22nd Century Group (XXII) Q1 2026 earnings summary

Executive summary

• Q1 2026 focused on execution and growth, with commercial expansion of proprietary VLN® reduced nicotine products now in over 2,000 stores across 20 states, aiming for 5,000 outlets by year-end 2026.

• VLN is positioned as a disruptive, FDA-authorized low-nicotine cigarette targeting adult smokers seeking to reduce nicotine dependence, supporting FDA low nicotine initiatives and offering licensing to other tobacco companies.

• Net revenues for Q1 2026 were $4.1 million, up from $3.5 million in Q4 2025 but down 31.1% year-over-year due to a strategic shift away from low-priced contract manufacturing customers.

• Marketing investments and new leadership in consumer marketing are underway to drive awareness and adoption.

• As of March 31, 2026, cash and cash equivalents totaled $9.5 million, and working capital was $13.2 million.

Financial highlights

• Net revenue for Q1 2026 was $4.1 million, up 16.1% sequentially from Q4 2025, but down from $6.0 million in Q1 2025.

• Gross loss improved to $0.6 million from $0.8 million in Q4 2025, but was slightly higher than $0.6 million in Q1 2025, with a gross margin of -15.5%.

• Operating loss was $3 million, compared to $2.8 million in the previous quarter and $2.6 million in Q1 2025.

• Net loss from continuing operations was $3 million, with a basic and diluted loss per share of $5.07.

• Adjusted EBITDA was negative $2.6 million, compared to negative $2.4 million in Q4 2025.

Outlook and guidance

• Targeting distribution in over 5,000 retail outlets by year-end 2026, with new markets in NY, NJ, Southern California, and the Southeast.

• Anticipates stronger commercial momentum and improved gross profits in the second half of 2026, prioritizing disciplined cost management and advancing toward EBITDA breakeven.

• Management expresses substantial doubt about the ability to continue as a going concern through one year from the financial statement issuance date, citing ongoing losses and negative cash flows.