22nd Century Group, Inc.

Previous wording

On December 17, 2024, we implemented a 1-for-135 reverse stock split and on March 28, 2024, we implemented a 1-for-16 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

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.* *

Previous wording

22nd Century Group, Inc. (NASDAQ: XXII) is an agricultural biotechnology company focused on tobacco harm reduction by offering tobacco products with 95% less nicotine, designed to improve health and wellness by giving smokers a choice to control their nicotine consumption. Backed by comprehensive and extensively patented technologies that regulate nicotine biosynthesis activities in the tobacco plant, the Company has pioneered development of high-yield, proprietary reduced nicotine content (RNC) tobacco plants and clinically validated RNC cigarette products. The Company received the first and only FDA Modified Risk Tobacco Product (MRTP) authorization for a combustible cigarette in December 2021. The Company is a subsequent participating manufacturer under the Master Settlement Agreement ("MSA") and vertically integrated for the production of its both own products and contract manufacturing operations ("CMO"), which consist primarily of branded filtered cigars and conventional cigarettes.

Current wording

22nd Century Group, Inc. (NASDAQ: XXII) is a tobacco products company focused on tobacco harm reduction by offering tobacco products with 95% less nicotine, designed to improve health and wellness by giving smokers a choice to control their nicotine consumption. Backed by comprehensive and extensively patented technologies that regulate nicotine biosynthesis activities in the tobacco plant, the Company has pioneered development of high-yield, proprietary reduced nicotine content (RNC) tobacco plants and clinically validated RNC cigarette products. The Company received the first and only FDA Modified Risk Tobacco Product (MRTP) authorization for a combustible cigarette in December 2021. The Company is a subsequent participating manufacturer under the Master Settlement Agreement ("MSA") and vertically integrated for the production of its both own products and contract manufacturing operations ("CMO"), which consist primarily of branded filtered cigars and conventional cigarettes.

Previous wording

(a) Compensation and benefits and equity compensation expense decreased for the three months ended March 31, 2025 compared to the prior year period due to a reduction of headcount.

Current wording

(a) Compensation and benefits expense decreased for the three and six months ended June 30, 2025 compared to the prior year period due to a reduction of headcount.

Previous wording

(b) Decreases of strategic consulting for the three months ended March 31, 2025 compared to the prior year periods were due to reduced spending related to investor relations expenses.

Current wording

(b) Increases of strategic consulting for the three months ended June 30, 2025, compared to the prior year period was due to increased spending related to investor relations and public company expenses.

Previous wording

(c) Legal expenses decreased for the three months ended March 31, 2025 compared to 2024 mainly due to an increase in regulatory legal in the prior year period.

Current wording

(c) Legal expenses decreased for the three and six months ended June 30, 2025 compared to 2024 mainly due to an increase in regulatory legal expense in the prior year period.

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 $2,976 for the three months ended March 31, 2025 and an accumulated deficit of $398,199 as of March 31, 2025. As of March 31, 2025, we had cash and cash equivalents of $1,133 and working capital deficit from continuing operations of ($5,201) (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 $6,454 for the six months ended June 30, 2025 and an accumulated deficit of $401,606 as of June 30, 2025. As of June 30, 2025, we had cash and cash equivalents of $3,083 and working capital deficit from continuing operations of ($3,064) (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.

Previous wording

As of March 31, 2025, we had working capital deficit from continuing operations, excluding assets and liabilities held for sale, of approximately ($5,201) compared to working capital of approximately $1,790 at December 31,2024 a decrease of $6,991. This decrease in working capital was primarily due to an increase in net current liabilities of $6,857 reflecting the reclassification of the convertible senior secured credit facility and the 2024 Omnia warrant liability to current, as the maturity date is within twelve months of the balance sheet date, offset by an increase of $134 in net current assets. Cash and cash equivalents decreased by $3,289 and the remaining net current assets increased by $3,655. As a result of the working capital balance, management has taken a number of steps to improve liquidity. Refer below to “Cash demands on operations.”

Current wording

As of June 30, 2025, we had working capital deficit from continuing operations, excluding assets and liabilities held for sale, of approximately ($3,064) compared to working capital of approximately $1,790 at December 31,2024 a decrease of $4,854. This decrease in working capital was primarily due to an increase in net current liabilities of $6,251 reflecting the reclassification of the convertible senior secured credit facility and the 2024 Omnia warrant liability to current, as the maturity date is within twelve months of the balance sheet date, offset by an increase of $1,397 in net current assets. Cash and cash equivalents decreased by $1,339 and the remaining net current assets increased by $2,736. As a result of the working capital balance, management has taken a number of steps to improve liquidity. Refer below to “Cash demands on operations.”

Previous wording

Cash used in operating activities increased $721 from $2,255 in 2024 to $2,976 in 2025. The primary driver for this change was lower net loss of $1,411, an increase of $41 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 $2,173 for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

Current wording

Cash used in operating activities decreased $516 from $6,970 in 2024 to $6,454 in 2025. The primary driver for this change was lower net loss of $884, an increase of $1,111 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 $289 for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

Previous wording

Cash used in investing activities amounted to $59 the three months ended March 31, 2025, as compared to cash provided by investing activities of $15 for the three months ended March 31, 2024. The decrease in cash provided by investing activities of $74 was primarily the result of a decrease of $22 of proceeds from the sale of property, plant and equipment and an increase of cash outflows of $52 related to the acquisitions of patents, trademarks, licenses and property, plant and equipment.

Current wording

Cash provided by investing activities amounted to $672 the six months ended June 30, 2025, as compared to cash used in investing activities of $49 for the six months ended June 30, 2024. The increase in cash provided by investing activities of $721 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 and an increase of cash outflows of $27 related to the acquisitions of patents, trademarks, licenses and property, plant and equipment.

Previous wording

During the three months ended March 31, 2025, cash provided by financing activities decreased by $1,953 from $1,699 in the prior year period, to cash used of $254, resulting from decreases in net proceeds from warrant exercise of $2,245 offset by decreases in cash outflows of note payable payments of $291 and taxes paid related to net share settlement of RSUs of $1.

Current wording

During the six months ended June 30, 2025, cash provided by financing activities decreased by $1,797 from $6,240 in the prior year period to $4,443, resulting from decreases in net proceeds from common stock issuances of $3,913, increases of payments of long-term debt of $768, decreases of proceeds from issuance of notes payable of $233, offset by increases in cash inflows from net proceeds from warrant exercises of $2,830 and a decrease of cash outflows from taxes paid related to net share settlement of RSUs of $1 and a decrease in payments on notes payable of $286.

Previous wording

In April 2025, we received net proceeds of $5,112 from the inducement and exercise of 6,889,497 existing warrants for shares of common stock and issuance of 6,889,497 warrants to purchase common stock. An additional tranche of 4,232,191 existing warrants for shares of common stock are exercisable under the same terms, under the conditions as described in the warrant inducement agreement, for additional net proceeds of up $3,103. In connection with the warrant inducement transaction, the Company amended the October 2024 PIPE warrants. See Note 14 “Subsequent Events”.

Current wording

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 wording

As of March 31, 2025, the remaining principal balance under our Senior Secured Credit Facility is $4,558, of which an additional $1,017 was repaid in April 2025. The Debentures under the Senior Secured Credit Facility allow the Holders to voluntarily convert the Debentures, in whole or in part, into shares of the Company’s common stock and the conversion option price in effect is $6.04. During the first quarter of 2025, the Holders converted $3,132 of principal balance in exchange for 518,600 shares of common stock.

Current wording

As of June 30, 2025, the remaining principal balance under our Senior Secured Credit Facility is $3,790. The Debentures under the Senior Secured Credit Facility allow the Holders to voluntarily convert the Debentures, in whole or in part, into shares of the Company’s common stock and the conversion option price in effect is $138.92. During the first quarter of 2025, the Holders converted $3,132 of principal balance in exchange for 22,549 shares of common stock. During the second quarter of 2025, the Company repaid $1,017 of principal balance contractually required with the proceeds of the warrant inducement transaction.

Previous wording

Additionally, at its option, JGB may require the Company to redeem 2% of the original principal amount of the Debentures, as amended to be no more than 50% or $210 per calendar month through July 2025 and $421 per calendar month thereafter which amount may at the Company’s election, subject to certain exceptions, be paid in cash, shares of the Company’s common stock, or a combination thereof. JGB did not elect the monthly redemption feature during the three month period ended March 31, 2025. If the redemption feature is elected, as of March 31, 2025, contractual maturities under the senior secured credit Facility for the remainder of 2025 are $2,948, and for 2026 are $1,610.

Current wording

Additionally, at its option, JGB may require the Company to redeem 2% of the original principal amount of the Debentures, as amended to be no more than 50% or $210 per calendar month through July 2025 and $421 per calendar month thereafter which amount may at the Company’s election, subject to certain exceptions, be paid in cash, shares of the Company’s common stock, or a combination thereof. JGB did not elect the monthly redemption feature during the three month period ended June 30, 2025. If the redemption feature is elected, as of June 30, 2025, contractual maturities under the senior secured credit Facility for the remainder of 2025 is $2,104, and for 2026 is $1,686.