22nd Century Announces Expiration of 2,250,000 Crede Warrants

CLARENCE, N.Y.–(BUSINESS WIRE)– 22nd Century Group, Inc. (NYSE MKT: XXII),
a plant biotechnology company that is a leader in tobacco harm
reduction, announced today that warrants previously issued by the
Company to Crede CG III, Ltd. to purchase an aggregate of 2,250,000
shares of common stock of the Company expired on September 29, 2016,
which resulted in a decrease of approximately 19.1% of the total number
of shares of Company common stock purchasable by warrants. Further, as
previously reported, two separate Crede Warrants to purchase an
aggregate of 2,000,000 additional shares of the Company’s common stock
will expire without exercise due to Crede’s non-performance in a prior
joint venture with the Company.

On September 29, 2014, the Company issued to Crede the now-expired
Tranche 1A Warrant to purchase 1,250,000 shares of Company common stock
at an exercise price of $3.36 per share and the now-expired Tranche 1B
Warrant to purchase 1,000,000 shares of Company common stock at an
exercise price of $2.5951 per share pursuant to the terms of a
now-expired consulting agreement and subsequently terminated joint
venture agreement with Crede. As previously disclosed, the Company
remains in litigation with Crede in the United States District Court for
the Southern District of New York (“SDNY”) regarding Crede’s claim for
the issuance of shares of the Company’s common stock under an exchange
provision of the Tranche 1A Warrant. On June 14, 2016, after hearing
evidence on Crede’s claim, the SDNY Court denied Crede’s request for
preliminary relief in the case to allow Crede to exercise its exchange
rights, with the SDNY Court determining, among other things, that Crede
had not proven a reasonable likelihood that it will prevail on its
claims under the Tranche 1A Warrant. In addition, the Company has filed
motions to dismiss certain of Crede’s claims and to transfer certain
claims to the United States District Court for the Western District of
New York located in Buffalo, where the Company’s headquarters are
located. The Company intends to continue to vigorously defend itself in
this case and is confident that it will prevail against Crede. If the
case continues, the Company also intends to file counterclaims against
Crede, against its principal, Terren Peizer, and against several Peizer
affiliates, personally.

On September 29, 2014, the Company also issued to Crede a Tranche 2
Warrant and a Tranche 3 Warrant to purchase an aggregate total of
2,000,000 additional shares of Company common stock at an exercise price
of $3.3736 per share. Although the Tranche 2 and Tranche 3 Warrants do
not expire until September 29, 2019, these warrants are subject to
certain vesting conditions related to the Company’s prior joint venture
agreement with Crede. Since the Company terminated the joint venture
agreement with Crede on June 22, 2015 due to non-performance by Crede,
the vesting conditions for the Tranche 2 and Tranche 3 Warrants will
never be satisfied and, for that reason, the Company no longer
recognizes the Tranche 2 and Tranche 3 Warrants in the Company’s
financial statements.

“The expiration of the Tranche 1A and Tranche 1B Warrants is very
positive news for our other shareholders,” explained Henry Sicignano,
III, President and Chief Executive Officer of 22nd Century Group.
“Furthermore, because the Tranche 2 and Tranche 3 Warrants will never
become exercisable, an aggregate of 4,250,000 shares of potential
dilution from the exercise of all the Crede warrants will be avoided
entirely.”

About 22nd Century Group, Inc.

22nd Century is a plant biotechnology company focused on technology
which allows it to increase or decrease the level of nicotine in tobacco
plants and the level of cannabinoids in cannabis plants through genetic
engineering and plant breeding. The Company’s primary mission is to
reduce the harm caused by smoking. 22nd Century currently owns or
exclusively controls more than 200 issued patents and more than 50
pending patent applications around the world. Visit www.xxiicentury.com
for more information.

Cautionary Note Regarding Forward-Looking Statements: This
press release contains forward-looking information, including all
statements that are not statements of historical fact regarding the
intent, belief or current expectations of 22nd Century Group, Inc., its
directors or its officers with respect to the contents of this press
release, including but not limited to our future revenue expectations.
The words “may,” “would,” “will,” “expect,” “estimate,” “anticipate,”
“believe,” “intend” and similar expressions and variations thereof are
intended to identify forward-looking statements. We cannot guarantee
future results, levels of activity or performance. You should not place
undue reliance on these forward-looking statements, which speak only as
of the date that they were made. These cautionary statements should be
considered with any written or oral forward-looking statements that we
may issue in the future. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any
of the forward-looking statements to conform these statements to reflect
actual results, later events or circumstances, or to reflect the
occurrence of unanticipated events. You should carefully review and
consider the various disclosures made by us in our annual report on Form
10-K for the fiscal year ended December 31, 2015, filed on February 18,
2016, including the section entitled “Risk Factors,” and our other
reports filed with the U.S. Securities and Exchange Commission which
attempt to advise interested parties of the risks and factors that may
affect our business, financial condition, results of operation and cash
flows. If one or more of these risks or uncertainties materialize, or if
the underlying assumptions prove incorrect, our actual results may vary
materially from those expected or projected.

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