Company: XXII
Filing Date: 2025-12-19
Form Type: PRE 14A
Source: 0001493152-25-028573
Chunk: 29

Company: 22nd Century Group, Inc.
Filing Date: 2025-12-19
Form: PRE 14A
Chunk 29
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 New Warrants, then such exercise price shall be lowered to such price at which the shares were offered.

| PROXY STATEMENT | 19 |

A holder of New Warrants will have the right to exercise the common warrants on a “cashless” basis if there is no effective registration statement registering the resale of the warrant shares. Subject to limited exceptions, a holder of New Warrants will not have the right to exercise any portion of its New Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the number of shares of our common stock outstanding immediately after giving effect to such exercise, provided that the holder may increase or decrease the beneficial ownership limitation up to 9.99%. Any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of such change to us. In addition, in certain circumstances, upon a fundamental transaction, the holder will have the right to require us to repurchase its New Warrants at the Black Scholes value. Except as otherwise provided in the New Warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the New Warrants will not have the rights or privileges of holders of our common stock, including any voting rights, until they exercise their New Warrants.

Reasons for Stockholder Approval

Our common stock is listed on the Nasdaq Capital Market under the symbol “XXII,” and we are subject to the Nasdaq listing standards and rules. Under Rule 5635(d) of the Nasdaq Stock Market, stockholder approval is required in connection with a transaction, other than a public offering, at a price below the Minimum Price (as defined under Nasdaq rules) involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock), which equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance. The Proposed Future Offering could result in the potential issuance of more than 19.99% of our outstanding common stock at below the Minimum Price under Nasdaq rules without approval of our stockholders.

Possible Effects of the Proposal

If the stockholders do not approve this Proposal 4, the failure to obtain stockholder approval may discourage future investors from engaging in future financings with us. If these consequences occur, we may have difficulty finding alternative sources of