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Tag: 22nd Century Group

  • 22nd Century Net Loss Widens

    22nd Century Net Loss Widens

    Photo: crizzystudio

    22nd Century Group reported net revenues of $5.9 million for the quarter that ended Sept. 30, 2024, down from $7.9 in last year’s comparable quarter. Net loss increased to $3.6 million, compared with $2.2 million in the 2023 quarter.

    “Having joined this company just under a year ago, we have transitioned from a purely financial focus to the next phase of 22nd Century Group’s turnaround plans, which includes deploying our extensive asset base of manufacturing, brand, customer relationship and distribution resources to build a sustainable and self-funding growth business,” said Chairman and CEO Larry Firestone in a statement.  

    “While the third quarter results reflect the operational adjustments that I spoke to on our last report intended to address underperforming results in the filtered cigar business, we remain focused on our goal of EBITDA breakeven results in the first quarter of 2025. We expect that the changes in our core CMO business will drive revenue growth going forward at appropriate margin levels.

    “I am also excited to announce that we are now moving ahead on our plans to launch additional products, including VLN SKUs within key customer brand families, as part of our drive to expand the distribution of reduced nicotine content cigarettes manufactured by 22nd Century.

    “Adding VLN within other brand families is a straightforward way to reduce our time to market, increase consumer awareness and expand the VLN footprint. This is really the beginning for 22nd Century as the synchronicity between the CMO business and VLN is progressing as planned and is the foundation for our growth plans for 2025 and beyond.”

  • John Miller Resigns from 22nd Century

    John Miller Resigns from 22nd Century

    John Miller (Photo: Swisher)

    John Miller has resigned as 22nd Century Group’s president of tobacco, effective Aug. 2, 2024.

    “I want to thank John for the pivotal role he played in the launch of VLN, leveraging his decades of industry experience to help us achieve national-scale distribution and establishing a retail presence in more than 5,000 stores across 26 states,” said Larry Firestone, chairman and CEO, in a statement.

    “He also played a key role in expanding our CMO business, including our exciting Pinnacle launch as a store brand for one of the top convenience store chains in the country. We are now well positioned to continue building on this incredible footprint as we work to achieve our company objectives.”

  • 22nd Century Eliminates $2.3 million of Debt

    22nd Century Eliminates $2.3 million of Debt

    22nd Century Group has entered into a binding letter of agreement to eliminate an additional $2.3 million in outstanding debt with JGB Capital.

    Under the terms of the agreement, the company and JGB Capital will exchange an aggregate of $2.3 million in principal, fees and expenses owed to JGB Capital for consideration of approximately 1.375 million shares of the company’s common stock and prefunded warrants. Additionally, the company will defer monthly amortization payments for an additional two months, resulting in no required further principal repayment until August 2024.

    “This agreement with JGB is another significant step in restoring strength to our balance sheet as we work toward becoming debt-free,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

    “This transaction also preserves our cash resources for commercial use as we work to become cash flow positive by the first quarter of 2025. We have made substantial progress on our commercial programs, including refining our revenue mix, implementing a lean operating cost profile and positioning the company to win new contracts, including the new CMO and distribution agreements announced recently, which are already advancing our sales in the second quarter.”

  • 22nd Century Eliminates Debt

    22nd Century Eliminates Debt

    Photo: Photo: Jade

    22nd Century Group has entered into a binding letter of agreement to redeem $5.2 million in outstanding principal and interest associated with the Omnia subordinated note and outstanding warrants.

    The agreement will exchange consideration of approximately $248,000 in cash, 1.15 million shares of common stock priced at $2.14 per share and 1.15 million shares of prefunded warrants priced at $2.14 per share as consideration of the debt. Additionally, the company will issue to Omnia 460,000 warrants with a term of five years and an exercise price of $2.14 per share.

    “Paying Omnia at maturity with equity greatly improves our balance sheet, preserves cash for growing our operating business and significantly increases shareholder equity,” said Chairman and CEO Larry Firestone in a statement. “This transaction also reduces our monthly interest expense and adds to the progress made on increasing sales and margin while reducing operating costs. This is a key milestone toward reaching our goal of being cash positive in the first quarter of 2025.”

  • Sullivan and Mish Resign From 22nd Century Group’s Board

    Sullivan and Mish Resign From 22nd Century Group’s Board

    Photo: Charnchai saeheng

    Nora Sullivan and James Mish have resigned as a directors of 22nd Century Group. In a press note, the company said it does not intend to fill the vacated seats and will instead reduce the board to four seats as part of its focus on corporate cost efficiency.

    “We thank Nora and Jim for their service to the company over the years,” said 22nd Century Group Chairman and CEO Larry Firestone.

    “We plan to reduce the size of the board in 2024, in addition to the previously announced reduction in board compensation, consistent with our efforts to achieve breakeven operations. In total, these changes to our board are expected to save more than $1 million annually.”

  • 22nd Century Signs New Manufacturing Deal

    22nd Century Signs New Manufacturing Deal

    Photo: thodonal

    22nd Century Group has expanded its Pinnacle private label brand to add distribution of cigarillo products to its existing Pinnacle cigarette products. Pinnacle products are currently sold as a private label brand in a leading U.S. gas station convenience store chain comprising approximately 1,700 stores in 26 states.

    According to 22nd Century Group, Pinnacle cigarette product re-order volumes are now achieving sustained sequential growth as the private label contract enters its second year with this top retail customer, which is itself seeing notable growth in its tobacco sales and gaining market share by offering value to its customers.

    “We are excited to expand our Pinnacle brand with new cigarillo products based on the successful sales growth of these private label cigarette products sold at one of the top U.S. c-store chains,” said 22nd Century Group Chairman and CEO Larry Firestone in a statement.

    “Agreements like this help us to further enhance revenue and profitability in our business as we work toward breakeven operations by the first quarter 2025.”

    The cigarillo expansion agreement is in addition to a recently announced new CMO customer contract that is expected to increase the 22nd Century Group’s contract manufacturing organization production volumes by at least 20 percent, with shipments commencing from the second quarter.

  • 22nd Century to Eliminate Senior Debt

    22nd Century to Eliminate Senior Debt

    Photo: Photo: Jade

    The step is part of an effort to put the company back on a path to growth, says CEO Firestone.

    22nd Century Group has entered into an agreement with its senior secured lender to eliminate all of its senior secured debt through potential debt for equity exchanges. Additionally, the company has entered into separate definitive agreements for the purchase of common stock and warrants.

    The company also announced the appointment of Daniel Otto as chief financial officer (CFO) and Jonathan Staffeldt as general counsel. Both are currently employed at 22nd Century Group, Otto as corporate controller and Staffeldt as vice president and deputy general counsel. R. Hugh Kinsman, the company’s current CFO, will leave the company on June 1, 2024.

    “We are putting 22nd Century back on a path to growth, and eliminating our debt is another key step in cutting our external operating cash needs,” said 22nd Century chairman and CEO Larry Firestone in a statement.

    “Combined with a new contract manufacturing customer announced last week that is expected to increase our CMO volumes by at least 20 percent and our plans to build a new tobacco harm reduction category around our FDA-authorized VLN products, we intend to become cash positive by the first quarter of 2025.

    “Dan and Jonathan have been key contributors to these turnaround efforts at 22nd Century, helping us to exit the hemp/cannabis business and significantly reduce our quarterly cash use as reported in our year-end results,” Firestone added. “I also want to thank Hugh for his hard work on behalf of 22nd Century, and in particular over the past several months as we worked to transform our financial footprint.”

  • 22nd Signs Contract Manufacturing Deal

    22nd Signs Contract Manufacturing Deal

    Photo: www.akolosov.art

    22nd Century Group has signed a significant new contract manufacturing agreement for the production of branded conventional cigarette products. The contract, which will commence revenue generation in the second quarter of 2024, is expected to increase carton production volumes at 22nd Century’s manufacturing facility by more than 20 percent when fully implemented.

    “We are excited to announce this new contract, the first result of our efforts to profitably grow our contract manufacturing business in North Carolina while also working to build our VLN franchise through the development of a new category focused on tobacco harm reduction,” said 22nd Century Chairman and CEO Larry Firestone in a statement.

    In line with the operating targets outlined on our most recent results call, this agreement helps us to scale revenue, improve gross margin and achieve our goal of breakeven operations by the first quarter 2025.”

  • 22nd Century Reports Quarterly Results

    22nd Century Reports Quarterly Results

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    22nd Century Group reported net revenues of $7.4 million for the quarter that ended Dec. 21, 2023, down from net revenues of $10 million in the comparable 2022 quarter. Gross loss for the fourth quarter was $7.8 million compared with a gross loss of $100,000 in the prior-year period. The loss included a one-time charge of $7.9 million for certain inventory write-down adjustments.

    During the quarter, 22nd Century exited its hemp/cannabis operations to fully focus on tobacco harm reduction and contract manufacturing activities. The company substantially reduced operating costs through efficiency initiatives and the hemp/cannabis business sale. It also began new initiatives to increase sales, improve gross margin and increase operating profit in 2024. Moreover, the company started developing new customer engagement strategies to drive additional sales growth for its VLN low-nicotine cigarettes, which have been authorized by the U.S. Food and Drug Administration.

    “Our turnaround is progressing rapidly after restructuring a significant portion of the business over the last 120 days as part of our mandate to produce stronger future financial results,” said 22nd Century chairman and CEO Larry Firestone in a statement. “Most importantly, cash use has declined rapidly, from a peak run rate of approximately $15 million a quarter last year to less than $4 million projected in the first quarter of 2024, with continued sequential improvement expected in each quarter throughout 2024 as we move further from prior-period cash obligations.”

    Firestone said the company now has two primary areas of focus that both directly pertain to its tobacco market assets. “In the short-term, we will evaluate and profitably grow our contract manufacturing business to cover our operating expenses and mission-critical initiatives around 22nd Century’s very low-nicotine content cigarette technology,” he said. “We will also invest in and grow the VLN brand through sales, customer awareness and capitalizing on a positive regulatory and social environment. With success in these efforts, we believe that 22nd Century can break even by the first quarter 2025.”

  • 22nd Century Slashes Board Compensation

    22nd Century Slashes Board Compensation

    Image: Garry L.

    22nd Century Group today announced a reduction in board compensation expenses expected to save more than $1 million in annual cost for 2024. In addition to the reduced cash compensation structure, the board has also waived any cash compensation due to non-employee directors for the fourth quarter of 2023 and the first quarter of 2024 and voted to forgo any equity compensation grants for directors in 2024.

    “We continue to build on our progress over the past two months as we rapidly turn 22nd Century into a lean operating tobacco business focused on efficiency and value in everything we do,” said 22nd Century Chairman and CEO Larry Firestone in a statement. “These latest changes not only reduce the cash and total compensation cost related to our board, they align the board with our operating philosophy as we seek to become a self-sustaining business through a combination of sales growth, margin improvement and cost reduction.”

    Under the revised compensation structure, adopted with immediate effect, annual independent director compensation will decline from $75,000 to $20,000, audit chair compensation from $20,000 to $10,000, and compensation and nominating & governance chair compensation from $20,000 to $5,000. Compensation for independent directors serving on these committees will be reduced from $10,000 per year to $5,000 per year, and independent board chair compensation, which was previously $50,000 per year, will be replaced with a lead director fee of $20,000 annually. Non-independent members of the board do not receive additional cash compensation for their board service.