CLARENCE, N.Y.-- 22nd Century Group, Inc. (NYSE MKT: XXII), a plant biotechnology company that is a leader in tobacco harm reduction, announced today that Crede CG III, Ltd. has dismissed claims against the Company in the on-going litigation related to a terminated China joint venture. Crede filed the lawsuit in the wake of the Company’s decision to terminate a failed China joint venture arrangement with Crede and its principal, Terren Peizer, due to non-performance and other breaches by Crede and its principals in their failure to perform under the joint venture agreements and impeding the Company’s efforts to expand into China.
As the Company previously announced, on January 20, 2017, the United States District Court for the Southern District of New York (the “SDNY Court”) granted the Company’s request to sever the Crede lawsuit into two separate cases and transfer the claims relating to the now terminated China joint venture to the United States District Court for the Western District of New York (the “WDNY Court”), where 22nd Century’s headquarters office is located. At the same time, the Crede claims relating to the now void exchange feature of the Tranche 1-A warrant previously issued to Crede under a financing agreement remained in the SDNY Court according to the jurisdictional provisions of that warrant. As previously reported, the SDNY Court held on June 14, 2016 that Crede had not demonstrated a reasonable likelihood that it would prevail on its claims, and that there was likelihood that Crede violated the activity restrictions of the Tranche 1-A warrant, which should bar Crede’s claim for such shares from the Company.
On February 14, 2017, Crede dismissed its lawsuit against the Company in the WDNY Court, determining not to pursue its claims against the Company related to the failed China joint venture; thus dismissing claims alleging damages in excess of $500 million. The Company plans to continue its efforts to conduct business in China without Crede and Peizer.
On February 21, 2017, the SDNY Court granted the Company’s request to file a motion for summary judgment in the case, with all discovery in the case being deferred until after the SDNY Court conducts a hearing and issues its decision on the upcoming summary judgment motion to be filed by 22nd Century. The Company intends to continue to vigorously defend itself in this remaining case and is confident that it will prevail against Crede.
“From the beginning, the Company has known that Crede’s lawsuit was frivolous and completely without merit,” explained a 22nd Century spokesman. “We are pleased that Crede has now recognized this fact and has dismissed the claims that were transferred to the WDNY Court. We look forward to the prompt and successful resolution of the remaining portion of the case in the SDNY Court.”
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.
