22nd Century Group Reports 32.5% Revenue Decline in Q3 2025

22nd Century Group, Inc. reported a significant decline in financial performance for the third quarter of 2025, with net revenues of $4,011,000, a decrease of 32.5% from $5,946,000 in the same period last year. The company attributed this decline primarily to shifts in product mix, despite an increase in the number of cartons sold, which rose to 517 from 439 year-over-year. The gross loss for the quarter was $1,059,000, compared to a loss of $588,000 in the prior year, reflecting a gross loss margin of 26.4% of revenues.

Operating expenses decreased to $2,153,000 from $2,789,000 in the previous year, driven by reductions in sales, general and administrative expenses, which fell to $1,849,000 from $2,547,000. This reduction was largely due to lower strategic consulting and legal costs. Research and development expenses also decreased to $193,000 from $240,000. The operating loss from continuing operations was $3,212,000, slightly improved from a loss of $3,377,000 in the prior year. The net loss from continuing operations was $3,763,000, with a basic and diluted loss per share of $1.06, compared to a loss of $3,585,000 and a per-share loss of $848.84 in the same quarter of 2024.

In terms of strategic developments, the company has made significant changes to its capital structure, including the issuance of Series A convertible preferred stock, which raised $10,650,000 in August 2025. This capital was utilized to fully repay the Senior Secured Credit Facility, which was terminated in September 2025. The company also reported a substantial increase in working capital, which rose to $12,711,000 as of September 30, 2025, compared to $1,790,000 at the end of 2024, primarily due to the recognition of $9,500,000 in insurance recoveries related to a prior claim.

Operationally, 22nd Century Group has focused on enhancing its product offerings, particularly its VLN® reduced nicotine cigarettes, which are expected to see a full-scale launch in over 1,700 convenience stores in the fourth quarter of 2025. The company continues to face challenges, including a substantial accumulated deficit of $396,117,000 and negative cash flow from operations of $10,472,000 for the nine months ended September 30, 2025. Management has expressed substantial doubt about the company's ability to continue as a going concern, emphasizing the need for additional financing and strategic partnerships to sustain operations.

Looking ahead, 22nd Century Group is actively evaluating various strategies to improve liquidity and reduce expenses. The company is pursuing financing options, including the potential issuance of additional equity or debt securities, and is focused on optimizing its product mix to enhance profitability. The management's outlook remains cautious, with ongoing efforts to navigate the challenges posed by market conditions and operational demands.