22nd Century Group, Inc. (XXII), announced that it has entered into an agreement with institutional investors to receive approximately $54 million in gross proceeds in a registered direct offering through the sale of 20.57 million shares of common stock at a price of $2.625 per share. According to the statement, “This no-warrant financing will be the largest capital raise – at the highest price per share – in the history of 22nd Century and will raise the Company’s cash balance to well over $60 million – enough to meet all regular operating expenses for more than five years.”
“We are very pleased to announce that, as a result of this no-warrant financing, 22nd Century will have more than 5 years of operating cash on hand,” explained Henry Sicignano, III, President, and CEO of 22nd Century Group. “More than $50 million in net proceeds will significantly improve our balance sheet and, therefore, our negotiating position in discussions with potential licensing and strategic partners.”
The proceeds will be used for general corporate purposes, including working capital, as the Company begins licensing and strategic partnership discussions with major tobacco companies. The offering is expected to close on or about October 10, 2017, subject to customary closing conditions.
22nd Century is a plant biotechnology company focused on genetic engineering and plant breeding which allows the increase or decrease of the level of nicotine in tobacco plants and the level of cannabinoids in cannabis plants. The company’s primary mission in tobacco is to reduce the harm caused by smoking and with regards to its focus on cannabis, the company plans to develop proprietary hemp/cannabis strains for important new medicines and agricultural crops.
The stock has jumped 115% over the past year and is one of the few cannabis companies that trades on the New York Stock Exchange. Among the products the company has developed are X-22, a smoking cessation aid consisting of very low nicotine (VLN) cigarettes; RED SUN and MAGIC cigarettes; SPECTRUM research cigarettes for the National Institute on Drug Abuse (NIDA); plant varieties of hemp/cannabis, such as plants with low to no amounts of delta-9-tetrahydrocannabinol (THC), plants with high levels of cannabidiol (CBD), and other non-THC cannabinoids.