22nd Century Group Inc (XXII) 2025 Q2 法說會逐字稿

Good morning, and welcome to the 22nd Century Group's second-quarter 2025 results call. (Operator Instructions) Please note this event is being recorded.

早安，歡迎參加 22 世紀集團 2025 年第二季業績電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to turn the conference over to Matt Kreps. Please go ahead.

現在我想將會議交給 Matt Kreps。請繼續。

Hello, and welcome to 22nd Century's second-quarter 2025 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 quarter ended June 30, 2025. The release and 10-Q are available in the Investors section of our website at xxiicentury.com.

您好，歡迎參加 22 世紀 2025 年第二季業績電話會議。今天與我一起出席的還有執行長 Larry Firestone 和財務長 Dan Otto。今天早些時候，我們發布了一份新聞稿，宣布了截至 2025 年 6 月 30 日的季度業績。新聞稿和 10-Q 可在我們網站 xxiicentury.com 的投資者部分找到。

Today's call will include prepared remarks from Larry and Dan updating you on 22nd Century's business, operations, strategy, and financial results through June 30, 2025, and subsequent events post the close of quarter end.

今天的電話會議將包括拉里和丹的準備好的發言，向您通報截至 2025 年 6 月 30 日的 22 世紀的業務、運營、戰略和財務業績，以及本季度結束後的後續事件。

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.

在我們開始之前，先提醒大家一些關於今天通話的內容。今天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。

Additional information regarding these factors can be found in our annual, quarterly and other reports filed with the SEC. 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 noncash and nonoperating expenses, and net debt calculated as a total principal amount of debt outstanding less cash and cash equivalents. For more details on these measures, please refer to our release issued earlier today.

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。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銷前利潤）；根據某些非現金和非營業費用進行調整，以及以未償還債務本金總額減去現金和現金等價物計算的淨債務。有關這些措施的更多詳情，請參閱我們今天早些時候發布的新聞稿。

Now with that, I will now turn the call over to Larry. Thank you.

現在，我將把電話轉給拉里。謝謝。

Thank you, Matt, and good morning, everyone, and thank you for joining 22nd Century's second-quarter 2025 earnings results conference call. 22nd Century is today a purpose-built tobacco company designed to lead the tobacco harm reduction movement into the future.

謝謝馬特，大家早安，謝謝大家參加 22 世紀 2025 年第二季收益業績電話會議。 22 世紀如今是一家專門的菸草公司，旨在引領菸草減害運動走向未來。

This position leverages our leadership in harm reduction for the past 27 years. The basis is the plant bioscience that was developed over the years to give 22nd Century the patented technology to produce our low nicotine tobacco strains that are the foundation of our 95% low-nicotine VLN cigarettes. The reason this is critical is that standard tobacco leaves produce the highly addictive substance, nicotine, and then highly addictive consumer products that are marketed and sold using the nicotine latent standard tobacco.

這一立場充分利用了我們過去 27 年來在減少危害方面的領導地位。其基礎是多年來不斷發展的植物生物科學，它為 22nd Century 提供了生產低尼古丁煙草品種的專利技術，而這些品種正是我們 95% 低尼古丁 VLN 香菸的基礎。這一點至關重要，因為標準菸葉會產生高度成癮物質——尼古丁，然後使用尼古丁潛在的標準菸草來行銷和銷售高度成癮的消費產品。

According to the University of California, San Francisco, nicotine has been proven to be as addictive as cocaine and heroin, and may even be more addictive. Many people who smoke, develop nicotine dependence, which makes quitting all the harder, especially when they try to stop smoking on their own.

根據加州大學舊金山分校研究，尼古丁已被證明與可卡因和海洛因一樣容易上癮，甚至可能更難上癮。許多吸菸的人會產生對尼古丁的依賴，這使得戒菸變得更加困難，尤其是當他們試圖自己戒菸時。

In fact, 70% of smokers report wanting to quit, but many wait until they develop a significant tobacco-related disease, such as heart disease, cancer or stroke. Think about that as the problem statement. There are 1.1 billion smokers in the world, all who are addicted to nicotine, and in addition to the smoking population, there are another 300 million smokeless tobacco users who are addicted to nicotine.

事實上，70% 的吸菸者表示想要戒菸，但許多人直到罹患嚴重的菸草相關疾病，如心臟病、癌症或中風才戒菸。將其視為問題陳述。全球有11億菸民，全部對尼古丁上癮，除了吸菸人口外，還有另外3億無菸菸草使用者對尼古丁上癮。

And now we not only have nicotine from tobacco plants, but our industry has developed synthetic nicotine, which is now used in pouches. Think about that. The desire to keep consumers addicted has created a synthetic version. Of the 1.1 billion smokers in the world, approximately 8 million die each year due to tobacco-related illnesses. That's 21,900 people per day dying on average from smoking.

現在，我們不僅有來自菸草植物的尼古丁，我們的產業也開發了合成尼古丁，現在用在小袋子裡。想想看。為了讓消費者上癮，我們創造了一種合成尼古丁。全球有11億吸菸者，每年約有800萬人死於與菸草有關的疾病。也就是說，平均每天有 21,900 人因吸菸而死亡。

Our tobacco industry does not like to talk about that, but we do. In the US, in 2018, more than $600 billion was spent on smoking-related illnesses and chronic health conditions born from smoking. I would speculate that seven years later in 2025 that $600 billion is a much, much larger number. In the US we spend six times more in health cost than the combined big four tobacco companies report in worldwide revenue annually.

我們的菸草業不喜歡談論這個，但我們卻談論它。在美國，2018年，用於治療吸煙相關疾病和吸煙引起的慢性健康問題的費用超過6000億美元。我推測七年後的 2025 年，6,000 億美元將是一個更大的數字。在美國，我們每年在醫療上的花費是四大菸草公司全球總收入的六倍。

Additionally, the $600 billion that was spent in health care costs was 14 times the operating profit that was reported by those same tobacco companies combined. The US government and the federal courts have been warning us about the harms of nicotine, including nicotine's addictive effect since the early 1950s.

此外，用於醫療保健費用的 6,000 億美元是這些菸草公司報告的總營業利潤的 14 倍。自 1950 年代初以來，美國政府和聯邦法院一直在警告我們尼古丁的危害，包括尼古丁的成癮作用。

75 years of money spent researching, messaging, proving, and killing, and still somehow our smoking population can't change the course of their lives because of their nicotine addiction. There are warnings on the packs, warnings on the doors of retailers, no more commercial advertising, rules after rules are in place and somehow, we have not gotten the message.

我們花了 75 年的時間進行研究、傳遞訊息、證明和消除尼古丁，但我們的吸菸人群仍然無法因為對尼古丁上癮而改變自己的生活軌跡。包裝上、零售商門上都有警告，不再有商業廣告，規則一一制定，但不知何故，我們卻沒有收到訊息。

I believe it's a simple message. Nicotine is really bad for you. It's seriously addictive. And once you're hooked, you can't quit, or if you do, it takes a herculean effort to do so.

我相信這是一個簡單的訊息。尼古丁真的對你有害。它真的很容易上癮。一旦你上癮了，你就無法戒掉，或者即使戒掉，也需要付出巨大的努力。

Now the FDA has put out a very important new tobacco product standard to try and force the issue regarding nicotine and its addictive nature. Researchers, scientists, labs, pharma companies have spent years and billions studying nicotine and its effect on the human brain, brain development, human behavior, and the addiction that is created so quickly, while using nicotine.

現在，FDA 推出了一項非常重要的新菸草產品標準，試圖強制解決尼古丁及其成癮性問題。研究人員、科學家、實驗室、製藥公司花了數年時間和數十億美元研究尼古丁及其對人類大腦、大腦發育、人類行為的影響，以及在使用尼古丁時迅速產生的成癮性。

While the FDA has proposed a new standard that when adopted into law, will require a two-year transformation of all combustible cigarettes and filtered cigars to contain less than 0.7 milligrams per gram of nicotine or essentially 95% less nicotine than traditional cigarettes, the worry for Big Tobacco is that they will not be able to convert their addicted brand loyal consumers to an alternative of their combustible brands in time before the new law is enacted.

儘管美國食品藥物管理局 (FDA) 提出了一項新標準，一旦通過成為法律，將要求所有可燃香煙和過濾嘴雪茄在兩年內實現尼古丁含量低於每克 0.7 毫克或比傳統香煙低 95% 的目標，但煙草巨頭們擔心，在新法律頒布之前，他們無法及時讓對其品牌忠誠的消費者轉向可燃品牌的替代品。

They're hustling to develop other high nicotine answers to keep their consumers addicted and married to their brands. Therefore, the race is on to develop different forms of nicotine delivery systems such as heat-not-burn, which are battery-operated, and oral products such as pouches and snuff. It's interesting that these other nicotine delivery vehicles are considered to be in the class of tobacco harm reduction, because really what we should be talking about is nicotine harm reduction.

他們正在努力開發其他高尼古丁產品，以保持消費者對他們的品牌的依賴。因此，人們競相開發不同形式的尼古丁輸送系統，如電池供電的加熱不燃燒系統，以及袋裝和鼻煙等口服產品。有趣的是，這些其他尼古丁輸送載體被認為屬於菸草危害減少類別，因為我們真正應該談論的是尼古丁危害減少。

Our society in the US has taken many steps over the years, and still, we resist, thanks to the products that are being marketed and sold in this category. We can no longer smoke on planes, in restaurants, public buildings; there are designated smoking areas outside. In one community in California, you cannot smoke in your apartment as the smoke travels through the air conditioning duct work. We've also clearly identified harms from secondhand smoke and now third-hand smoke.

多年來，美國社會已經採取了許多措施，但由於此類產品的營銷和銷售，我們仍然在抵制。我們不再能在飛機、餐廳和公共建築裡吸煙；外面有指定的吸煙區。在加州的一個社區，你不能在公寓裡吸煙，因為煙霧會透過空調管道傳播。我們也清楚地認識到二手煙和三手煙的危害。

Even with all these regulations, Big Tobacco still contests the FDA and their new mandate and race to keep consumers married to their nicotine habit. The newest efforts and claims are that these new nicotine delivery systems will reduce the exposure to the harmful tobacco-specific nitrosamines, or TSNAs, two of them, known as NNN and NNK to be specific, are two of the most harmful in the list of carcinogens and belong only to tobacco.

即使有這些規定，菸草巨頭們仍然在與 FDA 及其新規定競爭，並努力讓消費者保持對尼古丁的習慣。最新的努力和說法是，這些新的尼古丁輸送系統將減少接觸有害的煙草特有亞硝胺或 TSNA，其中兩種，具體稱為 NNN 和 NNK，是致癌物列表中最有害的兩種，並且只屬於煙草。

The simple truth is TSNAs are most lethal when they're combusted. So the thought process in the industry is, if we could deliver nicotine and keep people addicted without combusting the tobacco causing TSNAs to activate, the tobacco industry believes that has somehow done a good thing for the consumer and society.

簡單的事實是，TSNA 在燃燒時最致命。因此，菸草產業的思維過程是，如果我們能夠輸送尼古丁並使人們上癮，而無需燃燒菸草導致 TSNA 激活，那麼菸草產業認為這在某種程度上對消費者和社會來說是一件好事。

This is simply not true. The tobacco industry has simply kept their consumer addicted to nicotine, while working on lowering the exposure to the two most deadly TSNAs. This message has to finally sink in that the FDA has gotten it right with their latest low nicotine mandate.

這根本不是事實。菸草產業只是讓消費者對尼古丁上癮，同時致力於降低兩種最致命的 TSNA 的接觸量。人們最終必須接受這樣一個訊息：FDA 最新的低尼古丁強制規定是正確的。

When we hear the word addiction, our minds have to relate to the definition of addiction, which is not having control, over doing, taking or using something to the point where it is or could be harmful to you. Look at opioids, cocaine, heroin, alcohol, basically harmful drugs and substances, if not controlled by the user can cause serious harm.

當我們聽到「成癮」這個詞時，我們的思維必須與成癮的定義聯繫起來，即無法控制、過度做、服用或使用某些東西，以至於它對你有害或可能有害。看看鴉片類藥物、古柯鹼、海洛因、酒精，基本上都是有害的藥物和物質，如果使用者不加以控制，可能會造成嚴重傷害。

Nicotine does not get a pass card in the addiction category. It simply means that the consumer has given up control. This is the control that we are on a mission to get back to the smoker. In fact, due to the ease of access to nicotine, this industry has created a new harm: nicotine poisoning in children and youth. And this has come about as children are getting a hold of nicotine pouches and are emulating adults and beginning to use these products. Children who have been affected by this situation are then rushed to the hospital to the poison center.

尼古丁在成癮性類別中並未通過。這僅僅意味著消費者放棄了控制權。這就是我們的使命，要讓吸菸者重新獲得控制權。事實上，由於尼古丁的易得性，這個行業製造了一種新的危害：兒童和青少年尼古丁中毒。而這一切的根源在於，孩子開始接觸尼古丁煙袋，並效法成年人開始使用這些產品。受到這種情況影響的兒童隨後被緊急送往醫院的毒物控制中心。

Now we have to consume our medical resources to create a whole new mitigation strategy to add this condition off of the past. This will add to today's version of the $600 billion in health care costs related to nicotine addiction. The issue is that the tobacco industry is fighting to keep nicotine in the products.

現在我們必須耗費我們的醫療資源來制定一個全新的緩解策略，以消除過去的這種狀況。這將使目前與尼古丁成癮有關的醫療保健費用增加 6,000 億美元。問題在於菸草業正在努力保留產品中的尼古丁。

But 22nd Century started a technology initiative in 1998 to mitigate this nicotine addiction issue, and having stayed on that path, we now have the only authorized combustible cigarette that complies with the new low nicotine standard.

但 22 世紀公司於 1998 年啟動了一項技術計劃來緩解尼古丁成癮問題，並堅持走這條路，現在我們擁有唯一符合新的低尼古丁標準的授權可燃香菸。

So the FDA mandate can be adopted successfully. In 2024, there was a marketplace research study that was completed using our 95% less spectrum research cigarettes. And out of 450 subjects, 40% of them changed their smoking habit dramatically and reduced their consumption over a 16-week period.

因此 FDA 的授權可以成功實施。2024年，我們進行了一項市場調查，研究對象使用了我們95%低譜香菸。在450名受試者中，40%的人在16週內顯著改變了吸菸習慣，減少了吸菸量。

I'm going to project a concept, but if I extrapolate that over the 28.8 million US smoking population, that would mean that 11.5 million smokers could potentially dramatically change their smoking habit and take control of their dependence on nicotine and their addiction in roughly the same amount of time.

我將提出一個概念，但如果我將其推廣到 2880 萬美國吸煙人口，那就意味著 1150 萬吸煙者可能會在大致相同的時間內顯著改變他們的吸煙習慣並控制他們對尼古丁的依賴和成癮。

To help make that vision a reality and prove that reduced nicotine content products can perpetuate and populate the market, we have introduced, over the past 18 months or so, a strategy we call flanker or Partner VLN. Similar to the [Intel Inside] concept, now we have two early adopters to the new low nicotine standard with smoker-friendly and our Pinnacle brands who now carry a set of VLN product SKUs in their lineup.

為了幫助將這一願景變為現實，並證明低尼古丁含量產品能夠延續並佔領市場，我們在過去 18 個月左右的時間裡推出了一種我們稱之為側翼或合作夥伴 VLN 的策略。與 [Intel Inside] 概念類似，現在我們有兩個早期採用新低尼古丁標準的品牌，即吸煙者友好型品牌和我們的 Pinnacle 品牌，它們現在在其產品線中推出一組 VLN 產品 SKU。

These brands and the retailers that carry them are in a position to benefit when the FDA mandate goes into effect. Our hats are off to them. Our low nicotine VLN cigarette is a simple concept as the smoker will get less nicotine as they smoke and reduce the daily need for nicotine without giving up their comfort and practice of having a cigarette.

當 FDA 法規生效時，這些品牌及其零售商都將受益。我們向他們表示敬意。我們的低尼古丁 VLN 香菸有一個簡單的概念，因為吸菸者在吸菸時會攝取較少的尼古丁，從而減少日常對尼古丁的需求，同時又不放棄吸菸的舒適感和習慣。

No need to transition to a plastic battery-operated device, and this would be like turning an addicted smoker into a casual smoker. Following that backdrop, here's where we are in the progress of building 22nd Century. Just to review what we've stated previously, market penetration for the tobacco business is a serial process. There's test data that we need to provide to the states, along with an application to sell our products in the state.

無需轉換到塑膠電池供電的設備，這就像將上癮的吸煙者變成隨意吸煙者一樣。在此背景下，我們正在建立 22 世紀。回顧我們之前所說的，菸草業務的市場滲透是一個連續的過程。我們需要向各州提供測試數據，以及在該州銷售我們產品的申請。

Then the state attorney general approves or disapproves of the application. When approved, we are then registered to have our products sold in the state. Then we begin the sales process. For many retailers, they want to see that our products are authorized in all the states they have a presence before they launch as these are chain-wide launches.

然後州檢察長會批准或拒絕該申請。一旦獲得批准，我們便可在該州註冊銷售我們的產品。然後我們開始銷售流程。對於許多零售商來說，他們希望看到我們的產品在推出之前在其所在的所有州都獲得授權，因為這些都是全連鎖的推出。

As we noted in our press release, Pinnacle VLN began shipping into distribution in August and will be on sale at a major retailer in early September for a soft launch and a full launch in October. We're very excited as this has been a long time coming for 22nd Century.

正如我們在新聞稿中指出的那樣，Pinnacle VLN 於 8 月開始發貨，並將於 9 月初在一家大型零售商處進行試運行，並於 10 月全面上市。我們非常興奮，因為這對 22 世紀來說已經期待已久了。

This is so far the largest single deployment of VLN products in the company's history. Smoker-friendly VLN products will follow this launch, deploying smoker-friendly VLN into their corporate stores, and then 22nd Century VLN products will follow into another major retailer, and we will keep you up to date with further developments.

這是迄今為止該公司史上規模最大的VLN產品單一部署。吸煙友善 VLN 產品將在此次發布後推出，將吸煙友好型 VLN 部署到他們的公司商店，然後 22nd Century VLN 產品將進入另一家大型零售商，我們將隨時向您通報進一步的發展情況。

As mentioned previously, the margin profile for the branded products is much greater than the export CMO and cultured cigar products. And therefore, you will see us shifting our business in Q3 and Q4, away from the very low or close to breakeven high-volume business to focus on the branded business, which has healthier gross margins. Our top line may decline in the near term, but our gross margin will increase as a result.

如前所述，品牌產品的利潤率遠高於出口 CMO 和培育雪茄產品。因此，你會看到我們在第三季和第四季將業務從利潤率非常低或接近盈虧平衡的大批量業務轉向毛利率更高的品牌業務。我們的營業收入短期內可能會下降，但毛利率會因此上升。

We are committed to achieving profitability in the near term, but this mix shift will slow our progress to achieving that. However, this is the right move for our company as our resources need to be spent on our future. This right now is really the new beginning of 22nd Century and our move into a stronghold within the tobacco harm reduction movement.

我們致力於在短期內實現盈利，但這種組合轉變將減緩我們實現這一目標的進程。然而，這對我們公司來說是正確的舉措，因為我們的資源需要花在我們的未來上。這確實是 22 世紀的新起點，也是我們在菸草危害減少運動中邁向強盛的一步。

We are now focusing on our higher-margin products that utilize our [cornered resource], a resource that no one else in the industry has or can obtain anytime soon, and that is our proprietary low nicotine tobacco. And at the same time, multiple macro forces are pushing people away from traditional combustible cigarettes.

我們現在專注於利用我們的[壟斷資源]的高利潤產品，這是業內其他任何人都沒有或無法在短期內獲得的資源，那就是我們專有的低尼古丁煙草。同時，多種宏觀力量正在推動人們遠離傳統可燃香菸。

The FDA, with its proposed low nicotine mandate, and Big Tobacco, with its not-so-subtle attempt to switch everyone to heat not burn and non-combustibles, while who else has an option for all of those smokers being squeezed by these powerful macro forces, we do. With our low nicotine VLN products and the Partner VLN products being offered through smoker-friendly and Pinnacle.

美國食品藥物管理局 (FDA) 提出了低尼古丁強制規定，而菸草巨頭們則毫不掩飾地試圖讓所有人都轉向加熱不燃燒和非燃燒型電子煙。面對這些強大的宏觀力量，除了我們，還有誰能為所有受困於這些強大力量的吸煙者提供選擇呢？我們擁有低尼古丁 VLN 產品，並透過菸民友善和 Pinnacle 提供 Partner VLN 產品。

The summary of all this is as follows, we've been developing our low nicotine VLN for 27 years. The tobacco industry through the recent mandate by the FDA for defined nicotine levels has opened up the lane for tobacco harm reduction for which we are the anchor and the leader and have the best product to help in this mission.

總結起來就是，我們已經發展出低尼古丁 VLN 27 年了。菸草產業透過 FDA 最近頒布的規定尼古丁含量，開闢了減少菸草危害的道路，我們是這一領域的支柱和領導者，擁有最好的產品來幫助完成這項使命。

The smoker can simply transition to a VLN cigarette without having to buy a battery-operated device, manage device charging and change the form factor of the habit that is such a big part of their life. We have enough plug-in battery charge devices to manage in our world, and we don't need an electric nicotine delivery device to add to them.

吸菸者可以輕鬆過渡到 VLN 香煙，而無需購買電池供電的設備、管理設備充電並改變他們生活中非常重要的習慣。我們的世界中已經有足夠的插入式電池充電設備需要管理，我們不需要為它們添加電動尼古丁輸送裝置。

This same VLN cigarette is the only low nicotine cigarettes that's authorized by the FDA, is now in the market with Pinnacle VLN and smoker-friendly VLN products. Also, the only low nicotine cigarette that complies with the FDA's new proposed low nicotine standard.

這款 VLN 香菸是唯一獲得 FDA 授權的低尼古丁香菸，目前在市面上有 Pinnacle VLN 和吸菸者友善 VLN 產品。此外，唯一符合 FDA 新提出的低尼古丁標準的低尼古丁香菸標準。

The way I see the market shaping up is in four lanes. Lane one, pouches and moist snuff; lane two, heat-not-burn or heated tobacco products; lane three, low nicotine or VLN products; and lane four standard combustible cigarettes, smokers who are not going to quit, they're going to smoke anyway. The first three lanes are coined as being part of the tobacco harm reduction movement. It is clear that VLN products in all forms will be directly competing with heat-not-burn, or HTPs, for all the combustible tobacco users.

我認為市場發展分為四個方向。第一道是袋裝香煙和濕鼻煙；第二道是加熱不燃燒或加熱煙草製品；第三道是低尼古丁或 VLN 產品；第四道是標準可燃香煙，吸煙者如果不想戒菸，無論如何都會繼續吸煙。前三條路線是作為菸草危害減少運動的一部分而創建的。顯然，所有形式的 VLN 產品都將與加熱不燃燒產品（HTP）直接競爭，以爭奪所有可燃菸草使用者的青睞。

Also, as the FDA low nicotine standard is enacted, 22nd Century's VLN products will be competing for the smokers in lane four as their full-strength cigarette brands will become unavailable. We see this as an opportunity to expand our Partner VLN, our VLN Inside concept, to expand to other brands with a license model for our low nicotine tobacco and the VLN brand.

此外，隨著 FDA 低尼古丁標準的頒布，22nd Century 的 VLN 產品將與第四車道的吸菸者競爭，因為他們的全強度香菸品牌將變得無法購買。我們認為這是一個擴大我們的合作夥伴 VLN、我們的 VLN Inside 概念的機會，可以透過低尼古丁菸草和 VLN 品牌的授權模式擴展到其他品牌。

Rate of sale is key for all products in our branded portfolio, and this will drive our business model to the profitability targets that our industry delivers. We are also very excited to see the fruits of our work here and very much are looking forward to advancing VLN throughout the US and internationally.

銷售率是我們品牌組合中所有產品的關鍵，這將推動我們的商業模式實現產業所能實現的獲利目標。我們也很高興看到我們在這裡的工作成果，並非常期待在美國和國際上推動 VLN。

Now I'll turn the call over to Dan to discuss the numbers.

現在我將把電話轉給丹來討論這些數字。

Thank you, Larry. Good morning, everyone, and thanks again for joining our discussion today. We continue to build tremendous momentum in our company, as we're in the final stages and ready to emerge from what's been a challenging and lengthy restructuring period.

謝謝你，拉里。大家早安，再次感謝大家參加我們今天的討論。我們公司持續保持強勁發展勢頭，目前我們正處於最後階段，準備擺脫充滿挑戰且漫長的重組期。

We remain focused on entry of VLN and Partner VLN products in the market by expanding distribution and customer adoption, which although not yet reflected in our second quarter or year-to-date financial results, will begin in the third quarter and will generate steady revenue growth and gross margin expansion.

我們仍然專注於透過擴大分銷和客戶採用來將 VLN 和合作夥伴 VLN 產品打入市場，雖然這尚未反映在我們的第二季或年初至今的財務業績中，但將從第三季開始，並將產生穩定的收入成長和毛利率擴大。

As we move forward, we'll continue to cycle out of the lower-margin CMO business that makes either very little or loses money at the gross profit line and be replacing that volume with the high-margin branded products. However, consistent with messaging earlier in the year and in Larry's remarks today, there are a number of latent barriers to clear as we go-to-market with many of the new high-margin branded products, VLN and Partner VLN SKUs, which have resulted in delays to achieving our profitability goals.

隨著我們不斷前進，我們將繼續退出利潤率較低的 CMO 業務，這些業務在毛利上要么賺得很少，要么虧損，而將這一部分業務替換為利潤率較高的品牌產品。然而，與今年早些時候的信息和拉里今天的演講一致，當我們將許多新的高利潤品牌產品、VLN 和合作夥伴 VLN SKU 推向市場時，存在許多潛在的障礙需要清除，這導致我們實現盈利目標的延遲。

We now expect the impact of delays in the time necessary to execute the remaining pieces of the turnaround will take us into the first half of 2026 to achieve profitability. The milestones necessary to reach profitability will be measured against the interplay of continuing to cycle out of the low-margin CMO volume and adding in the high-margin growth volume of branded products in VLN. And adding the high-margin volume will depend on a number of variables, such as state registrations, number of stores and distribution, rate of sale, among others.

我們現在預計，執行剩餘轉型部分所需時間的延遲將使我們在 2026 年上半年才能實現盈利。獲利所需的里程碑將根據持續循環淘汰低利潤的CMO產量和增加VLN品牌產品高利潤成長產量之間的交互作用來衡量。而增加高利潤產量將取決於許多變量，例如州註冊、門市數量和分銷管道、銷售率等等。

Reflecting on the steps necessary to move forward, we are actively monitoring the timing of initial shipments of Partner VLN products in the third quarter to our distributors, along with initial restocking orders and rate of sale to register. We've already begun shipping Pinnacle VLN in August with the first stocking orders being over 3,000 cartons. Adding the higher-margin branded products will break open gross margin profitability, and as we maximize the capacity and efficiency of our factory that has largely fixed labor and overhead.

考慮到未來需要採取的措施，我們正在積極監控合作夥伴 VLN 產品在第三季向經銷商的首批出貨時間，以及首批補貨訂單和銷售登記率。我們已於 8 月開始出貨 Pinnacle VLN，首批庫存訂單超過 3,000 箱。添加利潤率較高的品牌產品將打破毛利率的獲利能力，同時我們將最大限度地提高工廠的產能和效率，而工廠的勞動力和管理費用基本上是固定的。

Aside from the P&L, during the quarter, we've made further progress in improving the balance sheet, reducing debt by approximately $1 million. We've also improved our working capital outlay by tightening finished good inventory on hand.

除了損益表之外，本季我們在改善資產負債表方面取得了進一步進展，減少了約 100 萬美元的債務。我們也透過減少庫存成品庫存來改善營運資本支出。

Let me now spend some time and walk through the specific numbers of our financial results for the quarter. Starting from the top, net revenue was $4 million in the second quarter 2025, decreased sequentially from $6 million in the first quarter of 2025, and gross margin was consistent at a loss of $0.6 million. Total cartons sold were 779,000 versus 478,000 in the first quarter. The increase in volume reflects significant increase in CMO cigarettes, including export which has high volume but low-priced products.

現在，讓我花點時間，來介紹一下我們本季財務表現的具體數字。由上至下，2025年第二季的淨收入為400萬美元，較2025年第一季的600萬美元季減，毛利率維持不變，為60萬美元的虧損。銷售紙箱總數為 779,000 箱，而第一季為 478,000 箱。銷售量的成長反映了CMO香菸的大幅成長，包括出口量大但價格低廉的產品。

Total operating expenses for the second quarter were $2.3 million compared to $2 million in the first quarter of 2025. This level of operating expense overhead is sustainable now as we move forward, and expanding and launching the high-margin branded products, whereby the company will be able to achieve rapid growth without having to incur significant additional OpEx spend.

第二季的總營運費用為 230 萬美元，而 2025 年第一季為 200 萬美元。隨著我們不斷前進，擴大和推出高利潤品牌產品，這種營運費用管理水準現在是可持續的，因此公司將能夠實現快速成長，而不必承擔大量額外的營運支出。

As it relates to our research and development overhead and expenditures, we will anticipate beginning to see additional spend over the next two years. There are important additional technologies for our company to complete research along with our research partners in order to maintain our stronghold on the low nicotine IP landscape.

由於它與我們的研發費用和支出有關，我們預計在未來兩年內將開始看到額外的支出。為了保持我們在低尼古丁智慧財產權領域的優勢，我們公司需要與我們的研究夥伴一起完成重要的附加技術的研究。

22nd Century will remain dominant in the low and very low nicotine plant genetics and bioscience space. And then further, as we bring additional low nicotine products to market across multiple form factors, funding for clinical research and market studies will be necessary along with the resources to submit additional or supplemental PMTA and MRTP filings with the FDA.

22nd Century 將繼續在低尼古丁和極低尼古丁植物遺傳學和生物科學領域佔據主導地位。此外，隨著我們向市場推出更多不同形式的低尼古丁產品，我們需要資金來資助臨床研究和市場研究，同時也需要資源來向 FDA 提交額外或補充的 PMTA 和 MRTP 文件。

Now continuing on, second-quarter 2025 net loss from continuing operations was approximately $3.3 million, consistent with the first quarter, and adjusted EBITDA during the quarter was a loss of $2.6 million as compared to a loss of $2.3 million in the first quarter of 2025.

現在繼續，2025 年第二季持續經營淨虧損約為 330 萬美元，與第一季持平，本季調整後的 EBITDA 虧損為 260 萬美元，而 2025 年第一季虧損為 230 萬美元。

Finally, the company remains active in our lawsuit against Dorchester Insurance Company based on their failure to pay any amounts owed toward our claim of $9 million in actual damages for business interruption insurance. Significant discovery is taking place, and the court has set a trial date for November 2025, which is now less than three months away.

最後，該公司仍在積極起訴多切斯特保險公司，因為該公司未能支付我們索賠的 900 萬美元業務中斷保險實際損失的任何款項。重大調查正在進行中，法院已將審判日期定為 2025 年 11 月，現在距離審判日期不到三個月。

With that, I'd like to open it up for any questions from our analysts.

現在，我想開始回答我們分析師的任何問題。

(Operator Instructions) Andrew White, Emerging Growth.

（操作員指示）安德魯懷特（Andrew White），新興成長。

Yeah. First and foremost, it sounds as if breakeven on EBITDA might be pushing back. Can you give some visibility on when you might achieve breakeven on a quarterly basis, EBITDA?

是的。首先，聽起來EBITDA的損益平衡可能會延後。您能否透露一下何時能夠達到季度收支平衡（EBITDA）？

Dan, I'll let you take that one.

丹，我讓你拿走這個。

Okay. Yeah, Andy, at this point, we're looking at first half of 2026. Definitely second quarter, and we're working on first quarter there really based on the timing of the branded products that we've spoken to high margin, both VLN and Partner VLN. As we watch initial stocking, rate of sale and number of stores, that will be the measure to see whether that first-quarter versus second-quarter 2026 is achievable.

好的。是的，安迪，目前，我們正在展望 2026 年上半年。肯定是第二季度，我們也在為第一季做準備，這主要取決於我們之前談過的高利潤品牌產品（包括VLN和合作夥伴VLN）的上市時間。我們會關注初期庫存、銷售率和門市數量，以衡量2026年第一季與第二季的業績能否實現。

Okay. So first quarter or second quarter. Okay. Good. Secondarily, your cash is sitting at about $3 million as of the end of the second quarter. Is that sufficient to see you through to breakeven in the first or second quarter of next year? Or will you envision additional share issuance?

好的。所以是第一季還是第二季？好的。好的。其次，截至第二季末，您的現金約為 300 萬美元。這些資金足以讓你們在明年第一季或第二季達到收支平衡嗎？或者你們會考慮增發股票嗎？

Dan, do you want that one, or you want me to take that one?

丹，你想要那個，還是想讓我拿那個？

Go ahead, Larry.

繼續吧，拉里。

Yeah. Andy, this is one of the reasons why we're shifting away from the low margin and some of its lost margin CMO businesses. It consumes our working capital. And so, we've got to get to the point where -- and we're -- actually, we're tracking our way to get to the point where the positive gross margin, gross margin performance of the branded products carries our overhead, but also contributes to the working capital. So there's a chance we're going to be raising some money in the near term, but the size of the raise will be less than what we've been doing in the past.

是的。安迪，這就是我們要放棄低利潤率和一些利潤損失的CMO業務的原因之一。它會消耗我們的營運資本。所以，我們必須達到這樣的水平——事實上，我們正​​在努力實現這樣的水平：品牌產品的毛利率為正，毛利率表現既能承擔我們的管理費用，又能為營運資本做出貢獻。因此，我們有可能在短期內籌集一些資金，但籌集的金額將低於我們過去的水平。

Okay. Good to hear. And in terms of the debt that's currently outstanding, you made a lot of progress in reducing it over the last year and quarter. It's rolling over supposedly in, I think, March of 2026. What are your plans with rolling over the debt and/or handling it otherwise?

好的。很高興聽到這個消息。就目前未償還的債務而言，過去一年和一季度，你們在減少債務方面取得了很大進展。我認為，它將於 2026 年 3 月結束。您對於債務展期和/或以其他方式處理債務有何計劃？

Yeah, we will be talking to -- well, we're in conversations with our debtor on that issue and paying it off and becoming debt-free, extinguishing the debt. But also as we raise money, a piece of that will go to extinguishing the debt as well. So it's kind of a balance right now as we look to make money, turn the company profitable and also extinguish that debt at the same time.

是的，我們正在與債務人討論這個問題，並幫助他們還清債務，擺脫債務，消除債務。但當我們籌集資金時，其中一部分也會用於償還債務。因此，現在我們需要一種平衡，既要賺錢，又要讓公司獲利，同時還要償還債務。

Okay. Okay. That's something to watch. And last but not least, I think it was Dan who touched on the MRTP renewal process. Is there any chance that VLN would not be renewed?

好的。好的。這是值得關注的事。最後但同樣重要的一點是，我認為是丹談到了 MRTP 更新過程。VLN 有可能無法續簽嗎？

I can give you -- my two cents on that is given the FDA's recent mandate that they put out in January and the fact that we comply and we're in the market sort of enabling -- not sort of but enabling, that mandate to come to fruition, I think there's very little chance that the MRTP won't be renewed.

我可以給你——我對此的看法是，鑑於 FDA 在一月份發布的最新授權，以及我們遵守規定並進入市場的事實，某種程度上，不是某種程度上，而是某種程度上，使該授權得以實現，我認為 MRTP 不續籤的可能性很小。

I'd now like to turn it back over to Larry Firestone for closing remarks.

現在我想把發言權交還給拉里·費爾斯通，請他做最後發言。

Thank you, everyone, for joining our call. 22nd Century has made a quantum leap forward. Our message is clear and aligned with the FDA. We've now begun to ship our newly branded VLN products into the market. This is at a time when the focus of tobacco harm reduction is at its peak.

感謝大家參加我們的電話會議。 22世紀已經取得了巨大的飛躍。我們的訊息很明確，並且與 FDA 一致。我們現在已經開始向市場推出新品牌的 VLN 產品。此時正值煙草減害關注度達到高峰。

We cannot be more excited for the launch of our VLN products into the market and the effect that this important technology will have on consumers who smoke. We are now hyper-focused on the rate of sale and scaling.

我們對我們的 VLN 產品進入市場以及這項重要技術將對吸煙消費者產生的影響感到無比興奮。我們現在高度關注銷售率和擴展率。

So stay tuned as this will be our discussion going forward as opposed to running an array of high-volume, super low or low gross margin products through the factory to achieve better cost absorption at our factory with our overhead, which is not the business model we're going to run going forward.

因此請繼續關注，因為這將是我們今後的討論，而不是透過工廠運行一系列大批量、超低或低毛利率的產品，以便透過我們的間接費用在工廠更好地吸收成本，這不是我們今後要運行的商業模式。

Our team is excited in driving 22nd Century to profitability. It will take a little longer as we give up the margin contribution from the high-volume mix, but the focus on the branded business will pay off. I would personally like to thank and appreciate our team for their extremely hard work transitioning our company in a very short period of time with very limited resources.

我們的團隊很高興能夠推動 22nd Century 獲利。由於我們放棄了大批量產品帶來的利潤貢獻，因此這將需要更長的時間，但對品牌業務的關注將會帶來回報。我個人要感謝並讚賞我們的團隊，他們在非常短的時間內以非常有限的資源完成了我們公司的轉型。

This has been like moving a mountain, and they've done an awesome job. So we look forward to updating you with press releases along the way and again, at next quarter's earnings release time frame. Hope you all have a great day. Thank you.

這就像移山一樣，他們做得非常出色。因此，我們期待在此過程中以及下個季度的收益發佈時向您更新新聞稿。祝大家有個愉快的一天。謝謝。

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。