Here we go. Can you hear me now? I hear you now. Welcome. Thank you. This is your screen that we have up here that you're sharing? Yep. Okay. Excellent. I think it looks like a presentation. I can't see it in the Zoom. I see it next to the Zoom. Yes. You might want to expand it and maximize it just for everybody. Yeah, that's great. Does that work right there? It's fantastic. Okay. Are we good to go? Yes, sir. Thank you. All right. Good afternoon, everyone. Welcome to the 22nd Century. I'm Larry Firestone. I'm the CEO of the company, and I've been here since December 1st. In that time, we've begun really hard work on turning the company around. A little background on me. I've been doing what I do for 43 years, and that's coming into companies such as 22nd Century and helping them realize their potential. So I think we've got a very exciting opportunity in front of us here. A little bit on the safe harbor. I wouldn't be doing my job if we didn't stop there. We're going to talk about a little bit of non-GAAP financials as we get to the back. Just a cautionary tale there. At a glance, as James mentioned, we're traded on the NASDAQ under XXII. We're headquartered in Mocksville, North Carolina. We're a pure-play tobacco company with a focus on nicotine harm reduction. We do that through our proprietary flagship product known as VLN. That stands for very low nicotine. We also have a contract manufacturing business for other brands, and that's both domestic and international brands. In North Carolina, we manufacture cigarettes for not only ourselves through the VLN but other brands as well. The synchronicity between those two is critically important because as the volume tips up, our absorption of direct labor and overhead goes down, so our cost per carton comes way down as we see volume increasing as we go through time here. As I mentioned, I joined on December 1st, and the financial discipline that we've put into place at 22nd Century is at probably the highest level of the company. This has really been since its history. It's been an R&D company, and we're right now in the conversion to commercial product company with VLN. And we have gone through a debt restructuring last Tuesday. We did a debt-for-equity swap with Omnia, our junior secured lender. And so we've been able to bring the debt load on our balance sheet down actually quite a bit. And we are targeting break-even in Q1 of 2025. So let's talk a little bit about VLN. VLN, again, stands for very low nicotine. We've been developing reduced nicotine products since 1998, so 26 years of work in the bioscience, if you will, of the plant. And we have the only FDA-authorized modified risk tobacco product, MRTP, combustible cigarette, in the market. And so when you look at the scientific community, VLNC, which stands for very low nicotine content, is how the scientific community refers to very low nicotine products. And so our goal with VLN and the low nicotine content is to create a separate category, much like you'd see for decaf coffee, diet soda, sugar-free, light beer, anything that has a hint towards less harmful, better health, something along those lines. So our strategy with the 22nd Century VLN product is to attach it to other brands as well, such as Ranger. I've got some brand presentations here of our Pinnacle product with VLN, Ranger with VLN, and then our standard VLN. We have other brands as well that we build for. And so the idea here is to not be the only VLN in the very low nicotine category, but to have other presentations as well, all manufactured by us, all to our predicate so that we can fill out, if you will, the light beer section of the beer cooler with respect to the cigarette category. So VLN, very low nicotine, is synonymous with smoker health, and it helps you smoke less. And we have some empirical data that backs that up as well. So we brought the brand forward. We put it in the market in 2021, and we're going through a rebranding exercise. So the pack that we have today, VLN, 95% less nicotine, that stands for something. And I'm going to get to the math here in just a second. But we look at our pack. We look how it sits on the shelf. And again, we want to build out this category. So we've got to create a package that for customers who want 95% less nicotine, they can find it, find it very easily on the shelf. So for us, it's really our goal to create a disturbance in the category. We want to be annoying to Big Tobacco. We want to have VLN start to get some traction and be the disruptor and not the blend-in. So if you think about parallels to other categories that are widely established categories, they're out there. Nobody would even think you could go in and crack a new code for the category. Liquid Death water is a very recent and very successful one, which the theme is death, the plastic bottles. White Claw was the first seltzer in the market. Miller Lite was the first major light beer, etc. You kind of get the point. So VLN's theme is death to smoking. We have a tool here that can help people smoke less. And as they move away from their nicotine addiction, then hopefully, they can smoke not at all. We've got some folks that have weighed in on that with us and have been very successful in that realm. So here's the math. The math is very simple. 1 pack of VLN cigarettes, the whole pack, equals 1 cigarette of a standard cigarette from the standpoint of nicotine content. And that's why it helps you smoke less. And so as we go and again, based on the empirical evidence, it's very much like quitting coffee, where a coffee drinker will stop. They'll have headaches. It'll last about 2 weeks. And then eventually, when they rehydrate because coffee's a diuretic, when they rehydrate their body, the body finds the natural ability to not need that draw to coffee. Well, cigarettes with nicotine or what we've found is very much the same. So somebody who starts smoking a VLN cigarette is going to, when they smoke that one, this 95% less nicotine, their body's going to want more. They're going to smoke. They're going to smoke through that pack. And remember, that equals one cigarette. And then eventually, over time, as they get to their daily consumption of cigarettes, their body says, "Hey, I don't need this nicotine anymore." And that's where it really comes in, you have people who have moved off of the addiction and can make those decisions on their own. And most of the time, I'm told, they choose to quit at that point in time. We also have people who are smokers who like to smoke. They have the natural rhythm of the physiology of smoking. They look at this as a way to turn into probably less of an addicted smoker and more of a casual social smoker. But we didn't really spend a lot of time getting the evidence on that. So for us, at 22nd Century, what does VLN mean to us? Well, if we could sell 223,000 cartons a year, we break even. And we have 5,100 points of distribution out there. So what does that mean? That means we need to sell one carton per week per store, and that'll bring us to break even on just the VLN product. So we haven't talked about our contract manufacturing side yet. When you look at our distribution, we've got some pretty top-tier distribution that we've secured with Walgreens, 7-Eleven, Circle K, Smoker Friendly. We've got Murphy's Oil and a whole bunch of distribution points across the U.S. in 26 states. And so if we were to equal some of the bigger brands, for example so we have 5,100 stores that are selling our product today. If we wanted to have VLN available everywhere everybody else is so that smoker can make that decision kind of right there at the counter, well, that would be over 250,000 distribution points. So what we have to do as we match distribution with availability with customer acquisition as we rebrand and represent VLN is we've got to grow the distribution, and we've got to grow the customer attachment right along with it. And so there's plenty of runway ahead of us as we look at the road ahead and places that we want to distribute. So where we are with VLN today is we're rebranding it. We expect that to come out in the second half of the year. We're putting together a marketing campaign that'll drive consumer awareness. That's a big piece of what was missing on the first launch that we did for VLN. Got a lot of lessons learned and then expanded distribution that I just talked through and increased sell-through. And that's really what we're after, is then to see the turn and to get VLN driving and cranking in the marketplace. So there's been a lot of discussion around our stock in Wall Street and in the government about government regulations and legislative environment. President Biden retracted his comments about menthol bans. We've got various states that have menthol bans or want to have menthol bans. The FDA has certainly had initiatives along those lines. I think that largely, a lot of the anticipation over the last 26 years of us bringing this product to the market has been something from the government or the legislative area is going to drop news on the market, and 22nd Century is going to be the only solution out there for smokers. Well, our strategy, we are not going to rely on government mandates or initiatives to be successful in the company and complete the turnaround and get the cash positive and profitability. So a little bit on our contract manufacturing side of our house. We have a drive to push our factory to full consumption of our capacity. And so we're agnostic to the end product. For me, we make 35,000 cartons a day. That's our capacity. If we're running at full capacity, we can actually run a four-day shift. We can take that to 7. We can double that. And then our machines on the floor, we can double those. So we can expand capacity quite a bit here. So if we look at it, if we run the full 4-day shift at full capacity on every machine, we can break even as a company. So the combination of and the margin profile between VLN and the contract manufacturing business is vastly different. Contract manufacturing is 10%-15% gross margin. The VLN side is 45% and even a little north of that. So we'd love to have the factory consumed by VLN. But if it's not, again, there's a cost coefficient there that drops our direct labor and overhead. So that's what we're driving for, is continuing to find areas in the tobacco business where we can help and have it be a service profile for various customers while we drive the VLN mission forward. On the R&D side, we've been in a strong year, as I mentioned, we've been doing this for 26 years. So we had our first tobacco strain that we got into the low nicotine category. Now we've got our second. So we're working on our blends there. We're working on a third as well. And so we partner with North Carolina State University. Our IP portfolio is very well protected. We've got a nice, strong IP portfolio. And there's other angles of the tobaccos that we grow that we have to continue to work on in the R&D environment. One is disease resistance. And of course, when you take the nicotine out of a tobacco, what you're doing is you're taking a lot of the sugar out. So we have to replace that sweetness in the tobacco. So sugar testing is a big piece of our game in how we return some sweetness into the tobacco. So we're always working on the agronomics of what we're putting together here to put inside the actual VLN cigarette. All of our R&D, by the way, is focused on the VLN side. When we do the contract manufacturing, it's other people's predicates. It's other people's cigarettes. Financially, we haven't announced we're going to announce our Q1 next week on Wednesday. So we haven't announced our Q1 yet. So this is 2023. We did about $32 million in sales. This is the tobacco side of the business. And gross margin-wise, we had a negative gross profit. The big one in Q4 is we actually had to write down some excess tobacco leaf. We turned around and sold that leaf at a discount to the market. So that was a big one-timer that came through Q4. For the year, we had a negative $43-$44 million in EBITDA. Now, last year, we were burning about $17 million a quarter, call it $15-$16 million a quarter in cash. Our burn right now is way down from that, dramatically down. You'll see that next week when we produce our earnings report. So as I mentioned at the very beginning, we're in the first phase of turning this company around. It's a hard turn. We plan on breaking even in Q1 of 2025, which is, I'm going to say, 200 and it's like 220 days. We're not just P&L focused. So we're working on the balance sheet as well. So they kind of run hand in hand. So we raised some money in April. We raised $4.2 million in proceeds in April, gross proceeds in April. So that gives us cash runway. We're trying to work that so that it carries us the whole way. But we're being very, very frugal on how we use that cash. And then we also we have an extreme focus on debt reduction. When we started the year, we had, I want to say, over $15 million in senior and junior secured facilities. So last week, we announced $5.2 million in a debt to equity swap with a company called Omnia. That's our junior. So no longer are they in the liability section of the balance sheet. And then we've got also our senior did a small conversion around the same time as the capital raise. And they've got a convertible feature in their debt as well. So one of my goals is I would love to see us be debt-free by the time we break even in the first quarter of next year. So we've got we're tracking down not only to become break-even and cash positive, but we're also tracking to work through our senior secured liability as well and get ourselves to the point where we're secured debt-free. We'll always have accounts payable cycling through, but that's a normal course of working capital. So as a summary, we've got the VLN strategy. We've reconfigured it. We're reconfiguring the branding. That's already solidified, and we're getting started on that. That'll be a second half of this year event for us. Increased gross profit. VLN volume, obviously, drives gross profit. As you saw in our financials, we had some negative gross profits in there. So we have some customers that we have contracts with that had negative gross margins. We've served up price increases to them, and we've also talked to a couple of them to say we have contractual exit obligations as well to say, "This business is not profitable, so we're going to need you to either take a pay sorry, a price increase or exit, having us do the contract manufacturing for you." And so that's going both ways. I've explained to them that we're no good to them if we're losing money on them. I mean, that's just not a good answer. And then the more we drive the volume at our factory in North Carolina, then the lower our cost per carton goes. There's a pretty good chunk of gross profit that we can gather from where we sit today to what I'll call maximum absorption when you double in this and do the additional equipment. And then we've got, as I mentioned, our cash burn, our operating expenses, our OpEx is way down from what it was last year. And then we've got the JGB and Omnia secured debt and our continued research on our low nicotine strains. So for a little company that has come through some tough times, I feel like we've got ourselves on the track, and we're starting to drive each of those avenues forward quite well. So with that, James, I'd open it up for questions. Thank you, Larry. Excellent presentation. We love the story. We are going to now open up the Q&A portion. If somebody has a question, please unmute your microphone, or you can place it in the chat below. We do have a couple that have come in while you've been presenting. The first question is from a current investor. What is the stock target of 2024 and 2025? I'm not sure if you can answer that. I can't answer that. Yeah. Very simply put, my job is to get this company to cash positive, profitability on a growth track, so. Correct. We do have another question, though. Given the restrictions on advertising, for example, broadcast ads on tobacco companies, what is the marketing strategy to build the brand name? Yeah, the restriction on advertising is challenging. What I can say is for the places, for the stores that we have VLN, we've got some point of sale and some materials to put through the store personnel so that people are educated, so that the clerks are educated on the product and how to sell the product. But when I showed or when I talked about the contract manufacturing brands and attaching a VLN SKU to that line, now, some of those are oriented towards their own store. So those are house brands in house stores. And the beauty of that is if we're successful in attaching those brands to those where the retailer doesn't really care, they're agnostic whether they're selling and making money on their own brand or their own brand, a VLN version of their own brand, and that's a financial answer. Then we have store clerks that are constantly getting trained because cigarettes for some of these stores are a big part of the revenue and profit stream. So it's really about store clerk education at the cash register and the motivation of the store to move VLN as part of the discussion. Okay. Thank you. Another question here from the field. How will you market without advertisement? I think it's kind of related to the prior. Yeah. Yes. I agree. I agree. Can I just go quick one there, James? Sure. Yeah. Thanks. Good morning, Larry. So could you just walk through the biggest components of reducing the cash burn? I mean, that was a pretty enormous cost savings that you've implemented to reduce that cash burn. And how do you think about that now that you're launching a marketing campaign? Is that cash burning going to kind of pop back up? Thanks. Well, if I unpack your question, the biggest components were taking apart each component of the P&L and eliminating anything that was superfluous in nature or nice to have, not a need to have. Target number one is get to cash break-even, get to break-even and cash break-even so that we're not having to go to Wall Street for lunch money every month. Behind that, the new mindset in the company and that also deals with pricing and customers as well. The mindset in the company is when we come up with an initiative, for example, to your example, a marketing initiative, then the question is to the team, "How are we going to pay for that?" And so if we're spending money that or we've got some things that are running out of their timeline here, and there'll be some opportunity to not spend that in the future, they've got to bring that answer with them. So it's either increased revenue. There's got to be an answer that's organic in the business. Okay. Thank you. All right. Any further questions? We can always have those directed to the company after the presentation. But that concludes 22nd Century Group for today. Larry, thank you so much. Thank you. We want to keep an eye on your company for the remainder of the year. Thank you for participating in the Aegis 2024 Virtual Conference today. You bet. Have a great day. Thank you so much. Bye-bye. The recording has stopped. We are going to take a brief break and come back at 3:00 P.M. with Helius Medical Technologies, HSDT.