Business
22nd Century Group (XXII) Secures $21 Million Debt Financing to Expand Working Capital for Growth Initiatives
Supports Accelerated Expansion of VLN Multi-State Retail Channels, GVB Global Ingredients and CDMO Business BUFFALO, N.Y., March 03, 2023 (GLOBE NEWSWIRE) --
About this update from 22nd Century Group, Inc
[{"type":"text","content":"Supports Accelerated Expansion of VLN Multi-State Retail Channels, GVB Global Ingredients and CDMO Business\nBUFFALO, N.Y., March 03, 2023 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), the world’s leading biotechnology company dedicated to improving health with reduced nicotine tobacco and advanced plant technologies in both hemp/cannabis and hops, today announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN® and GVB business lines. The new three-year financing was issued at 5% original issuance discount (OID), will bear cash interest at a rate of 7% per annum, and commence principal amortization in the second year at a rate of 2% of the original balance per month. The Company has the option to redeem the facility early starting in the second year. “We anticipate significant revenue growth in both of our core business lines, and believe this financing will provide the appropriate working capital for the year ahead,” said Hugh Kinsman, chief financial officer. “New retail partners already in talks to launch VLN® in additional states as part of our national-scale distribution capabilities are expected to increase our manufacturing and inventory requirements. Additionally, the continued growth in customer demand at GVB has increased our capital needs for bulk ingredients and inventory going forward.” For its VLN® products, the Company recently announced the first of multiple national-scale distribution partners that will begin forward stocking of VLN® inventory at warehouses located across the country. These new distribution partners support several multi-state retail chains seeking to launch sales of 22nd Century’s reduced nicotine content cigarette products. The company is on track to launch VLN® in up to 18 states by the end of 2023 with an expanded list of retail partners. Said John Miller, president of tobacco products at 22nd Century Group, “Our VLN® launch has continued to evolve and expand well beyond our initial plan based on the strong consumer and industry response to our unique VLN® reduced nicotine content cigarettes. The addition of national-level distribution partners was driven by a strategic pivot to collaborate with several retail chains seeking to launch our VLN® brand on a multi-state basis...