What changed in this filing

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Item 1. Business

2026-03-26 compared with 2025-03-20 · 63 added, 63 removed, 136 unchanged (48% of the section changed)

22nd Century Group is a tobacco products company that enables cigarette smokers to take control of their consumption of nicotine, the addictive drug in cigarettes.

22nd Century Group, Inc.

is a tobacco products company that enables cigarette smokers to take control of their consumption of nicotine, the addictive drug in cigarettes.

We manufacture and distribute the only combustible tobacco products containing minimally or non-addictive levels of nicotine that are authorized by the US Food and Drug Administration (FDA) for retail purchase.

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VLN ® cigarettes have 95% less nicotine than the traditional cigarette and have been proven to greatly reduce nicotine consumption.

Instead of offering new ways of delivering the nicotine drug to addicted smokers, we offer smokers the option to make their own informed and more productive choices, including the choice to avoid addictive levels of nicotine altogether and help adult smokers smoke less.

Instead of offering new ways of delivering the nicotine drug to addicted smokers, we offer smokers the option to make their own informed and health conscious productive choices, including the choice to avoid addictive levels of nicotine altogether and help adult smokers smoke less.

Nicotine Harm Reduction

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We received Modified Risk Tobacco Product (MRTP) granted orders from the FDA for marketing and sale of our revolutionary RNC cigarettes in December 2021, the first and only such orders ever awarded for a combusted tobacco product.

The authorized products are based on our proprietary RNC tobacco blends made possible by comprehensive and patented technologies that regulate nicotine biosynthesis activities in the tobacco plant, resulting in full flavor and high yield with 95% less nicotine.

We designed a pilot program to study retailer and consumer reaction to the RNC concept and our VLN ® cigarettes in selected retail outlets during 2022.

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Based on extensive consumer feedback and point-of-sale data, we made significant enhancements to nearly every aspect of the consumer and retailer VLN ® experience, including improved and revitalized branding, packaging, and messaging.

As we enter 2025, we have implemented a marketing approach that leverages our numerous contract manufacturing relationships together with cross branding strategies for integrative volume growth and enhanced retail access.

We forecast entering national distribution in 2025, with an eye eventually toward more than 270,000 domestic tobacco retail outlets and a substantial share of the estimated $12 billion non-Tier 1 US tobacco market.

Beginning in 2025, we implemented a new marketing and distribution approach.

We created a VLN ® version of popular cigarette brands that we already manufacture for existing clients and offer for sale through their extensive distribution channels.

This strategic pivot leverages our numerous contract manufacturing relationships together with cross branding strategies for integrative volume growth and enhanced retail access.

We will continue to expand national distribution in 2026, with an eye toward the approximately 270,000 domestic tobacco retail outlets and a meaningful share of those adult consumers in the estimated $58 billion combustible cigarette marketing in the U.S.

that want to smoke less.

A New and Disruptive Category

Our VLN ® cigarettes are currently available in a large number of top reatilers in US markets and present a groundbreaking alternative with 95% less nicotine content than conventional cigarettes.

Maintaining a familiar combustible product format, VLN ® products replicate the conventional cigarette smoking experience, encompassing sensory and experiential elements such as taste, scent, smell, and the familiar “hand-to-mouth” behavior.

Our approach is not to continue making and selling VLN ® cigarettes as a novel idea, but to build an entire Reduced Nicotine Content Category of products, including tiers of proprietary and partner or “flanker” brands that we manufacture and distribute.

Our VLN ® cigarettes are currently available in a number of top retailers in US markets and present a groundbreaking alternative with 95% less nicotine content than conventional cigarettes.

Maintaining a familiar combustible product format, VLN ® products present the conventional cigarette smoking experience, encompassing sensory and experiential elements such as enjoyment, taste, scent, smell, and the familiar “hand-to-mouth” behavior.

Our approach is not to continue making and selling VLN ® cigarettes as a novel idea, but to build an entire RNC category of products, including tiers of proprietary and partner or “flanker” brands that we manufacture and distribute.

We expect this “House of Brands” to drive retail shelf visibility, consumer recognition, and overall volume expansion.

At the same time, we are leveraging our CMO relationships for cross-sale of brand families to increase distribution and points-of-sale for each of us.

At the same time, we are leveraging our contract manufacturing operations (CMO) relationships for cross-sale of brand families to increase distribution and points-of-sale for each of us.

As a category, we expect RNC tobacco to be no less disruptive than the zero- and low-proof spirits segment, which has gone from a dubious notion to a multi-billion-dollar market in only a few years.

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The cigarette and filtered cigar manufacturing equipment we own is high speed and automated, allowing for minimal direct labor costs.

Our manufacturing operations are vertically integrated, allowing us to control production priorities and maintain the required high quality of our products, including our MRTP-designated VLN ® cigarettes.

Our manufacturing operations are vertically integrated, allowing us to control production priorities and maintain the required high quality of our products, including our VLN ® cigarettes which have the only MRTP-designation from the FDA.

Through the acquisition of NASCO and our North Carolina factory in 2014, we qualified as a subsequent participating manufacturer under the Master Settlement Agreement (MSA), an accord reached in 1998 between the State Attorneys General of 46 states, five U.S.

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In 2022, our factory began production of VLN ® Gold King and VLN ® Menthol King cigarettes following their authorization by the FDA as Modified Risk tobacco products.

We also operate as a turnkey contract manufacturing facility for many partnership brands both domestically and internationally.

We also operate as a turnkey contract manufacturing facility for partnership brands both domestically and internationally.

With high-speed manufacturing capabilities, we continue to attract additional contract manufacturing business, including third-party filtered cigar brands and MSA-compliant cigarette brands, to absorb our manufacturing overhead and help keep our unit cost profile low.

Tobacco Sources of Raw Materials

We obtain our reduced nicotine tobacco leaf from third party-growers, primarily in multiple states in the United States who are under direct contracts with us.

We obtain our reduced nicotine tobacco leaf from third party-growers, in multiple states in the United States who are under direct contracts with us.

These contracts prohibit the transfer of our proprietary tobaccos, seeds and plant materials to any other party.

We purchase conventional tobacco destined for contract manufacturing operations through third parties.

In 2023, we leased additional warehouse space in Winston-Salem, North Carolina.

This bonded and temperature conditioned space further supports growth of our VLN ® branded products and provides additional distribution opportunities for customers.

Sales, Distribution, and Growth

Our pilot VLN ® cigarette retail programs during 2022-23 proved the viability and potential of RNC tobacco products, and the appeal to consumers of having a choice in their nicotine consumption.

The motivation to provide tobacco users with lower nicotine options has only increased with the FDA’s recent January 2025 Notice of Proposed Rulemaking that would mandate substantially reduced nicotine content in all combusted tobacco products sold in the US.

Our sales and distribution strategy will be executed with a disciplined route-to-market plan allowing maximum impact for retail development and account depth.

We expect our initial focus to be in the convenience store segment, which accounts for the overwhelming share of tobacco revenue, with other channels to follow.

We plan to employ consistent marketing collateral combined with a comprehensive digital market campaign, targeting adult smokers to drive point purchase direction with connectivity through age-gated social media platforms and an interactive website for adult smokers.

All of this is supported by recently redesigned VLN ® packaging with a vibrant, modern look to drive an emotional consumer connection with adult smokers.

With the VLN ® concept validated, our unswerving focus now is upon rate-of-sale of our exclusively positioned products and profitable growth.

We will build our singular House of Brands by strategic increments, with time-to-market and profitability as our measures of success.

Our goal is to release what we see as the enormous untapped value of a disruptive product alternative capable of fulfilling unmet demand within a nearly $12 billion market segment.

In addition to continued focus on VLN ® and the Low Nicotine Category, we have renewed our focus on utilizing our tobacco assets and expertise to attract additional tobacco business to help fund our portfolio growth.

In addition to existing business relationships with multiple tobacco products companies, we will continue to expand the number of brands and products in our contract manufacturing operations (CMO) portfolio.

The motivation to provide tobacco users with lower nicotine options has only increased with the FDA’s January 2025 Notice of Proposed Rulemaking that, if approved, would mandate substantially reduced nicotine content in all combusted tobacco products sold in the US.

Our sales and distribution expansion strategy is being executed with a route-to-market plan allowing maximum impact for retail development and account depth.

Our initial focus is in the convenience store segment, which accounts for the overwhelming share of tobacco revenue, with other channels to follow.

We plan to deploy a comprehensive digital marketing campaign, targeting adult smokers to drive point purchase direction with connectivity through age-gated social media platforms and interactive websites for adult smokers.

All of this is supported by recently redesigned VLN ® product packaging, including partner brands with a vibrant, modern look to drive an emotional consumer connection with adult smokers.

With the VLN ® concept now validated, our focus is upon rate-of-sale of our exclusively positioned products and profitable growth.

We plan to build our House of Brands in strategic increments, with time-to-market and profitability as our measures of success.

Our goal is to release what we see as the enormous untapped value of a disruptive product alternative capable of fulfilling unmet demand within a nearly $58 billion market segment that includes adult smokers who have already declared the need or want to change their smoking habit.

Research & Development (R&D) & Intellectual Property (IP)

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In each case, we fund and control all patent filings as the exclusive licensee.

This model of contracting with public-sector researchers has enabled us to control R&D costs while achieving our desired results, including obtaining exclusive intellectual property rights relating to our outsourced R&D.

This model of contracting with public-sector researchers has enabled us to control R&D costs while staying at the forefront of low nicotine tobacco technology.

Pre-Commercialization R&D

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In addition to the breakthrough genome modification techniques licensed from NCSU in 1998, we independently invented or obtained exclusive licenses to ways of further affecting the nicotine biosynthetic pathway, including regulation of additional enzymes and transcription factors.

These discoveries were instrumental in our formulation of experimental variable-nicotine tobacco products, millions of which were manufactured and furnished for independent clinical trials funded NIDA and the National Cancer Institute (NCI).

The results of those trials showed that having a reduced nicotine cigarette option available could substantially affect behaviors and choices among smokers, which charted our course going forward.

In 2014, we entered into sponsored research and license agreements with NCSU for exclusive worldwide rights to bioengineering technologies for achieving low nicotine content in tobacco without having the plant strains regulated as genetically modified organisms (“GMOs”).

We subsequently entered into a separate license agreement with the University of Kentucky to license other next-generation very low nicotine content non-GMO tobacco plant lines.

In addition, we began assembling studies and data in support of a Premarket Tobacco Product Application (PMTA), a submission authorized under the 2009 Tobacco Control Act, for potential commercialization of consumer tobacco products based on our proprietary low nicotine tobacco.

The PMTA for marketing of our SPECTRUM ® cigarettes was submitted to the FDA on December 4, 2018.

Beginning in 2018, we also began to extend our R&D activities into the field of hemp (i.e., cannabis).

We increased staff at our Rockville, Maryland laboratory facility for this purpose and entered into sponsored and collaborative research agreements with several institutions and consultants for bioengineering of the hemp plant.

In 2022, 22nd Century acquired GVB Biopharma, an industrial scale processor of hemp-based derivatives for commercial applications, which itself was engaged in research and development related to its products and processes.

In December 2023, the Company divested its GVB subsidiary, terminated all hemp-related research, distribution and consulting agreements, and ceased all R&D activities related to hemp.

For more information regarding the GVB divestiture, please refer to Note 2, “Discontinued Operations and Divestiture,” in the Notes to Consolidated Financial Statements, which can be found in Item 15 of this report.

In February 2024, we relocated our laboratory activities from Rockville, Maryland to our Mocksville, NC manufacturing facility in order to reduce fixed costs and take advantage of proximity to the factory and NCSU.

The PMTA for marketing of our SPECTRUM ® cigarettes was submitted to the FDA in December of 2018.

Our R&D Today

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Since the launch of our VLN ® cigarette pilot program in 2022, our research and development activity has been devoted to supporting further VLN ® product development and improvements, regulatory compliance, and expanding the RNC portfolio of products.

We have authority to market our VLN ® cigarettes as MRTPs for a period of five years, which is the maximum duration for a marketing granted order for such products under the Family Smoking Prevention & Tobacco Control Act.

During 2025, we reapplied to the FDA to extend the FDA’s exposure modification order beyond December 23, 2026.

We continue to pursue improvements in our ability to control nicotine biosynthesis in tobacco, including gene editing techniques that provide for greater crop yields and disease resistance.

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We expect to develop new versions of our RNC cigarettes utilizing these cutting-edge technologies for future commercialization in the U.S.

and globally, including the coveted “American blend” of cigarettes in low nicotine form featuring a mix of bright, burley, and oriental proprietary RNC tobacco varieties.

and globally, including an “American blend” of cigarettes in low nicotine form featuring a mix of bright, burley, and oriental proprietary RNC tobacco varieties.

Intellectual Property

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Government Regulation

Tobacco Master Settlement Agreement

The Master Settlement Agreement (MSA) is an accord reached in November 1998 between the State Attorneys General of 46 states, five U.S.

territories, the District of Columbia and the four largest tobacco companies in the United States concerning the advertising, marketing and promotion of tobacco products.

The MSA also set standards for, and imposes restrictions on, the sale and marketing of cigarettes by participating cigarette manufacturers.

On August 29, 2014, we entered into an Amended Adherence Agreement with the 46 Settling States under the MSA pursuant to which the Company was approved to acquire NASCO Products, LLC, a federally licensed tobacco product manufacturer and subsequent participating manufacturer under the MSA.

On that same date, we closed the NASCO Acquisition and became an SPM under the MSA.

The National Association of Attorneys General (NAAG) coordinates with Settling States through its Center for Tobacco and Public Health to preserve and enforce the monetary and public health mandates of the MSA, including monitoring the compliance of tobacco companies with its terms.

As a participating manufacturer under the MSA, we are released from claims by the Settling States for smoking-related health costs and contribute actively toward the goal of reducing cigarette smoking among youth and raising public awareness about smoking and the tobacco industry.

FDA Regulation of Tobacco Products

The Family Smoking Prevention and Tobacco Control Act of 2009 (“Tobacco Control Act”) granted the FDA authority over the regulation of all tobacco products in the United States.

Among its authorities, the FDA requires that manufacturers of tobacco products first introduced or modified after February 15, 2007, undergo premarket review and obtain premarket authorization prior to commercialization, and to comply with post-authorization monitoring and reporting requirements.

The Tobacco Control Act granted FDA the authority to require the reduction of nicotine to any level other than zero or require reduction of other compouns in tobacco and cigarette smoke.

The FDA requires any manufacturers of new tobacco products to undergo premarket review and obtain premarket authorization prior to commercialization, and to comply with post-authorization monitoring and reporting requirements.

The Tobacco Control Act granted FDA the authority to require the reduction of nicotine to any level other than zero or require reduction of other compounds in tobacco and cigarette smoke.

The FDA has further authority to restrict marketing and advertising, impose regulations on packaging, mandate warnings and disclosure of flavors or other ingredients, prohibit the sale of tobacco products with certain flavors or other characteristics, limit or prohibit the sale of tobacco products by certain retail establishments and the sale of tobacco products in certain packaging sizes, and seek to hold retailers and distributors responsible for the adverse health effects associated with both smoking and exposure to environmental tobacco smoke.

The Tobacco Control Act requires manufacturers of tobacco products to, among, other things, provide FDA with a list of ingredients added to tobacco products in the manufacturing process and register any establishment engaged in the manufacture, preparation, or processing of a tobacco product.

The Tobacco Control Act requires manufacturers of tobacco products to, among, other things, provide the FDA with a list of ingredients added to tobacco products in the manufacturing process and register any establishment engaged in the manufacture, preparation, or processing of a tobacco product.

The manufacture of products is subject to strict quality control, testing and record-keeping requirements, and continuing obligations regarding the submission of safety reports and other post-market information.

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Under the Tobacco Control Act, a PMTA must be submitted to the FDA for any new tobacco product seeking a marketing order to enable commercialization of the product in the United States.

For FDA to grant such an order, the PMTA must enable the FDA to determine, among other things, that permitting the marketing of the proposed new tobacco product would be appropriate for the protection of the public health (APPH), and that the product manufacturing, processing, and labeling of the product otherwise conform to the requirements of the Food, Drug and Cosmetics Act.

For the FDA to grant such an order, the PMTA must enable the FDA to determine, among other things, that permitting the marketing of the proposed new tobacco product would be appropriate for the protection of the public health (APPH), and that the product manufacturing, processing, and labeling of the product otherwise conform to the requirements of the Food, Drug and Cosmetics Act.

A marketing order may include restrictions on the sale and distribution of the product, including restrictions on the access to, and the advertising and promotion of, the tobacco product, and requirements for record-keeping and post-market reporting.

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Once granted, the FDA may suspend or withdraw any marketing order on various grounds, such as a determination that the continued marketing of the tobacco product is no longer appropriate for the protection of public health, or where the PMTA holder has failed to comply with applicable post-market requirements.

We submitted a PMTA to the FDA on December 5, 2018, for proposed marketing of our proprietary RNC cigarettes, and, on December 17, 2019, the FDA issued a marketing order authorizing commercialization.

We submitted a PMTA to the FDA in December 2018 for proposed marketing of our proprietary RNC cigarettes, and, on December 17, 2019, the FDA issued a marketing order authorizing commercialization.

Any new tobacco products we wish to commercialize in the US that are not substantially equivalent to products already authorized or exempt from premarket review will require new PMTA authorization.

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Modified Risk Tobacco Products (MRTP)

The 2009 Tobacco Control Act grants the FDA authority to regulate the labeling and marketing of so-called Modified Risk Tobacco Products (MRTP), which include, among other things, tobacco products that may reduce harm or the risk of tobacco-related disease or reduce or eliminate exposure to a substance.

Before an MRTP can be introduced or delivered into interstate commerce in the United States, the FDA must issue a either a “risk modification order” or “exposure modification order” pursuant to the Tobacco Control Act.

The Tobacco Control Act grants the FDA authority to regulate the labeling and marketing of Modified Risk Tobacco Products (MRTP), which include, among other things, tobacco products that may reduce harm or the risk of tobacco-related disease or reduce or eliminate exposure to a substance.

Before an MRTP can be introduced or delivered into interstate commerce in the United States, the FDA must issue either a “risk modification order” or “exposure modification order” pursuant to the Tobacco Control Act.

An order permitting the sale of an MRTP, if granted by the FDA, enables the applicant to utilize certain claims with respect to a single, specific product, not an entire class of tobacco products.

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In issuing its granting orders for our VLN ® products, the FDA observed that “the data on these products show they can help addicted adult smokers transition away from highly addictive combusted cigarettes.”

Independent scientific research has consistently affirmed the effectiveness of our VLN ® products.

Most recently, a 2024 marketplace research study using our 95% less nicotine Spectrum research cigarettes, conducted among 438 randomized trial subjects, concluded that more than 40% of low nicotine cigarette users changed their smoking habits dramatically and reduced their consumption over the 12-week period.

We have authority to market our VLN ® cigarettes as MRTPs for a period of five years, which is the maximum duration for a marketing granted order for such products under the Tobacco Control Act.

During 2025, we reapplied to the FDA to extend the FDA’s exposure modification order beyond December 23, 2026.

Any action by the FDA to remove our products from the U.S.

market, including the termination or non-renewal of the exposure modification orders for our VLN ® cigarettes would have a material adverse impact on our business.

Proposed Mandate Limiting Nicotine Content in Cigarettes

On July 28, 2017, the FDA issued an advanced notice of proposed rulemaking (ANPRM) announcing its intention to institute a rule requiring that all combustible cigarettes sold in the United States contain only minimally or non-addictive levels of nicotine, as part pf the FDA’s Comprehensive Plan for Tobacco and Nicotine Regulation.

22nd Century submitted public comments endorsing the proposed rule with citations to clinical studies on the health benefits of RNC tobacco products in curbing nicotine consumption and tobacco-related harms.

We submitted further data in support of the technical feasibility of the rule and recommended that the mandated minimally or non-addictive level of nicotine be set at no more than 0.7 milligrams per gram (mg/g) of tobacco dry weight, which the World Health Organization (WHO) identified as the potential threshold to make cigarettes minimally or non-addictive.

On January 15, 2025, the FDA issued a notice of proposed rulemaking (NPRM) that would establish a maximum nicotine level of 0.7 mg/g in cigarettes and certain other combusted tobacco products.

According to the FDA, the proposed product standard would limit the addictiveness of the most toxic and widely used tobacco products, which would have significant public health benefits for all age groups.

The FDA referenced abundant scientific evidence and clinical studies in support of the proposal, including many furnished by 22nd Century, and noted the current commercial availability of low nicotine content cigarettes such as those currently produced by 22nd Century.

The period for public comment on the proposed rule closes on September 15, 2025.

We intend to submit comments and to be prominent and active in support of the proposed rule.

The FDA referenced abundant scientific evidence and clinical studies in support of the proposal, including many furnished by us, and noted the current commercial availability of low nicotine content cigarettes such as those currently produced by us.

We submitted a response in support of the FDA in public comment letter in September 2025.

The complete submission is available online at https://downloads.regulations.gov/FDA-2024-N-5471-4171/attachment_1.pdf .

The period for public comment on the proposed rule closed on September 15, 2025.

Proposed Regulation of Menthol Cigarettes

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For example, states like California introduced their own menthol and flavor bans.

Environmental Regulations

We are subject to a variety of federal, state and local environmental laws and regulations.

We have developed specific programs across our business units for ensuring high standards of environmental compliance, including, standard operating practices and procedures at our manufacturing facility as well at our research and development centers.

We believe that our manufacturing facility complies with all federal, state, and local environmental regulations, including the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act.

Lastly, in addition, any new products introduced by us are subject to a comprehensive environmental assessment by an independent third-party expert, including an assessment of how such products may create environmental risks.

For our PMTA product, the FDA prepared a programmatic environmental assessment (PEA), based on our submitted data in accordance with the Council on Environmental Quality's regulations (40 CFR 1500-1508) implementing the National Environmental Policy Act (NEPA) and FDA’s NEPA regulations (21 CFR 25.40).

The PEA concluded that the marketing orders would have no significant impact and that environmental impact statements would not be required.

Tobacco Master Settlement Agreement

The Master Settlement Agreement (MSA) is an accord reached in November 1998 between the State Attorneys General of 46 states, five U.S.

territories, the District of Columbia and the four largest tobacco companies in the United States concerning the advertising, marketing and promotion of tobacco products.

The MSA also set standards for, and imposes restrictions on, the sale and marketing of cigarettes by participating cigarette manufacturers.

On that same date, we closed the NASCO Acquisition and became an SPM under the MSA.

Tobacco products are subject to substantial excise taxes in the U.S.

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Tax increases have an adverse impact on sales of tobacco products.

Environmental Regulations

We are subject to a variety of federal, state and local environmental laws and regulations.

We have developed specific programs across our business units to ensure high standards of environmental compliance, including, standard operating practices and procedures at our manufacturing facility as well at our research and development centers.

Any new tobacco products introduced by us are subject to a comprehensive environmental assessment by an independent third-party expert, including an assessment of how such products may create environmental risks.

The PEA concluded that the marketing orders would have no significant impact and that environmental impact statements would not be required.

Although our products are not approved as smoking cessation aids, we believe that our RNC tobacco cigarettes may compete with FDA-approved smoking cessation aids.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business