22nd Century Group Announces Closing of $11.4 Million Above-Market Registered Direct Offering

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 that the Company closed today a registered direct
stock offering with one existing institutional investor and one new
institutional investor and received approximately $11.4 million in gross
proceeds through the sale of units priced at $1.3425 per unit, which is
$0.0625 per share above the closing price of the Company’s common stock
on the NYSE MKT on October 13, 2016, the date immediately prior to the
signing of the stock purchase agreement. The transaction included a
total of 8,500,000 shares of the Company’s common stock and 66-month
warrants to purchase 4,250,000 shares of common stock at an exercise
price of $1.45 per share (exercisable after six months). The net
proceeds of the financing will be used for general corporate purposes,
including working capital.

Chardan Capital Markets, LLC acted as the sole placement agent for this
transaction.

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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