22nd Century Group, Inc. (Nasdaq: XXII), a leading
biotechnology company dedicated to improving health with reduced
nicotine tobacco, hemp/cannabis and hops advanced plant
technologies, announced today that John Miller, who leads the
tobacco business unit, has been appointed as interim Chief
Executive Officer. James A. Mish, who has served as CEO since June
2020, will continue to serve as a member of the Board of Directors.
The Company has secured an additional $11.7 million in gross
proceeds from a registered direct financing and announced the
commencement of an estimated $15 million annualized cost reduction
initiative. Last, 22nd Century appointed Wall Street veteran Andrew
(“Andy”) Arno to its Board of Directors as an independent director.
“I have enjoyed advancing the key initiatives of
22nd Century, building an accomplished team of dedicated
individuals taking this Company from an R&D organization
focused on plant science, to a fully commercial consumer products
business,” Mish. “I am particularly proud of the work we have done
to date on tobacco harm reduction while simultaneously building a
competitive array of products that serve our hemp/cannabis
customers. As a result, we are at an opportune juncture to enhance
John Miller’s leadership role to take our VLN business to the next
level.”
“I look forward to continuing to advance our
mission of innovative plant technologies tied to tobacco harm
reduction and new consumer focused health and wellness products,”
said Miller. “VLN® represents the most unique and innovative
approach to harm reduction in years, providing adult smokers with a
truly unique, clinically studied solution to reducing their smoking
habit. Likewise, our work in the hemp/cannabis business is bringing
forward new products sought by consumers while applying the
consistent standards, reliable manufacturing processes and national
distribution support needed for brands to effectively scale in
these growing end markets.”
“On behalf of the entire Board of Directors, I
want to thank Jim for his numerous accomplishments and dedicated
service during his tenure as CEO, leading us through our FDA
authorization, GVB acquisition and the first 18 months of our
commercial transformation. Remaining as a member of the board will
allow him to continue lending his guidance and significant
expertise in the hemp/cannabis business,” said Nora Sullivan, Chair
of the Board.
Expands Board with Addition of Andy
Arno
The Company is also pleased to announce the
addition of capital markets veteran Andy Arno to its Board of
Directors. Mr. Arno has 35+ years of experience handling a wide
range of corporate and financial matters, including work as an
investment banker, strategic advisor and board member to emerging
growth companies.
“We are excited to have Andy join our board,
bringing decades of strategic and capital markets experience,” said
Sullivan. “Andy’s experience in strategically aligning public
companies to maximize the value is highly relevant as we continue
to advance through our transition to a fully commercial enterprise
selling products into high growth end markets. Andy has been an
investor, investment banker and advisor to the Company for almost a
decade and brings a unique viewpoint informed by his experience on
the operating side of public companies. His contributions will be a
welcome addition in our boardroom.”
Mr. Arno previously served, until February 2023,
as Vice Chairman of The Special Equities Group, a division of
Dawson James Securities, Inc., plus other senior roles at
investment banking firms. Prior, Mr. Arno served as Vice Chairman
and Chief Marketing Officer of Unterberg Capital, LLC, an
investment advisory firm that he co-founded, and as Vice Chairman
and Head of Equity Capital Markets of Merriman Capital LLC, where
he also served on the board of the parent company, Merriman
Holdings, Inc. Mr. Arno was responsible for Capital Markets for
C.E. Unterberg, Towbin, a Vice President at Lehman Brothers and in
the Individual Investors Services Division of L.F. Rothschild
Unterberg, Towbin in portfolio management for high-net-worth
individuals.
Mr. Arno is currently the Chairman of the Board
of Oncocyte Corporation and also serves on the boards of directors
of Smith Micro Software, Inc., Independa Inc., and Comhear Inc. Mr.
Arno previously served as a director of Asterias Biotherapeutics,
Inc. from August 2014 until it was acquired by Lineage Cell
Therapeutics, Inc. in March 2019. Mr. Arno received a BS degree
from George Washington University.
Strengthens Balance Sheet, Reduces
Operating Expenses
22nd Century entered into definitive agreements
with certain investors on July 19 for the purchase and sale of
common stock and warrants in a registered direct offering priced
above market under Nasdaq rules on such date. The transaction
closed on July 21. Gross proceeds to the Company from the
registered direct offering were $11.7 million, before deducting the
placement agent’s fees and other offering expenses payable by the
Company. The Company intends to use the net proceeds from this
offering for accelerating the consumer use data for VLN® among
adult smokers, accretive structural changes to streamline
operations and for general corporate purposes.
The Company has implemented a cost savings
initiative intended to simplify operations as it continues to
tighten its focus on key end markets and operating strategies
resulting in an estimated $15 million in annualized cost reductions
across its operations once fully in place.
The Special Equities Group, a division of Dawson
James Securities Inc., acted as the sole placement agent for the
above disclosed registered direct transaction.
As part of the transaction, the Company agreed
to issue to the investors 4.37 million shares of common stock at
$2.67 and warrants to purchase up to 8.75 million shares of common
stock at an exercise price of $2.42 per share and are immediately
exercisable.
The securities are being offered by the Company
pursuant to a “shelf” registration statement on Form S-3
previously filed with the Securities and Exchange Commission, or
the SEC, and declared effective by the SEC. The offering will be
made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration statement.
A final prospectus supplement and accompanying prospectus relating
to the securities being offered will be filed with the SEC. Copies
of the final prospectus supplement and accompanying base prospectus
may be obtained, when available, for free by visiting EDGAR on the
SEC’s website at www.sec.gov. Alternatively, you may contact
investorrelations@xxiicentury.com for a copy of these documents or
contact our principal executive offices at 500 Seneca Street, Suite
507, Buffalo, New York 14204, c/o Corporate Secretary, (716)
270-1523.
This press release shall not constitute an offer
to sell or the solicitation of any offer to buy the securities
discussed herein, nor shall there be any offer, solicitation, or
sale of the securities in any state in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About 22nd Century Group,
Inc.
22nd Century Group, Inc. (Nasdaq: XXII) is
a leading agricultural biotechnology company focused on tobacco
harm reduction, reduced nicotine tobacco and improving health and
wellness through plant science. With dozens of patents allowing it
to control nicotine biosynthesis in the tobacco plant, the Company
has developed proprietary reduced nicotine content (RNC) tobacco
plants and cigarettes, which have become the cornerstone of
the FDA’s Comprehensive Plan to address the widespread
death and disease caused by smoking. The Company received the first
and only FDA Modified Risk Tobacco Product (MRTP) authorization for
a combustible cigarette in December 2021. In tobacco, hemp/cannabis
and hop plants, 22nd Century uses modern plant breeding
technologies, including genetic engineering, gene-editing, and
molecular breeding to deliver solutions for the life science and
consumer products industries by creating new, proprietary plants
with optimized alkaloid and flavonoid profiles as well as improved
yields and valuable agronomic traits.
Learn more at xxiicentury.com, on Twitter,
on LinkedIn, and on YouTube.
Learn more about
VLN® at tryvln.com.
Cautionary Note Regarding Forward-Looking
Statements
Except for historical information, all of the
statements, expectations, and assumptions contained in this press
release are forward-looking statements. Forward-looking statements
typically contain terms such as “anticipate,” “believe,”
“consider,” “continue,” “could,” “estimate,” “expect,” “explore,”
“foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,”
“potential,” “predict,” “preliminary,” “probable,” “project,”
“promising,” “seek,” “should,” “will,” “would,” and similar
expressions. Actual results might differ materially from those
explicit or implicit in forward-looking statements. Important
factors that could cause actual results to differ materially are
set forth in “Risk Factors” in the Company’s Annual Report on Form
10-K filed on March 9, 2023. All information provided in this
release is as of the date hereof, and the Company assumes no
obligation to and does not intend to update these forward-looking
statements, except as required by law.
Investor Relations & Media ContactsMatt
Kreps Investor Relations22nd Century Group, Inc.
mkreps@xxiicentury.com214-597-8200
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