Financial Data and Key Metrics Changes - Net revenue for Q1 2025 was $6 million, a 50% increase sequentially from $4 million in Q4 2024 [28] - Gross margin loss improved by 50% to a loss of $600,000 from the previous quarter [28] - Net loss from continuing operations improved to $3.3 million from $4.2 million in the preceding quarter [31] - Adjusted EBITDA loss significantly improved to $2.3 million from $3.9 million in Q4 2024 [31] Business Line Data and Key Metrics Changes - Total cartons sold were 476,000, an increase of 41% compared to 338,000 in Q4 2024 [29] - The company is focusing on two main segments: reduced nicotine premium products and value-focused CMO brands [9][10] Market Data and Key Metrics Changes - The combustible cigarette market is valued at $85 billion, facing increasing price pressures and regulatory scrutiny [6] - The company aims to serve consumers transitioning from high nicotine products to lower nicotine options, capitalizing on market dynamics [21] Company Strategy and Development Direction - The company is transitioning into a growth phase, focusing on expanding distribution and launching targeted marketing campaigns [12][20] - New product introductions include Smoker Friendly Black Label and additional SKUs for existing brands, aimed at increasing market share [14][15] - The company is not waiting for FDA regulations to finalize its strategy and has developed technology for low nicotine products already approved by the FDA [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving breakeven EBITDA by Q4 2025, supported by improved pricing structures and volume growth [34][36] - The company is focused on restoring fiscal responsibility and improving balance sheet ratios through debt reduction and working capital improvements [27] Other Important Information - The company has reduced its outstanding debt to $3.9 million and executed a capital raise of approximately $5.4 million [31][32] - A lawsuit against Dorchester Insurance Company for $9 million in business interruption insurance is ongoing, with a trial date set for November 2025 [32] Q&A Session Summary Question: Do you still foresee a breakeven of EBITDA for the fourth quarter of this year? - Management confirmed they are on track to achieve breakeven in the latter half of the year [34] Question: Will CMO continue to grow from its first quarter level and will VLN kick in over the course of the year? - Management indicated that both Smoker Friendly and Pinnacle franchises are on a growth path, with state approvals expected to drive distribution [36] Question: Does the increase in accounts receivable indicate a need for additional financial capital? - Management stated they are comfortable with their cash runway following recent financing and attributed the increase in receivables to new customer agreements [38][39] Question: What is the expected timeline for collecting the accounts receivable balance? - Management noted that collections occur upon product delivery, following typical shipment terms [40] Question: What has been the share issuance dilution from the warrants? - Current shares outstanding include approximately 7 million shares issued under the recent warrant inducement offering, with additional warrants expected to be exercised [42] Question: Are there any implications for twenty second Century Group from competitors' earnings results? - Management highlighted that trends in the market, particularly the migration from Tier one to Tier four brands, present opportunities for the company [46][48] Question: Have we seen the worst of it in 2024 past, and are we now on a growth trajectory? - Management confirmed that they are now on a growth trajectory in terms of cartons, price, and revenue [49]

[Part I. Financial Information](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 financials show decreased cash, improved losses, and a going concern warning due to working capital deficit and low cash [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, cash significantly decreased to $1.1 million, total liabilities rose to $17.8 million due to current reclassification, and equity declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,133 | $4,422 | | Accounts receivable, net | $4,322 | $1,698 | | Total current assets | $11,095 | $11,522 | | Total assets | $21,458 | $21,673 | | **Liabilities & Equity** | | | | Total current liabilities | $16,396 | $9,962 | | Long-term debt | $0 | $5,165 | | Total liabilities | $17,833 | $17,661 | | Total shareholders' equity | $3,625 | $4,012 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 saw net revenues decrease to $6.0 million, but gross, operating, and net losses significantly narrowed due to cost controls and lower cost of goods sold Q1 2025 vs Q1 2024 Performance (in thousands, except per-share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $5,956 | $6,469 | | Gross (loss) profit | $(609) | $(1,129) | | Operating loss from continuing operations | $(2,570) | $(4,434) | | Net loss from continuing operations | $(3,274) | $(5,450) | | Net loss | $(4,328) | $(5,739) | | Basic and diluted loss per common share | $(2.50) | $(395.07) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash used in operating activities increased to $3.0 million, resulting in a $3.3 million net decrease in cash, ending at $1.1 million Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,976) | $(2,255) | | Net cash (used in) provided by investing activities | $(59) | $15 | | Net cash (used in) provided by financing activities | $(254) | $1,699 | | **Net decrease in cash and cash equivalents** | **$(3,289)** | **$(541)** | | Cash and cash equivalents - end of period | $1,133 | $1,517 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a 'going concern' warning, reverse stock splits, discontinued operations, complex debt, legal proceedings, and subsequent capital-raising events - The company's significant losses and negative cash flows raise **substantial doubt** about its ability to continue as a **going concern** for the next year, prompting management to explore expense reduction and capital raising strategies[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company completed **two reverse stock splits** (1-for-16 and 1-for-135) in 2024 to regain **Nasdaq listing requirements** compliance, with all share data retroactively adjusted[26](index=26&type=chunk) - The Senior Secured Credit Facility has undergone **numerous amendments**, with **$4.6 million** outstanding as of March 31, 2025, and **$3.1 million** of debt converted into 518,600 shares in January 2025[57](index=57&type=chunk)[68](index=68&type=chunk)[78](index=78&type=chunk) - Subsequent to quarter-end, a warrant inducement offering in April 2025 raised approximately **$5.4 million** in gross proceeds, and the Needle Rock Farms property was sold for **$770 thousand** in May 2025[134](index=134&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 revenue decline, improved losses due to cost controls, critical liquidity issues, and subsequent capital-raising efforts to address going concern doubts [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q1 2025 net revenues decreased by 7.9% to $6.0 million due to repriced cigar contracts, but improved gross and operating losses resulted from significant expense reductions Q1 2025 vs Q1 2024 Operating Results (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues, net | $5,956 | $6,469 | (7.9)% | | Gross (loss) profit | $(609) | $(1,129) | (46.1)% | | Sales, general and administrative | $1,799 | $2,906 | (38.1)% | | Research and development | $162 | $425 | (61.9)% | | Operating loss from continuing operations | $(2,570) | $(4,434) | (42.0)% | - Cigarette sales volume **increased** from new CMO contracts, while filtered cigar revenue **decreased** due to contract repricing, and VLN® cigarette net revenues were **negative** from return accruals[147](index=147&type=chunk) - SG&A expenses **decreased by $1.1 million** due to lower headcount, reduced consulting and legal costs, and lower insurance, while R&D expenses **decreased by $263 thousand** from lower headcount and reduced tobacco agreements[146](index=146&type=chunk)[149](index=149&type=chunk)[153](index=153&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces critical liquidity with $1.1 million cash and a $5.2 million working capital deficit, raising going concern doubts, partially addressed by a $5.1 million warrant inducement - The company's **$1.1 million** cash balance and projected operating needs raise **substantial doubt** about its ability to continue as a **going concern** for the next year[155](index=155&type=chunk) - The working capital deficit increased to **($5.2 million)** at March 31, 2025, from a **$1.8 million** surplus at December 31, 2024, primarily due to reclassification of the senior secured credit facility[160](index=160&type=chunk) - Subsequent to the quarter, the company received **$5.1 million** in net proceeds from a warrant inducement, using **$1.0 million** to repay senior secured credit facility debt[159](index=159&type=chunk)[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes have occurred in the company's quantitative and qualitative market risk disclosures since its 2024 Annual Report on Form 10-K - There have been **no material changes** to the market risk disclosures from the company's most recent Annual Report on Form 10-K[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the first quarter of 2025[179](index=179&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the quarter ended March 31, 2025[180](index=180&type=chunk) [Part II. Other Information](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a shareholder derivative case, insurance litigation, and contract disputes, as detailed in Note 12 - The company is subject to **various legal proceedings**, including a shareholder derivative case, an insurance claim dispute, and contract disputes, as detailed in Note 12[182](index=182&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since its 2024 Annual Report on Form 10-K filing - **No material changes** have occurred in the company's risk factors since the filing of its 2024 Annual Report on Form 10-K[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities occurred during the period[184](index=184&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No modifications were made to director or officer trading plans under Rule 10b5-1(c) during the first quarter of 2025 - **No modifications** were made to director or officer trading plans under Rule 10b5-1(c) during the quarter[184](index=184&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Filed exhibits include **Section 302 and 906 certifications** by the CEO and CFO, along with **XBRL data files**[187](index=187&type=chunk)

Financial Performance - Net revenues increased approximately 50% sequentially to $6.0 million, compared to $4.0 million in the previous quarter[6] - Gross profit improved to $(0.6) million, a 46.1% increase from $(1.3) million[6] - Operating loss decreased to $2.6 million, down 42.0% from a net loss of $4.1 million[6] - Net loss decreased to $3.3 million, a 39.9% improvement from $4.2 million[6] - Adjusted EBITDA loss improved to $2.3 million, up 33.8% from a loss of $3.9 million[6] Revenue Breakdown - Cigarette net revenues were $5.0 million, increased from $3.3 million in the fourth quarter of 2024, with carton volumes rising to 319 thousand[11] - Filtered cigar net revenues increased to $1.1 million, compared to $0.8 million in the previous quarter[11] Debt and Liabilities - The company ended the first quarter 2025 with net debt of $3.4 million, reduced from approximately $4.6 million[11] - Total liabilities increased slightly to $17,833 million as of March 31, 2025, from $17,661 million at December 31, 2024[26] - Net total debt (Non-GAAP) rose to $3,425 million as of March 31, 2025, compared to $3,268 million at December 31, 2024[30] Asset Management - Total current assets decreased to $11,095 million as of March 31, 2025, from $11,522 million at December 31, 2024, a decline of 3.7%[26] Product Development and Regulatory Compliance - The launch of VLN Red expands the reduced nicotine content category for adult smokers, joining VLN Gold and Green[6] - Regulatory filings for VLN and partner brands were submitted in all 50 states, preparing for new product launches in 2025[6] Year-over-Year Comparison - Revenues for the three months ended March 31, 2025, were $5,956 million, down 7.9% from $6,469 million in the same period of 2024[27] - Gross loss improved to $(609) million in Q1 2025 from $(1,129) million in Q1 2024, reflecting a reduction in cost of goods sold[27] - Operating loss from continuing operations decreased to $(2,570) million in Q1 2025, compared to $(4,434) million in Q1 2024, showing a favorable variance of $1,864 million[27] - Net loss from continuing operations was $(3,274) million for Q1 2025, an improvement of $2,175 million compared to $(5,450) million in Q1 2024[29] - Adjusted EBITDA loss improved to $(2,319) million in Q1 2025 from $(3,500) million in Q1 2024, indicating a favorable variance of $1,181 million[29] - Basic and diluted loss per common share from continuing operations was $(1.89) for Q1 2025, compared to $(230.82) for Q1 2024[27] - The company reported a comprehensive loss of $(4,328) million for Q1 2025, down from $(5,739) million in Q1 2024[27]

Core Insights - 22nd Century Group, Inc. reported a significant sequential sales increase of approximately 50% in Q1 2025, driven by its growth strategy and new sales activities across various product categories [1][3][6] - The company is preparing for the launch of its first VLN partner brand shipments and has made regulatory filings for new products in all 50 states [1][6] - The financial results indicate a reduction in operating loss and net loss compared to the previous quarter, reflecting improved operational efficiency [6][10] Financial Performance - Net revenues for Q1 2025 reached $6.0 million, up from $4.0 million in Q4 2024, marking a 50% increase [6][10] - Gross profit improved to a loss of $(0.6) million from $(1.3) million, while operating expenses decreased to $2.0 million from $2.8 million [6][10] - The operating loss decreased to $(2.6) million from $(4.1) million, and net loss decreased to $(3.3) million from $(4.2) million [6][10] Product Developments - The company launched VLN Red, expanding its reduced nicotine content product line, which already includes VLN Gold and Green [6][12] - New partner branded VLN products are set to be launched, supported by marketing campaigns to enhance sales volumes [3][6] - Shipments of conventional products under a new agreement with Smoker Friendly have commenced, including the launch of Smoker Friendly Black Label cigarettes [6][12] Debt and Liquidity - As of the end of Q1 2025, the company reported net debt of $3.4 million, down from $4.6 million at the end of the previous quarter [6][12] - The company has successfully reduced its total debt by $3.7 million year-to-date while managing working capital needs [12][33]

Core Insights - 22nd Century Group, Inc. has successfully closed the sale of its Needle Rock Farms assets, generating net proceeds of approximately $770,000 after expenses, which will enhance its cash position [1][2] - The sale of these unused assets, previously related to the hemp cannabis business, allows the company to redeploy capital into its growth strategies for 2025, which are already showing positive results [2] - The company plans to report its complete first quarter results on May 13, 2025, along with a conference call on the same day [2] Company Overview - 22nd Century Group is a pioneering company in nicotine harm reduction within the tobacco industry, focusing on enabling smokers to control their nicotine consumption [3] - The flagship product, VLN cigarettes, contains 95% less nicotine than traditional cigarettes and has been proven to significantly reduce nicotine consumption [4] - The company operates a 60,000 square foot manufacturing facility in Mocksville, North Carolina, with the capacity to produce over 45 million cartons of combusted tobacco products annually [5] Technology and Innovation - The proprietary reduced nicotine tobacco blends are developed using patented technologies that regulate nicotine biosynthesis in the tobacco plant, ensuring full flavor and high yield with significantly lower nicotine content [6] - The extensive patent portfolio positions the company as the sole provider of low nicotine combustible cigarettes in the United States and key international markets [6]

Core Insights - 22nd Century Group has successfully reduced its total debt by approximately $3.8 million, bringing the total debt principal outstanding to around $3.9 million [1][2] - The CEO, Larry Firestone, highlighted that total debt obligations have decreased from approximately $20 million to less than $4 million since he joined the company in December 2023, indicating a strong focus on becoming debt-free [2] - The company plans to report its complete first quarter results on May 13, 2025, along with a conference call on the same day [2] Company Overview - 22nd Century Group is a pioneering company in the tobacco industry focused on nicotine harm reduction, enabling smokers to control their nicotine consumption [3] - The company has developed its flagship product, the VLN cigarette, which contains 95% less nicotine than traditional cigarettes, aiming to provide smokers with a familiar alternative that helps them manage their nicotine intake [4][6] - The company operates a 60,000 square foot facility in Mocksville, North Carolina, capable of producing over 45 million cartons of combusted tobacco products annually, with potential for expansion [5] Product and Technology - The proprietary reduced nicotine tobacco blends are created using patented technologies that regulate nicotine biosynthesis in the tobacco plant, ensuring full flavor and high yield with significantly lower nicotine content [6] - The extensive patent portfolio positions the company as the sole provider of low nicotine combustible cigarettes in the United States and key international markets [6]

MOCKSVILLE, N.C., May 05, 2025 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a tobacco products company that is leading the fight against nicotine by offering smokers a choice about their nicotine consumption, will host a webcast on Tuesday, May 13, 2025, at 8:00 AM ET to discuss its 2025 first quarter results, which are to be reported in a press release at 6:00 AM ET the same day. During the webcast, Larry Firestone, chairman and chief executive officer, and Dan Otto, chief financial officer ...

MOCKSVILLE, N.C., April 17, 2025 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a tobacco products company that is leading the fight against nicotine and believes smokers should have a choice about their nicotine consumption, (the “Company”) has released the following notice according to THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK: UNITED STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF NEW YORK IN RE 22ND CENTURY GROUP, INC. DERIVATIVE LITIGATIONLead Case No. 1:19-cv ...

Core Insights - 22nd Century Group, Inc. has announced the execution of two new agreements to supply filtered cigar products, expanding its customer partnerships and production capabilities [1][3][4] Group 1: Business Expansion - The company is increasing production of filtered cigars, with initial shipments expected in Q2 2025, targeting an annual volume of 500,000 cartons or more [2] - The new agreements are designed to provide gross margin and consistent volume, reinforcing the company's core CMO business [3] - These agreements build on previous momentum from Q3 2024, indicating a strategic focus on expanding the footprint of its VLN brand through established retail channels [4] Group 2: Product Offering - The flagship product, VLN cigarettes, contains 95% less nicotine than traditional cigarettes, aiming to help smokers control their nicotine consumption [5][7] - The proprietary reduced nicotine tobacco blends are developed using patented technologies, ensuring a unique position in the market with the only low nicotine combustible cigarette in the U.S. and critical international markets [7] Group 3: Manufacturing Capabilities - The company operates a 60,000 square foot facility in Mocksville, North Carolina, capable of producing over 45 million cartons of combustible tobacco products annually, with room for expansion [6]

Corporate Update Letter Highlights Plans to Begin Profitable Growth Phase in 2025 on Expansion of Rebranded VLN® Cigarette Products MOCKSVILLE, N.C., April 08, 2025 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (NASDAQ:XXII), a tobacco products company that is leading the fight against nicotine by offering smokers a choice about their nicotine consumption, today issued the following letter to stockholders from Larry Firestone, the Chief Executive Officer of 22nd Century Group, Inc.: A Letter to Our Sharehold ...