22nd Century Group Reports $4.1 Million Revenue Decline and Increased Operating Loss in Q1 2026

22nd Century Group, Inc. reported a net revenue of $4.1 million for the first quarter of 2026, a decrease of 31.1% from $6.0 million in the same period last year. This decline is attributed to a strategic shift away from high-volume, low-priced contract manufacturing organization (CMO) export customers, resulting in a drop in cartons sold from 476 to 275. The company also experienced a gross loss of $636, slightly higher than the $609 loss reported in the prior year, reflecting ongoing challenges in revenue generation and product mix.

Operating expenses increased to $2.4 million in the first quarter of 2026, up from $2.0 million in the previous year. This rise was primarily driven by higher sales, general, and administrative expenses, which grew to $2.1 million from $1.8 million, largely due to increased compensation and legal costs. Research and development expenses also rose significantly to $285,000, compared to $162,000 in the prior year, reflecting higher testing costs associated with new product development. The operating loss from continuing operations widened to $3.0 million from $2.6 million year-over-year.

In terms of financial position, 22nd Century Group reported cash and cash equivalents of $9.5 million as of March 31, 2026, an increase from $7.1 million at the end of 2025. The company’s working capital improved to $13.2 million, up from $10.4 million, primarily due to proceeds from the issuance of Series B convertible preferred stock and common stock under its at-the-market (ATM) program. However, the company continues to face substantial doubt about its ability to continue as a going concern, given its accumulated deficit of $402.2 million and ongoing losses.

Strategically, the company has made significant changes, including the redemption of all outstanding shares of Series A convertible preferred stock and the issuance of Series B convertible preferred stock, which raised $16 million in net proceeds. This capital is intended to support ongoing operations and product development. The company is also focusing on reducing expenses and exploring additional financing options to enhance liquidity.

Looking ahead, 22nd Century Group aims to stabilize its operations and improve financial performance through strategic adjustments in product offerings and customer engagement. The management is actively evaluating various strategies to mitigate risks associated with liquidity and operational sustainability, while also pursuing opportunities for growth in the reduced nicotine tobacco market.