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Welcome to the 22nd Century Group's first quarter 2026 conference call and webcast. At this time, all participants have been placed in listen-only mode. It is now my pleasure to turn the floor over to Matt Kreps of Investor Relations for 22nd Century Group. Please begin.

Thank you. Welcome to 22nd Century's first quarter 2026 results conference call. Joining me today are Larry Firestone, CEO, and Dan Otto, CFO. Earlier today, we issued a press release announcing our results for the quarter ended March 31, 2026. The results release and 10-Q will be available in the investor section of our website at xxiicentury.com. Today's call will include prepared remarks from Larry and Dan, updating you on 22nd Century's business, operations, strategy, and financial results through March 31, 2026, and subsequent events post the close of quarter end. Before we begin, a few reminders for today's call. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements.

Additional information regarding these factors can be found in our annual, quarterly, and other reports filed with the SEC. During today's call, we may also discuss non-GAAP financial measures, including adjusted EBITDA, which we define as earnings before interest, taxes, depreciation, and amortization, as adjusted for certain non-cash or non-operating expenses. For more details on these measures, please refer to our results release issued earlier today. With that, I will now turn the call over to Larry.

Thank you, Matt. Good morning, everyone, and thank you for joining 22nd Century's first quarter 2026 results conference call. As we signaled in our year-end 2025 earnings call, which focused on the relaunch and initial shipments of VLN cigarettes, we expected Q1 2026 to yield modest sequential top-line growth and similar operating results to Q4. We anticipated additional shipments of our VLN products to be minimal while the initial stocking orders were worked through, which allowed time for in-store placement, setup, retailer education, and awareness, among other activities. As I will outline below, we will see further traction now in 2026. As a broad overview, looking at 2026, the shift for our company is now 100% focused on execution and growth.

Not only on growth in our retail outlets and points of distribution within those outlets, but through targeted investments in marketing, merchandising, and developing the base of adult smokers who we believe will and those who have already begun to smoke VLN cigarettes. We anticipate market expansion to be very much a grassroots effort for VLN products as the headliner of the tobacco harm reduction movement. We know big tobacco, also referred to as big nicotine, is instead putting all their financial and marketing muscle into transitioning combustible cigarette users into nicotine pouches and other highly addictive nicotine solutions.

We, on the other hand, are the contrarian and we accept the challenge to join the global efforts of the many countries around the world and regulatory bodies such as the U.S. FDA and the World Health Organization, who have been attempting to curb smoking and the health harms of smoking and nicotine for many years. At the core of this problem is nicotine addiction. Initially, in 2026, focused mainly on the U.S., we are looking for those adult smokers who are looking to change their lifestyle for the better. Life without nicotine addiction, that's the goal. Solving this problem for the adult smoking consumers is and has been the core of 22nd Century Group's strategy for 28 years.

We fully understand that other companies are trying to develop other methods to help adult smokers alter their smoking habits in what they claim is a positive way, like heat-not-burn and vaping, but with nicotine still at the core. They are not helping. There are additional companies trying to derive alternative solutions in the form of cigarettes, such as hemp-derived answers and even tea leaves. The fact is, our VLN is the only FDA-authorized cigarette that is made with authentic tobacco to satisfy the adult smoker's true smoking experience. We believe that for many smokers, they like to smoke as they enjoy the ritual and the experience. They just don't want to be beholden to an addiction where they have no choice.

We have heard from some of our new VLN smoking consumers that they're enjoying the VLN smoking experience and have reported the ability to change their smoking habit to a more casual or social activity, versus a need driven by nicotine. Along these lines, annual spending on their smoking habit always comes up in the conversation. With big tobacco raising their per carton prices every quarter, this price gouging has for years been putting pressure on the consumer's disposable income, similar to the increases in fuel, groceries, et cetera. A pack-a-day smoker smoking a premium brand will spend almost $5,000 per year on their smoking habit. Our VLN cigarettes, once adopted, give the consumer the advantage to manage their smoking habit and their personal spending on this commodity. We are here to help the smoking public shift the advantage to the consumer with our VLN cigarettes.

The fact still remains, we have a large market of smoking consumers who have weighed in and wanna change, but nicotine keeps the escape hatch locked. We believe that changing the dependence on nicotine is the key. On to the market and on to our consumer adoption. Make no mistake, our VLN cigarettes are a very disruptive product. In an industry that is desperately trying to keep people smoking, it is a product designed to help them smoke less. On the sales side, during the early phase of our VLN product rollout, we've secured distribution in the number three purveyor of tobacco products in the U.S. with our Pinnacle-branded products. In fact, for this retailer, on a sales per retail outlet basis, they rank number one.

This is an important early accomplishment for the launch of our VLN products, as we now focus in 2026 on using this as a stepping stone to garner additional retail penetration while the product rollout is occurring in planned phases. We are still in our infancy, as we mature with retailers, we anticipate a regular cadence where we can focus more on consumer adoption. In their stores from the get-go, we have seen sales activity from consumers. Some stores are moving Pinnacle VLN product quite nicely. Others are on a slower start, nevertheless, still selling. The initial launch was designed with limited marketing to establish a baseline, now we have begun promoting Pinnacle VLN with cross-promotions with other products, as well as digital promotions with their fuel rewards program. We are anticipating meaningful lift from this activity.

Bottom line, consumers are now finding and buying our Pinnacle VLN. We have also secured distribution of 22nd Century VLN with the number two purveyor of cigarettes in the U.S. in a limited market in Illinois. The results are similar, as we have some stores selling consistent volume, while others are just starting to see movement in the stores. As we look forward to the rest of Q2 and Q3, we will be adding distribution in New York, New Jersey, and Southern California for Pinnacle VLN and other Pinnacle-branded products. This will cover approximately 200 outlets. In Q3, we'll be adding distribution to the Southeast for Pinnacle VLN for a new retailer. We expect to see initial shipments in late Q3 and early Q4. This should get us close to our target for 5,000 retail outlets by the end of 2026.

Following the rate of sale patterns that we've seen in the early stage of the VLN rollout, we believe we will see measurable growth from all the markets we are in. More importantly, with every pack or carton sold, we are helping someone change their life for the better. On the marketing side, with our restructured balance sheet and our retail distribution expanding, we are now at the stage where we're investing in consumer marketing as the highest return on our resources. To that end, we're hiring a new vice president of marketing to build out our consumer marketing capability and lead our efforts to drive awareness and adoption of VLN products among adult smokers. Consumer adoption is the unlock from here, and we will build the toolkit to engage customer awareness. On the science side, the science behind VLN cigarettes is proven.

Our products and results have been recognized and documented by the FDA and the World Health Organization in their efforts to establish low-nicotine standards worldwide. Multiple scientific studies have consistently demonstrated the merits of our VLN products. Using our proprietary technology, we have created and will continue to create new and innovative products as well as new strains of non-GMO low-nicotine tobacco to support our brands and other brands around the world as opportunities arise. We continue to engage the scientific community in advancing approaches to this problem using the form factor most comfortable for the smoking consumer, a cigarette. On the financial side, we are addressing the remaining low or no-margin products that we still produce. We're addressing pricing first, and we are continuing to exit the few remaining unprofitable contracts while ensuring our customers have continuity of supply.

This, along with our branded product initiatives, including VLN products, will begin to produce the anticipated improvements in gross profits as the year progresses. On the operating expense side, consistent with our remarks in previous quarters, we will be adding headcount in marketing and sales as we continue to unfold new opportunities to expand. With that, I'll turn the call over to Dan for a review of the financials.

Thank you, Larry. For the first quarter of 2026, net revenue was $4.1 million, compared to $3.5 million in the fourth quarter of 2025, an increase of approximately 16.1% on a sequential basis. Gross loss for the quarter was $0.6 million, compared to a gross loss of $0.8 million in the fourth quarter of 2025. As Larry noted, while first-quarter revenue improved sequentially, overall top-line and profitability performance still remain below where we are targeting. That said, we believe the sequential improvement in revenue and gross margin is an early indicator of the commercial progress we are working to build on as distribution expands and product mix continues to evolve. Operating loss for the quarter was $3 million, compared to $2.8 million in the fourth quarter of 2025.

Net loss from continuing operations was $3 million, compared to $2.8 million in the fourth quarter of 2025. Finally, adjusted EBITDA for the quarter was negative $2.6 million, compared to negative $2.4 million in the fourth quarter of 2025. While our near-term profitability metrics remain under pressure, our operating focus continues to be on scaling revenue, improving gross margin mix, and managing costs in a disciplined way as we expand the platform. Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $9.5 million. We continue to manage liquidity carefully and remain focused on aligning spending with our highest priority commercial and regulatory initiatives. Capital allocation remains disciplined, with resources directed toward distribution growth, VLN commercial support, marketing initiatives, and key opportunities for advancement of our reduced nicotine pipeline.

For the remainder of 2026, we're solely focused on execution. That includes growing store count to more than 5,000 locations, expanding retail availability, supporting new launches under the Pinnacle portfolio of products and partner VLN platform, and improving the underlying economics of the business through better absorption and mix. While the timing of that improvement may not be linear quarter to quarter, we continue to believe, and we are very excited about the back half of the year, which has the potential to show much stronger commercial momentum than the first half. With that, I'll now turn the call back to Larry for closing comments.

Thank you, Dan. As we look further into 2026, our priorities are clear. We are focused on execution. This includes expanding distribution, increasing retail outlets, improving the effectiveness of our VLN marketing campaigns, broadening the footprint of the Pinnacle franchise, and continuing to advance the regulatory and product pipeline behind our current VLN reduced nicotine platform. We have very disruptive technology and products with our low-nicotine tobacco and VLN cigarettes. In fact, VLN is the only authorized disruptive product in the form of a cigarette on the market, and it is fully aligned and recognized by the global organizations who have adopted a mission to get to a smoke-free world. To really accomplish this, they know that nicotine must be addressed, but step one is the smoking public. We believe at this time, we have the antidote.

There are 1.1 billion smokers in the world, and a host of them are looking for an answer to change. We have the answer, and that's the size of our opportunity. Our job now is execution, and we know we will face headwinds from the market, but we'll continue to drive VLN cigarettes into smokers' hands and target to change lives one pack at a time. I'd like to thank our team, as always, for their support and excellent execution, as well as their belief and commitment to the mission we are on. We appreciate your continued interest in 22nd Century and your participation on today's call. Have a nice day.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Welcome to 22nd Century Group's fourth quarter and full year 2025 conference call and webcast. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Matt Kreps, investor relations for 22nd Century Group. Please go ahead.

Thank you. Hello, and welcome to 22nd Century's fourth quarter and full year 2025 results conference call. Joining me today are Larry Firestone, CEO, and Dan Otto, CFO. Earlier today, we issued a press release announcing our results for the quarter and year ended December 31, 2025. The earnings release and 10-K are available in the investors section of our website at xxiicentury.com. Today's call will include prepared remarks from Larry and Dan, updating you on 22nd Century's business, operations, strategy, and financial results through December 31, 2025, and subsequent events post the close of quarter ends. Before we begin, a few reminders for today's call. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements.

Additional information regarding these factors can be found in our annual, quarterly, and other reports filed with the SEC. During today's call, we may also discuss non-GAAP financial measures, including Adjusted EBITDA, which we define as earnings before interest, taxes, depreciation, and amortization as adjusted for certain non-cash or non-operating expenses. For more details on these measures, please refer to our earnings release issued earlier today. With that, I'll now turn the call over to Larry.

Thank you, Matt. Good morning, everyone, and thank you for joining 22nd Century's fourth quarter 2025 results conference call. 2025 was truly our transition year from restructuring to fully focus on growth. As final acts of the restructuring, we closed out a host of legacy issues from the prior business model, closed unprofitable contracts and product lines, reduced our manufacturing overhead, and paid off our structured senior and subordinated remaining debt. We shifted into growth in 2025, that allowed us to launch new brands and new products, secure a substantial base of retail outlets, and begin to see initial sales of VLN products in the market under our own VLN brand and our two newest VLN partner brand products. The progress made in 2025 was an extremely heavy lift, and our team did an awesome job.

As a result, we have set our company up to begin an exciting growth path for 2026 and beyond. We are now in the market with our VLN combustible cigarette products, and smoking consumers are finding our products in 1,636 retail outlets in 23 states. These numbers will continue to grow, especially as we secure more retail partners throughout the U.S. The consumer tobacco market is changing rapidly. The big tobacco companies are aggressively pushing consumers into alternative, yet highly addictive nicotine products like pouches and vapes in order to maintain their customer base. They know many of their customers want to smoke less, which is, of course, bad for their business model. Their solution is to transition as many of their 28.8 million U.S. cigarette customers as possible to other addictive products.

This strategy prioritizes revenue and market share to the detriment of the health of the consumer and the overall cost of healthcare related to illnesses derived from smoking and nicotine. In contrast, we're the only tobacco products company focused on reducing the harms of smoking through nicotine reduction while using the form factor smokers are used to and most comfortable with, a cigarette. The company's proprietary low nicotine technology is designed to serve adult smokers who want to change their smoking habits and smoke less by significantly reducing nicotine consumption. 22nd Century Group is focusing on smoker health and wellness by giving smokers an opportunity to control their tobacco consumption rather than switching them to another highly addictive product like a vape or a pouch. Although the market is in flux, we are right in the middle of the directional battle for the smoker.

Our VLN products are now in stores in 23 states, and consumers who enjoy smoking are choosing our VLN products and giving them a try. We've seen some stores with very low volume but building, and some stores are moving VLN products and the reorders are starting to materialize. Some stores are about to put our VLN products into position in the front of the store and begin selling. Our sample size is small as we are in the first quarter of selling our VLN products. Even with the compressed timeline and the small data set, we are seeing month-over-month growth within the stores. Our VLN products are backed by science, and we have the results to prove it.

We have examples of smokers who have changed from their traditional high nicotine brand to one of our VLN brands in just 12 weeks, have cut their smoking habit by two-thirds. The positive impact of this change for the smoker is huge, health-wise as well as financially. The total addressable market for smokers in the U.S. is 28.8 million smokers. And as we've reported, surveys of adult smokers indicate that approximately 70% have expressed their desire to change their habit, including quitting. Unfortunately, nicotine is what keeps them coming back at the rate they are used to. Many smokers actually enjoy their smoke as it is a comfort zone for them. They just wish they could maintain their habit at a more controlled pace. That's where we come in.

If 70% of the 28.8 million smokers are sincere, our serviceable addressable market, or SAM, is 20.2 million smokers, roughly a $58 billion market. All of the smokers who have been making the choice to now try our VLN products represent a shift in the market. We have our sights set on taking a meaningful share of that market, where even initially a small piece would be a substantial business for 22nd Century Group. We know that none of our competitors are going to move over and let us in, so we'll have to win on every front to gain retail positions and earn a shot at the smoking consumer's mind. This is why we welcome other brands to join the battle and introduce a VLN concept within their own brands that they have in the market.

This could range from including our low-nicotine tobacco in their products, or they could license our VLN brand and use it within their brand lineup. I'll transition now to discuss topics in the regulatory arena. In December 2025, we filed our MRTP renewal application with the FDA. We're excited about this milestone as we also plan to expand our PMTA and MRTP filings with the FDA for other products. We have the 100 mm version of our VLN cigarette, which once authorized, will allow us to expand served markets for those consumers who prefer the 100 mm cigarette. For the broader picture, the FDA published their low-nicotine proposed rule in January 2025, with a comment period extending through to September 2025. This allowed the FDA to harvest comment letters from all constituents, those for and those against, and they are now in an internal review process.

Our VLN products and science are the backbone of the proposed rule, including specific citations to 22nd Century Group and Spectrum research cigarettes, which once again proves the positive impact we can make on smokers' health and wellness. Our attitude with respect to the proposed rule is we are the only ally the FDA has from the tobacco business in this battle. The FDA, the tobacco industry, and the politicians all know what the answer is, and we have the answer. However, the forces of politics, financial power, and taxes all cast aside the care and the cost of care and the mortality of our smoking population who are addicted. We have to force ourselves into the ring and fight the fight to at least offer the option to smokers who have had what we call the moment.

Our strategy is to continue to expand distribution and push our way into retail in all 50 states, continue to gain consumers and share the market so that when the FDA has to make the final go, no-go decision on the mandate, we, 22nd Century Group, will have already established a full low-nicotine ecosystem to address their low-nicotine mandate and silence the claims that were made by opposition in their responses to the FDA. This would include the development of other low-nicotine tobacco strains developed by our team to expand the variety, setting up and contracting with growers who can produce our low-nicotine crops with no problem and no harm or degradation to their business, entering into agreements with other brands that will have adopted a VLN SKU in their branded lineup.

Retail positions that can display the products prominently for the consumer so they may choose how they want to pursue their habit. This would be a normal share shift, as we have seen over many years in all varieties of consumer products. We are building the chassis of a business that will develop new strains of low-nicotine tobacco, sell low-nicotine tobacco to others, and potentially license others to grow and produce low-nicotine products using our genetics and technology, and potentially license our VLN brand to others, making VLN a prominent worldwide brand. We are clearly at the center of the conflict as the larger forces and around the industry are pushing more and more nicotine. We're pulling the opposite way. We know the harms of nicotine has on the brain, the skeletal system, and the vascular system.

While our competitors are pushing as hard as they can to keep consumers addicted and looking away from the harms of nicotine, they are also adding new consumers and are ignoring the bigger picture, which is health. We are just fine having the answer and being the contrarian. One thing is clear, all the smokers who have quit in their lifetime and the 70% of the 28.8 million smokers in the U.S. who have declared they want to make a change have all had the moment. When they do, we will be there with the answer. An answer that does not require pharma to invent a new drug or a visit to the doctor or other nicotine reduction therapies. The answer, VLN products, will be ready and on the shelf for the consumer to choose.

We also consider the regulatory environment outside the U.S., where the World Health Organization has a similar mandate as the FDA. Their doctrine is known as the Framework Convention on Tobacco Control, or FCTC. Like the FDA's mandate, 22nd Century's low nicotine cigarettes and the science behind are mentioned in the document. Even though this organization has been around since 2016, the international tobacco market has remained challenged in impacting widespread positive change in tobacco harm reduction. However, we believe additional action is beginning to shape to address the harms of smoking and the harms of nicotine worldwide. Australia, for example, has just implemented a doubling of the tax on cigarettes, and every legal pack of cigarettes in Australia now retails for $40. Australia is a government that is serious about smoking.

Several other countries have taken a strong position against smoking in public areas and the workplace. Our low nicotine tobacco varieties include non-GMO, so we can manufacture products that comply with many of the international country standards for consumer products, including tobacco. Our non-GMO low nicotine tobacco varieties utilize our most recent technology developed into commercial form over the last few years. We've had an open dialogue with several international constituents, both at the governmental level and the commercial level, regarding our low nicotine tobacco and our VLN products. All of these discussions are in their infancy, but it is clear that we are in the middle of the battle.

Our attitude internationally is the same as it is domestically, which is let's get our low nicotine tobacco and VLN products in the market, recognized by the retailers and consumers as a brand they can trust with their smoking choices and build a base of business like we are in the U.S. Transitioning now into the year ahead for 2026, I'm excited to report that we're finally in the building phase of our company and focused on growth. We fully understand that we're gonna have to earn our place in the market one smoker at a time. We know with every pack we sell, we're changing a life. This is a delicate transition for a smoker who's had what we call the moment.

That moment has to initiate a change, and we understand that changing a habit is one thing, but altering an addiction as powerful as nicotine, which is akin to heroin, is a really big deal. Earlier this week, we closed an additional round of financing to provide additional growth capital to support the plans we will be implementing throughout 2026. We now have over $10 million in cash on the balance sheet to implement our strategy. Now, looking ahead in the coming months, we'll be adding important additional points of distribution in the Northeast and other states that wrap around the Mid-Atlantic region. We'll also be expanding in California on the West Coast. We will be launching our latest Pinnacle combustible product, complementing the broad Pinnacle brand portfolio, Pinnacle Pure.

Pinnacle Pure is a tobacco and water style cigarette that we will be looking to drive into existing retail outlet footprint. As we launched VLN under three different brands in the U.S., the initial phase was stocking retail locations as well as training distributors and retail associates about reduced nicotine content cigarettes. Now, we will add prominent retail collateral and strengthen our marketing support to increase rate of sale. We have very early baseline measurements and are looking for steady growth. We will track not only the number of cartons, but the geographies that are moving our VLN products the most. A key component of our growth is that we'll be adding headcount in the coming months to support product launches and other marketing initiatives. We believe we're the good guys in this market.

Long term, even if a smoker desires a high nicotine alternative to a standard combustible cigarette, such as a vape, an e-cigarette, a heat-not-burn device, a pouch or moist snuff, we will be here in the market with a VLN answer when they have the moment and they decide they've had enough nicotine. We know this is the beginning of a very long and challenging road to success. We're up for the challenge. As we've seen, we have consumers who are up for a change. Now, I'll turn the call over to Dan to discuss the numbers.

Thank you, Larry. Good morning, everyone, and thank you for joining our discussion today. Fourth quarter and full year 2025 reflect continued progress in strengthening our balance sheet and improving our operating model as we transition the business into higher margin proprietary branded products. During the year, we exited several unprofitable high volume revenue streams and focused our resources on building the foundation for growth in our reduced nicotine VLN cigarette portfolio and partner VLN brands. Shipments of our VLN and partner VLN products continued to build as distribution expanded and additional retail locations were authorized. In the fourth quarter of 2025, we shipped approximately 8,800 cartons of newly branded VLN and partner VLN to our customers, in many cases being swapped out or exchanged for the legacy branded VLN packages.

These products remain central to our strategy, as they typically generate gross profit margin in the range of 20%-30% after marketing and promotional costs and assuming optimal labor and overhead is achieved within our factory. As I discussed at length in the third quarter, this has been a large focus of 2025. We now will track rate of sale metrics in early 2026 with a keen eye for the effectiveness of pricing and promotional strategies, which has long been the tactics used to drive revenue across the heavily regulated tobacco industry in lieu of the ability to directly market the product. In addition to garnering new customers and repeat purchase, scaling in 2026 will occur primarily through expanded distribution and adoption at additional retail locations, with the majority being second half of the year additions.

We are now authorized across the majority of U.S. states and continue working to increase store count and availability of our product. We estimate increasing current store count by more than double by the end of 2026. Let me now walk through some of the specific numbers from our financial results for the fourth quarter and full year 2025. All figures discussed exclude discontinued operations unless noted. For the fourth quarter of 2025, we recorded net revenue of approximately $3.6 million, compared with $4 million in the third quarter of 2025. Total cartons shipped during the quarter were approximately 248,000, compared with 517,000 cartons in the third quarter. The reduction in volume reflects our strategic shift away from lower margin contract manufacturing activity into higher margin branded products that we've previously spoken of.

Revenue will remain consistent in the first quarter of 2026 and then will begin growing sequentially thereafter, mirroring the timing of added points of distribution. The initial 8,800 cartons of VLN and partner VLN shipped in the fourth quarter continue to be distributed and sold to retail, and we anticipate restocking shipments to commence later in the second quarter of 2026. For the full year 2025, net revenues were approximately $17.6 million, compared with $24.4 million in 2024. Again, reflecting the same strategic repositioning of the business that I've spoken of.

Gross profit for the fourth quarter improved sequentially with a gross loss of approximately $0.8 million, compared with a $1.1 million gross loss in the third quarter of 2025, reflecting early benefits from our late third quarter cost reduction initiatives and operational restructuring of our manufacturing facility. As volume scales in the high margin branded products throughout 2026, that will drive gross margin improvement. Operating loss for the fourth quarter was $2.8 million, compared with $3.2 million in the third quarter, and net loss from continuing operations for the fourth quarter was approximately $2.8 million, compared with $3.8 million in the third quarter. And adjusted EBITDA for the fourth quarter was $2.4 million, compared with $2.9 million in the third quarter of 2025.

Now, for the full year 2025, net loss from continuing operations was approximately $13.1 million, improved from $15.5 million in 2024, reflecting the progress made in reducing operating expenses and restructuring the business. Turning to the balance sheet, we ended the year with approximately $7.1 million in cash and cash equivalents, and importantly, $0 long-term debt, having fully extinguished our remaining senior secured debt during 2025. We also increased our inventory position during the fourth quarter of 2025 to approximately $4.3 million, up from $2 million at the end of the third quarter, reflecting the harvest of our 2025 reduced nicotine tobacco crop in preparation for expanded VLN production.

Overall, we believe our strengthened balance sheet, inclusive of the capital raise activity earlier this week, which added approximately $5.6 million in cash, our debt-free capital structure and streamlined cost base positions us well to execute our growth strategy as we move into 2026. In summary, 2025 was a year of transition and foundation building for the company. We strengthened the balance sheet, exited unprofitable revenue streams, restructured our manufacturing operations, continued expanding the distribution of our proprietary reduced nicotine products. With these steps largely behind us, our focus now turns to scaling distribution, increasing product adoption, and leveraging our improved operating model to drive sequential improvements in revenue, margin, and overall profitability as we progress through 2026. I will now turn the call back over to Larry for concluding remarks.

Thank you, Dan. The most important point from today's call is 2026 is really the new beginning for 22nd Century. We have built the operating foundation, the brands, the products, and the initial pathways to reach the consumer with a product that can truly change smoking behaviors and reduce health harms. We meet the adult smoker where they are with a cigarette and give them, for the first time, a real option to choose a lower nicotine pathway. This has been over a quarter of a century in the making and we have a very large market to serve with what I call the answer. I would personally like to take a minute and thank and appreciate our team for their extremely hard work transitioning our company in a very short period of time with very limited resources. This has been like moving a mountain.

They have done an awesome job, and we look forward to updating you with press releases along the way and again at next quarter's earnings release timeframe. I hope you all have a great day and thank you for joining.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.