22nd Century (XXII) - 2025 Q3 - Quarterly Results

Stock Issuance and Sales - The Company plans to issue and sell up to an aggregate of $25.0 million of common stock through Needham & Company, LLC as the Sales Agent[2] - The issuance will be conducted under the effective Registration Statement filed with the SEC on March 10, 2023, which was declared effective on March 31, 2023[3] - The Company must comply with limitations on the number or dollar amount of shares sold, which includes the Maximum Amount defined in the agreement[2] - The Sales Agent will use commercially reasonable efforts to sell the Placement Shares at market prices prevailing at the time of sale[5] - Settlement for sales of Placement Shares will occur on the first Trading Day following the date of sale, with Net Proceeds calculated after deducting the Sales Agent's commission and other fees[8] - The Company is responsible for ensuring compliance with the limitations on the number or dollar amount of shares sold under this Agreement[12] - The Sales Agent will provide written confirmation of sales, including the number of shares sold and the average price, by the next Trading Day[5] - The Company may suspend sales if it possesses material non-public information, and no sales will occur during such periods[7] - The Company must ensure that the total gross sales proceeds do not exceed the Maximum Amount or the amount authorized by its board of directors[12] - The Sales Agent is not obligated to purchase Placement Shares on a principal basis unless otherwise agreed in a separate written agreement[5] Compliance and Regulatory Matters - The Company has filed a Registration Statement with the Commission, which has been declared effective prior to the issuance of any Placement Notice[13] - The aggregate market value of the outstanding voting and non-voting common equity held by non-affiliates was equal to or greater than $75 million within 60 days of the closing price[25] - The financial statements included in the Registration Statement present fairly the financial condition of the Company and its consolidated Subsidiaries in accordance with generally accepted accounting principles[26] - The Company has not received any notice from the Commission objecting to the use of the shelf registration statement form[13] - The Company and its Subsidiaries are duly organized and validly existing, with full power and authority to conduct their business[22] - The Placement Shares have been duly authorized and, when issued, will be validly issued, fully paid, and nonassessable[23] - The Company is not an "ineligible issuer" as defined in Rule 405 of the Rules and Regulations[19] - The Company has not distributed any offering material other than the Registration Statement and the Prospectus prior to the completion of the distribution of the Placement Shares[13] - The Company meets the requirements for the use of Form S-3 under the Act, including compliance with General Instruction I.B.1[25] Financial Condition and Operations - The Company has authorized, issued, and outstanding capital stock as set forth in its most recent Quarterly Report on Form 10-Q[23] - The Company has not experienced any Material Adverse Effect or material adverse change in its business or financial condition since the dates provided in the Registration Statement and the Prospectus[28] - There has been no change in the Company's capitalization or long-term indebtedness, except for routine stock option exercises and warrant exercises[28] - The Company and its Subsidiaries have not incurred any material liabilities or obligations outside the ordinary course of business[28] - The Common Stock is registered under Section 12(b) of the Exchange Act and is currently listed on the Exchange under the trading symbol "XXII"[42] Intellectual Property and Assets - The Company and its Subsidiaries own or have adequate rights to use all necessary Intellectual Property to conduct their business as currently conducted[43] - The Company and its Subsidiaries have good and marketable title to all properties and assets described in the Registration Statement and the Prospectus[37] - The Company and its Subsidiaries possess all necessary authorizations and licenses to conduct their business, with no pending proceedings that could materially affect these authorizations[47] Legal and Compliance Issues - The Company has filed all required tax returns and paid all taxes and assessments due, with no known tax deficiencies that could have a Material Adverse Effect[46] - There are no pending or threatened legal actions that could have a Material Adverse Effect on the Company or its Subsidiaries[32] - The Company is in compliance with the Sarbanes-Oxley Act and has made all required certifications regarding its financial reporting[50] - The Company's internal accounting controls are effective, with no material weaknesses identified since the last audited financial statements[52] - The Company has established effective disclosure controls and procedures, ensuring material information is communicated to its principal officers[53] - The Company complies with all applicable environmental laws and has received necessary permits for its operations[58] - The Company has policies in place to ensure compliance with privacy and data protection laws regarding customer data[64] - There are no material labor disputes affecting the Company or its Subsidiaries[62] Insurance and Liabilities - The Company maintains adequate insurance coverage for its business operations, including protection against theft and damage[48] - The Company has not incurred any liabilities related to broker's fees in connection with the execution of agreements[49] - The Company is not subject to any sanctions and has policies to ensure compliance with relevant sanctions laws[55] Reporting and Communication - The Company will provide electronic copies of the Registration Statement, Prospectus, and any amendments or supplements to the Sales Agent promptly and without charge[71] - The Company will comply with all requirements imposed by the Act and the Exchange Act to permit the sales of the Placement Shares[73] - The Company will maintain accurate books and records reflecting its assets and ensure internal accounting controls are in place[83] - The Company will not sell or offer any shares of Common Stock outside of the Placement Shares during specified periods[84] - The Company will use the Net Proceeds from the Placement Shares as outlined in the Prospectus under "Use of Proceeds"[83] - The Company will file all necessary statements and reports to maintain registration or qualification for the Placement Shares in applicable jurisdictions[75] - The Company will provide annual reports and quarterly financial information to its stockholders as required[77] - The Company will make an earning statement available to holders of its securities within 15 months after the end of the current fiscal quarter[78] Sales Agent Agreement - The Company will use commercially reasonable efforts to list the Placement Shares on the Exchange prior to the first Placement Notice[86] - The Company will promptly notify the Sales Agent of any information that would materially affect any required documents[87] - The Company will cooperate with reasonable due diligence reviews conducted by the Sales Agent, including providing information and access to senior corporate officers[88] - The Company agrees to file a prospectus supplement detailing the number of Placement Shares sold, Net Proceeds, and compensation to the Sales Agent[89] - The Company must deliver a certificate to the Sales Agent on Representation Dates, confirming the accuracy of the Registration Statement and Prospectus[91] - Comfort Letters from the Accountant must be provided to the Sales Agent within five Trading Days of each Representation Date[93] - If any Placement Shares remain unsold by the third anniversary of the initial effective date, the Company will file a new shelf registration statement[95] - The Company must notify the Sales Agent if it is no longer eligible to use Form S-3 and file a new prospectus supplement within two Business Days[96] - The Sales Agent's obligations are contingent upon the effectiveness of the Registration Statement and the absence of any stop orders or adverse changes[98] - The Company must ensure that all representations and warranties are true and correct, and all covenants are fulfilled[104] - The Sales Agent must receive required legal opinions and Comfort Letters on or before specified dates[106][107] - The Company must provide a certificate of its corporate documents and resolutions to the Sales Agent prior to the first Placement Notice[108] Indemnification and Termination - The Company will indemnify the Sales Agent against any losses, claims, liabilities, and expenses arising from untrue statements or omissions in the Registration Statement or Prospectus[116] - The Sales Agent will indemnify the Company for losses arising from untrue statements or omissions made in reliance on Sales Agent Information[117] - The Company agrees to reimburse the Sales Agent for reasonable legal and other expenses incurred in connection with claims or investigations[124] - The Sales Agent may terminate the Agreement if there is a Material Adverse Effect or if trading in the Company's securities is suspended[125] - The Company has the right to terminate the Agreement with 10 days' notice without liability to the Sales Agent[126] - The Company has agreed to pay the Sales Agent a commission of 3% on the aggregate gross proceeds from each sale of Placement Shares[157] - The Sales Agent has the right to terminate the Agreement with a 10-day prior notice without liability to any party, except for certain provisions that remain in effect[127] - The Agreement will remain in effect unless terminated by mutual agreement or under specified sections, ensuring certain provisions continue to apply[128] - The Company acknowledges that the Sales Agent is acting solely as an agent in the public offering of Placement Shares and does not assume any fiduciary responsibility[131] - The Company has consulted its own advisors and understands the terms, risks, and conditions of the transactions contemplated by the Agreement[131] - The Agreement constitutes the entire agreement between the parties and supersedes all prior agreements regarding the subject matter[137] - The Sales Agent may assign its rights and obligations under the Agreement to an affiliate without the Company's consent[135] - All share-related numbers in the Agreement will be adjusted for any stock splits or similar events affecting the Common Stock[136] - The Agreement is governed by the laws of the State of New York, and any disputes will be adjudicated in New York City[138][144] - The Company must provide written notice for any changes in address for notices under the Agreement[132] Additional Notes - The Company has not experienced any material adverse change in its business or financial condition since the date of the Prospectus[167] - The maximum amount of Placement Shares authorized for sale has been duly approved by the Company's board of directors[168] - The Company does not possess any material non-public information[168]