Business
22nd Century Group's Senior Lender Approves Sale of Hemp/Cannabis Franchise on Improved Terms
Sale and Related Actions Ultimately Expected to Reduce Debt Principal by $5.2 Million Buffalo, New York--(Newsfile Corp. - December 14, 2023) - 22nd Century
About this update from 22nd Century Group, Inc
[{"type":"text","content":"Sale and Related Actions Ultimately Expected to Reduce Debt Principal by $5.2 Million\nBuffalo, New York--(Newsfile Corp. - December 14, 2023) - 22nd Century Group, Inc. (NASDAQ: XXII) (the \"Company\" or \"22nd Century\"), a biotechnology company focused on utilizing advanced plant technologies to improve health and wellness, today announced it has secured the consent of its senior lender under the terms of its Senior Secured Credit Facility for the previously announced sale of its GVB Biopharma (\"GVB\") hemp/cannabis operations to Specialty Acquisition Corporation, a Nevada corporation (the \"Buyer\"), an entity affiliated with current GVB employees.\nThe updated transaction terms include a cash payment of $1.1 million from the Buyer at closing of the sale (the \"Closing\") and a secured promissory note for $2.0 million issued by the Buyer to the Company's senior lender to be paid by the end of June 2024. Additionally, 22nd Century will pay $1.1 million of cash-on-hand toward additional debt reduction and assign a non-strategic hemp/cannabis asset in Colorado to the senior lender as a non-monetary transaction resulting in debt reduction of $1.0 million. After the Buyer has paid the note in full, the transaction would result in a cumulative reduction of $5.2 million in outstanding principal, with the remaining outstanding principal expected to be approximately $8.8 million.\n\"We are pleased to announce further debt reduction as part of the lender consent process, representing substantial progress toward our goal of extinguishing the remaining principal balance of our Senior Secured Credit Facility by the end of the third quarter 2024,\" stated Larry Firestone, Chairman and Chief Executive Officer of 22nd Century. \"We also believe the divestiture of our GVB hemp/cannabis franchise and corporate-wide cost cutting initiatives will substantially reduce the operating costs of our business. We are fully focused on creating value for our shareholders by operating our tobacco assets, including our VLN® reduced nicotine content products authorized by the FDA for harm reduction, in a sustainable, cash positive manner.\"\nAs previously announced, insurance proceeds expected to be received in connection with the fire at the Company's Grass Valley manufacturing facility will be used to further reduce the debt. At present, damages being s...