Notes sold for $1.7 million; investors receive 120% warrant coverage
By Devika Patel
Knoxville, Tenn., Dec. 16 - 22nd Century Group, Inc. sold about $1.9 million of convertible promissory notes for roughly $1.7 million in a private placement on Dec. 14, according to an 8-K filed Friday with the Securities and Exchange Commission. The notes were sold with an original issue discount of about 15%.
The convertible promissory notes mature on Dec. 14, 2012, and the company may force conversion under some circumstances. The notes are convertible into common stock at $0.75 per share, which is a 16.67% discount to the Dec. 13 closing share price of $0.90.
Investors also received 120% warrant coverage. The warrants are each exercisable at $1.50 for five years. The strike price is a 66.67% premium to the Dec. 13 closing share price.
22nd Century is a Williamsville, N.Y., plant biotechnology company. Its proprietary technology allows for the level of nicotine and other nicotinic alkaloids in the tobacco plant to be decreased or increased through genetic engineering and breeding.
| Issuer: | 22nd Century Group, Inc.
|
| Issue: | Convertible promissory notes
|
| Amount: | $1.9 million (approximate)
|
| Maturity: | Dec. 14, 2012
|
| Price: | $1.7 million (approximate), a 15% discount
|
| Conversion price: | $0.75
|
| Call: | Yes
|
| Warrants: | 120% coverage
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $1.50
|
| Settlement date: | Nov. 1
|
| Stock symbol: | Pink Sheets: XXII
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| Stock price: | $0.90 at close Nov. 1
|
| Market capitalization: | $23.72 million
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