Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ________ to ________ Commission File Number: 001-36338 22nd Century Group, Inc. (Exact name of registrant as specified in its charter) (State or other juri ...

Financial Data and Key Metrics Changes - Net sales increased 144% quarter-over-quarter to $22 million, reflecting the addition of GVB revenue [48] - Gross profit is projected to improve significantly in Q2 2023 due to a higher margin product mix and the return of production capabilities [49] - Revenue guidance for fiscal year 2023 is set at $105 million to $110 million, representing a 69% to 77% increase from $62 million in 2022 [13][53] Business Line Data and Key Metrics Changes - Tobacco revenue for Q1 remained relatively unchanged at $8.9 million, with gross profit slightly decreasing to $18,000 due to a reallocation towards higher margin products [50] - Hemp/cannabis revenue grew 85% to $13 million from $7 million, driven by strong customer demand for bulk ingredient products [51] - The company reported record cannabinoid ingredient volumes, delivering over 68,000 kilograms in Q1, four times the amount delivered in the same quarter last year [39] Market Data and Key Metrics Changes - The VLN rollout is occurring at twice the speed of a typical tobacco product rollout, with plans to expand from 500 stores to 5,000 [16][20] - The company has secured major national-scale distribution agreements, enabling rapid placement of VLN into thousands of stores across multiple states [14][20] - The hemp/cannabis business is positioned as a market leader in North America, with a focus on expanding sales and distribution capabilities [37] Company Strategy and Development Direction - The company aims to achieve cash positive operations in 2024, focusing on growth in both tobacco and hemp/cannabis business units [7][15] - Strategic initiatives include cost-cutting measures and a focus on high-margin products, with a commitment to not solely rely on cost reductions for success [8][15] - The company is enhancing consumer marketing strategies to drive awareness and acceptance of VLN, positioning it as a solution for smokers [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets and highlighted the importance of business interruption insurance in improving financial results [9][52] - The company anticipates significant margin expansion in the second half of 2023 due to restored production capacity and new distribution agreements [13][49] - Management emphasized the importance of federal regulations and potential market opportunities arising from reduced nicotine content mandates [34] Other Important Information - The company received $5 million in insurance proceeds from the Grass Valley fire in Q1, with additional proceeds of approximately $8 million expected in Q2 [52] - The company is actively pursuing international market opportunities, with tests planned in Switzerland and Japan [30][31] Q&A Session Summary Question: Impact of shelf resets on VLN revenue generation - Management confirmed that VLN is included in retailer merchandising plans and is positioned to meet the needs of smokers [55] Question: Revenue growth expectations from tobacco - Approximately 60% to 70% of the expected revenue increase is driven by VLN, with the remainder from Pinnacle growth [57] Question: Timing and ramping of contracts with Old Pal and Cookies - Shipments from these contracts are expected to start in Q3, with significant ramp-up anticipated in Q4 and continuing into 2024 [60] Question: Price positioning of Pinnacle amidst down trading in U.S. cigarettes - Pinnacle is positioned competitively, similar to Lucky Strike, to attract consumers [63] Question: Update on VLN launch in priority states - The company is on track with plans for Arizona, New Mexico, and Utah, focusing on retailer demand and schematic changes [65] Question: Menthol market mix and marketing strategy - The company is monitoring menthol market dynamics and positioning VLN as a solution for menthol smokers [69] Question: Gross margin expectations for 2023 and 2024 - Expected gross margins for hemp could reach 20% to 30% by 2024, while tobacco margins are projected to expand significantly as VLN sales ramp up [82]

Revenue Performance - Net revenues for Q1 2023 were $21,962, an increase of 142.8% from $9,045 in Q1 2022, driven primarily by hemp/cannabis revenue of $13,035 due to the acquisition of GVB[167] - Revenue from tobacco-related products for Q1 2023 was $8,927, a decrease of 1.3% from $9,045 in Q1 2022, reflecting a planned reallocation in production resources[171] Profitability and Loss - Gross profit for Q1 2023 was a loss of $1,177 compared to a profit of $309 in the prior year period, with gross profit margin declining to (5.4)% from 3.4%[167] - Operating loss for Q1 2023 was $17,823, compared to a loss of $8,146 in the prior year period, representing an increase of 118.8%[167] - Net loss for Q1 2023 was $18,182, with a net loss per share of $0.08, compared to a net loss of $8,918 and a net loss per share of $0.05 in Q1 2022[167] Operating Expenses - Total operating expenses for Q1 2023 increased to $16,646, up 96.9% from $8,455 in Q1 2022, primarily due to increased SG&A expenses driven by the acquisition of GVB[167] - R&D expenses increased by $376 million, a 33% rise compared to 2022, driven by higher compensation and benefits for additional personnel[179] - Other operating expenses totaled $898 million for the three months ended March 31, 2023, significantly up from $52 million in the same period of 2022[180] Cash and Investments - Cash, cash equivalents, and short-term investments as of March 31, 2023, totaled $16,227, with an additional $7,500 in restricted cash[171] - Cash and cash equivalents rose to $10,952 million as of March 31, 2023, compared to $3,020 million at December 31, 2022[185] - Net cash used in operating activities increased to $17,500 million in Q1 2023, up from $7,928 million in Q1 2022, primarily due to a higher net loss[189] - Cash provided by investing activities was $14,723 million for Q1 2023, compared to $8,772 million in Q1 2022, reflecting a $5,951 million increase[190] - Cash provided by financing activities increased by $18,805 million in Q1 2023, driven by proceeds from long-term debt issuance[191] Financing Activities - The company entered into a new Senior Secured Credit Facility, issuing $21,053 million in debentures with a 7% interest rate, maturing on March 3, 2026[194] - The company executed a Subordinated Promissory Note with a principal amount of $2,865 million, maturing on May 1, 2024, with interest accruing at 26.5% per annum[197] - The company plans to raise up to $50,000 million through an ATM Offering for general corporate purposes, including business expansion and R&D[199] Insurance and Claims - The company received $5,000 in casualty loss insurance recoveries from the Grass Valley fire during Q1 2023, with additional claims expected[171] - The company anticipates approximately $2,258 in business interruption insurance claims to offset margin losses due to increased raw material costs[173] Accounting and Risk Management - The Company uses a Monte Carlo valuation model to estimate the fair value of detachable warrants, with key assumptions including expected future volatility and expected life of the warrants[207] - There have been no material changes to the market risk information disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[210] - The Company does not have any off-balance sheet arrangements as defined by Item 303(a)(4) of Regulation S-K[209] - The Company evaluates new accounting pronouncements to assess their potential impact on financial statements[208] New Services - The company launched a new CDMO+D service offering for the hemp/cannabis sector in Q1 2023, enhancing its capabilities in ingredient supply and manufacturing[167]

X 22ND CENTURY GROUP FOURTH QUARTER AND FULL YEAR EARNINGS PRESENTATION MARCH 9, 2023 Nasdaq XXII SURGEON GENERAL'S WARNING: Ciparette HELPS YOU SMOKE LESS VLN® is deliberately different from all other traditional cigarettes, because VLN® is the only cigarette authorized by the FDA that Helps You Smoke Less. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS | --- | |----------------------------------------------------------------------------------------------------| | | | This presentation contains forward-look ...

22nd Century Group, Inc. (NASDAQ:XXII) Q4 2022 Earnings Conference Call March 9, 2023 10:00 AM ET Corporate Participants Matt Kreps - Investor Relations Jim Mish - Chief Executive Officer John Miller - President, Tobacco Business Hugh Kinsman - Chief Financial Officer Conference Call Participants Aaron Grey - Alliance Global Partners Vivien Azer - TD Cowen Alex Fuhrman - Craig-Hallum Capital Group Brian Wright - ROTH MKM Jim McIlree - Dawson James Operator Good day, ladies and gentlemen, and welcome to the ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2022 or ☐ Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 001-36338 22nd Century Group, Inc. 500 Seneca Street, Suite 507, Buffalo, New York 14204 (Address of principal executive offices) (716) 270-1523 (Registrant's telephone number ...

Financial Data and Key Metrics Changes - Net sales increased by 149% quarter-over-quarter to $19.4 million, reflecting a full quarter of GVB revenue and record tobacco CMO manufacturing sales [42] - Gross profit increased slightly quarter-over-quarter to $619,000, with improved gross margin from CMO manufacturing offset by lower margin from hemp/cannabis sales [43] - Tobacco revenue for the third quarter increased to a record $11.5 million from $7.8 million, an increase of 48% [44] Business Line Data and Key Metrics Changes - Tobacco revenue increased to $11.5 million, with a gross profit margin of 5.5% due to strong unit sales growth and improved product mix [44] - Hemp/cannabis revenue grew 25% to $7.8 million, reflecting an increase in unit sales of over 80% due to strong demand for premium quality ingredients [45] Market Data and Key Metrics Changes - The current five states represent about 7% of the total U.S. retail cigarette market, valued at approximately $5.7 billion [16] - Access to 18 states could provide access to more than half of the total U.S. cigarette market, equating to over $39 billion in cigarette sales [19] Company Strategy and Development Direction - The company plans to expand its presence in up to 18 states over the next 12 months, aiming for a notable market share [9] - Integration of GVB Biopharma is expected to enhance the company's position in the hemp/cannabis market, aiming for increased margins and certifications [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for the tobacco business, driven by consumer interest and regulatory changes favoring reduced nicotine products [30] - The company is closely monitoring investments to drive share, scale, and financial returns in commercial pursuits [12] Other Important Information - The company has a cash balance of $44 million, which will support near-term strategic initiatives, primarily the accelerated launch of VLN [47] - GVB is on pace to become a cash-generating business in 2023 due to investments made to meet market demand [49] Q&A Session Summary Question: Key factors for hitting 12 vs. 18 states - Management indicated that supply chain considerations are the major driver for the number of states targeted, with a focus on ensuring adequate supply [55][56] Question: Modeling tobacco opportunity and revenue realization - Management suggested that sequential growth seen in Q2 to Q3 is a good framework for modeling future revenue, with expectations for VLN sales to accelerate [59][60] Question: Ensuring shelf placement in new markets - Management confirmed that they have similar programs in Colorado as in Illinois, leveraging learnings from the pilot to ensure effective retail placement [65][66] Question: Insights on GVB acquisition and revenue expectations - Management expressed satisfaction with the GVB acquisition, noting that integration is progressing well and revenue growth is expected as demand for specialty ingredients increases [73][78] Question: Drug Master File submission to the FDA - Management confirmed that the submission is scheduled for Q1, which will open doors to the ethical pharmaceutical industry and establish high-quality standards [88][89]

THIRD QUARTER EARNINGS PRESENTATION NOVEMBER 8, 2022 XXII CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS | --- | |----------------------------------------------------------------------------------------------------| | | | This presentation contains forward-looking statements | | concerning our business operations, and financial performance | | and conditions, as well as our plans, objectives, and | | expectations for our business operations and financial | | performance and conditions that are subject to ris ...

Product Development and Market Expansion - 22nd Century Group, Inc. received FDA Modified Risk Tobacco Product authorization for its VLN® cigarettes, which contain 95% less nicotine than conventional cigarettes [138]. - The company has launched VLN® reduced nicotine cigarettes in over 150 Circle K stores in Chicago and plans to expand to more than 3,000 locations in Colorado [139]. - By the end of 2023, the company aims to launch VLN® in a total of up to 12 to 18 states, having secured regulatory authorizations to sell in 47 states and the District of Columbia [142]. - The company planted its largest VLN® tobacco crop in 2022, achieving 30% higher yields and improved quality, with plans for expansion in 2023 [143]. - The FDA's new leadership is expected to favor policies that support the company's reduced nicotine products, including a proposed nicotine cap in combustible cigarettes [144]. - The company anticipates commercial production of its VLN® 2.0 American blend cigarettes featuring non-GMO reduced nicotine varieties to begin in 2023 [148]. - The global nicotine retail sales were approximately $853 billion in 2021, with 84.1% from combustible cigarettes, indicating a significant market opportunity for VLN® [136]. - The company has provided over 31.6 million variable nicotine research cigarettes for independent clinical studies, with costs exceeding $125 million [134]. - Studies show that smokers using the company's reduced nicotine products reduce nicotine exposure and dependence, smoke fewer cigarettes, and double their quit attempts [135]. Financial Performance - Net revenues for Q3 2022 were $19,383, a 148.2% increase from $7,811 in Q3 2021, driven by contract manufacturing volumes and GVB's full quarter revenue [162]. - Net revenues from tobacco-related products were $11,535, a 47.7% increase from the previous year, while hemp/cannabis-related products generated $7,848 in revenue [162]. - Gross profit for Q3 2022 was $619, reflecting a 112.0% increase from $292 in Q3 2021, despite an inventory write-down of $281 [162]. - Total operating expenses for Q3 2022 rose to $15,887, up from $7,861 in the prior year, primarily due to the GVB acquisition and increased strategic consulting and marketing expenses [162]. - Research and development expenses for Q3 2022 were $1,318, an increase of $287 from the prior year, driven by strategic initiatives and personnel costs [169]. - Sales, general and administrative expenses for Q3 2022 were $14,569, a significant increase of $7,739 from the previous year, largely due to GVB-related expenses and accelerated launch costs for VLN® [171]. Cash Flow and Financial Position - The company had $43,721 in cash, cash equivalents, and short-term investment securities as of September 30, 2022 [162]. - Unrealized loss on investments for Q3 2022 was $(345), a significant improvement from $(1,900) in Q3 2021, indicating better performance in equity securities [175]. - As of September 30, 2022, the company reported an unrealized loss of $345 for the three months and $2,041 for the nine months due to fluctuations in the value of PLSH common stock, which was valued at $299 per share [177]. - Interest expense increased to $(148) for the quarter ended September 30, 2022, compared to $(23) in the same quarter of 2021, primarily due to interest from GVB bridge notes related to the GVB acquisition [178]. - Cash and cash equivalents decreased by $5,015 to $2,364 as of September 30, 2022, primarily due to cash used in operating activities [179]. - Working capital decreased by $222 to approximately $45,736 as of September 30, 2022, primarily due to a $10,238 increase in net current liabilities [180]. - Cash used in operating activities increased by $14,441 to $(32,648) for the nine months ended September 30, 2022, driven by higher SG&A spending [182]. - Cash provided by investing activities decreased by $33,587, primarily due to increased cash used for acquisitions and investments, including GVB and Change Agronomy Ltd. [184]. - Cash provided by financing activities decreased by $18,718, resulting from lower net proceeds from common stock issuances and warrant exercises [185]. - As of September 30, 2022, the company had approximately $43,721 in cash and cash equivalents and short-term investment securities, a decrease of $5,015 from December 31, 2021 [186]. - The company completed a capital raise on July 25, 2022, generating net proceeds of $32,484 to accelerate the launch of VLN® products and meet increased customer demands [188]. - Future cash requirements are anticipated to decrease, reflecting higher sales volume for VLN® products and continued organic growth of GVB's operations [187]. Strategic Acquisitions and Growth - The company is focused on developing proprietary hemp/cannabis varieties for applications in life sciences and consumer products, optimizing plant genetics for high-quality production [149]. - The acquisition of GVB Biopharma is expected to double the company's revenue going forward, enhancing its position in the hemp-derived active ingredients market [154]. - GVB's Prineville facility is one of the largest hemp extraction plants globally, with a projected CBD crude output capacity exceeding 15,000 kg/month at full capacity [155].

X 22ND CENTURY GROUP INVESTOR OVERVIEW October 2022 Nasdaq XXII CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS | --- | |----------------------------------------------------------------------------------------------------| | | | This presentation contains forward-looking statements | | concerning our business operations, and financial performance | | and conditions, as well as our plans, objectives, and | | expectations for our business operations and financial | | performance and conditions that are subject ...