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Agricultural biotechnology company 22nd Century Group, which focuses on hemp, tobacco and hops, says it has reduced the outstanding amount of its senior secured debt by $8.1 million.
The Buffalo, New York-based company said its senior secured credit facility now has roughly $14 million outstanding, down from $22.1 million, following “an amendment and waiver process with its lenders.”
“The reduction reflects a waiver and repayment of the $7.5 million minimum cash balance required under terms of the original debenture agreements,” 22nd Century Group said in a Wednesday news release.
An existing promissory note was also assigned as part of the deal, with $600,000 of the note allocated to reduce the outstanding principal and $2 million allocated “to a reduction in the put price associated with the lenders’ outstanding warrants, which portion was subsequently canceled.”
“The remaining principal loan balance of $14 million and remaining $500,000 of the put price will be due at maturity in 2026 in accordance with the original terms of the debenture agreements,” 22nd Century Group said.
The principal reduction will save 22nd Century Group roughly $500,000 in cash per year, Chief Financial Officer Hugh Kinsman said in a statement.
“We continue to actively manage our balance sheet, with a focus on executing our cost reduction initiatives,” he added.
Meanwhile, 22nd Century Group announced last week it had priced a public offering to raise $5.25 million.
Gross proceeds from that offering are being used for general operating purposes.
In 2022, the company announced a registered direct offering of shares that was expected to raise gross proceeds of $35 million.
Shares of 22nd Century Group trade as XXII on the Nasdaq exchange.