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]

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, 2025 ☐ 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) Nevada 98-0468420 (S ...

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]

Core Insights - 22nd Century Group, Inc. is expanding its VLN product line with new partner brands and increased state authorizations, positioning itself as a leader in tobacco harm reduction [1][3][2] - The company reported a decrease in net revenues for Q2 2025, with a focus on profitable growth through its branded products [5][9] Business Highlights - The company commenced shipments of Pinnacle VLN products to nearly 1,000 locations, with additional locations expected [1][5] - State authorizations for VLN products have significantly increased, with 44 states now allowing sales of VLN products and 30 states for partner VLN products [5][10] - The company is working on developing additional tobacco products to cater to users seeking lower nicotine options [3][10] Financial Performance - Net revenues for Q2 2025 were $4.1 million, down 48.6% from $7.9 million in Q2 2024 [9] - Operating loss increased to $3.0 million compared to $2.6 million in the previous quarter, while net loss remained stable at $3.3 million [5][9] - Adjusted EBITDA loss was $2.6 million, slightly worse than the loss of $2.3 million in the previous quarter [5][9] Product Line Developments - Cigarette net revenues decreased to $2.7 million from $5.0 million in Q1 2025, despite an increase in carton volumes to 594 thousand [10] - Filtered cigar net revenues increased to $1.3 million, reflecting stabilized volume from new contracts [10] - The company announced new branding for its VLN products and two new partner brand VLN product families, with initial shipments expected in Q3 2025 [10][12] Balance Sheet Overview - Total debt was approximately $3.9 million at the end of Q2 2025, with net debt reduced to $0.7 million [7][9] - Cash reserves stood at approximately $3.1 million, down from $4.4 million at the end of 2024 [7][25]

Core Viewpoint - 22nd Century Group, Inc. is set to discuss its second quarter results for 2025 during a webcast on August 14, 2025, highlighting its ongoing efforts in nicotine harm reduction and the introduction of its VLN® cigarette product [1][2]. Company Overview - 22nd Century Group is a leader in the nicotine harm reduction movement within the tobacco industry, focusing on enabling smokers to manage their nicotine consumption [4]. - The company has developed the VLN® cigarette, which contains 95% less nicotine than traditional cigarettes, providing smokers with a familiar alternative to help reduce their nicotine intake [5]. Product Details - The VLN® cigarette is designed to allow consumers to make informed choices regarding their nicotine consumption, potentially avoiding addictive levels altogether [5]. - The proprietary reduced nicotine tobacco blends are created using patented technologies that regulate nicotine biosynthesis in tobacco plants, ensuring full flavor and high yield while maintaining low nicotine levels [6]. Webcast Information - The webcast will feature Larry Firestone, CEO, and Dan Otto, CFO, who will review financial results and discuss the company's progress and plans for 2025 [2][3]. - The live and archived webcast will be available on the company's Investor Relations website [3].

Core Insights - 22nd Century Group, Inc. has launched its new Pinnacle VLN® Gold and Pinnacle VLN® Menthol reduced nicotine content cigarettes, with initial shipments supporting a sales launch on September 1, 2025, at nearly 1,000 locations across 12 states for a top-5 U.S. convenience store chain [1][2] - The Pinnacle VLN® products represent a significant innovation in the tobacco industry, offering a 95% reduction in nicotine compared to traditional cigarettes, aligning with the FDA's proposed low nicotine mandate [2][4] - The company aims to expand the reach of its VLN® products to promote harm reduction in smoking habits, backed by extensive clinical research [4][6] Product Details - VLN® products utilize proprietary tobacco that has 95% reduced nicotine content, making them the first combusted tobacco products compliant with the FDA's proposed new Tobacco Product Standard for Nicotine Yield [3][7] - The VLN® cigarette is designed to provide traditional smokers with a familiar alternative that allows them to control their nicotine consumption [6][7] - The company holds a comprehensive patent portfolio, ensuring it remains the only provider of low nicotine combustible cigarettes in the U.S. and critical international markets [7] Market Strategy - The launch of Pinnacle VLN® products is expected to enhance brand loyalty among customers of the convenience store chain, reinforcing the company's position in the tobacco harm reduction movement [2][4] - The company plans to continue adding more states and locations for Pinnacle VLN® products, along with re-ordering inventory through the distributor [2]