22nd Century (XXII) 10-K 11 Mar 20 2019 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Mar. 11, 2020	Jun. 28, 2019
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Registrant Name	22nd Century Group, Inc.
Entity Central Index Key	0001347858
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Trading Symbol	XXII
Entity Public Float			$ 249
Entity Common Stock, Shares Outstanding		138,856,809
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 485,111	$ 604,925
Short-term investment securities	38,477,074	55,748,939
Accounts receivable	866,860	871,293
Inventory, net	2,266,304	3,043,949
Prepaid expenses and other assets	648,149	928,420
Total current assets	42,743,498	61,197,526
Property, plant and equipment:
Machinery and equipment, net	3,119,970	3,260,748
Operating leases right-of-use assets, net	601,979	0
Total property, plant and equipment	3,721,949	3,260,748
Other assets:
Intangible assets, net	8,493,913	9,751,504
Investments	8,402,527	3,092,358
Convertible note receivable, net	5,589,478	0
Total other assets	22,485,918	12,843,862
Total assets	68,951,365	77,302,136
Current liabilities:
Notes payable	580,709	689,148
Operating lease obligations	219,814	0
Accounts payable	1,997,820	2,574,840
Accrued expenses	2,618,577	1,826,481
Accrued severance	358,610	0
Deferred income	4,850	83,075
Total current liabilities	5,780,380	5,173,544
Long-term liabilities:
Notes payable	292,177	848,217
Operating lease obligations	382,165	0
Accrued severance	445,821	0
Total liabilities	6,900,543	6,021,761
Commitments and contingencies (Note 10)
Shareholders' equity
Common stock value	1,384	1,246
Capital in excess of par	187,735,391	170,392,249
Accumulated other comprehensive income	7,074	21,363
Accumulated deficit	(125,693,027)	(99,134,483)
Total shareholders' equity	62,050,822	71,280,375
Total liabilities and shareholders' equity	$ 68,951,365	$ 77,302,136

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares issued	138,362,809	124,642,593
Common stock, shares outstanding	138,362,809	124,642,593

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue:
Sale of products, net	$ 25,832,530	$ 26,426,347	$ 16,600,244
Cost of goods sold (exclusive of depreciation shown separately below):
Products	25,818,075	25,527,360	17,308,156
Gross profit (loss)	14,455	898,987	(707,912)
Operating expenses:
Research and development (including equity-based compensation)	8,057,147	14,989,746	3,366,468
Sales, general and administrative (including equity-based compensation)	12,956,417	8,585,533	8,278,487
Impairment	1,142,349	0	0
Depreciation	589,310	522,695	353,435
Amortization	835,693	819,640	593,562
Total operating expenses	23,580,916	24,917,614	12,591,952
Operating loss	(23,566,461)	(24,018,627)	(13,299,864)
Operating income (expense):
Unrealized (loss) gain on investment	(2,419,348)	284,400	342,562
Realized gain on investments	0	14,492,968	0
Realized gain (loss) on short-term investment securities	220,872	(54,451)	0
Litigation expense	(1,890,900)	0	0
Gain on the sale of machinery and equipment	87,351	0	0
Warrant liability gain (loss), net	0	48,711	(157,809)
Dividend income	0	221,991	0
Interest income, net	1,066,324	1,069,036	115,098
Interest expense	(56,382)	(10,939)	(29,104)
Total other income (expense)	(2,992,083)	16,051,716	270,747
Loss before income taxes	(26,558,544)	(7,966,911)	(13,029,117)
Income taxes	0	0	0
Net loss	(26,558,544)	(7,966,911)	(13,029,117)
Other comprehensive income (loss):
Unrealized gain (loss) on short-term investment securities	206,583	(21,653)	0
Reclassification of (gains) losses to net loss	(220,872)	43,016	0
Other comprehensive income (loss)	(14,289)	21,363	0
Comprehensive loss	$ (26,572,833)	$ (7,945,548)	$ (13,029,117)
Net loss per common share - basic and diluted	$ (0.21)	$ (0.06)	$ (0.13)
Common shares used in basic and diluted earnings per share calculation	125,882,717	124,298,981	101,161,380

CONSOLIDATED STATEMENTS OF OP_2

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense	$ 1,341,215	$ 758,796

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Capital in Excess of Par Value [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Deficit [Member]	Total
Beginning balance at Dec. 31, 2016	$ 907	$ 102,471,907	$ 0	$ (78,138,455)	$ 24,334,359
Beginning balance (in shares) at Dec. 31, 2016	90,698,113
Stock issued in connection with warrant exercises	$ 122	12,446,986	0	0	12,447,108
Stock issued in connection with warrant exercises (in shares)	12,249,327
Stock issued in connection with option exercises	$ 1	(1)	0	0	0
Stock issued in connection with option exercises (in shares)	51,927
Equity-based compensation	$ 0	941,650	0	0	941,650
Equity-based compensation (in shares)	0
Stock issued in October 2017 registered direct offering, net	$ 206	50,731,994	0	0	50,732,200
Stock issued in October 2017 registered direct offering, net (in shares)	20,570,000
Unrealized gain (loss) on short-term investment					0
Reclassification of gains (losses) to net loss					0
Net loss	$ 0	0	0	(13,029,117)	(13,029,117)
Ending balance at Dec. 31, 2017	$ 1,236	166,592,536	0	(91,167,572)	75,426,200
Ending balance (in shares) at Dec. 31, 2017	123,569,367
Stock issued in connection with warrant exercises	$ 5	(5)	0	0	0
Stock issued in connection with warrant exercises (in shares)	490,012
Stock issued in connection with option exercises	$ 5	444,608	0	0	444,613
Stock issued in connection with option exercises (in shares)	583,214
Equity-based compensation	$ 0	3,187,331	0	0	3,187,331
Equity-based compensation (in shares)	0
Stock issued in October 2017 registered direct offering, net (in shares)	0
Reclassification of warrant liability to capital in excess of par	$ 0	167,779	0	0	167,779
Unrealized gain (loss) on short-term investment	0	0	(21,653)	0	(21,653)
Reclassification of gains (losses) to net loss	0	0	43,016	0	43,016
Net loss	0	0	0	(7,966,911)	(7,966,911)
Ending balance at Dec. 31, 2018	$ 1,246	170,392,249	21,363	(99,134,483)	71,280,375
Ending balance (in shares) at Dec. 31, 2018	124,642,593
Stock issued in connection with warrant exercises	$ 113	10,615,505	0	0	10,615,618
Stock issued in connection with warrant exercises (in shares)	11,293,211
Stock issued in connection with option exercises	$ 1	(1)	0	0	0
Stock issued in connection with option exercises (in shares)	39,988
Equity-based compensation	$ 1	3,539,744	0	0	3,539,745
Equity-based compensation (in shares)	100,000
Stock issued in connection with litigation expense	$ 10	1,890,890	0	0	1,890,900
Stock issued in connection with litigation expense (in shares)	990,000
Stock issued in connection with Panacea investment	$ 13	1,297,004	0	0	1,297,017
Stock issued to PLS (in shares)	1,297,017
Unrealized gain (loss) on short-term investment	$ 0	0	206,583	0	206,583
Reclassification of gains (losses) to net loss	0	0	(220,872)	0	(220,872)
Net loss	0	0	0	(26,558,544)	(26,558,544)
Ending balance at Dec. 31, 2019	$ 1,384	$ 187,735,391	$ 7,074	$ (125,693,027)	$ 62,050,822
Ending balance (in shares) at Dec. 31, 2019	138,362,809

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (26,558,544)	$ (7,966,911)	$ (13,029,117)
Adjustments to reconcile net loss to cash used in operating activities:
Impairment of intangible assets	1,142,349	0	0
Amortization and depreciation	1,186,343	1,199,794	848,974
Amortization of license fees	238,661	142,541	98,022
Lease expense	212,297	0	0
Severance expense	880,838	0	0
Unrealized loss (gain) on investment	2,419,348	(284,400)	(342,562)
Realized gain on the sale of investments	0	(14,492,968)	0
Realized (gain) loss on short-term investment securities	(220,872)	54,451	0
Litigation expense	1,890,900	0	0
Gain on the sale of machinery and equipment	(87,351)	0	0
Warrant liability (gain) loss	0	(48,711)	157,809
Accretion of interest on notes payable and accrued severance	47,775	10,939	29,104
Accretion of interest income on convertible note receivable	(21,978)	0	0
Equity-based employee compensation expense	3,539,745	3,187,331	941,650
Inventory write-off	985,238	0	0
Decrease in allowance for doubtful accounts	0	0	(10,000)
(Decrease) increase in inventory reserve	0	(95,000)	(60,623)
(Increase) decrease in assets:
Accounts receivable	4,433	85,773	(906,074)
Inventory	(207,593)	333,588	(129,228)
Prepaid expenses and other assets	280,271	(181,615)	(551,236)
Increase (decrease) in liabilities:
Operating lease obligations	(212,297)	0	0
Accounts payable	(732,135)	323,070	473,804
Accrued expenses	792,095	(166,873)	586,109
Accrued severance	(88,661)	0	(203,365)
Deferred revenue	(78,226)	54,725	28,350
Net cash used in operating activities	(14,587,364)	(17,844,266)	(12,068,383)
Cash flows from investing activities:
Acquisition of patents and trademarks	(515,335)	(656,985)	(450,208)
Acquisition of machinery and equipment	(527,330)	(448,639)	(1,156,906)
Acquisition of license	(50,000)	0	0
Proceeds from the sale of machinery and equipment	166,150	0	0
Investment in Panacea	(12,000,000)	0	0
Proceeds from the sale of investments	0	13,051,503	0
Sales and maturities of short-term investment securities	(1,841,821)	37,415,159	0
Purchase of short-term investment securities	19,320,269	(34,215,994)	(58,979,131)
Net cash provided by (used in) investing activities	4,551,933	15,145,044	(60,586,245)
Cash flows from financing activities:
Payment on note payable	(700,000)	(800,000)	(333,334)
Proceeds from exercise of stock options	0	444,613	0
Net proceeds from exercise of stock warrants	10,615,617	0	12,447,108
Net proceeds from October 2017 registered direct offering	0	0	50,732,200
Net cash provided by (used in) financing activities	9,915,617	(355,387)	62,845,974
Net decrease in cash	(119,814)	(3,054,609)	(9,808,654)
Cash and cash equivalents - beginning of period	604,925	3,659,534	13,468,188
Cash and cash equivalents - end of period	485,111	604,925	3,659,534
Net cash paid for:
Cash paid during the period for interest	3,338	0	29,104
Cash paid during the period for income taxes	0	0	0
Non-cash transactions:
Patent and trademark additions included in accounts payable	155,116	152,322	188,818
Machinery and equipment additions included in accounts payable	0	18,757	77,913
Unrealized (gain) loss on short-term investment securities	(206,583)	27,042	0
Licenses acquired with notes payable	0	2,326,427	0
Reclassification of warrant liability to capital in excess of par	0	167,779	0
Stock issued in connection with equity investment	$ 1,297,017	$ 0	$ 0

NATURE OF BUSINESS AND SUMMARY

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2019
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1. – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The accompanying consolidated financial statements include the accounts of 22nd Century Group, Inc. (“22nd Century Group”), its three wholly-owned subsidiaries, 22nd Century Limited, LLC (“22nd Century Ltd”), NASCO Products, LLC (“NASCO”), and Botanical Genetics, LLC (“Botanical Genetics”), and two wholly-owned subsidiaries of 22nd Century Ltd, Goodrich Tobacco Company, LLC (“Goodrich Tobacco”) and Heracles Pharmaceuticals, LLC (“Heracles Pharma”, formerly known as Hercules Pharmaceuticals, LLC) (collectively, the “Company”). All intercompany accounts and transactions have been eliminated. Nature of Business - 22nd Century Ltd is a plant biotechnology company specializing in technology that allows (i) for the level of nicotine and other nicotinic alkaloids in tobacco plants to be altered through genetic engineering and modern plant breeding and (ii) the levels of cannabinoids in hemp plants to be decreased or increased through genetic engineering and modern plant breeding. Goodrich Tobacco and Heracles Pharma are business units for the Company’s (i) potential modified risk tobacco products and (ii) smoking cessation product, respectively. NASCO is a federally licensed tobacco products manufacturer, a subsequent participating member under the tobacco Master Settlement Agreement (“MSA”) between the tobacco industry and the settling states under the MSA and operates the Company’s tobacco products manufacturing business in North Carolina. Botanical Genetics is a wholly-owned subsidiary of 22nd Century Group and was incorporated to facilitate the original investment in Anandia, Inc., and performs research and development related to the Company’s hemp business. Reclassifications - Certain items in the 2018 and 2017 financial statements have been reclassified to conform to the 2019 classification. During the third quarter of 2019, the Company combined sales and marketing expenses with general and administrative expenses to create a single line item in the operating expense section of the Company’s Consolidated Statements of Operations and Comprehensive Loss titled sales, general and administrative expenses. The comparative classifications for 2018 and 2017 have been reclassified to conform to the new presentation. Preferred stock authorized - The Company is authorized to issue “blank check” preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock. Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in financial institutions. Although the cash accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Management reviews the financial viability of these institutions on a periodic basis. Cash and cash equivalents – The Company considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. However, the Company has elected to classify money market mutual funds related to its short-term investment portfolio as short-term investment securities. Short-term investment securities – The Company’s short-term investment securities are classified as available-for-sale securities and consist of money market funds, corporate bonds, U.S. government agency bonds, U.S. treasury securities, and commercial paper with maturities greater than three months at the time of acquisition. The Company’s short-term investment securities are carried at fair value within current assets on the Company’s Consolidated Balance Sheets. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. The Company’s investment policy states that all investment securities must have a maximum maturity of twenty-four (24) months or less and the maximum weighted maturity of the investment securities must not exceed twelve (12) months. All the Company’s short-term investment securities are fixed-income debt instruments, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Realized gains and losses on short-term investment securities are recorded in the other income (expense) portion of the Company’s Consolidated Statements of Operations and Comprehensive Loss. Interest income is recorded on the accrual basis and presented net of investment related fees. Accounts receivable - The Company periodically reviews aged account balances for collectability. The Company concluded that an allowance for doubtful accounts was not required at both December 31, 2019 and December 31, 2018. Inventory - Inventories are valued at the lower of historical cost or net realizable value. Cost is determined using an average cost method for tobacco leaf inventory and raw materials inventory and standard cost is primarily used for finished goods inventory. Inventories are evaluated to determine whether any amounts are not recoverable based on slow moving or obsolete condition and are written off or reserved as appropriate. For the year ended December 31, 2019, the Company wrote off tobacco leaf inventory with a cost of $985,238 and this cost is included in research and development expenses on the Company’s Consolidated Statement of Operations and Comprehensive Loss. Inventories at December 31, 2019 and 2018 consisted of the following: December 31, December 31, 2019 2018 Inventory - tobacco leaf $ 1,178,147 $ 1,556,581 Inventory - finished goods Cigarettes and filtered cigars 106,264 156,702 Inventory - raw materials Cigarette and filtered cigar components 1,081,893 1,430,666 2,366,304 3,143,949 Less: inventory reserve 100,000 100,000 $ 2,266,304 $ 3,043,949 Machinery and equipment – Machinery and equipment are recorded at their acquisition cost and depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 10 years. Depreciation commences when the asset is placed in service. Right-of-use assets - On January 1, 2019, the Company adopted ASU 2016-02, Subtopic ASC 842, Leases, and as a result has recorded Right-to-use assets and corresponding Lease obligations as more fully discussed in Note 3. Intangible Assets - Intangible assets are recorded at cost and consist primarily of (1) expenditures incurred with third-parties related to the processing of patent claims and trademarks with government authorities, as well as costs to acquire patent rights from third-parties, (2) license fees paid for third-party intellectual property, (3) costs to become a signatory under the tobacco MSA, and (4) license fees paid to acquire a predicate cigarette brand. The amounts capitalized relate to intellectual property that the Company owns or to which it has exclusive rights. The Company’s intellectual property capitalized costs are amortized using the straight-line method over the remaining statutory life of the granted patent assets in each of the Company’s patent families, which have estimated expiration dates ranging from 2019 to 2036. Periodic maintenance or renewal fees are expensed as incurred. Annual minimum license fees are charged to expense. License fees paid for third-party intellectual property are amortized on a straight-line basis over the last to expire patents, which patent expiration dates are expected to range from 2019 through 2036. The Company believes costs associated with becoming a signatory to the MSA and acquiring a predicate cigarette brand have an indefinite life and as such, no amortization is taken. Total intangible assets at December 31, 2019 and 2018 consisted of the following: December 31, December 31, 2019 2018 Intangible assets, net Patent and trademark costs $ 5,712,415 $ 7,136,774 Less: accumulated amortization and impairment 2,839,135 3,194,565 Patent and trademark costs, net 2,873,279 3,942,209 License fees, net 3,776,427 3,776,427 Less: accumulated amortization 707,793 469,132 License fees, net 3,068,634 3,307,295 MSA signatory costs 2,202,000 2,202,000 License fee for predicate cigarette brand 350,000 300,000 $ 8,493,913 $ 9,751,504 Amortization expense relating to the above intangible assets for the years ended December 31, 2019, 2018, and 2017 amounted to $835,693, $819,640 and $539,562, respectively. The estimated annual average amortization expense for the next five years is approximately $401,500 for patent costs and $239,100 for license fees. Impairment of Long-Lived Assets - The Company reviews the carrying value of its amortizing long-lived assets whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be recoverable. The Company assesses recoverability of the asset by estimating the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the estimated future undiscounted net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and its fair value. During the year ended December 31, 2019, the Company decided on a going-forward basis that it will be concentrating its business and scientific resources, personnel and efforts on the portion of our intellectual property portfolio (patents, patent applications and trademarks) that relate to very low nicotine tobacco plants and potential products, as well as unique hemp/cannabis plants and potential products, in order to more strategically pursue our objectives. Accordingly, we recorded a non-cash impairment charge of $1,142,349 (cost of $2,092,485 less accumulated amortization of $950,136) relating to patent and trademark costs not associated with these strategic objectives. This impairment charge is included as a separate line item in operating expenses on the Company’s Consolidated Statements of Operations and Comprehensive Loss. There was no impairment loss recorded during the years ended December 31, 2018, and 2017. Income Taxes - The Company recognizes deferred tax assets and liabilities for any basis differences in its assets and liabilities between tax and U.S. GAAP reporting, and for operating loss and credit carry-forwards. As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2019 and 2018. Additionally, because the Company has a full valuation allowance offsetting its deferred tax assets and as a result has an effective tax rate of zero, the Company has elected to present other comprehensive income items relating to net unrealized gains on short-term investment securities gross and not net of taxes. The Company’s federal and state tax returns for the years ended December 31, 2016 through December 31, 2018 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2019. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was signed into law on December 22, 2017. The TCJA includes significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%. In accordance with a question and answer document issued by the Financial Accounting Standards Board (“FASB”) staff on January 18, 2018, the Company is applying the guidance in Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which provides guidance on applying FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, if the accounting for certain income tax effects of the TCJA are incomplete by the time the financial statements are issued for a reporting period. Specifically, SAB 118 permits companies to use reasonable estimates and provisional amounts for some line items for taxes when preparing year-end 2018 and 2017 financial statements. The Company has completed the accounting under the TCJA, and accordingly, has reported the effects in the Company’s consolidated financial statements for the years ended December 31, 2019, 2018, and 2017. Additional disclosures required by SAB 118 are included in Note 13. Stock Based Compensation - The Company uses a fair-value based method to determine compensation for all arrangements under which Company employees and others receive shares, restricted stock units or options to purchase common shares of the Company. Stock based compensation expense is recorded over the requisite service period based on estimates of probability and time of achieving milestones and vesting. For accounting purposes, the shares will be considered issued and outstanding upon vesting or risks of forfeiture expiring. Revenue Recognition - On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers and all related amendments (the “new revenue standard”) for all contracts using the modified retrospective method. Under the modified retrospective method, the Company was required to record a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2018. The Company has determined that the adoption of the new revenue standard did not require a cumulative-effect adjustment. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company recognizes revenue when it satisfies a performance obligation by transferring control of the product to a customer. The Company’s customer contracts consist of obligations to manufacture the customer’s branded filtered cigars and cigarettes. For certain contracts, the performance obligation is satisfied over time as the Company determines, due to contract restrictions, it does not have an alternative use of the product, and it has an enforceable right to payment as the product is manufactured. The Company recognizes revenue under those contracts at the unit price stated in the contract based on the units manufactured. The manufacturing process is completed on a daily basis and, therefore, there were no performance obligations partially satisfied at December 31, 2019 and 2018. For contracts where the performance obligation is satisfied at a point in time, the Company recognizes revenue when the product is transferred to the customer. Revenue from the sale of the Company’s products is recognized net of cash discounts, sales returns and allowances. There was no allowance for discounts or returns and allowances at December 31, 2019 and 2018. The Company provides assurance to customers that the product complies with agreed-upon contractual specifications. Shipping and handling activities associated with the outbound freight after control of the product has transferred to a customer are considered a fulfillment activity. The related shipping and handling expenses are included in cost of goods sold. The Company generally requires a down payment from its customers prior to commencement of manufacturing the product. Amounts received in advance of satisfying the performance obligations are recorded as deferred revenue. Customer payment terms vary depending on the terms of each customer contract, but payment is generally due prior to product shipment or within extended credit terms up to twenty-one (21) days after shipment ; therefore The Company's contracts with customers do not include a significant financing component. The Company’s net sales revenue is derived from customers located primarily in the United and is disaggregated by the timing of revenue recognition. For the years ended December 31, 2019 and 2018, net sales revenue from products transferred over time amounted to approximately $16,466,000 and $16,785,000, respectively, and net sales revenue from products transferred at a point in time amounted to approximately $9,367,000 and $9,641,000, respectively. The Company had certain customers whose revenue individually represented 10% or more the Company’s total revenue and whose accounts receivable balances individually represented 10% or more the Company’s total accounts receivable. For the years ended December 31, 2019, and 2018, three customers accounted for over 92.7% and 92.0% of our revenue and approximately 98.5% and 85.6%, respectively, of accounts receivable. Derivatives - The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments are initially recorded at fair market value and then are revalued at each reporting date, with changes in fair value reported in the Consolidated Statements of Operations and Comprehensive Loss. The classification of derivative instruments is evaluated at the end of each reporting period. Derivative instruments are classified on the balance sheet as current or non-current based on if the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. Research and Development - Research and development costs are expensed as incurred. Loss Per Common Share - Basic loss per common share is computed using the weighted-average number of common shares outstanding. Diluted loss per share is computed assuming conversion of all potentially dilutive securities. Potential common shares outstanding are excluded from the computation if their effect is anti-dilutive. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments - The Company’s financial instruments include cash and cash equivalents, short-term investment securities, accounts receivable, investments, a convertible note receivable, accounts payable, accrued expenses, and notes payable. Other than for cash equivalents, short-term investment securities, investments, and convertible note receivable, fair value is assumed to approximate carrying values for these financial instruments, since they are short term in nature, they are receivable or payable on demand, or had stated interest rates that approximate the interest rates available to the Company as of the reporting date. The determination of the fair value of cash equivalents, short-term investment securities, investments (stock warrants and equity investment), and convertible note receivable are discussed in Note 5. Investments - The Company accounts for investments in equity securities of other entities under the equity method of accounting if the Company’s investment in the stock of the other entity provides the Company with the ability to have significant influence over the operating and financial policies of the investee. If the Company does not have significant influence over the operating or financial policies of the entity, and such equity investment does not have a readily determinable market value, then the Company accounts for such equity investments in accordance with FASB ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assts and Financial Liabilities, which the Company adopted in the first quarter of 2018 with respect to the Company’s investments. Under ASU 2016-01 equity securities are recorded at fair value, with changes in fair value recorded through the statement of operations. Equity securities without a readily determinable market value are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company considers debt instruments as available-for-sale securities, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company has an investment in Aurora stock warrants that are considered equity securities under ASC 321 – Investments – Equity Securities and a derivative instrument under ASC 815 – Derivatives and Hedging. The stock warrants are not designated as a hedging instrument, and in accordance with ASC 815, the Company’s investment in stock warrants are recorded at fair value with changes in fair value recorded in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company also has Panacea stock warrants that are not considered a derivative under ASC 815. As such, the Panacea stock warrants are considered an equity investment with no readily determinable market value and are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. During the fourth quarter of 2019, the Company made an investment in Panacea consisting of preferred shares that are not considered in-substance common stock, a stock warrant and a convertible note receivable. The convertible note receivable was recorded at a discount with the note discount amortized into interest income over the term of the note. This transaction, along with the related valuation techniques are more fully described in Note 4. Accounting Pronouncement - In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires companies to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The ASU requires retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The Company will adopt ASU 2016-13 on January 1, 2023 and is evaluating the expected impacts.

MACHINERY AND EQUIPMENT

MACHINERY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2019
MACHINERY AND EQUIPMENT
MACHINERY AND EQUIPMENT	NOTE 2. – MACHINERY AND EQUIPMENT Machinery and equipment at December 31, 2019 and December 31, 2018 consisted of the following: December 31, December 31, Useful Life 2019 2018 Cigarette manufacturing equipment 3 - 10 years $ 4,869,808 $ 4,608,267 Office furniture, fixtures and equipment 5 years 152,454 135,909 Laboratory equipment 5 years 124,627 104,709 Leasehold improvements 6 years 256,604 169,362 5,403,493 5,018,247 Less: accumulated depreciation 2,283,523 1,757,499 Machinery and equipment, net $ 3,119,970 $ 3,260,748 Depreciation expense was $589,310, $522,695 and $353,435 for the years ended December 31, 2019, 2018, and 2017, respectively.

RIGHT-OF-USE ASSETS, LEASE OBLI

RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES	12 Months Ended
	Dec. 31, 2019
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES	NOTE 3. – RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES On January 1, 2019, the Company adopted ASU 2016-02, Subtopic ASC 842, Leases (the “new guidance”). Under the new guidance, the Company was required to evaluate its leases and record a Right-of-use (“ROU”) asset and a corresponding lease obligation for leases that qualified as either finance or operating leases. Prior to the adoption of the new guidance, the Company had various operating leases for real estate. The Company elected to use the practical expedient which allowed the Company to carry forward the historical lease classifications of the existing leases. The Company determined that its leases contained (1) no variable lease expenses, (2) no termination options, (3) no residual lease guarantees, and (4) no material restrictions or covenants. The new guidance calls for the lease obligations to be recorded at the present value of the remaining lease payments under the leases and the ROU assets are recorded as the sum of the present value of the lease obligations plus any initial direct costs minus lease incentives plus prepaid lease payments. All remaining renewal options have been included in the computation of the ROU assets and lease obligations. The present value of the remaining lease payments was computed using a discount rate of 5.14%. The Company determined that two real estate leases qualified as operating leases under the new guidance as discussed below. Further, FASB issued ASU 2018-11, Re-Leases Targeted Improvements to ASC 842, to provide entities with relief from the costs of implementing certain aspects of the new guidance. Under ASU 2018-11, entities may elect not to recast comparative periods when transitioning to the new guidance. The Company has adopted ASU 2018-11, and accordingly, will (1) apply ASC 840 Lease Accounting (the "old guidance") in comparative periods, (2) provide disclosures for all comparative periods presented in accordance with the old guidance, and (3) recognize the effects of applying the new guidance as a cumulative-effects adjustment to retained earnings as of January 1, 2019. No cumulative-effects adjustment was made as the Company determined it to be immaterial. The Company leases a manufacturing facility and warehouse located in North Carolina on a triple net lease basis with a monthly lease payment of $14,094. As of January 1, 2019, the lease had a remaining term of thirty-four (34) months including all renewal options. Under the new guidance, the Company recorded a ROU asset and a corresponding lease obligation in the amount of $446,950 on January 1, 2019 and recorded a lease expense for the year ended December 31, 2019 of approximately $168,100. On October 4, 2017, the Company entered a lease for office space at a location in Williamsville, New York with an initial monthly lease payment of $6,375 per month for the first three years of the lease. The monthly lease payment increases by 5% annually for the remainder of the lease. As of January 1, 2019, the lease had a remaining term of sixty-two (62) months including all renewal options. Under the new guidance, the Company recorded a ROU asset and a corresponding lease obligation in the amount of $367,325 on January 1, 2019 and recorded a lease expense for the year ended December 31, 2019 of approximately $76,500. As of December 31, 2019, the ROU assets and corresponding operating lease obligations had a balance of $601,979, with $219,814, and $382,165 of the operating lease obligation shown as current and long-term, respectively. In addition, the Company has two leases that did not qualify as operating or financing leases under the new guidance as discussed below. On August 14, 2017, the Company entered into a lease for warehouse space in North Carolina to store and operate tobacco leaf processing equipment, to store the Company’s proprietary tobacco leaf and to store inventory used in the Company’s contract manufacturing business. On August 14, 2019 the Company signed an amended month to month lease agreement. The lease calls for a monthly payment of $4,665 and expires on August 14, 2020. On May 1, 2016, the Company entered a sublease for laboratory space in Buffalo, New York. During the years ended December 31, 2017, 2018, and 2019 the Company entered various sublease amendments that changed the subleased laboratory space and increased the monthly sublease payments and extended the sublease periods until February 2020. On January 15, 2020 the Company entered a new lease agreement with the landlord. The lease commences on February 1, 2020 with an initial one-year term, a monthly lease payment of $8,408 and an option to renew for an additional 12 months with a 3% increase in the monthly lease payments. The lease expense for the laboratory space was approximately $68,700, $62,600 and $30,483 for the years ended December 31, 2019, 2018, and 2017, respectively. Future minimum annual lease payments under the laboratory space lease will be approximately $100,000, $104,000, and $8,700 for the years ended December 31, 2020, 2021, and 2022, respectively .

INVESTMENTS

INVESTMENTS	12 Months Ended
	Dec. 31, 2019
INVESTMENTS
INVESTMENTS	NOTE 4. – INVESTMENTS Investments at December 31, 2019 and 2018 are $8,402,527 and $3,092,358, respectively. The investments at December 31, 2019 consist of the fair value of the Aurora stock warrants of $673,010, the fair value of the Panacea preferred stock of $4,864,517 and the cost of the Panacea stock warrants of $2,865,000. The Company also has a convertible note receivable from Panacea in the amount of $5,589,478 at December 31, 2019. The investment at December 31, 2018 consists of the fair value of the Aurora stock warrants. These investments are described in more detail below. Investment in Panacea On December 3, 2019, the Company entered into an agreement to obtain a 15.8% ownership in Panacea as part of its strategy to expand its operations to the legal, hemp/cannabis, consumer packaged goods space. Panacea offers a line of legal, THC-free, hemp-derived cannabinoid products for humans and animals, including fast-acting sublingual tablets, soft gels, gummies, tinctures, cosmetics and other topicals. The transaction gives the Company 33% voting interest in the board of directors of Panacea. Pursuant to the agreement, the Company received 3,733,334 shares of preferred stock with an embedded put right, warrants to purchase additional preferred stock, and a $7,000,000 note receivable bearing interest at 10% that is convertible to 3,733,334 preferred shares. The Company paid Panacea $12,000,000 in cash and issued 1,297,017 shares of 22nd Century common stock with a fair value of $1,297,017. The agreement with Panacea also requires the Company to purchase 5,333,334 shares of puttable preferred stock at $1.875 when Panacea achieves a certain twelve-month sales target that is payable in $8,500,000 of cash and the remainder in 22nd Century Group common stock. The financial instruments acquired are as follows: The warrant allows the Company to purchase additional shares of preferred stock sufficient to obtain a 51% controlling interest in Panacea. The warrant can be exercised any time after December 3, 2024, or earlier if Panacea achieves certain sales targets for two consecutive years at an exercise price of $2.344 per share. Upon the exercise of the warrant, the other stockholders of Panacea have the option to put their remaining stock in Panacea to the Company at $2.344 per share , which shall be payable in cash and/or 22nd Century common stock at the Company’s discretion. The preferred stock in Panacea accrues cumulative preferred dividends at 10% of face value of $7,000,000 compounded annually payable upon a liquidation event, conversion or redemption. The preferred stock also includes an embedded put right that expires at the earlier date of December 3, 2024 or when the warrants are exercised. The put allows the Company to require Panacea to redeem its 3,733,334 preferred stock at its original issue price of $1.875 per preferred share plus any unpaid cumulative preferred dividends. The put option is not considered a derivative instrument for accounting purposes. Note receivable from Panacea with a par value of $7,000,000 bears interest at 10% payable monthly, with final principal payment due on December 3, 2024. The note receivable has an embedded conversion option that allows the Company to convert the note to 3,733,333 additional shares of preferred stock. The embedded conversion option is not considered a derivative instrument for accounting purposes. The Company allocated the purchase price of its investment in Panacea as follows: Convertible note receivable $ 5,567,500 Preferred stock $ 4,864,517 Preferred stock warrants $ 2,865,000 $ 13,297,017 To allocate the cost of its investment in Panacea, the Company determined the fair value of the warrants of $2,865,00 based on the following assumptions: volatility of 70%, discount of 25% for lack of marketability and risk-free rate of 2 % and is classified as level 3 of the fair value hierarchy at the time of its acquisition. The value of the warrants was allocated to the preferred stock and the note receivable equally as a discount to the acquisition price. The discount on the preferred shares was determined to be for lack of control and the discount on the note receivable was determined to be related to issuing the note at an interest rate below market rates for similar instruments. The discount on the convertible note receivable amounted to $1,432,500 and is being amortized into interest income over the term of the note. The amortization of the discount amounted to $21,978 for the year ended December 31, 2019, leaving convertible note receivable with a balance of $5,589,478 at December 31, 2019. There were no adjustments recorded to the fair value of the convertible note receivable for the year ended December 31, 2019. The Company accounts for its warrant to purchase additional preferred stock of Panacea using the practical expedient for equity securities without readily determinable fair values at its cost minus an impairment charge, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There were no adjustments recorded to the original cost basis, for the year ended December 31, 2019. The note receivable and the preferred stock in Panacea are considered an available for sale security debt securities and are recorded at fair value. Investment in Anandia The Company (through its wholly-owned subsidiary, Botanical Genetics) held an equity investment in Anandia, a Canadian plant biotechnology company. On August 8, 2018, all of Anandia’s outstanding common stock was acquired by Aurora Cannabis, Inc. (“Aurora”), a Canadian company (NYSE: ACB and TSX: ACB), and as a result the Company received in exchange for its Anandia equity: (i) 1,947,943 free trading shares of Aurora common stock, and (ii) stock warrants to purchase 973,971 shares of Aurora common stock (the “Anandia transaction”). The Company sold all the shares of Aurora common stock during the third quarter of 2018 but retains ownership of the stock warrant to purchase 973,971 shares of Aurora common stock as of December 31, 2019. The stock warrants have a five-year contractual term, an exercise price of $9.37 per share (Canadian Dollars; approximately $7.21 per share U.S. Dollars at December 31, 2019), is currently exercisable, is considered an equity security, and is recorded at fair value (Level 3 of the valuation hierarchy). The Company recorded the fair value of the Aurora common stock warrant of $673,010 and $3,092,358 at December 31, 2019 and December 31, 2018, respectively, using the Black-Scholes pricing model and was classified within Other assets on the Company’s Consolidated Balance Sheets. The Company recorded an unrealized (loss) gain, the adjustment to fair value, in the amount of ($2,419,348) and $284,400 for the years ended December 31, 2019 and 2018, respectively. Effective January 1, 2018, the Company adopted Financial Accounting Standards Board ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changed how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. Under ASU 2016-01, the Company was required to measure its investment in Anandia at fair value at the end of each reporting period and recognize changes in fair value in net income. As allowed by ASU 2016-01, since the Company’s investment in Anandia did not have readily determinable fair value, the Company elected to account for its investment at cost. The cost basis is required to be adjusted in the event of impairment, if any, and for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Accordingly, and as a result of, an equity issuance in January of 2018 by Anandia that was considered an orderly transaction, the Company recorded an unrealized gain on its investment in Anandia in the amount of $6,147,088 during the first quarter of 2018. There were no further changes in the fair value of the Company’s equity investment in Anandia through the acquisition of Anandia by Aurora on August 8, 2018, as discussed above. As a result of the Anandia transaction, the Company received 1,947,943 shares of Aurora common stock and warrants to purchase 973,971 shares of Aurora common stock that had a fair value of $9,221,594 and $2,807,958, respectively. The Company recorded a realized gain on the transaction in the amount of $4,515,971 during the third quarter of 2018. Additionally, the unrealized gain on the Company’s investment in Anandia in the amount of $6,147,088 under ASU 2016-01 from the first quarter of 2018 became a realized gain at time of the Anandia transaction (see the paragraph below for additional details). Subsequent to the transaction, the Company sold all of its Aurora common stock resulting in net sales proceeds to the Company of $13,051,503 and realized a gain on the sale of $3,829,909 during the year ended December 31, 2018. The Anandia transaction, the gain from ASU 2016-01, and the sale of the Aurora common shares resulted in an aggregate realized gain of $14,492,968 for the year ended December 31, 2018. The Company’s investment in Anandia was recorded using the equity method of accounting until the first quarter of 2017, when a dilutive event occurred bringing the Company’s investment percentage in Anandia below 20%. Accordingly, the Company discontinued applying the equity method of accounting for its investment in Anandia and began accounting for its investment in Anandia under the cost method of accounting. The Company’s unrealized gain (loss) on the investment in Anandia was $346,180 for the year ended December 31, 2017. There was no unrealized gain (loss) for the year ended December 31, 2018. At December 31, 2017, the Company’s investment balance in Anandia was $1,366,493, and was classified within Other assets on the accompanying Consolidated Balance Sheets.

FAIR VALUE MEASUREMENTS AND SHO

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS	12 Months Ended
	Dec. 31, 2019
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS	NOTE 5. – FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS FASB ASC 820 - “Fair Value Measurements and Disclosures” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; · Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and · Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or a financial liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table presents information about our assets and liabilities measured at fair value at December 31, 2019 and 2018, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Asset and Liabilities at Fair Value As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 12,145,726 $ — $ — $ 12,145,726 Corporate bonds — 26,331,348 — 26,331,348 Total short-term investment securities $ 12,145,726 $ 26,331,348 $ — $ 38,477,074 Investments : Stock warrants $ — $ — $ 673,010 $ 673,010 Convertible note receivable — — 5,589,478 5,589,478 Preferred stock in Panacea — — 4,864,517 4,864,517 Total Investment $ — $ — $ 11,270,005 $ 11,270,005 Asset and Liabilities at Fair Value As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 10,083,972 $ — $ — $ 10,083,972 Corporate bonds — 38,579,055 — 38,579,055 U.S. treasury securities — 2,970,900 — 2,970,900 U.S. government agency bonds — 4,115,012 — 4,115,012 Total short-term investment securities $ 10,083,972 $ 45,664,967 $ — $ 55,748,939 Investments: Stock warrants $ — $ — $ 3,092,358 $ 3,092,358 Money market mutual funds are valued at their daily closing price as reported by the fund. Money market mutual funds held by the Company are open-end mutual funds that are registered with the SEC that generally transact at a stable $1.00 Net Asset Value (“NAV”) representing its estimated fair value. On a daily basis the fund’s NAV is determined by the fund based on the amortized cost of the funds underlying investments. U.S. government agency bonds, U.S. treasury securities, and corporate bonds are valued using pricing models maximizing the use of observable inputs for similar securities. The investment in stock warrants that are accounted for under ASC 815 are measured at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The unobservable input is an estimated volatility factor of 83% at December 31, 2019. A 20% increase or decrease in the volatility factor used at December 31, 2019 would have the impact of increasing or decreasing the fair value measurement of the stock warrants by approximately $260,000. The stock warrants (the Panacea warrants) are not recorded under ASC 815 and are not adjusted to fair value at each reporting date due to the practical expedient under ASU 2016-01. The convertible note receivable is with a private company (Panacea) that is not traded in active markets. Since observable price quotations were not available, fair value was estimated based on cost less an appropriate discount, and the fair value is evaluated based on Panacea’s financial performance and credit worthiness, and changes in market interest rates. The discount is amortized into interest income over the life of the convertible note receivable and amounted to $21,978 for the year ended December 31, 2019. As a result of the put option included in the Panacea preferred shares, they are not considered equity instruments. Fair value is determined similarly to the convertible note. The following table sets forth a summary of the changes in fair value of the Company’s Level 3 investments for the year ended December 31, 2019: Fair value at December 31, 2017 $ — Fair value of stock warrants acquired on August 8, 2018 2,807,958 Unrealized gain as a result of change in fair value 284,400 Fair value at December 31, 2018 3,092,358 Unrealized loss as a result of change in fair value (2,419,348) Accretion of interest income on convertible note receivable 21,978 Panacea convertible note receivable 5,567,500 Preferred stock in Panacea 4,864,517 Fair value at December 31, 2019 $ 11,127,005 The warrant liability was measured at fair value using certain estimated factors such as volatility and probability which are classified within Level 3 of the valuation hierarchy. Significant unobservable inputs that are used in the fair value measurement of the Company’s derivative warrant liabilities including the volatility factor. Significant increases or decreases in the volatility factor would have resulted in a significantly higher or lower fair value measurement. The Company’s warrants associated with the warrant liability were exercised in July 2018 and the remaining outstanding warrants at December 31, 2018 do not include anti-dilution features and therefore are not considered derivative instruments and do not have an associated warrant liability. The following table sets forth a summary of the Company’s available-for-sale securities from amortized cost basis to fair value at December 31, 2019 and 2018: Available-for-sale Securities - December 31, 2019 Gross Amortized Gross Unrealized Cost Basis Unrealized Gains Losses Fair Value Corporate bonds $ 26,324,274 $ 64,408 $ (57,334) $ 26,331,348 Convertible Note Receivable 5,589,478 — — 5,589,478 Preferred stock in Panacea 4,864,517 — — 4,864,517 Totals $ 36,778,269 $ 64,408 $ (57,334) $ 36,785,343 Available-for-Sale Securities - December 31, 2018 Amortized Gross Gross Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 38,579,541 $ 48,796 $ (49,282) $ 38,579,055 U.S. treasury securities 2,959,063 11,837 – 2,970,900 U.S. government agency bonds 4,099,321 15,691 – 4,115,012 Totals $ 45,637,925 $ 76,324 $ (49,282) $ 45,664,967 The following table sets forth a summary of the Company’s available-for-sale securities in its short-term investment account for amortized cost basis and fair value by contractual maturity at December 31, 2019 and 2018: Available-for-Sale Securities Available-for-Sale December 31, 2019 December 31, 2018 Amortized Amortized Cost Basis Fair Value Cost Basis Fair Value Due in one year or less $ 16,823,028 $ 16,851,008 $ 43,050,306 $ 43,082,677 Due after one year through five years 9,501,246 9,480,340 2,587,619 2,582,290 Due in five years 10,453,995 10,453,995 — — $ 36,778,269 $ 36,785,343 $ 45,637,925 $ 45,664,967

NOTE PAYABLES FOR LICENSE FEES

NOTE PAYABLES FOR LICENSE FEES	12 Months Ended
	Dec. 31, 2019
NOTE PAYABLES FOR LICENSE FEES
NOTE PAYABLES FOR LICENSE FEES	NOTE 6. – NOTE PAYABLES FOR LICENSE FEES On June 22, 2018, the Company entered into the Second Amendment to the License Agreement (the “Second Amendment”) with North Carolina State University (“NCSU”) that amended an original License Agreement between the Company and NCSU, dated December 8, 2015, and the First Amendment, dated February 14, 2018, to the original License Agreement. Under the terms of the Second Amendment, the Company is obligated to pay NCSU milestone payments totaling $1,200,000, of which amount $500,000 was payable upon execution of the Second Amendment, $400,000 was payable on the first anniversary of the execution of the Second Amendment, and $300,000 will be payable on the second anniversary of the execution of the Second Amendment. The Company has recorded the present value of the obligations under the Second Amendment as a note payable that originally amounted to $1,175,226. The cost of the acquired license amounted to $1,175,226 and is included in Intangible assets, net on the Company’s Consolidated Balance Sheets, and will be amortized on a straight-line basis over the last-to-expire patent, which is expected to be in 2036. On October 22, 2018, the Company entered into a License Agreement with the University of Kentucky. Under the terms of the License Agreement, the Company is obligated to pay the University of Kentucky milestone payments totaling $1,200,000, of which amount $300,000 was payable upon execution, and $300,000 will be payable annually over the next three years on the anniversary of the execution of the License Agreement. The Company has recorded the present value of the obligations under the License Agreement as a note payable that originally amounted to $1,151,201.The cost of the of acquired licenses amounted to $1,151,201 and is included in Intangible assets, net on the Company’s Consolidated Balance Sheets, and will be amortized on a straight-line basis over the last-to- expire patent, which is expected to be in 2033. After the accretion of interest during the year ended December 31, 2019 in the amount of $35,521 the balance remaining on these two notes payable as of December 31, 2019 amounted to $872,886, with $580,709 and $292,177 reported as current and long-term, respectively, on the Company’s Consolidated Balance Sheets (notes payable balance of $1,537,365 as of December 31, 2018, with $689,148 and $848,217 reported as current and long-term,respectively).

SEVERANCE LIABILITY

SEVERANCE LIABILITY	12 Months Ended
	Dec. 31, 2019
SEVERANCE LIABILITY
SEVERANCE LIABILITY	NOTE 7. – SEVERANCE LIABILITY The Company recorded an accrual for employee severance during the third quarter of 2019 in the initial amount of $720,838 in accordance with FASB ASC 712 - “Compensation – Nonretirement Postemployment Benefits.” The severance accrual relates to the resignation of the Company’s former President and Chief Executive Officer (the “former CEO”) effective July 26, 2019. Concurrent with the former CEO’s resignation, the Company entered into a Consulting Agreement (the “Agreement”) with the former CEO. The Agreement calls for the Company to pay a monthly consulting fee to the former CEO in the amount of $16,667 plus health insurance benefits for a period of forty-two months. The Company concluded that the terms of the Agreement met the severance criteria in ASC 712 and accordingly, a severance accrual was recorded. The Company computed the present value of the payments called for under the Agreement and recorded an initial severance liability in the amount of $720,838. As a result of broad-based actions to reduce expenses in the fourth quarter the Company initiated a reduction in its workforce. An additional severance accrual in the amount of $160,000 was recorded as of December 31, 2019. After payments under the Agreement and the accretion of interest during 2019, the accrued severance balance remaining at December 31, 2019 was $804,431 with $358,610 and $445,821, respectively, shown as current and long-term accrued severance on the Company’s Consolidated Balance Sheets.

WARRANTS FOR COMMON STOCK

WARRANTS FOR COMMON STOCK	12 Months Ended
	Dec. 31, 2019
WARRANTS FOR COMMON STOCK
WARRANTS FOR COMMON STOCK	NOTE 8. – WARRANTS FOR COMMON STOCK At December 31, 2019, the Company had outstanding warrants to purchase 11,293,211 shares of common stock of the Company that were issued in conjunction with the November 2019 warrant exchange agreement with an exercise price of $1.11 per share and an expiration date of November 25, 2024. On November 25, 2019, the Company entered into Warrant Exercise Agreements (the "2019 Exercise Agreements") with all of the holders (the "Holders") of its outstanding warrants to purchase up to 11,293,211 shares of common stock of the Company with an exercise price of $2.15 per share (the "Warrants") whereby the Holders and the Company agreed that the Holders would immediately exercise for cash 7,350,000 of the Warrants at a reduced exercise price of $1.00 per share, generating proceeds to the Company before expenses of approximately $7.4 million. In addition, the Holders agreed to exercise the remaining 3,943,211 Warrants for cash on or prior to January 27, 2020 provided that the Holders are in compliance with the beneficial ownership limitation provisions contained in the Warrants. The Holders exercised all of the Warrants for cash during December 2019 and the Company received net proceeds of approximately $10.6 million from the exercise of all of the Warrants, after deducting expenses associated with the transaction. In consideration for the Holders exercising their Warrants for cash, the Company issued to each Holder a new warrant (each, a "2019 Warrant") to purchase shares of common stock equal to the number of shares of common stock underlying the Warrants that shall be exercisable to the extent such Holder exercises for cash such Holder's Warrants pursuant to the 2019 Exercise Agreements. The terms of the 2019 Warrants are substantially similar to the terms of the Warrants, except that the 2019 Warrants are (i) exercisable from first issuance of the 2019 Warrants for a period of five years and (ii) had an initial exercise price equal to $1.25 per share. On December 22, 2019, the Company entered in to a Warrant Amendment Agreement with the holders of the Warrants (the "Amendment") whereby the Company agreed to amend the Warrants to (i) reduce the exercise price of the Warrants to $1.11 and (ii) to add a call provision whereby the Company may call the Warrants with prior notice to the holders for $0.001 per Warrant (during which time the holders may exercise the Warrants) provided that the Company's volume weighted average stock price exceeds $3.00 per share for ten consecutive trading days and certain other conditions are satisfied. On June 19, 2017, the Company entered into Warrant Exercise Agreements (the " 2017 Exercise Agreements") with all the holders (the " 2016 Holders") of outstanding warrants to purchase up to 7,043,211 shares of common stock of the Company at $1.00 per share and warrants to purchase up to 4,250,000 shares of common stock of the Company at $1.45 per share (collectively, the “ 2016 Warrants”). The Company and the 2016 Holders agreed that the 2016 Holders would, subject to beneficial ownership limitations on exercise contained in the 2016 Warrants, exercise all the 2016 Warrants for cash. During the second and third quarters of 2017, the 2016 Holders exercised 7,043,211 2016 Warrants at $1.00 per share and 4,250,000 2016 Warrants at $1.45 per share, resulting in net proceeds to the Company in the amount of $12,336,858, after deducting expenses associated with the transaction. In consideration for the 2016 Holders exercising their 2016 Warrants for cash, the Company issued to each 2016 Holder a new warrant (the "New Warrants") to purchase shares of common stock of the Company equal to the number of shares of common stock received by each 2016 Holder upon the cash exercise of the 2016 Holder's 2016 Warrants. The terms of the New Warrants are substantially similar to the terms of the 2016 Warrants exercised, except the New Warrants (i) have an exercise price equal to $2.15 per share and (ii) are exercisable six months from the date of issuance of the New Warrants for a period of five (5) years. Accordingly, the Company issued an aggregate of 11,293,211 New Warrants to the 2016 Holders, upon exercise of the 2016 Holder's 2016 Warrants as described above. These New Warrants were all exercised pursuant to the 2019 Exercise Agreements, described above, and are no longer outstanding. During the year ended December 31, 2018, warrant holders exercised 794,869 warrants on a cashless basis, resulting in the issuance of 490,012 shares. The Company estimates the value of warrant liability upon issuance of warrants that are considered derivative instruments and at each balance sheet date using the binomial lattice model to allocate total enterprise value to the warrants and other securities in the Company’s capital structure. Volatility was estimated based on historical observed equity volatilities and implied (forward) or expected volatilities for a sample group of guideline companies and consideration of recent market trends. The Company’s outstanding warrants at December 31, 2019 and 2018 do not include anti-dilution features and therefore are not considered derivative instruments and do not have an associated warrant liability. All warrants considered derivative instruments with an associated warrant liability were exercised during 2018. The following table is a roll-forward summary of the warrant liability since December 31, 2017: Fair value at December 31, 2017 $ 216,490 Gain as a result of change in fair value (48,711) Reclassification of warrant liability to capital in excess of par (167,779) Fair value at December 31, 2018 — Fair value at December 31, 2019 $ — The aggregate net gain (loss) as a result of the Company’s warrant liability for the years ended December 31, 2019, 2018, and 2017 amounted to $0, $48,711 and ($157,809), respectively, and are included in Other income (expense) under Warrant liability gain (loss), net in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The following table summarizes the Company’s warrant activity since December 31, 2016: Number of Warrants Warrants outstanding at December 31, 2016 13,781,921 Warrants exercised during 2017 (1,470,027) Warrants expired during 2017 (223,814) Warrants exercised pursuant to June 2017 warrant exercise agreements (11,293,211) Warrants issued pursuant to June 2017 warrant exercise agreements 11,293,211 Warrants outstanding at December 31, 2017 12,088,080 Warrants exercised during 2018 (794,869) Warrants outstanding at December 31, 2018 11,293,211 Warrants exercised during 2019 pursuant to November 2019 warrant exercise agreement (11,293,211) Warrants issued during 2019 pursuant to November 2019 warrant exercise agreement 11,293,211 Warrants outstanding at December 31, 2019 11,293,211

RETIREMENT PLAN

RETIREMENT PLAN	12 Months Ended
	Dec. 31, 2019
RETIREMENT PLAN
RETIREMENT PLAN	NOTE 9. – RETIREMENT PLAN The Company sponsors a defined contribution plan under IRC Section 401(k). The plan covers all employees who meet the minimum eligibility requirements. Under the 401(k) plan eligible employees are allowed to make voluntary deferred salary contribution to the plan, subject to statutory limits. The Company has elected to make Safe Harbor Non-Elective Contributions to the plan for eligible employees in the amount of three percent (3%) of the employee’s compensation. Total employer contributions to the plan for the years ended December 31, 2019, 2018, and 2017 amounted to $156,908, $141,083 and $98,368, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2019
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 10. – COMMITMENTS AND CONTINGENCIES License agreements and sponsored research – The Company has entered into various license agreements and sponsored research and development agreements. The costs associated with the following three agreements were initially recorded as a Prepaid expense on the Company’s Consolidated Balance Sheets and subsequently expensed on a straight- line basis over the applicable period and included in Research and development costs on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The amounts expensed during the years ended December 31, 2019, 2018, and 2017 amounted to $265,452, $394,249, and $232,140, respectively. Under its exclusive worldwide license agreement with North Carolina State University (“NCSU”), the Company is required to pay minimum annual royalty payments, which are credited against running royalties on sales of licensed products. The minimum annual royalty is $225,000. The license agreement continues through the life of the last-to-expire patent, which is expected to be 2022. The license agreement also requires a milestone payment of $150,000 upon FDA approval or clearance of a product that uses the NCSU licensed technology. The Company expensed license fees of $225,000 for each of the years ended December 31, 2019, 2018, and 2017. The Company is also responsible for reimbursing NCSU for actual third-party patent costs incurred. These costs vary from year to year and the Company has certain rights to direct the activities that result in these costs. During the years ended December 31, 2019, 2018, and 2017 the aggregate costs incurred related to capitalized patent costs and patent maintenance expense amounted to $33,673, $95,602, and $71,596, respectively. On December 8, 2015, the Company entered into an additional license agreement (the “License”) with NCSU. Under the terms of the License, the Company paid NCSU a non-refundable, non-creditable lump sum license fee of $150,000. Additionally, the License calls for the Company to pay NCSU a non-refundable, non-creditable minimum annual royalty beginning on December 31, 2018 in the amount of $10,000. The minimum annual royalty payment increases to $15,000 in 2019, $25,000 in 2020 and 2021, and $50,000 per year thereafter for the remaining term of the License. The Company expensed license fees of $15,000, $0, and $0 for the years ended December 31, 2019, 2018, and 2017, respectively. The Company is also responsible for reimbursing NCSU for actual third-party patent costs incurred. During the years ended December 31, 2019, 2018, and 2017 the aggregate costs incurred related to capitalized patent costs and patent maintenance expense amounted to $11,740, $113,578, and $31,947, respectively. This License continues through the life of the last-to-expire patent, expected to be in 2036. On February 10, 2014, the Company entered into a sponsored research and development agreement (the “Agreement”) with NCSU. Under the terms of the Agreement, the Company paid NCSU $162,408 over the two-year term of the Agreement, which grants certain licensed rights to the Company. The Company had extended the Agreement through January 31, 2017 at an additional cost of $85,681. In February 2018, the Company finalized an additional extension to this Agreement through April 30, 2018 at a cost of $88,344. In May 2018, the Company finalized an additional extension to this Agreement through April 30, 2019 at a total cost of $121,357. The amounts expensed during the years ended December 31, 2019, 2018, and 2017 were $40,452, $169,249, and $7,140, respectively. Other license agreements - Additionally, the Company has entered into the following license agreements and the costs associated with these license agreements are included in Intangible assets, net in the Company’s Consolidated Balance Sheets and the applicable license fees will be amortized over the term of the agreements based on their last-to-expire patent date. Amortization expense during the years ended December 31, 2019, 2018, and 2017 amounted to $238,661, $142,541, and $98,022, respectively, and was included in Amortization expense on the Company’s Consolidated Statements of Operations and Comprehensive Loss. On October 22, 2018, the Company entered into a License Agreement (the “License”) with the University of Kentucky. Under the terms of the License, the Company is obligated to pay the University of Kentucky a non-refundable, non-creditable license fee of $1,200,000. The license fee is payable in accordance with a note payable more fully described in Note 10. The present value of the payments in the amount of $1,151,201 are included in Intangible assets, net on the Company’s Consolidated Balance Sheets, and will be amortized on a straight-line basis over the last-to-expire patent, which is expected to be in 2033. On June 22, 2018, the Company entered into the Second Amendment to the License Agreement (the “Second Amendment”) with NCSU that amended an original License Agreement between the Company and NCSU, dated December 8, 2015. Under the terms of the Second Amendment, the Company is obligated to pay NCSU a non-refundable, non-creditable license fee of $1,200,000. The license fee is payable in accordance with a note payable more fully described in Note 6. The present value of the payments in the amount of $1,175,226 are included in Intangible assets, net on the Company’s Consolidated Balance Sheets, and will be amortized on a straight-line basis over the last-to-expire patent, which is expected to be in 2036. On August 22, 2014, the Company entered into a Commercial License Agreement with Precision PlantSciences, Inc. (the “Precision License”). The Precision License grants the Company a non-exclusive, but fully paid up right and license to use technology and materials owned by Precision PlantSciences for a license fee of $1,250,000. The Precision License continues through the life of the last-to-expire patent, which is expected to be in 2028. On August 27, 2014, the Company entered into an additional exclusive License Agreement (the “License Agreement”) with NCSU. Under the License Agreement, the Company paid NCSU a non-refundable, non-creditable lump sum license fee of $125,000, and the Company must pay to NCSU an additional non-refundable, non-creditable lump sum fee of $75,000 upon issuance of a U.S. utility patent included in the patent rights. A patent was issued during the first quarter of 2017 under this clause, and accordingly, the $75,000 was due and payable to NCSU. The $75,000 cost was included in Research and development costs on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2017. Additionally, under the License Agreement the Company paid NCSU a non-refundable, non-creditable license maintenance fee in the amount of $15,000 during the year ended December 31, 2017. The Company is obligated to pay to NCSU an annual minimum royalty fee of $20,000 in 2018, $30,000 in 2019, and $50,000 per year thereafter for the remaining term of the License Agreement. The Company is also responsible for reimbursing NCSU for actual third-party patent costs incurred. During the years ended December 31, 2019, 2018, and 2017, the aggregated costs incurred related to capitalized patent costs and patent maintenance expense amounted to $49,714, $24,016, and $41,033, respectively. The License Agreement continues through the life of the last-to-expire patent, which is expected to be in 2034. On September 15, 2014, the Company entered into a Sublicense Agreement with Anandia, Inc. (the “Anandia Sublicense”). Under the terms of the Anandia Sublicense, the Company was granted an exclusive sublicense in the United States and a co-exclusive sublicense in the remainder of the world, excluding Canada, to the licensed intellectual property. The Anandia Sublicense required an up-front fee of $75,000, an annual license fee of $10,000, the payment of patent filing and maintenance costs, a running royalty on future net sales of products made from such sublicensed intellectual property, and a sharing of future sublicensing consideration received from sublicensing to third-parties such sublicensed intellectual property. The Anandia Sublicense continues through the life of the last-to-expire patent, which is expected to be in 2035. As discussed in Note 4, Anandia was purchased by Aurora on August 8, 2018 and has become a wholly owned subsidiary of Aurora. The Anandia Sublicense is still in effect. Other research agreements - Further, the Company has entered into the following agreements relating to sponsored research. Costs associated with these agreements are expensed when incurred in Research and development costs on the Company’s Consolidated Statements of Operations and Comprehensive Loss. On September 28, 2015, the Company’s wholly-owned subsidiary, Botanical Genetics, entered into a Sponsored Research Agreement (the “Agreement”) with Anandia. Pursuant to the Agreement, Anandia conducted research on behalf of the Company relating to the hemp/cannabis plant. During the years ended December 31, 2019, 2018, and 2017 expenses related to the Agreement amounted to $0, $130,850, and $654,250, respectively. Under the terms of the Agreement, the Company will have co-exclusive worldwide rights with Anandia to all the intellectual property resulting from the sponsored research between the Company and Anandia. The party that commercializes such intellectual property in the future will pay royalties in varying amounts to the other party, with the amount of such royalties being dependent upon the type of products that are commercialized in the future. If either party sublicenses such intellectual property to a third- party, then the Company and Anandia will share equally in such sublicensing consideration. As discussed in Note 4, Anandia was purchased by Aurora on August 8, 2018 and has become a wholly owned subsidiary of Aurora. In December 2016, the Company entered into a new sponsored research agreement with UVA and an exclusive license agreement with the University of Virginia Patent Foundation d/b/a University of Virginia Licensing & Ventures Group (“UVA LVG”) pursuant to which the Company will invest approximately $1,000,000 over a three-year period with UVA to create unique industrial hemp plants with guaranteed levels of THC below the legal limits and optimize other desirable hemp plant characteristics to improve the plant’s suitability for growing in Virginia and other legacy tobacco regions of the United States. This work with UVA will also involve the development and study of medically important cannabinoids to be extracted by UVA from the Company’s hemp plants. UVA and the Company will conduct all activities in this scientific collaboration within the parameters of state and federal licenses and permits held by UVA for such work. The agreements with UVA and UVA LVG grant the Company exclusive rights to commercialize all results of the collaboration in consideration of royalty payments by the Company to UVA LVG. The Company incurred expenses under the agreement in the amount $287,535, $360,046, and $296,710 for the years ended December 31, 2019, 2018, and 2017, respectively. On May 1, 2018, the Company entered into a University Growing and Evaluation Agreement (the “Agreement”) with the University of Kentucky Research Foundation (“UKRF”) whereby UKRF will provide the Company with services relating to growing certain tobacco breeding lines of the Company. Under the Agreement, the Company is obligated to pay $75,000 to UKRF in three installments of $25,000 each through January 31, 2019. During the years ended December 31, 2019 and 2018 expenses related to the Agreement amounted to $25,000 and $50,000, respectively. On February 1, 2019, the Company entered into a Master Collaboration and Research Agreement (the “Agreement”) with a Natural Good Medicines, LLC (“NGM”), the owners of certain hemp and cannabis plant lines (the “NGM Material”). The Agreement calls for NGM to cultivate, grow and process a certain amount of the NGM Material with the financial support of the Company. NGM has granted the Company certain exclusive rights to the hemp and cannabis plant lines of NGM. Additionally, three (3) years from the effective date of the Agreement, NGM and the Company will mutually share in the proceeds from the sale of non-propagating parts of the NGM Material. The Company’s total financial commitment under the Agreement is $442,333, which has been included in Research and development expenses on the Company’s Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2019. On April 3, 2019, the Company entered into a Framework Collaborative Research Agreement (the “Agreement”) with KeyGene under which KeyGene has agreed to work exclusively with the Company with respect to the Cannabis Sativa L . plant and all uses thereof (the “Field”). The initial term is for five (5) years with an option for an additional two (2) years in consideration of the Company paying KeyGene an aggregate of Six Million United States Dollars ($6,000,000) over the initial term of the Agreement. A minimum of $1,200,000 will be paid annually during the initial term of the Agreement with a portion of such amount being paid based on KeyGene achieving certain milestone deliverables for the Company. The Company will exclusively own all results and all intellectual property relating to the results from this collaboration with KeyGene (“Results”). The Company will pay royalties in varying amounts to KeyGene relating to the Company’s commercialization in the Field of certain Results. The Company has granted KeyGene a license to commercialize the Results outside of the Field and KeyGene will pay royalties in varying amounts to the Company relating to KeyGene’s commercialization outside of the Field of the Results. The Agreement also includes customary termination provisions for both KeyGene and the Company as well as representations, warranties, and covenants by the parties that are customary for a transaction of this nature. During the year ended December 31, 2019, expenses related to the agreement amounted to approximately $905,000. Modified Risk Tobacco Product Application (“MRTP Application”) – In connection with the Company’s MRTP Application for its Very Low Nicotine Content (“VLNC”) cigarettes with the FDA, the Company has entered in various contracts with third-party service providers to fulfill various requirements of the MRTP Application. Such contracts include services for clinical trials, perception studies, legal guidance, product testing, and consulting expertise. During the years ended December 31, 2019 and 2018 the Company incurred expenses relating to these contracts in the approximate amount of $1,675,000 and $9,800,000, respectively. The Company will incur consulting and legal expenses as our MRTPA continues through the FDA review process. The Company cannot currently quantify the additional expenses that the Company will incur in the FDA review process because it will involve various factors that are within the discretion and control of the FDA. Litigation - In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of related expenses. The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability. Crede Settlement On June 19, 2019,the Company, Crede CG III, LTD. (“Crede”) and Terren Peizer (“Peizer”) participated in a settlement conference meeting as required by the United States District Court for the Southern District of New York (the “SDNY Court”) entitled Crede CG III, LTD. v. 22nd Century Group, Inc . Subsequently, the Company, Crede and Peizer entered into a settlement agreement that settled this case, with the effective date of the settlement agreement being on July 22, 2019. Under the terms of the settlement agreement: (i) the Company issued to Crede on July 25, 2019 an aggregate of Nine Hundred Ninety Thousand (990,000) shares of common stock of the Company in full satisfaction of the cashless exchange of the Tranche 1A warrant and in settlement of all disputes between Crede, Peizer and the Company; (ii) Crede granted a proxy to the Company for a period of five (5) years for the Company to vote all of the shares of common stock of the Company owned by Crede in favor of the recommendations by the Company’s Board of Directors (excluding any extraordinary transactions); (iii) Crede agreed to not purchase, borrow or short any securities of the Company; and (iv) the Company, Crede and Peizer agreed to mutual releases of all claims between the parties and the dismissal of all the litigation claims and counterclaims with prejudice. The Company accrued an expense related to the settlement of this case during the second quarter of 2019 in the amount of $1,890,900, which is equal to the fair value of the 990,000 shares of Company common stock on July 22, 2019. The accrual was reclassified to capital upon the issuance of the common stock during the third quarter of 2019. Class Action Cases On January 21, 2019, Matthew Jackson Bull, a resident of Denver, Colorado, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Matthew Bull, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer , Case No. 1:19-cv-00409 . The Complaint alleges that Plaintiff Mr. Bull purchased shares of the Company’s common stock. Mr. Bull sues individually and seeks to bring a class action for persons or entities who acquired the Company’s common stock between February 18, 2016 and October 25, 2018, and alleges in Count I that the Company’s Annual Reports on Form 10-K for the years 2015, 2016 and 2017 allegedly contained false statements in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder, and alleges in Count II that Messrs. Sicignano and Brodfuehrer are liable for the allegedly false statements pursuant to Section 20 (a) of the Securities Exchange Act. The Complaint seeks declaratory relief, unspecified money damages, and attorney’s fees and costs. On January 29, 2019, Ian M. Fitch, a resident of Essex County Massachusetts, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Ian Finch, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer , Case No. 2:19-cv-00553 . The Complaint filing alleges that the Plaintiff Mr. Fitch purchased shares of the Company’s common stock. Mr. Fitch sues individually and seeks to bring a class action for persons or entities who acquired the Company’s common stock between February 18, 2016 and October 25, 2018, and alleges in Count I that the Company’s Annual Reports on Form 10-K for the years 2015, 2016 and 2017 allegedly contained false statements in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder, and alleges in Count II that Messrs. Sicignano and Brodfuehrer are liable for the allegedly false statements pursuant to Section 20(a) of the Securities Exchange Act. The Complaint seeks declaratory relief, unspecified money damages, and attorney’s fees and costs. On March 25, 2019, Plaintiffs’ counsel in the Fitch litigation filed a motion in both the Fitch and Bull actions: (1) proposing Joseph Noto, Garden State Tire Corp, and Stephens Johnson for Mr. Fitch as purportedly representative plaintiffs, (2) moving to consolidate the Fitch litigation with the Bull litigation, and (3) seeking to be appointed as lead counsel in the consolidated action. Plaintiffs’ counsel in the Bull litigation filed and then withdrew a comparable motion seeking to consolidate the cases and be appointed as lead counsel. On May 28, 2019, plaintiff in the Fitch case voluntarily dismissed that action. On August 1, 2019, the Court in the Bull case issued an order designating Joseph Noto, Garden State Tire Corp, and Stephens Johnson as lead plaintiffs. On September 16, 2019, pursuant to a joint motion by the parties, the Court in the Bull case transferred the class action to federal district court in the Western District of New York, where it remains pending as Case No. 1:19-cv-01285. On October 9, 2019, the Court in the Bull case, now pending in the federal district court in the Western District of New York, entered an order requiring Plaintiffs to file an amended complaint by November 19, 2019, for the Company and Messrs. Sicignano and Brodfuehrer to file any motion to dismiss the amended complaint by January 29, 2020, for Plaintiffs then to file their response to the motion to dismiss by March 30, 2020, and for the Company and Messrs. Sicignano and Brodfuehrer to file their final reply in support of their motion to dismiss by April 29, 2020. Plaintiffs filed their Amended Complaint on November 19, 2019. The Amended Complaint alleges that the Plaintiffs purchased shares of the Company’s common stock and sues individually and to bring a class action for all persons or entities who acquired the Company’s common stock between February 18, 2016 and July 31, 2019. The Amended Complaint alleges three counts: Count I sues the Company and Messrs. Sicignano and Brodfuehrer and alleges that the Company’s quarterly and annual reports, SEC filings, press releases and other public statements and documents contained false statements in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5; Count II sues Messrs. Sicignano and Brodfuehrer pursuant to Section 10(b) of the Securities Exchange Act and Rule 10b5(a) and (c); and Count III sues Messrs. Sicignano and Brodfuehrer for the allegedly false statements pursuant to Section 20(a) of the Securities Exchange Act. The Amended Complaint seeks to certify a class, and unspecified compensatory and punitive damages, and attorney’s fees and costs. On January 29, 2020, the Company and Messrs. Sicignano and Brodfuehrer filed a Motion to Dismiss the Amended Complaint. Plaintiffs have until March 30, 2020 to file a response to the Motion to Dismiss. We believe that the claims are frivolous, meritless and that the Company and Messrs. Sicignano and Brodfuehrer have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and Messrs. Sicignano and Brodfuehrer against such claims. Shareholder Derivative Cases On February 6, 2019, Melvyn Klein, a resident of Nassau County New York, filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the United States District Court for the Eastern District of New York entitled: Melvyn Klein, derivatively on behalf of 22nd Century Group v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer and 22nd Century Group, Inc ., Case No. 1:19-cv-00748 . Mr. Klein brings this action derivatively alleging that (i) the director defendants supposedly breached their fiduciary duties for allegedly allowing the Company to make false statements; (ii) the director defendants supposedly wasted corporate assets to defend this lawsuit and the other related lawsuits; (iii) the defendants allegedly violated Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder for allegedly approving or allowing false statements regarding the Company to be made; and (iv) the director defendants allegedly violated Section 14(a) of the Securities Exchange Act and Rule 14a-9 promulgated thereunder for allegedly approving or allowing false statements regarding the Company to be made in the Company’s proxy statement. The Complaint seeks declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. On April 11, 2019, pursuant to a stipulation by the parties, the Court ordered this litigation stayed and transferred the stayed action to the Western District of New York. On April 19, 2019, the case was opened in the United States District Court for the Western District of New York, Case No. 1-19-cv-0513. On August 15, 2019, the case was consolidated with the Mathew case identified below and stayed. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On February 11, 2019, Stephen Mathew filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Stephen Mathew, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, John T. Brodfuehrer, Richard M. Sanders, Joseph Alexander Dunn, James W. Cornell, Nora B. Sullivan and 22nd Century Group, Inc., Index No. 801786/2019 . Mr. Mathew brings this action derivatively alleging that (i) the director defendants supposedly breached their fiduciary duties by allegedly allowing the Company to make false statements; (ii) the director defendants were allegedly unjustly enriched by allegedly benefitting from allegedly allowing the Company to make false statements; (iii) the defendants supposedly wasted corporate assets to defend this lawsuit and the other related lawsuits; (iv) the individual defendants allegedly abused their ability to control and influence the Company; and (v) the individual defendants allegedly engaged in gross mismanagement. The Complaint seeks declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. On April 12, 2019, the parties jointly filed a Stipulated Notice of Removal in United States District Court for the Western District of New York. On April 23, 2019, the parties jointly filed an Amended Stipulated Notice of Removal in the Western District of New York. On May 3, 2019, pursuant to a stipulation from the parties, the Court ordered this litigation stayed. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On August 15, 2019, the Court consolidated the Mathew and Klein actions pursuant to a stipulation by the parties. On June 10, 2019, Judy Rowley filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Judy Rowley, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer, and 22nd Century Group, Inc. , Index No. 807214/2019 . Ms. Rowley brings this action derivatively alleging that the director defendants supposedly breached their fiduciary duties by allegedly allowing the Company to make false statements. The Complaint seeks declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On September 13, 2019, the Court ordered the litigation stayed pursuant to joint stipulation by the parties. On January 15, 2020, Kevin Broccuto filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company’s prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Kevin Broccuto, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. Mr. Broccuto brings this action derivatively alleging three counts: Count I alleges that the defendants breached their fiduciary duties; Count II alleges they committed corporate waste; and Count III that they were unjustly enriched, by allegedly allowing the Company to make false statements. The Complaint seeks unspecified monetary damages, corrective corporate governance actions, disgorgement of alleged profits and imposition of constructive trusts, and attorney’s fees and costs. The Company and the individual defendants have not yet filed a response to the Complaint. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On February 11, 2020, Jerry Wayne filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company’s prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Jerry Wayne, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. Mr. Wayne brings this action derivatively alleging three counts: Count I alleges that the defendants breached their fiduciary duties; Count II alleges they committed corporate waste; and Count III that they were unjustly enriched, by allegedly allowing the Company to make false statements. The Complaint seeks unspecified monetary damages, corrective corporate governance actions, disgorgement of alleged profits and imposition of constructive trusts, and attorney’s fees and costs. The Complaint also seeks to declare as unenforceable the Company’s Bylaw requiring derivative lawsuits to be filed in Erie County, New York, where the Company is headquartered. The Company and the individual defendants have not yet filed a response to the Complaint. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. Shareholder Derivative Demand On February 19, 2019, the Company received a demand letter from attorneys representing Van McClendon, a shareholder of the Company, in which Mr. McClendon demanded that the Company’s Board of Directors take action to pursue cer

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE	12 Months Ended
	Dec. 31, 2019
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE	NOTE 11. – EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2019, 2018, and 2017: December 31, December 31, December 31, 2019 2018 2017 Net loss attributed to common shareholders $ (26,558,544) $ (7,966,911) $ (13,029,117) Denominator for basic and diluted earnings per common share-weighted average shares adjusted for dilutive securities 125,882,717 124,298,981 101,161,380 Loss per common share - basic and diluted $ (0.21) $ (0.06) $ (0.13) Securities outstanding that were excluded from the computation of earnings per share for the years ended December 31, 2019, 2018, and 2017 because they would have been anti-dilutive are as follows: December 31, December 31, December 31, 2019 2018 2017 Warrants 11,293,211 11,293,211 12,088,080 Options 7,837,172 8,672,082 8,156,691 Restricted stock units 951,000 — — 20,081,383 19,965,293 20,244,771

EQUITY BASED COMPENSATION

EQUITY BASED COMPENSATION	12 Months Ended
	Dec. 31, 2019
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION	NOTE 12. – EQUITY BASED COMPENSATION 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. During the year ended December 31, 2019, the Company issued awards for restricted stock units from the OIP for 1,301,000 shares to eligible individuals with such restricted stock unit awards having vesting periods from immediate vesting to three years. During the year ended December 31, 2019, the Company issued stock option awards from the OIP for 700,000 shares having vesting periods of five and one-half months to thirty-five months. Additionally, during the year ended December 31, 2019, (1) 100,000 restricted stock units vested and 250,000 restricted stock units were forfeited, and (2) 75,410 stock options were exercised on a cashless basis and 1,395,500 were forfeited. During the year ended December 31, 2018, the Company issued stock option awards from the OIP for 1,631,841 shares, to eligible individuals. Stock options issued to acquire 1,231,841 shares of Company common stock have vesting periods ranging from one to three years from the date of the award, and stock options issued to acquire 400,000 shares of Company common stock are scheduled to vest upon the attainment of various milestones. Additionally, 300,000 stock options were cancelled due to the death of the Company’s Senior Vice President of Science and Regulatory Affairs. All forfeited and cancelled restricted stock units and stock option were added back to the remaining shares available to be rewarded under the OIP. All stock option awards were valued using the Black-Scholes option-pricing model on the date of the award. For the years ended December 31, 2019, 2018, and 2017, the Company recorded compensation expense related to stock option and restricted stock awards granted under the OIP of $3,539,745, $3,187,331 and $941,650, respectively. During the third quarter of 2019, in connection with the Company’s recent management changes, certain existing stock options were modified with respect to vesting and exercise dates. The modifications to the stock options, in accordance with ASC 718, resulted in compensation expense in 2019 of approximately $741,000. The compensation expense for the year ended December 31, 2018 includes compensation expense in the amount of approximately $1,227,000 recognized in the second quarter of 2018 when 900,000 stock options vested upon of the death of the Company’s Senior Vice President of Science and Regulatory Affairs on April 19, 2018. As of December 31, 2019, unrecognized compensation expense related to non-vested stock options amounted to approximately $2,153,200, which is expected to be recognized as follows: approximately $1,011,500, $450,200 and $54,600 during 2020, 2021 and 2022, respectively. Approximately $636,900 of the unrecognized compensation expense relates to previously issued stock options, with the vesting of such stock options being based on the achievement of a certain milestones. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Risk-free interest rate (weighted average) 1.54 % 2.77 % 2.05 % Expected dividend yield 0 % 0 % 0 % Expected stock price volatility 70 % 90 % 90 % Expected life of options (weighted average) 5.15 years 5.61 years 5.56 years The Company estimated the expected volatility of the Company’s stock to be 70%. The expected term was estimated using the contract life of the option. The risk-free interest rate assumption was determined using yield of the equivalent U.S. Treasury bonds over the expected term. The Company has never paid any cash dividends and does not anticipate paying any cash dividends in the foreseeable future. Therefore, the Company assumed an expected dividend yield of zero. A summary of all stock option activity since December 31, 2016 is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2016 5,650,679 $ 1.04 Granted in 2017 2,692,000 $ 1.76 Exercised in 2017 (85,988) $ 0.79 Expired in 2017 (100,000) $ 1.43 Outstanding at December 31, 2017 8,156,691 $ 1.28 Granted in 2018 1,631,841 $ 2.64 Exercised in 2018 (612,259) $ 0.87 Expired / cancelled in 2018 (504,191) $ 1.71 Outstanding at December 31, 2018 8,672,082 $ 1.54 Granted in 2019 600,000 $ 2.07 Exercised in 2019 (75,410) $ 0.93 Forfeited in 2019 (1,359,500) $ 2.09 Outstanding at December 31, 2019 7,837,172 $ 1.49 5.4 years $ 761,699 Exercisable at December 31, 2019 6,182,688 $ 1.39 5.1 years $ 575,233 The weighted average grant date fair value of options issued during the years ended December 31, 2019 and 2018 was $1.19 and $1.81, respectively. The total fair value of options that vested during the years ended December 31, 2019 and 2018 amounted to $2,634,010 and $2,628,622, respectively. There were 75,410 options exercised on a cashless basis during the year ended December 31, 2019 resulting in the issuance of 39,988 shares of the Company stock. There were 612,259 options exercised on a cash and cashless basis during the year ended December 31, 2018 resulting in the issuance of 583,214 shares and proceeds of $444,614 to the Company. S tock options to purchase 900,000 shares of the Company common stock were not exercised by a former employee's beneficiaries during the twelve-month period following his death and have subsequently been returned to the OIP.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2019
INCOME TAXES
INCOME TAXES	NOTE 13. – INCOME TAXES The Tax Cuts and Jobs Act ("TCJA") was signed into law on December 22, 2017. The TCJA includes significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%. The Company’s income tax provision (benefit) reflects the effect of this change in Federal corporate tax rates, primarily from the re-measurement of the Company’s deferred tax assets and liabilities, including prior net operating loss carry-forwards. The effect of the rate change attributable to the TCJA on the Company’s effective tax rate was a decrease of approximately 46% in the net deferred tax assets before the valuation allowance. The following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Current: Federal $ — $ — $ — State — — — Total current — — — Deferred: Federal $ (5,607,324) (1,446,323) 1,263,677 State 55,210 (13,927) 214,628 Total deferred (5,552,114) (1,460,250) 1,478,305 Change in valuation allowance 5,552,114 1,460,250 (1,478,305) $ — $ — $ — The provision (benefit) for income tax varies from that which would be expected based on applying the statutory federal rate to pre-tax accounting loss, including the effect of the change in the U.S. corporate income tax rates, as follows: 2019 2018 2017 Statutory federal rate (21.0) % (21.0) % (34.0) % Other items (0.1) 0.1 (2.4) Litigation Settlement 1.5 Derivative liability — (0.1) 0.4 Stock based compensation 1.8 2.5 2.0 Research and development credit carryforward (3.3) (1.2) (1.8) State tax provision, net of federal benefit 0.2 (0.1) 0.1 Equity investment — 1.5 — Federal tax rate change — — 46.1 Valuation allowance 20.9 18.3 (11.4) Effective tax rate (benefit) provision 0.0 % 0.0 % 0.0 % Individual components of deferred taxes consist of the following as of December 31: 2019 2018 2017 Deferred tax assets: Net operating loss carry-forward $ 14,996,042 $ 11,526,599 $ 9,917,641 Inventory 52,030 21,000 48,011 Stock-based compensation 1,048,993 813,585 388,925 Start-up expenditures 220,640 242,704 279,709 Research and development credit carryforward 1,208,641 326,269 232,198 Loss on equity investment — 760 11,760 Accrued bonus 199,707 100,896 — Severance liability 134,414 — — Investment in Panacea 39,966 Operating lease obligations 127,385 Other 22,094 19,605 4,272 18,049,912 13,051,418 10,882,516 Deferred tax liabilities: Machinery and equipment (238,733) (214,587) (220,888) Patents and trademarks (350,798) (562,140) (558,760) Gain on investment (104,223) (612,286) — Accrued expense (51,069) (70,933) — Operating lease right-of-use assets (126,416) Other intangible assets (188,394) (153,307) (124,953) (1,059,633) (1,613,253) (904,601) Valuation allowance (16,990,279) (11,438,165) (9,977,915) Net deferred taxes $ — $ — $ — The Company generated net operating losses (“NOL”) of approximately $16,800,000 and $7,700,000 for the years ended December 31, 2019 and 2018, respectively, and these NOL carryforward losses do not expire. The Company had accumulated an NOL carryforward of approximately $46,900,000 through December 31, 2017 and this NOL carryforward begins to expire in 2031. As of December 31, 2019, the Company has a research and development credit carryforward of approximately $1,200,000 that begins to expire in 2031. U tilization of these NOL carryforwards may be subject to an annual limitation in the case of equity ownership changes, as defined by law. Due to the uncertainty of the Company’s ability to generate sufficient taxable income in the future, the Company has recorded a valuation allowance to reduce the net deferred tax asset to zero. These carryforwards are included in the net deferred tax asset that has been fully offset by the valuation allowance. ASC 740 provides guidance on the financial statement recognition and measurement for uncertain income tax positions that are taken or expected to be taken in a company’s income tax return. The Company has evaluated its tax positions and believes there are no uncertain tax positions as of December 31, 2019.

SELECTED QUARTERLY FINANCIAL DA

SELECTED QUARTERLY FINANCIAL DATA (unaudited)	12 Months Ended
	Dec. 31, 2019
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
SELECTED QUARTERLY FINANCIAL DATA (unaudited)	NOTE 14. – SELECTED QUARTERLY FINANCIAL DATA (unaudited) Below is selected quarterly financial data for the years ended December 31, 2019 and 2018: Three Months Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenue, net $ 6,293,648 $ 5,814,979 $ 6,461,914 $ 7,261,989 Gross (loss) profit $ (102,910) $ (86,300) $ (21,068) $ 224,733 Loss from operations $ (5,379,159) $ (5,028,839) $ (7,605,516) $ (5,552,947) Net loss $ (2,072,713) $ (8,041,682) $ (10,245,717) $ (6,198,432) Loss per common share - basic and diluted $ (0.02) $ (0.06) $ (0.08) $ (0.05) Three Months Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Revenue, net $ 6,116,309 $ 6,914,913 $ 6,260,518 $ 7,134,967 Gross profit $ 71,578 $ 161,714 $ 150,949 $ 514,746 Loss from operations $ (4,968,772) $ (7,040,512) $ (6,208,834) $ (5,800,509) Net income (loss) $ 1,386,488 $ (6,738,652) $ 6,304,654 $ (8,919,401) Income (loss) per common share - basic $ 0.01 $ (0.05) $ 0.05 $ (0.07) Income (loss) per common share - diluted $ 0.01 $ (0.05) $ 0.04 $ (0.07)

NATURE OF BUSINESS AND SUMMAR_2

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2019
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation - The accompanying consolidated financial statements include the accounts of 22nd Century Group, Inc. (“22nd Century Group”), its three wholly-owned subsidiaries, 22nd Century Limited, LLC (“22nd Century Ltd”), NASCO Products, LLC (“NASCO”), and Botanical Genetics, LLC (“Botanical Genetics”), and two wholly-owned subsidiaries of 22nd Century Ltd, Goodrich Tobacco Company, LLC (“Goodrich Tobacco”) and Heracles Pharmaceuticals, LLC (“Heracles Pharma”, formerly known as Hercules Pharmaceuticals, LLC) (collectively, the “Company”). All intercompany accounts and transactions have been eliminated.
Nature of Business	Nature of Business - 22nd Century Ltd is a plant biotechnology company specializing in technology that allows (i) for the level of nicotine and other nicotinic alkaloids in tobacco plants to be altered through genetic engineering and modern plant breeding and (ii) the levels of cannabinoids in hemp plants to be decreased or increased through genetic engineering and modern plant breeding. Goodrich Tobacco and Heracles Pharma are business units for the Company’s (i) potential modified risk tobacco products and (ii) smoking cessation product, respectively. NASCO is a federally licensed tobacco products manufacturer, a subsequent participating member under the tobacco Master Settlement Agreement (“MSA”) between the tobacco industry and the settling states under the MSA and operates the Company’s tobacco products manufacturing business in North Carolina. Botanical Genetics is a wholly-owned subsidiary of 22nd Century Group and was incorporated to facilitate the original investment in Anandia, Inc., and performs research and development related to the Company’s hemp business.
Reclassifications	Reclassifications - Certain items in the 2018 and 2017 financial statements have been reclassified to conform to the 2019 classification. During the third quarter of 2019, the Company combined sales and marketing expenses with general and administrative expenses to create a single line item in the operating expense section of the Company’s Consolidated Statements of Operations and Comprehensive Loss titled sales, general and administrative expenses. The comparative classifications for 2018 and 2017 have been reclassified to conform to the new presentation.
Preferred stock authorized	Preferred stock authorized - The Company is authorized to issue “blank check” preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock.
Concentration of Credit Risk	Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in financial institutions. Although the cash accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Management reviews the financial viability of these institutions on a periodic basis.
Cash and cash equivalents	Cash and cash equivalents – The Company considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. However, the Company has elected to classify money market mutual funds related to its short-term investment portfolio as short-term investment securities.
Short-term investment securities	Short-term investment securities – The Company’s short-term investment securities are classified as available-for-sale securities and consist of money market funds, corporate bonds, U.S. government agency bonds, U.S. treasury securities, and commercial paper with maturities greater than three months at the time of acquisition. The Company’s short-term investment securities are carried at fair value within current assets on the Company’s Consolidated Balance Sheets. The Company views its available-for-sale securities as available for use in current operations regardless of the stated maturity date of the security. The Company’s investment policy states that all investment securities must have a maximum maturity of twenty-four (24) months or less and the maximum weighted maturity of the investment securities must not exceed twelve (12) months. All the Company’s short-term investment securities are fixed-income debt instruments, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Realized gains and losses on short-term investment securities are recorded in the other income (expense) portion of the Company’s Consolidated Statements of Operations and Comprehensive Loss. Interest income is recorded on the accrual basis and presented net of investment related fees.
Accounts receivable	Accounts receivable - The Company periodically reviews aged account balances for collectability. The Company concluded that an allowance for doubtful accounts was not required at both December 31, 2019 and December 31, 2018.
Inventory	Inventory - Inventories are valued at the lower of historical cost or net realizable value. Cost is determined using an average cost method for tobacco leaf inventory and raw materials inventory and standard cost is primarily used for finished goods inventory. Inventories are evaluated to determine whether any amounts are not recoverable based on slow moving or obsolete condition and are written off or reserved as appropriate. For the year ended December 31, 2019, the Company wrote off tobacco leaf inventory with a cost of $985,238 and this cost is included in research and development expenses on the Company’s Consolidated Statement of Operations and Comprehensive Loss. Inventories at December 31, 2019 and 2018 consisted of the following: December 31, December 31, 2019 2018 Inventory - tobacco leaf $ 1,178,147 $ 1,556,581 Inventory - finished goods Cigarettes and filtered cigars 106,264 156,702 Inventory - raw materials Cigarette and filtered cigar components 1,081,893 1,430,666 2,366,304 3,143,949 Less: inventory reserve 100,000 100,000 $ 2,266,304 $ 3,043,949
Machinery and equipment	Machinery and equipment – Machinery and equipment are recorded at their acquisition cost and depreciated on a straight-line basis over their estimated useful lives ranging from 3 to 10 years. Depreciation commences when the asset is placed in service.
Right-of-use assets	Right-of-use assets - On January 1, 2019, the Company adopted ASU 2016-02, Subtopic ASC 842, Leases, and as a result has recorded Right-to-use assets and corresponding Lease obligations as more fully discussed in Note 3.
Intangible Assets	Intangible Assets - Intangible assets are recorded at cost and consist primarily of (1) expenditures incurred with third-parties related to the processing of patent claims and trademarks with government authorities, as well as costs to acquire patent rights from third-parties, (2) license fees paid for third-party intellectual property, (3) costs to become a signatory under the tobacco MSA, and (4) license fees paid to acquire a predicate cigarette brand. The amounts capitalized relate to intellectual property that the Company owns or to which it has exclusive rights. The Company’s intellectual property capitalized costs are amortized using the straight-line method over the remaining statutory life of the granted patent assets in each of the Company’s patent families, which have estimated expiration dates ranging from 2019 to 2036. Periodic maintenance or renewal fees are expensed as incurred. Annual minimum license fees are charged to expense. License fees paid for third-party intellectual property are amortized on a straight-line basis over the last to expire patents, which patent expiration dates are expected to range from 2019 through 2036. The Company believes costs associated with becoming a signatory to the MSA and acquiring a predicate cigarette brand have an indefinite life and as such, no amortization is taken. Total intangible assets at December 31, 2019 and 2018 consisted of the following: December 31, December 31, 2019 2018 Intangible assets, net Patent and trademark costs $ 5,712,415 $ 7,136,774 Less: accumulated amortization and impairment 2,839,135 3,194,565 Patent and trademark costs, net 2,873,279 3,942,209 License fees, net 3,776,427 3,776,427 Less: accumulated amortization 707,793 469,132 License fees, net 3,068,634 3,307,295 MSA signatory costs 2,202,000 2,202,000 License fee for predicate cigarette brand 350,000 300,000 $ 8,493,913 $ 9,751,504 Amortization expense relating to the above intangible assets for the years ended December 31, 2019, 2018, and 2017 amounted to $835,693, $819,640 and $539,562, respectively. The estimated annual average amortization expense for the next five years is approximately $401,500 for patent costs and $239,100 for license fees.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets - The Company reviews the carrying value of its amortizing long-lived assets whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be recoverable. The Company assesses recoverability of the asset by estimating the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the estimated future undiscounted net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and its fair value. During the year ended December 31, 2019, the Company decided on a going-forward basis that it will be concentrating its business and scientific resources, personnel and efforts on the portion of our intellectual property portfolio (patents, patent applications and trademarks) that relate to very low nicotine tobacco plants and potential products, as well as unique hemp/cannabis plants and potential products, in order to more strategically pursue our objectives. Accordingly, we recorded a non-cash impairment charge of $1,142,349 (cost of $2,092,485 less accumulated amortization of $950,136) relating to patent and trademark costs not associated with these strategic objectives. This impairment charge is included as a separate line item in operating expenses on the Company’s Consolidated Statements of Operations and Comprehensive Loss. There was no impairment loss recorded during the years ended December 31, 2018, and 2017.
Income Taxes	Income Taxes - The Company recognizes deferred tax assets and liabilities for any basis differences in its assets and liabilities between tax and U.S. GAAP reporting, and for operating loss and credit carry-forwards. As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2019 and 2018. Additionally, because the Company has a full valuation allowance offsetting its deferred tax assets and as a result has an effective tax rate of zero, the Company has elected to present other comprehensive income items relating to net unrealized gains on short-term investment securities gross and not net of taxes. The Company’s federal and state tax returns for the years ended December 31, 2016 through December 31, 2018 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2019. The Tax Cuts and Jobs Act of 2017 (the “TCJA”) was signed into law on December 22, 2017. The TCJA includes significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%. In accordance with a question and answer document issued by the Financial Accounting Standards Board (“FASB”) staff on January 18, 2018, the Company is applying the guidance in Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which provides guidance on applying FASB Accounting Standards Codification (“ASC”) 740, Income Taxes, if the accounting for certain income tax effects of the TCJA are incomplete by the time the financial statements are issued for a reporting period. Specifically, SAB 118 permits companies to use reasonable estimates and provisional amounts for some line items for taxes when preparing year-end 2018 and 2017 financial statements. The Company has completed the accounting under the TCJA, and accordingly, has reported the effects in the Company’s consolidated financial statements for the years ended December 31, 2019, 2018, and 2017. Additional disclosures required by SAB 118 are included in Note 13.
Stock Based Compensation	Stock Based Compensation - The Company uses a fair-value based method to determine compensation for all arrangements under which Company employees and others receive shares, restricted stock units or options to purchase common shares of the Company. Stock based compensation expense is recorded over the requisite service period based on estimates of probability and time of achieving milestones and vesting. For accounting purposes, the shares will be considered issued and outstanding upon vesting or risks of forfeiture expiring.
Revenue Recognition	Revenue Recognition - On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers and all related amendments (the “new revenue standard”) for all contracts using the modified retrospective method. Under the modified retrospective method, the Company was required to record a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2018. The Company has determined that the adoption of the new revenue standard did not require a cumulative-effect adjustment. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company recognizes revenue when it satisfies a performance obligation by transferring control of the product to a customer. The Company’s customer contracts consist of obligations to manufacture the customer’s branded filtered cigars and cigarettes. For certain contracts, the performance obligation is satisfied over time as the Company determines, due to contract restrictions, it does not have an alternative use of the product, and it has an enforceable right to payment as the product is manufactured. The Company recognizes revenue under those contracts at the unit price stated in the contract based on the units manufactured. The manufacturing process is completed on a daily basis and, therefore, there were no performance obligations partially satisfied at December 31, 2019 and 2018. For contracts where the performance obligation is satisfied at a point in time, the Company recognizes revenue when the product is transferred to the customer. Revenue from the sale of the Company’s products is recognized net of cash discounts, sales returns and allowances. There was no allowance for discounts or returns and allowances at December 31, 2019 and 2018. The Company provides assurance to customers that the product complies with agreed-upon contractual specifications. Shipping and handling activities associated with the outbound freight after control of the product has transferred to a customer are considered a fulfillment activity. The related shipping and handling expenses are included in cost of goods sold. The Company generally requires a down payment from its customers prior to commencement of manufacturing the product. Amounts received in advance of satisfying the performance obligations are recorded as deferred revenue. Customer payment terms vary depending on the terms of each customer contract, but payment is generally due prior to product shipment or within extended credit terms up to twenty-one (21) days after shipment ; therefore The Company's contracts with customers do not include a significant financing component. The Company’s net sales revenue is derived from customers located primarily in the United and is disaggregated by the timing of revenue recognition. For the years ended December 31, 2019 and 2018, net sales revenue from products transferred over time amounted to approximately $16,466,000 and $16,785,000, respectively, and net sales revenue from products transferred at a point in time amounted to approximately $9,367,000 and $9,641,000, respectively. The Company had certain customers whose revenue individually represented 10% or more the Company’s total revenue and whose accounts receivable balances individually represented 10% or more the Company’s total accounts receivable. For the years ended December 31, 2019, and 2018, three customers accounted for over 92.7% and 92.0% of our revenue and approximately 98.5% and 85.6%, respectively, of accounts receivable.
Derivatives	Derivatives - The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments are initially recorded at fair market value and then are revalued at each reporting date, with changes in fair value reported in the Consolidated Statements of Operations and Comprehensive Loss. The classification of derivative instruments is evaluated at the end of each reporting period. Derivative instruments are classified on the balance sheet as current or non-current based on if the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
Research and Development	Research and Development - Research and development costs are expensed as incurred.
Loss Per Common Share	Loss Per Common Share - Basic loss per common share is computed using the weighted-average number of common shares outstanding. Diluted loss per share is computed assuming conversion of all potentially dilutive securities. Potential common shares outstanding are excluded from the computation if their effect is anti-dilutive.
Use of Estimates	Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments	Fair Value of Financial Instruments - The Company’s financial instruments include cash and cash equivalents, short-term investment securities, accounts receivable, investments, a convertible note receivable, accounts payable, accrued expenses, and notes payable. Other than for cash equivalents, short-term investment securities, investments, and convertible note receivable, fair value is assumed to approximate carrying values for these financial instruments, since they are short term in nature, they are receivable or payable on demand, or had stated interest rates that approximate the interest rates available to the Company as of the reporting date. The determination of the fair value of cash equivalents, short-term investment securities, investments (stock warrants and equity investment), and convertible note receivable are discussed in Note 5.
Investments	Investments - The Company accounts for investments in equity securities of other entities under the equity method of accounting if the Company’s investment in the stock of the other entity provides the Company with the ability to have significant influence over the operating and financial policies of the investee. If the Company does not have significant influence over the operating or financial policies of the entity, and such equity investment does not have a readily determinable market value, then the Company accounts for such equity investments in accordance with FASB ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assts and Financial Liabilities, which the Company adopted in the first quarter of 2018 with respect to the Company’s investments. Under ASU 2016-01 equity securities are recorded at fair value, with changes in fair value recorded through the statement of operations. Equity securities without a readily determinable market value are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company considers debt instruments as available-for-sale securities, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company has an investment in Aurora stock warrants that are considered equity securities under ASC 321 – Investments – Equity Securities and a derivative instrument under ASC 815 – Derivatives and Hedging. The stock warrants are not designated as a hedging instrument, and in accordance with ASC 815, the Company’s investment in stock warrants are recorded at fair value with changes in fair value recorded in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company also has Panacea stock warrants that are not considered a derivative under ASC 815. As such, the Panacea stock warrants are considered an equity investment with no readily determinable market value and are carried at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. During the fourth quarter of 2019, the Company made an investment in Panacea consisting of preferred shares that are not considered in-substance common stock, a stock warrant and a convertible note receivable. The convertible note receivable was recorded at a discount with the note discount amortized into interest income over the term of the note. This transaction, along with the related valuation techniques are more fully described in Note 4.
Accounting Pronouncements	Accounting Pronouncement - In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The standard replaces the incurred loss model with the current expected credit loss (CECL) model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. The CECL model requires companies to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions and reasonable and supportable forecasts. The provisions of the ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The ASU requires retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The Company will adopt ASU 2016-13 on January 1, 2023 and is evaluating the expected impacts.

NATURE OF BUSINESS AND SUMMAR_3

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2019
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of Inventories	December 31, December 31, 2019 2018 Inventory - tobacco leaf $ 1,178,147 $ 1,556,581 Inventory - finished goods Cigarettes and filtered cigars 106,264 156,702 Inventory - raw materials Cigarette and filtered cigar components 1,081,893 1,430,666 2,366,304 3,143,949 Less: inventory reserve 100,000 100,000 $ 2,266,304 $ 3,043,949
Schedule of Intangible Assets	December 31, December 31, 2019 2018 Intangible assets, net Patent and trademark costs $ 5,712,415 $ 7,136,774 Less: accumulated amortization and impairment 2,839,135 3,194,565 Patent and trademark costs, net 2,873,279 3,942,209 License fees, net 3,776,427 3,776,427 Less: accumulated amortization 707,793 469,132 License fees, net 3,068,634 3,307,295 MSA signatory costs 2,202,000 2,202,000 License fee for predicate cigarette brand 350,000 300,000 $ 8,493,913 $ 9,751,504

MACHINERY AND EQUIPMENT (Tables

MACHINERY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2019
MACHINERY AND EQUIPMENT
Schedule of Machinery and equipment	December 31, December 31, Useful Life 2019 2018 Cigarette manufacturing equipment 3 - 10 years $ 4,869,808 $ 4,608,267 Office furniture, fixtures and equipment 5 years 152,454 135,909 Laboratory equipment 5 years 124,627 104,709 Leasehold improvements 6 years 256,604 169,362 5,403,493 5,018,247 Less: accumulated depreciation 2,283,523 1,757,499 Machinery and equipment, net $ 3,119,970 $ 3,260,748

INVESTMENTS (Tables)

INVESTMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
INVESTMENTS
Schedule of investment based on the fair value of the of the financial instruments received	Convertible note receivable $ 5,567,500 Preferred stock $ 4,864,517 Preferred stock warrants $ 2,865,000 $ 13,297,017

FAIR VALUE MEASUREMENTS AND S_2

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS
Schedule of assets and liabilities measured at fair value	Asset and Liabilities at Fair Value As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 12,145,726 $ — $ — $ 12,145,726 Corporate bonds — 26,331,348 — 26,331,348 Total short-term investment securities $ 12,145,726 $ 26,331,348 $ — $ 38,477,074 Investments : Stock warrants $ — $ — $ 673,010 $ 673,010 Convertible note receivable — — 5,589,478 5,589,478 Preferred stock in Panacea — — 4,864,517 4,864,517 Total Investment $ — $ — $ 11,270,005 $ 11,270,005 Asset and Liabilities at Fair Value As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investment securities: Money market funds $ 10,083,972 $ — $ — $ 10,083,972 Corporate bonds — 38,579,055 — 38,579,055 U.S. treasury securities — 2,970,900 — 2,970,900 U.S. government agency bonds — 4,115,012 — 4,115,012 Total short-term investment securities $ 10,083,972 $ 45,664,967 $ — $ 55,748,939 Investments: Stock warrants $ — $ — $ 3,092,358 $ 3,092,358
Schedule of the changes in fair value of the Company's stock warrants	Fair value at December 31, 2017 $ — Fair value of stock warrants acquired on August 8, 2018 2,807,958 Unrealized gain as a result of change in fair value 284,400 Fair value at December 31, 2018 3,092,358 Unrealized loss as a result of change in fair value (2,419,348) Accretion of interest income on convertible note receivable 21,978 Panacea convertible note receivable 5,567,500 Preferred stock in Panacea 4,864,517 Fair value at December 31, 2019 $ 11,127,005
Schedule of available-for-sale securities reconciliation	Available-for-sale Securities - December 31, 2019 Gross Amortized Gross Unrealized Cost Basis Unrealized Gains Losses Fair Value Corporate bonds $ 26,324,274 $ 64,408 $ (57,334) $ 26,331,348 Convertible Note Receivable 5,589,478 — — 5,589,478 Preferred stock in Panacea 4,864,517 — — 4,864,517 Totals $ 36,778,269 $ 64,408 $ (57,334) $ 36,785,343 Available-for-Sale Securities - December 31, 2018 Amortized Gross Gross Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 38,579,541 $ 48,796 $ (49,282) $ 38,579,055 U.S. treasury securities 2,959,063 11,837 – 2,970,900 U.S. government agency bonds 4,099,321 15,691 – 4,115,012 Totals $ 45,637,925 $ 76,324 $ (49,282) $ 45,664,967
Schedule of available for sale securities classified by contractual maturity	Available-for-Sale Securities Available-for-Sale December 31, 2019 December 31, 2018 Amortized Amortized Cost Basis Fair Value Cost Basis Fair Value Due in one year or less $ 16,823,028 $ 16,851,008 $ 43,050,306 $ 43,082,677 Due after one year through five years 9,501,246 9,480,340 2,587,619 2,582,290 Due in five years 10,453,995 10,453,995 — — $ 36,778,269 $ 36,785,343 $ 45,637,925 $ 45,664,967

WARRANTS FOR COMMON STOCK (Tabl

WARRANTS FOR COMMON STOCK (Tables)	12 Months Ended
	Dec. 31, 2019
WARRANTS FOR COMMON STOCK
Schedule of roll-forward summary of the warrant liability	Fair value at December 31, 2017 $ 216,490 Gain as a result of change in fair value (48,711) Reclassification of warrant liability to capital in excess of par (167,779) Fair value at December 31, 2018 — Fair value at December 31, 2019 $ —
Schedule of warrant activity	Number of Warrants Warrants outstanding at December 31, 2016 13,781,921 Warrants exercised during 2017 (1,470,027) Warrants expired during 2017 (223,814) Warrants exercised pursuant to June 2017 warrant exercise agreements (11,293,211) Warrants issued pursuant to June 2017 warrant exercise agreements 11,293,211 Warrants outstanding at December 31, 2017 12,088,080 Warrants exercised during 2018 (794,869) Warrants outstanding at December 31, 2018 11,293,211 Warrants exercised during 2019 pursuant to November 2019 warrant exercise agreement (11,293,211) Warrants issued during 2019 pursuant to November 2019 warrant exercise agreement 11,293,211 Warrants outstanding at December 31, 2019 11,293,211

EARNINGS PER COMMON SHARE (Tabl

EARNINGS PER COMMON SHARE (Tables)	12 Months Ended
	Dec. 31, 2019
EARNINGS PER COMMON SHARE
Schedule of computation of basic and diluted earnings per common share	December 31, December 31, December 31, 2019 2018 2017 Net loss attributed to common shareholders $ (26,558,544) $ (7,966,911) $ (13,029,117) Denominator for basic and diluted earnings per common share-weighted average shares adjusted for dilutive securities 125,882,717 124,298,981 101,161,380 Loss per common share - basic and diluted $ (0.21) $ (0.06) $ (0.13)
Schedule of outstanding excluded from dilutive securities	December 31, December 31, December 31, 2019 2018 2017 Warrants 11,293,211 11,293,211 12,088,080 Options 7,837,172 8,672,082 8,156,691 Restricted stock units 951,000 — — 20,081,383 19,965,293 20,244,771

EQUITY BASED COMPENSATION (Tabl

EQUITY BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2019
EQUITY BASED COMPENSATION
Schedule of fair value assumptions	2019 2018 2017 Risk-free interest rate (weighted average) 1.54 % 2.77 % 2.05 % Expected dividend yield 0 % 0 % 0 % Expected stock price volatility 70 % 90 % 90 % Expected life of options (weighted average) 5.15 years 5.61 years 5.56 years
Schedule of stock option activity	Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value Outstanding at December 31, 2016 5,650,679 $ 1.04 Granted in 2017 2,692,000 $ 1.76 Exercised in 2017 (85,988) $ 0.79 Expired in 2017 (100,000) $ 1.43 Outstanding at December 31, 2017 8,156,691 $ 1.28 Granted in 2018 1,631,841 $ 2.64 Exercised in 2018 (612,259) $ 0.87 Expired / cancelled in 2018 (504,191) $ 1.71 Outstanding at December 31, 2018 8,672,082 $ 1.54 Granted in 2019 600,000 $ 2.07 Exercised in 2019 (75,410) $ 0.93 Forfeited in 2019 (1,359,500) $ 2.09 Outstanding at December 31, 2019 7,837,172 $ 1.49 5.4 years $ 761,699 Exercisable at December 31, 2019 6,182,688 $ 1.39 5.1 years $ 575,233

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2019
INCOME TAXES
Summary of the components giving rise to the income tax provision (benefit)	2019 2018 2017 Current: Federal $ — $ — $ — State — — — Total current — — — Deferred: Federal $ (5,607,324) (1,446,323) 1,263,677 State 55,210 (13,927) 214,628 Total deferred (5,552,114) (1,460,250) 1,478,305 Change in valuation allowance 5,552,114 1,460,250 (1,478,305) $ — $ — $ —
Schedule of effective income tax rate reconciliation	2019 2018 2017 Statutory federal rate (21.0) % (21.0) % (34.0) % Other items (0.1) 0.1 (2.4) Litigation Settlement 1.5 Derivative liability — (0.1) 0.4 Stock based compensation 1.8 2.5 2.0 Research and development credit carryforward (3.3) (1.2) (1.8) State tax provision, net of federal benefit 0.2 (0.1) 0.1 Equity investment — 1.5 — Federal tax rate change — — 46.1 Valuation allowance 20.9 18.3 (11.4) Effective tax rate (benefit) provision 0.0 % 0.0 % 0.0 %
Schedule of deferred tax assets and liabilities	2019 2018 2017 Deferred tax assets: Net operating loss carry-forward $ 14,996,042 $ 11,526,599 $ 9,917,641 Inventory 52,030 21,000 48,011 Stock-based compensation 1,048,993 813,585 388,925 Start-up expenditures 220,640 242,704 279,709 Research and development credit carryforward 1,208,641 326,269 232,198 Loss on equity investment — 760 11,760 Accrued bonus 199,707 100,896 — Severance liability 134,414 — — Investment in Panacea 39,966 Operating lease obligations 127,385 Other 22,094 19,605 4,272 18,049,912 13,051,418 10,882,516 Deferred tax liabilities: Machinery and equipment (238,733) (214,587) (220,888) Patents and trademarks (350,798) (562,140) (558,760) Gain on investment (104,223) (612,286) — Accrued expense (51,069) (70,933) — Operating lease right-of-use assets (126,416) Other intangible assets (188,394) (153,307) (124,953) (1,059,633) (1,613,253) (904,601) Valuation allowance (16,990,279) (11,438,165) (9,977,915) Net deferred taxes $ — $ — $ —

SELECTED QUARTERLY FINANCIAL _2

SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Tables)	12 Months Ended
	Dec. 31, 2019
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
Schedule of quarterly financial information	Three Months Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenue, net $ 6,293,648 $ 5,814,979 $ 6,461,914 $ 7,261,989 Gross (loss) profit $ (102,910) $ (86,300) $ (21,068) $ 224,733 Loss from operations $ (5,379,159) $ (5,028,839) $ (7,605,516) $ (5,552,947) Net loss $ (2,072,713) $ (8,041,682) $ (10,245,717) $ (6,198,432) Loss per common share - basic and diluted $ (0.02) $ (0.06) $ (0.08) $ (0.05) Three Months Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Revenue, net $ 6,116,309 $ 6,914,913 $ 6,260,518 $ 7,134,967 Gross profit $ 71,578 $ 161,714 $ 150,949 $ 514,746 Loss from operations $ (4,968,772) $ (7,040,512) $ (6,208,834) $ (5,800,509) Net income (loss) $ 1,386,488 $ (6,738,652) $ 6,304,654 $ (8,919,401) Income (loss) per common share - basic $ 0.01 $ (0.05) $ 0.05 $ (0.07) Income (loss) per common share - diluted $ 0.01 $ (0.05) $ 0.04 $ (0.07)

NATURE OF BUSINESS AND SUMMAR_4

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details)	Dec. 21, 2017	Dec. 31, 2019USD ($)subsidiary	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Condensed Financial Statements, Captions [Line Items]
Number of subsidiaries | subsidiary		3
Maximum maturity date of securities		24 months
Maximum weighted maturity of securities.		12 months
Inventory Write-down		$ 985,238	$ 0	$ 0
Amortization of Intangible Assets		835,693	819,640	539,562
Impairment		$ 1,142,349	$ 0	$ 0
Revenue collection period		21 days
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	21.00%	34.00%
Performance obligation partially satisfied		$ 0	$ 0
Allowance for Doubtful Accounts Receivable		0	0
Revenues		$ 25,832,530	$ 26,426,347	$ 16,600,244
Revenue [Member]
Condensed Financial Statements, Captions [Line Items]
Concentration Risk, Percentage		92.70%	92.00%
Accounts Receivable [Member]
Condensed Financial Statements, Captions [Line Items]
Concentration Risk, Percentage		98.50%	85.60%
Transferred at Point in Time [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues		$ 9,367,000	$ 9,641,000
Transferred over Time [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues		$ 16,466,000	$ 16,785,000
Twenty Second Century Ltd [Member]
Condensed Financial Statements, Captions [Line Items]
Number of subsidiaries | subsidiary		2
Maximum
Condensed Financial Statements, Captions [Line Items]
Property, Plant and Equipment, Estimated Useful Lives		P10Y
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%
Minimum
Condensed Financial Statements, Captions [Line Items]
Property, Plant and Equipment, Estimated Useful Lives		P3Y
Patent and Trademark [Member]
Condensed Financial Statements, Captions [Line Items]
Non-cash impairment charge		$ 1,142,349
Finite Lived Intangible Assets, Gross, Accumulated Impairment		2,092,485
Accumulated amortization relating to impairment costs		950,136
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months		401,500
Finite-Lived Intangible Assets, Amortization Expense, Year Two		401,500
Finite-Lived Intangible Assets, Amortization Expense, Year Three		401,500
Finite-Lived Intangible Assets, Amortization Expense, Year Four		401,500
Finite-Lived Intangible Assets, Amortization Expense, Year Five		401,500
Licensing Agreements [Member]
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months		239,100
Finite-Lived Intangible Assets, Amortization Expense, Year Two		239,100
Finite-Lived Intangible Assets, Amortization Expense, Year Three		239,100
Finite-Lived Intangible Assets, Amortization Expense, Year Four		239,100
Finite-Lived Intangible Assets, Amortization Expense, Year Five		$ 239,100

NATURE OF BUSINESS AND SUMMAR_5

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Inventory, Net
Inventory - tobacco leaf	$ 1,178,147	$ 1,556,581
Inventory - finished goods
Cigarettes and filtered cigars	106,264	156,702
Inventory - raw materials
Cigarette and filtered cigar components	1,081,893	1,430,666
Inventory - tobacco leaf, net	2,366,304	3,143,949
Less: inventory reserve	100,000	100,000
Inventory, Net	$ 2,266,304	$ 3,043,949

NATURE OF BUSINESS AND SUMMAR_6

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Intangible assets, net
Intangible assets, net	$ 8,493,913	$ 9,751,504
Patent and Trademark [Member]
Intangible assets, net
Intangible assets, before impairment	5,712,415	7,136,774
Less: impairment	2,092,485
Less: accumulated amortization before impairment	2,839,135	3,194,565
Total	2,873,279	3,942,209
Licensing Agreements [Member]
Intangible assets, net
Gross	3,776,427	3,776,427
Less: accumulated amortization	707,793	469,132
Total	3,068,634	3,307,295
MSA Signatory Costs [Member]
Intangible assets, net
Other	2,202,000	2,202,000
License Fee [Member]
Intangible assets, net
Other	$ 350,000	$ 300,000

MACHINERY AND EQUIPMENT - Addit

MACHINERY AND EQUIPMENT - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
MACHINERY AND EQUIPMENT
Depreciation, Total	$ 589,310	$ 522,695	$ 353,435

MACHINERY AND EQUIPMENT (Detail

MACHINERY AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Machinery and Equipment, Gross	$ 5,403,493	$ 5,018,247
Less: accumulated depreciation	2,283,523	1,757,499
Machinery and equipment, net	3,119,970	3,260,748
Cigarette manufacturing equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 4,869,808	4,608,267
Cigarette manufacturing equipment [Member] | Maximum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Cigarette manufacturing equipment [Member] | Minimum
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Office furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 152,454	135,909
Property, Plant and Equipment, Useful Life	5 years
Laboratory equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 124,627	104,709
Property, Plant and Equipment, Useful Life	5 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 256,604	$ 169,362
Property, Plant and Equipment, Useful Life	6 years

RIGHT-OF-USE ASSETS, LEASE OB_2

RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES - (Details) - USD ($)	Feb. 01, 2020	Oct. 04, 2017	Aug. 14, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
Operating Lease, Right-of-Use Asset				$ 601,979	$ 0		$ 446,950
Operating Lease, Liability							$ 367,325
Operating Lease, Liability, Current				219,814	0
Operating Lease, Liability, Noncurrent				382,165	0
Operating Leases Monthly lease payment				14,094
Lessee, Operating Lease, Renewal Term							34 months
Percentage Of Lease Payment Increase		5.00%
Operating Lease, Payments				168,100
Operating Lease, Expense				76,500
Operating Leases, Rent Expense, Minimum Rentals		$ 6,375
Lessee, Operating Lease, Term of Contract							62 months
Capital Lease Obligations, Current				219,814
Capital Lease Obligations, Noncurrent				382,165
Operating Lease, Weighted Average Discount Rate, Percent							5.14%
Warehouse Space in North Carolina
Operating Lease, Expense			$ 4,665
Laboratory space in Buffalo
Lessee, Operating Lease, Renewal Term	12 months
Operating Lease, Expense				68,700	$ 62,600	$ 30,483
Lessee, Operating Lease, Term of Contract	1 year
Monthly rent	$ 8,408
Percentage of operating leases lessee monthly payment	3.00%
2020				100,000
2021				104,000
2022				$ 8,700

INVESTMENTS (Details)

INVESTMENTS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 03, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Investments	$ 8,402,527		$ 3,092,358
Convertible Notes Receivable	5,589,478		$ 0
Investment in Panacea
Schedule of Equity Method Investments [Line Items]
Convertible Notes Receivable	5,589,478	$ 7,000,000
Investment in Panacea | Preferred stock
Schedule of Equity Method Investments [Line Items]
Fair value of investment	4,864,517
Investment in Panacea | Preferred stock warrants
Schedule of Equity Method Investments [Line Items]
Fair value of investment	2,865,000
Aurora Cannabis Inc [Member]
Schedule of Equity Method Investments [Line Items]
Fair Value of The Common Stock Warrant	$ 673,010

INVESTMENTS - Investment in Pan

INVESTMENTS - Investment in Panacea (Details)	Dec. 03, 2019USD ($)$ / sharesshares	Dec. 31, 2019USD ($)$ / shares	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Marketable Securities [Line Items]
Fair value of shares issued		$ 1,297,017
Exercise price | $ / shares		$ 1.11
Convertible Notes Receivable		$ 5,589,478	$ 0
Accreted interest income on convertible note receivable		$ 21,978	$ 0	$ 0
Volatility
Marketable Securities [Line Items]
Assumption rate		0.83
Investment in Panacea
Marketable Securities [Line Items]
Ownership percentage (in percent)	15.80%
Voting interest in board of directors	33.00%
Convertible note receivable	$ 7,000,000
Interest rate	10.00%
Amount paid to acquire investments	$ 12,000,000
Fair value of shares issued	$ 1,297,017
Number of shares issued | shares	1,297,017
Sales target payable in cash	$ 8,500,000
Dividend rate	10.00%
Expected controlling interest	51.00%
Convertible Notes Receivable	$ 7,000,000	$ 5,589,478
Discount on notes receivable	$ 1,432,500
Accreted interest income on convertible note receivable		21,978
Investments, Fair Value Disclosure [Abstract]
Convertible note receivable		5,567,500
Total investment		13,297,017
Preferred stock | Investment in Panacea
Marketable Securities [Line Items]
Number of shares received | shares	3,733,334
Number of shares converted	3,733,334
Number of shares to be received | shares	5,333,334
Share price | $ / shares	$ 1.875
Additional shares | shares	3,733,333
Investments, Fair Value Disclosure [Abstract]
Fair value of investment		4,864,517
Preferred stock warrants | Investment in Panacea
Marketable Securities [Line Items]
Period of sales target	2 years
Exercise price | $ / shares	$ 2.344
Remaining exercise price | $ / shares	$ 2.344
Investments, Fair Value Disclosure [Abstract]
Fair value of investment		$ 2,865,000
Fair Value, Inputs, Level 3 | Preferred stock warrants | Investment in Panacea | Volatility
Marketable Securities [Line Items]
Assumption rate	0.70
Fair Value, Inputs, Level 3 | Preferred stock warrants | Investment in Panacea | Discount for lack of marketability
Marketable Securities [Line Items]
Assumption rate	0.25
Fair Value, Inputs, Level 3 | Preferred stock warrants | Investment in Panacea | Risk-free rate
Marketable Securities [Line Items]
Assumption rate	0.02

INVESTMENTS - Investment in Ana

INVESTMENTS - Investment in Anandia (Details) - USD ($)	Aug. 08, 2018	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]
Unrealized (loss) gain on investment					$ (2,419,348)	$ 284,400	$ 342,562
Term of the warrant				5 years
Fair Value of Warrants	$ 2,807,958
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 1.11
Fair Value of Common Stock Transferred	$ 9,221,594
Realized Gain Loss on Investments					$ 0	14,492,968	0
Realized Gain on Sale Of Common Stock						3,829,909
Warrant
Schedule of Equity Method Investments [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					973,971
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 9.37				$ 7.21
Investment in Anandia [Member]
Schedule of Equity Method Investments [Line Items]
Unrealized (loss) gain on investment			$ 6,147,088			0	346,180
Equity Method Investments							$ 1,366,493
Aurora Cannabis Inc [Member]
Schedule of Equity Method Investments [Line Items]
Fair value of the common stock warrant					$ 673,010
Common Stock Transferred Number	1,947,943
Realized Gain Loss on Investments		$ 4,515,971				14,492,968
Proceeds from Issuance of Common Stock						13,051,503
Aurora Cannabis Inc [Member] | Warrant
Schedule of Equity Method Investments [Line Items]
Unrealized (loss) gain on investment					(2,419,348)	284,400
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	973,971
Aurora Cannabis Inc [Member] | Other Assets
Schedule of Equity Method Investments [Line Items]
Fair value of the common stock warrant					$ 673,010	$ 3,092,358

FAIR VALUE MEASUREMENTS AND S_3

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS - Fair value measurements (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Assets
Investments, Fair Value Disclosure	$ 11,270,005
U.S. government agency bonds
Assets
Total short-term investment securities		$ 4,115,012
US Treasury Securities
Assets
Total short-term investment securities		2,970,900
Short-term investment securities
Assets
Total short-term investment securities	38,477,074
Corporate Bonds
Assets
Total short-term investment securities	26,331,348	38,579,055
Total cash equivalents and short-term investment securities
Assets
Total short-term investment securities		55,748,939
Stock Warrants
Assets
Investments, Fair Value Disclosure	673,010	3,092,358
Preferred stock in Panacea
Assets
Total short-term investment securities	4,864,517
Convertible note receivable
Assets
Investments, Fair Value Disclosure	5,589,478
Money Market Funds
Assets
Total short-term investment securities	12,145,726	10,083,972
Fair Value, Inputs, Level 3
Assets
Investments, Fair Value Disclosure	11,270,005
Fair Value, Inputs, Level 3 | Stock Warrants
Assets
Investments, Fair Value Disclosure	673,010	3,092,358
Fair Value, Inputs, Level 3 | Preferred stock in Panacea
Assets
Total short-term investment securities	4,864,517
Fair Value, Inputs, Level 3 | Convertible note receivable
Assets
Investments, Fair Value Disclosure	5,589,478
Fair Value, Inputs, Level 1 | Short-term investment securities
Assets
Total short-term investment securities	12,145,726
Fair Value, Inputs, Level 1 | Total cash equivalents and short-term investment securities
Assets
Total short-term investment securities		10,083,972
Fair Value, Inputs, Level 1 | Money Market Funds
Assets
Total short-term investment securities	12,145,726	10,083,972
Fair Value, Inputs, Level 2 | U.S. government agency bonds
Assets
Total short-term investment securities		4,115,012
Fair Value, Inputs, Level 2 | US Treasury Securities
Assets
Total short-term investment securities		2,970,900
Fair Value, Inputs, Level 2 | Short-term investment securities
Assets
Total short-term investment securities	26,331,348
Fair Value, Inputs, Level 2 | Corporate Bonds
Assets
Total short-term investment securities	$ 26,331,348	38,579,055
Fair Value, Inputs, Level 2 | Total cash equivalents and short-term investment securities
Assets
Total short-term investment securities		$ 45,664,967

FAIR VALUE MEASUREMENTS AND S_4

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS - Fair value measurements - Changes in fair value of the stock warrants (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 08, 2018
Fair value of stock warrants acquired on August 8, 2018				$ 2,807,958
Accreted interest income on convertible note receivable	$ 21,978	$ 0	$ 0
Warrant
Fair value at beginning of the period	3,092,358
Fair value of stock warrants acquired on August 8, 2018				$ 2,807,958
Unrealized gain as a result of change in fair value	(2,419,348)	284,400
Accreted interest income on convertible note receivable	21,978
Panacea convertible note receivable	5,567,500
Preferred stock in Panacea	4,864,517
Fair value at end of the period	$ 11,127,005	$ 3,092,358

FAIR VALUE MEASUREMENTS AND S_5

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS - Fair value measurement - Available-for-sale securities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis	$ 36,778,269	$ 45,637,925
Available-for-sale Securities - Gross Unrealized Gains	64,408	76,324
Available-for-sale Securities - Gross Unrealized Losses	(57,334)	(49,282)
Available-for-sale Securities - Fair Value	36,785,343	45,664,967
Corporate Bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis	26,324,274	38,579,541
Available-for-sale Securities - Gross Unrealized Gains	64,408	48,796
Available-for-sale Securities - Gross Unrealized Losses	(57,334)	(49,282)
Available-for-sale Securities - Fair Value	26,331,348	38,579,055
Convertible note receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis	5,589,478
Available-for-sale Securities - Fair Value	5,589,478
Preferred stock in Panacea
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis	4,864,517
Available-for-sale Securities - Fair Value	$ 4,864,517
U.S. government agency bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis		4,099,321
Available-for-sale Securities - Gross Unrealized Gains		15,691
Available-for-sale Securities - Fair Value		4,115,012
US Treasury Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities - Amortized Cost Basis		2,959,063
Available-for-sale Securities - Gross Unrealized Gains		11,837
Available-for-sale Securities - Fair Value		$ 2,970,900

FAIR VALUE MEASUREMENTS AND S_6

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS - Fair value measurement - Available-for-sale securities by contractual maturity (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available For Sale Securities Debt Maturities Within Five Years Amortized Cost	$ 10,453,995
Available-for-sale Securities, Amortized Cost	36,778,269	$ 45,637,925
Available For Sale Securities Debt Maturities Within Five Years Fair Value	10,453,995
Debt Securities, Available-for-sale, Total	36,785,343	45,664,967
Due in one year or less
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available For Sale Securities Debt Maturities After One Year or Less Amortized Cost	16,823,028	43,050,306
Available-for-sale, Maturity, Allocated and Single Maturity Date, within One Year, Fair Value	16,851,008	43,082,677
Due after one year through two years
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available For Sale Securities Debt Maturities After One Year Through Five Years Amortized Cost	9,501,246	2,587,619
Available For Sale Securities Debt Maturities After One Through Five Years Fair Value	$ 9,480,340	2,582,290
Due after one year through five years
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities, Amortized Cost		$ 45,637,925

FAIR VALUE MEASUREMENTS AND S_7

FAIR VALUE MEASUREMENTS AND SHORT-TERM INVESTMENTS - Additional Information (Details)	12 Months Ended
	Dec. 31, 2019USD ($)$ / shares	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Warrants and Rights Outstanding Measurement Input Estimated Period Increase	20.00%
Warrants and Rights Outstanding Increase in fair value due to Increase in Measurement Input	$ 260,000
Accreted interest income on convertible note receivable	$ 21,978	$ 0	$ 0
Net Asset Value Per Share | $ / shares	$ 1
Volatility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Warrants and Rights Outstanding, Measurement Input	0.83

NOTE PAYABLES FOR LICENSE FEES

NOTE PAYABLES FOR LICENSE FEES - Additional Information (Details)	Oct. 22, 2018USD ($)installment	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Jun. 22, 2018USD ($)
Notes Payable		$ 872,886	$ 1,537,365
Notes Payable, Current		580,709	689,148
Notes Payable, Noncurrent		292,177	848,217
License acquired with intangible assets		8,493,913	9,751,504
Accretion Expense		47,775	$ 10,939	$ 29,104
License Agreement With NCSU
Aggregate Milestone Payments to be Made					$ 1,200,000
Milestone Payable Upon Execution of Second Amendment					500,000
Milestone Payable on First Anniversary of Execution of Second Amendment					400,000
Milestone Payable on Second Anniversary of Execution of Second Amendment					300,000
Notes Payable					$ 1,175,226
Notes Payable, Current		689,148
Notes Payable, Noncurrent		848,217
License acquired with intangible assets		1,175,226
License Agreement With University Of Kentucky
Aggregate Milestone Payments to be Made	$ 1,200,000
Milestone Payable Upon Execution of Second Amendment	300,000
Milestone Payable on First Anniversary of Execution of Second Amendment	300,000
Notes Payable	$ 1,151,201
License acquired with intangible assets		1,151,201
Number Of Installments | installment	3
License Agreement
Accretion Expense		$ 35,521

SEVERANCE LIABILITY - Additiona

SEVERANCE LIABILITY - Additional Information (Details) - USD ($)	Jul. 26, 2019	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SEVERANCE LIABILITY
Accrual for severance		$ 720,838	$ 880,838	$ 0	$ 0
Consulting agreement
Monthly consulting fee to the former CEO	$ 16,667
Period of health insurance benefit to the former CEO (in months)	42 months
Additional severance costs			160,000
Accrued severance liabilities			804,431
Accrued severance liabilities, current			358,610	$ 0
Accrued severance liabilities, long-term			$ 445,821

WARRANTS FOR COMMON STOCK (Deta

WARRANTS FOR COMMON STOCK (Details) - USD ($)	Nov. 25, 2019	Jun. 19, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 08, 2018	Sep. 30, 2017
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 1.11
Proceeds from Warrant Exercises		$ 12,336,858	$ 10,615,617	$ 0	$ 12,447,108
Fair Value of Warrants						$ 2,807,958
Number Of Warrants Exercised					1,470,027
Conversion of Stock, Shares Issued				490,012
Derivative, Gain (Loss) on Derivative, Net			0	$ 48,711	$ (157,809)
Warrant
Class of Warrant or Right [Line Items]
Number Of Warrants Exercised				794,869
Class of Warrant or Right,Exercise Price One [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		7,043,211					7,043,211
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1					$ 1
Class of Warrant or Right,Exercise Price Two [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		4,250,000					4,250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.45					$ 1.45
New Warrants [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	11,293,211
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 2.15	$ 2.15
Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Exercised For Cash	7,350,000
Class of Warrant or Right, Cash Exercise Price of Warrants or Rights	$ 1
Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Remaining	3,943,211
Proceeds from Warrant Exercises	$ 7,400,000		$ 10,600,000
Initial exercise period		6 months
Expiration period		5 years
Number Of Warrants Issued		11,293,211
Warrants 2019 [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 1.25
Initial exercise period			5 years
Common Stock [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			11,293,211

WARRANTS FOR COMMON STOCK - Rol

WARRANTS FOR COMMON STOCK - Roll-Forward of Warrant Liability (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
WARRANTS FOR COMMON STOCK
Warrant liability, Fair value		$ 216,490
Gain as a result of change in fair value	$ 0	(48,711)	$ 157,809
Reclassification of warrant liability to capital in excess of par		$ (167,779)
Warrant liability, Fair value			$ 216,490

WARRANTS FOR COMMON STOCK - War

WARRANTS FOR COMMON STOCK - Warrant Activity (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Class of Warrant or Right [Line Items]
Warrant outstanding beginning balance	11,293,211	12,088,080	13,781,921
Warrants exercised			(1,470,027)
Warrants expired			(223,814)
Warrant outstanding ending balance	11,293,211	11,293,211	12,088,080
June 2017 Warrants Pursuant to Warrant Exercise Agreements
Class of Warrant or Right [Line Items]
Warrants issued			11,293,211
Warrants exercised			(11,293,211)
Warrants exercised in 2018
Class of Warrant or Right [Line Items]
Warrants exercised		(794,869)
November 2019 Warrants Pursuant To Warrant Exercise Agreements
Class of Warrant or Right [Line Items]
Warrants issued	11,293,211
Warrants exercised	(11,293,211)

RETIREMENT PLAN (Details)

RETIREMENT PLAN (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
RETIREMENT PLAN
Employer match of employee contribution, as a percent	3.00%
Employer contribution	$ 156,908	$ 141,083	$ 98,368

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details)	Feb. 01, 2020USD ($)	Jun. 19, 2019shares	Oct. 22, 2018USD ($)installment	May 01, 2018USD ($)installment	Oct. 04, 2017USD ($)	Aug. 14, 2017USD ($)	Dec. 08, 2015USD ($)	Sep. 15, 2014USD ($)	Aug. 27, 2014USD ($)	Aug. 22, 2014USD ($)	Feb. 10, 2014USD ($)	Dec. 31, 2016USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2019USD ($)agreement	Apr. 30, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Apr. 30, 2018USD ($)	Jan. 31, 2017USD ($)	Jan. 01, 2019	Jun. 22, 2018USD ($)
Other Commitments [Line Items]
Research and Development Expense														$ 8,057,147		$ 14,989,746	$ 3,366,468
Annual minimum royalty payments														225,000
Milestone payment upon approval of a product														150,000
License Expenses														225,000		225,000	225,000
Amortization of Intangible Assets														835,693		819,640	539,562
Intangible Assets, Net (Excluding Goodwill)														8,493,913		9,751,504
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
Lessee, Operating Lease, Term of Contract																				62 months
Lessee, Operating Lease, Renewal Term																				34 months
Operating Leases, Rent Expense, Minimum Rentals					$ 6,375
Operating Lease, Expense														76,500
Litigation Settlement Shares Issued | shares		990,000
Operating Leases Monthly lease payment														14,094
Modified Risk Tobacco Products Application
Other Commitments [Line Items]
License Expenses														1,675,000		9,800,000
Licensing Agreements [Member]
Other Commitments [Line Items]
License Expenses							$ 150,000
Patents [Member]
Other Commitments [Line Items]
Capitalized Patent Costs Gross														33,673		95,602	71,596
KeyGene
Other Commitments [Line Items]
Research and Development Expense														905,000
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
Research and Development Arrangement, Investment Amount														6,000,000
Minimum | KeyGene
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
Research and Development Arrangement, Investment Amount														1,200,000
Warehouse Space in North Carolina
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
Operating Lease, Expense						$ 4,665
Laboratory space in Buffalo
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
Lessee, Operating Lease, Term of Contract	1 year
Lessee, Operating Lease, Renewal Term	12 months
Operating Leases, Future Minimum Payments Due, Next Twelve Months														100,000
Operating Leases, Future Minimum Payments, Due in Two Years														104,000
Operating Leases, Future Minimum Payments, Due in Three Years														8,700
Monthly rent	$ 8,408
Percentage of operating leases lessee monthly payment	3.00%
Operating Lease, Expense														$ 68,700		62,600	30,483
License Agreements And Sponsored Research And Development Agreements
Other Commitments [Line Items]
Number Of Agreements | agreement														3
Research and Development Expense														$ 265,452		394,249	232,140
Additional License Agreement With NCSU
Other Commitments [Line Items]
License Expenses														15,000		0	0
Capitalized Patent Costs Gross														11,740		113,578	31,947
Minimum Annual Royalties In Year One																10,000
Minimum Annual Royalties In Year Two																15,000
Minimum Annual Royalties In Year Three																25,000
Minimum annual royalties in year four																25,000
Minimum Annual Royalties, Thereafter																50,000
Sponsored Research And Development Agreement With NCSU
Other Commitments [Line Items]
License Expenses											$ 162,408			40,452	$ 121,357	169,249	7,140	$ 88,344	$ 85,681
Agreement Term											2 years
Master Collaboration and Research Agreement with Natural Good Medicines, LLC [Member]
Other Commitments [Line Items]
Research and Development Expense														$ 442,333
Duration from effective date for proceeds that will be mutually shared from sale														3 years
License Agreement
Other Commitments [Line Items]
Amortization of Intangible Assets														$ 238,661		142,541	98,022
License Agreement With University Of Kentucky
Other Commitments [Line Items]
Aggregate Milestone Payments to be Made			$ 1,200,000
Intangible Assets, Net (Excluding Goodwill)														1,151,201
Number Of Installments | installment			3
License Agreement With NCSU
Other Commitments [Line Items]
Aggregate Milestone Payments to be Made																					$ 1,200,000
Intangible Assets, Net (Excluding Goodwill)														1,175,226
Commercial License Agreement With Precision PlantSciences, Inc.
Other Commitments [Line Items]
Finite-lived Intangible Assets Acquired										$ 1,250,000
Additional Exclusive License Agreement With NCSU
Other Commitments [Line Items]
Research and Development Expense													$ 75,000
Milestone payment upon approval of a product									$ 75,000
License Expenses									125,000								15,000
Capitalized Patent Costs Gross														49,714		24,016	41,033
Minimum Annual Royalties In Year One																20,000
Minimum Annual Royalties In Year Two														30,000
Minimum Annual Royalties, Thereafter									$ 50,000
Sublicense Agreement With Anandia
Other Commitments [Line Items]
Annual minimum royalty payments								$ 10,000
Upfront Fee								$ 75,000
Anandia Laborotories Sponsored Research Agreement
Other Commitments [Line Items]
Research and Development Expense														0		130,850	654,250
Research And Development Agreement With UVA
Other Commitments [Line Items]
Research and Development Expense														287,535		360,046	$ 296,710
Annual minimum royalty payments												$ 1,000,000
Agreement Term												3 years
University Growing and Evaluation Agreement With UKRF
Other Commitments [Line Items]
Research and Development Expense														$ 25,000		$ 50,000
Annual minimum royalty payments				$ 75,000
Minimum Royalty Fee Payments Due In Year One				$ 25,000
Number Of Installments | installment				3

EARNINGS PER COMMON SHARE - Com

EARNINGS PER COMMON SHARE - Computation of basic and diluted earnings per common share (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EARNINGS PER COMMON SHARE
Net loss attributed to common shareholders	$ (6,198,432)	$ (10,245,717)	$ (8,041,682)	$ (2,072,713)	$ (8,919,401)	$ 6,304,654	$ (6,738,652)	$ 1,386,488	$ (26,558,544)	$ (7,966,911)	$ (13,029,117)
Denominator for basic and diluted earnings per common share-weighted average shares adjusted for dilutive securities									125,882,717	124,298,981	101,161,380
Loss per common share - basic and diluted	$ (0.05)	$ (0.08)	$ (0.06)	$ (0.02)					$ (0.21)	$ (0.06)	$ (0.13)

EARNINGS PER COMMON SHARE - Out

EARNINGS PER COMMON SHARE - Outstanding excluded from anti-dilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities outstanding but excluded from computation of earnings per share	20,081,383	19,965,293	20,244,771
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities outstanding but excluded from computation of earnings per share	11,293,211	11,293,211	12,088,080
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities outstanding but excluded from computation of earnings per share	7,837,172	8,672,082	8,156,691
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities outstanding but excluded from computation of earnings per share	951,000

EQUITY BASED COMPENSATION - Add

EQUITY BASED COMPENSATION - Additional information (Details) - USD ($)	May 03, 2019	Apr. 29, 2017	Jun. 30, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Apr. 12, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based employee compensation expense				$ 3,539,745	$ 3,187,331	$ 941,650
Compensation expense as ASC 718				$ 741,000
Plan life				5 years 1 month 24 days	5 years 7 months 10 days	5 years 6 months 22 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value				$ 1.19	$ 1.81
Proceeds from Stock Options Exercised				$ 0	$ 444,613	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value				$ 2,634,010	$ 2,628,622
Vice President
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares				900,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period				300,000
Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				1,231,841
Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				400,000
Minimum | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				1 year
Maximum | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				3 years
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				39,988	583,214	51,927
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares				900,000
Common Stock [Member] | Maximum | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				39,988
Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized										5,000,000
Equity-based employee compensation expense				$ 3,539,745	$ 3,187,331	$ 941,650
Plan life				10 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	5,000,000	5,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				6,307,115
Scenario, Forecast
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized							$ 54,600	$ 450,200	$ 1,011,500
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period					612,259
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options				$ 636,900
Employee Stock Option | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				75,410
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares				1,395,500
Employee Stock Option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				5 months 15 days
Employee Stock Option | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				35 months
Employee Stock Option | Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period				700,000	1,631,841
Non vested stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized				$ 2,153,200
Restricted stock units | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares				100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares				250,000
Restricted stock units | Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				3 years
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period				1,301,000
Employee Stock Option One [Member] | Vice President
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value			$ 1,227,000

EQUITY BASED COMPENSATION - Fai

EQUITY BASED COMPENSATION - Fair value assumptions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY BASED COMPENSATION
Risk-free interest rate (weighted average)	1.54%	2.77%	2.05%
Expected dividend yield	$ 0	$ 0	$ 0
Expected stock price volatility	70.00%	90.00%	90.00%
Expected life of options (weighted average)	5 years 1 month 24 days	5 years 7 months 10 days	5 years 6 months 22 days

EQUITY BASED COMPENSATION - Sto

EQUITY BASED COMPENSATION - Stock option activity (Details) - Employee Stock Option - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of Options
Options Outstanding, Beginning of Period	8,672,082	8,156,691	5,650,679
Granted	600,000	1,631,841	2,692,000
Exercised	(75,410)	(612,259)	(85,988)
Expired / cancelled	(1,359,500)	(504,191)	(100,000)
Options Outstanding, End of Period	7,837,172	8,672,082	8,156,691
Exercisable, End of Period	6,182,688
Weighted Average Exercise Price
Options Outstanding, Beginning of Period	$ 1.54	$ 1.28	$ 1.04
Granted	2.07	2.64	1.76
Exercised	0.93	0.87	0.79
Expired / cancelled	2.09	1.71	1.43
Options Outstanding, End of Period	1.49	$ 1.54	$ 1.28
Exercisable, End of Period	$ 1.39
Weighted Average Remaining Contractual Term
Options Outstanding, End of Period	5 years 4 months 24 days
Exercisable, End of Period	5 years 1 month 6 days
Aggregate Intrinsic Value
Options Outstanding, End of Period	$ 761,699
Exercisable, End of Period	$ 575,233

INCOME TAXES - Additional infor

INCOME TAXES - Additional information (Details) - USD ($)	Dec. 21, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	21.00%	34.00%
Deferred Tax Assets Increase Decrease Percent		46.00%
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration		$ 16,800,000	$ 7,700,000
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration				$ 46,900,000
Liability for uncertain tax positions		0
Deferred Tax Assets, Tax Credit Carryforwards, Research		$ 1,208,641	$ 326,269	$ 232,198
Maximum
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%

INCOME TAXES - Provision (Detai

INCOME TAXES - Provision (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred:
Federal	$ (5,607,324)	$ (1,446,323)	$ 1,263,677
State	55,210	(13,927)	214,628
Total deferred	(5,552,114)	(1,460,250)	1,478,305
Change in valuation allowance	5,552,114	1,460,250	(1,478,305)
Income Tax Expense (Benefit), Total	$ 0	$ 0	$ 0

INCOME TAXES - Rate reconciliat

INCOME TAXES - Rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
INCOME TAXES
Statutory federal rate	(21.00%)	(21.00%)	(34.00%)
Other items	(0.10%)	0.10%	(2.40%)
Litigation Settlement	1.50%
Derivative liability		(0.10%)	0.40%
Stock based compensation	1.80%	2.50%	2.00%
Research and development credit carryforward	(3.30%)	(1.20%)	(1.80%)
State tax provision, net of federal benefit	0.20%	(0.10%)	0.10%
Equity investment		1.50%
Federal tax rate change			46.10%
Valuation allowance	20.90%	18.30%	(11.40%)
Effective tax rate (benefit) provision	0.00%	0.00%	0.00%

INCOME TAXES - Deferred Tax Ass

INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carry-forward	$ 14,996,042	$ 11,526,599	$ 9,917,641
Inventory	52,030	21,000	48,011
Stock-based compensation	1,048,993	813,585	388,925
Start-up expenditures	220,640	242,704	279,709
Research and development credit carryforward	1,208,641	326,269	232,198
Loss on equity investment		760	11,760
Accrued bonus	199,707	100,896
Severance liability	134,414
Investment in Panacea	39,966
Operating lease obligations	127,385
Other	22,094	19,605	4,272
Total deferred tax assets	18,049,912	13,051,418	10,882,516
Deferred tax liabilities:
Machinery and equipment	(238,733)	(214,587)	(220,888)
Patents and trademarks	(350,798)	(562,140)	(558,760)
Gain on investment	(104,223)	(612,286)
Accrued expense	(51,069)	(70,933)
Operating lease right-of-use assets	(126,416)
Other intangible assets	(188,394)	(153,307)	(124,953)
Total deferred tax liabilities	(1,059,633)	(1,613,253)	(904,601)
Valuation allowance	$ (16,990,279)	$ (11,438,165)	$ (9,977,915)

SELECTED QUARTERLY FINANCIAL _3

SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
Revenue, net	$ 7,261,989	$ 6,461,914	$ 5,814,979	$ 6,293,648	$ 7,134,967	$ 6,260,518	$ 6,914,913	$ 6,116,309
Gross (loss) profit	224,733	(21,068)	(86,300)	(102,910)	514,746	150,949	161,714	71,578	$ 14,455	$ 898,987	$ (707,912)
Loss from operations	(5,552,947)	(7,605,516)	(5,028,839)	(5,379,159)	(5,800,509)	(6,208,834)	(7,040,512)	(4,968,772)	(23,566,461)	(24,018,627)	(13,299,864)
Net income (loss)	$ (6,198,432)	$ (10,245,717)	$ (8,041,682)	$ (2,072,713)	$ (8,919,401)	$ 6,304,654	$ (6,738,652)	$ 1,386,488	$ (26,558,544)	$ (7,966,911)	$ (13,029,117)
Loss per common share - basic and diluted	$ (0.05)	$ (0.08)	$ (0.06)	$ (0.02)					$ (0.21)	$ (0.06)	$ (0.13)
Income (loss) per common share - basic					$ (0.07)	$ 0.05	$ (0.05)	$ 0.01
Income (loss) per common share - diluted					$ (0.07)	$ 0.04	$ (0.05)	$ 0.01