22nd Century (XXII)2025-03-20 11:45Financial Performance - Net revenues for the fourth quarter of 2024 were 7,357 in 2023, primarily driven by a decrease in volumes of filtered cigars [191]. - Net revenues for the full year 2024 were 32,204 in 2023 [193]. - Gross profit (loss) for the fourth quarter of 2024 was a loss of 7,829 in the prior year period [191]. - Operating loss for the fourth quarter 2024 was 14,232 in the prior year period [191]. - Net loss in the fourth quarter of 2024 was 10.59 compared with a net loss in the fourth quarter of 2023 of 1,413.40 [191]. Operating Expenses and Cash Flow - Total operating expenses for the fourth quarter 2024 decreased 56% to 6,403 in the prior year quarter [191]. - Cash used in operating activities decreased from 14,345 in 2024, a reduction of 14,345 for the year ended December 31, 2024, and has an accumulated deficit of 18,251, including an 20,361 from 16,848 in 2024, driven by lower net proceeds from long-term debt issuance and other financing sources [217]. - The remaining principal balance under the Senior Secured Credit Facility is 1,500 classified as current [220]. - The company raised net proceeds of 3,913 from common stock issuance in April 2024 [219]. Asset Management and Impairment - The company performed an annual impairment review of indefinite-lived intangible assets on December 1, 2024, and determined that it is more likely than not that the assets are not impaired [232]. - No impairment indicators were identified for long-lived assets during 2024 [236]. - Impairment assessments for indefinite-lived intangible assets consider factors such as sales projections, strategic objectives, and market conditions [231]. - The carrying value of long-lived assets is reviewed against undiscounted future cash flows to determine impairment [233]. - The company has the option to perform a qualitative assessment before conducting a quantitative impairment review for indefinite-lived intangible assets [231]. - No significant changes in the estimated useful lives of long-lived assets were reported, and depreciation rates may be accelerated if useful lives are shorter than originally estimated [233]. Strategic Initiatives - The company completed the sale of substantially all of the GVB hemp/cannabis business in December 2023, focusing fully on tobacco operations [191]. - The company executed two significant new export customer contracts to drive additional revenue and improve margin profile, with initial shipments during the fourth quarter [191]. - The company announced plans for new VLN product branding and marketing initiatives designed to drive greater customer engagement, with the first VLN partner brand set to begin shipments in the second quarter of 2025 [191]. Cash and Working Capital - As of December 31, 2024, the company had cash and cash equivalents of 2,364 from 1,790 as of December 31, 2024, compared to a working capital deficit of (8,616 [212]. Management Judgments and Estimates - Significant management judgment is required in estimating cash flows and useful lives of long-lived assets, with potential material effects from unforeseen changes [235]. - The company uses a Monte Carlo valuation model to estimate the fair value of detachable warrants, with key assumptions including expected future volatility and the expected life of the warrants [237]. - The company evaluates embedded derivatives in debt agreements to determine if they require bifurcation, using a binomial lattice model for fair value estimation [238]. - The company does not have any off-balance sheet arrangements as defined by Regulation S-K [239].