22nd Century Group, Inc. announced that it has secured a substantial new agreement with a prominent tobacco industry partner that specializes in exporting cigarettes to countries outside the United States. As a result, the company will make investments to optimize margins and improve efficiencies by hiring additional staff at its tobacco manufacturing facility in North Carolina, and by installing new equipment at the site to increase efficiencies. 22nd Century will also leverage this new relationship and others through its contract manufacturing operations (CMO) to establish additional distribution channels in preparation for the launch of its VLN® reduced nicotine content (RNC) cigarettes. This is the latest win for 22nd Century’s CMO operations. Earlier this year, the Company signed on a new cigar contract manufacturing customer, and it is currently in advanced negotiations with two other significant tobacco industry partners that could further expand 22nd Century’s sales domestically and internationally. 22nd Century is focused on preparing for the launch of its VLN® cigarettes, and the Company will leverage these newly established trade relationships to expand distribution of VLN® after the cigarettes are introduced. In addition to the planned installation of new equipment to reduce waste at its manufacturing facility, the Company recently completed an expansion of testing capabilities at the site, which will allow for rapid, in-house analysis of its tobacco. This will improve the production cost per VLN® sample by more than 90%, while significantly reducing the lead time to uncover key data. Internal testing of the VLN® leaf is scheduled to begin at the facility in August, using the newly installed testing equipment. The Company is highly confident that it is in the final stages of the FDA’s application process to obtain MRTP designation for its VLN® cigarettes. The FDA has already authorized 22nd Century’s RNC tobacco technology under the Premarket Tobacco Product Application (PMTA) pathway, saying that it is “appropriate for the protection of public health,” and concluding that it offers, “among several key considerations, the potential to reduce nicotine dependence in addicted adult smokers, who may also benefit from decreasing nicotine exposure and cigarette consumption.” MRTP designation will allow 22nd Century to communicate and market the key features of its RNC cigarettes, including the headline claim of 95% less nicotine. Although VLN® contains just 0.5 milligrams of nicotine per gram of tobacco, the cigarettes taste, smell, and smoke like traditional cigarettes. The Company is fully prepared to launch its VLN® cigarettes within 90 days of receiving authorization. The FDA has proposed a plan to require all cigarettes sold in the U.S. to be made minimally and non-addictive. Projections show that when the FDA implements its nicotine cap, it would help five million adult smokers to quit within one year, help 33 million people to avoid becoming regular smokers, and save more than eight million American lives by the end of the century. The Company is fully prepared to license its patented RNC tobacco technology to every cigarette manufacturer in the industry to enable compliance with the FDA’s plan. In support of the FDA’s plan, numerous independent scientific studies, funded largely by the FDA, the National Institutes of Health (NIH), and other U.S. federal government agencies, have demonstrated that using reduced nicotine content tobacco cigarettes helps smokers reduce their nicotine exposure and dependence, smoke fewer cigarettes per day, increase their number of smoke-free days, and double their quit attempts – all with minimal or no evidence of nicotine withdrawal or compensatory smoking. Adult smokers deserve a choice and 22nd Century is committed to bringing VLN® to market.