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].