22nd Century Group Announces Reverse Stock Split

22nd Century (NASDAQ:XXII) Group, Inc., a manufacturing company specializing in cigarettes, has announced a reverse stock split of its common stock amid challenging market conditions. According to InvestingPro data, the company’s stock has declined 99.43% over the past year, trading near its 52-week low of $0.62. The reverse stock split is at a ratio of 1-for-23 and will affect both the authorized shares and issued and outstanding shares. This move is intended to restore compliance with the NASDAQ Capital Market’s continued listing standards, as the company grapples with a weak financial health score and significant debt burden.

The reverse stock split will be effective from 12:01 a.m. Eastern Time on June 20, 2025, with shares beginning to trade on a split-adjusted basis at the market open on the same day. The company’s trading symbol on NASDAQ, "XXII," will remain unchanged, although it will be assigned a new CUSIP number, 90137F509. InvestingPro analysis reveals the company faces operational challenges with negative EBITDA of -$10.99M and rapidly diminishing cash reserves. Subscribers can access 20+ additional ProTips and comprehensive financial metrics in the Pro Research Report.

In terms of logistics, no fractional shares will be issued. Stockholders who would have received a fractional share will instead be issued one whole share of post-reverse stock split common stock. Stockholders holding shares electronically do not need to take any action, as the change will be reflected automatically in their brokerage accounts. Those holding paper certificates have the option, but are not required, to exchange their certificates for new ones through the company’s transfer agent.

The reverse stock split was authorized by the Board of Directors of 22nd Century Group without stockholder approval, in accordance with Nevada law, which allows for such action if certain conditions are met. The company’s capitalization will change as a result of the reverse stock split, with the authorized shares of common stock being reduced from 250,000,000 shares to approximately 10,869,565 shares. The outstanding shares will also be reduced accordingly.

This action is not expected to have any impact on the company’s authorized preferred stock, which remains at 10,000,000 shares. The reverse stock split aims to maintain each stockholder’s percentage ownership and proportional voting power, barring minor changes due to the rounding of fractional shares.

The company has filed the necessary documentation with the Secretary of State of the State of Nevada to effectuate the reverse stock split, and the information is based on a press release statement. Despite current challenges, InvestingPro analysts project potential sales growth and a return to profitability in the current fiscal year, though the company’s overall financial health score remains weak at 1.03 out of 5.

In other recent news, 22nd Century Group reported a notable increase in net revenue for the first quarter of 2025, with sales climbing 50% sequentially to $6 million. Despite this revenue surge, the company reported a net loss from continuing operations of $3.3 million and an earnings per share loss of $1.89. The company has executed a capital raise amounting to $5.4 million, with potential for an additional $3.3 million. The company aims to achieve EBITDA breakeven by late 2025, with anticipated growth in the second quarter and significant gains expected in the latter half of the year. Analysts have noted the company’s efforts to expand state approvals for product distribution, which could bolster growth. Additionally, 22nd Century Group continues to face challenges, including ongoing legal issues with Dorchester Insurance Company. The company remains active in its lawsuit against Dorchester, with a trial date set for November 2025. Despite these challenges, the company is optimistic about its growth trajectory, with CEO Larry Firestone expressing confidence in the company’s reconfigured business model.

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