Material Agreement Form 8 K

Item 1.01Entry into a Material Definitive Agreement.

Securities Purchase Agreement

On September 27, 2024, 22nd Century Group, Inc. (the "Company") and certain investors (the "Investors") entered into a securities purchase agreement (the "Securities Purchase Agreement") relating to the issuance and sale of shares of common stock of the Company (the "Common Stock") pursuant to a registered direct offering and a private placement of warrants to purchase shares of common stock (collectively, the "Offering"). The Investors purchased approximately $1.2 million of shares and warrants, consisting of an aggregate of 5,153,508 shares of Common Stock and warrants (the "Warrants") to purchase 10,307,016 shares of common stock, at a purchase price of $0.228 per share and accompanying warrant. The Warrants are exercisable after the Stockholder Approval Date (as defined in the Securities Purchase Agreement) at an exercise price of $1.00 per share of common stock, expire on the date that is five (5) years after the Stockholder Approval Date and are 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 Warrants, then such exercise price shall be lowered to such price at which the shares were offered. The Offering is expected to close on October 1, 2024, subject to customary closing conditions.

The Securities Purchase Agreement provides that, subject to certain exceptions, until 30 days after the closing of the Offering, neither the Company nor any of its subsidiaries will issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents. The Securities Purchase Agreement also provides that the Investors in the Offering have a right of participation in future equity or equity linked offerings by the Company for 9 months following the Closing Date (as defined in the Securities Purchase Agreement).

The Securities Purchase Agreement provides that, subject to certain exceptions, for a period of one year following the closing of the Offering, the Company will be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the Securities Purchase Agreement).

The net proceeds to the Company from the Offering, after deducting the fees of Dawson James Securities, Inc. (the "Placement Agent") and the Company's estimated offering expenses, are expected to be approximately $1.1 million.

The Common Stock is being offered and sold pursuant to the Company's Registration Statement on Form S-3 (Registration No. 333-270473) previously filed with the Securities and Exchange Commission (the "SEC") and declared effective on March 31, 2023, the base prospectus included therein and the related prospectus supplement to be filed. The Warrants are being issued in a private placement and were exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on Section 4(a)(2) thereof as a transaction not involving a public offering and/or Rule 506 of Regulation D promulgated thereunder. The Company has agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale by the Investors of the shares issued and issuable upon exercise of the Warrants within 30 trading days of the date of the Securities Purchase Agreement.

The shares issuable upon exercise of the Warrants are subject to stockholder approval. The Company has agreed to hold an annual or special meeting of stockholders within 75 days following the Closing Date (as defined in the Securities Purchase Agreement) to have stockholders approve the issuance of the shares of common stock underlying the Warrants pursuant to applicable Nasdaq rules.