Grossly Misleading “Short and Distort” Article Wrongfully Attempts to Dupe 22nd Century Group Shareholders

As 22nd Century clearly stated in its public response to the FDA’s Advanced Notice of Proposed Rulemaking (ANPRM), 22nd Century has been the sole source since the year 2011 for the production and delivery of more than 24 million (now 28 million) VLNC cigarettes for use in the above-referenced clinical studies, which shows that the FDA’s planned nicotine reduction rule is immediately feasible by 22nd Century. In contrast, and contradicting the short seller’s article, the Big Tobacco companies continue to oppose the FDA’s planned nicotine reduction rule because the Big Tobacco companies have publicly admitted that they are not able to comply with such new rule because 22nd Century holds all the necessary IP; 22nd Century is the only company in the world to have produced very low nicotine tobacco with 95% less nicotine than conventional tobacco.

22nd Century has also advanced further ahead of the Big Tobacco companies by already successfully developing the next generation non-GMO very low nicotine tobacco varieties. 22nd Century has publicly stated that it has successfully developed flue cured (bright) and burley varieties of non-GMO very low nicotine tobacco varieties. The Company is also in the process of developing an oriental variety of non-GMO very low nicotine tobacco. These new VLNC tobacco varieties have superior agronomic and sensory characteristics and are expected to form the foundation of new VLNC tobacco products to be introduced by the Company in the near future. Considering 22nd Century’s achievements, as well as Big Tobacco’s own public statements, it is clear that the rest of the world is playing a long game of catch-up to 22nd Century’s very low nicotine tobacco technology.

The near-term application for 22nd Century’s VLNC tobacco technology is making possible the Company’s Modified Risk Tobacco Product (MRTP) application to the FDA for VLN™ cigarettes. Upon approval by the FDA, 22nd Century will be the first and only company to have an authorized MRTP claim (e.g., “95% Less Nicotine”) for a combustible tobacco product.

3. The “short and distort” article also incorrectly states that British American Tobacco (BAT) supposedly terminated its prior research agreement with 22nd Century because of the expiration of a portion of the QPT gene patents that are supposedly essential for the Company’s Vector 21-41 VLNC tobacco. The true facts are that the QPT gene and the Company’s Vector 21-41 VLNC tobacco were never part of the BAT research agreement. That said, only a portion of the QPT patents expired in 2018 and, as admitted by the Big Tobacco companies (see above) and as detailed in 22nd Century’s 2018 SEC Form 10-K, the QPT patents, by themselves, are not sufficient to create VLNC tobacco. What’s more, as stated previously, the Company’s proprietary Vector 21-41 VLNC tobacco also continues to enjoy plant variety protection through the year 2023. In reality, BAT was trying to create a non-GMO VLNC tobacco plant under its prior research agreement with 22nd Century because GMO plants are not able to be commercialized in the European Union market. BAT was not successful in its research. Subsequently, however, 22nd Century succeeded where BAT failed; 22nd Century publicly announced last year that 22nd Century has developed proprietary non-GMO very low nicotine tobacco plants in both the flue-cured (bright) and burley tobacco varieties. Thus, once again, 22nd Century has been able to achieve what Big Tobacco companies have not been able to achieve in the unique world of VLNC tobacco.

4. The short seller’s “hit piece” article also falsely and wrongfully accuses 22nd Century and its CEO, Henry Sicignano, of supposedly “stealing” the IP rights of Global Tobacco. The true facts are that Global Tobacco and 22nd Century previously had a business disagreement that was resolved with a settlement rather than wasting resources litigating the issue, after which Global Tobacco separately proposed that 22nd Century contract manufacture Global’s little cigar tobacco products. Thus, Global Tobacco is now a customer of 22nd Century’s NASCO manufacturing facility. It is completely false for the “short and distort” article to allege that the manufacturing contract between Global Tobacco and 22nd Century is somehow not an arms’ length contract. All of 22nd Century’s business dealings, whether in contract manufacturing or otherwise, are done on an arms’ length basis, including but not limited to the Global Tobacco contract.

5. The “short and distort” article also states that 22nd Century has paid authors to write stock promotion articles; subsequently, this allegation has been used to file class action and derivative lawsuits. 22nd Century has previously publicly stated and continues to assert that the claims made in the on-going class action and shareholder derivative cases related to such matters are frivolous, meritless and that 22nd Century and the individual defendants have substantial legal and factual defenses to such claims.

6. Finally the self-serving “hit piece” article falsely alleges that 22nd Century is supposedly under SEC investigation. As 22nd Century has publicly stated on several occasions, 22nd Century has not received any notice of, and the Company has no knowledge of, any enforcement proceeding against 22nd Century by the SEC or any other regulator.

In summary, the true facts are that (i) 22nd Century remains the ONLY source in the world for VLNC tobacco plants that meet the FDA’s planned nicotine reduction rule; (ii) a vibrant and growing IP portfolio protects 22nd Century’s technology and proprietary VLNC tobacco; (iii) 22nd Century has developed non-GMO flue cured (bright) and burley VLNC tobacco plants when Big Tobacco companies have failed to do so; (iv) Big Tobacco companies have publicly recognized 22nd Century’s IP and VLNC tobacco as being dominant in this field; (v) upon approval by the FDA, 22nd Century will be the first and only company to have an authorized MRTP claim (e.g., “95% Less Nicotine”) for a combustible tobacco product; and (vi) 22nd Century continues to operate the Company in compliance with all applicable laws, rules and regulations.

“By publishing such a grossly misleading ‘hit piece,’ the anonymous short seller attempts to personally profit by creating a self-fulfilling prophecy – of a declining share price of a target company,” explained Henry Sicignano III, President and Chief Executive Officer of 22nd Century Group. “We are done tolerating this sort of anonymous and self-serving stock manipulation and are now considering taking legal action against those responsible for writing and disseminating the fake news articles penned by ‘Fuzzy Panda.’”

Mr. Sicignano concluded, “22nd Century’s proprietary technology portfolio, financial resources, regulatory prospects, and commercial opportunities have never been stronger. We trust that anyone interested in 22nd Century will ignore the grossly misleading articles published by anonymous self-professed short sellers of the Company’s stock and will instead reference the large volume of public information – from credible, independent sources – that is available on www.xxiicentury.com. We are confident that investors who conduct their own due diligence will indeed conclude that 22nd Century is a truly remarkable company… well on its way to disrupting the entire tobacco industry.