Company: XXII
Filing Date: 2025-12-19
Form Type: PRE 14A
Source: 0001493152-25-028573
Chunk: 28

Company: 22nd Century Group, Inc.
Filing Date: 2025-12-19
Form: PRE 14A
Chunk 28
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 Ownership Limitation. The New Preferred Stock cannot be converted to Common Stock if the holder and its affiliates would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding Common Stock. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice.

Preemptive Rights .No holders of New Preferred Stock will, as holders of New Preferred Stock, have any preemptive rights to purchase or subscribe for Common Stock or any of our other securities.

Redemption.At any time following a period of time after the issuance date, the Company may redeem all or a portion of the shares of New Preferred Stock outstanding by delivering notice days prior equal to a percentage above the Stated Value per share of New Preferred Stock being redeemed.

Negative Covenants. As long as any New Preferred Stock is outstanding, unless the holders of more than a percentage of the then outstanding shares of New Preferred Stock shall have otherwise given prior written consent, the Company cannot, subject to certain exceptions enter into, create, incur, assume, guarantee or suffer to exist a specified dollar threshold of indebtedness (as defined in the Certificate of Designations), which shall not be less than $100,000.

Trading Market. There will be no established trading market for any of the New Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the New Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the New Preferred Stock will be limited.

Terms of Proposed New Warrants

The Proposed Future Offering of New Preferred Stock will include New Warrants that are substantially similar to the existing warrants issued with the Series A Preferred Stock, as follows:

The New Warrants would be exercisable at an exercise price equal to the Nasdaq Minimum Price when a binding agreement is executed and would expire on the date that is five (5) years after issuance. The number of Warrants issued would equal the total subscription amount for the New Preferred Stock divided by the exercise price. The exercise price of the New Warrants would be subject to adjustment in certain circumstances, including upon any subsequent equity sales at a price per share lower than the then effective exercise price of such