Wiki source code of 22nd Century Group

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7 22nd Century Group (XXII) is a plant biotechnology company focused on (i) potentially reduced risk tobacco cigarettes and smoking cessation products produced from modifying the nicotine content in tobacco plants through genetic engineering and plant breeding, and (ii) research and development of unique cannabis/hemp plants through genetic engineering and plant breeding to alter levels of cannabinoids for new medicines and improved agricultural uses. The company has an extensive intellectual property portfolio of issued patents and patent applications relating to the tobacco and cannabis plants. Its management team is focused on monetizing its intellectual property portfolio, obtaining regulatory approval to market both its reduced exposure cigarettes and its smoking cessation product in development, and developing and commercializing high value products derived from its unique cannabis/hemp plants. Additional information about its business and operations is contained in tis Annual Report on Form 10-K for the year ended December 31, 2016.{{footnote}}https://fintel.io/doc/sec-xxii-22nd-century-group-10k-2018-march-07-17952{{/footnote}}
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9 = Strategic Objectives =
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11 The company strategic objectives include the following:
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13 * Pursuit of reduced exposure authorization from the U.S. Food and Drug Administration (“FDA”) for is BRAND A Very Low Nicotine cigarettes in development that have 95% less nicotine than conventional tobacco cigarettes, and therefore drastically reduce smokers’ exposure to nicotine. In response to the FDA’s requests, and in conjunction with additional clarifying guidance, the Company intends to bifurcate its combined Modified Risk Tobacco Product application (“MRTP application”) into a separate Premarket Tobacco Product application (“PMT application”) and a separate MRTP application for BRAND A to enjoy the benefit of the FDA’s shorter review timing for PMT applications as compared to MRTP applications;
14 * Pursuit of authorization from the FDA and regulatory agencies in other countries to introduce its X-22 smoking cessation aid in development into commerce as a prescription-based smoking cessation medical product. As a part of these efforts, The company is also working to establish a strategic joint venture to conduct a Phase III smoking cessation clinical trial for X-22;
15 * Pursuit of FDA reduced exposure authorization for its its low tar-to-nicotine BRAND B modified risk cigarette in development;
16 * Research and development of industrial hemp plants with: (i) guaranteed levels of THC below the legal limits and (ii) improved suitability for optimized growing in various regions of North America, which the Company has already commenced in Virginia with the University of Virginia (“UVA”). This alliance with UVA will also involve the development and study of medically important cannabinoids to be extracted by UVA from the Company’s unique hemp plants;
17 * Establishment of substantial multi-year sales contracts around the world for its proprietary high nicotine tobacco leaf and Very Low Nicotine tobacco leaf;
18 * Commercialization of its proprietary super-premium cigarette brands; and
19 * Expansion of its growing base of contract manufacturing business at its manufacturing facility in Mocksville, North Carolina.
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21 **For the second quarter of 2017, The company's accomplishments and notable events include:**
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23 On June 15, 2017, The company met with the Center for Tobacco Products (“CTP”) of the FDA in a guidance meeting regarding the Company’s “BRAND A” MRTP application. Based on this meeting, the company will resubmit a more expansive and robust MRTP application that will include additional scientific data and information from already completed clinical studies on its Very Low Nicotine (“VLN”) tobacco cigarettes. In response to the CTP’s clarifying guidance, The company intend to divide its combined MRTP application into a separate PMT application and a separate MRTP application for BRAND A to enjoy the benefit of the CTP/FDA’s shorter review period for PMT applications as compared to MRTP applications.
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25 On June 20, 2017, The company met with the Center for Drug Evaluation and Research (“CDER”) of the FDA in a guidance meeting regarding “X-22,” its prescription-based smoking cessation aid in development. Based on this meeting, the company will work collaboratively with CDER/FDA on an appropriate path for X-22 to become a prescription-based cessation aid for smokers in the United States. Pending FDA authorization, and finding a joint venture partner or another source of capital, it intend to conduct a Phase III clinical trial in 2018. The company also plan to seek “fast track” designation by the FDA for X-22.
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27 With prior FDA authorization, The company conducted a clinical trial studying its BRAND B, low tar-to-nicotine ratio cigarettes. This trial was designed to confirm that as smokers make the adjustment to a higher nicotine cigarette, they take in less smoke because the nicotine is more readily available. After results of the trial are compiled and evaluated, The company intend to conduct additional, larger trials in 2018.
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29 The company's wholly-owned subsidiary, Goodrich Tobacco Company, received a new purchase order from U.S. federal government agencies for 2.4 million of its proprietary SPECTRUM variable-nicotine research cigarettes. SPECTRUM brand research cigarettes are an important tool in clinical research for investigating the impact of reduced nicotine levels for cigarette addictiveness and cessation success. Including the new order, it has now received purchase orders for nearly 25 million SPECTRUM government research cigarettes.
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31 Its research collaboration with North Carolina State University yielded several new VLN tobacco varieties that contain no foreign DNA and no trace of genetic modification. These second-generation non-GMO VLN tobacco varieties also show improved ripening and curing qualities making them ideally suited for use in its unique VLN products domestically and in foreign markets.
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33 22nd Century and the University of Virginia (“UVA”) launched a project to use novel varieties of industrial hemp to clean up and reclaim abandoned mine lands and other polluted areas – a plant-based process known as “phytoremediation.” The company has proprietary hemp plants that are particularly well-suited for use in phytoremediation.
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35 On June 19, 2017, The company entered into Warrant Exercise Agreements (the “Agreements”) with all the holders (the “Holders”) of outstanding warrants to purchase up to 7,043,211 shares of common stock of the Company at $1.00 per share and warrants to purchase up to 4,250,000 shares of common stock of the Company at $1.45 per share (collectively, the “Warrants”). These Warrants to purchase shares of its common stock were acquired by the Holders in registered direct offerings in October of 2016 and in July of 2016, respectively. The Holders agreed, subject to beneficial ownership limitations on exercise contained in the Warrants, to exercise all the Warrants for cash. In June 2017, the Holders exercised 3,229,711 Warrants at $1.00 per share and 2,354,948 Warrants at $1.45 per share, resulting in net proceeds to us in the amount of $6,169,212, after deducting expenses associated with the transaction. In consideration for the Holders exercising their Warrants for cash, The company issued to each Holder a new warrant (the “New Warrants”) to purchase shares of its common stock equal to the number of shares of common stock received by each Holder upon the cash exercise of the Holder’s Warrants. The terms of the New Warrants are substantially similar to the terms of the Warrants exercised, except the New Warrants (i) have an exercise price equal to $2.15 per share and (ii) are exercisable beginning December 20, 2017 for a period of five (5) years. Accordingly, The company issued 5,584,659 New Warrants to such Holders on June 20, 2017, upon exercise of the Warrants of such Holder.
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37 **Subsequent to the close of the second quarter of 2017, The company also announced:**
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39 On July 28, 2017, the FDA announced a new comprehensive plan for tobacco and nicotine regulation in the United States. The FDA announced that it plans to begin a public dialogue about lowering nicotine levels in combustible cigarettes to non-addictive levels. The FDA stated that it will soon issue an Advance Notice of Proposed Rulemaking to seek input on a nicotine mandate. The FDA announcement stated that “lowering nicotine levels could decrease the likelihood that future generations become addicted to cigarettes and allow more currently addicted smokers to quit smoking.” On July 31, 2017, The company announced that the Company is already capable of achieving the FDA’s new product standard; as previously reported, The company is the only company in the world capable of growing tobacco with non-addictive levels of nicotine. The company's proprietary Very Low Nicotine tobacco is grown on independently-owned farms in the United States – without any artificial extraction or chemical processes. The company also announced that, over the last 6 years, agencies of the U.S. federal government have invested more than $100 million on independent clinical research with its proprietary SPECTRUM cigarettes that supports the conclusion that lowering nicotine levels in combustible tobacco cigarettes would drastically improve public health. There are at least 17 completed independent scientific clinical trials using its proprietary Very Low Nicotine tobacco and at least 25 ongoing clinical trials using its proprietary Very Low Nicotine cigarettes. The company have announced that the Company stands ready to partner with the FDA and with any Big Tobacco companies that are committed to improving the health of American smokers.
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41 In July and August of 2017, certain of the Holders of the Warrants from the June 19, 2017 warrant exercise transaction exercised an aggregate of 3,813,500 Warrants with an exercise price of $1.00 per share and an aggregate of 1,895,052 Warrants with an exercise price of $1.45 per share for cash, resulting in net cash proceeds to it of $6,167,646, after deducting expenses associated with the exercise. In consideration for Holders exercising their Warrants for cash, The company issued those Holders New Warrants to purchase shares of common stock of the Company equal to the number of shares of common stock received by each such Holder upon cash exercise of the Holder’s Warrants. The terms of the New Warrants are substantially similar to the terms of the Warrants exercised, except the New Warrants (i) have an exercise price equal to $2.15 per share and (ii) are exercisable beginning December 20, 2017 for a period of five (5) years. Accordingly, The company issued an aggregate of 5,708,552 New Warrants to such Holders in July and August of 2017 upon exercise of the Warrants of such Holders.
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43 = References =
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