22nd Century (NASDAQ:) Group, Inc. (NASDAQ:XXII), a manufacturer in the cigarettes industry with a market capitalization of just $1.48 million, has announced a significant corporate restructuring in the form of a 1-for-135 reverse stock split. According to InvestingPro data, the company has faced severe challenges, with its stock price plummeting nearly 99% over the past year.
This strategic move comes as a response to the company’s non-compliance with Nasdaq’s minimum bid price requirement, which resulted in a delisting notice from the exchange.
InvestingPro analysis reveals concerning fundamentals, with the company’s Financial Health Score rated as WEAK and significant cash burn issues. InvestingPro subscribers have access to 15+ additional key insights about the company’s financial situation.
On Monday, the company received a letter from Nasdaq indicating that the bid price for its common stock had fallen below the $1.00 minimum threshold for 30 consecutive business days. Additionally, the stock’s closing bid price was at or below $0.10 for 10 consecutive trading days, invoking the Nasdaq’s Low Priced Stocks Rule. Consequently, Nasdaq has decided to delist the company’s securities, despite the initial grace period provided to rectify the bid price deficiency.
In an effort to counteract this delisting, 22nd Century Group has implemented a reverse stock split, effective today, with the hopes of increasing the trading price of its common stock and thereby addressing the listing deficiencies. The reverse split reduces the number of outstanding shares, with the aim of proportionally increasing the share price.
The company’s stockholders had previously granted approval for the reverse stock split, and the Board of Directors determined the exact split ratio. The reverse stock split does not change the number of authorized shares or affect the company’s preferred stock.
As a result of the reverse stock split, the company’s outstanding common stock has been significantly reduced. However, the company’s percentage ownership and voting power remain virtually unchanged, except for minor adjustments due to the rounding of fractional shares into whole shares.
The reverse stock split has been effected by filing a Certificate of Change with the Secretary of State of Nevada, and the stock will continue trading on Nasdaq under the ticker symbol “XXII” with a new CUSIP number. Stockholders holding shares electronically will see the change reflected in their accounts, while those holding paper certificates can exchange them for new certificates representing the post-split share count.
22nd Century Group plans to appeal Nasdaq’s delisting decision, with the outcome pending a hearing. There is no guarantee that the appeal will be successful or that the company will be able to regain or maintain compliance with Nasdaq’s listing requirements.
This news is based on a recent SEC filing by the company.
In other recent news, 22nd Century Group, a cigarette manufacturing company, has seen a series of significant developments. The company received shareholder approval for a reverse stock split, a strategic move aimed at maintaining its listing status on the Nasdaq Capital Market.
Additionally, 22nd Century Group has successfully met the NASDAQ Capital Market’s minimum shareholders’ equity requirement, a feat achieved through the issuance of common stock and additional shares.
The company has also altered the terms of a previous agreement with investment entities Partners, LP, JGB Capital, LP, and JGB Capital Offshore Ltd., allowing for a reset of the conversion price of the debentures. This move, however, is contingent upon shareholder approval.
In terms of business expansion, 22nd Century Group has entered into new agreements to increase its manufacturing volumes by producing filtered cigar products and introducing its Moonlight brand cigarettes to the Southeast Asian market. Furthermore, the company plans to extend the distribution of its VLN® cigarettes, which contain 95% less nicotine than standard cigarettes, to over 270,000 retail outlets nationwide.
From a financial perspective, the company secured approximately $3.48 million in an equity sale involving 6.1 million shares of common stock. These are the latest developments in the company’s operations, as reported by various investment and financial sources.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
