22nd Century Group Files 2023 Annual Report on Form 10-K

TL;DR

<b>22nd Century Group, Inc. filed its 2023 10-K, reporting $14.35M in revenue and a net income of $43.53M.</b>

AI Summary

22nd Century Group, Inc. (XXII) filed a Annual Report (10-K) with the SEC on March 28, 2024. 22nd Century Group, Inc. reported total assets of $207,110,000 and total debt of $12,856,000 for the fiscal year ended December 31, 2023. The company's net income was $43,525,862, with an Earnings Per Share (EPS) of $2.64 for the fiscal year 2023. Revenue for the fiscal year 2023 was $14,349,275, representing a growth of 2.84% compared to the previous year. Operating margin was 4.16% and gross margin was 1.81% for the fiscal year 2023. The company's debt-to-equity ratio stood at 0.48 for the fiscal year 2023.

Why It Matters

For investors and stakeholders tracking 22nd Century Group, Inc., this filing contains several important signals. The filing details the company's financial performance and strategic initiatives throughout 2023, including significant warrant and offering activities. Key financial metrics such as revenue, net income, and debt levels provide insight into the company's operational health and financial stability.

Risk Assessment

Risk Level: medium — 22nd Century Group, Inc. shows moderate risk based on this filing. The company's financial performance, including revenue growth and profitability, is subject to market acceptance of its products and competitive pressures within the tobacco and potentially other industries it operates in.

Analyst Insight

Monitor the company's progress in commercializing its products and managing its debt levels in the upcoming fiscal year.

Key Numbers

• 20711000 — Total Assets (As of December 31, 2023)
• 12856000 — Total Debt (As of December 31, 2023)
• 43525862 — Net Income (Fiscal Year 2023)
• 2.64 — EPS (Fiscal Year 2023)
• 14349275 — Revenue (Fiscal Year 2023)
• 2.84 — Revenue Growth (Fiscal Year 2023 vs. prior year)
• 4.16 — Operating Margin (Fiscal Year 2023)
• 1.81 — Gross Margin (Fiscal Year 2023)

Key Players & Entities

• 22nd Century Group, Inc. (company) — Filer
• Williamsville, NY (location) — Business Address
• NV (location) — State of Incorporation
• Touchstone Mining LTD (company) — Former Company Name
• Omnia Warrants (other) — Warrant Type
• Jgb Warrants (other) — Warrant Type
• Gvb Biopharma (company) — Acquired Entity/Segment
• Keygene (company) — Dispute Context

FAQ

Risk Factors

• Liquidity and Capital Resources [medium — financial]: The company's ability to continue as a going concern is dependent on its ability to generate sufficient cash flows from operations and/or secure additional financing.
• Competition [medium — market]: The company faces intense competition in the tobacco and potentially other product markets, which could adversely affect its market share and profitability.
• Government Regulation [high — regulatory]: Changes in laws and regulations related to tobacco and nicotine products could significantly impact the company's business, financial condition, and results of operations.

Key Financial Figures

• $0.00001 — ange on Which Registered Common Stock, $0.00001 par value XXII NASDAQ Capital Marke
• $300 billion — annually and an economic toll of nearly $300 billion in lost productivity and direct health
• $612 billion — ail sales reached an estimated 84.1% or $612 billion of the $853 billion market for products
• $853 billion — estimated 84.1% or $612 billion of the $853 billion market for products that contain nicoti

Filing Documents

• xxii-20231231x10k.htm (10-K) — 3058KB
• xxii-20231231xex4d1.htm (EX-4.1) — 5KB
• xxii-20231231xex19d1.htm (EX-19.1) — 36KB
• xxii-20231231xex21d1.htm (EX-21.1) — 37KB
• xxii-20231231xex23d1.htm (EX-23.1) — 4KB
• xxii-20231231xex31d1.htm (EX-31.1) — 10KB
• xxii-20231231xex31d2.htm (EX-31.2) — 10KB
• xxii-20231231xex32d1.htm (EX-32.1) — 7KB
• xxii-20231231xex97d1.htm (EX-97.1) — 30KB
• 0001558370-24-004163.txt (&nbsp;) — 15836KB
• xxii-20231231.xsd (EX-101.SCH) — 115KB
• xxii-20231231_cal.xml (EX-101.CAL) — 139KB
• xxii-20231231_def.xml (EX-101.DEF) — 507KB
• xxii-20231231_lab.xml (EX-101.LAB) — 893KB
• xxii-20231231_pre.xml (EX-101.PRE) — 819KB
• xxii-20231231x10k_htm.xml (XML) — 2947KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 17 Item 1B. Unresolved Staff Comments 32 Item 1C. Cybersecurity 33 Item 2.

Properties

Properties 34 Item 3.

Legal Proceedings

Legal Proceedings 34 Item 4. Mine Safety Disclosures 34 PART II 34 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 34 Item 6. [Reserved] 36 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 50 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 50 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 50 Item 9A.

Controls and Procedures

Controls and Procedures 51 Item 9B. Other Information 51 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 51 PART III 52 Item 10. Directors, Executive Officers and Corporate Governance 52 Item 11.

Executive Compensation

Executive Compensation 52 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 52 Item 13. Certain Relationships and Related Transactions and Director Independence 52 Item 14. Principal Accountant Fees and Services 52 PART IV 53 Item 15. Exhibits and Financial Statement Schedules 53 Item 16 Form 10-K Summary 57

SIGNATURES

SIGNATURES 58 2 Table of Contents Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary This Annual Report on Form 10-K contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Annual Report on Form 10-K are forward-looking statements. You can identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned," "predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including the following summary of risks related to our business: We have had a history of losses and negative cash flows, and we may be unable to achieve and sustain profitability and positive cash flows from operations. Our ability to continue as a going concern. Our ability to regain compliance with the NASDAQ listing requirements. Our competitors generally have, and any future competitors may have, greater financial resources and name recognition than we do, and they may therefore develop products or other technologies similar or superio

Business

Item 1. Business. Overview 22nd Century Group, Inc. is a tobacco products company with sales and distribution of our own proprietary new reduced nicotine tobacco products authorized as Modified Risk Tobacco Products by the FDA. Additionally, we provide contract manufacturing services for conventional combustible tobacco products for third-party brands. Our mission in tobacco is dedicated to mitigating the harms of smoking through our proprietary reduced nicotine content ("RNC") tobacco plants and our Very Low Nicotine, VLN combustible cigarette products. In December 2021, we secured the first and only authorization from the FDA to market a combustible cigarette, our brand VLN as a Modified Risk Tobacco Product ("MRTP") using certain reduced nicotine exposure claims. In April 2022, the inaugural launch of our proprietary VLN cigarettes commenced through a pilot program in select Circle K stores in and around Chicago, Illinois. Building on the success of the pilot, we initiated a phased rollout strategy in 2023, progressing state by state and region by region to a store footprint spanning more than 5,000 stores in 26 states. Our VLN tobacco products are supported by a substantial intellectual property portfolio comprising issued patents and patent applications related to tobacco plants, and in particular our reduced nicotine tobacco plants. In addition to continued focus on VLN , we renewed our focus on utilizing our tobacco assets to attract additional tobacco business to help fund the growth of VLN . In addition to existing business relationships with multiple tobacco products companies, we will continue to expand the number of brands in our contract manufacturing operations ("CMO") portfolio in 2024. GVB Divestiture On December 22, 2023, we completed the sale of substantially all of the GVB hemp/cannabis business (referred to as the "GVB Divestiture"). As a result, we have classified the results of operations of the hemp/cannabis segment and disposal grou

View Full Filing

View this 10-K filing on SEC EDGAR