22nd Century Group Inc
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
XXII$1.55-19.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001558370-24-008199
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001558370-24-011967
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 74 current paragraphs.
42 unchanged; 17 reworded; 12 added; 8 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 35 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
On March 28, 2024, we implemented a 1-for-16 reverse stock split (the “Reverse Stock Split”) of our common stock. As a result of the Reverse Stock Split, every sixteen (16) shares of our pre-Reverse Stock Split common stock were combined and reclassified into one share of our Common Stock. The number of shares of common stock subject to outstanding options, warrants, and convertible securities were also reduced by a factor of sixteen and the exercise price of such securities increased by a factor of sixteen, as of March 28, 2024. All historical share and per-share amounts reflected throughout this section have been adjusted to reflect the Reverse Stock Split. The par value per share of our common stock was not affected by the Reverse Stock Split.
Current report
22nd Century Group, Inc. (NASDAQ: XXII) is an agricultural biotechnology company focused on tobacco harm reduction by offering tobacco products with 95% less nicotine, designed to improve health and wellness by helping smokers smoke less. Backed by comprehensive and extensively patented technologies that regulate nicotine biosynthesis activities in the tobacco plant, the Company has pioneered development of high-yield, proprietary reduced nicotine content (RNC) tobacco plants and clinically validated RNC cigarette products. The Company received the first and only FDA Modified Risk Tobacco Product (MRTP) authorization for a combustible cigarette in December 2021. The Company is a subsequent participating manufacturer under the Master Settlement Agreement ("MSA") and vertically integrated for the production of its both own products and contract manufacturing operations ("CMO"), which consist primarily of branded filtered cigars and conventional cigarettes.
Current report
Product line revenue, net
Current report
For the second quarter and first six months of 2024, cigarette net revenues, including export volume, increased to $4,107 million or 8%, and decreased to $6,867 or (17%), respectively, compared to the prior year periods. For the second quarter 2024, cigarette sales benefitted from strong summer seasonal demand with key customers, price increases that took effect in April 2024 and a one-time Spectrum®research cigarette order which provided a $0.9 million boost, sequentially compared to the first quarter 2024. For the first six months of 2024, volume decreases were result of prior year comparable period stocking orders of Pinnacle cigarettes launched in a top-five convenience store chain and a large one-time order of export product.
Current report
For the second quarter and first six months of 2024, filtered cigars net revenues decreased to $3,303 and $6,927, respectively, compared to $3,931 and $8,326 in the prior year comparable periods, reflecting lower volumes as the Company continues to transition away from low or negative margin manufacturing agreements, in favor of higher margin cigarette manufacturing agreements. Additionally, price increases for certain customers took effect in April 2024.
Current report
Cigarillo distribution net revenues for the second quarter and first six months of 2024 amounted to $552, reflective of the expanded Pinnacle branded product offerings launched in April 2024 with a top-five national convenience store chain.
Current report
VLN® cigarette net revenues were negligible in the second quarter 2024, a decrease from the comparable prior year period which benefited from stocking orders with major c-stores. While the Company has secured broad distribution of its VLN® products, the sell-through has not yet materialized. The Company is currently making changes to rebrand and relaunch its VLN® products.
Current report
The improvement in gross profit and gross profit as a percent of revenues, net for the three and six-month periods ended June 30, 2024, compared to the prior year periods, was primarily due to the benefit of ongoing cost cut initiatives, efficiency, and the shift in product mix.
Current report
(c) Decreases in public company expenses for the three- and six-month periods ended June 30, 2024 compared to the prior year periods were mainly due to waived board of director compensation fees in the current year periods and a decrease in professional services fees due to the restructuring of our business.
Current report
(d) Other expenses decreased for the three and six months ended June 30, 2024 compared to the three and six month periods ended June 30, 2023 were mainly due to decreases in insurance, technology and legal expenses.
Current report
Other income (expense), net decreased for the six months ended June 30, 2024 compared to the same prior year period, due to a decrease of $60 of realized losses on short term investments and $1,047 gain resulting from change in fair value of warrant liabilities.
Current report
For the six months ended June 30, 2024 compared to the prior year period, interest expense partially increased as a result of higher PIK interest accrual prior to extinguishment in April 2024 of $609, and $400 loss on extinguishment. This is offset by the ongoing repayment and elimination of debt obligations on our balance sheet, resulting in a decrease of cash interest of $102 and a decrease of non-cash interest amortization of $349 recognized from the Senior Secured Credit Facility (of these totals, interest that was allocated to discontinued operations decreased by $18), and additional decreases of $459 as a result of change in fair value of conversion option derivative liability.
Removed paragraphs (8)
Previous report
22nd Century Group, Inc. isan agricultural biotechnology company focused on tobacco harm reduction, reduced nicotine tobacco and improving health and wellness through plant science. With dozens of patents allowing it to control nicotine biosynthesis in the tobacco plant, the Company has developed proprietary reduced nicotine content (RNC) tobacco plants and cigarettes, which have become the cornerstone of the FDA’s Comprehensive Plan to address the widespread death and disease caused by smoking. The Company received the first and only FDA Modified Risk Tobacco Product (MRTP) authorization for a combustible cigarette in December 2021. 22nd Century uses modern plant breeding technologies, including genetic engineering, gene-editing, and molecular breeding to deliver solutions for the life science and consumer products industries by creating new, proprietary plants with optimized alkaloid and flavonoid profiles as well as improved yields and valuable agronomic traits.
Previous report
To support the launch and expansion of VLN®, we are vertically integrated and utilize our tobacco assets for contract manufacturing operations (“CMO”) that consists primarily of branded filtered cigars and conventional cigarettes. With high-speed manufacturing capabilities we continue to attract additional CMO business to absorb our manufacturing overhead and help keep our unit cost profile low. The Company is a subsequent participating manufacturer under the Master Settlement Agreement (“MSA”), of which all cigarette products are compliant.
Previous report
Recent Highlights and Other Events
Previous report
Revenue, net
Previous report
Tobacco revenue was $6,469, a decrease of 27.5% from $8,926 in the prior year period, reflecting lower unit sales as a result of a planned reallocation in production resources during 2023 at the Company’s NASCO facilities away from negative margin filtered cigars to higher margin VLN® and conventional cigarette products. Price increases and new cigarette export contract volume commence in the second quarter of 2024, among other additional new CMO revenue opportunities, while the Company concurrently exits certain filtered cigar production with negative profitability.
Previous report
The decrease in gross profit and gross profit as a percent of revenues, net for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023, was primarily driven by lower volume due to carryover from 2023 of our intentional shift in product mix, production staffing, and capacity as we stabilize operations in connection with ongoing restructuring efforts. During the quarter ended March 31, 2024, the Company recorded an additional reserve for excess, obsolete or expired leaf inventory of $431 related to the 2023 crop year received in the first quarter 2024 and an additional $233 for excise taxes on products based on an assessment received related to prior periods.
Previous report
(c) Other expenses decreased for the three-month ended March 31, 2024, due to decreases of $412 of for public company expenses, $310 of insurance expenses, $150 of facilities expenses and $122 of other.
Previous report
Following the JGB October and December Amendments (as further described in Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements contained), as of March 31, 2024 and December 31, 2023, respectively, the remaining principal loan balance is approximately $10,752, exit fee of $1,052 and remaining $500 of the put price will be due at maturity in March 2026 in accordance with the original terms of the debenture agreements. As of March 31, 2024, the Company has pledged to JGB the $2,000 GVB promissory note and $1,000 assignment of Needle Rock Farms to be applied as principal reduction in 2024.
Reworded paragraphs (17)
Previous wording
For purposes of this MD&A, references to the “Company,” “we,” “us” or “our” refer to the operations of 22nd Century Group, Inc. and its direct and indirect subsidiaries for the periods described herein. In addition, dollars are in thousands, except per share data or unless otherwise specified.
Current wording
For purposes of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), references to the “Company,” “we,” “us” or “our” refer to the operations of 22nd Century Group, Inc. and its direct and indirect subsidiaries for the periods described herein. In addition, dollars are in thousands, except per share data or unless otherwise specified.
Previous wording
*The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31,*2023, as well as our Condensed Consolidated Financial Statements and the accompanying notes included in Item 1 of this Form 10-Q. Note references are to the notes to consolidated financial statements included in Item 1 of this Form 10-Q.
Current wording
*The following MD&A should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended December 31,*2023, as well as our Condensed Consolidated Financial Statements and the accompanying notes included in Item 1 of this Form 10-Q. Note references are to the notes to consolidated financial statements included in Item 1 of this Form 10-Q.
Previous wording
Except for historical information, all of the statements, expectations, and assumptions contained in this section are forward-looking statements. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Forward looking statements include, but are not limited to, statements regarding (i) our ability to continue as a going concern, (ii) our expectations regarding our debt obligations, (iii) our financial and operating performance, (iv) our strategic alternatives, including our cost savings initiatives, (v) our expectations regarding regulatory enforcement (vi) our products, and (vii) the volatility of our common stock and warrants. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” herein and in our Annual Report on Form 10-K filed on March 28, 2024. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as otherwise required by law. All information provided in this quarterly report is as of the date hereof, and we assume no obligation to and do not intend to update these forward-looking statements, except as required by law.
Current wording
Except for historical information, all of the statements, expectations, and assumptions contained in this section are forward-looking statements. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Forward looking statements include, but are not limited to, statements regarding (i) our ability to continue as a going concern, (ii) our expectations regarding our debt obligations, (iii) our ability to remain listed on NASDAQ (iv) our financial and operating performance, (v) our strategic alternatives, including our cost savings initiatives, (vi) our expectations regarding regulatory enforcement (vii) our products, and (viii) the volatility of our common stock and warrants. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” herein and in our Annual Report on Form 10-K filed on March 28, 2024 and within Part II Item 1A of our Form 10-Q for the three months ended March 31, 2024. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as otherwise required by law. All information provided in this quarterly report is as of the date hereof, and we assume no obligation to and do not intend to update these forward-looking statements, except as required by law.
Previous wording
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023
Current wording
Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023
Previous wording
(a) Compensation and benefits and equity compensation expense decreased for the three-month period ending March 31, 2024 compared to the prior year period due to a reduction of headcount as part of our cost cut initiatives.
Current wording
(a) Compensation and benefits and equity compensation expense decreased for the three and six months ended June 30, 2024 compared to the prior year periods due to a reduction of headcount as part of our cost cut initiatives.
Previous wording
(b) Decreases of strategic consulting, sales and marketing and travel and entertainment for the three-month period ending March 31, 2024, were due to reduced spending as part of our cost cut initiatives.
Current wording
(b) Decreases of strategic consulting, sales and marketing and travel and entertainment for the three and six months ended June 30, 2024 compared to the prior year periods were due to reduced spending as part of our cost cut initiatives.
Previous wording
We have incurred significant losses and negative cash flows from operations since inception and expect to incur additional losses until such time that we can generate significant revenue and profit in our tobacco business. We had negative cash flow from operations of $2,255 for the three months ended March 31, 2024 and an accumulated deficit of $384,446 as of March 31, 2024. As of March 31, 2024, we had cash and cash equivalents of $1,517 and working capital from continuing operations of ($9,497) (compared to working capital from continuing operations of ($6,826) at December 31, 2023). Given our projected operating requirements and existing cash and cash equivalents, there is substantial doubt about our ability to continue as a going concern through one year following the date that the Condensed Consolidated Financial Statements herein are issued.
Current wording
We have incurred significant losses and negative cash flows from operations since inception and expect to incur additional losses until such time that we can generate significant revenue and profit in our tobacco business. We had negative cash flow from operations of $6,970 for the six months ended June 30, 2024 and an accumulated deficit of $385,558 as of June 30, 2024. As of June 30, 2024, we had cash and cash equivalents of $1,279 and working capital deficit from continuing operations of ($2,249) (compared to working capital deficit from continuing operations of ($6,826) at December 31, 2023). Given our projected operating requirements and existing cash and cash equivalents, there is substantial doubt about our ability to continue as a going concern through one year following the date that the Condensed Consolidated Financial Statements herein are issued.
Previous wording
Our cash, and cash equivalents and working capital as of March 31, 2024 and December 31, 2023 are set forth below:
Current wording
Our cash, and cash equivalents and working capital from continuing operations as of June 30, 2024 and December 31, 2023 are set forth below:
Previous wording
As of March 31, 2024, we had working capital from continuing operations, excluding assets and liabilities held for sale, of approximately ($9,497) compared to working capital of approximately ($6,826) at December 31,2023 a decrease of $2,671. This decrease in working capital was primarily due to a $2,403 decrease in net current assets and an increase in net current liabilities of $268. Cash and cash equivalents decreased by $541 and the remaining net current assets increased by $1,862. As a result of the working capital balance, management has taken a number of steps to improve liquidity. Refer below to “Cash demands on operations.”
Current wording
As of June 30, 2024, we had working capital deficit from continuing operations, excluding assets and liabilities held for sale, of approximately ($2,249) compared to working capital deficit of approximately ($6,826) at December 31,2023 an increase of $4,577. This increase in working capital was primarily due to a $2,597 increase in net current assets and a decrease in net current liabilities of $7,174. Cash and cash equivalents decreased by $779 and the remaining net current assets decreased by $1,818. As a result of the working capital balance, management has taken a number of steps to improve liquidity. Refer below to “Cash demands on operations.”
Previous wording
Cash used in operating activities decreased $15,245 from $17,500 in 2023 to $2,255 in 2024. The primary driver for this decrease was lower net loss of $12,443, a decrease of $1,016 related to net adjustments to reconcile net loss to cash, and a decrease in cash used for working capital components related to operations in the amount of $3,818 for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.
Current wording
Cash used in operating activities decreased $30,362 from $37,332 in 2023 to $6,970 in 2024. The primary driver for this decrease was lower net loss of $31,870, a decrease of $5,830 related to net adjustments to reconcile net loss to cash, and a decrease in cash used for working capital components related to operations in the amount of $4,322 for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.
Previous wording
Net cash provided by investing activities
Current wording
Net cash (used in) provided by investing activities
Previous wording
Cash provided by investing activities amounted to $15 the three months ended March 31, 2024, as compared to cash provided by investing activities of $14,723 for the three months ended March 31, 2023. The decrease in cash provided by investing activities of $14,708 was the result of (i) a decrease in net proceeds from short-term investments of $12,959; (ii) $3,500 of property, plant and equipment casualty loss insurance proceeds collected in the prior year period (iii) $90 from the acquisitions of RXP in the prior year period and (iv) a decrease of $178 of proceeds from the sale of property, plant and equipment. These decreased cash inflows were partially offset by a decrease in cash outflows of $2,019 related to the acquisitions of patents, trademarks and property, plant and equipment.
Current wording
Cash used in investing activities amounted to $49 the six months ended June 30, 2024, as compared to cash provided by investing activities of $18,923 for the six months ended June 30, 2023. The decrease in cash provided by investing activities of $18,972 was primarily the result of (i) a decrease in net proceeds from short-term investments of $18,239; (ii) decrease of $3,500 in property, plant and equipment casualty loss insurance proceeds collected in the prior year period (iii) decrease of $90 from the acquisition of RXP in the prior year period and (iv) a decrease of $229 of proceeds from the sale of property, plant and equipment. These decreased cash inflows were partially offset by a decrease in cash outflows of $3,086 related to the acquisitions of patents, trademarks and property, plant and equipment.
Previous wording
During the three months ended March 31, 2024, cash provided by financing activities decreased by $16,510, from $18,209 in the prior year period, to $1,699, resulting from decreases in (i) the net proceeds of $16,048 from issuance of long-term debt, (ii) proceeds of $6,016 from issuance of detachable warrants, and (iii) proceeds from issuance of notes payable of $71 offset by an increase in net proceeds from warrant exercise of $2,245. These cash inflows were offset by a decrease in cash outflows of note payable payments of $2,967 and taxes paid related to net share settlement of RSUs of $413.
Current wording
During the six months ended June 30, 2024, cash provided by financing activities decreased by $21,082, from $27,322 in the prior year period, to $6,240, resulting from decreases in (i) net proceeds of $16,048 from issuance of long-term debt, (ii) proceeds of $6,016 from issuance of detachable warrants, (iii) net proceeds of $3,501 from the issuance of common stock (iv) proceeds from issuance of notes payable of $962 offset by an increase in net proceeds from warrant exercise of $2,245. These cash inflows were offset by decreases in cash outflows of note payable payments of $3,030 and taxes paid related to net share settlement of RSUs of $419 and increases in payments of long-term debt of $249.
Previous wording
As of March 31, 2024, we had approximately $1,517 of cash and cash equivalents. Our principal sources of liquidity are our cash and cash equivalents and cash generated from our tobacco contract manufacturing business and proceeds from debt and equity financing activities, which cash flows provided by financing activities for the quarter ended March 31, 2024 were $1,699.
Current wording
As of June 30, 2024, we had approximately $1,279 of cash and cash equivalents. Our principal sources of liquidity are our cash and cash equivalents and cash generated from our tobacco contract manufacturing business and proceeds from debt and equity financing activities, which cash flows provided by financing activities for the six months ended June 30, 2024 were $6,240.
Previous wording
Under the terms of the May 2024 Exchange Agreement, the Company and Holders exchanged an aggregate of $2,328 in principal, fees and expenses owed under the Debentures for 395,000 shares of common stock and 895,000 immediately exercisable pre-funded warrants to purchase shares of common stock at an exercise price of $.00001 (at an effective per share price of $1.69). The remaining principal balance of the Debentures is $9,825 of which $3,000 remains current with corresponding pledged assets.
Current wording
Under the terms of the May 2024 Exchange Agreement, the Company and Holders exchanged an aggregate of $2,328 in principal, fees and expenses owed under the Debentures for 395,000 shares of common stock and 895,000 immediately exercisable pre-funded warrants to purchase shares of common stock at an exercise price of $.00001 (at an effective per share price of $1.69). As a result of the transaction, the exercise price on 5,876,887 of the Company’s outstanding warrants is reduced to $1.69 per share in accordance with the adjustment provisions therein.
Previous wording
On April 29, 2024, the Company entered into a General Release and Settlement Agreement (the “Omnia Agreement”) with Omnia Capital LP (“Omnia”). The Omnia Agreement settles and extinguishes all outstanding debt and interest owed to Omnia under the outstanding Subordinated Promissory Note dated March 3, 2023 (the “Old Note”) and the put provision contained the outstanding common stock purchase warrant dated March 3, 2023 (the “Old Warrant”), amounting to a total of approximately $5,228, for (i) a cash payment of $249; (ii) 1,150,000 shares of common stock and 1,150,000 immediately exercisable pre-funded warrants to purchase shares of common stock at an exercise price of $0.0001 that are exercisable until May 1, 2029 (at an effective per share price of $2.14) and (iii) 460,000 immediately exercisable warrants to purchase an equal number of shares of common stock at an exercise price of $2.14 until May 1, 2029 (the “New Warrant”). The New Warrant contains a put provision that permits the holder to require the Company to redeem the New Warrants, no earlier than May 1, 2025, for a purchase price equal to $2.675 per New Warrant. Subject to limited exceptions, a holder of pre-funded warrants and New Warrants will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise. As part of the Omnia Agreement, the parties agreed to terminate and cancel the Old Note and the Old Warrant and released all debts, claims or other obligations against each other occurring prior to the date of the Omnia Agreement.
Current wording
On April 29, 2024, the Company entered into a General Release and Settlement Agreement (the “Omnia Agreement”) with Omnia Capital LP (“Omnia”). The Omnia Agreement settles and extinguishes all outstanding debt and interest owed to Omnia under the outstanding Subordinated Promissory Note dated March 3, 2023 (the “Old Note”) and the put provision contained the outstanding common stock purchase warrant dated March 3, 2023 (the “Old Warrant”), amounting to a total of approximately $5,228, for (i) a cash payment of $249; (ii) 1,150,000 shares of common stock and 1,150,000 immediately exercisable pre-funded warrants to purchase shares of common stock at an exercise price of $0.0001 that are exercisable until May 1, 2029 (at an effective per share price of $2.14) and (iii) 460,000 immediately exercisable warrants to purchase an equal number of shares of common stock at an exercise price of $2.14 until May 1, 2029 (the “New Warrant”). The New Warrant contains a put provision that permits the holder to require the Company to redeem the New Warrants, no earlier than May 1, 2025, for a purchase price equal to $2.675 per New Warrant, and had an initial fair value of $1,515. Subject to limited exceptions, a holder of pre-funded warrants and New Warrants will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise. As part of the Omnia Agreement, the parties agreed to terminate and cancel the Old Note and the Old Warrant and released all debts, claims or other obligations against each other occurring prior to the date of the Omnia Agreement. The total cash and non-cash consideration amounted to $5,628, resulting in extinguishment charges of $400.
Previous wording
For the period from January 1, 2024 to February 15, 2024, the date of shareholder approval, the Company entered into warrant inducement agreements with certain holders of the Existing Warrants to purchase an aggregate of 820,769 shares of common stock at a reduced weighted average exercise price of approximately $2.9504 (which were subsequently reduced to $1.69 in connection with the May 2024 JGB debt for equity exchange). Pursuant to the warrant inducement agreements, the exercising holders of the Existing Warrants received 1,641,535 Inducement Warrants and the Company received aggregate gross proceeds of approximately $2,421 from the exercise of the Existing Warrants. Additionally, on the date of Shareholder Approval, the exercise price of the 3,581,213 outstanding Inducement Warrants, was reduced to $2.8237 based on the lowest Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)) during the inducement period.
Current wording
For the period from January 1, 2024 to February 15, 2024, the date of shareholder approval, the Company entered into warrant inducement agreements with certain holders of the Existing Warrants to purchase an aggregate of 820,769 shares of common stock at a reduced weighted average exercise price of approximately $2.9504 (which were subsequently reduced to $1.69 in connection with the May 2024 JGB debt for equity exchange). Pursuant to the warrant inducement agreements, the exercising holders of the Existing Warrants received 1,641,535 Inducement Warrants and the Company received aggregate gross proceeds of approximately $2,421 from the exercise of the Existing Warrants. Additionally, on the date of Shareholder Approval, the exercise price of the 3,581,213 outstanding
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
*Giving retroactive effect to the 1-for-16 reverse stock split on April 2, 2024 and the 1-for-15 reverse stock split on July 5, 2023.
Current report — wording carried from elsewhere
As of June 30, 2024, the remaining principal balance of the Debentures is $8,325 of which $1,500 remains current with corresponding pledged assets.
Current report — wording carried from elsewhere
Inducement Warrants, was reduced to $2.8237 based on the lowest Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)) during the inducement period.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As a result of the transaction, the exercise price on 5,876,887 of the Company’s outstanding warrants is reduced to $1.69 per share in accordance with the adjustment provisions therein.