22nd Century Group Inc (XXII) 2024 Q4 法說會逐字稿

Welcome to 22nd Century Group's fourth quarter and full-year 2024 conference call and webcast. At this time, all participants have been placed in a listen-only mode. (Operator Instructions) Please note this event is being recorded.

歡迎參加22世紀集團2024年第四季和全年電話會議和網路廣播。目前，所有參與者都處於只聽模式。（操作員指示）請注意，此事件正在被記錄。

It is now my pleasure to turn the floor over to Matt Kreps, Investor Relations for 22nd Century Group. Please begin.

現在我很高興將發言權交給 22 世紀集團投資者關係部門的 Matt Kreps。請開始。

Hello, and welcome to 22nd Century's fourth quarter and full-year results conference call. Joining me today are Larry Firestone, CEO; and Dan Otto, CFO. Earlier today we issued a press release announcing our results for the year ending December 31, 2024. The release and 10-K are available in the investors section of our website at xxiicentury.com.

您好，歡迎參加22世紀第四季和全年業績電話會議。今天與我一起出席的還有執行長 Larry Firestone；以及財務長 Dan Otto。今天早些時候，我們發布了一份新聞稿，宣布了截至 2024 年 12 月 31 日的年度業績。您可在我們網站 xxiicentury.com 的投資者專區查閱該新聞稿和 10-K 文件。

Today's call will include prepared remarks from Larry and Dan, updating you on 22nd Century's business operations strategy and financial results through December 31, 2024, and subsequent.

今天的電話會議將包括拉里和丹的準備好的發言，向您介紹 22 世紀截至 2024 年 12 月 31 日及之後的業務運營戰略和財務業績。

Before we begin, a few reminders for today's call. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks uncertainties and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in our annual, quarterly, and other reports filed with the SEC.

在我們開始之前，先提醒一下今天的通話內容。今天發表的一些聲明具有前瞻性。前瞻性陳述受風險、不確定性和其他因素的影響，這些因素可能導致實際結果與這些陳述所預期的結果有重大差異。有關這些因素的更多資​​訊可以在我們向美國證券交易委員會提交的年度、季度和其他報告中找到。

During today's call, we may also discuss non-GAAP financial measures including adjusted EBITDA, which we define as earnings before interest taxes depreciation and amortization. As adjusted for certain non-cash and non-operating expenses, and net debt calculated as total principal amount of debt outstanding less cash and cash equivalents. More details on these measures please refer to our release issued earlier today.

在今天的電話會議中，我們也可能討論非公認會計準則財務指標，包括調整後的 EBITDA，我們將其定義為息稅折舊攤提前利潤。經調整某些非現金和非營業費用以及淨債務，計算為未償還債務的總本金減去現金和現金等價物。有關這些措施的更多詳細信息，請參閱我們今天早些時候發布的新聞稿。

And with that, I'd like to now turn the call over to Larry.

說完這些，我現在想把電話轉給拉里。

Thank you, Matt. Good morning, ,everyone and thank you for joining 22nd Century's fourth quarter and full-year 2024 results conference call. When I joined 22nd Century Group a little over 16 months ago as CEO and Chairman, the task at hand was 100% focused on restructuring and turnaround efforts. The company was burning cash, posting significant losses, and operating with an unclear and unfunded strategy.

謝謝你，馬特。大家早安，感謝您參加22世紀2024年第四季和全年業績電話會議。16 個多月前，當我加入 22 世紀集團擔任執行長兼董事長時，當時我手頭上的任務 100% 集中在重組和扭虧為盈上。該公司正在消耗現金，出現嚴重虧損，營運策略不明確且缺乏資金支持。

Entering fiscal 2024, our near-term operating plans were consumed with the day to day and week to week liquidity concerns. I'm happy to say that the situation has evolved into so much more over the course of 2024. And we're now focused on 2025 and beyond.

進入 2024 財年，我們的近期營運計劃都被日常和每週的流動性問題所困擾。我很高興地說，到 2024 年，情況已經發生了巨大的變化。我們現在關注的是2025年及以後。

The executive team and employees at our company. We're tasked with the most difficult of restructurings to be completed as an undercapitalized cash-burning and loss-generating public company.

我們公司的執行團隊和員工。身為一家資本不足、燒錢且虧損的上市公司，我們肩負著最艱鉅的重組任務。

However, we've embarked on an incredible transformative journey involving much more than just the financials. We're progressing now with a new strategy and restoring the mission that was crafted over 25 years ago. We believe it's time for the tobacco user to decide for themselves how much nicotine they choose to consume. And through our flagship VLN product, we can give adult smokers an authentic and familiar alternative to smoking that helps them take control. I would now like to take the time to reflect on the major milestones and accomplishments of the company over this time period before providing further overview of the strategic direction we're executing today.

然而，我們已經踏上了一段令人難以置信的轉型之旅，其中涉及的遠不止財務方面。我們現在正按照新的策略前進，並恢復25年前所訂定的使命。我們相信現在是時候讓菸草使用者自己決定他們選擇攝取多少尼古丁了。透過我們的旗艦產品 VLN，我們可以為成年吸菸者提供真實且熟悉的吸菸替代品，幫助他們控制吸菸。現在，我想花點時間回顧一下公司在這段時間內取得的主要里程碑和成就，然後再進一步概述我們今天正在執行的策略方向。

First, in late 2023, we repositioned our focus to a pure play tobacco company. To do this, we divested the GDP hemp/cannabis business shut down all R&D projects related to hemp/cannabis and hops, which greatly reduced the operating cash burn.

首先，在 2023 年底，我們將重點重新定位為純菸草公司。為此，我們剝離了 GDP 大麻業務，關閉了所有與大麻和啤酒花相關的研發項目，這大大減少了營運現金消耗。

Second, we restructured the Board of Directors and Board compensation. We also terminated all executive management team contracts and restructured personnel. Eliminated cash bonuses and stock-based compensation awards. We also turned over every function and department expenditure ensuring we achieved the appropriate operating model and overhead for the reduced size and scale of the company. This dramatically reduced our R&D and G&A expenses.

第二，我們重組了董事會和董事會薪酬。我們還終止了所有高階主管團隊的合約並進行了人員重組。取消了現金獎金和股票薪酬獎勵。我們也移交了每個職能和部門支出，確保在公司規模縮小的情況下實現適當的營運模式和管理費用。這大大降低了我們的研發和一般行政費用。

Next, we worked over the balance sheet, repaying or settling approximately $18 million in total liabilities, including $5.2 million in subordinated debt $4.1 million in convertible senior secured debt.

接下來，我們研究了資產負債表，償還或結清了約 1,800 萬美元的總負債，包括 520 萬美元的次級債務和 410 萬美元的可轉換優先擔保債務。

Various tobacco creditors and other payables retained from the GVB divestiture and shut down the hemp/cannabis operations. Then we turned our attention to VLN, the person only FDA authorized modified risk tobacco product. Which needed redesigned packaging plus new marketing and selling activity to support the relaunch and store activation.

各種菸草債權人和其他應付款項從 GVB 資產剝離中保留下來並關閉了大麻/大麻業務。然後我們將注意力轉向 VLN，唯一獲得 FDA 授權的改良風險菸草產品。這需要重新設計包裝並開展新的行銷和銷售活動來支援重新推出和商店啟動。

We also began expanding the number of state regulatory approvals so that VLN would be authorized for sale in all 50 states in the US. In addition, our R&D strategy now includes a technology roadmap to expand the reach of VLN to other tobacco products and revived efforts to grow the best varieties in quality of our proprietary low nicotine tobacco leaf. Finally, the base of our operations has been our CMO customers with the production of cigarettes and filtered cigars.

我們也開始擴大州監管部門的批准數量，以便 VLN 能夠被授權在美國所有 50 個州銷售。此外，我們的研發策略現在包括一份技術路線圖，旨在將 VLN 的覆蓋範圍擴大到其他菸草產品，並重新努力種植品質最好的專有低尼古丁菸葉品種。最後，我們業務的基礎是生產香菸和過濾嘴雪茄的CMO客戶。

During 2024, we signed and began shipping additional CMO brands for export offloaded certain filtered cigar contracts that were losing money some of which we subsequently had re-signed contracts with under new pricing terms in 2025. We've secured a long-term commitment from one of our key accounts Smoker Friendly, and we're working on others as we speak. Our team has had amazing focus and drive. As they worked incredibly hard through this effort, and the results have been permanent changes in our business architecture. To put 2024 in perspective, this is the equivalent of taking apart and rebuilding your car while you're driving it on the Audubon.

2024 年，我們簽署並開始運送更多 CMO 品牌用於出口，卸載了一些虧損的過濾雪茄合同，其中一些我們隨後在 2025 年根據新的定價條款重新簽署了合同。我們已經從我們的一個主要客戶「Smoker Friendly」獲得了長期承諾，我們正在與其他客戶洽談。我們的團隊具有驚人的專注力和動力。他們付出了極大的努力，最終我們的業務架構發生了永久性的變化。從 2024 年的角度來看，這相當於在奧杜邦公路上駕駛汽車時將其拆開並重新組裝。

Turnarounds are extremely difficult and take time and cash. While we were losing money and paying down our liabilities outside investment support was and is still necessary to fund the lack of free-cash flow from operations. During 2024, we raised almost $17 million in financing. Which were primarily equity cash infusions and debt conversions to support the company.

週轉極為困難，需要時間和金錢。當我們虧損並償還債務時，外部投資支持過去和現在仍然是必要的，以彌補營運中缺乏的自由現金流。2024年，我們籌集了近1700萬美元的融資。主要透過股權現金注入和債務轉換來支持公司。

Fortunately, we've been supported by investors and debt holders that believe in the long-term growth potential of our company. And have funded our efforts in realigning the business, giving the 22nd Century a chance to become profitable and cash positive. And for us to get our paradigm shifting veal and product into the market. The fourth quarter numbers are improved in many ways. But also show the time necessary to complete the turnaround and begin top line and profitable growth in our business.

幸運的是，我們得到了投資者和債權人的支持，他們相信我們公司的長期成長潛力。並為我們重組業務的努力提供資金，使22世紀有機會實現盈利和現金流正增長。我們將革新性的牛肉和產品推向市場。第四季的數據在許多方面都有所改善。同時也展現出完成扭虧為盈和開始實現業務營收和獲利成長所需的時間。

This is why as we roll out our rebranded VLN, our focus Is on driving rate of sale and carton volume. The second half of 2024 was a transition process.

這就是為什麼當我們推出更名後的 VLN 時，我們的重點是提高銷售率和紙箱數量。2024年下半年是一個過渡過程。

As we fulfilled last time buy orders on legacy filtered cigar contracts that were priced below cost. These contracts and orders were losing money at the gross profit line which means they do not pay for any operating expenses or overhead. We worked with our customers and ended those agreements. And in most cases, replace them with properly priced agreements with the same customers. But that crossover time creates a dip in sales, which produced the revenue troughs you saw in our filtered cigar and cigarette businesses. The lag time from contract signing to shipment on revenues is anywhere between three and six months.

正如我們上次履行了低於成本價的傳統過濾雪茄合約的買入訂單一樣。這些合約和訂單在毛利潤線上虧損，這意味著它們不支付任何營運費用或管理費用。我們與客戶合作並終止了這些協議。並且在大多數情況下，用與同一客戶達成的價格合理的協議來取代它們。但這一交叉時間導致銷售額下降，從而產生了您在我們的過濾雪茄和香菸業務中看到的收入低谷。從簽訂合約到收入交付的滯後時間為三至六個月。

During 2024, we also remain focused on maintaining our Nasdaq listing. Regaining compliance with the minimum bid rules and the minimum shareholder equity. As a result in addition to capital raises and debt paydowns it's been necessary to effect two reverse splits in 2024. And so far, that has accomplished our goal to maintain our listing.

2024 年，我們也將致力於維持我們在納斯達克的上市地位。重新遵守最低投標規則和最低股東權益。因此，除了增加資本和償還債務之外，還必須在 2024 年進行兩次反向拆分。到目前為止，我們維持上市的目標已經達成。

Before we talk about 2025, I acknowledge that during the turnaround process we've seen an unstable share price and market capitalization that is not reflective of the value of this company. It's my bias that it is imperative that our management team remains committed to executing our strategy and operations. This will drive our company to sustainable growth and cash positive operations with a future that has very strong potential.

在我們談論 2025 年之前，我承認在轉型過程中，我們看到了不穩定的股價和市值，這並不能反映這家公司的價值。我的觀點是，我們的管理團隊必須繼續致力於執行我們的策略和營運。這將推動我們公司實現永續成長和現金流正成長，未來潛力巨大。

Then I believe based on my experience investors in Wall Street will see this company as they once did. And the incredible investment opportunity it provides. However at this time, we are still working through cash burn operating losses. And debt service in the final stages of our turnaround. I encourage all long-term investors to read the latest annual report on Form 10-K outlining more detail on our strategy and business model. But also the inherent risk factors and challenges we are facing.

那麼我相信根據我的經驗，華爾街的投資人將會像以前一樣看待這家公司。它提供了令人難以置信的投資機會。然而目前，我們仍在努力彌補現金消耗和營運損失。在我們轉型的最後階段，還要償還債務。我鼓勵所有長期投資者閱讀最新的 10-K 表年度報告，其中詳細介紹了我們的策略和商業模式。但我們也面臨固有的風險因素和挑戰。

Although we still have to finish our turnaround, 2025 is essentially the launch of the new 22nd Century. Now that we have put new foundational blocks in place, let me characterize the opportunity that we have going forward. Our core contract manufacturing business has been the lion's share of our revenues over the past few years, which is a high-volume low margin business.

儘管我們仍需完成扭轉局面，但 2025 年本質上是新 22 世紀的開啟。現在我們已經奠定了新的基礎，讓我來描述一下我們未來的機會。我們的核心合約製造業務在過去幾年中一直佔據我們收入的最大份額，這是一項高產量、低利潤的業務。

In this business, we provide a turnkey manufacturing service including in some cases regulatory services and supply chain management. Our customers are then responsible for their brand and brand development sales marketing product placement and rate of sale.

在這個業務中，我們提供交鑰匙製造服務，在某些情況下包括監管服務和供應鏈管理。然後，我們的客戶負責他們的品牌和品牌開發、銷售、行銷、產品置入和銷售率。

In our core business, we service both domestic and international customers. Our domestic customers run to adjust in time structure where we replenish the mainstream distribution with initial load orders, if it's a new product, and replacement orders if the products are already in the market. So domestic business is very much dependent on consumer behavior and what we call rate of sale.

我們的核心業務是為國內和國際客戶提供服務。我們的國內客戶會及時調整結構，如果是新產品，我們會用初始裝載訂單來補充主流分銷，如果產品已經上市，我們會用替換訂單來補充。因此，國內業務在很大程度上依賴消費者行為以及我們所說的銷售率。

For the international customer shipments and some of the filtered cigar customers, we manufacture and ship on a per container basis. The order flow on this side of the business is much different than the replenishment orders. The runs are longer and we ship in bulk.

對於國際客戶的發貨和部分過濾雪茄客戶，我們按貨櫃進行生產和運輸。此業務的訂單流與補貨訂單有很大不同。運行時間更長，而且我們批量發貨。

One of the hidden gems in our CMO business Is Smoker Friendly's latest product launch called Smoker Friendly Black. This is a tobacco and water only. Additive-free all natural premium American blend cigarette that is designed to directly compete with the natural cigarette category, which is the hottest segment in the full nicotine cigarette market right now. This appears to be a great growth engine for us as the manufacturer and Smoker Friendly starting in 2025.

我們的 CMO 業務中的一顆隱藏的寶石是 Smoker Friendly 最新推出的產品 Smoker Friendly Black。這只是煙草和水。不含添加劑的全天然優質美式混合香菸，旨在直接與天然香菸類別競爭，這是目前全尼古丁香菸市場中最熱門的部分。從 2025 年開始，這似乎將成為我們作為製造商和 Smoker Friendly 的巨大的成長引擎。

Our branded business has not been part of our revenues over the past couple of years. And we consider our branded business as our growth business. Our VLN products and strategy are the core of our growth business. To frame the market that we play in, Big Tobacco contractually owns approximately 85% of the $85 billion dollar US cigarette business.

過去幾年來，我們的品牌業務一直不是我們的收入來源。我們將品牌業務視為我們的成長業務。我們的 VLN 產品和策略是我們成長業務的核心。為了建立我們所處的市場，菸草巨頭根據合約擁有價值 850 億美元的美國香菸業務的約 85% 的股份。

That leaves 15% for an approximately $12.5 billion market for all the other brands to fit into. New brands such as VLN products in the market are not looked at favorably as all brands are battling for the same space on the shelf at the various retailers. As we are poised at the beginning of 2025 to re-launch VLN and bring our newly branded VLN into the market, our strategy is different than what we implemented when VLN was first launched in 2022.

這樣，剩下 15% 的市佔率就達到了約 125 億美元，而其他所有品牌都可以搶佔這個市場。由於所有品牌都在各個零售商的貨架上爭奪相同的空間，因此市場上的新品牌（例如 VLN 產品）並不受到青睞。由於我們準備在 2025 年初重新推出 VLN，並將我們新品牌的 VLN 推向市場，因此我們的策略與 2022 年首次推出 VLN 時實施的策略不同。

Not only will we bring our 22nd Century VLN brand into the market with three skews: gold, red, and green, or menthol. We are introducing what I have referred to in the last year as flanker VLN. But what we are now calling partner VLN. And these are private label VLN brands that will enter the market under other brands and widen the presence of VLN in the market.

我們不僅將把我們的 22nd Century VLN 品牌帶入市場，而且還有三種不同的顏色：金色、紅色、綠色或薄荷色。我們正在推出我在去年提到的側翼 VLN。但我們現在稱之為合作夥伴 VLN。這些是自有品牌 VLN 品牌，它們將以其他品牌的名義進入市場，擴大 VLN 在市場上的影響力。

This is where our CMO customers can adopt a VLN SKU within their lineup and add a higher margin product to their product line. This is similar to the Intel Inside approach for computers and instead a tobacco product with VLN inside. So as we announced you will begin to see Smoker Friendly VLN in the marketplace.

在這裡，我們的 CMO 客戶可以在其產品線中採用 VLN SKU，並在其產品線中添加利潤更高的產品。這類似於電腦的 Intel Inside 方法，而菸草產品內部則裝有 VLN。正如我們所宣布的，您將開始在市場上看到 Smoker Friendly VLN。

However, I will point out this will be a slow, gradual walk up as we want to establish not only the VLN brand. But the product and prove the rate of sale. With our marketing and consumer engagement techniques to make sure that we succeed where we failed in the first launch and that is rate a sale at the cash register.

然而，我要指出的是，這將是一個緩慢、漸進的過程，因為我們不僅想建立 VLN 品牌。但產品並有銷售率證明。透過我們的行銷和消費者參與技術，確保我們在第一次發佈時失敗的地方取得成功，即在收銀台進行銷售。

We are in the process of getting our newly branded VLN and partner VLN SKUs approved for sale in the various regulatory agencies in all 50 states. This initiative should be complete by the end of July 2025.

我們正在爭取讓我們的新品牌 VLN 和合作夥伴 VLN SKU 在美國全部 50 個州的各個監管機構批准銷售。該計劃預計將於 2025 年 7 月底完成。

We have important markets that we could serve. For example, Massachusetts. Where some doctors have reached out to communicate the state restrictions that are in force and are preventing patients who smoke from undergoing critical surgery until they have documented proof that they have stopped smoking for a minimum of six weeks and the doctors have communicated.

我們擁有可以服務的重要市場。例如馬薩諸塞州。一些醫生已聯繫到他們，告知他們目前實施的州限制措施，即禁止吸煙的患者接受關鍵手術，直到他們提供文件證明，證明他們已經戒菸至少六週，並且醫生已經與他們進行了溝通。

These laws and sent their documentation to me believe that VLN is an asset to that endeavor. Beyond Smoker Friendly, we believe that you will see other brands adopting VLN instead discs in their in their lineup.

這些法律及其文件發送給我相信 VLN 對此項努力是一筆財富。除了 Smoker Friendly 以外，我們相信您還會看到其他品牌在其產品線中採用 VLN 代替圓盤。

As we roll these brands into the market along with our own VLN, we are still competing for the valuable shelf space that is represented by the 15% of the US cigarette market.

當我們將這些品牌與我們自己的 VLN 品牌一起推向市場時，我們仍然在爭奪占美國香菸市場 15% 份額的寶貴貨架空間。

Rate of sale is everything in corporate retail because every slot in every store has to perform and make money. Once a brand is in, you're on the clock and it's your job to make sure it sells. And that we achieve customer awareness with both partner VLNs, as well as our own.

銷售率對於企業零售來說至關重要，因為每個商店的每個位置都必須獲利。一旦品牌進入市場，您就要開始投入工作，您的工作就是確保它能夠暢銷。而我們透過合作夥伴 VLN 和我們自己的 VLN 來提高客戶認知。

This is why the walk up is going to be slower than one would think. We have to be focused and not out kick our coverage to use a football analogy. Once we prove our VLN domestically, we will look beyond the US. We've already been contacted by a few companies that have international reach to potentially extend the positioning of VLN beyond the US borders.

這就是為什麼步行會比人們想像的要慢。我們必須集中註意力，並且不要用足球來打比方，超出我們的報道範圍。一旦我們在國內證明了我們的 VLN，我們就會將目光投向美國以外。一些具有國際影響力的公司已經與我們聯繫，希望將 VLN 的定位擴展到美國境外。

In addition to the VLN combustible products, we've also kicked off several R&D programs to develop new next-generation products to fit. The VLN brand or fit VLN within the brand. These products will define a piece of our future and broaden the reach of VLN to widen the opportunity and give tobacco users a choice to control their nicotine consumption.

除了 VLN 可燃產品外，我們還啟動了多個研發項目，以開發新的下一代產品。VLN 品牌或適合該品牌的 VLN。這些產品將定義我們的未來，擴大 VLN 的覆蓋範圍，為菸草使用者提供更多機會並讓他們可以選擇控制自己的尼古丁消費量。

As we gain traction in the market, we are driving for a VLN-C category which will be a very low nicotine content category and this would allow us to carve our VLN products out of the mainstream cigarettes vapes heat not burn and other tobacco products.

隨著我們在市場上的影響力不斷擴大，我們正在推動 VLN-C 類別的發展，這是一個尼古丁含量非常低的類別，這將使我們能夠將 VLN 產品從主流香菸、加熱不燃燒電子煙和其他菸草產品中脫穎而出。

And instead, stand alone in retail has its own category numbers just like decaf coffee non-alcoholic spirits, non-alcoholic beer. This, however, will take time and I'm sure will be met with resistance from big tobacco along with the redress of VLN. We will begin launching a new 22nd Century web page and a refreshed try VLN webpage. So that the consumers will be able to find VLN in a retail location in their market.

相反，零售中的獨立產品有自己的類別編號，就像無咖啡因咖啡、無酒精烈酒、無酒精啤酒一樣。然而，這需要時間，而且我確信這將遭到菸草巨頭的抵制以及 VLN 的糾正。我們將開始推出新的 22 世紀網頁和更新的試用 VLN 網頁。這樣消費者就能在其市場的零售店找到 VLN。

We're also getting ready to reactivate our social media platform within the guidelines and restrictions of tobacco advertising. So that consumers can share their experiences with the with our VLN products. Then we'll discuss our numbers historically. But as we build the base of VLN distribution and traction through the rate of sale.

我們也準備在菸草廣告的指導方針和限制範圍內重新啟動我們的社群媒體平台。以便消費者可以分享他們使用我們的 VLN 產品的體驗。然後我們將討論我們的歷史數據。但隨著我們透過銷售率建立起 VLN 分銷和牽引力的基礎。

VLN is our most profitable product in our lineup and will be a major component to the completion of the turnaround. In January of this year, the FDA released a new proposed rule titled Tobacco Product Standard for Nicotine Yield of Cigarettes and Certain Other Combusted Tobacco Products, which gave us a little bit of a tailwind behind the relaunch of VLN. The new proposed standard would set a maximum nicotine content level of 0.7 mg of nicotine per gram of tobacco and cigarettes. with VLN being the only cigarette in the market that would meet this standard today. The comment period is currently scheduled to be completed by mid-September 2025. And if enacted We'll have a two-year implementation period for which all combustible tobacco products must comply. We know there will be resistance and a lot of money thrown at delaying this order by big tobacco.

VLN 是我們產品線中最賺錢的產品，並將成為完成轉型的重要因素。今年 1 月，FDA 發布了一項新的擬議規則，名為《香煙和某些其他燃燒型煙草製品的尼古丁產量煙草產品標準》，這給我們重新推出 VLN 提供了一點順風。新提議的標準將每克菸草和香菸的最大尼古丁含量設定為0.7毫克。 VLN 是目前市面上唯一符合標準的香菸。目前，評論期預計於 2025 年 9 月中旬完成。一旦頒布，我們將有兩年的實施期，在此期間所有可燃菸草產品都必須遵守。我們知道菸草巨頭會遇到阻力並投入大量資金來推遲這項命令。

So we will not rely on this implementation as a pillar to our success. However If this were to succeed and is implemented. I will point out that we currently have the only FDA approved combustible tobacco product on the market that meets the standard set fourth by the FDA.

因此，我們不會依賴這項實施作為我們成功的支柱。然而如果這項計劃成功並得以實施。我要指出的是，我們目前擁有市場上唯一獲得 FDA 批准的符合 FDA 第四階段標準的可燃菸草產品。

Both sides of our business, the core business and the growth business, are poised for success in 2025 and beyond. As I explained this is a very surgical execution that will define the success of our CMO business our branded business. And the new products that we'll be bringing into the market in the future. Our team is laser focused on that execution. And although our goals for distribution and penetration are aggressive our implementation will be targeted and strategic as we understand the rate of sale is the key to the puzzle. And with that, I'll turn it over to Dan to discuss the numbers.

我們的業務，即核心業務和成長業務，都將在 2025 年及以後取得成功。正如我所解釋的，這是一次非常精準的執行，它將決定我們的 CMO 業務和品牌業務的成功。以及我們將來將向市場推出的新產品。我們的團隊全神貫注於此執行。儘管我們在分銷和滲透方面的目標是雄心勃勃的，但我們的實施將是有針對性和策略性的，因為我們知道銷售率是解決難題的關鍵。接下來，我將把話題交給丹來討論這些數字。

Thank you, Larry. Good morning, everyone, and thanks again for joining our discussion today. Over the course of 2024 I've spoken about the importance of implementing fiscal responsibility in our restructuring efforts.

謝謝你，拉里。大家早安，再次感謝大家參加我們今天的討論。在 2024 年期間，我談到了在重組工作中履行財務責任的重要性。

These can be categorized in three main pillars that we've made substantial progress against. First we're working to achieve profitability in the P&O for the first time in this company's history in 2025. We're poised for revenue growth and margin improvement with our CMO customer contracts in 2025 and we'll be rapidly expanding the on points of distribution during the year. This sits on top of the lien operating costs and overhead structure implemented throughout 2024.

這些可以分為三大支柱，我們已經取得了實質進展。首先，我們致力於在 2025 年實現 P&O 歷史上首次獲利。憑藉 2025 年的 CMO 客戶合同，我們準備實現收入成長和利潤率提高，並將在今年迅速擴大分銷點。這是在 2024 年實施的留置權營運成本和管理費用結構之上的。

Second, restoration of normal balance sheet ratios and KPIs through elimination of debt obligations and improvements in working capital. And third, prioritize and secure cash runways to complete these initiatives and improve the overall capital structure. As I walk through additional financial details on our fourth quarter and full-year results, I'll also highlight progress in these three areas.

第二，透過消除債務和改善營運資本恢復正常的資產負債表比率和關鍵績效指標。第三，優先考慮並確保現金流以完成這些計劃並改善整體資本結構。當我介紹我們第四季度和全年業績的更多財務細節時，我還將強調這三個領域的進展。

As a reminder, all financial results in our earnings release are presented on a continuing operations basis, which excludes our former hemp/cannabis segment. Net revenue was $4 million in the fourth quarter of 2024 decreased sequentially from $5.9 million in the third quarter 2024 and gross margin was a loss of $1.2 million compared to $588,000 in the same periods.

提醒一下，我們收益報告中的所有財務結果都是以持續經營為基礎的，不包括我們以前的大麻/大麻部門。2024 年第四季的淨收入為 400 萬美元，較 2024 年第三季的 590 萬美元環比下降，毛利率虧損 120 萬美元，而同期為 588,000 美元。

The sequential revenue and margin decline is reflective of lower volume with cartons sold being $338,000 compared to $439,000. The volume change is reflective of the initiatives Larry and I have been discussing regarding repricing our CMO contracts primarily with our filtered cigar customers and is a temporary decline.

收入和利潤率的連續下降反映出銷量的下降，紙箱銷量為 338,000 美元，而去年同期為 439,000 美元。銷售變化反映了拉里和我一直在討論的舉措，即重新定價我們與過濾雪茄客戶的 CMO 合同，並且是暫時的下降。

First quarter 2025 volume will begin to grow again and expand more rapidly in the second quarter of 2025 as certain of these filtered cigar customers are returning. The increase in volume and return of the CMO business will help stabilize revenue and provide appropriate economics for margin and cash flow.

由於部分過濾雪茄客戶的回歸，2025 年第一季的銷售量將開始再次成長，並在 2025 年第二季實現更快的成長。CMO業務的銷售和回報的增加將有助於穩定收入並為利潤和現金流提供適當的經濟效益。

Further, as Larry has discussed, we are launching new marketing and awareness campaigns to drive VLN sales. The rebranded VLN is expected to begin shipping in the second quarter of 2025. This will be expanded as we launch our partner brand VLN products using recognized CMO brands to build the category going forward.

此外，正如拉里所討論的，我們正在啟動新的行銷和宣傳活動來推動 VLN 的銷售。更名後的 VLN 預計將於 2025 年第二季開始出貨。隨著我們推出合作品牌 VLN 產品並使用公認的 CMO 品牌來建立未來的產品類別，這一領域將會擴大。

Together, restoration of the filtered cigar volume growth and sales under certain cigarette CMO customers. And the expanded launch of VLN will lead us to achieving our P&O goals. Total operating expenses for the fourth quarter were $2.8 million, flat from the third quarter 2024.

共同恢復某些香菸 CMO 客戶下的過濾雪茄產量成長和銷售。VLN 的擴大推出將幫助我們實現 P&O 目標。第四季總營運費用為 280 萬美元，與 2024 年第三季持平。

We have substantially decreased the G&A overhead of our business. And we're beginning to make select investments and additional sales and marketing activities around the relaunch of our VLN products. Net loss, EPS, and adjusted EBITDA in the fourth quarter of 2024 follow similar P&L trends as compared to prior periods.

我們大幅降低了業務的一般及行政管理費用。我們開始圍繞 VLN 產品的重新推出進行選擇性投資以及額外的銷售和行銷活動。2024 年第四季的淨虧損、每股盈餘和調整後的 EBITDA 與前期相比遵循類似的損益趨勢。

The balance sheet has improved substantially year over year with an overall decline in total liabilities of over $18 million or nearly 50% ending the year at $17.7 million. The company has improved networking capital deposit of $1.6 million from a deficit of $8.8 million in the prior year.

資產負債表年增率大幅改善，年底總負債整體下降 1,800 多萬美元，降幅近 50%，至 1,770 萬美元。該公司已將網路資本存款從去年的 880 萬美元赤字提高至 160 萬美元。

Also notably in the first quarter of 2025, we've now further reduced our outstanding debt under the convertible senior secured credit facility by $3.1 million. Bringing the remaining principal balance down to $4.6 million and reducing monthly cash principal amortization payments.

同樣值得注意的是，在 2025 年第一季度，我們進一步減少了可轉換優先擔保信貸安排下的未償債務 310 萬美元。將剩餘本金餘額降至 460 萬美元，並減少每月現金本金攤銷付​​款。

Cash interest paid during 2024 was reduced to $722,000 compared to $1.3 million in the prior year. And which will be even further reduced now in 2025. Last, our overall cash burden has declined meaningfully in the past year. We remain focused on minimizing cash use by the business while executing the turnaround and emerging into a rapidly growing business.

2024 年支付的現金利息從前一年的 130 萬美元減少至 72.2 萬美元。到 2025 年，這一數字還將進一步減少。最後，我們的整體現金負擔在過去一年中大幅下降。我們將繼續致力於在實現扭虧為盈和快速成長的同時，最大限度地減少業務的現金使用。

And finally, the company remains active in our lawsuit against Dorchester Insurance Company based on their failure to pay any amounts to our claim of $9 million in actual damages for business interruption insurance.

最後，該公司仍在積極起訴多切斯特保險公司，因為多切斯特保險公司未能就我們索賠的 900 萬美元業務中斷保險實際損失支付任何款項。

Significant discoveries taken place and the court set a trial date for November, 2025. Now with that we will open it up for questions from our analysts.

有了重大發現，法院將審判日期定為 2025 年 11 月。現在我們將開始接受分析師的提問。

(Operator Instructions)

（操作員指令）

Andrew White, Emerging Growth Research.

安德魯懷特 (Andrew White)，新興成長研究。

Good morning. Thank you for that. Following up on what you were talking about, do you see in the first quarter of 2025 a stabilization of CMO-contract terminations? In other words is this a 2024 story not a 2025 story? And that question goes towards the second question as well, which is are you still expecting EBITDA to break even in the fourth quarter of 2025? Thank you very much.

早安.謝謝你。接下來您談到的問題，您是否認為 2025 年第一季 CMO 合約終止情況會穩定下來？換句話說，這是一個 2024 年的故事，而不是 2025 年的故事？這個問題也涉及第二個問題，即您是否仍預計 EBITDA 將在 2025 年第四季實現收支平衡？非常感謝。

Yeah, and I'll take the -- I'll take that one. Good morning, Andrew. Thanks for thanks for joining. Yeah the I would say the reshuffling of the CMO contracts is -- it's gone full term and that really was a 2024 story.

是的，我會選擇——我會選擇這個。早安，安德魯。感謝您的加入。是的，我想說 CMO 合約的重新洗牌是——它已經到了最後一個任期，這真的是 2024 年的故事。

So now, we have for our CMO customers that were that we're going through that transition it's now moving into new production under the new contract, if you will. And those economics are more in our favor. And so as far as break even in Q4 yeah that's still our outlook as we sit today.

所以現在，對於我們的 CMO 客戶來說，我們正在經歷這一轉變，如果你願意的話，現在我們正在根據新的合約進入新的生產階段。這些經濟因素對我們更有利。所以就第四季的收支平衡而言，這仍然是我們今天的展望。

This concludes our question and answer session. I would like to turn the conference back over to Larry Firestone for any closing remarks.

我們的問答環節到此結束。我想將會議交還給拉里·費爾斯通 (Larry Firestone) 並請他作最後發言。

Thank you. We've come a long way in 2024. And our shifting to growth in 2025. Our strategy is in place, our team is excited, and we have started to execute our strategy. The posture in the company is predominantly offensive versus defensive as we book new contracts and lay the foundation for the future.

謝謝。2024 年，我們已經走了很長一段路。我們將在 2025 年實現成長。我們的策略已經制定，我們的團隊感到興奮，我們已經開始執行我們的策略。當我們簽訂新合約並為未來奠定基礎時，公司的態勢主要是進攻而非防守。

Our balance sheet is stronger, our operating costs have been cut, and are more closely aligned with our sales. Our CMO business is producing positive gross margins and is growing. And we are beginning to build our branded business with our VLN reduced nicotine content products to drive profitable growth opportunities ahead. In short, while our turnaround is still not complete we will keep working it. And 22nd Century is on track to becoming a self-sustaining and profitable company for the first time in the company's history.

我們的資產負債表更加強勁，營運成本已削減，並且與銷售額更加緊密地掛鉤。我們的 CMO 業務正在產生正的毛利率，並且還在成長。我們正開始利用 VLN 低尼古丁含量產品來打造我們的品牌業務，以推動未來的獲利成長機會。簡而言之，儘管我們的扭轉局面尚未完成，但我們將繼續努力。22 世紀公司預計在公司歷史上首次成為一家能夠自我維持並獲利的公司。

We will be participating in investor conferences throughout the year. And look forward to updating you again as new developments occur. including the progress on our new branding, new webpage, new contracts, new distribution shipments, and other developments. I would like to thank our team for their energy and stick-to-itiveness.

我們將全年參加投資者會議。並期待在出現新進展時再次向您通報。包括我們的新品牌、新網頁、新合約、新分銷發貨和其他發展的進展。我要感謝我們團隊的活力和堅持不懈的精神。

This has not been an easy road and our team's tenacity to drive forward has been awesome. If you have any questions, or would like to arrange a follow up. Please contact Matt Kreps, Investor Relations for the company. Using his contact information provided on the press release or to myself directly as many of you have. Have a great rest of your day, and thank you for joining our call.

這條路不好走，但我們團隊堅持前進的毅力令人敬佩。如果您有任何疑問，或想要安排後續事宜。請聯絡公司投資者關係部 Matt Kreps。許多人都使用新聞稿中提供的聯絡資訊，或直接向我本人提供。祝您今天過得愉快，感謝您加入我們的電話會議。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。