22nd Century (XXII) AI Stock Analysis

• Market Cap: $1.28M
• Dividend Yield: N/A
• Average Volume (3M): 1.86M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.96
• Revenue Growth: -56.65%
• EPS Growth: 99.11%
• Country: US
• Employees: 56
• Sector: Consumer Defensive
• Sector Strength: 52
• Industry: Tobacco
• EPS (TTM): -43.47
• Shares Outstanding: 500,331
• 10 Day Avg. Volume: 2,279,245
• 30 Day Avg. Volume: 1,857,398
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 5.42
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: -3.49
• Enterprise Value/Ebitda: -0.65
• 1Y Price Target: $2.50
• Price Target Upside: -1.96% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 46 Neutral
• Price Target: $2.50 ▼(-1.96% Downside)

The overall score reflects significant financial and technical challenges faced by 22nd Century. While financial performance and technical indicators are weak, there are positive signs from the recent earnings call and strategic corporate events like the new manufacturing agreement. The company’s efforts to improve operational efficiency and secure new agreements are encouraging but need to translate into consistent financial improvements to enhance the stock's attractiveness.

22nd Century Business Overview & Revenue Model

Company Description

22nd Century Group, Inc., an agricultural biotechnology company, focuses on tobacco harm reduction, reduced nicotine tobacco, and enhancing health and wellness through plant science for the life science and consumer products industries. It develops very low nicotine content tobacco and cigarette products under the VLN King and VLN Menthol King names; and SPECTRUM research cigarettes for use in independent clinical studies. The company has collaboration with Keygene N.V. to develop hemp/cannabis plants for exceptional cannabinoid profiles and other superior agronomic traits for medical, therapeutic, and agricultural uses, as well as other applications. 22nd Century Group, Inc. was founded in 1998 and is headquartered in Buffalo, New York.

How the Company Makes Money

22nd Century Group primarily generates revenue through the sale of its reduced-nicotine tobacco products and hemp/cannabis-derived products. The company's proprietary technology, which allows for the manipulation of nicotine and cannabinoid levels, is a critical component of its revenue model. In addition to product sales, 22nd Century Group may engage in licensing agreements and partnerships with other companies in the tobacco and cannabis industries, leveraging its technology to enhance revenue. Key factors contributing to its earnings include regulatory approvals, market acceptance of reduced-harm products, and strategic collaborations to expand its market reach.

22nd Century Financial Statement Overview

Summary

22nd Century is facing significant financial challenges, with declining revenue and persistent losses impacting profitability and cash flow. The balance sheet shows high leverage and limited equity, reflecting financial instability. Despite these challenges, efforts to manage debt provide a glimpse of financial discipline. Overall, the company's financial health is weak, with urgent need for strategic turnaround to achieve sustainable growth.

Income Statement

The company's income statement shows a deteriorating trend in revenue, with a sharp decline from $62.1 million in 2022 to $21.69 million TTM. Gross profit margin is negative due to consistent gross losses, indicating inefficiencies in core operations. Net profit margin is also negative, reflecting ongoing losses and challenges in achieving profitability. While revenue growth was negative, there are no signs of recovery in EBIT and EBITDA margins, which remain deeply negative.

Balance Sheet

The balance sheet highlights a risky financial structure with a debt-to-equity ratio worsening over time, reaching 1.54 TTM. The company has a low equity ratio, reducing financial stability. Return on equity remains negative, reflecting sustained net losses. While liquidity appears constrained, the company has managed to reduce debt in recent periods, which is a positive aspect.

Cash Flow

Cash flows demonstrate consistent negative operating cash flow and free cash flow, indicating cash burn. The operating cash flow to net income ratio is challenging, reflecting ongoing operational inefficiencies. Free cash flow growth remains negative, suggesting difficulties in generating cash. Financing activities have been a source of liquidity, but reliance on financing could pose a risk.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.88M	32.20M	62.11M	30.95M	28.11M
Gross Profit	-2.40M	-8.70M	1.17M	2.07M	1.44M
EBITDA	-12.11M	-40.41M	-32.89M	-31.00M	-18.07M
Net Income	-15.16M	-140.78M	-59.80M	-32.61M	-19.71M
Balance Sheet
Total Assets	21.67M	27.50M	114.65M	75.95M	51.69M
Cash, Cash Equivalents and Short-Term Investments	4.42M	2.06M	21.21M	48.74M	22.34M
Total Debt	8.62M	16.38M	6.73M	2.34M	786.00K
Total Liabilities	17.66M	35.91M	18.68M	9.88M	7.58M
Stockholders Equity	4.01M	-8.41M	95.97M	66.07M	44.11M
Cash Flow
Free Cash Flow	-14.51M	-60.60M	-56.14M	-23.91M	-16.14M
Operating Cash Flow	-14.35M	-54.99M	-51.71M	-22.84M	-15.62M
Investing Cash Flow	-139.00K	16.82M	22.58M	-27.73M	16.47M
Financing Cash Flow	16.85M	37.21M	30.82M	50.88M	-304.00K

22nd Century Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XXII, the sentiment is Negative. The current price of 2.55 is below the 20-day moving average (MA) of 3.88, below the 50-day MA of 9.16, and below the 200-day MA of 101.08, indicating a bearish trend. The MACD of -1.92 indicates Negative momentum. The RSI at 21.41 is Positive, neither overbought nor oversold. The STOCH value of 13.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XXII.

22nd Century Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPB	70 Neutral	$1.45B	35.83	26.05%	0.36%	4.44%	-5.94%
Sector *	63 Neutral	$20.31B	12.53	-7.33%	3.14%	2.97%	-12.13%
UVV	63 Neutral	$1.34B	14.12	6.56%	6.02%	7.23%	-20.91%
ISPR	49 Neutral	$156.01M	―	-110.47%	―	-1.69%	-106.13%
XXII	46 Neutral	$1.28M	―	-385.90%	―	-56.65%	99.11%
GNLN	38 Underperform	$4.95M	―	-113.32%	―	-78.81%	92.54%
KAVL	31 Underperform	$5.60M	―	-88.92%	―	-71.85%	59.22%

22nd Century Corporate Events

22nd Century Approves Key Proposals at Annual Meeting

On July 15, 2025, 22nd Century Group, Inc. held its 2025 Annual Meeting of Stockholders, where several key proposals were approved. These included the election of two Class II directors, an increase in authorized shares of common stock to 500 million, amendments to the 2021 Omnibus Incentive Plan, and the appointment of Freed Maxick CPAs, P.C. as the company’s independent accountants for 2025. Additionally, stockholders approved measures related to executive compensation, reverse stock split, issuance of shares upon exercise of warrants, and amendments to convertible debentures, aligning with Nasdaq Listing Rules.

22nd Century Secures Exclusive Manufacturing Agreement

On June 23, 2025, 22nd Century Group entered into a Master Services Agreement with an existing customer to exclusively manufacture the customer’s Pinnacle cigarette and moist snuff brands for five years. This agreement includes the production of existing Pinnacle cigarette brands and the launch of new low nicotine and natural style brands, as well as moist snuff products. The company will pay royalties for each carton sold to distributors. This partnership expands 22nd Century’s market presence, leveraging the Pinnacle brand’s strong sales record in over 1,700 stores across 27 states, with new product sales expected to begin in late summer and early fall of 2025.

22nd Century Announces Reverse Stock Split Plan

On June 16, 2025, 22nd Century Group, Inc. filed a Certificate of Change in Nevada to authorize a 1-for-23 reverse stock split of its common stock. This move was aimed at restoring compliance with NASDAQ’s listing standards. The reverse stock split will take effect on June 20, 2025, and the company’s shares will trade under a new CUSIP number while retaining the same NASDAQ symbol ‘XXII’. The split will reduce the number of authorized and outstanding shares proportionally, with no fractional shares being issued. Stockholders’ percentage ownership and voting power remain largely unchanged, and all options and warrants will be adjusted accordingly.

22nd Century Modifies Securities Purchase Agreement

On May 22, 2025, 22nd Century Group, Inc. announced a modification to its Securities Purchase Agreement and debentures with JGB Partners and related entities, allowing for a potential reset of the Conversion Price, contingent upon stockholder approval. This move, aimed at financial restructuring, involves resetting the Conversion Price to the average of the daily VWAPs of the preceding five Nasdaq trading days, not exceeding the current $6.04, with $3.8M in Debentures outstanding. Additionally, Anthony Johnson, a Director of the Company, resigned effective July 15, 2025, with his departure unrelated to any conflicts with the company.