22nd Century CEO & Chairman Larry Firestone Provides 2025 Year-in-Review Letter to Stockholders

Rhea-AI Summary

22nd Century Group (Nasdaq: XXII) issued a 2025 year-in-review letter from CEO Lawrence Firestone highlighting the company’s exit from a multi-year restructuring, relaunch of its VLN® reduced-nicotine cigarette platform, and strengthened balance sheet.

Key facts: VLN® contains ~95% less nicotine, is the only FDA-authorized MRTP combustible cigarette, VLN® relaunched in 2025 and is now in ~2,000 retail locations across 20+ states, and the company eliminated debt and improved liquidity while targeting EBITDA breakeven as higher-margin VLN® sales scale.

Positive

• VLN® contains ~95% less nicotine than conventional cigarettes
• VLN® is the only FDA-authorized combustible MRTP
• Distribution expanded to ~2,000 retail locations in 20+ states
• Company eliminated debt and improved liquidity in 2025

Negative

• Company has not yet reached sustainable profitability; targeting EBITDA breakeven
• Final timing and form of FDA nicotine rule remain uncertain, creating regulatory risk

News Market Reaction

+0.84%

1 alert

+0.84% News Effect

+$52K Valuation Impact

$6M Market Cap

0.1x Rel. Volume

On the day this news was published, XXII gained 0.84%, reflecting a mild positive market reaction. This price movement added approximately $52K to the company's valuation, bringing the market cap to $6M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Industry experience: 27 years Nicotine reduction in VLN: 95% less nicotine Consumer smoking reduction: 66% reduction +1 more

4 metrics

Industry experience 27 years Company position in tobacco harm reduction movement

Nicotine reduction in VLN 95% less nicotine VLN® reduced-nicotine cigarette platform vs conventional cigarettes

Consumer smoking reduction 66% reduction Reported individual decrease in cigarette consumption over 12 weeks

Observation period 12 weeks Timeframe for reported 66% reduction in cigarette consumption

Market Reality Check

Price: $7.68 Vol: Volume 75,640 is below 20...

low vol

$7.68 Last Close

Volume Volume 75,640 is below 20-day average of 164,928, suggesting limited confirmation so far. low

Technical Shares at 0.8578 are trading below the 200-day MA of 7.56, reflecting a longer-term downtrend.

Peers on Argus

XXII gained 5.08% while peers were mixed: KAVL +14.56%, TPB +3.14%, UVV +0.53%, ...

1 Down

XXII gained 5.08% while peers were mixed: KAVL +14.56%, TPB +3.14%, UVV +0.53%, GNLN -1.89%, ISPR -1.09%. Momentum data flags no coordinated sector move.

Historical Context

5 past events · Latest: Jan 12 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 12	Conference participation	Neutral	-6.0%	Announcement of Needham Growth Conference presentation and investor meetings.
Jan 06	Regulatory filing	Positive	-4.2%	Filed VLN® MRTP renewal for FDA-authorized reduced-nicotine cigarettes.
Dec 09	Conference participation	Neutral	-2.7%	Emerging Growth virtual investor conference presentation announcement.
Oct 28	Insurance settlement	Positive	-0.7%	Reported receipt of <b>$9.5 million</b> cash from insurance settlement.
Oct 23	Commercial launch	Positive	+3.4%	VLN® launch at Circle K locations and expansion to 45 authorized states.

Pattern Detected

Across recent positive operational and regulatory updates, XXII saw 2 negative and 1 positive next-day reactions, indicating a tendency for good news to face selling pressure.

Recent Company History

Over the last several months, 22nd Century highlighted VLN® commercialization, state-level launches, and regulatory milestones. The Oct 23 Circle K launch in 45 states drew the only clearly positive price reaction. A $9.5 million insurance settlement on Oct 28 and the Jan 6 VLN® MRTP renewal filing both prompted negative moves. Conference participation updates in Dec 2025 and Jan 2026 also saw selling, framing today’s upbeat year-in-review against a backdrop of cautious trading around prior news.

Regulatory & Risk Context

Active S-3 Shelf

Shelf Active

Active S-3 Shelf Registration 2025-06-20

An effective Form S-3 shelf filed on June 20, 2025 registers up to 8,588,811 warrant-related resale shares. These are exercisable via a cashless feature that delivers shares with no cash proceeds to the company, increasing tradable float and diluting ownership/EPS without enhancing liquidity. The shelf remains effective through June 20, 2028 and has been used in multiple prospectus supplements.

Market Pulse Summary

This announcement emphasizes 2025 as a reset year, with VLN® relaunch, expansion to nearly 2,000 out...

Analysis

This announcement emphasizes 2025 as a reset year, with VLN® relaunch, expansion to nearly 2,000 outlets and over 20 states, and elimination of debt, alongside a focus on EBITDA breakeven. It also highlights alignment with the FDA’s proposed nicotine cap. Investors may watch VLN® adoption metrics, progress toward profitability, implementation of cost controls, and any capital-structure changes alongside the existing S-3 resale registration.

Key Terms

modified risk tobacco product, mrtp, u.s. food and drug administration, ebitda, +1 more

5 terms

modified risk tobacco product regulatory

"only combustible cigarette authorized by the U.S. Food and Drug Administration as a Modified Risk Tobacco Product (MRTP)"

A modified risk tobacco product is a tobacco or nicotine product that is marketed with claims it reduces health risks or exposure to harmful substances compared with other tobacco products; such claims are typically subject to regulatory review and approval. For investors, this matters because approved modified-risk status can change consumer demand, legal exposure, labeling requirements and market access—similar to how a government-backed “low-risk” label can alter a product’s sales and liability profile.

mrtp regulatory

"authorized by the U.S. Food and Drug Administration as a Modified Risk Tobacco Product (MRTP)"

An MRTP (Modified Risk Tobacco Product) is an official U.S. regulatory designation for a tobacco or nicotine product that a regulator has reviewed and allowed to be marketed as posing lower health risks or reduced exposure to harmful substances. Think of it like an official “lower-risk” label: investors watch MRTP decisions closely because they can open or restrict market access, change legal and marketing rights, and materially affect a product’s sales and a company’s valuation.

u.s. food and drug administration regulatory

"only combustible cigarette authorized by the U.S. Food and Drug Administration as a Modified Risk Tobacco Product"

The U.S. Food and Drug Administration is the federal agency that evaluates and enforces safety, effectiveness and labeling standards for medicines, medical devices, vaccines, food and related products before they reach consumers. For investors it matters because FDA approvals, warnings or recalls determine whether a product can be sold, how quickly it reaches the market and how costly compliance will be—changes that directly affect a company’s revenue, costs and stock value.

ebitda financial

"Advancing toward EBITDA breakeven as higher-margin revenues scale"

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

non-gmo medical

"Our proprietary non-GMO reduced nicotine tobacco plants were developed"

Non-GMO means a product or ingredient was produced without genetic modification techniques — the plant or organism’s DNA has not been intentionally altered in a laboratory. Investors care because non-GMO labeling can affect consumer demand, price premiums, shelf access and supply-chain cost; think of it like an organic or “no added hormones” label that can open certain markets, change margins, and create reputational risk or advantage for companies.

AI-generated analysis. Not financial advice.

MOCKSVILLE, N.C., Jan. 15, 2026 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), the only tobacco products company that has for 27 years led and continues to lead the fight against the harms of smoking driven by nicotine addiction, today issued the following letter to stockholders from Lawrence Firestone, the Chief Executive Officer of 22nd Century Group, Inc.: 

2025 Year-in-Review Shareholder Letter

Dear Shareholders,

2025 was a pivotal year for 22nd Century Group, Inc. as we exited our multi-year restructuring, began advancing our strategic initiatives, strengthened our financial foundation, and reinforced our leadership position in tobacco harm reduction. In a complex regulatory and operating environment, our team remained focused on disciplined execution, scientific integrity, and long-term value creation for our shareholders.

Tobacco Harm Reduction

We remain dedicated to being the leader of the tobacco harm reduction movement through science-based innovation, regulatory alignment, and responsible commercialization of reduced nicotine content combustibles. Our mission is to provide adult smokers with alternatives that significantly reduce nicotine exposure, supporting the potential for reduced dependence while preserving consumer choice.

The core of this strategy is our proprietary VLN^® reduced-nicotine cigarette platform, the market leading, first and only combustible cigarette authorized by the U.S. Food and Drug Administration as a Modified Risk Tobacco Product (MRTP). VLN^® products contain approximately 95% less nicotine than conventional cigarettes, without altering taste or smoking ritual, offering a differentiated and scientifically validated approach to harm reduction based on VLN^® products ability to significantly reduce nicotine exposure and nicotine dependence in a very short period of time.

Following the relaunch of our VLN^® and partner VLN^®-branded products in 2025, we are beginning to receive early feedback from adult consumers in the marketplace. We are encouraged by initial testimonials from smokers who have chosen VLN^® products as part of a health- and wellness-oriented approach to nicotine reduction. In several cases, consumers have reported meaningful reductions in cigarette consumption, including one individual who indicated a reduction of approximately 66% in just 12 weeks. As we move through 2026, we look forward to responsibly sharing additional insights from these experiences as we continue to evaluate consumer engagement and outcomes.

Strategic and Operational Progress

Throughout 2025, we made meaningful progress executing against our strategic priorities:

• Transition to Higher-Margin Branded Products: We continued shifting our business mix toward proprietary, value-added offerings, with VLN^® products being the centerpiece of our long-term growth strategy.
• Commercial Expansion: VLN^® product distribution expanded across additional retail locations and geographies, supported by growing awareness among adult smokers seeking reduced-nicotine alternatives. We are now in almost 2,000 retail locations in over 20 states.
• Operational Discipline: Cost-reduction initiatives and operational streamlining implemented during our strategic reset continued to yield results, lowering our operating expense base and improving cash efficiency.
• Balance Sheet: We exited 2025 with a significantly strengthened balance sheet, including the elimination of debt and improved liquidity, providing flexibility to execute our strategy.
  
  

While we remain focused on reaching sustainable profitability, we believe the foundation built in 2025 materially improves our long-term financial outlook.

Regulatory Landscape and FDA Proposed Nicotine Rule

In January 2025, the U.S. Food and Drug Administration issued a proposed rule to establish a maximum nicotine content for cigarettes, a landmark regulatory development with the potential to fundamentally reshape the combustible tobacco market. The proposed rule reflects growing regulatory consensus that reducing nicotine to minimally addictive levels may significantly decrease smoking initiation and dependence.

22nd Century Group is uniquely positioned in this evolving landscape. Our VLN® products were developed specifically to meet very low nicotine thresholds and are supported by extensive scientific research and FDA authorization. While the timing and final form of any regulation remain uncertain, we believe this proposal underscores the strategic relevance of our harm-reduction platform and validates years of investment in reduced-nicotine innovation.

Outlook for 2026

As we enter 2026, we do so with a clearer strategic focus and a stronger financial and operational foundation. Our priorities include:

• Expanding VLN^® product distribution and consumer awareness
• Continuing disciplined cost management and capital allocation
• Advancing toward EBITDA breakeven as higher-margin revenues scale
• Remaining actively engaged with FDA regulators and public-health stakeholders
  
  

We believe the convergence of regulatory momentum, consumer awareness, and our differentiated product portfolio creates a compelling opportunity for long-term value creation.

Appreciation

On behalf of the Board of Directors and the entire 22nd Century Group team, thank you for your continued support and confidence. The progress made in 2025 reflects the resilience, commitment, and belief of our employees, partners, and shareholders. We remain committed to transparency, responsible leadership, and advancing our mission to reduce the harm associated with combustible tobacco.

Sincerely,

Lawrence D. Firestone
Chairman and Chief Executive Officer
22nd Century Group, Inc.

About 22^nd Century Group, Inc. 

22nd Century Group is pioneering the tobacco harm reduction movement by enabling smokers to take control of their nicotine consumption. 

Our Technology is Tobacco 

Our proprietary non-GMO reduced nicotine tobacco plants were developed using our patented technologies that regulate alkaloid biosynthesis activities resulting in a tobacco plant that contains 95% less nicotine than traditional tobacco plants. Our extensive patent portfolio has been developed to ensure that our high-quality tobacco can be grown commercially at scale. We continue to develop our intellectual property to ensure our ongoing leadership in the tobacco harm reduction movement. 

Our Products 

We created our flagship product, the VLN^® cigarette using our low nicotine tobacco, to give traditional cigarette smokers an authentic and familiar alternative in the form of a combustible cigarette that helps them take control of their nicotine consumption. VLN^® cigarettes have 95% less nicotine compared to traditional cigarettes and have been proven to allow consumers to greatly reduce their nicotine consumption. 

FDA Authorized

Our VLN^® cigarette is the only low nicotine combustible cigarette authorized by the FDA in the United States. 

VLN^® is a registered trademark of 22nd Century Limited LLC. 

Learn more at xxiicentury.com, on X (formerly Twitter), on LinkedIn, and on YouTube. 

Learn more about VLN^® at tryVLN®.com. 

Cautionary Note Regarding Forward-Looking Statements 

Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements, including but not limited to our full year business outlook. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Forward-looking statements include, but are not limited to, statements regarding (i) our cost reduction initiatives, (ii) our expectations regarding regulatory enforcement, including our ability to receive an exemption from new regulations, and (iii) our financial and operating performance. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” in the Company’s Annual Report on Form 10-K filed on March 20, 2025, and Quarterly Reports on Form 10-Q on May 13, 2025, August 14, 2025, and November 4, 2025. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law. 

Investor Relations & Media Contact

Matt Kreps
Investor Relations
22nd Century Group
investorrelations@xxiicentury.com
214-597-8200

FAQ

What did 22nd Century (XXII) report about VLN® nicotine content in the 2025 shareholder letter?

The company said VLN® cigarettes contain approximately 95% less nicotine than traditional cigarettes.

How widely distributed are 22nd Century’s VLN® products as of January 15, 2026 (XXII)?

The letter states VLN® is in about 2,000 retail locations across more than 20 states.

Did 22nd Century (XXII) report any balance sheet improvements in 2025?

Yes; the company reported it eliminated debt and improved liquidity during 2025.

What is 22nd Century’s (XXII) near-term financial goal for 2026?

The company is targeting EBITDA breakeven as higher-margin VLN® revenues scale.

How does the FDA proposed nicotine rule affect 22nd Century (XXII)?

Management says the proposed rule underscores VLN®’s relevance because the product meets very low nicotine thresholds, though final rule timing and form remain uncertain.