MOCKSVILLE, NC - 22nd Century (NASDAQ:XXII) Group, Inc. (NASDAQ: XXII), a biotechnology company specializing in tobacco products, has announced a significant reduction in its secured debt. The company reported that it has paid down $1.5 million of its secured debt through a payment made by GVB on the GVB secured promissory note.
This payment is part of the terms agreed upon during GVB's acquisition of 22nd Century Group's hemp and cannabis assets in December 2023. The remaining balance of $500,000 on the note has been extended to December 31, 2024.
Larry Firestone, Chairman and CEO of 22nd Century Group, stated, "We continue to make substantial progress across our key business objectives as we work to create value for our stockholders." He further added that the company's total outstanding debt and related obligations have been reduced to $8.3 million, with $1.5 million of non-operating assets pledged, down from $15.8 million as of December 31, 2023.
According to Firestone, the rapid repayment of senior and subordinated debt has considerably lowered the company's cash and noncash interest expenses.
22nd Century Group is known for its work in tobacco harm reduction and reduced nicotine tobacco, leveraging its proprietary tobacco plant technology. The company holds numerous patents that enable it to control nicotine biosynthesis in the tobacco plant, and it has developed reduced nicotine content tobacco products.
In December 2021, it received the first and only FDA Modified Risk Tobacco Product authorization for a combustible cigarette. The company is also a participating manufacturer under the Master Settlement Agreement and is involved in contract manufacturing operations, including branded filtered cigars and conventional cigarettes.
The information provided in this article is based on a press release statement from 22nd Century Group, Inc. It is important to note that forward-looking statements made by the company are subject to various risks and uncertainties that could cause actual results to differ materially from those projected. These risks have been detailed in the company's filings with the SEC, including its Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
In other recent news, 22nd Century Group, a plant biotechnology company, has been busy with a number of significant developments. The company has been granted a 180-day extension by Nasdaq to regain compliance with a key listing rule, providing them with additional time to address an equity deficit.
In parallel, the company has been making strategic financial moves to improve its balance sheet, including reducing its outstanding debt by $2.3 million through an equity exchange with JGB Capital, and restructuring its debt with Omnia, redeeming $5.2 million in principal and interest.
In terms of leadership changes, John Miller, President of Tobacco, has tendered his resignation, leaving a notable impact on the company's successful launch and distribution of the VLN® product line. Furthermore, the company has opted to streamline its board to enhance corporate cost efficiency, resulting in the immediate resignations of Directors Nora Sullivan and James Mish.
These recent developments reflect the company's ongoing efforts to maintain compliance with Nasdaq, strengthen its financial position, and enhance operational efficiency. Notably, despite these changes, 22nd Century Group continues to focus on its core mission of leveraging plant biotechnology for health and wellness.
InvestingPro Insights
In light of 22nd Century Group's recent announcement regarding their debt reduction, real-time data and insights from InvestingPro provide a deeper look into the company's financial health and stock performance. With a market capitalization of just $5.53 million, the company operates with a significant debt burden, which is reflected in the recent efforts to pay down its secured debt.
InvestingPro data shows that the company's revenue has declined by 36.57% in the last twelve months as of Q1 2024, with a gross profit margin of -50.91%. These figures underscore the challenges 22nd Century Group faces in generating profit from its operations. Moreover, the company's stock has experienced extreme volatility, with a 1-month price total return of -49.19% and a staggering 1-year price total return of -99.33% as of the same period.
Still, there are some potential positive indicators for investors to consider. According to InvestingPro Tips, analysts anticipate sales growth in the current year for 22nd Century Group, and the company's stock is currently in oversold territory based on the Relative Strength Index (RSI), which could suggest a potential rebound.
Investors interested in further insights can find additional tips on InvestingPro, where there are 17 more InvestingPro Tips available, offering a comprehensive analysis of the company's financial and stock performance. To benefit from these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As 22nd Century Group strives to advance its key business objectives and reduce its debt, keeping an eye on these metrics and tips from InvestingPro could be valuable for investors and stakeholders looking to assess the company's outlook and investment potential.
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