22nd Century Group Inc (XXII) 2026 Q2 法說會逐字稿

Thank you. Welcome to the 22nd Century Group's second quarter 2026 conference call and webcast. (Operator Instructions)

謝謝。歡迎收聽第22世紀集團（22nd Century Group）2026年第二季財報電話會議與網路直播。（接線員指示）

It is now my pleasure to turn the call over to Dan Otto, Chief Financial Officer of 22nd Century Group.

現在我很榮幸將電話會議交給第22世紀集團財務長 Dan Otto。

Good morning, everyone, and welcome to 22nd Century Group's second quarter 2026 earnings conference call. Thank you for joining us. With me on the call today is Larry Firestone, Chief Executive Officer.

各位早安，歡迎參加第22世紀集團2026年第二季財報電話會議。感謝各位撥冗參與。今天與我一同出席的還有執行長 Larry Firestone。

Before we begin, please note that today's remarks include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Please refer to the company's earnings release and SEC filings, including our most recent annual report on Form 10-K, for a discussion of these risks and other factors.

在開始之前，請注意今天的發言包含前瞻性陳述，這些陳述受風險與不確定性影響，可能導致實際結果與陳述中所描述者出現重大差異。關於這些風險與其他因素的討論，請參閱公司財報新聞稿與向美國證券交易委員會（SEC）提交的文件，包括我們最近一期的 Form 10-K 年度報告。

In addition, during today's call, management may refer to certain non-GAAP financial measures. Reconciliations of those measures to the most directly comparable GAAP measures are included in the company's earnings release.

此外，在今天的電話會議中，管理團隊可能會提及若干非 GAAP 財務衡量指標。這些指標與最直接可比的 GAAP 指標之調節表已載於公司財報新聞稿中。

I'll now turn the call over to Larry.

接下來我把電話會議交給 Larry。

Thanks, Dan. And good morning, everyone.

謝謝，Dan。各位早安。

Thank you for joining us today and for your continued interest in 22nd Century Group. The second quarter was an important period for our company. We continued executing a strategy that is reshaping 22nd Century into a stronger, more focused, and ultimately more profitable business. That strategy is centered on building a scalable branded platform led by our proprietary reduced nicotine tobacco products, including our flagship VLN cigarettes, expanding distribution of our higher-margin products, improving our product mix and moving decisively away from the legacy business that did not generate acceptable economics.

感謝各位今天加入我們，並持續關注第22世紀集團。第二季對公司而言是重要的期間。我們持續執行一項策略，正將第22世紀重塑為更強健、更聚焦，並最終更具獲利能力的企業。該策略的核心是打造可擴展的品牌平台，以我們專有的降尼古丁菸草產品為主軸，包括旗艦產品 VLN 香菸；擴大高毛利產品的通路；改善產品組合；並果斷遠離無法帶來可接受經濟效益的傳統業務。

22nd Century is the leader in low-nicotine tobacco and low-nicotine combustible cigarettes, designed with authentic tobacco to help smokers reduce their nicotine consumption. We're seeing smokers choose our VLN products as an alternative to full-strength combustible cigarettes. And we believe this category has meaningful room to grow.

第22世紀是低尼古丁菸草與低尼古丁可燃式香菸的領導者，採用真正的菸草設計，協助吸菸者降低尼古丁攝取量。我們看到吸菸者選擇 VLN 產品，作為全尼古丁可燃式香菸的替代方案。我們相信此品類仍有相當大的成長空間。

More broadly, our direction is clear. We are prioritizing profitable growth over uneconomic volume. We are investing behind brands that can win at retail, and we are aligning our commercial model, pricing strategy and manufacturing footprint to support a stronger earnings profile over time.

更廣泛而言，我們的方向很明確。我們將獲利性成長置於缺乏經濟效益的出貨量之上。我們投資於能在零售端勝出的品牌，並調整我們的商業模式、定價策略與製造佈局，以在時間推移下支撐更強的獲利表現。

The first half of 2026 reflects a company in transition, but transition with purpose. Historically, too much of our business was tied to high-volume, low or negative margin contract manufacturing. That volume may have added scale, but did not create durable value. In many cases, it created negative working capital, absorbed factory capacity and masked the true earnings power of the branded platform we are now building.

2026年上半年反映出公司正處於轉型之中，但這是一場有目的的轉型。過去，我們的業務有太大一部分繫於高量、低毛利或負毛利的代工製造。這些量或許帶來規模，但未能創造持久價值。在許多情況下，它造成負營運資金、占用工廠產能，並掩蓋了我們目前正在打造之品牌平台的真正獲利能力。

Today, we are taking a different path. We are building 22nd Century around higher-quality revenue streams, branded products, differentiated offerings and categories where we can compete on value, innovation and margin rather than simply on price. We believe that shift is the right one for shareholders and the right one for retail partners and the right one for the long-term future of the company.

如今，我們正走上一條不同的道路。我們以更高品質的營收來源、品牌產品、差異化供給，以及能以價值、創新與毛利（而非僅以價格）競爭的品類，來打造第22世紀。我們相信這項轉變對股東是正確的、對零售合作夥伴是正確的，也對公司長期未來是正確的。

Let me turn now to what we believe were the most important developments in the quarter: Commercial progress, pricing discipline and the foundation for margin improvement in the second half of the year. The second quarter delivered meaningful validation of the opportunity in front of us. We announced new distribution that will be ramped up to begin selling in Q4 for Pinnacle VLN in Metro New York and Northern New Jersey through one of the nation's largest cigarette retailers.

接下來談談我們認為本季最重要的進展：商業進展、定價紀律，以及為下半年毛利改善奠定基礎。第二季為我們面前的機會提供了具意義的驗證。我們宣布新增通路，將於第四季開始逐步放量，透過全美最大的香菸零售商之一，在大紐約都會區與新澤西州北部銷售 Pinnacle VLN。

This expansion adds nearly 150 high-visibility store locations in a dense and attractive market, creating another strong platform for consumer trial, brand awareness and incremental high-margin revenue. That matters for several reasons. First, it is another proof point that retailers are increasingly willing to allocate space to the Pinnacle platform and the low-nicotine offerings under the Pinnacle brand.

此次擴張新增近150個高能見度門市據點，位於人口密集且具吸引力的市場，為消費者試用、品牌知名度與額外高毛利營收建立另一個強而有力的平台。這在多個層面都很重要。首先，這再次證明零售商愈來愈願意為 Pinnacle 平台以及 Pinnacle 品牌旗下的低尼古丁產品提供陳列空間。

Second, it shows that our commercial discussions are translating into placement with meaningful operators in attractive geographies.

其次，這顯示我們的商業洽談正轉化為在具吸引力地區、與具規模的營運商達成上架。

And third, broader distribution is one of the key levers for accelerating awareness, trial and repeat purchase over time. We also continue to build out the broader Pinnacle branded portfolio, including the launch of Pinnacle Pure. This is strategically important because we do not view Pinnacle as a single product story. We view it as a growing brand family that can compete across multiple product types, price points and merchandising positions.

第三，更廣泛的通路覆蓋是加速提升知名度、促進試用並在時間推移下帶動回購的關鍵槓桿之一。我們也持續擴充更完整的 Pinnacle 品牌產品組合，包括推出 Pinnacle Pure。這在策略上很重要，因為我們不把 Pinnacle 視為單一產品故事。我們將其視為正在成長的品牌家族，可在多種產品類型、價格帶與陳列位置上競爭。

The more complete our portfolio becomes, the more relevant we are to retailers and the more leverage we have in distribution discussions, and we believe our Pinnacle brand is poised to become a national brand. Further, we believe Pinnacle Pure opens up a particularly compelling opportunity. In the premium Tier 2 cigarette category, especially within tobacco and water style product offerings, there are relatively few strong options available from major retailers and traditional cigarette purveyors.

我們的產品組合越完整，對零售商就越具相關性，在通路談判中也越有籌碼；我們相信 Pinnacle 品牌已蓄勢待發，有望成為全國性品牌。此外，我們認為 Pinnacle Pure 開啟了一個特別具吸引力的機會。在高端第二級（premium Tier 2）香菸品類中，特別是在菸草與「water style」產品供給方面，主要零售商與傳統香菸供應商可提供的強勢選項相對有限。

That gives us room to differentiate our brand, win new shelf space and support the broader momentum of the Pinnacle franchise. Importantly, the success of the conventional Pinnacle portfolio also supports the adoption of Pinnacle VLN because both the retailer and the company benefit from broader brand recognition and the ability to merchandise the brand across multiple slots in the store.

這讓我們有空間去差異化品牌、贏得新的貨架空間，並支撐 Pinnacle 系列更廣泛的成長動能。重要的是，傳統 Pinnacle 產品組合的成功也有助於 Pinnacle VLN 的採用，因為零售商與公司都能受益於更高的品牌辨識度，以及在店內多個陳列位置進行品牌陳列的能力。

Beyond what we announced during the quarter, we are encouraged by what we are seeing in the pipeline. The progress we made in Q2 is generating follow-on interest from additional large retailers and cash-and-carry operators. We're also seeing growing interest from new classes of trade, including drug and digital-first convenience.

除了本季宣布的事項之外，我們也對目前在案的機會感到鼓舞。我們在第二季取得的進展，正引發更多大型零售商與現金批發（cash-and-carry）營運商的後續興趣。我們也看到新型態通路的興趣升溫，包括藥妝通路與以數位為先的便利通路。

In other words, the funnel is broadening, and that's exactly what we want to see at this stage of commercialization. At the same time, we want to be clear about where we are in the revenue cycle. Much of the volume we have seen to date still reflects initial load-in orders. That's an important milestone, but it's only the beginning.

換言之，商機漏斗正在擴大，而這正是我們在商業化此階段希望看到的。同時，我們也希望清楚說明我們在營收循環中的位置。迄今為止我們看到的多數出貨量，仍反映初次鋪貨訂單。這是一個重要里程碑，但也只是開始。

The next phase is about execution, converting initial placement into repeat purchasing, increasing velocity at store level and building a recurring revenue base that becomes more predictable and more profitable over time. That is why our focus in the back half of the year is not just on adding slots, but on activating those slots. Our objective is to grow total store count from approximately 2,000 to 5,000 by year-end across roughly 35 states, while also improving rate of sale and consumer pull-through. Those two goals must work together. Distribution without sell-through is not enough, and strong unit economics require both broader placement and better recurring movement at retail.

下一階段關鍵在於執行：把初次上架轉化為重複採購、提升單店銷售速度，並建立一個隨時間推移更可預測、也更具獲利性的經常性營收基礎。因此，我們在下半年關注的不僅是增加陳列位置，更是啟動並活化這些陳列位置。我們的目標是在約35個州，將門市總數由約2,000家提升至年底的5,000家，同時改善銷售率與消費者拉動（pull-through）。這兩項目標必須相互配合。只有通路、沒有動銷是不夠的；而要有良好的單位經濟效益，必須同時具備更廣的上架覆蓋與更佳的零售端持續動銷。

To support that next phase, we're refreshing our marketing approach and adding expertise that we believe will strengthen commercial execution in the second half. Our goal is straightforward: Faster adoption, deeper penetration and better conversion of pipeline interest into productive durable accounts. Another major theme of the quarter is pricing discipline. Across the tobacco industry, successful operators manage pricing carefully to recover declines in unit volume, increases in excise taxes and offset inflationary pressure across material, labor and overhead. We are doing the same.

為了支援下一階段，我們正在更新行銷策略，並增添我們相信能在下半年強化商業執行的專業能力。我們的目標很明確：更快的採用、更深的滲透，以及將管線興趣更有效地轉化為具生產力且可持續的客戶帳戶。本季另一個重要主題是定價紀律。在整個菸草產業中，成功的業者會謹慎管理定價，以彌補單位銷量下滑、消費稅上升，並抵銷原物料、勞動力與間接費用的通膨壓力。我們也在做同樣的事。

We have taken steps to ensure that our pricing better reflects the real economics of manufacturing and distribution, and we believe that this discipline is necessary if we're going to build a sustainable and investable business.

我們已採取措施，確保我們的定價能更好地反映製造與配送的真實經濟性；我們也相信，若要建立可持續且具投資價值的企業，這樣的紀律是必要的。

This is especially relevant in the legacy CMO business, where significant volume historically came with low or even negative gross margin. As we have implemented pricing changes to improve profitability, some customers have chosen not to continue with 22nd Century and instead moved to lower-cost suppliers. We view that as an acceptable consequence of rational pricing.

這在傳統的 CMO 業務中特別相關，因為過去相當大的出貨量往往伴隨著偏低、甚至為負的毛利率。隨著我們實施定價調整以提升獲利能力，部分客戶選擇不再與 22nd Century 合作，轉而改向成本更低的供應商。我們認為，這是理性定價可接受的結果。

Let me be very clear. We are not interested in holding on to revenue that undermines gross profit and consumes factory capacity without creating shareholder value. If a piece of business cannot meet appropriate economic thresholds, it is not the right business for us to pursue. Our reported revenue and volume will continue to reflect the final stages of this transition over the next two to three quarters.

讓我說得非常清楚。我們不打算維持那些侵蝕毛利、占用工廠產能卻無法創造股東價值的營收。如果某項業務無法達到適當的經濟門檻，就不是我們應該追求的業務。我們所揭露的營收與出貨量，將在未來兩到三個季度持續反映這項轉型的最後階段。

Just as important, the business we are building in its place is better business. Our branded platform and particularly products under the Pinnacle brand, offers stronger margin potential, greater brand equity and better strategic positioning than legacy contract volume ever could. So while our low-quality CMO revenue will decline, we believe the mix shift is underway and is directionally very positive for the company. As we look forward, we continue to expect the legacy CMO transition to play out over the balance of 2026 and into early 2027.

同樣重要的是，我們正在以更好的業務來取代它。我們的自有品牌平台，尤其是 Pinnacle 品牌旗下產品，相較於傳統合約量，具備更強的毛利潛力、更高的品牌資產，以及更佳的策略定位。因此，儘管我們低品質的 CMO 營收將下滑，我們相信產品組合轉移已在進行中，且方向上對公司非常正面。展望未來，我們仍預期傳統 CMO 的轉型將在 2026 年剩餘期間並延續至 2027 年初逐步完成。

By the end of 2026 or early first quarter of 2027, we believe the majority of the remaining legacy CMO volume in categories such as filtered cigars, white-label cigarettes and export cigarettes will be substantially transitioned away from our factory, and those contracts will be largely wound down. That does not mean factory utilization stops mattering. It still does. Our contracts and pricing are now much better aligned with the economics we need, but sustained gross margin improvement still requires sufficient profitable volume to absorb the fixed cost structure of the plant.

到 2026 年底或 2027 年第一季初，我們相信在濾嘴雪茄、白牌香菸與出口香菸等品類中，剩餘的大部分傳統 CMO 產量將大幅自我們工廠轉出，相關合約也將大致結束。這並不代表工廠稼動率不再重要。它仍然重要。我們的合約與定價如今已更貼近我們所需的經濟性，但要持續改善毛利率，仍需要足夠的獲利性出貨量來吸收工廠的固定成本結構。

While our pricing reset has been critical, it is only part of the equation. The other part is replacing low-quality volume with better quality, higher-margin revenue streams that can scale. That is why we continue to view the Pinnacle platform, our broader branded portfolio and our expanding commercial reach as the primary drivers of financial improvement going forward. When you put these pieces together, the gross margin story becomes clearer. We believe three forces are beginning to work in our favor.

雖然我們的定價重設至關重要，但它只是方程式的一部分。另一部分是以更高品質、更高毛利且可擴張的營收來源，取代低品質的出貨量。這也是為什麼我們持續將 Pinnacle 平台、我們更廣泛的自有品牌組合，以及不斷擴大的商業觸及，視為未來財務改善的主要驅動因素。當你把這些要素放在一起，毛利率的故事就更清楚了。我們相信有三股力量正開始朝有利於我們的方向發揮作用。

First, we are expanding distribution of products that carry better margin potential than the legacy volume they are replacing. Second, we are moving from initial load-in towards repeat sales, which should help improve revenue quality and factory absorption over time. Third, we believe our major contract and pricing actions are now substantially in place, giving a stronger economic foundation from which to operate. For that reason, we believe the second half of the year should begin to show the benefits of the repositioning we have been discussing over the last several quarters.

第一，我們正在擴大具備較佳毛利潛力的產品之通路覆蓋，以取代正在退出的傳統出貨量。第二，我們正從初期鋪貨（load-in）走向重複性銷售，這應可隨時間提升營收品質並改善工廠固定成本吸收。第三，我們相信主要的合約與定價行動如今已大致到位，為營運提供更強的經濟基礎。因此，我們認為今年下半年應開始展現我們在過去數個季度所討論之重新定位所帶來的效益。

We are not declaring victory, and we know execution remains critical, but we do believe the building blocks for gross margin enhancement are materially stronger than they were at the start of the year. Over the long term, we are building a strategy that is succeeding in the US and that can ultimately extend beyond the US to international markets facing many of the same challenges. We were first to market with our low-nicotine technology, and maintaining that leadership will require continued investment in product development, technology and distribution.

我們並未宣告勝利，也知道執行仍然關鍵，但我們確實認為，提升毛利率的基礎要件已較年初時顯著強化。長期而言，我們正在打造一套在美國行之有效、並最終可延伸至面臨許多相同挑戰的國際市場之策略。我們率先將低尼古丁技術推向市場，而要維持這項領先地位，將需要持續投資於產品開發、技術與通路。

Our pipeline of retailer discussions remains very active. As our low-nicotine products continue reaching consumers in the market, we expect to keep building awareness, generating sales data needed to support the broader national and over time, international expansion. We have clear targets for the second half of 2026 that we believe can establish the foundation for a stronger 2027. Shipments of our branded products in the second half of the year are expected to be significantly larger than the first half of 2026. At the same time, we will continue completing the wind down of the volume-driven CMO business and focus our resources on growing branded products.

我們與零售商的洽談管線仍非常活躍。隨著我們的低尼古丁產品持續在市場上觸及消費者，我們預期將持續提升認知度，並產生支持更廣泛全國性、以及隨時間推進的國際擴張所需的銷售數據。我們對 2026 年下半年有明確目標，並相信這些目標可為更強勁的 2027 年奠定基礎。預期今年下半年我們自有品牌產品的出貨量將顯著高於 2026 年上半年。同時，我們將持續完成以量為導向的 CMO 業務之收尾退出，並把資源聚焦於成長自有品牌產品。

So to summarize, the second quarter reinforced that 22nd Century is moving in the right direction. We expanded commercial distribution. We advanced the Pinnacle brand platform. We broadened our opportunity set across retail and alternative channels. We maintained pricing discipline, and we continue to exit lower-quality business in favor of revenue streams with better economics and stronger long-term strategic value.

總結來說，第二季再次印證 22nd Century 正朝正確方向前進。我們擴大了商業通路分銷。我們推進了 Pinnacle 品牌平台。我們在零售與替代通路上擴大了機會集合。我們維持定價紀律，並持續退出較低品質的業務，轉而偏好經濟性更佳且長期策略價值更強的營收來源。

And with that, I'll turn the call over to Dan to go through the financial results in more detail.

接下來，我把電話會議交給 Dan，請他更詳細說明財務結果。

Thank you, Larry.

謝謝你，Larry。

For the second quarter of 2026, net revenue was $2.9 million compared to $4.1 million in the first quarter of 2026, a sequential decline of approximately 29%. For the first half of 2026, net revenue was $7 million compared to $10 million in the first half of 2025. As Larry noted, our first half top line as well as expected over the next two quarters continues to reflect the intentional transformation of the business that we've already been discussing for several quarters, shifting away from the majority of our contract manufacturing business and focusing on our reduced nicotine products and branded offerings, which we believe provides substantially better gross margin potential.

2026 年第二季，淨營收為 290 萬美元，較 2026 年第一季的 410 萬美元下降，季減約 29%。2026 年上半年，淨營收為 700 萬美元，較 2025 年上半年的 1,000 萬美元下降。如 Larry 所提到，我們上半年營收表現以及未來兩個季度的預期，仍反映我們在過去數個季度已討論的刻意業務轉型：逐步遠離我們大部分的合約製造業務，並聚焦於降尼古丁產品與自有品牌產品；我們相信這能帶來顯著更佳的毛利潛力。

Turning to gross margin. Both quarters in the first half of 2026 generated gross losses, but the trajectory is informative. Gross loss for the second quarter was $0.3 million compared to a gross loss of $0.6 million in the first quarter of 2026. On a year-over-year basis, our second quarter gross loss also narrowed meaningfully versus the $0.6 million recorded in the second quarter of 2025, reflecting our deliberate shift away from low-margin CMO export volume and toward higher-margin Pinnacle and VLN SKUs.

接著談毛利率。2026 年上半年兩個季度皆出現毛損，但其走勢具有參考價值。第二季毛損為 30 萬美元，相較 2026 年第一季毛損 60 萬美元有所改善。以年對年來看，我們第二季毛損也較 2025 年第二季所記錄的 60 萬美元明顯收斂，反映我們刻意從低毛利的 CMO 出口量轉向毛利較高的 Pinnacle 與 VLN SKU。

Included in second quarter gross margin were two discrete items. First, we recorded a one-time charge of approximately $196,000 for the reversal and write-off of aged inventory discontinued by one of our contract manufacturing customers.

第二季毛利率中包含兩項一次性事項。首先，我們記錄了一筆約196,000美元的一次性費用，用於沖回並報廢由我們某家委託製造客戶停產的久置庫存。

Second, and offsetting the first, we recognized a one-time MSA NPM excise tax recovery of approximately $692,000 covering prior tax periods. We view both items as non-recurring, and neither is reflected in our forward planning. For the first half of 2026, gross loss was $0.9 million compared to $1.2 million in the first half of 2025. While the narrowing of gross loss year-over-year is a positive directional signal, the pace of improvement has not been as fast as we planned. I'll come back to our expectations for the second half of 2026 in a moment.

第二項則抵銷了第一項，我們確認了一筆約692,000美元的一次性MSA NPM消費稅退稅，涵蓋先前的課稅期間。我們認為這兩項皆屬非經常性，且均未納入我們的前瞻規劃。2026年上半年，毛損為90萬美元，較2025年上半年的120萬美元為低。雖然毛損年對年縮小是正向訊號，但改善速度未如我們原先規劃般快速。稍後我會回到我們對2026年下半年的預期。

Operating loss for the quarter was $3.3 million compared to $3 million in the first quarter of 2026. Net loss from continuing operations for the quarter was $3.3 million compared to $3 million in the first quarter, and adjusted EBITDA was a negative $3.5 million compared to $2.6 million in the first quarter of 2026.

本季營業虧損為330萬美元，較2026年第一季的300萬美元為高。本季持續營業單位淨虧損為330萬美元，較第一季的300萬美元為高；調整後EBITDA為負350萬美元，較2026年第一季的負260萬美元為差。

Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $6.1 million and no outstanding debt. We continue to manage liquidity carefully and remain focused on aligning spending with our highest priority commercial and regulatory initiatives.

接著看資產負債表。本季末我們的現金及約當現金為610萬美元，且無任何未償債務。我們持續審慎管理流動性，並專注於使支出與我們最高優先順序的商業與法規推進計畫保持一致。

Capital allocation remains disciplined. Resources are being directed toward distribution growth, VLN commercial, Pinnacle portfolio launch, marketing initiatives and advancement of our reduced nicotine pipeline.

資本配置仍維持紀律。資源正投入於通路成長、VLN商業化、Pinnacle產品組合上市、行銷計畫，以及推進我們的降尼古丁產品線。

Looking ahead, our focus for the remainder of 2026 and the central reason we continue to believe in a second half inflection is execution across two priorities: distribution growth and margin improvement. First, distribution. We ended the quarter with a retail presence of approximately 2,000 stores across 20 states, and we're targeting expansion to approximately 5,000 retail outlets by year-end 2026 across 35 states for our VLN and partner VLN cigarette products. That expansion is already underway with recent entries in the Metro New York, Northern New Jersey and California.

展望未來，2026年剩餘期間我們的重點，以及我們持續相信下半年將出現轉折的核心原因，在於圍繞兩項優先事項的執行：通路成長與毛利率改善。第一，通路。本季末我們在約2,000家門市、橫跨20個州有零售據點；我們的目標是在2026年底前，讓VLN及合作夥伴的VLN香菸產品擴展至約5,000個零售據點、涵蓋35個州。該擴張已在進行中，近期已進入大紐約都會區、北新澤西與加州。

Looking beyond the convenience channel, we anticipate onboarding additional independents, cash and carry operators and a new digital-first convenience chain to help fill out that 5,000 store footprint, each contributing incremental stocking orders that support gross margin improvement.

除便利商店通路之外，我們預期將導入更多獨立零售商、現金批發（cash and carry）業者，以及一家以數位優先的新型便利連鎖，以協助補足5,000家門市的版圖；各方新增的鋪貨訂單將支持毛利率改善。

Second is mix and absorption. We expect continued expansion of our product portfolio, together with higher-margin Pinnacle Pure and Pinnacle VLN reorder activity to improve the gross margin trajectory in the back half. At the same time, we continue to manage the absorption impact of lower overall plant volume as legacy contract manufacturing winds down. That balance, better mix offset with lower legacy volume essential to the second half story. Our 2026 strategic priorities remain unchanged: expand VLN distribution, manage costs with discipline and advance toward meaningful improvements in gross margin.

第二是產品組合與產能吸收。我們預期產品組合將持續擴充，並透過毛利較高的Pinnacle Pure與Pinnacle VLN補貨活動，改善下半年毛利率走勢。同時，隨著既有的委託製造業務逐步縮減，我們也持續管理整體工廠產量較低所帶來的產能吸收影響。在下半年敘事中，這種平衡——更佳的產品組合對沖較低的既有產量——至關重要。我們2026年的策略重點維持不變：擴大VLN通路、以紀律管理成本，並推進毛利率的實質改善。

With that, I'll turn the call back to Larry for closing comments.

接下來，我把電話交回Larry作結語。

Thanks, Dan.

謝謝你，Dan。

Many companies in the tobacco and adjacent industries describe themselves as a leader or leading within a particular niche. We believe 22nd Century has earned a differentiated leadership position as we are the leader in low-nicotine tobacco and low-nicotine combustible cigarettes made from authentic tobacco designed to help smokers reduce their nicotine consumption, and we intend to maintain that position. We've spent 28 years developing the technology portfolio that has brought us to this point. Today, our VLN low-nicotine products are in the market.

許多菸草及相關產業的公司都形容自己在某個利基市場是領導者或具領先地位。我們相信22nd Century已建立差異化的領導地位：我們是低尼古丁菸草與低尼古丁可燃式香菸的領導者，產品採用真實菸草製成，旨在協助吸菸者降低尼古丁攝取量，而我們也打算維持這一地位。我們投入28年打造技術組合，才走到今天。如今，我們的VLN低尼古丁產品已在市場上銷售。

Consumers are buying them, and we have a strategy to expand the category further through additional blends and brands. We will continue to engage with the FDA, pursue the necessary authorizations, maintain our technology leadership, and work to establish a meaningful position in the global tobacco market.

消費者正在購買，我們也有策略透過更多配方與品牌進一步擴大此品類。我們將持續與FDA互動、爭取必要的核准、維持技術領先，並致力於在全球菸草市場建立具意義的地位。

With our current authorizations, we believe our first-mover advantage remains significant. We're building a different 22nd Century, one driven by better brands, better distribution, better pricing, and better economics. We believe the commercial traction we're seeing today is laying the groundwork for stronger margins, stronger recurring revenue, and stronger shareholder value over time. Our job now is focused on execution, getting our brands and products into the hands of adult smokers who are looking for a familiar alternative to their full-nicotine cigarette.

憑藉我們目前取得的核准，我們相信先行者優勢仍然顯著。我們正在打造一個不同的22nd Century——由更好的品牌、更好的通路、更好的定價與更好的經濟效益所驅動。我們相信目前看到的商業動能，正為未來更高的毛利、更強的經常性營收，以及更高的股東價值奠定基礎。我們當前的工作重點在於執行，把我們的品牌與產品交到尋求熟悉替代方案的成年吸菸者手中，以取代其全尼古丁香菸。

We are pleased to welcome Katherine Rouse-Bailey as our Vice President of Marketing. Consumer awareness is critical, and navigating brand building within the constraints of tobacco marketing requires the right expertise. We believe Katherine is well equipped to lead that effort. We also expect to add talent selectively in other parts of the organization, including sales and R&D, to support our expanding retail presence and the continued work required across science, product development, and technology.

我們很高興歡迎Katherine Rouse-Bailey加入，擔任行銷副總裁。提升消費者認知至關重要，而在菸草行銷限制下推動品牌建設需要合適的專業能力。我們相信Katherine具備領導此項工作的能力。我們也預期將在組織其他部門有選擇地延攬人才，包括銷售與研發，以支持我們不斷擴大的零售據點，以及在科學、產品開發與技術方面持續所需的工作。

We expect to have additional developments to share in the coming months, and we also plan to present at the H.C. Wainwright Conference in New York in September, along with other conferences in the fourth quarter.

我們預期未來幾個月將有更多進展可分享；此外，我們也計畫於9月在紐約出席H.C. Wainwright大會發表，並參與第四季的其他會議。

Finally, I want to thank our team for their hard work and commitment. The road to this point has not been easy, but we believe the road ahead is exciting and rewarding. The dedication of our employees has been and will continue to be critical to our success. We appreciate your continued interest in 22nd Century and your participation on today's call.

最後，我要感謝我們的團隊付出的辛勤努力與承諾。走到今天並不容易，但我們相信前方的道路令人振奮且值得期待。員工的投入一直是、也將持續是我們成功的關鍵。感謝各位持續關注22nd Century，並參與今天的電話會議。

Thank you and have a great day.

謝謝，祝各位有美好的一天。

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

本次會議到此結束。感謝各位出席今天的簡報。您現在可以掛線。