22nd Century Group, Inc. Leases Disclosure
NOTE 6. – RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES
The Company leases a manufacturing facility in Mocksville, North Carolina.
On January 1, 2023, the Company signed a lease agreement for an inventory storage facility. The lease had an initial monthly base rent of $15 (escalating 3.0% annually after the first year), an initial term of 36 months – with two twenty-four-month optional renewal options at the Company’s discretion. The Company did not renew its extension option and therefore the lease has ended as of December 31, 2025.
On March 31, 2023, the Company extended the lease terms for its manufacturing facility and corporate headquarters in Mocksville, North Carolina. As a result of this lease modification, the Company re-measured the lease liability and adjusted the ROU asset on the modification dates, including reassessment of renewal options.
The following table summarizes the Company’s discount rate and remaining lease terms as of December 31, 2025:
Weighted average remaining lease term in years | 3.8 | |||
Weighted average discount rate |
| 9.0 | % |
Future minimum lease payments as of December 31, 2025 are as follows:
2026 | $ | 231 | |
2027 | 233 | ||
2028 | 246 | ||
2029 | 205 | ||
Total lease payments |
| 915 | |
Less: imputed interest |
| (146) | |
Present value of lease liabilities | 769 | ||
Less: current portion of lease liabilities | (168) | ||
Total long-term lease liabilities | $ | 601 |
Operating lease costs for the years ended December 31, 2025 and 2024, were $339 and $419, respectively.
Supplemental cash flow information for leases for fiscal years 2025 and 2024 is comprised of the following:
December 31, | December 31, | |||||
| | 2025 | | 2024 | ||
Cash paid for operating leases | $ | 357 | $ | 396 | ||
ROU assets released under operating leases | $ | (666) | $ | — | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 1, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.