Investor
Presentation
May 2024
XXII
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 "anticipate," "believe," "consider," "continue," "could," "drive to" "estimate," "expect," "explore," "foresee," "goal," "guidance," "intend," "likely," "may," "plan," "potential," "predict," "preliminary," "probable," "project," "promising," "seek," "should," "will," "would," and similar expressions. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in "Risk Factors" in the Company's Annual Report on Form 10-K filed on March 28, 2024. All information provided in this presentation is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law.
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 EBITDA further adjusted for certain non-cash and/or non-operating expenses, including equity-based employee compensation expense, restructuring and restructuring-related charges such as impairment, acquisition and transaction costs, and other unusual or infrequently occurring items, if applicable, such as inventory reserves and adjustments, gains or losses on disposal of property, plant and equipment, and gains or losses on investments (Adjusted EBITDA).
We believe that the presentation of EBITDA and Adjusted EBITDA are important financial measures that supplement discussion and analysis of its financial condition and results of operations and enhances an understanding of its operating performance. While management considers EBITDA and Adjusted EBITDA to be important, these financial performance measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating (loss) income, net (loss) income and cash flows from operations. Adjusted EBITDA is susceptible to varying calculations and the Company's measurement of Adjusted EBITDA may not be comparable to those of other companies.
At a Glance
- NASDAQ - XXII, headquartered in Mocksville, NC
- Pure Play Tobacco Company with a focus on
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- Nicotine Harm Reduction - VLN®
- Contract Manufacturing for other brands - Domestic and International
- The Synchronicity between the two revenue streams
- Financial Discipline and Turnaround
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- Driving Cash Positive/Profitable Operations
- Debt restructuring
- Targeting Breakeven in Q1 2025
VLN®
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
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- Recognition for VLN® as a separate or sub-category - Health related products seen as better for you or not as bad for you
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- Decaf Coffee
- Light Beer
- Diet Soda
- I.e. less nicotine addiction or less harmful
- Strategy to brand with our other 22nd Century products like:
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- Tab to Diet Coke to Coke
- Ranger VLN® to Ranger
- Pinnacle VLN® to Pinnacle
- Standard VLN® - The Original VLN® attachment
- Possible license opportunity to other brands
- VLN® is synonymous with smoker health - Helps you smoke less
VLN®: Goal
Recognition for VLN® with new branding and trade dress:
- VLN® brand stands for something - Leads to healthier, less nicotine addictive smoking
- Pop to the pack
- Customers looking for less nicotine drawn to the pack and therefore an understanding of 95% less Nicotine
- Disturbance in the category
- Annoying to the major brands
- VLN® is the Original and Only
- VLN® theme - Death to cigarette smoking
Parallels to category disruptors:
- Liquid Death Water - Theme is death to plastic bottles
- White Claw - 1st seltzer in the market
- Miller Lite - 1st major light beer - less calories
- Heineken zero alcohol - Beer without the buzz
- Gatorade - The original electrolyte replacement
- Red Bull - The original energy drink
THE GOAL - Be THE disruptor - not to blend in
VLN® - The Math
For the Customer:
- 1 pack of VLN® Cigarettes = 1 standard cigarette for nicotine content
- The math is why it helps you smoke less
For XXII:
- The Original VLN® and New Blend
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- Cartons needed to breakeven - 223,000 (2.9% of NASCO Capacity)
- Current distribution 5,100 stores
- Cartons/year needed per store - 44
- Cartons/wk - .85 or 9pks/week avg. per store
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 tobacco related products, registrations in additional states for continued expansion
§ Diverse range of top C-store and pharmacy retail chains by geography, plus additional opportunities in military, club and other channels
VLN® - Outlook
- Rebranding
- Marketing Campaign - Consumer awareness
- Expanded Distribution
- Increased Sell-through
- Driving Growth in VLN
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Attachments
Disclaimer
22nd Century Group Inc. published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 11:40:52 UTC.