investors for the purchase and sale of 778,634 shares of common stock and warrants at a price of $3.80 per share in a registered direct offering priced above market.

    The company expects the offering to generate gross proceeds of $3 million before deducting the placement agent’s fees and other offering expenses payable by the company. 22nd Century intends to use the net proceeds from this offering for the continued commercial expansion of its VLN reduced-nicotine content tobacco cigarettes in additional markets, working capital related to its commercial activities and general corporate purposes.

    “We are encouraged by the confidence investors have demonstrated in our path forward through the participation in our latest offering of securities, which corresponds with the inflection point we are experiencing in critical aspects of the business,” said CEO James A. Mish in a statement. “In turn, we are pleased to have strengthened our capital position, deliver[ed] continued operational momentum and taken successful steps toward regaining compliance with Nasdaq listing standards.”

    The Special Equities Group, a division of Dawson James Securities, acted as the sole placement agent for this transaction.

    As part of the transaction, the company agreed to issue to the investors warrants to purchase up to 1,557,268 shares of common stock. The warrants have an exercise price of $3.80 per share and are exercisable six months from the date of issuance. The closing of the offering is expected to occur on or about July 10, 2023, subject to the satisfaction of customary closing conditions.