Latest news with #22ndCentury
Business Insider
18-07-2025
- Business
- Business Insider
Why Is 22nd Century Stock (XXII) Up 85% Today?
22nd Century (XXII) stock rocketed higher on Thursday after the tobacco company announced new partnerships for its low-nicotine cigarettes. The company has teamed up with Smoker Friendly and Pinnacle for the sale of its unique cigarettes, which are designed to reduce the harmful effects of smoking normal cigarettes. This includes weaning smokers off normal cigarettes and helping them stop smoking. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. To go along with this, 22nd Century cigarettes are compliant with the U.S. Food and Drug Administration's proposed new Tobacco Product Standard for Nicotine Yield of Cigarettes and Certain Other Combusted Tobacco Products. 22nd Century CEO Larry Firestone said, 'The FDA's new product standard proposed in January is one of many factors that are driving early commercial interest in our VLN reduced nicotine content tobacco products.' 22nd Century Stock Movement Today XXII stock was up 86.035% in pre-market trading on Thursday, following a 3.58% drop yesterday. The stock has also fallen 96.25% year to date and 99.83% over the past 12 months. Today's rally came with heavy trading, as some 10 million shares changed hands, compared to a three-month daily average of about 94,000 units. Is 22nd Century Stock a Buy, Sell, or Hold? Turning to Wall Street, coverage of 22nd Century is lacking. Luckily, TipRanks' AI analyst Spark has it covered. Spark rates XXII stock a Neutral (44) with a $5 price target, suggesting a potential 9.17% upside for the shares. It cites 'weak financial performance and bearish technical indicators' as reasons for this stance.
Business Insider
18-07-2025
- Business
- Business Insider
22nd Century reports expanded state authorization progress for product sales
22nd Century (XXII) Group announced a 'significant' increase in state authorizations for the sale of its portfolio of both proprietary and contract manufactured products. The increase in state authorizations enables new sales activity and new product launches for 22nd Century's proprietary VLN reduced nicotine content cigarettes, a growing list of partner VLN brands, an expanded range of Smoker Friendly products and a growing number of Pinnacle products sold at a top 5 C-Store chain in the U.S. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Business Upturn
18-07-2025
- Business
- Business Upturn
22nd Century Reports Expanded State Authorization Progress to Sell VLN®, Partner VLN® and Conventional Products
State Authorizations Mean Even More Adult Smokers Will Be Able to Purchase VLN ® , Partner VLN ® , Smoker Friendly and Pinnacle Products MOCKSVILLE, N.C., July 17, 2025 (GLOBE NEWSWIRE) — 22nd Century Group, Inc. (Nasdaq: XXII), today announced a significant increase in state authorizations for the sale of its growing portfolio of both proprietary and contract manufactured products. The increase in state authorizations enables new sales activity and new product launches for 22nd Century's proprietary VLN® reduced nicotine content cigarettes, a growing list of partner VLN® brands, a diverse and expanded range of Smoker Friendly products and a growing number of Pinnacle® products sold at a top 5 C-Store chain in the U.S. 'The most recent state authorizations will open even more new markets as we drive toward approval to sell VLN® based products in all 50 states. Additionally, this demonstrates to the FDA that VLN® based products can be available on a nationwide basis by the close of its proposed Low Nicotine Mandate comment period in mid-September. Our VLN® and partner VLN® products are the only combustible cigarettes that fit within the confines of the FDA's mandate as originally issued by the first Trump administration in 2018 and reissued in January 2025,' said Larry Firestone, Chief Executive Officer of 22nd Century Group. 'We already have partner VLN® retailers accounting for over 2,000 outlets progressing through implementation to begin shipping in the second half of 2025 and expect more ahead.' Key state authorizations to date now include the following brands. Additional state authorizations are pending and expected in the second half of 2025, supporting the launch of these products in further new markets. Products marked with an * represent new introductions to the market and retailers in 2025: VLN ® Gold and Green – 41 States Gold and Green – 41 States *VLN ® Red – 21 States Red – 21 States *Smoker Friendly VLN ® – 20 States – 20 States *Pinnacle ® VLN ® – 20 States VLN – 20 States Smoker Friendly – 45 States *Smoker Friendly Black Label – 27 States Pinnacle® – 37 States The growing list of state approvals expands the market opportunity for additional partner brands to launch their own private label VLN® products in large and untapped markets across the country. 'With more than 272,000 U.S. retail outlets that sell tobacco products across the country, 22nd Century and its partners have a tremendous untapped market opportunity for both our VLN® and conventional products in the US, and we have begun to look internationally with VLN® as well,' said Firestone. 22nd Century is the only tobacco products company that has for 27 years led the tobacco harm reduction movement and continues to lead the fight against the harms of smoking driven by nicotine addiction is creating a new pathway to reducing the rate of smoking and related health harms through increasing adoption of its VLN® reduced nicotine content cigarette products by additional brands. Our products incorporate proprietary and patented tobacco that contains 95% less nicotine than tobacco used in highly addictive conventional cigarettes. Decades of peer reviewed studies have shown that the level of nicotine content in 22nd Century's products can reduce both the rate of smoking and the health harms of smoking. About 22nd Century Group, Inc. 22nd Century Group is the pioneering nicotine harm reduction company in the tobacco industry enabling smokers to take control of their nicotine consumption. We created our flagship product, the VLN® cigarette, to give traditional cigarette smokers an authentic and familiar alternative in the form of a combustible cigarette that helps them take control of their nicotine consumption . VLN® cigarettes have 95% less nicotine than the traditional cigarette and have been proven to allow consumers to greatly reduce their nicotine consumption. Instead of offering new ways of delivering nicotine to addicted smokers, we offer smokers in the form that they are used to, the option to take control of their nicotine consumption and make informed and more productive choices, including the choice to avoid addictive levels of nicotine altogether. Our proprietary reduced nicotine tobacco blends are made possible by comprehensive and patented technologies and tobacco plants that regulate nicotine biosynthesis activities in the tobacco plant, resulting in full flavor and high yield with 95% less nicotine. Our extensive patent portfolio has been developed to ensure we have the only low nicotine combustible cigarette in the United States and critical international markets. VLN® is a registered trademark of 22nd Century Limited LLC. Learn more at on X (formerly Twitter), on LinkedIn, and on YouTube. Learn more about VLN® at Cautionary Note Regarding Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements, including but not limited to our full year business outlook. Forward-looking statements typically contain terms such as 'anticipate,' 'believe,' 'consider,' 'continue,' 'could,' 'estimate,' 'expect,' 'explore,' 'foresee,' 'goal,' 'guidance,' 'intend,' 'likely,' 'may,' 'plan,' 'potential,' 'predict,' 'preliminary,' 'probable,' 'project,' 'promising,' 'seek,' 'should,' 'will,' 'would,' and similar expressions. Forward-looking statements include, but are not limited to, statements regarding (i) our cost reduction initiatives, (ii) our expectations regarding regulatory enforcement, including our ability to receive an exemption from new regulations, (iii) our financial and operating performance and (iv) our expectations for our business interruption insurance claim. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in 'Risk Factors' in the Company's Annual Report on Form 10-K filed on March 20, 2025, and in the Company's Quarterly Reports filed on May 13, 2025. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law. Investor Relations & Media ContactMatt KrepsInvestor Relations22nd Century Group [email protected] 214-597-8200
Business Upturn
17-07-2025
- Business
- Business Upturn
VLN Commercial Launches Confirm Viability of the FDA's Proposed Reduced Nicotine Mandate
Multiple Tobacco Brands Partnering with 22nd Century to Expand Availability and Awareness of VLN Based Reduced Nicotine Content Products Manufactured in the USA, VLN Products from 22nd Century Provide Clinically Proven Solution to Reduce the Rate and Harms of Smoking MOCKSVILLE, N.C., July 16, 2025 (GLOBE NEWSWIRE) — 22nd Century Group, Inc. (Nasdaq: XXII), the only tobacco products company that has for 27 years led and continues to lead the fight against the harms of smoking driven by nicotine addiction is creating a new pathway to reducing the rate of smoking and related health harms through increasing adoption of its VLN® reduced nicotine content cigarette products by additional brands. Our products incorporate proprietary and patented tobacco having 95% less nicotine than tobacco used in highly addictive conventional cigarettes. Decades of peer reviewed studies have shown that the level of nicotine content in 22nd Century's products can reduce both the rate of smoking and the health harms of smoking. The recently announced partner VLN® initiatives, such as Smoker Friendly VLN®, Pinnacle VLN®, reflect a growing commitment by tobacco brands to accelerate compliance with the U.S. Food and Drug Administration's proposed new Tobacco Product Standard for Nicotine Yield of Cigarettes and Certain Other Combusted Tobacco Products, which is intended to curb the harms of smoking. 'The FDA recognizes that nicotine is a highly addictive substance and that to achieve true tobacco harm reduction, nicotine consumption must be addressed. The FDA's new product standard proposed in January is one of many factors that are driving early commercial interest in our VLN reduced nicotine content tobacco products. We are excited to see our customer's brands adding VLN cigarettes to their lineup. This will enhance market availability of VLN cigarettes and offer customers a Tobacco Harm Reduction product that will give the smoker a choice to control their nicotine consumption,' said Larry Firestone, Chief Executive Officer of 22nd Century Group. 'These commercial launches and our readiness once we receive state approval to scale availability to all 50 states for the entire U.S. cigarette market continues to demonstrate that there need not be any commercial barriers to adopting this FDA policy, which could be the most impactful health decision in a generation.' Formally announced in January 2025, the proposed standard sets a maximum nicotine content of 0.7 mg of nicotine per gram of tobacco in cigarettes and certain other combusted tobacco products, taking effect two years from final approval. VLN® based products from 22nd Century are the only combustible cigarette products authorized by the FDA to meet the standard, at an average of 0.5 mg per gram, and the only product that offers consumers a choice about their nicotine consumption. On implementation of the FDA proposal, people who are addicted and wish to alter their dependency or even quit could have the ability to do so more easily, significantly reducing the morbidity and mortality caused by smoking. Based on FDA's population health model, by the year 2100, in the United States, approximately 48 million youth and young adults who would have otherwise initiated smoking would not start as a result of the proposed product standard. 22nd Century is monitoring comment submissions under the proposed rule and intends to make its own submission before the comment period closes. This activity follows the 2018 rule making process, which ultimately incorporated many of the suggestions, independent clinical research studies and feasibility data from 22nd Century's comment letter at that time, including: A proposed standard of not more than 0.7mg/g of nicotine content, based on 22nd Century's recommendation of an average of 0.5mg/g, The fact that our patented low nicotine content tobacco leaf contained in our VLN Products that already meets the standard can be readily sourced in enough quantity to meet demand for reduced nicotine content cigarette products, and The fact the reduced nicotine content tobacco is an effective way to reduce the rate and harms of smoking, as documented by dozens of peer reviewed and published independent clinical studies using research cigarettes manufactured by 22nd Century The FDA's January 15, 2025 press release announcing the rule includes the following statement from the former FDA Commissioner Robert M. Califf, M.D.: 'Today's proposal envisions a future where it would be less likely for young people to use cigarettes and more individuals who currently smoke could quit or switch to less harmful products. This action, if finalized, could save many lives and dramatically reduce the burden of severe illness and disability, while also saving huge amounts of money. I hope we can all agree that significantly reducing the leading cause of preventable death and disease in the U.S. is an admirable goal we should all work toward.' About 22nd Century Group, Inc. 22nd Century Group is the pioneering nicotine harm reduction company in the tobacco industry enabling smokers to take control of their nicotine consumption. We created our flagship product, the VLN® cigarette, to give traditional cigarette smokers an authentic and familiar alternative that helps them take control of their nicotine consumption . VLN® cigarettes have 95% less nicotine than the traditional cigarette and have been proven to allow consumers to greatly reduce their nicotine consumption. Instead of offering new ways of delivering nicotine to addicted smokers, we offer smokers the option to take control of their nicotine consumption and make informed and more productive choices, including the choice to avoid addictive levels of nicotine altogether. Our proprietary reduced nicotine tobacco blends are made possible by comprehensive and patented technologies and tobacco plants that regulate nicotine biosynthesis activities in the tobacco plant, resulting in full flavor and high yield with 95% less nicotine. Our extensive patent portfolio has been developed to ensure we have the only low nicotine combustible cigarette in the United States and critical international markets. VLN® is a registered trademark of 22nd Century Limited LLC. Learn more at on X (formerly Twitter), on LinkedIn, and on YouTube. Learn more about VLN® at Cautionary Note Regarding Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements, including but not limited to our full year business outlook. Forward-looking statements typically contain terms such as 'anticipate,' 'believe,' 'consider,' 'continue,' 'could,' 'estimate,' 'expect,' 'explore,' 'foresee,' 'goal,' 'guidance,' 'intend,' 'likely,' 'may,' 'plan,' 'potential,' 'predict,' 'preliminary,' 'probable,' 'project,' 'promising,' 'seek,' 'should,' 'will,' 'would,' and similar expressions. Forward-looking statements include, but are not limited to, statements regarding (i) our cost reduction initiatives, (ii) our expectations regarding regulatory enforcement, including our ability to receive an exemption from new regulations, (iii) our financial and operating performance and (iv) our expectations for our business interruption insurance claim. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in 'Risk Factors' in the Company's Annual Report on Form 10-K filed on March 20, 2025, and in the Company's Quarterly Reports filed on May 13, 2025. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law. Investor Relations & Media ContactMatt KrepsInvestor Relations22nd Century Group [email protected] 214-597-8200
Yahoo
14-05-2025
- Business
- Yahoo
Q1 2025 22nd Century Group Inc Earnings Call
Matt Kreps; IR Contact Officer; 22nd Century Group Inc Lawrence Firestone; Chairman of the Board, Chief Executive Officer; 22nd Century Group Inc Daniel Otto; Chief Financial Officer; 22nd Century Group Inc Andrew White; Analyst; Emerging Growth Research Operator Welcome to 22nd Century Group's first-quarter 2025 conference call and webcast. (Operator Instructions) It is now my pleasure to turn the floor over to Matt Kreps, Investor Relations for 22nd Century Group. Please begin. Matt Kreps Hello, and welcome to 22nd Century's first-quarter 2025 results conference call. Joining me today are Larry Firestone, CEO; and Dan Otto, CFO. Earlier today, we issued a press release announcing the results for the quarter ended March 31, 2025. The release and 10-Q are available in the Investors section of our website at Today's call will include prepared remarks from Larry and Dan, updating you on 22nd Century's business, operations, strategy, and financial results through March 31, 2025, and subsequent. Before we begin, a few reminders for today's call. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in our annual, quarterly, and other reports filed with the SEC. Also during today's call, we may discuss non-GAAP financial measures, including adjusted EBITDA, which we define as earnings before interest, taxes, depreciation and amortization; as adjusted for certain noncash and nonoperating expenses and net debt calculated as total principal amount of debt less -- outstanding less cash and cash equivalents. For more details on these measures, please refer to our release issued earlier today. And with that, I'll now turn the call over to Larry. Lawrence Firestone Thank you, Matt. Good morning, everyone, and thank you for joining 22nd Century's First Quarter 2025 Results Conference Call. On our 2024 year-end financial results call in March, I addressed our journey over the first 16 months of my tenure as CEO, which was defined as a turnaround. We're now putting 2024 in the past and are solely focused on our future. We have completely reconfigured our business and laid the tracks to drive into what we believe will be a very profitable future. Dan will talk about the numbers and the wins we had in the first quarter of 2025, and I would like to begin my remarks. First, by talking a little bit about the turbulent tobacco market that we serve, and then I will describe our road map to success as we continue the transition of 22nd Century into a growth company. The $85 billion combustible cigarette market is showing increasing friction around price, products, nicotine delivery systems, FDA regulatory environment and more. Right now, we see an incredible focus on nicotine that we've never seen before, even as big tobacco remains under the pressure to reduce the harms of smoking. Big tobacco's answer to smoking arm is to keep their consumers booked on nicotine by transitioning what have been their mainstream products to noncombustible products such as nicotine pouches, which come in all levels of nicotine, with some brands bragging about having the highest nicotine to the wave of heat not burn to avoid the carcinogens, vaping, moist snuff, which has been in the market for a long time. They, being big tobacco flat out, disregard the harms of nicotine and drive to deliver nicotine in new ways. Nicotine addiction is their secret weapon to keep consumers addicted to their products. In fact, high nicotine and access to high nicotine is in their marketing materials and core to some of their brands and products. In addition, we have the same big tobacco companies raising their combustible cigarette prices as often as quarterly, which has the [era] of arrogance and lack of care for their consumer and their consumers' wallet. It seems to be almost a contest to see how far they can dig into their consumers' pocket book before the consumer's attitude changes And therefore, big tobacco's attitude changes. The cost of a pack of Tier 1 branded cigarettes is competing in the consumer's wallet for consumer staple items such as gasoline and groceries and especially as prices for consumer goods are increasing steadily. It's as if they know that their customer is addicted, thanks to nicotine, and they can charge whatever they want for their cigarettes. And they're testing that theory quarterly with their price increases. We look at the market differently, with changing dynamics in Tier 1 as an opportunity for 22nd Century. 22nd Century serves and will serve two main segments of the market, reduced nicotine premium products and value-focused CMO brands. our main domestic brands are Smoker Friendly, Pinnacle and VLN. Our smoker-friendly and Pinnacle CMO brands, our value brands that serve the Tier 4 market, which is roughly 2/3 of the price of a Tier 1 brand to the consumer; this is a price point that is much friendlier to the consumer's wallet for those who want to continue to smoke a standard combustible cigarette. So this is predominantly a value price play. Then with the relaunch of our VLN-branded products into the market, we will serve consumers who wish to take control of their nicotine consumption. There are plenty of consumers who wish to control their nicotine to either transition from a need to smoke every day or multiple times a day, and they can choose when to smoke or not need to smoke at all. This, we will prove out as we make our VLN-branded products available across the US and gain distribution and rate of sale. This is predominantly a health and wellness play. We believe there's a large consumer population for both Tier 4 value brands and the consumers who want to control their smoking habit with low-nicotine cigarettes. This will fuel our customers' growth and 22nd Century's growth as well. Our growth will also come from wider distribution as a result of expanded domestic state approvals. But once approved within the state, we will be looking to add points of distribution and launching targeted marketing campaigns that will drive rate of sale. So as the smoker-friendly, Pinnacle and VLN footprint grows throughout the US, our revenues will grow as will our profitability. In the past, these brands have had limited approvals in the US, and we are opening up the opportunity to serve all 50 states across all brands. In addition to the widening footprint of our brands nationwide, we're developing with Smoker Friendly and Pinnacle, new products, which will widen the SKU count in the stores where we are the manufacturer. The latest product introductions include, for Smoker Friendly, which has over 350 stores and another 450 authorized dealers, is introducing Smoker Friendly Black Label for the natural cigarette market, containing only tobacco and water that is designed to compete directly with major names on quality and profile -- flavor profile at a much more affordable price. For example, Natural American Spirit is one of the top-selling brands in the market. I think it's number seven. And one of the most expensive, quite possibly number one as the most expensive. Smoker Friendly in conjunction with 22nd Century has launched this new natural-style cigarette in the US. And once we obtain additional state approvals, Smoker Friendly Black Label will be available to be offered in every state at a price point that is much more affordable compared to Natural American Spirit. This is an exciting growth opportunity for both Smoker Friendly and 22nd Century. Smoker Friendly VLN, which is a private label presentation of our VLN. This is a new set of SKUs for our Smoker Friendly relationship, and we will be available not only chain-wide but potentially in every state as we receive state approvals and distribution. The importance of the adoption of VLN to these brands is not only the well-established distribution channels that they already possess, but also the brand equity that they carry. We believe we can build the VLN product franchise within our CMO customers brands nicely and then move the 22nd Century-branded VLN alongside as awareness expands. Our Pinnacle-branded products are sold in a top five C-store chain in the US with over 1,700 outlets, where the retailer is looking to expand the Pinnacle SKU lineup as well. This will come together in the second half of 2025 and will add additional revenue opportunities for both the retailer and 22nd Century. The year-over-year growth in the Smoker Friendly and Pinnacle branded products that we produce, continue to drive not only retail growth, but 22nd Century growth profitably as well. We believe we're in a great position to build our company on the market opportunities in the Tier 4 and the nicotine control consumer. It would be a candidate for our VLN products. The sequence of this rollout is key to understand, as none of this is an instant success. First, there's product development and brand alignment, then state registration, followed by state approval. Then once the states approved, the SKUs ability for sale, that's when we begin the sales cycle to the various retailers in the various states. And upon successful adoption from retail, we will add distribution. Finally, once approved by the retailers, then shipments to the distributors who will then ship to the stores. Then we will work on rate of sale as the distributors will replenish the supply to the retailer after the first loaded. This is a very serial process and will roll out and gain momentum over time like starting a locomotive. We start slow and pick up steam as we go. This will be an extended growth process that will add to the normal year-over-year growth in the same-store sales of the existing distribution. Eventually, we'd like to create a VLN category in retail. That would separate all of our VLN-branded SKUs from the standard cigarette category. This will take time and rate of sale numbers to create, but we believe this is possible. Our growth comes from growth in same-store sales plus new distribution. Then as we add new products, we follow the same cycle. We believe that current market dynamics, which include price pressure on consumers from big tobacco, have and will continue to create an opportunity for our high-quality branded products in the overall Tier 4 and above markets. The balance of our CMO business is high-volume, low-margin, low-mix business for domestic supply of filtered cigars and container orders for export cigarettes. This steady volume of business consumes our machine capacity and allows us to manage our above-the-line costs while contributing to our gross profit. Now turning my attention to other areas that our management team continues to progress with. We will be launching a new 22nd Century website in the coming weeks and a refreshed [Tri-VLN] resource so that once we have established distribution, consumers will be able to find VLN products in retail locations in their market. We are also getting ready to reactivate our social media platform within the guidelines and restrictions of tobacco advertising so that consumers can share their experiences with our branded and VLN products. On the regulatory front, the low-nicotine FDA proposed rule is midway to the completion of the comment period, which ends in September. When the comment period concludes, we can determine the FDA's direction on what could be the most meaningful and impactful tobacco harm reduction policy in a generation. But I also want to be very clear, we are not waiting for the FDA to finalize their rule, and we are not dependent on the FDA's rule. We have developed an important technology in our low-nicotine tobacco and VLN products that the FDA has already approved, and a certain contingent of customers will want today that give smokers a choice with their nicotine consumption. It's important to note that we have the only FDA-approved combustible cigarette that meets the new policy standard. Pulling all the pieces together, we have rebuilt the foundation of our company to what we believe is a more substantial business model. This model features a suite of our branded products, which include Smoker Friendly, Pinnacle and 22nd Century VLN, which now represents a wide menu of SKUs. Further, we service our standard high-volume, low-mix CMO customers for domestic filtered cigars and export cigarettes. Approaching the market with our current suite of products is a much different proposition than what we had with just the original VLN product set when I joined the company. The railroad tracks are laid, now we have to drive as fast as the states will let us and the markets will allow us to. And now I'll turn the call over to Dan to discuss the numbers. Daniel Otto Thank you, Larry. Good morning, everyone, and thanks again for joining our discussion today. This has really been an exciting quarter for 22nd Century as the foundational pieces of our strategy continue to be laid and we execute growth initiatives, we are set up for success in improving financial results for the remainder of 2025. Larry and I have spoken consistently about the importance of restoring fiscal responsibility as a result of our restructuring efforts. And in our 2024 year-end results call, we expanded on those details. We've continued to make substantial progress. And although we aren't claiming victory yet, we've come a long way. As a recap in setting the stage for today's comments, I'll cover three main pillars of our financial targets as we emerge from our restructuring and turnaround. First, achieving profitability in the P&L. For the first time in this company's history in late 2025, we are ready to deliver revenue growth and margin improvement with our CMO customer contracts in 2025. And we'll begin rapidly expanding VLN points of distribution during the year. This sits on top of the much improved operating cost and overhead structure implemented throughout 2024. Second, the restoration of normal balance sheet ratios and KPIs will occur through continued elimination of debt obligations and improvements in working capital; and third, prioritizing and securing cash run rate to complete these initiatives as we will then turn our attention to improvement of the overall capitalization table. First quarter 2025 results begin to showcase of the hard work and planning is coming together to help us deliver on these priorities. Starting from the top, net revenue was $6 million in the first quarter of 2025, increased 50% sequentially from $4 million in the fourth quarter 2024. Gross margin was a loss of $0.6 million, also an improvement of 50% from the prior quarter. These results reflect slowly rebuilding volume and normal manufacturing capacity with our CMO customers. Total cartons sold were 476,000, increased 41% versus $338,000 in the fourth quarter. The volume change is reflective of the initiatives Larry and I have discussed regarding repricing our CMO customer contracts, which initially had created a temporary decline in the later half of 2024 as customers worked off last time buys, inventory, but is now beginning to reverse back to more normalized volumes. We expect volume will be similar to growing again in the second quarter of 2025 with more meaningful gains in the second half of the year. As a function of the following three points, we also see an inflection point occurring later in 2025, whereby the gross profit deficits currently incurred will quickly be erased. First, we'll continue to see the benefits of the revised pricing structures in the new customer contracts. Second, we'll see volume ramping up and expanded shipments under those same agreements. And third, we'll begin to see meaningful sales of our higher-margin branded cigarettes, including both natural style cigarettes and our FDA authorized very-low nicotine content cigarettes. [Sharing] positive gross margin in the early stages of the second half of 2025 from these initiatives is integral to us reaching our breakeven profitability goal. Total operating expenses for the first quarter were $2 million compared to $2.8 million in the fourth quarter of 2024. This level of operating expense overhead is the lowest quarterly amount we've incurred since our turnaround began in late 2023. First quarter 2025 net loss from continuing operations improved to $3.3 million from $4.2 million in the preceding quarter. EPS improved to a loss of $1.89 a share compared to [$10.59] a share. and adjusted EBITDA significantly improved to a loss of $2.3 million from $3.9 million in the fourth quarter of 2024. As Larry mentioned, we're exiting the turnaround phase now and moving into growth where our story focuses purely on execution against achieving our P&L goals. With respect to continued balance sheet improvement, we further reduced our outstanding debt under this convertible senior secured credit facility, bringing the remaining principal balance down to $3.9 million with debt for equity conversions of $3.1 million that occurred during the quarter and a contractual cash payment subsequent to quarter end of an additional $1 million. Cash used in operations in the first quarter of 2025 was [$2.9 million], and we remain focused on minimizing cash used by the business while also executing a rapid growth strategy. In late April 2025, subsequent to quarter end, we executed a capital raise through inducement of existing warrants to raise gross proceeds of approximately $5.4 million, with an additional option for a further exercise to raise $3.3 million. This provides us with the cash runway to execute on our strategy for the remainder of 2025. Finally, the company remains active in our lawsuit against [Dorchester] Insurance Company based on their failure to pay any amount toward our claim of $9 million in actual damages for business interruption insurance. Significant [discovery is] taking place in the Carteret trial date for November 2025. That concludes our prepared remarks. I'll now open it up for any questions from our analysts. Operator (Operator Instructions) Andrew White, Emerging Growth Research. Andrew White First, I want to say, these are great results, guys. You're doing a good job. I do have a couple of questions. First and foremost, do you still foresee a breakeven of EBITDA for the fourth quarter of this year? . Daniel Otto Andy, this is Dan. Yes, we're still on track in the later half of the year to get to breakeven. Andrew White Okay. Great. So you're seeing that CMO will continue to grow from this first quarter level and the VLN will hopefully kick in over the course of the year? Daniel Otto Yes. that's what we're currently looking at. So we have -- as I said in the prepared remarks, Andy, we've got the smoker-friendly franchise on a pretty nice growth path. We've got the Pinnacle franchise on a nice growth path, and they're going to add -- they're actually going to add some products, some SKUs to the lineup. And then as we get our state approvals for both of them and then state approvals for VLN and our partner VLN, we'll start to see some distribution in there. So that side of the house is beginning to percolate pretty nicely. Andrew White Good to hear. Secondarily, looking at the balance sheet, you have a very large increase in the first quarter of accounts receivable. And that impacts your net working capital, which is notable that you're almost breakeven on net working capital, despite the fact that your debt facility is now listed as a current liability. That's pretty impressive. But I did want to ask, does this portend a need for additional financial capital, whether by debt or by share issuance? Daniel Otto Yes. And after the most recent financing we just completed here, we're comfortable with the cash runway we have, getting into that latter half of the year where we plan to get to breakeven. As far as the receivable balance increasing, a large portion of that is a sizable contract asset, which is a result of some of the new customer agreements we've signed in the CMO business during the quarter. Andrew White Over what time period do you expect to collect the accounts receivable balance? Daniel Otto It's the same terms as the typical shipments. So generally, we collect when products delivered. . Andrew White Okay. Do I have time to ask a couple of more questions? . Daniel Otto Yes. Andrew White Okay. Great. On the warrants, the overhang, what has been the share issuance dilution from that? And what can we still expect over the course of the year via exercise or inducement? Daniel Otto Andy, current shares outstanding as of the filing date of the document, $11.3 million. That includes the almost 7 million shares we issued under the warrant inducement offering we completed a couple of weeks ago. Between the end of the quarter and now, we had another 1.7 million warrants that were exercised. As far as going forward, really I'd say our priorities still remain focused on P&L profitability, balance sheet strength. And as a function of those two coming into focus, we can continue to address the capitalization table of the warrants. But the first two priorities really are a focus areas. Andrew White Okay. Okay. So is it a fair comment to say that we're about halfway through the exercise inducement process for the warrants? . Daniel Otto Yes. We -- as part of the inducement offering we completed. We have another tranche that still has a period that can be exercised. That would be up to an additional $3.3 million of proceeds to the company and another 4 million or so approximately shares warrants that will be induced, that runs for a couple of months yet. Andrew White Okay. And last but not least, there have been some pretty good earnings results out from some competitors within the tobacco industry, [indiscernible] in a starting point. Wondering, are there any implications for 22nd Century growth? . Daniel Otto From their earnings reports? Andrew White The trends that are driving them, yes? Daniel Otto Yes. I would say I spoke to some of the trends in my prepared remarks. I think the upside for us or the place that we play would be really the advancement in the value play for us, which is a smoker-friendly and Pinnacle brands. And that's a migration from the result of the price increases that have been going on in the market. The other results at big tobacco is in the middle of there are products like [Zen] , things like [Panther], just nicotine pouches and what I'd say in the true combustible cigarette area, we have seen attrition from the Tier 1 brands down to Tier 4, and that's where we play. So that's -- and then, of course, we're waiting for not waiting. We're anticipating the launch of the partner of VLN in the market. Andrew White Okay. And I guess, last but not least, just to reiterate, within the CMO product line, have we seen the worst of it in 2024 past? And are we now on a growth trajectory cartons-wise, price-wise, revenue-wise? Daniel Otto Yes, that's correct. Operator This concludes our question-and-answer session. I would like to turn the conference back over to Larry Firestone for any closing remarks. Lawrence Firestone 21st Century is in its new business model. As I stated on the last earnings call, this is the start of a new company. We have our branded lineup and our standard CMO business backing it up. Our cost structure is in line, and we believe we have the cash on the balance sheet to carry us into breakeven. That assumes the choreography of state approvals and shipments into distribution happen according to plan. And our team is excited in driving 22nd Century to profitability and beyond. I'd personally like to take a minute to thank and appreciate our team for their hard work transitioning our company in a very short period of time with very limited resources. They've done an awesome job. We look forward to updating you with press releases along the way and again at next quarter's earnings release time frame. I hope you all have a great day. Thank you. Operator The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
