22nd Century Group, Inc. (OTCQB:XXII) announced today that the company sent notices to all its warrant holders encouraging the exercise or amendment of the company’s warrants. 22nd Century Group’s management believes the company will have sufficient stockholders equity to up-list its common stock to a national securities exchange – such as NASDAQ or NYSE – if the company’s “derivative warrant liability” is reduced through the exercise or amendment of the outstanding warrants.
“Derivative warrant liability” is not an actual cash obligation (or cash expense) and is classified and reported as a derivative liability for accounting purposes and marked-to-market at the balance sheet date. Upon the exercise of a warrant or elimination of the anti-dilution feature of a warrant, the warrant liability is reduced and equity (capital in excess of par value) is increased accordingly.
“Since British American Tobacco’s strategic $7 million investment in 22nd Century Group last month, we have been contacted by several institutional investors and retail brokers looking to build a position in 22nd Century Group stock. Many of these funds and brokers cannot buy OTC Bulletin Board stocks,” said Joseph Pandolfino, Founder and CEO of the company. “In order to deliver maximum benefit and value for our shareholders, we concluded that listing our common stock on a national securities exchange is very important.”
22nd Century Group Paving the Way for Up-Listing to a National Securities Exchange - Yahoo Finance