22nd Century Group, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
XXII$1.55-19.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001104659-25-105922
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001104659-26-056615
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 52 previous paragraphs and 53 current paragraphs.
28 unchanged; 13 reworded; 10 added; 10 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 29 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
All figures reported below reflect continuing operations, excluding discontinued operations related to the sale and exit of the Company’s hemp/cannabis business in late 2023, except as noted.
Current report
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Current report
Gross loss for the three-month period ended March 31, 2026 remained consistent as compared to the prior year comparable period, benefitting from manufacturing overhead cost savings initiatives implemented by management in 2025, offset by decreased volume as compared to the prior year comparable period.
Current report
(e) Increases in other expenses for the three months ended March 31, 2026, compared to the prior year period were due to increased public company expenses of $124 mainly related to the special shareholder meeting held on February 20, 2026, $36 of facilities expenses due to the movement of inventory into a new storage facility, $42 of other expenses primarily related to state filing fees, and $14 for travel and entertainment expenses. These increases were partially offset by a decrease in technology expenses of $49.
Current report
We entered into a sales agreement (the “Sales Agreement”) with Needham & Company, LLC (the “Sales Agent”) which permits us to sell up to $25,000 of our common stock from time to time at prevailing market prices, which program was reduced to a maximum of $1,840 on April 10, 2026. During the three months ended March 31, 2026, the Company sold 44,381 shares of common stock under the ATM Program for gross proceeds of $200 at a weighted average price of $4.51. The Company paid fees to the Sales Agent in the amount of $6.
Current report
March 2026 Series B Convertible Preferred Stock Offering
Current report
On March 20, 2026, we and certain investors entered into a securities purchase agreement with respect to the offer and sale of $20,000 of shares of Series B Convertible Preferred Stock, stated value $1,000 per share (the “Series B Preferred Stock”), initially convertible into shares of common stock at an initial conversion price of $3.57 (subject to adjustment in certain circumstances with a floor price of $0.714) and, alternatively, at a 15% discount to the lowest daily volume-weighted average price (“VWAP”) during the prior 20 trading days (the “Alternative Conversion Price”) and warrants to purchase shares of Common Stock pursuant to a registered direct offering. The Company has the ability to reset the fixed conversion price (lower), subject to board approval and the floor price. Stockholder approval for the offering was obtained at the February 20, 2026 Special Meeting of the Stockholders.
Current report
At the initial closing, the investors purchased $16,000 of shares of Series B convertible preferred stock and warrants. The remaining $4,000 of shares of Series B Preferred Stock and warrants are expected to be purchased at a second closing. The investors may request the second closing at any time until the one-year anniversary of the initial closing date and we may require the second closing at any time until the one-year anniversary of the initial closing date by individual investor once less than 50% of such Investor’s Series B Preferred Stock purchased at the initial closing remains outstanding and certain equity conditions have been satisfied for at least 7 of the prior 10 trading days, including: (1) the Common Stock closes above 2.5 times the floor price and (2) the daily dollar trading volume of the Common Stock exceeds $500. The warrants are immediately exercisable at an exercise price of $3.57 per share of common stock and expire on the date that is five years after issuance. In addition, the Company issued placement agent warrants to purchase an aggregate of 187,816 shares of common stock with substantially the same terms as the Warrants, except that the exercise price of the Placement Agent Warrants is $3.927.
Current report
We used the net proceeds from the offering to repurchase at par all of the shares of outstanding Series A Convertible Preferred Stock issued in August 2025 in the amount of $9,650. The balance of the net proceeds from the offering was approximately $5,680, after deducting placement agent case fees but before any other offering expenses.
Current report
As of May 1, 2026, convertible preferred stock transaction activity is summarized in the table below:
Removed paragraphs (10)
Previous report
Three Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Previous report
For the nine-month period ended September 30, 2025, cigarette volume increased to 1,370 cartons reflecting additional CMO cigarette customers, including product sold for export, as compared to the prior year period. Cigarette sales benefitted from new customer contracts with our largest CMO customer effective January 1, 2025, including the initial impact of accounting for revenue accruals recorded as over-time revenue recognition, offset by pricing arrangements recorded as consideration payable to the customer recognized within revenue and low-priced product sold for export volume. In prior year periods under legacy contracts, similar pricing arrangements were recorded within cost of goods sold. During April 2024, the Company also benefitted from a one-time Spectrum®research cigarette order which provided a $889 benefit to the prior year period.
Previous report
Gross (loss) profit for the third quarter and nine month period ended September 30, 2025 declined as compared to the prior year comparable period, primarily driven by the decrease in overall volume, and shifts in product mix. In the third quarter of 2025, management implemented further cost savings initiatives of our manufacturing operations to align to our higher margin branded products and VLN cigarettes, as well as forecasted volume, to drive margin improvement. Cost savings include headcount reductions and pricing strategies employed with raw material suppliers. Additionally, during April 2024, the Company also benefitted from a one-time Spectrum®research cigarette order which provided an approximate $750 benefit to the prior year period.
Previous report
(e) Decreases in sales and marketing expense for the three and nine months ended September 30, 2025, compared to the prior year period was due to decreased trade show costs and marketing agency fees.
Previous report
For the nine months ended September 30, 2025 compared to the prior year period, cash interest decreased $301, non-cash interest amortization increased $1,110 due to $1,091 of extinguishment charges recognized from the Senior Secured Credit Facility (of these totals, interest that was allocated to discontinued operations increased by $168), and other interest charges of $78, offset by a gain that occurred in the prior year period of $482 as a result of change in fair value of conversion option derivative liability. Additionally, interest expense decreased $1,430 from the Subordinated Note, which was due to a $400 loss on extinguished prior to maturity in April 2024.
Previous report
In April 2025, we received net proceeds of $5,075 from the inducement and exercise of 76,100 existing warrants for shares of common stock and issuance of 76,100 warrants to purchase common stock. The additional tranche of 184,008 existing warrants for shares of common stock was not exercised and has expired under the terms of the inducement.
Previous report
In August 2025, we received net proceeds of $9,893 from the issuance of Series A convertible preferred shares and issuance of 10,028,302 warrants to purchase common stock. The proceeds were used to fully repay the remaining principal balance of the Senior Secured Credit Facility.
Previous report
In September 2025, the Company settled its outstanding litigation with its insurer related to the November 2022 fire at the Company’s Grass Valley manufacturing facility in Oregon. Under the terms of the settlement, the insurer will pay the Company an aggregate amount of $9,500 in cash within 45 days. On October 29, 2025, the Company received payment.
Previous report
Impact of Recently Issued Accounting Standards
Previous report
In the normal course of business, we evaluate all new accounting pronouncements issued by the FASB, SEC, or other authoritative accounting bodies to determine the potential impact they may have on our Condensed Consolidated Financial Statements. See Note 1 “Nature of Business and Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements contained in Item 1 of this report for additional information about these recently issued accounting standards and their potential impact on our financial condition or results of operations.
Reworded paragraphs (13)
Previous wording
For purposes of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), references to the “Company,” “we,” “us” or “our” refer to the operations of 22nd Century Group, Inc. and its direct and indirect subsidiaries for the periods described herein. In addition, dollars are in thousands, except per share data or unless otherwise specified.
Current wording
For purposes of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), references to the “Company,” “we,” “us” or “our” refer to the operations of 22nd Century Group, Inc. and its direct and indirect subsidiaries for the periods described herein.
Previous wording
On April 2, 2024, we implemented a 1-for-16 reverse stock split, on December 17, 2024, we implemented a 1-for-135 reverse stock split, and on June 20, 2025, we implemented a 1-for-23 reverse stock split. All historical share and per-share amounts reflected throughout this section have been adjusted to reflect the reverse stock splits. The par value per share of our common stock was not affected.* *
Current wording
All historical share and per-share amounts reflected throughout this section have been adjusted to reflect prior reverse stock splits. The par value per share of our common stock was not affected.
Previous wording
For the third quarter and nine months ended September 30, 2025, total product line revenues decreased to $4,011 and $14,050, respectively, compared to the prior year periods.
Current wording
For the first quarter and three months ended March 31, 2026, total product line revenues decreased to $4,105 from $5,956, respectively, compared to the prior year period, as follows:
Previous wording
(a) Compensation and benefits expense decreased for the three and nine months ended September 30, 2025 compared to the prior year period due to a reduction of headcount.
Current wording
(a) Compensation and benefits expense increased for the three months ended March 31, 2026, compared to the prior year period due to an increase in headcount and equity compensation expenses.
Previous wording
(b) Decreases of strategic consulting for the three and nine months ended September 30, 2025, compared to the prior year period was due to decreased spending related to investor relations and consulting for post-market studies.
Current wording
(b) Strategic consulting costs decreased for the three months ended March 31, 2026, compared to the prior year period was due to decreased spending related to investor relations and consulting for post-market studies.
Previous wording
(c) Legal expenses decreased for the three and nine months ended September 30, 2025 compared to 2024 mainly due to decreased spending for regulatory legal expense compared to the prior year period.
Current wording
(c) Legal expenses increased for the three months ended March 31, 2026 compared to 2025 mainly due to additional legal spend related to regulatory matters compared to the prior year period.
Previous wording
(d) Decreases in insurance for the three and nine months ended September 30, 2025 compared to the prior years periods were due to lower insurance premiums.
Current wording
(d) Insurance costs decreased for the three months ended March 31, 2026 compared to the prior year period due to lower insurance premiums.
Previous wording
We have incurred significant losses and negative cash flows from operations since inception and expect to incur additional losses until such time that we can generate significant revenue and profit in our tobacco business. We had negative cash flow from operations of $10,472 for the nine months ended September 30, 2025 and an accumulated deficit of $396,117 as of September 30, 2025. As of September 30, 2025, we had cash and cash equivalents of $4,846 and working capital from continuing operations of $12,711 (compared to working capital from continuing operations of $1,790 at December 31, 2024). Given our projected operating requirements and existing cash and cash equivalents, there is substantial doubt about our ability to continue as a going concern through one year following the date that the Condensed Consolidated Financial Statements herein are issued.
Current wording
We have incurred significant losses and negative cash flows from operations since inception and expect to incur additional losses until such time that we can generate significant revenue and profit in our tobacco business. We had negative cash flow from operations of $3,103 for the three months ended March 31, 2026 and an accumulated deficit of $402,186 as of March 31, 2026. As of March 31, 2026, we had cash and cash equivalents of $9,545 and working capital from continuing operations of $13,164 (compared to working capital from continuing operations of $10,359 at December 31, 2025). Given our projected operating requirements and existing cash and cash equivalents, there is substantial doubt about our ability to continue as a going concern through one year following the date that the Condensed Consolidated Financial Statements herein are issued.
Previous wording
As of September 30, 2025, we had working capital from continuing operations, excluding assets and liabilities held for sale, of approximately $12,711 compared to working capital of approximately $1,790 at December 31,2024, an increase of $10,921. This increase in working capital was primarily due to an increase in net current assets of $12,452 due to the recognition of $9,500 of insurance recoveries related to the Dorchester claim (see Note 12), offset by an increase in net current liabilities of $1,531 reflecting the reclassification of the 2024 Omnia warrant liability to current and an increase in accrued excise taxes and fees offset by the elimination of debt in the current period. Cash and cash equivalents increased by $424 and the remaining net current assets increased by $12,028. Management continues to take further steps to improve liquidity more. Refer below to “Cash demands on operations.”
Current wording
As of March 31, 2026, we had working capital from continuing operations of approximately $13,164 compared to working capital of approximately $10,359 at December 31,2025, an increase of $2,805. This increase in working capital was primarily due to an increase in net current assets of $3,439 due to proceeds received related to the ATM and Series B convertible preferred stock, offset by an increase in net current liabilities of $634. Cash and cash equivalents increased by $2,396 and the remaining net current assets increased by $1,043. Management continues to take further steps to improve liquidity more. Refer below to “Cash demands on operations.”
Previous wording
Cash used in operating activities increased $525 from $9,947 in 2024 to $10,472 in 2025. The primary driver for this change was lower net loss of $8,362, an increase of $1,833 related to net adjustments to reconcile net loss to cash, and an increase in cash used for working capital components related to operations in the amount of $10,720 for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
Current wording
Cash used in operating activities increased $127 from $2,976 in 2025 to $3,103 in 2026. The primary driver for this change was lower net loss of $1,067, a decrease of $1,433 related to net adjustments to reconcile net loss to cash, and a decrease in cash used for working capital components related to operations in the amount of $239 for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
Previous wording
Cash provided by investing activities amounted to $150 the nine months ended September 30, 2025, as compared to cash used in investing activities of $119 for the nine months ended September 30, 2024. The increase in cash provided by investing activities of $269 was the result of an increase of $748 of proceeds from the sale of property, plant and equipment primarily from the sale of Needlerock farms, a decrease of cash outflows of $21 related to the acquisitions of patents, trademarks, licenses and property, plant and equipment offset by $500 from the issuance of the GVB promissory note.
Current wording
Cash used in investing activities amounted to $47 for the three months ended March 31, 2026, as compared to cash used in investing activities of $59 for the three months ended March 31, 2025. The decrease in cash provided by investing activities of $12 was the result of an overall decrease of cash outflows related to the acquisitions of patents, trademarks, licenses and property, plant and equipment.
Previous wording
Net cash provided by (used in) investing activities
Current wording
Net cash provided by (used in) financing activities
Previous wording
During the nine months ended September 30, 2025, cash provided by financing activities decreased by $2,603 from $13,349 in the prior year period to $10,746, resulting from decreases in net proceeds from common stock issuances of $10,592, increases of payments of long-term debt of $3,666, decreases of proceeds from issuance of notes payable of $233, offset by increases in cash inflows from net proceeds from Series A preferred stock of $9,893 and from warrant exercises of $1,672, decreases of cash outflows from taxes paid related to net share settlement of RSUs of $1 and in payments on notes payable of $322.
Current wording
During the three months ended March 31, 2026, cash provided by financing activities increased by $5,800 from cash used in financing activities of $254 in the prior year period to cash provided by financing activities of $5,546, resulting from increases in net proceeds from Series B convertible preferred stock issuances of $15,256, net proceeds from issuance of common stock related to the ATM of $64, decreases of cash outflows from payments on notes payable of $134 offset by cash outflows from the redemption of Series A at par value of $9,650 and from principal payments for finance leases of $4.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Dollars are in thousands, except per share data or unless otherwise specified.
Current report — wording carried from elsewhere
Net cash used in investing activities
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net cash provided by financing activities