Business Context and Reporting Period
Company: 22nd Century Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 15, 2012
Event: Entry into a Material Definitive Agreement and Unregistered Sales of Securities.
Key Financial Metrics
This filing reports a capital raise event rather than periodic financial performance. Specific metrics include:
- Capital Raised: Approximately $1,025,500.
- Securities Issued: 1,709,167 shares of Common Stock ($0.00001 par value).
- Warrants Issued: Warrants to purchase up to 1,709,167 shares at an exercise price of $1.00 per share with a 5-year term.
- Use of Proceeds: Tobacco leaf purchases, working capital, and general corporate purposes.
Note: The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity positions as this is a transaction-specific report.
Material Changes
The primary material change is the expansion of the company's capital base through a private placement to accredited investors. This transaction increases the number of outstanding shares and creates potential future dilution via the attached warrants.
Guidance, Outlook, and Risks
- Management Commentary: The Company intends to utilize the proceeds specifically for tobacco leaf purchases and working capital.
- Regulatory Status: The offering was conducted pursuant to exemptions under Sections 4(2), 4(6), and Regulation S of the Securities Act and Rule 506 of Regulation D.
- Risks/Contingencies: Shares issuable upon exercise of the Warrants are unregistered and may not be offered or sold in the United States without an effective registration statement or exemption. The Company may be required to pay commissions in connection with the Offering.
Investor Verification Checklist
- Verify the exact number of shares issued and the total aggregate purchase price in the attached Securities Purchase Agreement (Exhibit 10.1).
- Review the specific terms of the Warrants (Exhibit 4.1) regarding exercise conditions and potential dilution.
- Confirm the identity of the accredited investors and any potential conflicts of interest.
- Check for any subsequent filings regarding the registration of the warrant shares for future sale.