22nd Century Group, Inc · NASDAQ:XXII
22nd Century — Investor Presentation (October 2024)
20 slides from 22nd Century's investor presentation, October 2024
Slide 1: Investor Presentation October 2024
VLN VLN VLN VLN INVESTOR VLN VLN PRESENTATION VLN VLN OCTOBER 2024 VLN VLN VLN VLN VLN VLN
Slide 2: Safe Harbor & Forward-looking Statement
Safe Harbor & Forward-looking Statement Except for historical information, all of the statements, expectations, and assumptions contained in this presentation are forward-looking statements, including but not limited to our business outlook forward-looking statements typically contain terms such as
Slide 3: At A Glance
At A Glance ▪ NASDAQ – XXII – headquartered in Mocksville, NC ▪ Pure play tobacco company with a premier low nicotine tobacco brand ➢ VLN - focused on nicotine harm reduction ➢ The ONLY low nicotine cigarette ➢ The CHOICE to control ▪ NASCO private label contract manufacturing ▪ Targeting breakeven
Slide 4: Nicotine = Addiction
Nicotine = Addiction XXII MISSION: LEAD THE NICOTINE HARM REDUCTION MOVEMENT ▪ Our nicotine harm reduction mission started at xxii in 1998 – we are the pioneer ▪ $ billions are being spent on nicotine harm awareness campaigns and governance: ➢ TV/Radio commercials – Undo.org, CDC, American Heart Ass
Slide 5: VLN
VLN ® VL N® - TH E CH O ICE T O CO NT RO L 5
Slide 6: VLN Plan of Action
VLN® Plan of Action THE ONLY - LOW NICOTINE CIGARETTE WITH 95% LESS NICOTINE - FDA AUTHORIZED GOAL STRATEGY Create a separate Low Nicotine Create VLN flanker brands to join the Original Category – Health related products VLN® in the category: seen as a nicotine choice for you o Smoker Friendly VLN®
Slide 7: VLN Mission: Bring Options = Profit
VLN® MISSION: BRING OPTIONS = PROFIT UNIQUENESS OF VLN: PROVIDE TRADE-UP WITH ADDITIONAL MARGIN PREMIUM PREMIUM RANGER VLN® VLN® SFBL VLN® PINNACLE VLN® PREMIUM TIER SUPER PREMIUM PREMIUM TIER PREMIUM TIER TIER VL N® - TH E CH O ICE T O CO NT RO L 7
Slide 8: VLN - The Math
VLN® - The Math CUSTOMER FOR XXII: ▪ 1 pack of VLN® 95% less nicotine ▪ The original VLN® cartons needed to breakeven cigarettes = 1 standard cigarette for – 223,000 (2.9% of NASCO capacity) nicotine content o Current distribution 5,100 stores FOR RETAILER o Cartons/year needed per store – 44 ▪ Answ
Slide 9: VLN: The Gift from Federal Courts and Big Tobacco
VLN® THE GIFT FROM FEDERAL COURTS AND BIG TOBACCO This sign is required by every retailer that sells tobacco in the US The Problem The Choice Simply Put – The Problem – The Choice – VLN® VL N® - TH E CH O ICE T O CO NT RO L 9
Slide 10: VLN Distribution
VLN® Distribution DIVERSE LIST OF U.S., RE TAIL L OCATIONS CARRY VLN® PRODUCTS ACROS S BROAD GEOGRAPHY CURRENT DISTRIBUTION: ▪ More than 5,100 retail stores across 26 states, including three largest state markets of Texas, California and Florida ▪ Secured distribution with top national and regional
Slide 11: VLN Outlook
VLN® OUTLOOK ▪ Product Strategy – Build out the Category: ➢ Original VLN® ➢ VLN® Flanker Brands ➢ VLN® New Product Extensions ▪ Marketing Campaign – Consumer awareness – Emotional connection ▪ Expanded Distribution ▪ Increased Sell-through with activation ▪ Driving Growth in VLN® with Branded Produc
Slide 12: Contract Manufacturing
CONTRACT MANUFACTURING VL N® - TH E CH O ICE T O CO NT RO L 12
Slide 13: Contract Manufacturing Strategy
Contract Manufacturing Strategy LEADING PROVIDER OF MANUFACTURING SERVICES TO THE TOBACCO INDUST RY ▪ Services include: ➢ High Quality Private Label Production Services ➢ Turnkey or Consigned ➢ Leverage our Machine Capacity ➢ Supply Chain Management ➢ MSA Cigarette Producer ➢ Low-Cost advantage ▪ We
Slide 14: Research & Development
RESEARCH & DEVELOPMENT VL N® - TH E CH O ICE T O CO NT RO L 14
Slide 15: R&D Goal: Position company IP assets for ongoing commercial value
R&D GOAL: To ensure company IP assets are positioned to provide ongoing commercial value with continuing to develop further advancement in low nicotine tobacco products. ▪ Key Areas Of Focus: ➢ Non-Combustible Low Nicotine Product Extensions ➢ Partnership with NCSU on various low nicotine tobacco im
Slide 16: Financial
FINANCIAL VL N® - TH E CH O ICE T O CO NT RO L 16
Slide 17: TTM Quarterly P&L
TTM Quarterly P&L (in 000’s) Q2 2024 earnings reflect Continuing Operations Q3 2023 Q4 2023 Q1 2024 Q2 2024 improved trends in Revenue, net $ 7,871 $ $7,357 $ $6,469 $ $7,947 P&L including: Cost of goods sold 3,920 11,565 4,213 3,869 ▪ Shifting product mix to Excise taxes + fees on products 3,873 3,
Slide 18: Non-GAAP Financial Information
Non-GAAP Financial Information The presentation contains certain financial information that is not presented in conformity with accounting principles generally accepted in the united states of America (“US GAAP”), including earnings before interest, taxes, depreciation and amortization (EBITDA) and
Slide 19: Summary
Summary KEY INITIATIVES & THE ROAD AHEAD: ▪ VLN® strategy solidified and launched ▪ Positive cash flow from sales of current VLN inventory ▪ Increased gross profit through: ➢ VLN® volume and new placements ➢ Higher margin contract manufacturing volume and further DLOH absorption ▪ Significant reduct
Slide 20: Thank You
THANK YOU THANK THANK YOU YOU Q A THANK THANK YOU YOU THANK
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