22nd Century Group, Inc. (NASDAQ:XXII) Q4 2023 Earnings Call Transcript

Jim McIlree: Okay. Thank you. I am just trying to understand. There seems to be a conflict between the two. Between the growth of VLN and the limited resources to make it grow. It seems like you really can’t make it – you really cannot get it to grow and drive that business until you get additional cash resources. I am just puzzled over the timing and how you guys are looking at accomplishing growth in VLN given the limited resources right now.

Larry Firestone: Well, first of all, there are many ways that we can, I would say, enhance the presentation of VLN in the market. Price is one. I do not like to touch price as a first option, but it is certainly out there for us. We have some major chains that are carrying VLN right now. To move some market awareness material into a major chain, the good news is that whatever money we spend gets pretty widely distributed. Those will be discussions that we will be having with the chains. The digital world that we have has been pretty dormant for the last – when I looked at our website and our socials, I would say it has been dormant now for about six months. We can start to activate a lot of that on a very little budget. As we grow, as VLN starts to sell, VLN is a very profitable, very profitable business.

Product for us, margins are very healthy, very tobacco industry healthy. We just need to get the product moving through the stores. That should start the generation of cash, generation of profitability.

Jim McIlree: Okay. Thank you. That’s helpful. That is it for me. Thank you.

Larry Firestone: Thanks, Jim.

Operator: There are no further questions at this time. I will now turn the call over to Larry for closing remarks.

Larry Firestone: Thank you. I would like to thank everyone for joining our call today. In closing, I will emphasize that we are absolutely focused on turning 22nd Century around and becoming a profitable company for the first time in the company’s history. This, as I described earlier, is going to require our full focus on the business of making and selling cigarettes, our VLN brand, and our CMO brands as well, and keeping our costs in line. We look forward to updating you again soon in mid-May on our first quarter 2024 conference call. Lastly, I would like to thank our employees who keep driving 22nd Century forward. That concludes our remarks.

Operator: Ladies and gentlemen, this does conclude your conference call for today. We thank you for participating and ask that you please disconnect.