Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - AGM Group Holdings Inc. (AGMH) increased by 185% to $6.36 [3] - AlphaVest Acquisition Corp (ATMV) rose by 77% to $26.80 [3] - Brera Holdings PLC (BREA) saw a 20% increase to $30.00 [3] - Asset Entities Inc. (ASST) gained 18% to $4.54 [3] - 22nd Century Group, Inc. (XXII) also increased by 18% to $2.08 [3] - Millennium Group International Holdings Limited (MGIH) rose by 16% to $2.84 [3] - Robo.ai Inc. (AIIO) increased by 11% to $2.17 [3] - Butterfly Network, Inc. (BFLY) saw a 10% rise to $2.10 [3] - GrafTech International Ltd. (EAF) increased by 9% to $13.91 [3] - Cardlytics, Inc. (CDLX) rose by 8% to $2.99 [3] Premarket Losers - ECD Automotive Design, Inc. (ECDA) decreased by 14% to $3.70 [4] - Champions Oncology, Inc. (CSBR) fell by 8% to $6.11 [4] - Beam Global (BEEM) saw an 8% decline to $2.79 [4] - Fathom Holdings Inc. (FTHM) decreased by 8% to $2.19 [4] - Ventyx Biosciences, Inc. (VTYX) fell by 7% to $2.20 [4] - SciSparc Ltd. (SPRC) decreased by 6% to $4.35 [4] - Lightwave Logic, Inc. (LWLG) fell by 6% to $3.45 [4] - Jasper Therapeutics, Inc. (JSPR) decreased by 6% to $2.43 [4] - StableX Technologies, Inc. (SBLX) fell by 5% to $5.67 [4] - Galecto, Inc. (GLTO) decreased by 5% to $2.70 [4]

Core Insights - 22nd Century Group has successfully repaid $3.9 million in senior secured debt, significantly reducing ongoing cash needs and operating costs by eliminating cash interest and amortization expenses [1][2] - The company has eliminated over $20 million in senior secured and subordinated debt since the current CEO joined, positioning itself for growth with a debt-free balance sheet [2] - The completion of the Series A convertible preferred stock offering and debt repayment has resulted in an approximate $9.1 million increase in adjusted pro forma net tangible book value, equating to about $1.05 per share [2] Financial Position - The company’s balance sheet now reflects working capital that supports the purchase of low nicotine leaf crops, enabling the production of more than 1 million cartons of VLN products [1][2] - Plans are in place to deploy a portion of capital to expand the inventory of very low nicotine tobacco leaf in Q4 2025 [2] Product and Technology - 22nd Century Group is pioneering the tobacco harm reduction movement with its proprietary non-GMO reduced nicotine tobacco plants, which contain 95% less nicotine than traditional tobacco [4][5] - The flagship product, VLN cigarettes, provide traditional smokers with a familiar alternative that helps them control their nicotine consumption [5][6] - VLN cigarettes are the only low nicotine combustible cigarettes authorized by the FDA in the United States [6]

Core Insights - 22nd Century Group, Inc. is leading the nicotine harm reduction movement in the tobacco industry, focusing on helping smokers control their nicotine consumption [3][4] - The company will host investor meetings on September 9, 2025, during the HC Wainwright Conference in New York [1][2] Company Overview - 22nd Century Group has developed the VLN cigarette, which contains 95% less nicotine than traditional cigarettes, providing smokers with a familiar alternative to manage their nicotine intake [4][5] - The company utilizes proprietary non-GMO reduced nicotine tobacco blends, supported by patented technologies that regulate nicotine biosynthesis in tobacco plants, ensuring a full flavor experience with lower nicotine levels [5] Product Details - VLN cigarettes are designed to allow consumers to significantly reduce their nicotine consumption while still enjoying a combustible cigarette format [4] - The extensive patent portfolio of 22nd Century Group secures its position as the only provider of low nicotine combustible cigarettes in the United States and key international markets [5]

Core Viewpoint - Emerging Growth Research released a quarterly update report on 22nd Century Group, indicating that the company missed expectations for Q2 2025 due to slower CMO stabilization and VLN® rollout timing, with EBITDA breakeven now projected for Q2 2026 [1][3]. Financial Performance - Q2 2025 revenue was $4.1 million, a decline of 49% year-over-year from $7.9 million in Q2 2024 and a 31% sequential decrease from $6.0 million in Q1 2025 [8]. - Gross loss remained stable at $(0.6) million compared to $(0.6) million in Q1 2025 [8]. - Operating loss increased to $(3.0) million from $(2.6) million in Q1 2025 due to higher VLN® promotional spending [8]. - EBITDA was $(2.8) million compared to $(2.5) million in Q1 2025 [8]. - Net debt was significantly reduced to $0.7 million from $3.3 million in Q4 2024 following a warrant exercise that generated $5.1 million in proceeds [4][8]. Strategic Focus and Growth Potential - The company is focusing on higher-margin operations and has significant long-term growth potential, with revenue growth expectations of +127% in 2026, +68% in 2027, and +39% in 2028 driven by VLN® market penetration in the $12 billion tobacco market [5][3]. - VLN® cigarettes are now shipping following state registrations, with management noting that only 223,000 cartons (5% of production capacity) are needed for breakeven profitability [4]. Management and Restructuring - New management has undertaken operational restructuring since 2023, divesting certain business lines to concentrate on contract manufacturing operations (CMO) and the VLN® product line [9]. - The company is positioned as a pure-play contract manufacturer for combustible tobacco products and the sole provider of VLN® reduced-nicotine cigarettes [9].

Summary of 22nd Century Group (XXII) Conference Call - August 20, 2025 Company Overview - **Company Name**: 22nd Century Group Inc. - **Ticker Symbol**: XXII - **Industry**: Tobacco, specifically focused on nicotine harm reduction - **Market Position**: Leader in the tobacco harm reduction movement since 1998, aligned with FDA's low nicotine mandate [1][2][3] Key Industry Insights - **Tobacco Market Size**: - Global market: $1.1 trillion in annual sales, with $873 billion from cigarette sales [4] - U.S. market: $109 billion in annual sales, with $83 billion from cigarette sales [4] - **Smoker Statistics**: - 1.1 billion smokers globally, with 28.8 million in the U.S. [4] - 8 million annual deaths globally due to smoking-related health conditions [4] - U.S. smoking-related deaths: approximately 480,000 annually [4] - **Market Growth**: U.S. tobacco industry projected to grow to $180 billion by 2030, representing an 8.15% CAGR [5] Core Company Strategies - **Product Focus**: - Emphasis on low nicotine (VLN) products, which are positioned to compete with traditional combustible cigarettes and other nicotine delivery systems [11][12] - Development of a diverse portfolio including VLN cigarettes, moist snuff, and other tobacco products [26] - **Regulatory Alignment**: - Fully compliant with FDA's proposed rule for low nicotine content (0.7 mg/g), which is expected to significantly reduce nicotine addiction [14][42] - **Research and Development**: - Ongoing research into non-GMO low nicotine tobacco and its potential to lower harmful nitrosamines [16][30] - Independent studies showing that 40% of participants reduced their smoking habits using VLN products [17] Financial Strategy and Performance - **Shift in Business Model**: - Transitioning away from high-volume, low-margin contract manufacturing to focus on branded products [25][31] - Anticipated lower revenues in the short term as the company prioritizes gross profit and margins [25] - **Future Financial Goals**: - Targeting cash flow breakeven by 2026 [48] - Maintaining operating expenses around $2 million per quarter [31] Market Launch and Distribution - **Product Launch**: - VLN products are set to launch in 2,000 retail outlets across 30 states, with plans for nationwide distribution [27][39] - Marketing strategies include extensive consumer communication and in-store promotions [22] - **Retail Partnerships**: - Engaging with major retailers for broader distribution once state approvals are secured [39][28] Additional Insights - **Public Health Concerns**: - Addressing issues of nicotine addiction and the impact of smoking on public health, particularly among youth [6][8] - **Industry Dynamics**: - The company positions itself as a leader in the transition towards reduced nicotine products, similar to the shift from leaded to unleaded gasoline [47] - **Government Support**: - No direct government funding anticipated; the company relies on independent research to validate its products [37][38] Conclusion - **Outlook**: - The company is optimistic about its future, focusing on growth in the VLN segment and aligning with regulatory changes to capture market share [32][50]

Core Viewpoint - 22nd Century Group, Inc. is leading the tobacco harm reduction movement with its VLN products, which are designed to significantly reduce nicotine consumption and help smokers manage their addiction [1][14]. Group 1: Product Development and Market Adoption - The company has successfully launched VLN cigarettes, which contain 95% less nicotine than traditional cigarettes, and have been proven to reduce nicotine consumption [14][15]. - Early adoption of VLN products has been seen with partner brands Smoker Friendly and Pinnacle, with initial stocking orders shipped in August 2025 [2][7]. - The company is expanding its product offerings to include 100mm cigarettes and international versions tailored to consumer preferences [9]. Group 2: Regulatory Landscape - The FDA has proposed a new Tobacco Product Standard for Nicotine Yield, setting a maximum nicotine content of 0.7mg/g, which is supported by clinical documentation and real-world testing of VLN products [4][5]. - The proposed regulation has garnered strong support from public health advocates, emphasizing the importance of reducing nicotine levels in tobacco products [6]. Group 3: Research and Development - Ongoing research is investigating the link between non-GMO low nicotine tobacco genetics and lower levels of harmful Tobacco-Specific Nitrosamines (TSNAs), which are potent carcinogens [11]. - The company is committed to expanding its intellectual property portfolio in low nicotine genetics, enhancing its leadership in tobacco harm reduction [12]. Group 4: Future Outlook - The company aims to continue its mission of providing low nicotine technology and products that can improve public health and potentially save lives [13].

Core Viewpoint - 22nd Century Group, Inc. is leading the nicotine harm reduction movement in the tobacco industry, focusing on providing smokers with alternatives to manage their nicotine consumption effectively [3][4]. Group 1: Company Overview - 22nd Century Group, Inc. has been at the forefront of combating the harms of smoking due to nicotine addiction for 27 years [1]. - The company is set to present at the Emerging Growth Virtual Investor Conference on August 20, 2025, at 1:10 PM Eastern Time [1]. - The flagship product, VLN cigarettes, contains 95% less nicotine than traditional cigarettes, allowing smokers to significantly reduce their nicotine intake [4]. Group 2: Product Details - VLN cigarettes are designed to provide an authentic smoking experience while enabling smokers to take control of their nicotine consumption [4]. - The company utilizes proprietary non-GMO reduced nicotine tobacco blends, supported by patented technologies that regulate nicotine biosynthesis in tobacco plants [5]. - The extensive patent portfolio ensures that 22nd Century Group holds the only low nicotine combustible cigarette in the United States and key international markets [5].

Financial Data and Key Metrics Changes - Net revenue for Q2 2025 was $4 million, a decrease from $6 million in Q1 2025, with total cartons sold increasing to 779,000 from 478,000 in the previous quarter [33] - Gross margin remained consistent at a loss of $600,000, with total operating expenses rising to $2.3 million from $2 million in the previous quarter [34] - Net loss from continuing operations was approximately $3.3 million, consistent with Q1 2025, while adjusted EBITDA was a loss of $2.6 million compared to a loss of $2.3 million in Q1 2025 [35] Business Line Data and Key Metrics Changes - The company is shifting focus from low-margin CMO business to high-margin branded products, which is expected to improve gross margins despite a potential decline in top-line revenue in the near term [23][31] - The introduction of VLN products is anticipated to drive revenue growth and gross margin expansion, although initial financial results may not reflect this until Q3 2025 [31] Market Data and Key Metrics Changes - The company has begun shipping Pinnacle VLN products in August 2025, with initial stocking orders exceeding 3,000 cartons, indicating a positive market entry for the new product line [32] - The FDA's proposed low nicotine mandate is expected to create a competitive environment for VLN products, positioning the company favorably against traditional combustible cigarettes [24][28] Company Strategy and Development Direction - The company aims to lead the tobacco harm reduction movement by leveraging its proprietary low nicotine tobacco technology, which is compliant with the FDA's new standards [25][26] - A strategic shift towards higher-margin products is underway, with plans to phase out low-margin CMO products to enhance profitability [23][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in achieving profitability due to delays in launching high-margin products, projecting a timeline into 2026 for breakeven on EBITDA [32] - The company is optimistic about the market potential for VLN products, emphasizing the importance of scaling and rate of sale as key metrics for future success [49] Other Important Information - The company is actively pursuing a lawsuit against Dorchester Insurance Company for $9 million in business interruption insurance, with a trial date set for November 2025 [35] - The company has reduced debt by approximately $1 million and improved working capital by tightening inventory [33] Q&A Session Summary Question: When might the company achieve breakeven on a quarterly basis for EBITDA? - Management indicated that they are looking at the first half of 2026, with a focus on the timing of branded product launches and sales rates to determine if breakeven can be achieved in Q1 or Q2 [41] Question: Is the current cash position sufficient to reach breakeven, or will additional share issuance be necessary? - Management noted that while the current cash of $3 million is being managed carefully, there may be a need for additional fundraising, though it would be less than previous amounts [42][43] Question: What are the plans regarding the outstanding debt rolling over in March 2026? - Management is in discussions with creditors about paying off the debt and plans to allocate part of any new fundraising towards extinguishing it [44] Question: Is there a chance that the MRTP for VLN would not be renewed? - Management expressed confidence that the MRTP would be renewed, given compliance with the FDA's recent mandates [45]

Financial Performance - Net revenues for Q2 2025 were $4,083, a decrease of 48.6% from $7,947 in Q2 2024, reflecting shifts in product mix [171]. - Gross profit for Q2 2025 was a loss of $635 compared to a profit of $570 in Q2 2024, representing a 211.4% decline [171]. - Operating loss from continuing operations for Q2 2025 was $2,981, compared to a loss of $2,047 in Q2 2024, an increase of 45.6% [171]. - Net loss from continuing operations in Q2 2025 was $3,296, compared to a net loss of $2,214 in Q2 2024, an increase of 48.9% [171]. - Total operating expenses for Q2 2025 decreased to $2,346 from $2,617 in Q2 2024, a reduction of 10.4% [171]. - For the six months ended June 30, 2025, net revenues were $10,039, down 30.4% from $14,416 in the prior year [174]. Product Performance - Cigarette volumes for Q2 2025 increased to 594 cartons, reflecting additional CMO cigarette customers, despite a decrease in sales dollars [175]. - Filtered cigars net revenues for Q2 2025 decreased to $1,319 from $3,303 in Q2 2024, reflecting lower volumes [175]. - VLN® cigarette net revenues reflect return accruals for previously sold products, with initial shipments scheduled for the rebranded product launch in Q3 2025 [175]. Cash and Liquidity - As of June 30, 2025, the company had $3,083 in cash and cash equivalents [171]. - Cash flow from operations was $(6,454) million for the six months ended June 30, 2025, a decrease of $516 million from the prior year [194]. - Cash provided by investing activities was $672 million for the six months ended June 30, 2025, compared to cash used of $(49) million in the prior year [196]. - Cash provided by financing activities decreased to $4,443 million for the six months ended June 30, 2025, down from $6,240 million in the prior year [197]. - As of June 30, 2025, the company had cash and cash equivalents of $3,083 million, down from $4,422 million at December 31, 2024 [191]. - The working capital deficit was $(3,064) million as of June 30, 2025, a decrease of $4,854 million from $1,790 million at December 31, 2024 [192]. Debt and Warrants - The remaining principal balance under the Senior Secured Credit Facility was $3,790 million as of June 30, 2025 [200]. - As of August 11, 2025, the company has a total of 2,880,015 outstanding warrants with various exercise prices and expiration dates [203]. - The July 2022 RDO warrants total 1,527,660 with an exercise price of $1, expiring on July 25, 2027 [203]. - The company has 2,080,914 amended October 2024 PIPE warrants with an exercise price of $17.25, expiring on July 15, 2030 [203]. - The warrants include anti-dilution protection provisions for subsequent equity sales at lower effective prices [204]. - The warrants allow for alternative cashless exercise options, resulting in the issuance of shares for no additional consideration [205]. - The total number of warrants includes various types such as inducement warrants and placement agent warrants, with exercise prices primarily around $18.15 [203]. Accounting and Management - The company does not have any off-balance sheet arrangements as defined by Item 303(a)(4) of Regulation S-K [210]. - There have been no material changes to the information set forth in the Annual Report on Form 10-K for the year ended December 31, 2024 [208]. - Management believes that the estimates, assumptions, and judgments used in financial statements are reasonable, but actual results could differ materially [207]. - The company evaluates new accounting pronouncements to determine their potential impact on financial statements [209].

Financial Performance - Net revenues for Q2 2025 decreased to $4.1 million, down 48.6% from $7.9 million in Q2 2024[11] - Total product line revenues for the first half of 2025 were $10.0 million, down 30.4% from $14.4 million in the same period of 2024[11] - Total revenues for Q2 2025 were $4,083, a decrease of 48.6% compared to $7,947 in Q2 2024[27] - Gross loss for Q2 2025 was $635, compared to a gross profit of $570 in Q2 2024, indicating a shift in profitability[27] - Net loss from continuing operations for Q2 2025 was $3,296, compared to a net loss of $2,214 in Q2 2024, reflecting a worsening financial position[27] - Adjusted EBITDA for Q2 2025 was $(2,640), slightly worse than $(2,589) in Q2 2024[29] Operating Loss and Debt Management - Operating loss increased to $3.0 million, compared to $2.6 million in the previous quarter, reflecting a 45.6% increase[6] - Adjusted EBITDA loss was $2.6 million, compared to a loss of $2.3 million in the previous quarter[6] - Operating loss from continuing operations for the first half of 2025 was $5,552, an improvement from a loss of $6,481 in the same period of 2024[27] - The company reduced total debt by $1.0 million, bringing total debt to $3.8 million[6] - Net total debt (Non-GAAP) as of June 30, 2025, was $707, significantly reduced from $3,268 at the end of 2024[30] Product Development and Market Expansion - VLN® product state authorizations expanded significantly, with 44 states for VLN® products and 30 states for partner VLN® products[6] - The company announced the launch of Pinnacle VLN® products in almost 1,000 stores across 12 states, with sales expected to begin on September 1, 2025[6] - The company is advancing a 100mm VLN® reduced nicotine content cigarette prototype, targeting FDA submission in Q4 2025[6] Asset and Liability Management - Total current assets increased to $11,868 as of June 30, 2025, up from $11,522 at the end of 2024[26] - Total liabilities decreased to $16,753 as of June 30, 2025, down from $17,661 at the end of 2024[26] - Cash and cash equivalents decreased to $3,083 as of June 30, 2025, from $4,422 at the end of 2024[26] Strategic Focus - The company is focusing on profitable growth with its branded products leading the way, supported by increased distribution and partner brands[3]