22nd Century Group, Inc · NASDAQ:XXII
22nd Century — Investor Presentation (May 2024)
20 slides from 22nd Century's investor presentation, May 2024
Slide 1: Investor Presentation
Investor Presentation May 2024 XXII
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: 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 4: At a Glance
At a Glance § NASDAQ – XXII, headquartered in Mocksville, NC § Pure Play Tobacco Company with a focus on § Nicotine Harm Reduction – VLN® § Contract Manufacturing for other brands – Domestic and International § The Synchronicity between the two revenue streams § Financial Discipline and Turnaround §
Slide 5: VLN®
HELPS YOU SMOKE LESS w r | _E =, = q ey Z Q i | s H Su) (= FA 95% LESS NICOTINE ,| \ | Po Oy “ 4 | Nicotine is addictive t By | SShicotine does NOT inean Ky) I 4 3 Safer. All cigarettes can cause 3 ¥ o C) Sisease and death,
Slide 6: VLN® Strategy
VLN® Strategy We have been developing Reduced Nicotine Tobacco strains since 1998 VLN is the only FDA authorized MRTP combustible cigarette VLN-C is how the scientific community refers to the low nicotine content cigarette § Goal § Recognition for VLN® as a separate or sub-category – Health related
Slide 7: VLN®: Goal
VLN®: Goal Recognition for VLN® with new Parallels to category disruptors: branding and trade dress: § VLN® brand stands for something – Leads to healthier, § Liquid Death Water – Theme is death to plastic bottles less nicotine addictive smoking § White Claw – 1st seltzer in the market § Pop to the
Slide 8: VLN® - The Math
VLN® - The Math For the Customer: For XXII: § 1 pack of VLN® Cigarettes = 1 standard § The Original VLN® and New Blend cigarette for nicotine content § Cartons needed to breakeven – § The math is why it helps you smoke less 223,000 (2.9% of NASCO Capacity) § Current distribution 5,100 stores § Carto
Slide 9: VLN® Distribution
VLN® Distribution Diverse List of U.S., Retail Locations Carry VLN® Products Across Broad Geography § More than 5,000 retail stores across 26 states, including three largest state markets of Texas, California and Florida § Secured distribution with top national and regional retail distributors for t
Slide 10: VLN® - Outlook
VLN® - Outlook § Rebranding § Marketing Campaign – Consumer awareness § Expanded Distribution § Increased Sell-through § Driving Growth in VLN Lorem ipsum Dolor Art Company
Slide 11: The Regulatory and Legislative Environment Continues to Evolve and Change
The Regulatory and Legislative Environment Continues to Evolve and Change Federal and State Regulatory Opportunities: § Although promised, federal regulation around a menthol ban and a low nicotine mandate was retracted by President Biden § There is potential, in specific states, for action and we a
Slide 12: Contract Manufacturing
Contract Manufacturing
Slide 13: CMO and Operations Strategy
CMO and Operations Strategy Goal: Drive the Factory output to full capacity – VLN® + CMO § Agnostic to the end product § 35,000 cartons per day on one shift depending on mix § Running at Full Capacity will drop DLOH per carton precipitously § Current shift capacity can be grown by: § Additional shif
Slide 14: Research & Development
Research & Development
Slide 15: R&D Goal: To ensure company IP assets are positioned to provide ongoing commercial value
R&D Goal: To ensure company IP assets are positioned to provide ongoing commercial value where viable, along with continuing to develop further advancement in tobacco. § Key Areas Of Focus: § Partnership with NCSU on various low nicotine tobacco technologies § Tobacco disease resistance § Other toba
Slide 16: Financial
Financial
Slide 17: TTM Summary P&L (in 000’s) - 2023
TTM Summary P&L (in 000’s) - 2023 $000s Q1 Q2 Q3 Q4 YTD Revenues, net $ 8,927 $ 8,050 $ 7,871 $ 7,357 $ 32,204 Cost of goods sold 4,723 4,683 3,920 11,565 24,891 Excise taxes + fees on products 4,186 4,329 3,873 3,621 16,010 Gross (loss) profit 18 (962) 78 (7,829) (8,697) Total operating expenses 10
Slide 18: Strengthening the Balance Sheet
Strengthening the Balance Sheet Goals Capital Raise – April 2024 § Extend cash runway closer to profitable/cash positive operations § Added $4.2m in gross cash proceeds § Fund VLN® and CMO growth initiatives Debt Reduction – April 2024 Goals § Conversion feature for Senior Secured § Eliminate approx
Slide 19: Summary
Summary Key Initiatives & Successes: § VLN® Strategy solidified and started § Increased Gross Profit through: § VLN® volume and new placements § Higher margin CMO volume and further DLOH absorption § Price increases to negative margin customers or exit § Significant reduction in operating expenses §
Slide 20: Q&A Thank You
Thank You Q A Questions + Answers
22nd Century Group — Investor Presentation (May 2024) on 6ix