22nd Century Group (XXII) Executes Reverse Stock Split on NYSE American
22nd Century Group, Inc. - Corporate Action Analysis
22nd Century Group, Inc. (NASDAQ: XXII)
Analysis of Recent Corporate Action: Reverse Stock Split
Executive Summary
This report details the recent 1-for-24 reverse stock split undertaken by 22nd Century Group, Inc., effective March 5, 2024. The primary objective of this corporate action was to regain compliance with The Nasdaq Capital Market's minimum bid price requirement. The report includes an overview of the company, key details of the reverse split, its theoretical impact on share price, and implications for the company and its shareholders. Data is sourced from company press releases and public financial information providers.
Company Overview
22nd Century Group, Inc. (NASDAQ: XXII) is a biotechnology company focused on leveraging advanced plant science and agricultural technology to improve global health and wellness. The company's primary focus areas include:
- Tobacco Harm Reduction: Developing and commercializing proprietary very low nicotine content (VLNC) tobacco products designed to reduce smokers' nicotine exposure and aid in smoking cessation. Their VLN® King and VLN® Menthol King cigarettes are FDA MRTP (Modified Risk Tobacco Product) authorized.
- Hemp/Cannabis Research: Utilizing its expertise in plant genetics and breeding to develop proprietary hemp/cannabis lines for medical, therapeutic, and agricultural applications, focusing on optimizing cannabinoid profiles and agronomic traits.
- Hops: Exploring advancements in hops research and development, aiming to provide solutions for the brewing industry.
The company aims to disrupt existing markets by providing innovative, plant-based solutions to address significant health and agricultural challenges.
Reverse Stock Split Analysis (Effective March 5, 2024)
In early 2024, 22nd Century Group, Inc. executed a reverse stock split to address its stock price and maintain its listing on The Nasdaq Capital Market. A reverse stock split consolidates the number of existing shares of corporate stock into fewer, proportionally more valuable, shares. This action does not directly alter the company's market capitalization but aims to increase the per-share market price.
Key Details of the Reverse Stock Split
| Parameter | Detail |
|---|---|
| Company | 22nd Century Group, Inc. |
| Ticker Symbol | XXII (remained unchanged) |
| Exchange | The Nasdaq Capital Market |
| Announcement of Effectiveness | March 5, 2024 |
| Effective Date | March 5, 2024 (at market open) |
| Reverse Split Ratio | 1-for-24 (One new share for every twenty-four old shares) |
| Reason for Split | To regain compliance with Nasdaq's $1.00 minimum bid price requirement for continued listing. |
| Pre-Split Share Price (Closing Price, March 4, 2024) | $0.1656 (approximate) |
| Theoretical Post-Split Share Price | $3.9744 ($0.1656 * 24) |
| Actual Post-Split Opening Price (March 5, 2024) | $3.71 |
| New CUSIP Number | 90137F 208 |
| Fractional Shares | Cash payment in lieu of fractional shares, based on the post-split closing price on the effective date. |
Visual Representation: Theoretical Share Price Impact
Purpose and Implications of the Reverse Stock Split
The primary driver for 22nd Century Group's reverse stock split was to increase the per-share trading price of its common stock to meet The Nasdaq Capital Market's minimum bid price requirement of $1.00 per share for continued listing. Failure to meet this requirement can lead to delisting, which can negatively impact a company's visibility, liquidity, and access to capital markets.
Common Implications of Reverse Stock Splits:
- Nasdaq Compliance: Successfully achieving a share price above $1.00 can resolve listing compliance issues, which was the stated goal.
- Investor Perception: A higher share price might make the stock more attractive to certain institutional investors and brokerage firms that have policies against recommending or investing in very low-priced (penny) stocks. However, reverse splits are often viewed cautiously by the market as they are typically undertaken by companies facing challenges.
- Reduced Share Count: The number of outstanding shares is significantly reduced. While this doesn't change the company's overall market capitalization initially, it can affect trading liquidity.
- Potential for Increased Volatility: A smaller float (publicly tradable shares) can sometimes lead to increased price volatility.
- No Change in Company Fundamentals: It's crucial to note that a reverse stock split is a cosmetic change to the stock's price and outstanding share count. It does not alter the company's underlying financial health, business operations, or intrinsic value. The long-term success of the stock will depend on the company's ability to execute its business strategy and achieve its operational and financial goals.
Following the split, the company's stock (XXII) continued to trade on The Nasdaq Capital Market under the same symbol but with a new CUSIP number. The actual market performance post-split will depend on various factors, including market sentiment, company performance, and broader economic conditions.
Citations
- 22nd Century Group, Inc. (2024, March 5). 22nd Century Group Announces Effectiveness of 1-for-24 Reverse Stock Split. GlobeNewswire. Retrieved from https://www.globenewswire.com/news-release/2024/03/05/2840439/0/en/22nd-Century-Group-Announces-Effectiveness-of-1-for-24-Reverse-Stock-Split.html
- Yahoo Finance. 22nd Century Group, Inc. (XXII) Stock Price, News, Quote & History. Retrieved from https://finance.yahoo.com/quote/XXII/ (Data accessed for historical prices around March 2024).
- Yahoo Finance. 22nd Century Group, Inc. (XXII) Historical Data (March 2024). Retrieved from https://finance.yahoo.com/quote/XXII/history?period1=1709251200&period2=1709683200&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true (Specific link for price verification).
Report Generated: 2025-06-17