22nd Century Group, Inc · NASDAQ:XXII
22nd Century — FY2021 Earnings Presentation
24 slides from 22nd Century's earnings presentation, Mar 1, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
FOURTH QUARTER AND FULL YEAR 2021 EARNINGS PRESENTATION March 1 , 2022 XXII
Slide 2: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD - LOOKING STATEMENTS This presentation contains forward - looking statements concerning our business operations, and financial performance and conditions, as well as our plans, objectives, and expectations for our business operations and financial performance and condition
Slide 3: VLN Helps You Smoke Less
Financial 3 VLN® HELPS YOU SMOKE LESS *Trade dress subject to change. Launching VLN® in the U.S. pilot market and select international markets ▪ Secured VLN® MTRP authorization December 23 , 2021 ▪ FDA mandated additional data - driven claim ‘ Helps You Smoke Less ’ on every package ▪ Pilot launch i
Slide 4: Tobacco
Tobacco Hemp/Cannabis Hops Financials
Slide 5: The First and Only Combustible Cigarette MRTP
THE FIRST AND ONL Y COMBUSTIBLE CIGARETTE MRTP 5 ▪ FDA authorized VLN® King and VLN® Menthol King MRTPs on December 23, 2021 ▪ FDA added the data - driven claim “Helps You Smoke Less” and authorized all requested claims ▪ Rather than just shifting smokers to another highly addictive, nicotine - lade
Slide 6: Readying for U.S. Pilot Market Launch
READYING FOR U.S. PILOT MARKET LAUNCH Pilot launch leading to national rollout with current and additional retail partners ▪ 62,000 sq. ft. manufacturing facility in NC producing and shipping VLN® cigarettes; ready to increase production ▪ Circle K is pilot retail partner, which has more than 7,000
Slide 7: VLN Pilot Market: Chicago
22 ND CENTURY'S VLN® PILOT WILL EMPHASIZE TRIAL, REPEAT PURCHASE, AND ADVOCACY BY ADULT SMOKERS. PILOT MARKET: CHICAGO Pilot launch leading to national rollout with current and additional retail partners 7 ▪ 3rd largest U.S. City ▪ Illinois is the 2nd most expensive cigarette market in the U.S. ▪ Di
Slide 8: Pilot Partner: Circle K
READY TO ADVANCE TO FULL NATIONAL ROLL - OUT AFTER PILOT PROGRAM PILOT PARTNER: CIRCLE K Pilot launch leading to national rollout with current and additional retail partners 8 ▪ 2 nd largest national C - store chain, 7,000 + stores ▪ 150 + identified Chicago metro pilot stores currently sell in exce
Slide 9: Global Markets: Launch in South Korea
9 ▪ First shipment to South Korea by end of March ▪ High smoking rate – 1 in 3 adult men are smokers ▪ Large alternative cigarette market channels ▪ Strong government support for its “tobacco endgame” plan ▪ Launch partner in place ▪ Targeting additional key markets in Asia and Europe where regulati
Slide 10: Supporting a Menthol Ban & Nicotine Cap
SUPPORTING A MENTHOL BAN & NICOTINE CAP ▪ FDA continues to advance its menthol and reduced nicotine content mandates. The Agency has sent their proposed rule to prohibit menthol cigarettes to the Office of Management and Budget. ▪ By banning menthol and reducing nicotine in all cigarettes, the scien
Slide 11: Hemp/Cannabis
Tobacco Hemp/Cannabis Hops Financials
Slide 12: Moving to Revenue in Hemp/Cannabis
First Hamp/Cannabis Revenue in Q4 2021 ▪ First biomass sales in Q4 2021 ▪ Three - party IP agreement for Anandia biosynthetic IP ▪ Follow - on distillate/isolate sales Q1 2022 ▪ USDA Organic Certification under 7 CFR Part 205 2022+ Commercial Accelerant Opportunities ▪ Readying next - generation pla
Slide 13: Breakthrough in Functional Transformation
BREAKTHROUGH IN FUNCTIONAL TRANSFORMATION 13 ▪ Breakthrough in proprietary plant transformation leading to clear protein expression by the introduced genes ▪ Allows 22 nd Century Group to target specific hemp/cannabis biosynthesis pathways and engineer the modification of cannabinoids ▪ Typically on
Slide 14: Hops
Tobacco Hemp/Cannabis Hops Financials
Slide 15: 22nd Century's Hops Value Proposition
Introduce new agronomic traits to improve disease/pest resistance and plant architecture to increase crop yields in leading hop strains that are already well - accepted by the brewing industry. Increase hops content of hops active molecules that drive the beer industry, such as alpha and beta acids,
Slide 16: Financials
Tobacco Hemp/Cannabis Hops Financials
Slide 17: Fourth Quarter 2021 Financial Highlights
FOURTH QUARTER 2021 FINANCIAL HIGHLIGHTS Net Sales Gross Profit Gross Profit Margin Operating Loss Cash and Cash Equivalents 4Q 2021 $8.0M $387K 4.9 % $(9.0)M $48.7M 4Q 2020 $7.3M $588K 8.1% $(6.2)M $22.3M 17 CMO activities fund the cost of facilities needed to manufacture VLN® reduced nicotine toba
Slide 18: Full Year 2021 Financial Highlights
FULL YEAR 2021 FINANCIAL HIGHLIGHTS Net Sales Gross Profit Gross Profit Margin Operating Loss Cash and Cash Equivalents FY 2021 $30.9M $2.1M 6.7 % $(28.4)M $48.7M FY 2020 $28.1M $1.4M 5.1% $(19.2)M $22.3M 18 CMO activities fund the cost of facilities needed to manufacture VLN® reduced nicotine tobac
Slide 19: Full Year 2021 Financial Highlights: Balance Sheet
FULL YEAR 2021 FINANCIAL HIGHLIGHTS Quarter Ended Dollar amounts in millions December 31, 2021 December 31, 2020 Cash and cash equivalents 1 $ 48.7 $ 22.3 Total assets 2 $ 76.0 $ 51.7 Total liabilities 3 $ 9.9 $ 7.6 Total shareholders' equity 4 $ 66.1 $ 44.1 19 Balance sheet aligned to partner - foc
Slide 20: 2022 Priorities & Areas of Focus
2022 PRIORITIES & AREAS OF FOCUS 20 Tobacco Franchise Hemp/Cannabis & Hops Franchises Financial Launching VLN® in U.S. and International Markets ▪ Launching VLN® Chicago pilot with Circle K ▪ Engaging with multiple retail trade partners to support national launch capabilities post - pilot ▪ First VL
Slide 21: Q&A
Q&A 1,300 Americans die from cigarette smoking every day. Smoking remains the leading cause of preventable death. In the U.S., nearly 3 out of 4 smokers want to quit, but fewer than 1 in 10 succeed. Reducing the nicotine content of cigarettes is a comerstone of the FDA's Comprehensive Plan to addres
Slide 22: Contact Information
CONTACT INFORMATION INVESTOR RELATIONS & MEDIA CONTACT Mei Kuo 22nd Century Group, Inc. Director, Communications & Investor Relations T: 716 - 300 - 1221 mkuo@xxiicentury.com Matt Kreps Darrow Associates Investor Relations T: 214 - 597 - 8200 mkreps@darrowir.com
Slide 23: Hemp/Cannabis Applications and Targeted Benefits
Application Targeted Benefit Zero/Undetectable THC and High CBD Zero/Undetectable THC and High CBG Crop loss due to hemp going “hot” (exceeding 0.3% THC content) is a common industry issue. Zero THC helps growers stay under the allowed threshold, reduce crop losses, and reduce processing cost while
Slide 24: Hops Applications and Targeted Benefits
Application Targeted Benefit Agronomic traits/powdery mildew, downey mildew, fusarium, and wireworm (disease resistance/pest resistance) Crop loss can be as much as 30% of the yield depending on region and year Architecture traits/ratio cone/biomass and lupulin density Success can generate 20 - 60%