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Item 5. Market for Registrant’s Common Equity

2021-03-11 compared with 2020-03-11 · 25 added, 97 removed, 15 unchanged (89% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is

listed on the NYSE American under the symbol “XXII.”

As of December 31, 2019, there were 89 holders of record of shares

of our common stock.

Our common stock is listed on the NYSE American under the symbol “XXII.” As of December 31, 2020, there were 86 holders of record of shares of our common stock.

Dividend Policy

We have not previously and do not plan to

declare or pay any dividends on our common stock.

Our current policy is to retain all funds and any earnings for use in the operation

and expansion of our business.

Payment of future dividends, if any, will be at the discretion of our board of directors after taking

into account various factors, including current financial condition, operating results and current and anticipated cash needs.

Recent Sales of Unregistered

We have not previously and do not plan to declare or pay any dividends on our common stock.

Our current policy is to retain all funds and any earnings for use in the operation and expansion of our business.

Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.

Recent Sales of Unregistered Securities

Issuer Purchases of Equity Securities

authorized for issuance under equity compensation plans

On April 12, 2014, the shareholders of the

Company approved the 22nd Century Group, Inc.

2014 Omnibus Incentive Plan (the “OIP”) and the authorization of 5,000,000

shares thereunder.

On April 29, 2017, the stockholders approved an amendment to the OIP to increase the number of shares available

for issuance by an additional 5,000,000 shares and on May 3, 2019, the stockholders approved an additional amendment to the OIP

to increase the number of shares available for issuance by an additional 5,000,000 shares.

The OIP allows for the granting of equity

and cash incentive awards to eligible individuals over the life of the OIP.

The OIP has a term of ten years and is administered

by the Compensation Committee of the Company’s Board of Directors to determine the various types of incentive awards that

may be granted to recipients under this plan and the number of shares of common stock to underlie each such award under the OIP.

As of December 31, 2019, the Company had available 6,307,115 shares remaining for future awards under the OIP.

The following table summarizes the number of shares of common

stock to be issued upon exercise of outstanding and restricted stock units, the weighted-average exercise price of such stock options

and the number of securities available to be issued under the OIP as of December 31, 2019:

Shares authorized for issuance under equity compensation plans

On April 12, 2014, our stockholders approved the 22nd Century Group, Inc.

2014 Omnibus Incentive Plan (the “OIP”) and the authorization of 5,000,000 shares thereunder.

On April 29, 2017, the stockholders approved an amendment to the OIP to increase the number of shares available for issuance by an additional 5,000,000 shares and on May 3, 2019, the stockholders approved an additional amendment to the OIP to increase the number of shares available for issuance by an additional 5,000,000 shares.

The OIP allows for the granting of equity and cash incentive awards to eligible individuals over the life of the OIP.

The OIP has a term of ten years and is administered by the Compensation Committee of our Board of Directors to determine the various types of incentive awards that may be granted to recipients under this plan and the number of shares of common stock to underlie each such award under the OIP.

As of December 31, 2020, we had available 3,987,167 shares remaining for future awards under the OIP.

The following table summarizes the number of shares of common stock to be issued upon exercise of outstanding options and vesting of restricted stock units under the OIP and our prior 2010 Equity Incentive Plan, the weighted-average exercise price of such stock options, and the number of securities available to be issued under the OIP as of December 31, 2020:

Number of securities

Number of securities to

remaining available for

be issued upon exercise

issuance under equity

of outstanding options,

and restricted stock units,

Weighted average

exercise price of

outstanding options

of securities

remaining available for

issuance under equity

compensation plans

and restricted stock

exercise price of

(excluding securities

outstanding options

reflected in column (a))

1 unchanged sentence

Equity compensation plans not approved by security holders

6,307,115 (1)

(1) Consists of shares available for award under the OIP.

Performance Graph

The following information in this Item of

the Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the Securities

and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended (the “Exchange

Act”), or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference to

any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate

such information into such filing.

The performance graph shown below compares

the cumulative total shareholder return on the Company’s common stock, based on the market price of the common stock, with

the total return of the NYSE American Composite Index and the NASDAQ US Small Cap Biotechnology Index for the period covering December

31, 2014 through December 31, 2019.

The comparison of total return assumes that a fixed investment of $100 was invested on December

31, 2014 in the Company’s common stock and in each of the foregoing indices and further assumes the reinvestment of dividends.

No future awards are available under the 2010 Equity Incentive Plan.

Stock Performance Graph

The following information in this Item of the Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference to any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate such information into such filing.

The performance graph shown below compares the cumulative total shareholder return on the Company’s common stock, based on the market price of the common stock, with the total return of the NYSE American Composite Index and the NASDAQ US Small Cap Biotechnology Index for the period covering December 31, 2015 through December 31, 2020.

The comparison of total return assumes that a fixed investment of $100 was invested on December 31, 2015 in the Company’s common stock and in each of the foregoing indices and further assumes the reinvestment of dividends.

The stock price performance shown on the graph is not necessarily indicative of future price performance.

Selected Financial Data

The selected consolidated financial data

for each of the five years in the period ending December 31, 2019 are derived from our audited financial statements.

consolidated financial data should be read in conjunction with our audited consolidated financial statements and the notes thereto

contained in Item 8, and Management’s Discussion and Analysis of Financial Condition and Results of Operations and Comprehensive

Loss, as set forth in Item 7 of this Annual Report on Form 10-K.

Years Ended December 31 ,

Consolidated Statements of Operations and Comprehensive Loss data:

Gross profit (loss)

Operating expenses (1)

Equity based compensation included in operating expenses

Operating loss

$ (23,566,461 )

$ (24,018,627 )

$ (13,299,864 )

$ (11,387,847 )

$ (12,043,883 )

Warrant liability gain (loss) - net

$ (26,558,544 )

$ (7,966,911 )

$ (13,029,117 )

$ (11,581,430 )

$ (11,031,931 )

Loss per common share - basic and diluted

Common shares used in basic earnings per share calculation

Consolidated Balance Sheet data:

Working capital

Total shareholders' equity

Net cash used in operating activities

$ (14,587,364 )

$ (17,844,266 )

$ (12,068,383 )

$ (9,887,580 )

$ (7,321,811 )

Net cash provided by (used in) investing activities (2)

$ (60,586,245 )

Net cash (used in) provided by financing activities

Acquisition of patents and trademarks (3)

Amortization (4)

(1) Operating expenses include costs for research

and development, sales, general and administrative, and exclude impairment, depreciation and amortization expense.

Operating expenses

for the years ended December 31, 2019 and 2018 include expenses relating to our MRTPA of approximately $1,675,000 and $9,800,000,

respectively.

(2) Includes $58,979,131

used to purchase short-term investment securities during the year ended December 31, 2017.

(3) Includes cash paid for patent and trademark

costs during the applicable year.

(4) Includes the amortization of patent costs

and license fees.

Not applicable for a smaller reporting company, as defined by Item 10(f)(1) of Regulation S-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity