22nd Century Group Inc (XXII) 2025 Q3 法說會逐字稿

Welcome to 22nd Century Group's third quarter 2025 Conference Call and webcast. (Operator Instructions) It is now my pleasure to turn the floor over to Matt Kreps, Investor Relations for 22nd Century Group. Please begin.

歡迎參加22世紀集團2025年第三季電話會議及網路直播。（操作員說明）現在我很高興將發言權交給 22 世紀集團的投資者關係負責人 Matt Kreps。請開始。

Hello, and welcome to 22nd Century's third 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 September 30, 2025. The release and 10-Q are available in the Investors section of our website at xxiicentury.com. Today's call will include prepared remarks from Larry and Dan updating you on 22nd Century's business operations, strategy and financial results through September 30, 2025, and subsequent events post the close of quarter end.

大家好，歡迎參加22世紀公司2025年第三季業績電話會議。今天和我一起的有執行長 Larry Firestone 和財務長 Dan Otto。今天早些時候，我們發布了一份新聞稿，公佈了截至 2025 年 9 月 30 日的季度業績。新聞稿和10-Q表格可在我們網站xxiicentury.com的投資者關係欄位查閱。今天的電話會議將包括Larry和Dan的發言，他們將向您介紹22nd Century截至2025年9月30日的業務運營、戰略和財務業績，以及季度末之後的相關事宜。

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. 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. For more details on these measures, please refer to our release issued earlier today.

在開始之前，先提醒大家今天通話的幾個事項。今天發表的一些聲明具有前瞻性。前瞻性陳述受風險、不確定性及其他因素的影響，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信息，請參閱我們向美國證券交易委員會提交的年度報告、季度報告和其他報告。在今天的電話會議中，我們可能還會討論非GAAP財務指標，包括調整後的EBITDA，我們將其定義為扣除利息、稅項、折舊和攤銷前的收益，並根據某些非現金和非經營性支出進行調整。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公告。

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

接下來，我將把電話交給拉里。

Thank you, Matt, and good morning, everyone, and thank you for joining 22nd Century's third quarter 2025 Results Conference Call. Our team continues to make significant progress. We've transitioned from a company that was dedicated to a massive cleanup and restructuring to a company poised to contribute important technology to a very well-established industry, which will fuel our growth phase. We have also improved our balance sheet significantly during this quarter, becoming debt-free and now we are funded with cash resources we have not had over the past two years.

謝謝馬特，大家早安，謝謝各位參加 22 世紀公司 2025 年第三季業績電話會議。我們的團隊持續取得顯著進展。我們已經從一家致力於大規模清理和重組的公司轉型為一家準備為一個非常成熟的行業貢獻重要技術的公司，這將推動我們的成長階段。本季度，我們的資產負債表也得到了顯著改善，實現了零負債，現在我們擁有了過去兩年都沒有的現金資源。

Today, I will lay out the direction of our company as we end 2025 and enter 2026 where we are focused on growing distribution followed by measuring and accelerating rate of sale of our products. To start, I want to review some facts and lay some groundwork on the tobacco plant, nicotine and the overall industry. As the tobacco plant grows, it produces the highly addictive substance, nicotine. The leaves are harvested and cured, and the nicotine contained within is then utilized for a variety of highly addictive consumer products, both combustible and noncombustible.

今天，我將闡述我們公司在 2025 年底和 2026 年的發展方向，我們將專注於擴大分銷管道，然後衡量並加快我們產品的銷售速度。首先，我想回顧一些事實，並對菸草植物、尼古丁和整個產業進行一些基礎介紹。菸草植株在生長過程中會產生高度成癮性物質尼古丁。葉子被採摘和加工後，其中所含的尼古丁被用於生產各種高度成癮的消費品，包括可燃性和非可燃性產品。

These products are designed to release neurotransmitters that bind to the receptors in the brain, triggering the release of dopamine, norepinephrine and serotonin, which cause a feeling of pleasure and alertness, which contributes to its highly addictive nature. Once this cycle starts, the nicotine-laden products in the market keep consumers coming back for more and they remain addicted to nicotine and nicotine addiction is the market our competitors have thrived on.

這些產品旨在釋放與大腦受體結合的神經傳導物質，從而觸發多巴胺、去甲腎上腺素和血清素的釋放，產生愉悅和警覺的感覺，這也是其高度成癮的原因之一。一旦這種循環開始，市面上的含尼古丁產品就會讓消費者不斷回購，使他們對尼古丁上癮，而尼古丁成癮正是我們的競爭對手賴以生存的市場。

According to the University of California, San Francisco, nicotine has been proven to be as or more addictive as cocaine and heroin. Therefore, many people who use these products, cigarette smokers, for example, develop nicotine dependence, which makes it extremely hard to quit, especially when they try to stop smoking under their own influence and will. 70% of smokers report they want to quit. But unfortunately, all too often, quitting attempts are not successful or pursued to completion unless they are predicated on the user having developed a significant tobacco-related health issues such as heart disease, cancer or stroke.

據加州大學舊金山分校稱，尼古丁已被證明與可卡因和海洛因一樣容易上癮，甚至更甚。因此，許多使用這些產品的人，例如吸菸者，都會對尼古丁產生依賴，這使得戒菸極其困難，尤其是在他們試圖依靠自身意志力戒菸的情況下。 70%的吸菸者表示他們想要戒菸。但不幸的是，除非戒菸者出現了嚴重的與菸草相關的健康問題，例如心臟病、癌症或中風，否則戒菸嘗試往往不會成功或無法堅持到底。

Sadly, according to the American Lung Association, tobacco use is the #1 cause of preventable death in the U.S. and of the 28.8 million smokers in the U.S., almost 500,000 people die each year from smoking-related issues. We can extrapolate these statistics and apply them to the worldwide market of 1.1 billion smokers and the same math, only larger numbers, such as approximately 8 million people die each year due to smoking-related health issues. In the U.S., we spend approximately $600 billion annually or 6x more than the total U.S. tobacco industry revenues in health care costs, cleaning up the mess that this industry has made.

令人遺憾的是，根據美國肺臟協會的數據，吸菸是美國可預防死亡的首要原因，在美國2,880萬吸菸者中，每年有近50萬人死於與吸菸相關的問題。我們可以將這些統計數據推斷並應用於全球 11 億吸煙者的市場，同樣的數學原理，只是數字更大，例如每年約有 800 萬人死於與吸煙相關的健康問題。在美國，我們每年花費約 6,000 億美元（相當於美國菸草業總收入的 6 倍）用於醫療保健支出，以清理該行業造成的爛攤子。

This is why over the years, there's been a whole industry developed to help nicotine-addicted consumers reduce their consumption or quit, including pharma, health centers, rehabilitation centers, nonprofits, et cetera. And this does not include the billions that are siphoned from smokers' pocketbooks when they purchase cigarettes to allow the tobacco industry to make payments under the MSA or the Master Settlement Agreement to the settling states, which is funding designed to handle the significant health care prevention of you smoking, education and tobacco control issues resulting from smoking.

這就是為什麼多年來，已經發展出一個完整的產業來幫助尼古丁成癮的消費者減少消費或戒菸，其中包括製藥公司、健康中心、康復中心、非營利組織等等。這還不包括吸菸者購買香菸時從口袋裡掏出的數十億美元，這些錢用於讓菸草業根據《主和解協議》（MSA）向和解州支付款項，而這些款項旨在解決吸煙引起的重大健康問題，包括預防吸煙、教育和煙草控制等。

Nicotine addiction is clearly the issue at hand that needs to be addressed and solved. Some of our peers in the industry talk a big game and some not at all. The whole concept of Tobacco Harm Reduction starts by addressing the nicotine that is produced in the tobacco plant itself. We at 22nd Century have made Tobacco Harm Reduction our mission and are here to help solve this big problem with our technology and our products. One thing is clear, there's a substantial place in the market for our low nicotine tobacco and other VLN products. In our opinion, every combustible cigarette brand should be carrying a VLN set of SKUs to round out their product portfolio and shift their position to support the FDA and the tobacco harm reduction movement.

顯然，尼古丁成癮是當前需要解決的問題。業界有些同行誇誇其談，有些則沉默寡言。菸草減害的整個概念是從解決菸草植物本身產生的尼古丁問題開始的。我們 22 世紀公司以減少菸草危害為使命，致力於透過我們的技術和產品幫助解決這一重大問題。有一點很明確，我們的低尼古丁煙草和其他VLN產品在市場上佔有相當大的份額。我們認為，每個可燃香菸品牌都應該推出一系列 VLN SKU，以完善其產品組合，並轉變立場以支持 FDA 和菸草減害運動。

Now to our business. We've spoken in our remarks throughout 2025 about a shift in our strategy away from elements of our legacy CMO business, whereby we have had either negative margin or low-margin product sales. Many of these customer contracts were high volume with razor-thin margins and consumed significant working capital. Although high volume in manufacturing is usually an advantage, frankly, the nature of this business model and our company is not aligned to our mission and is counter to our overall profitability goals.

現在進入正題。我們在 2025 年的演講中多次提到，我們將調整策略，擺脫傳統 CMO 業務的某些方面，這些業務要么利潤為負，要么產品利潤很低。這些客戶合約大多金額龐大，利潤卻非常微薄，而且消耗了大量的營運資金。雖然製造業的大量生產通常是一種優勢，但坦白說，這種商業模式的性質和我們公司的實際情況與我們的使命不符，也與我們的整體獲利目標背道而馳。

Our financial results each quarter this year reflect the slow transition of revenues from this business into the higher-margin branded products as our product mix shifts. However, with the sustained losses at the gross profit line, during the third quarter, we also implemented widespread changes in our manufacturing operations to improve the cost structure so that it fits in the direction of where this company is headed and to shutter the slow drip burn in profitability and cash. Had we continued, our breakeven point running the former CMO business would have been over 12 million cartons annually. This simply was not achievable for these products and frankly, was a distraction to our larger strategy and does not take advantage of the cornered resource we have in our IP and our technology.

今年每季的財務表現都反映出，隨著產品組合的轉變，該業務的收入正緩慢地向利潤率更高的品牌產品轉移。然而，由於第三季毛利持續虧損，我們也對生產營運進行了廣泛的調整，以改善成本結構，使其符合公司的發展方向，並遏制獲利能力和現金的緩慢流失。如果我們繼續經營之前的 CMO 業務，我們的損益平衡點將超過每年 1,200 萬箱。對於這些產品來說，這根本無法實現，坦白說，這會分散我們對更大策略的注意力，也沒有利用我們在智慧財產權和技術方面所擁有的獨特資源。

Now to our branded business. We are the only company that produces and distributes brands that carry both full nicotine and very low nicotine combustible cigarettes. So far, the brands that we are carrying in the full nicotine landscape are primarily represented in Tier 4. We believe in offering our customers other mid-tier and premium options in these brands. This is important as our sales pitch to distributors, wholesalers and retail requires a full slate of product offerings as opposed to just VLN products.

現在來說說我們的品牌業務。我們是唯一一家生產和銷售同時含有高尼古丁含量和低尼古丁含量可燃香菸品牌的公司。目前，我們代理的尼古丁產品品牌主要集中在第四梯隊。我們相信應該為我們的客戶提供這些品牌的其他中高端選擇。這一點很重要，因為我們向經銷商、批發商和零售商推銷產品時，需要提供全套產品系列，而不僅僅是 VLN 產品。

Although our primary goal is to advance our VLN products in the market, we need to continue to gain brand recognition, awareness and product availability in order to be successful. This is why our product offerings have expanded to include other mid-tier and premium full nicotine combustibles, primarily with natural style cigarettes. Natural style cigarettes, generally having only tobacco and water as the main ingredients are underrepresented in the market with respect to the lower-tier brands. Most natural style product offerings are in a premium position only.

雖然我們的主要目標是在市場上推廣我們的 VLN 產品，但為了取得成功，我們需要繼續提高品牌知名度、認知度和產品可近性。因此，我們的產品系列擴大到包括其他中檔和高檔全尼古丁可燃物，主要以天然風格的香菸為主。天然型香煙，通常只以煙草和水為主要成分，與低端品牌相比，在市場上佔較少份額。大多數天然風格產品都定位在高端市場。

Not only does our company benefit from the expanded product offerings at higher margin, but we are also able to provide customers with a product mix of SKUs that have higher margin per slot in a category that carries significant demand. By pairing the natural style with existing brands and a partner brand VLN, we are able to more quickly gain market penetration. Our newly branded and partner-branded VLN products are finally in the market for sale, with shipments occurring in the third quarter and many store display resets are actually being implemented.

我們公司不僅能從利潤更高的擴大產品供應中受益，還能為客戶提供在需求量大的品類中每個貨位利潤更高的 SKU 產品組合。透過將自然風格與現有品牌和合作夥伴品牌 VLN 相結合，我們能夠更快地獲得市場滲透率。我們新推出的品牌和合作夥伴品牌的 VLN 產品終於上市銷售了，發貨工作已於第三季度進行，許多商店的陳列調整也正在實際實施中。

Smoker-friendly VLN can be found in smoker-friendly stores in Missouri and Florida. Pinnacle VLN can be found in 1,361 Murphy USA stores in 20 states and 22nd Century VLN can now be found in Illinois in the Chicago land area in Circle K. We also have commitments from some smaller wholesalers and retailers in other markets that will keep our VLN brands moving to the market and widening distribution and consumer accessibility. Our new tryvln.com web page has a store locator that will allow our customers to find our VLN and Partner VLN products in the market and currently reflects all locations I just mentioned.

在密蘇裡州和佛羅裡達州的吸煙友善商店中可以找到適合吸煙者使用的VLN。Pinnacle VLN目前已在20州的1361家Murphy USA門市有售，而22nd Century VLN現在也可以在伊利諾州芝加哥地區的Circle K便利商店找到。此外，我們也與其他市場的一些小型批發商和零售商達成了合作協議，這將確保我們的VLN品牌持續進入市場，擴大分銷管道，提高消費者的購買便利性。我們新的 tryvln.com 網頁上有一個商店定位器，讓我們的客戶在市場上找到我們的 VLN 和合作夥伴 VLN 產品，目前反映了我剛才提到的所有地點。

With respect to adoption of our natural VLN and Partner VLN product offerings, we've added smoker-friendly Black Label, which is a natural style and SmokerFriendly VLN now represented by over 20 different SKUs in total for all styles. Likewise, we are adding Pinnacle Pure as a natural to complement the Pinnacle VLN products for a top five C-store chain in the U.S., bringing that total SKU count to 10. We will continue this strategy as we continue to introduce our brands and expand our presence.

就我們天然 VLN 和合作夥伴 VLN 產品系列的採用情況而言，我們增加了適合吸煙者的 Black Label，這是一種天然風格，而適合吸煙者的 VLN 現在共有 20 多個不同的 SKU，涵蓋所有風格。同樣，我們正在為美國排名前五的便利商店連鎖店添加 Pinnacle Pure 作為 Pinnacle VLN 產品的天然補充，使 SKU 總數達到 10。我們將繼續沿用這項策略，不斷推出我們的品牌並擴大我們的市場份額。

The importance of this approach where we develop brands with both a full nicotine and a low nicotine presentation is that if and when the FDA enacts their very low nicotine mandate, our branded customers will already be positioned to have a surviving product with long-term brand recognition. In any event, we are helping our customers address the changing demands of the tobacco consumer in the U.S. We look forward to having additional customers and brands adopt our Partner VLN strategy and add a set of VLN SKUs to their roster, ultimately to widen the VLN presence in the market and to be prepared to support the FDA mandate.

我們開發同時包含全尼古丁和低尼古丁產品的品牌，這種方法的重要性在於，如果 FDA 實施其極低尼古丁強制令，我們的品牌客戶將已經做好準備，擁有能夠長期生存並保持品牌知名度的產品。總之，我們正在幫助客戶應對美國菸草消費者不斷變化的需求。我們期待更多客戶和品牌採用我們的合作夥伴 VLN 策略，並在其產品系列中添加一系列 VLN SKU，最終擴大 VLN 在市場上的份額，並做好準備支持 FDA 的強制要求。

We are currently in development of a third brand under this strategy as well as others that would be available for licensing to retailers for their own private label brand. Given the margin profile of the One-Two Punch of the natural style and VLN product offerings, our profitability will benefit regardless of product mix between them. The natural and VLN products business model in comparison to the high-volume business model has a breakeven point of approximately 500,000 cartons, which is quite a difference from selling over 12 million cartons of the low-margin CMO products required to be sold for us to breakeven.

我們目前正在根據此策略開發第三個品牌以及其他品牌，這些品牌將授權給零售商，用於他們自己的自有品牌。鑑於自然風格和 VLN 產品組合的利潤率，無論它們之間的產品組合如何，我們的盈利能力都將受益。與大批量生產模式相比，天然和 VLN 產品的商業模式的損益平衡點約為 50 萬箱，這與我們實現盈虧平衡所需的低利潤 CMO 產品銷量超過 1,200 萬箱有著相當大的差異。

Now to our technology. We continue to move ahead. Our plans are to offer not only packaged combustible cigarette products, but also to offer low nicotine leaf to other players in the market as well as licensing opportunities. And therefore, our technology development platform is the nucleus of our company, and we believe will be a key to a transformation of the tobacco industry. We understand that others are developing alternate technologies for low nicotine combustible products. We've seen vapes, hemp/cannabis tea and other composites as attempts to deliver a similar result to our VLN cigarette.

現在來說說我們的技術。我們繼續前進。我們的計畫不僅是提供包裝好的可燃香菸產品，還要向市場上的其他參與者提供低尼古丁菸葉以及授權機會。因此，我們的技術開發平台是我們公司的核心，我們相信它將成為菸草產業轉型的關鍵。我們了解到，其他公司正在開發低尼古丁可燃產品的替代技術。我們已經看到電子煙、大麻茶和其他複合材料，這些都是為了達到與我們的 VLN 香菸類似的效果而進行的嘗試。

The challenge is, smoking is a very personal habit and having to change form factors to something other than the familiarity of a combustible cigarette is a big deal. We believe that our straightforward low-nicotine tobacco combustible solution is the strongest offering for the market with a very entrenched customers who are used to smoking tobacco in cigarette form. For that reason, we see our solution as the easiest and most straightforward transition to a low-nicotine tobacco product. Not to mention, our VLN predicate is already FDA authorized, familiar in taste and format and form factor and is now in the retail market that offers the consumer an easy choice.

問題在於，吸煙是一種非常個人化的習慣，要改變吸煙的方式，使用與熟悉的可燃香煙不同的東西，是一件大事。我們相信，我們簡單易用的低尼古丁可燃煙草解決方案是市場上最強有力的產品，尤其對於那些習慣於吸食捲菸的根深蒂固的客戶群而言。因此，我們認為我們的解決方案是向低尼古丁菸草產品過渡的最簡單、最直接的方式。更何況，我們的 VLN 原型產品已獲得 FDA 授權，口味、規格和外形都廣為人知，現在已進入零售市場，為消費者提供了便利的選擇。

Our development plans also include 100-millimeter VLN cigarettes to join our King size, which we will file a PMTA application with the FDA in the coming months. Additional low nicotine tobacco strains, which will be available for license or alternative blends. We successfully grew very low nicotine oriental tobacco varieties as part of our 2025 crop year to add to our flue-cured and burley leaf, disease resistance to help crop yields, very low nicotine filtered cigars. We previously developed this form factor and have sold limited quantities to universities to be used for research purposes. Under the FDA's proposed rule, filtered cigars are included and therefore, are an important addition to our very low nicotine products offerings in the market.

我們的開發計劃還包括推出 100 毫米 VLN 香煙，與我們的特大號香菸一起上市，我們將在未來幾個月內向 FDA 提交 PMTA 申請。還將提供其他低尼古丁含量的菸草品種，可用於授權或替代混合。作為 2025 年作物季的一部分，我們成功種植了尼古丁含量極低的東方菸草品種，以補充我們的烤煙和白肋菸葉，提高抗病性，從而提高作物產量，並生產尼古丁含量極低的過濾雪茄。我們之前開發了這種外形尺寸的產品，並已向大學少量出售用於研究用途。根據 FDA 的擬議規則，過濾雪茄包含在內，因此，它們是我們市場上超低尼古丁產品的重要補充。

Other Tobacco Harm Reduction attributes. We are not finished developing improved technology for this industry. In 2024, there was a marketplace research study that was completed using our 95% less nicotine Spectrum research cigarettes. And out of 450 subjects, 40% of them changed their smoking habit dramatically and reduced their consumption over the 12-week period. This is a huge result. If we extrapolate that against the 28.8 million U.S. 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 the roughly the same amount of time. 11.5 million smokers is 57% of the 70% of the smoking population that has reported that they want to quit.

其他煙草減害特性。我們仍在不斷研發適用於該產業的先進技術。2024 年，我們完成了一項市場調查，使用了我們尼古丁含量降低 95% 的 Spectrum 研究型香菸。在 450 名受試者中，40% 的人在 12 週內大幅改變了吸菸習慣並減少了吸菸量。這是一個巨大的成果。如果將這一比例推算到美國2880萬吸菸人口上，那就意味著大約有1150萬吸菸者有可能在大致相同的時間內徹底改變他們的吸菸習慣，並控制他們對尼古丁的依賴和菸癮。這1,150萬名吸菸者佔已表示想要戒菸的吸菸人口總數（佔總吸菸人口的70%）的57%。

We know of no other technology and solution that has the potential impact that our VLN products have. Following that backdrop, here's where we are in the progress of building 22nd Century. Our management team has completely reshaped 22nd Century since November of 2023. And we are now ready for the marathon of building a technology-driven consumer products business with market-leading technology in the tobacco industry. Our business model going forward will change again as we will support not only products manufactured and sold by us, given the importance of addressing the nicotine epidemic in the U.S. and around the world, we will also support licensing arrangements that will allow other tobacco companies to adopt VLN products under their brands.

我們目前還沒有發現任何其他技術和解決方案能夠像我們的 VLN 產品一樣具有如此巨大的潛在影響。在此背景下，我們來看看我們在建立 22 世紀的進程中處於什麼階段。自 2023 年 11 月以來，我們的管理團隊對 22 世紀進行了徹底的改造。現在，我們已經準備好迎接一場馬拉松，那就是打造一個以技術為驅動、在菸草產業中擁有市場領先技術的消費品業務。鑑於解決美國乃至全世界尼古丁流行問題的重要性，我們未來的商業模式將再次改變，我們不僅會支持我們自己生產和銷售的產品，還會支持許可安排，允許其他菸草公司在其品牌下採用 VLN 產品。

This could come through us selling leaf, licensing the plant science technology to other companies, licensing our FDA authorized VLN predicate or licensing the use of the VLN trademark for use in their products like our partner brands. We believe by opening this door to others in the industry, this will welcome other tobacco companies to join forces with us and support the FDA and the low nicotine mandate by licensing our technology and offering the choice of low nicotine products under their brands. Many in the industry currently oppose the FDA's goal with respect to implementation of a low nicotine standard for combustibles.

這可以透過我們出售葉片、將植物科學技術授權給其他公司、授權我們獲得 FDA 授權的 VLN 基準技術或授權在其產品中使用 VLN 商標（例如我們的合作夥伴品牌）來實現。我們相信，透過向業內其他公司敞開這扇門，將吸引其他菸草公司與我們攜手合作，透過授權我們的技術並以他們的品牌提供低尼古丁產品，來支持 FDA 和低尼古丁強制令。目前業界許多人反對 FDA 在實施可燃物低尼古丁標準的目標。

However, we believe it is similar to other sweeping industry changes that we've seen in the past caused from the enactment of law for the betterment of public health, such as the implementation of unleaded gas. We already are and plan to continue to be the first to market and the architect of the low nicotine combustible market with both cigarettes and filtered cigars. When other players in this industry begin to understand that low-nicotine tobacco is crucial to tobacco harm reduction and fits within the scope of their harm reduction mission and a complementary product offering necessary for consumers, we stand ready to help them. We have several solutions to offer the industry.

然而，我們認為它與我們過去看到的因頒布有利於公眾健康的法律而引起的其他重大行業變化類似，例如無鉛汽油的實施。我們一直是低尼古丁可燃菸草市場的先驅，並計劃繼續引領這個市場，無論是香菸還是過濾雪茄。當業內其他參與者開始意識到低尼古丁菸草對於減少菸草危害至關重要，並且符合他們減少危害的使命，以及消費者所需的補充產品時，我們隨時準備幫助他們。我們可為業界提供多種解決方案。

22nd Century branded VLN products, those are already in the market. Partner-branded VLN products such as SmokerFriendly and Pinnacle, those are already in the market. Other partner VLN brand options, ones manufactured by 22nd Century, we can make those for people. Licensed for manufacturing by others, we can license out so that folks can manufacture with our tobacco. Our low nicotine tobacco that is leaf not consumed by us, can be sold to other companies who wish to adopt and license a VLN product line or can be licensed to other tobacco companies who wish to license our technology and leaf to grow their own and license the VLN product line.

22世紀品牌的VLN產品，這些產品已經上市。VLN 的合作夥伴品牌產品，例如 SmokerFriendly 和 Pinnacle，已經上市銷售。其他合作夥伴的 VLN 品牌選項，例如 22nd Century 生產的那些，我們也可以為客戶提供。我們已獲得授權，允許他人使用我們的菸草進行生產，我們可以將授權範圍擴大到其他人。我們自己不消費的低尼古丁菸葉，可以出售給其他希望採用和授權 VLN 產品線的公司，或者可以授權給其他希望獲得我們的技術和菸葉許可，自行種植並獲得 VLN 產品線許可的菸草公司。

When we look at the industry, and our consumers, we believe that we have the right product for this changing market in a form factor that is familiar to the consumer. We are very much aligned with the advent of the NA beer and NA spirits markets as those established markets are also transitioning. Like these parallels, beer and spirits industry delivered these NA products in the same form factor that was familiar and customary for the consumer. VLN cigarettes do the same. Tobacco harm reduction does not need to rely on new electronic vessels to consume tobacco products. We believe that a better combustible low-nicotine cigarette or filtered cigar that gives the consumer a choice is a far superior answer in this market to solve a problem.

當我們審視這個產業以及我們的消費者時，我們相信我們擁有適合這個不斷變化的市場的正確產品，其外形也符合消費者的習慣。我們非常認同北美啤酒和北美烈酒市場的興起，因為這些成熟的市場也正在轉型。與這些相似之處一樣，啤酒和烈酒行業以消費者熟悉和習慣的形式提供了這些無酒精產品。VLN香菸也有同樣的效果。減少菸草危害並不需要依賴新型電子設備來消費菸草製品。我們認為，在這個市場上，更好的可燃低尼古丁香菸或過濾雪茄，能夠提供消費者更多選擇，才是解決問題的更優方案。

The product reviews of our newly branded and partner branded VLN products are strong. Our VLN products received excellent reviews on taste and smoking experience. Now as we expand distribution to all 50 states in the U.S. and gain traction with C-stores, independents and other retail outlets, rate of sale will be the key measure for all products in our branded portfolio, and this will drive our business model to the profitability targets that our industry delivers.

我們新推出的品牌產品和合作夥伴品牌的VLN產品獲得了良好的產品評價。我們的VLN產品在口味和吸煙體驗方面獲得了極佳的評價。現在，隨著我們將分銷範圍擴大到美國所有 50 個州，並在便利商店、獨立商店和其他零售店獲得市場認可，銷售率將成為我們品牌組合中所有產品的關鍵衡量標準，這將推動我們的商業模式達到我們所在行業所能實現的盈利目標。

Before I transition to Dan to talk over the numbers, I want to end with a reflection of accomplishments during the quarter and through today. Our company and management team is increasingly focused on our future. And for the most part, we are no longer dealing with the issues of the past. Examples of this include we filed our response to the FDA's low nicotine mandate. Not only are we in support of the FDA's proposed rule, our technology is the foundational backbone, and we have proven the commercial feasibility of this standard. Further, we are fully aligned with the responses publicly available on the FDA's website condition by the medical community, counting the impactful benefits to public health.

在將數據交由 Dan 來討論之前，我想先回顧一下本季以及今天所取得的成就。我們公司和管理團隊越來越關注公司的未來。而且在很大程度上，我們不再需要處理過去的問題了。例如，我們已就 FDA 的低尼古丁強制令提交了回應。我們不僅支持 FDA 提出的規則，而且我們的技術是其基礎支柱，我們已經證明了該標準的商業可行性。此外，我們完全同意美國食品藥物管理局 (FDA) 網站上公開的醫學界的回應，認為這對公眾健康具有重大益處。

From an industry point of view, based on published comments, 22nd Century is the only tobacco company that is an ally of the FDA and the proposed rule. Every other tobacco company is opposed and wants to fight the FDA and keep nicotine addiction as part of the equation. Having the wider tobacco industry carry both full nicotine and low nicotine cigarettes would be a huge step forward in the Tobacco Harm Reduction Movement. As Dan will share, we finally have a balance sheet that we can now direct our resources towards the future versus the cleanup that we've been executing. This included raising capital, which allowed us to pay off our senior secured debt and ground the balance sheet for growth capital.

從行業角度來看，根據已發表的評論，22世紀煙草公司是唯一支持FDA及其擬議規則的煙草公司。其他所有菸草公司都反對，並想與美國食品藥物管理局對抗，以維持尼古丁成癮在菸草產品中的存在。如果整個菸草產業能夠同時銷售含尼古丁量較高和含尼古丁量較低的香菸，這將是菸草減害運動向前邁出的一大步。正如丹將要分享的那樣，我們終於有了一張資產負債表，現在我們可以將資源用於未來，而不是用於我們一直在執行的善後工作。這包括籌集資金，使我們能夠償還優先擔保債務，並為成長資本奠定資產負債表的基礎。

We also settled the insurance lawsuit, which has added $9.5 million in non-dilutive cash to the balance sheet. We will also implement an at-the-market ATM facility. This is a responsible tool for us to selectively and opportunistically raise capital to meet the demands we will have for growth capital. We currently are well funded and therefore, we'll look to this resource to maintain lower cost of capital moving forward in comparison to where we have been in the past two years.

我們也解決了保險訴訟，這為資產負債表增加了 950 萬美元的非稀釋性現金。我們也將設立市場內的自動櫃員機。這是一個負責任的工具，讓我們能夠有選擇地、有機會地籌集資金，以滿足我們未來對成長資金的需求。我們目前資金充足，因此，我們將依靠這項資源，在未來維持比過去兩年更低的資本成本。

And finally, this management team has entered into customary executive employment agreements with our key NEOs who have been instrumental in transitioning this company and will be key resources moving forward to achieve rapid growth. We're very excited to see the fruits of our work here and are very much looking forward to advancing VLN throughout the U.S. and internationally.

最後，管理團隊已與公司轉型過程中發揮關鍵作用的關鍵主管簽訂了慣例的僱用協議，這些主管將成為公司未來快速成長的關鍵資源。我們非常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 的發展。

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

現在我將把電話交給丹，讓他來討論這些數字。

Thank you, Larry. Good morning, everyone, and thanks again for joining our discussion today. Third quarter 2025 is a story of significant improvement to our balance sheet and completion of the necessary steps to drive margin improvement with the restructuring of our manufacturing operations. The stage is set now for adoption of our higher-margin branded products to begin delivering sequential quarterly improvement, both top line and in overall profitability. Shipments of our newly branded VLN and Partner VLN products year-to-date through the end of October now represent approximately 6,000 cartons.

謝謝你，拉里。各位早安，再次感謝大家今天參加我們的討論。2025 年第三季度，我們的資產負債表將顯著改善，並且透過重組製造業務，我們將完成必要的步驟來提高利潤率。現在，我們高利潤品牌產品的推廣已做好充分準備，可望實現季度環比增長，無論是營收還是整體盈利能力都將得到提升。截至 10 月底，我們新推出的 VLN 和 Partner VLN 品牌產品的出貨量約為 6,000 箱。

Natural style cigarettes, which we have been shipping for a larger portion of the year, have added an additional 14,000 cartons. As we push forward to breakeven profitability, we will measure progress against our annual goal of 500,000 cartons of these products, adding to the remaining layer of base CMO business. The higher-margin branded products typically provide for gross profit margin of 20% to 30% after accounting for pricing promotions and other marketing dollars. Scaling will occur through adoption of these products at additional store locations.

我們今年大部分時間都在出貨的天然型香煙，又增加了 14,000 條的出貨量。隨著我們努力實現損益平衡，我們將以每年 50 萬箱此類產品的目標來衡量進展，這將有助於我們擴大剩餘的基礎 CMO 業務。利潤率較高的品牌產品在計入價格促銷和其他行銷費用後，通常可實現 20% 至 30% 的毛利率。規模化將透過在其他門市推廣這些產品來實現。

VLN and Partner VLN cigarette products are now in approximately 1,500 stores today across 21 states, and we are authorized in approximately 40 states. The full detail of state authorizations for each brand is provided in our earnings release. As our state authorizations continue to increase for each product SKU, that will allow for more rapid expansion to increase store count. Availability of very low nicotine cigarettes across the United States is paramount to our ongoing effort of educating consumers and garnering trial and adoption. And therefore, each additional state we receive from authorization is key.

VLN 和 Partner VLN 香菸產品目前已在 21 個州的約 1500 家商店銷售，並在約 40 個州獲得授權。我們已在財報中提供了各品牌獲得各州授權的完整詳情。隨著各州對每種產品 SKU 的授權不斷增加，這將使我們能夠更快地擴張，從而增加門市數量。在美國各地供應超低尼古丁香菸對於我們持續進行消費者教育、推廣試用和普及工作至關重要。因此，我們從授權中獲得的每一個額外狀態都至關重要。

We expect to begin seeing rate of sale metrics in the early part of 2026. These metrics will provide invaluable data as to the efforts and successes of our marketing collateral, which is all reflective of our latest branding as well as our current pricing structures such as buydowns, rebates and other spend. As I mentioned, we implemented cost savings and restructuring initiatives of our manufacturing operations during the quarter in effort to more rapidly improve gross margin. Outside of raw materials used for our products, our costs are largely fixed, and therefore, each additional carton manufactured and sold drives improvement to margin.

我們預計將於 2026 年初開始看到銷售率指標。這些指標將提供關於我們行銷資料的努力和成功情況的寶貴數據，所有這些都反映了我們最新的品牌形像以及我們當前的定價結構，如折扣、回扣和其他支出。正如我之前提到的，本季我們實施了製造業的成本節約和重組計劃，以期更快地提高毛利率。除了產品所使用的原料外，我們的成本大部分是固定的，因此，每生產和銷售一箱額外的紙箱都會提高利潤率。

And with the strategy shift to focus on higher-margin branded products, we will be able to reach our profit goals with significantly fewer cartons. We expect to see sequential improvement in the fourth quarter of 2025 and throughout 2026, reflecting these efforts. I'll transition now to walk through some of the specific numbers in our financial results for the quarter, all excluding discontinued operations unless noted. The balance sheet includes $4.8 million of cash on hand and a $9.5 million receivable related to insurance recovery from the Dorchester business interruption insurance claim, which was subsequently received in cash in October 2025. This increased total assets to $32.4 million as compared to $21.7 million at December 31, 2024.

隨著策略轉向專注於利潤更高的品牌產品，我們將能夠用更少的紙箱實現我們的利潤目標。我們預計，隨著這些努力的開展，2025 年第四季和 2026 年全年業績將持續改善。接下來，我將詳細介紹本季財務業績中的一些具體數字，除非另有說明，所有數據均不包括已終止經營的業務。資產負債表包括 480 萬美元的現金和 950 萬美元的應收帳款，這筆款項是多切斯特商業中斷保險索賠的保險賠償款，已於 2025 年 10 月以現金形式收到。這使得總資產增加到 3,240 萬美元，而 2024 年 12 月 31 日的總資產為 2,170 萬美元。

Current and long-term debt were zero at September 30, 2025, reflecting the full repayment of the senior secured credit facility during the quarter. The company also paid in full the put option exercised on the Omnia warrants of $1.23 million held by a former subordinated lender after quarter end, further improving our liabilities and overhang from the past. Total liabilities decreased to $11.3 million at September 30, 2025, as compared to $17.7 million at December 31, 2024. Accordingly, we have ended the quarter with having improved our balance sheet current ratio to approximately 2.3:1.

截至 2025 年 9 月 30 日，公司流動負債和長期負債均為零，這反映了本季優先擔保信貸額度已全部償還。該公司還全額支付了前次級貸款人持有的價值 123 萬美元的 Omnia 認股權證的認沽期權，該期權在季度末生效，進一步改善了我們過去的負債和未償債務。截至 2025 年 9 月 30 日，總負債減少至 1,130 萬美元，而截至 2024 年 12 月 31 日，總負債為 1,770 萬美元。因此，本季末，我們的資產負債表流動比率已改善至約 2.3:1。

Moving to the P&L. Net revenue was $4 million in the third quarter 2025, decreased from $4.1 million in the second quarter 2025. Total cartons sold were $517,000 versus $779,000. The decrease in volume reflects the aforementioned adjustments we have made in shifting our strategy within the CMO business. Gross profit was a loss of $1.1 million in the third quarter of 2025 as compared to a $0.6 million loss in the second quarter of 2025. The increase in loss was reflective of lower volume and the transition period of our product mix from low-margin CMO to higher-margin branded products as well as incurring some restructuring costs from implementing our cost savings initiatives and inventory write-downs.

接下來檢查損益表。2025 年第三季淨收入為 400 萬美元，低於 2025 年第二季的 410 萬美元。總銷量為 517,000 美元，而目標價為 779,000 美元。銷售下降反映了我們先前在 CMO 業務策略調整方面所做的調整。2025 年第三季毛利虧損 110 萬美元，而 2025 年第二季毛利虧損 60 萬美元。虧損增加反映了銷量下降，以及我們的產品組合從低利潤的CMO產品向高利潤的品牌產品過渡的時期，此外，實施成本節約計劃和庫存減值也產生了一些重組成本。

Total operating expenses for the third quarter were $2.2 million as compared to $2.3 million in the second quarter. Interest expense for the third quarter was $0.5 million, but included a $0.4 million noncash debt extinguishment charge related to the full repayment of the senior secured credit facility. Continuing on, third quarter 2025 net loss from continuing operations was approximately $3.8 million as compared to $3.3 million in the second quarter and adjusted EBITDA during the third quarter was a loss of $2.9 million as compared to a loss of $2.6 million in the second quarter of 2025.

第三季總營運支出為 220 萬美元，而第二季為 230 萬美元。第三季利息支出為 50 萬美元，但其中包括與全額償還優先擔保信貸安排相關的 40 萬美元非現金債務清償費用。繼續來看，2025 年第三季持續經營業務淨虧損約 380 萬美元，而第二季為 330 萬美元；第三季調整後 EBITDA 虧損 290 萬美元，而 2025 年第二季虧損 260 萬美元。

Finally, consolidated basic earnings per share for the third quarter 2025, inclusive of discontinued operations was $1.55 per share, reflective of recognizing the $9.5 million gain on insurance settlement from the Dorchester business interruption claim as compared to a basic loss per share of $13.61 in the second quarter of 2025.

最後，2025 年第三季合併基本每股收益（包括終止經營業務）為每股 1.55 美元，反映出確認了多切斯特業務中斷索賠保險賠償的 950 萬美元收益，而 2025 年第二季度基本每股虧損為 13.61 美元。

That concludes our prepared remarks. I'd now like to open it up for any questions from our analysts.

我們的發言稿到此結束。現在我想開放提問環節，歡迎各位分析師踴躍提問。

Andrew White, Emerging Growth Research.

Andrew White，新興成長研究。

Good to hear from you again. It looks like you had a pretty interesting quarter, good quarter, too. I had a couple of questions, if I could ask you. First and foremost, it looks like post the end of the quarter, you had about $14 million in cash. What are your plans to use that cash going forward?

很高興再次收到你的來信。看來你這季過得相當精彩，而且業績也不錯。我有幾個問題想問您。首先，看起來在季度末，你們大約有 1400 萬美元的現金。接下來您打算如何使用這筆資金？

Yes, Andy, we're going to look forward to entering 2026 with a pretty well-funded balance sheet, as Larry said. This represents some growth capital that we've really needed and haven't had over the last couple of years. And so this will support operations. It will support advancing VLN in the market, where we'll continue to add additional store count and distribution. And we actually have a little bit of R&D and CapEx that will start. That will commence in the early part of '26 as well, where we've really not been able to do much of that in the last couple of years as we work through the restructuring.

是的，安迪，正如拉里所說，我們期待在 2026 年擁有資金充足的資產負債表。這代表著我們過去幾年一直缺乏但一直非常需要的成長資金。因此，這將有助於各項營運工作。這將有助於VLN在市場上的發展，我們將繼續增加門市數量和分銷管道。我們實際上有一些研發和資本支出項目即將啟動。這也將於 2026 年初開始，而過去幾年由於我們一直在進行重組，所以實際上並沒有太多時間去做這件事。

Okay. Do you intend to use any of the cash to settle outstanding warrants? And for that matter, what's the share equivalent of outstanding warrants right now?

好的。你打算用這筆現金來償還未償付的認股權證嗎？那麼，目前未行使的認股權證相當於多少股票呢？

No.

不。

No. Okay. And what's the current share equivalent of outstanding warrants?

不。好的。目前未行使認股權證的等值股票是多少？

Just under 7 million shares outstanding as of quarter end and on a fully diluted basis with the convertible Series A preferred and common warrants, fully diluted basis were $23.7 million.

截至季末，流通股略低於 700 萬股，按可轉換 A 系列優先股和普通股認股權證完全稀釋後的市值為 2,370 萬美元。

Okay. I was wondering if you could spend a little bit more time on the Needham sale agreement and the severance agreement. Why now? And what will be the impact on SG&A going forward?

好的。我想請您多花一點時間研究一下 Needham 的出售協議和離職補償協議。為什麼是現在？那麼，未來對銷售、管理及行政費用（SG&A）又會產生什麼影響呢？

Sure. I'll start with that. So yes, starting with the employment agreements, Andy, these are just customary employment agreements. They will not change what the current G&A level is, just formalizing terms and conditions for our named executive officers. As far as the sales agent agreement with Needham, we're commencing an at-the-market offering up to $25 million that will be off the shelf. As Larry and I said in our remarks, we're currently well funded. And so really, this is just a responsible tool that we've got another arrow in our quiver, if you will, where if we can opportunistically raise additional capital to support our growth, we will. But we certainly are not necessarily under the gun in any respect to go ahead and use that.

當然。我先從這裡開始。是的，先說說僱傭協議，安迪，這些都是普通的僱傭協議。他們不會改變目前的行政管理費用水平，只是正式確定了我們指定的執行官的條款和條件。至於與 Needham 的銷售代理協議，我們將開始推出價值高達 2,500 萬美元的現成房產。正如拉里和我剛才所說，我們目前資金充足。所以說，這其實是我們手中又多了一支可靠的工具，如果我們有機會籌集更多資金來支持我們的成長，我們就會這麼做。但我們絕不會在任何方面都迫於壓力而不得不使用它。

Okay. Good to hear. And last but not least.

好的。很高興聽到這個消息。最後，也是非常重要的一點。

Andy, let me just add one thing on the executive agreements. When I joined the company, I just banded all agreements with the executives and just to run the -- execute the turnaround so that everyone that's here at the company is on the same playing field, and now I feel like that we come through the turnaround that we've come through and we've got the company positioned where it's positioned, it's time to actually put situations like that back into play for the team. We've got an awesome team, and we want them taking us to the next step.

安迪，關於高階主管協議，我只想補充一點。我加入公司後，就和高階主管們達成了所有協議，然後著手進行——執行扭虧為盈的計劃，讓公司裡的每個人都站在同一起跑線上。現在我覺得，我們已經完成了扭虧為盈的階段，公司也已經發展到了現在的地位，是時候讓團隊重新適應這樣的局面了。我們擁有一支非常棒的團隊，我們希望他們帶領我們邁向下一個階段。

Understandable. And last but not least, EBITDA breakeven before you had indicated second quarter of 2026. I understand your rate of sales stats aren't in yet for the end of the year. But are you standing by that second quarter breakeven for EBITDA? Or has that changed?

可以理解。最後但同樣重要的是，EBITDA 損益平衡點在你之前已經指出是 2026 年第二季。我知道你們年底的銷售統計數據還沒出來。但你是否堅持第二季度 EBITDA 損益平衡點的預期？或者情況已經改變了？

We're still driving for that, Andy. That's a line of sight. That's where we're looking to.

我們仍在為此努力，安迪。那是一條視線。這就是我們關注的方向。

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。我謹將會議交還給拉里·費爾斯通，請他作總結發言。

Thank you. All the structural changes we've made to date have been leading up to this point. I don't believe there's an element of this company that we have not touched or reshaped. Our team has put the building blocks in place to start the long process of securing distribution and rate of sale. And we're fortunate to have had investors who have funded our turnaround so that we could bring the company to this spot. 22nd Century has very important technology for the tobacco industry. And instead of the traditions in the industry of having secret recipes and trying to outmaneuver one another, we welcome our larger peers to join us in leading the Tobacco Harm Reduction Movement by licensing our technology and pushing our VLN technologies expansion as fast as we all can.

謝謝。我們迄今為止所做的所有結構性改變都是為了達到這一步。我相信這家公司的每一個環節我們都已經觸及或改造過了。我們的團隊已經奠定了基礎，即將開始確保分銷管道暢通和銷售速度的漫長過程。我們很幸運地得到了投資者的資助，他們幫助我們扭轉了局面，使公司發展到今天的規模。 22世紀公司擁有對菸草產業至關重要的技術。我們摒棄了業內傳統的秘方壟斷和相互競爭的做法，歡迎規模更大的同行加入我們，共同引領煙草減害運動，透過授權我們的技術，並盡我們所能地推動VLN技術的擴展。

Based on the scientific results, our low nicotine tobacco and VLN cigarettes are a game changer for those who smoke and want to take control. The wider tobacco universe needs to become good stewards of the health of our consumers and move this technology into the market. This would allow a wider audience to join the FDA and the medical profession in the pursuit of a healthier America instead of the constant fighting. The core elements of the fight can be resolved with VLN products in the marketplace. This would also keep the industry economics in place for growers, employees, taxes, et cetera.

根據科學研究結果，我們的低尼古丁菸草和超低尼古丁香菸將改變吸菸者想要控制吸菸行為的方式。整個菸草產業需要成為消費者健康的良好守護者，並將這項技術推向市場。這將使更多人能夠加入美國食品藥物管理局和醫學界的行列，共同追求一個更健康的美國，而不是陷入無休止的鬥爭。這場鬥爭的核心要素可以透過市場上的VLN產品來解決。這也有助於維持種植者、員工、稅收等方面的產業經濟秩序。

This is a long game from here, but we're excited to take on the challenge, and we have a great team to bring this together. On behalf of the Board and myself personally, I'd say thank you to our entire team and appreciate our team for their extremely hard work transitioning our company in a very short period of time with very limited resources. This has been a monumental task, and they've done an awesome job. We look forward to updating you with press releases along the way and again in Q1 as we close 2025. Thank you all, and have a great day.

從現在開始，這將是一場持久戰，但我們很興奮能接受挑戰，我們擁有一支優秀的團隊來實現這一目標。我謹代表董事會和我個人，感謝我們整個團隊，感謝他們付出的辛勤努力，在資源非常有限的情況下，在很短的時間內完成了公司的轉型。這是一項艱鉅的任務，他們做得非常出色。我們期待在此過程中透過新聞稿向您報告最新進展，並在 2025 年第一季結束之際再次向您報告。謝謝大家，祝大家今天過得愉快。

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

會議已經結束。感謝各位參加今天的報告會。您現在可以斷開連線了。