22nd Century Group (XXII) Reduces Debt by $8.1 Million

37% Reduction Through the Transfer of Non-Core and Previously Restricted Assets

BUFFALO, N.Y., Oct. 25, 2023 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a leading biotechnology company focused on utilizing advanced plant technologies to improve health and wellness with reduced nicotine tobacco, hemp/cannabis and hops, announced that it has reduced the outstanding principle of its Senior Secured Credit Facility from approximately $22.1 million to approximately $14.0 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 non-monetary exchange, the assigned value of the promissory note was allocated as $600,000 to further principal reduction and $2.0 million to a reduction in the put price associated with the lenders outstanding warrants, which portion was subsequently cancelled.

The remaining principal loan balance of $14.0 million and 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.

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.

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 Contact
Matt Kreps
Investor Relations
22nd Century Group