0001104659-26-034814
SEC filing22nd Century Group, Inc. reported FY 2025 net revenues of $17.6M, a 27.9% decrease from $24.4M in FY 2024. The company recorded a gross loss of $3.1M (17.8% of revenues) compared to a $2.4M gross loss (9.8% of revenues) in the prior year. Operating loss from continuing operations was $11.6M, an improvement from $14.0M in FY 2024. Net loss from continuing operations was $13.1M, with a basic loss per share of $71.26. The company ended the year with $7.1M in cash and cash equivalents and total assets of $27.0M. Key developments include the FDA's January 2025 proposed rule mandating reduced nicotine content in combustible cigarettes, which positions the company's VLN® cigarettes as the only FDA-authorized product meeting the proposed standard. The company also strengthened its balance sheet through equity offerings and debt reduction.
22nd Century Group reported FY 2025 net revenues of $17.6M, representing a 27.9% decrease from $24.4M in FY 2024. The company recorded a gross loss of $3.1M (17.8% of revenues) compared to a $2.4M gross loss (9.8% of revenues) in the prior year. Operating loss from continuing operations improved to $11.6M from $14.0M in FY 2024, representing a 17.1% improvement. Net loss from continuing operations was $13.1M, a 15.3% improvement from $15.5M in the prior year. Basic loss per share from continuing operations was $71.26 compared to $27,812.56 in FY 2024. The company ended the year with $7.1M in cash and cash equivalents, up from $4.4M at the end of FY 2024.
Revenue declined across all product categories in FY 2025. Contract manufacturing cigarette revenue decreased to $12.9M from $14.2M in FY 2024, with volume increasing to 1,525 cartons from 644 cartons. The revenue decline was attributed to pricing arrangements recorded as consideration payable to customers and the absence of a one-time Spectrum® research cigarette order that provided $889K benefit in 2024. Filtered cigar revenue decreased significantly to $4.1M from $9.4M, reflecting lower volumes as the company implemented repricing of customer contracts and shifted product mix toward higher margin branded cigarettes. Other tobacco products revenue decreased to $0.4M from $0.8M, though this category included new moist snuff sales of $387K. VLN® cigarette revenue was $138K, representing initial stocking orders offset by return accruals.
The gross loss margin deteriorated to 17.8% in FY 2025 from 9.8% in FY 2024, primarily driven by a shift in product mix toward cigarettes, which carry higher excise taxes including amounts payable under the Master Settlement Agreement. Filtered cigars have no comparable excise tax. Operating expenses decreased 27.0% to $8.4M from $11.6M in FY 2024, with sales, general and administrative expenses decreasing 26.2% to $7.6M and research and development expenses decreasing 39.3% to $0.7M. The improvement in operating loss was driven by reduced operating expenses despite the wider gross loss.
Net cash used in operating activities was $7.7M in FY 2025, an improvement from $14.3M in FY 2024. Net cash used in investing activities was $0.5M, primarily for acquisitions of patents, trademarks, and property. Net cash provided by financing activities was $11.0M, driven by net proceeds from warrant exercises ($5.1M), Series A convertible preferred stock ($9.9M), and common stock issuances ($16.1M), offset by debt payments. Total assets were $27.0M at year-end, with current assets of $17.6M and total liabilities of $8.5M. Working capital from continuing operations improved to $10.4M from $1.8M in the prior year.
The company faces substantial doubt about its ability to continue as a going concern, with management evaluating strategies to reduce expenses and pursue financing through securities issuance, asset sales, and strategic partnerships. The FDA's January 2025 proposed rule mandating reduced nicotine content in all combustible cigarette products represents a potential opportunity, as the company's VLN® cigarettes are the only FDA-authorized combustible product meeting the proposed standard. The company reapplied to the FDA in 2025 to extend its exposure modification order beyond December 2026. Key risk factors include history of losses, competition from larger tobacco and pharmaceutical companies, regulatory uncertainties, and dependence on FDA authorizations for product commercialization.