22nd Century Group, Inc.

To the Shareholders and the Board of Directors of 22nd Century Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of 22 nd Century Group, Inc. and subsidiaries (the “Company”) as of December 31, 2025, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity (deficit) and mezzanine equity and cash flows for year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Other Matter

The financial statements of the Company as of and for the year ended December 31, 2024 were audited by Freed Maxick P.C., who joined WithumSmith+Brown, PC on August 1, 2025, and rendered their opinion on such statements on March 20, 2025.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue and profit in its tobacco business. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accounting and Valuation for the Modifications of the August 2025 Series A Convertible Preferred Stock Offering

Critical Audit Matter Description

As discussed in Note 9 of the financial statements, during the year ended December 31, 2025, the Company entered a securities purchase agreement with investors to sell Series A Convertible Preferred Stock and warrants. Subsequent to the initial sale, the terms of both the Series A Convertible Preferred Stock and warrants were amended. As a result of the amendments, the Company determined that the fair value of the Series A Convertible Preferred Stock and warrants had increased and recorded a deemed dividend of approximately $4.7 million. We identified the evaluation of the Company’s accounting and valuation for modifications of the Series A Convertible Preferred Stock and warrants as a critical audit matter due to the complexity of the calculations required in determining the proper accounting treatment and fair value of the Series A Convertible Preferred Stock and warrants. This led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s assumptions and calculations. Additionally, auditing these elements required the involvement of professionals with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the critical audit matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed included: (i) obtaining and reading relevant amendment agreements for the Series A Convertible Preferred Stock and warrants, (ii) obtaining an understanding and evaluating of the design of controls over the financial reporting and equity transaction cycle, (iii) assessing management’s conclusions of the modifications under the relevant guidance, (iii) testing the accuracy and completeness of the inputs to the external valuation analysis to evaluate whether the conclusions reached were reasonable and consistent with our understanding, (iv) utilizing the knowledge, experience, and expertise of our internal valuation specialists to assess the reasonableness of the methodologies employed to value the fair value of the Series A Preferred Stock and warrants at the amendment date, and (v) assessing the completeness and accuracy of the financial statement disclosures.

/s/WithumSmith+Brown, PC

We have served as the Company’s auditor since 2011.

Buffalo, New York

March 26, 2026

PCAOB ID Number 100

To the Shareholders and the Board of Directors of 22nd Century Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of 22nd Century Group, Inc. and subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of operations, statements of comprehensive loss, changes in shareholders' equity and cash flows for the year ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue and profit in its tobacco business. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Debt related accounting and classification

As discussed in Note 12 of the financial statements, during the year ended December 31, 2024, the Company amended their debt via a series of letter agreements/amendments. For each agreement/amendment, the Company was required to evaluate troubled debt restructuring applicability and debt modification versus extinguishment analysis. None of these agreements/agreements met the criteria to qualify as an extinguishment. We identified the accounting for the various agreements/amendments as a critical audit matter. Auditing the accounting for these items was especially challenging due to the inherent complexity of the agreements/amendments. Auditing these elements required an increased level of audit effort, including the involvement of professionals with specialized skill and knowledge.

Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedure we performed include: Inspecting the underlying agreements/amendments and ensuring appropriate application of the relevant accounting literature to the terms of the amended Debentures.

Subordinated note settlement accounting, classification, and valuation

As discussed in Note 12 of the financial statements, during the year ended December 31, 2024, the Company entered into a General Release and Settlement Agreement with Omnia Capital LP (Omnia). This agreement settled and extinguished all outstanding debt and interest owed to Omnia, via their subordinated note, as well as the put provision on the 2023 Omnia warrants. In return, Omnia received a combination of shares, pre-funded warrants, warrants, and cash. The warrants were recorded at fair value on the date of the settlement and are subsequently adjusted to fair value at the end of each reporting period.

We identified the accounting for the settlement as well as the valuations related to the warrants as a critical audit matter. Auditing the accounting for these items was especially challenging due to the inherent complexity of the agreements and the related valuation models. Auditing these elements required an increased level of audit effort, including the involvement of professionals with specialized skill and knowledge.

Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed include: Inspecting the underlying agreements and ensuring appropriate application of the relevant accounting literature to the terms of the settlement; evaluating the appropriateness of the fair value of the warrants; and utilizing personnel with specialized skill and knowledge in valuation to assist in assessing the fair value determined.

Warrants issued with equity raises and related deemed dividend valuation

As discussed in Note 9 of the financial statements, during the year ended December 31, 2024, the Company entered into several warrant and common stock agreements with investors. Due to anti-dilution and down round provisions with their existing warrants, the agreements triggered these provisions multiple times. We identified the valuation for these deemed dividends to be a critical audit matter. Auditing these elements required an increased level of audit effort, including the involvement of professionals with specialized skill and knowledge.

Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed include: Inspecting the underlying agreements; evaluating the appropriateness of the fair value calculations of the warrants; and utilizing personnel with specialized skill and knowledge in valuation to assist in assessing the fair value determined.

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/s/ Freed Maxick P.C. (F/K/A Freed Maxick CPAs, P.C.)​​

We have served as the Company’s auditor since 2011.​​

Buffalo, New York

March 20, 2025