After the close of trading on August 9th, 22nd Century Group (NYSE:XXII) reported the company's earnings for their second fiscal quarter ended June 30th, 2017. Here's 7 highlights that current and potential investors should pay attention to from their earnings release:
Net sales increased 37.8% from the second quarter of last year to $3,897,206 in Q2'17. This increase in revenues was primarily attributable to a new filtered cigar manufacturing agreement that started in mid-May.
For the three months ended June 30, 2017, 22nd Century reported an operating loss of $3,282,525, an increase of 16% compared to the second quarter of last year. The increased operating loss is attributable to higher operating expenses and a higher gross product loss.
22nd Century Group's net loss in Q2'17 was $3,355,624, or ($0.04) per share. This compares to a net loss of $2,902,354, or ($0.04) per share for the second quarter of 2016. The y/y increase in net losses is attributable to an increase in operating losses of approximately $452,000.
Although 22nd Century has not yet received revenues from licensing or broad commercial sales of the Company’s proprietary Very Low Nicotine tobacco, sales are expected to be considerable, especially given the FDAs recent policy guidance. On July 28, 2017, U.S. FDA Commissioner, Scott Gottlieb, announced that the FDA was exercising its authority under the Family Smoking Prevention and Tobacco Control Act to mandate a reduction in the nicotine level of combustible cigarettes sold in the U.S. to non-addictive levels. The best part is that 22nd Century is the only company in the world capable of growing tobacco with non-addictive levels of nicotine.
In June, the company met twice with the FDA to discuss their application for an over-the-counter cigarette (BRAND A Modified Risk Tobacco Product) with labeling that discloses that the product contains 95% less nicotine than conventional tobacco cigarettes and their prescription-based smoking cessation aid in development (X-22). 22nd Century intends to submit its revised MRTP application for the world’s lowest nicotine tobacco cigarette in 2018. Additionally, pending FDA authorization and finding a joint venture partner or another source of capital, 22nd Century plans on conducting a phase three trial of X-22 in 2018.
22nd Century continues to make strides in the area of hemp biotechnology. The company is currently working on developing hemp plants that combine zero-THC traits with increased levels of other cannabinoids including CBC, CBG, and CBD. In partnership with the University of Virginia, 22nd Century is optimizing hemp plants for the climate of the Southeastern United States and is testing hemp plants for use in phytoremediation.
Recently, New York State Governor Andrew Cuomo, signed a measure into law that aims to treat industrial hemp like any other agricultural crop in New York State. 22nd Century has applied for licenses to research, grow and commercialize hemp in New York, and pending approval of their license applications, 22nd Century will be able to begin conducting cutting-edge hemp research at its laboratory in Buffalo, NY.
Conference Call
22nd Century will be hosting a conference call on Thursday, August 10th, at 4:15 PM EDT to discuss their financial results, provide a business update for investors and conduct a question and answer session. The call can be accessed by dialing (800) 344-6491 and using Conference ID 9326956.
Conclusion
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Now Read: 22nd Century to Use Industrial Hemp to Restore Polluted Lands
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