MOCKSVILLE, North Carolina - 22nd Century (NASDAQ:XXII) Group, Inc. (NASDAQ: XXII), a company specializing in tobacco products with a focus on nicotine reduction, announced today that it has regained compliance with the Nasdaq's minimum stockholders' equity requirement. The company has successfully improved its financial position through new equity offerings and reduced its liabilities and debt, resulting in meeting the Nasdaq's equity minimum of $2.5 million.
The company's CEO, Larry Firestone, stated, "Over the past two quarters, we have made significant strides in improving our balance sheet and expanding our business. We have raised $11.6 million of equity proceeds and de-levered our balance sheet, among other activities, to reach the equity minimum."
22nd Century Group is known for its VLN® cigarette, which contains 95% less nicotine than traditional cigarettes. This product is the only combustible cigarette to have received a Modified Risk Tobacco Product designation from the FDA, marketed with the claim "Helps You Smoke Less®." The company's mission is to offer smokers options to control their nicotine intake and to eventually sell the last cigarette before the 22nd Century.
The company's facilities in Mocksville have the capacity to produce over 45 million cartons of combustible tobacco products annually. Its patented technologies enable the production of tobacco with significantly reduced nicotine levels while maintaining flavor and yield.
The company's forward-looking statements in the press release, which include expectations about regulatory compliance and financial performance, are subject to risks and uncertainties as detailed in their filings with the SEC. These statements are not guarantees of future performance and are based on current expectations.
This news is based on a press release statement from 22nd Century Group, Inc.
In other recent news, 22nd Century Group has made notable strides in its operations and financial maneuvers. The company successfully met the NASDAQ Capital Market's minimum shareholders' equity requirement, thus ensuring its continued listing on the exchange. This was achieved through a series of actions including issuing shares of common stock to settle subordinated debt and the sale of additional shares.
In terms of business expansion, 22nd Century Group has secured agreements to increase its manufacturing volumes by producing filtered cigar products for an existing customer and to introduce its Moonlight brand cigarettes to the Southeast Asian market.
Financially, the company secured approximately $3.48 million in an equity sale involving 6.1 million shares of common stock. Additionally, it issued 12.2 million warrants, each exercisable into one share of common stock at a price of $1.00.
The company also announced plans to extend the distribution of its VLN® cigarettes, which contain 95% less nicotine than standard cigarettes. The aim is to increase its footprint to over 270,000 retail outlets nationwide and to amplify its global presence. These are recent developments in the company's operations.
InvestingPro Insights
While 22nd Century Group has made progress in regaining Nasdaq compliance, recent financial data from InvestingPro paints a challenging picture for the company. The company's market capitalization stands at a modest $4.98 million, reflecting its current struggles in the market.
InvestingPro Tips highlight some concerning trends. The company is operating with a significant debt burden and may have trouble making interest payments on its debt. This aligns with the company's recent efforts to improve its balance sheet, as mentioned in the article. Additionally, the company is quickly burning through cash, which could pose challenges for its future operations and growth plans.
On a more positive note, analysts anticipate sales growth in the current year, which could potentially support the company's turnaround efforts. However, it's important to note that analysts do not expect the company to be profitable this year.
The stock's recent performance has been particularly weak, with InvestingPro data showing a 71.76% decline over the past three months and a staggering 98.33% drop over the past year. This poor performance is reflected in the stock price, which closed at $0.19 in the most recent session.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for 22nd Century Group, providing a deeper understanding of the company's financial health and market position.
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