22nd Century Group, Inc. XXII announced that John Miller, who leads the tobacco business unit, has been appointed as interim CEO. 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.
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.
Price Action
22nd Century Group shares were trading 40.0% lower at $2.91 per share at the time of writing Monday morning.
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22nd Century To Secure $3M Via Registered Direct Offering Priced Above Market
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