22ND Century Group Inc

This proposal asks shareholders to authorize the Board to amend the company’s Articles of Incorporation to effect a reverse stock split at any ratio between 1-for-2 and 1-for-200, with the Board retaining sole discretion to determine the ratio or to abandon the amendment within an authorized period. Management is pursuing the reverse split primarily to attempt to increase the market price per share so the company can satisfy Nasdaq’s $1.00 minimum bid price requirement and avoid delisting, and it emphasizes past frequent reverse splits as context for ongoing compliance efforts. The proposal does not reduce the number of authorized shares, meaning it will create a larger pool of unissued shares post-split that the Board could issue without further stockholder approval (subject to Nasdaq rules), raising potential dilution and corporate-control considerations. The proxy discloses practical mechanics including fractional-share treatment (board may round up or pay cash), adjustments to equity awards, warrants and convertible securities, and tax and shareholder-rights consequences. Management highlights uncertainty: there is no guarantee the split will sustainably increase the share price, and a split could magnify percentage declines and reduce liquidity by producing odd lots. The Board’s discretionary authority is justified as providing flexibility to time implementation based on trading conditions, trading volume, and general market factors. Investors should weigh the immediate objective of maintaining Nasdaq listing and potential increased investor interest against dilution and anti-takeover concerns arising from a materially larger authorized-but-unissued share pool. Given the company’s history of multiple recent reverse splits, the proposal appears driven by recurring listing-price pressure rather than one-time corrective action, increasing the strategic significance and risk that future similar actions may be required. The Board recommends a vote FOR because it believes the potential benefits of preserving Nasdaq listing and flexibility outweigh the risks that the Reverse Split may not achieve its intended effects.

This proposal requests shareholder approval under Nasdaq Rule 5635(d) to authorize the Inducement Warrants issued in June 2026 and the underlying shares because the warrants could result in an issuance exceeding Nasdaq’s 19.99% threshold at a price below the Minimum Price. The inducement arrangement was offered as part of a warrant inducement offering to certain holders of existing warrants to encourage exercise and to adjust terms; following a reverse split adjustment, the Inducement Warrants represent up to 3,019,586 shares exercisable at an adjusted exercise price of $6.32, but the exercise price is subject to further adjustment in the event of future lower-priced equity issuances. Management emphasizes that without stockholder approval the Inducement Warrants will not become exercisable and the company would be required to call a stockholder meeting every 90 days until approval is obtained, creating ongoing administrative and market uncertainty. Approval would allow the company to permit warrant exercise, which may incentivize existing warrant holders and support liquidity or capital formation, but it will be dilutive to current shareholders and could further pressure per-share metrics. The company asserts that failure to secure approval may discourage future investors from participating in financings with the company, potentially impairing access to capital. The Board recommends FOR, framing approval as necessary to implement a previously negotiated commercial arrangement and preserve financing flexibility while complying with Nasdaq listing rules. Analysts should consider the interaction between this proposal and concurrently proposed future offerings (Proposals 3 and 4), which together could materially increase outstanding shares and lead to significant dilution. The adjustments and anti-dilution provisions in the warrants (including resets on lower-priced issuances) and the history of recent reverse splits should be evaluated for their likely effect on share count and potential downward pressure on the market price over time.

This proposal seeks pre-approval under Nasdaq Rule 5635(d) for a contemplated private financing of up to $20 million consisting of a new class of convertible preferred stock and accompanying warrants, to be substantially similar to the Series B Preferred Stock previously issued. The New Preferred Stock would be non-voting (except as required by law), convertible into common stock at a conversion price tied to the Nasdaq Minimum Price subject to a floor (and with anti-dilution protections), include beneficial ownership conversion limits (4.99% default, 9.99% electable), and carry liquidation preferences and other protective provisions. The New Warrants would be exercisable at an exercise price equal to the Nasdaq Minimum Price at signing, subject to adjustment, and could be exercised on a cashless basis if resale registrations are not effective; both instruments are designed to provide investors downside protection while enabling capital infusion. Management frames the proposal as necessary to permit a rapid close of a significant financing with substantially the same investor group as the March 2026 Series B transaction, and requires shareholder approval because the potential issuance could exceed Nasdaq’s 19.99% threshold at below-market prices. The Board notes limited liquidity for the New Preferred Stock (no listing expected) and that proceeds would be used for general corporate purposes, potentially including redemption of Series B shares. If not approved, the company risks discouraging these investors and losing an important source of capital; if approved, current shareholders will face dilution and possible governance impact through contractual rights of preferred holders. The proposal should be assessed in light of the company’s repeated reverse splits and short share base, which may amplify dilution effects and investor concentration risks. The Board recommends FOR as enabling necessary financing flexibility while complying with Nasdaq rules, though it underscores the dilutive consequences and trading illiquidity of the preferred security.

This proposal requests shareholder pre-approval under Nasdaq Rule 5635(d) for a contemplated private offering of up to $10 million of common stock (or pre-funded warrants in lieu of shares) together with one warrant per share, exercisable for up to an aggregate $10 million of additional common stock and expiring in five years. The offering contemplates entry into a Securities Purchase Agreement with customary standstills and participation rights, sale pricing at or above the Nasdaq Minimum Price on signing, beneficial ownership limits on warrant exercise (4.99% default, 9.99% elective with notice), and anti-dilution adjustments for subsequent lower-priced issuances; purchasers may exercise warrants on a cashless basis if resale registrations are unavailable. Management argues that approval is necessary to preserve investor confidence and enable closing with the identified investor group, and that failure to secure approval could hamper future financings and access to capital. The Board discloses that the offering would be dilutive to current shareholders and might be completed alongside the Proposed Future Offering in Proposal 3, increasing aggregate dilution risk. Analysts should evaluate the terms (including exercise/reset mechanics, cashless exercise features, and the lockout/standstill covenants) and the impact on share count, float, and future share-price downward pressure given the company’s thin share base and history of capital raises. The Board recommends FOR because it views the financing as necessary to fund operations and believes the negotiated terms are appropriate given current market constraints and Nasdaq requirements.

This procedural proposal asks shareholders to permit the Company to adjourn the Special Meeting, if the Board determines it is necessary or advisable, to solicit additional proxies in favor of Proposals 1–4 should there be insufficient votes to approve those matters at the scheduled meeting. The authority to adjourn is intended to provide management flexibility to continue outreach and to convene the meeting at a later date within certain notice parameters without holding a new full meeting, thereby increasing the chance of obtaining favorable outcomes for the substantive proposals. The proxy explains quorum and notice rules for adjournments and that an adjourned meeting may transact any business that could have been transacted at the original meeting. If approved, the Company could use adjournment tactically to pursue additional votes from beneficial holders or brokers, which may materially affect timing and costs but could avoid the need to abandon previously negotiated financings or inducement arrangements. The Board recommends FOR because without the ability to adjourn, they may be unable to secure the approvals necessary for the proposed financings and corporate actions; however, adjournment can delay resolution and prolong uncertainty for investors. Investors should weigh the potential benefits of increased solicitation time against attendant costs, market perception of repeated adjournments, and the possibility that adjournment signals difficulty obtaining support for the substantive proposals.