CMO Strategy
Leading Provider of Manufacturing Solutions to the Tobacco Industry
- Services include:
- High Quality Private Label Production Services
- Turnkey or Consigned
- Leverage our Machine Capacity: Supply Chain Management, MSA Cigarette Producer, Low-Cost advantage
- 22nd Century handle the Front End; They handle the "Go-to-Market"
Operations Strategy
Goal: Drive the Factory output to full capacity – VLN® + CMO
- Agnostic to the end product – Cigarettes or Filtered Cigars
- 35,000 cartons per day on one shift depending on mix
- Running at Full Capacity will drop DLOH per carton across the board
- Current capacity can be grown by: Additional shifts, Additional production lines, In-line automation
- Full consumption of current 1 shift capacity with CMO business can cover the Company's overhead
- The goal is to fill the capacity with CMO business and fund VLN® growth
- Substantial revenue stream at full capacity
- Growth in revenue and lower DLOH = Good margin and cash flow
Grab key sources/details here: XXII Presentation.
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As mentioned above, XXII has several potential catalysts to keep a close eye on right now. Take a look:
No. 1 XXII Potential Catalyst - A Low Float Could Lead To Explosive Volatility In A Blink.
According to the Yahoo Finance website, XXII has a fairly low float.
In fact, the website reports this profile to have approximately 8.64Mn shares in its float.
Why is that important? It's important on one crucial level. Volatility.
Could more positive company news in the tail half of 2024 provide a near term spark?
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No. 2 XXII Potential Catalyst - An Exciting Innovation Shows Promise As A Potential Future Upgrade To VLN® (Key CMO Agreement).
22nd Century Announces New Greenbutts Manufacturing Agreement for Innovative Plant-Based, Biodegradable Cig-a-rette Filters
Patented, Fully Water Dispersing, Biodegradable Solution for World's Most Littered Item
Mocksville, North Carolina--(Newsfile Corp. - July 10, 2024) - 22nd Century Group, Inc. (NASDAQ: XXII), ..., today announced an agreement with Greenbutts, LLC to provide manufacturing space at its Mocksville, North Carolina NASCO manufacturing facility and NASCO staff to operate the manufacturing equipment for an innovative new cig-a-rette filter solution. Greenbutts offers a patented technology to replace single-use, plastic-based filters currently used in to-bacco products with water soluble, fully biodegradable filter solutions.
Said Larry Firestone, Chairman and CEO: "With an estimated 6 trillion manufactured every year, plastic-based cig-a-rette butts are the most abundant form of plastic waste worldwide. Adding to that, an estimated 65% are littered, making them the world's single most littered item. Unfortunately, the cellulose acetate plastics used in conventional cig-a-rette butts takes decades to biodegrade, resulting in toxic waste that is harmful to ecosystems and wildlife, especially aquatic ecosystems. Greenbutts provides a simple, non-toxic, 100% biodegradable, plant-based and water dispersing solution that is free of plastic and harmful chemicals while providing the same smoking experience as current filters."
"Under this new multi-year agreement, 22nd Century Group will provide the manufacturing space and support needed to produce sample product to allow Greenbutts to pursue FDA approval, with the mutual goal thereafter of expanding to full commercial production. We see this as an exciting new innovation and disruptor that could be used in both our VLN® reduced nicotine content cig-a-rettes, the first and only combustible cig-a-rette to receive an FDA harm reduction authorization, and in our CMO business for other conventional cig-a-rette brands as well, where advanced discussions about potential use in cig-a-rette products are already underway."
Read the full article here.
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No. 3 XXII Potential Catalyst - Company Announces Agreement To Continue Sponsored Research Through 2025 With NCSU.
22nd Century Satisfies IP Licensing and Sponsored Research Obligations to NCSU Through 2025 in an Equity Transaction
Mocksville, North Carolina--(Newsfile Corp. - September 9, 2024) - 22nd Century Group, Inc. (NASDAQ: XXII), ..., today announced an agreement to fund all intellectual property, licensing and sponsored research payments to North Carolina State University through 2025 in equity as part of a deal valued at over $1.2Mn. The payments will occur over the course of three tranches, in equity or cash, at the company's election. The transaction covers all expenses related to patent maintenance, royalty, license and sponsored research from the fourth quarter of 2023 through the end of 2025. Additionally, the Company has extended its field trial activity to 2025.
Said Larry Firestone, Chairman and CEO: "We recently secured our relationship with NCSU in November of 2023, bringing on additional IP to enhance our reduced nicotine content tobacco capabilities. This latest agreement further aligns NCSU with our continued success at 22nd Century."
Read the full article here.
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No. 4 XXII Potential Catalyst - With Aims Of Being Cash Positive Early Next Year, XXII Reduces Debt In A Major Way.
The company has been on the warpath to reduce its debt in 2024 with the hopes of being cash positive in Q1 2025.
Take a look at XXII's recent accomplishments:
6/25/24 - 22nd Century Reduces Debt by Additional $1.5Mn via Payment from GVB
5/13/24 - 22nd Century Eliminates an Additional $2.3Mn of Debt
4/30/24 - 22nd Century Eliminates $5.2Mn of Debt in Above-Market Equity Transaction
The company really made it known that they were going to do whatever it takes when they shared this back in February: 22nd Century Group Announces Reduction in Board Compensation
From the article:
"We continue to build on our progress over the past two months as we rapidly turn 22nd Century into a lean operating tobacco business focused on efficiency and value in everything we do," said Larry Firestone, Chairman and Chief Executive Officer of 22nd Century. "These latest changes not only reduce the cash and total compensation cost related to our board, they align the board with our operating philosophy as we seek to become a self-sustaining business through a combination of sales growth, margin improvement and cost reduction."
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No. 5 XXII Potential Catalyst - Could Oversold Leaning Technicals Suggest A Healthy Reversal Is Approaching Near Term?
At 11:00AM EST Tuesday, Barchart was reporting multiple oversold leaning technical indicators for XXII.
These technicals could be signaling a healthy reversal is approaching in the near term.
Here's the definition of a "reversal" from Investopedia:
"A reversal is a change in the price direction of an asset. A reversal can occur to the upside or downside. Following an uptrend, a reversal would be to the downside. Following a downtrend, a reversal would be to the upside. Reversals are based on overall price direction and are not typically based on one or two periods/bars on a chart."
Here's the technicals to pay close attention to (as of 11:00AM EST Tuesday):
- 9-Day Relative Strength Index: 29.90%
- 14-Day Relative Strength Index: 28.57%
When these numbers drop down to the 30% range and lower, they can be viewed as being in oversold territory. While in this territory, they can paint the picture of a profile that is undervalued.
- 14-Day Raw Stochastic: 16.33%
- 14-Day Williams %R: 83.67%
As the Raw Stochastic nears the 10% range and lower and the Williams %R nears the 90% range or higher, these technical indicators may also be viewed as oversold and undervalued.
Keep an eye on these technicals closely.
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(Nasdaq: XXII) Potential Catalysts Recap - The Top 5
No. 1 - A Low Float Could Lead To Explosive Volatility In A Blink.
No. 2 - An Exciting Innovation Shows Promise As A Potential Future Upgrade To VLN® (Key CMO Agreement).
No. 3 - Company Announces Agreement To Continue Sponsored Research Through 2025 With NCSU.
No. 4 - With Aims Of Being Cash Positive Early Next Year, XXII Reduces Debt In A Major Way.
No. 5 - Could Oversold Leaning Technicals Suggest A Healthy Reversal Is Approaching Near Term?
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Coverage is officially initiated on (Nasdaq: XXII). Get this breakout idea on your screen now.
Sincerely,
Kai Parker
StockWireNews
(Always Remember The St-ock Prices Could Be Significantly Lower Now From The Dates I Provided.)
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