Company: XXII
Filing Date: 2025-06-10
Form Type: PRER14A
Source: 0001641172-25-014371
Chunk: 70

Company: 22nd Century Group, Inc.
Filing Date: 2025-06-10
Form: PRER14A
Chunk 70
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Use of Proceeds

The Company believes the Warrant holders will fully exercise under a Zero Exercise Price Exercise as it provides for two shares of common stock for no cash payment, as compared to one share or less upon a cash or cashless exercise. Accordingly, we do not expect to receive any net proceeds from Warrant exercises.

Possible Effects of the Proposal

If the stockholders do not approve this Proposal 7, then the Warrants will not be exercisable. The Company, as provided in the Securities Purchase Agreement will be obligated to incur additional management resources and expenses to call and hold a meeting every 75 days thereafter to seek such stockholder approval until the date Stockholder Approval is obtained. Additionally, 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 capital to fund our operations in the future on terms favorable to us or at all. We can provide no assurance that we would be successful in raising funds pursuant to additional equity or debt financings.

If the stockholders approve this Proposal 7, the Warrants shall become immediately exercisable.The Company believes the issuance
of the securities described in this Proposal No. 7 would result in the issuance of over 20% of the Company’s outstanding shares
of Common Stock on a pre-transaction basis as the number of shares issuable underlying the warrants (assuming a Zero Exercise Price
Exercise) of 119,329,636 is approximately 1,037% of the total common shares outstanding of 11,507,622 as of May 16, 2025. As such,
for so long as the Holders beneficially own a significant amount of shares of our Common Stock, it could significantly influence future
Company decisions.

Our
stockholders will incur substantial dilution of their percentage ownership to the extent that the Holders fully exercise the October
24, 2024 Amended Warrant Shares, as the warrants could have a reduced exercise price upon a dilutive issuance, or more likely as a
result of a Zero Exercise Price Exercise. As a result of the issuance of additional shares of
common stock, the price of our common stock could fall below the minimum bid price under the continued listing standards of Nasdaq, resulting
in our shares being delisted from the Nasdaq Capital Markets exchange under rule.

<div align='center'>Our Board of Directors recommends that the stockholders vote “FOR” Proposal 7 to approve the issuance of the shares of common