22nd Century (US:XXII)2025-08-14 10:31Financial 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].