22nd Century Group, Inc.

A Biotechnology Company Focused on Smoking Cessation and Tobacco Harm Reduction Products
Ticker: XXII Q4 2013

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Disclaimer, Safe Harbor and Risk Factors

This document is based on information provided by 22nd Century Group, Inc. (the Company) and other sources that the Company believes are reliable. Nothing in this document is, or may be relied upon as, a promise or representation by the Company as to the past or the future. This document contains statements that the Company believes to be forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that is not a statement of historical fact, including, without limitation, statements regarding the Companys business strategy and plans and objectives of management for future operations or that may predict, forecast, indicate or imply future results, performance or achievements. The words estimate, project, intend, forecast, anticipate, plan, planning, expect, believe, will, will likely, should, could, would, may or the negative of such words or words or expressions of similar meaning are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, and all such forward-looking statements involve risks and uncertainties, many of which are beyond the Companys ability to control. Actual results may differ materially from those expressed or implied by such forward-looking statements as a result of various factors, including but not limited to the Risk Factors set forth below and the Risk Factors disclosed in the Companys reports filed with the Securities and Exchange Commission. Additional information concerning these and other factors is contained in the Companys filings with the Securities and Exchange Commission. All forwardlooking statements and other information in this document speak only as of the date of this document. The delivery of this document at any time does not imply that the information contained herein is correct as of any time subsequent to the date hereof. We do not undertake, and we disclaim, any obligation to update any forward-looking statements or to announce revisions to any of the forward-looking statements. The risks and uncertainties relating to the forward-looking statements in this presentation are included in those described under Risk Factors in the Companys Annual Report filed with the Securities and Exchange Commission on March 18, 2013. The below summary of Risk Factors is not complete and does not contain all the information that should be considered before investing in our common stock. We will require additional capital in 2013 for working capital purposes and to complete the FDA authorization process for our Modified Risk Cigarettes and clinical trials for our X-22 smoking cessation product. We may not be able to obtain additional debt or equity financing on favorable terms, if at all. There can be no assurance that we will receive FDA authorization to market BRAND A and BRAND B as Modified Risk Cigarettes and there can be no assurance our X-22 smoking cessation aid will be approved by the FDA, European Medicines Agency (EMA), or any other governmental body. We face intense competition in the market for our RED SUN and MAGIC cigarettes, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations. We also face significant governmental action, especially in the U.S. pursuant to the Tobacco Control Act, including but not limited to efforts aimed at reducing the incidence of tobacco use, restricting marketing and advertising, and imposing regulations on products and packaging. In addition, there can be no assurance that all necessary regulatory approvals will be granted or sustained for our potential products and commercial products. Regulatory review or actions may involve delays, including those caused by requests for additional information or testing, that could adversely affect the time to market for our potential products and the continued sale of our products. Our common stock is an OTC Bulletin Board penny stock, which is likely to limit its liquidity. The market price of our common stock is, and will likely remain for the foreseeable future, less than $5.00 per share, and therefore will be a penny stock according to SEC rules.

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Overview

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Corporate Structure

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Upcoming Catalysts
Purchase manufacturing facility

Apply to up-list to national securities exchange, NASDAQ or NYSE, in Q1 2014

Closing NASCO acquisition; company will become MSA member National distribution of RED SUN cigarette brand in Q1 2014 Increase in Exports in 2014 including MAGIC GOLD in Benelux Published results from smoking cessation Phase II trials will be available in 2014 Applications will be filed in 2014 with the FDA for two types of proprietary modified risk cigarette candidates Closing of a pharmaceutical JV to fund Phase III clinical trials for X-22, the companys prescription smoking-cessation aid in development. Milestone payments from British American Tobacco
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U.S. and Global Markets

Smoking Cessation Market

U.S. market is $1 billion; Global market is $3+ billion 22 million Americans attempt to quit smoking each year 2-5% quit smoking permanently in a given year Average number of serious quit attempts before success: 8 to 11
Cigarette Market

U.S. market is $80 billion; Global market is $610 billion (~6 trillion cigarettes) 45 million Americans are smokers; 1.3 billion smokers worldwide According to JP Morgan, 90% of smokers would be willing to try a new brand if it were safer than their usual brand

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Multiple Value Drivers

Very low nicotine (VLN) cigarettes under development as a prescription smoking cessation aid Six independent trials have demonstrated efficacy No new side effects Very attractive to smokers New product category regulated by FDA in which the advantages of cigarettes that reduce risk can be marketed and conveyed to the public BRAND A 95% less nicotine than cigarettes marketed as light BRAND B Lowest amount of tar per milligram of nicotine

X-22

Modified Risk Cigarettes

Commercial Products

Super-premium priced cigarette brands RED SUN MAGIC

Research Cigarettes

National Institute on Drug Abuse (NIDA) research cigarettes SPECTRUM Approx. 12 million cigarettes delivered to date Received Order for additional 5.5 million cigarettes
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Proprietary Technology
Model of the Nicotine Biosynthetic Pathway

22nd Centurys 114 patents and 36 patent applications relate primarily to decreasing and increasing the expression of key genes and transcription factors responsible for the production of nicotine (and other alkaloids) in the tobacco plant (depicted in blue) and the tobacco and products produced therefrom.
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Extensive Intellectual Property Portfolio

Technology Covered by

12 Patent Families
114 issued patents in 78 countries 36 pending patent applications

2 Plant Variety Protection (PVP) Certificates

PVP prevents growing, importing and exporting of the protected plant variety/tobacco leaf

Various Trademarks

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X-22 Smoking Cessation Aid

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Smoking Cessation Competitive Landscape

The limited effectiveness and serious side effects of currently available FDA-approved smoking cessation aids have resulted in a huge unmet medical need

Nicotine Replacement Therapy (NRT)

Gums

Nasal Patches Sprays Inhalers

Lozenges

X-22
2010 Future

1980
Non-nicotine pills

1990

2000

In 2009, the FDA required a Boxed Warning on both Zyban and Chantix

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Smoking Cessation Chantix Case Study

The FDA boxed warning on Chantix has significantly reduced its market acceptance among patients and physicians

Quarterly Chantix Sales

November 20, 2007:
FDA issues Early Communication Warning on safety of CHANTIX

February 1, 2008:

$200 MM

FDA issues a Public Health Advisory on CHANTIX

July 1, 2009:

$150 MM

FDA requires a Boxed Warning, the most serious type of warning in prescription drug labeling

June 16, 2011:

$100 MM

$50 MM

FDA issues a drug safety communication that Chantix use is associated with an increased risk of certain cardiovascular adverse events

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012

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X-22 Smoking Cessation Aid

X-22 is the only smoking cessation aid that functions exactly like a conventional cigarette

Benefits of X-22 Over Other Cessation Therapies

Smokes, tastes, and smells like a regular cigarette and involves the same smoking behavior Contains 95% less nicotine than commercial light cigarettes does not expose smokers to any new drugs or new side effects Provides greater relief from withdrawal symptoms than the FDA-approved nicotine lozenge Reduces cravings more than the FDA-approved prescription nicotine inhaler Increases the efficacy of Chantix and Nicotine Replacement Therapy (NRT)
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X-22 Smoking Cessation Aid

How X-22 Works

Patients smoke VLN cigarettes over six-week treatment period to facilitate quitting smoking by the end of the treatment period Patients concurrently use X-22 with either Chantix or NRT

X-22 satisfies smokerscravings for cigarettes while:

Greatly reducing nicotine exposure and nicotine dependence

Separating the act of smoking from the rapid delivery of nicotine (addresses the behavioral aspects of smoking)

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Six Independent Cessation Trials with VLN Cigarettes

1. Phase II: University of Minnesota Masonic Cancer Center Hatsukami et al. 2010, Addiction 105:343-355 2. Phase III: Clinical Trials Research Unit, University of Auckland Walker et al. 2012, Addiction (Epub ahead of print)
SRNT Poster of 1,410-patient study presented at SRNT Europe 2011

3. Phase II: Vector Tobacco Becker et al. 2008, Nic Tob Res 10:1139-1148 4. Phase II: Roswell Park Cancer Institute Rezaishiraz et al. 2007, Nic Tob Res 11:1139-1146 Partial Results disclosed to SRNT conference in Boston in March 2013: 5. Phase II: Queen Mary University
NCT01250301 Pfizer Inc. is collaborator in study 22nd Centurys XODUS VLN cigarettes utilized

6. Phase II: University of Minnesota Masonic Cancer Center Follow-up Study Innovative Interventions for Smoking Cessation: NCT01050569
22nd Century has right to use data and results for its own IND at FDA 22nd Centurys XODUS VLN cigarettes utilized
XODUS has the same nicotine content as other independent trials all of which were successful
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VLN Cigarettes Work When Used By Themselves

University of Minnesota Masonic Cancer Center - PHASE II TRIAL (ITT)

VLN Cigarette
(0.05 mg) n = 53 Abstinent Percent

Nicotine Lozenge
(4 mg) n = 60 Abstinent Percent

Reduced Nicotine Cigarette (0.30 mg)

n = 52 Abstinent Percent

-value

Quit Rate
4-week continuous abstinence (during weeks 3 to 6 post-treatment)

23

43%

21

35%

11

21%

0.0508

Quit Rate
7-day point prevalence (at 6 weeks post treatment)

25

47%

22

37%

12

23%

0.0357

The VLN group used as many VLN cigarettes as needed for 6 weeks. The 0.05 mg nicotine cigarette was associated with greater relief of withdrawal from usual brand cigarettes than the FDA-approved nicotine lozenge.
Hastukami et al. 2010, Addiction 105:343-355
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VLN Cigarettes Improve Quit Rates of NRT

The University of Auckland - PHASE III TRIAL (ITT)
VLN cigarettes + NRT (patches and/or gum or lozenges) n = 705 Abstinent Percent Quit rate at 6 weeks (7-day point prevalence) Quit rate at 6 months (7-day point prevalence) Quit rate at 6 months (Continuous abstinence) NRT (patches and/or gum or lozenges) n = 705 Abstinent Percent

-value

333 231 160

47% 33% 23%

232 195 107

33% 28% 15%

0.0001 0.037 0.0003

A clear increase in cessation rates over NRT was found, with a positive impact on time to relapse and high participant acceptability. There was no evidence of any excess adverse events in the VLN cigarette + NRT intervention group.
Walker et al. 2012, Addiction (Epub ahead of print) SRNT Poster of 1,410-patient study presented at SRNT Europe 2011
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VLN Cigarettes Improve Quit Rates of CHANTIX & NRT

Queen Mary University of London, in collaboration with Pfizer
Chantix or NRT plus VLN
n = 100 Percent Abstinent

Chantix or NRT
n = 100 Percent Abstinent
-value

Quit Rate 1 week after stopping all cigarettes Quit Rate 4 weeks continuous abstinence after stopping all cigarettes

70%

53%

0.02

64%

50%

0.06

The use of VLN cigarettes in conjunction with either Chantix or NRT resulted in higher quit rates at all time points than the use of Chantix or NRT
ClinicalTrials.gov Identifier: NCT012550301
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Smoking Cessation - Clinical Path to FDA Approval

22nd Century will include results from the following trials in its IND:
Queen Mary University of London clinical trial: NCT01250301 University of Minnesota follow-up Phase II trial: NCT01050569
22nd Century provided its own VLN cigarettes for both these trials; these VLN cigarettes had the same nicotine content (95% reduced) as VLN cigarettes in other independent trials all of which were successful

University of Auckland clinical trial: Walker et al. 2012

Upon identifying a joint venture partner to fund further X-22 clinical trials, we anticipate the remainder of the FDA approval process to be approximately 2 years.

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Modified Risk Cigarettes

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Modified Risk Cigarettes

The Tobacco Control Act passed in 2009 granted the FDA regulatory control of all tobacco products
Banned the terms low tar, light and ultra light on cigarette labeling and in marketing effective June 2010 Created large void in marketplace (70% of $80 Billion U.S. cigarette market) Established procedures for less harmful cigarettes to be marketed as

Modified Risk Tobacco Products

FDA issued Modified Risk Tobacco Product Applications Draft Guidance on March 30, 2012

Modified Risk Cigarettes Cigarettes that reduce exposure to tobacco toxins and are reasonably likely to pose lower health risks as compared to conventional cigarettes

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Modified Risk Cigarettes

Brand A Very Low Nicotine (VLN) Cigarettes ~ 1 mg/cig (content)

Fewer cigarettes per day and reduced smoke consumption Hatsukami et al. 2010 Donny et al. 2007 Donny & Jones 2009 Becker et al. 2008 22nd Century Phase IIb clinical trial, unpublished
Brand B Low Tar-to-Nicotine Ratio Cigarettes: T/N <8

Curtails compensatory smoking of low-tar cigarettes The lower the ratio, the less smoke exposure Literature (researchers added nicotine to cigarettes or tobacco) Russell MAH 2000 Company presentation given to LSRO, Reducing the Adverse summarizes: Armitage et al. 1988 Fagerstrom 1982 Woodman et al. 1987
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Modified Risk Cigarettes

Tar-to-Nicotine Ratio
(TNR) = Tar yield/Nicotine yield (inversely correlated to nicotine content)

12

14

125

250

Lowest TNR SPECTRUM

Highest TNR SPECTRUM

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Brand A VLN Cigarette

Reduction in biomarkers over 6 weeks from smoking VLN cigarettes containing 22nd Centurys proprietary tobacco

LEVEL IN PATIENTS BIOMARKER DESCRIPTION

Metabolites of the tobacco-specific carcinogen NNK Metabolites of the tobacco-specific carcinogen NNN Metabolite of pyrene, a marker for uptake of carcinogenic polycyclic aromatic hydrocarbons Metabolite of the smoke toxicant acrolein Metabolite of the carcinogen benzene (pmol/mg creatinine)

REDUCTION

Baseline

VLN Cigarette

NNAL NNN 1-HOP 3-HPMA S-PMA

0.92 0.09 0.89 3320 2.46

0.2 0.03 0.57 1453 0.76

78% 67% 36% 56% 69%

Hatsukami et al . 2010 Addiction 105, 343-355, 2010 All differences were statistically significant (P<0.05).

Cigarettes per day on average were also reduced from baseline of 19 to 12

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Brand B Low Tar-to-Nicotine Ratio Cigarette

The lower the Tar-to-Nicotine Ratio, the less tar and other smoke components per milligram of nicotine

14

Tar-to-Nicotine Ratio

12 10
63% Reduction

8
6 4

2
0
Marlboro Marlboro Gold Marlboro Silver Newport Camel Blue Menthol King BRAND B

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Companys Commercial Products

In 2011, 22nd Century introduced 2 super-premium cigarette brands into the U.S. market: RED SUN & MAGIC

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SPECTRUM
5-Year contract funded by National Institute on Drug Abuse (NIDA), a department of the National Institutes of Health (NIH)
Approximately 12 million SPECTRUM cigarettes delivered to date; received order for additional 5.5 million cigarettes 24 styles with 8 levels of nicotine content (from very low to high) 22nd Century met officials from NIDA, NCI, FDA and CDC Contract between RTI International and NIDA; 22nd Century is subcontractor

SPECTRUM proprietary cigarettes will be used by researchers for independent smoking cessation and smoking behavioral studies
Dozens of studies are expected to be conducted with SPECTRUM

The New York Times reported on SPECTRUM on October 28, 2011

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Appendix

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Management
Name Joseph Pandolfino, MBA Chief Executive Officer Experience Founded 22nd Century Limited, LLC in 1998 Developed and marketed a number of specialty cigarette brands during 20 years in tobacco industry Vice President and Marketing Director of Santa Fe Natural Tobacco Company (SFNTC) Spearheaded transition of Natural American Spirit from a niche brand to a recognized national brand and SFNTCs sale to RJ Reynolds for $356MM in 2002 More than 25 years experience in plant biotechnology including six years as Director of Biotechnology Development at Fundacin Chile 33 years of experience in corporate finance, business acquisitions and divestitures, and public accounting Highly skilled CFO with diverse experience in complex corporate transactions; impeccable reputation over 15-year history as CFO of leading consumer products corporations
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Henry Sicignano, III, MBA President

Michael R. Moynihan, Ph.D. Vice President of R&D

John T. Brodfuehrer Chief Financial Officer

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Cap Table

Common shares authorized: 300,000,000 Total shares issued and outstanding: 50,112,180
Total shares owned by management and affiliates: ~20 Million Total shares in float: ~30 Million

Outstanding Warrants: ~18.5 Million

All warrants have a cashless exercise provision

Potential Shares from Options: 680,000

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History of 22nd Centurys R&D

1998 22nd Century is founded to fund a 5-year R&D project at NORTH CAROLINA STATE UNIVERSITY (NCSU) on nicotine biosynthesis in tobacco 22nd Century obtains exclusive worldwide license from NCSU for QPT and other technologies 1999 22nd Century sub-licenses QPT to Liggett Group/Vector Tobacco in Reduced Nicotine Field 2005 22nd Century funds 4-year R&D project at NARA INSTITUTE OF SCIENCE & TECHNOLOGY, Japan 22nd Century obtains exclusive worldwide license from NARA for NBB1, A622 and MPO 2005 22nd Century funds two 4-year R&D projects at NCSU

R&D includes multiple field trials on increasing expression of nicotine biosynthesis genes
2006 22nd Century funds 3-year R&D project at NATIONAL RESEARCH COUNCIL, PLANT BIOTECHNOLOGY UNIT, Saskatoon Canada (NRC) 22nd Century obtains exclusive worldwide license from NRC for MPO and TRANSCRIPTION FACTOR Technology

2008 Following arbitration with Vector, 22nd Century is awarded: Right of Reference to Vectors smoking cessation IND and a monetary award; all rights under NCSU sub-license revert back to 22nd Century
2010 NARA assigns all subject patents under exclusive license agreement to 22nd Century 2011 22nd Century receives FDA clearance for X-22 Investigational New Drug (IND) Application Hercules Pharmaceuticals is licensed all rights to X-22 22nd Century enters into a 3-year R&D agreement with UNIVERSITY OF VIRGINIA 2012 22nd Century completes Phase II-B trial for X-22; does not demonstrate statistical significance 2013 22nd Century and British American Tobacco (BAT) enter into a worldwide research license agreement
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Worldwide Patent Portfolio Summary

PATENT FAMILY
1 2 3 4 5 6 7 8 9 QPT Expression Root Cortex (TobRD2) Promoter PMT Promoter Molecular Decoys Reduced TSNAs NBB1 & A622 (Down-regulation) NBB1 & A622 (Up-regulation) N-methylputrescine Oxidase (MPO) N-methylputrescine Oxidase (MPO) Transcription Factors 10 Reduced Exposure Tobacco Products 11 Non-addictive Tobacco Products 12 Tobacco Biomass

Assignee
NCSU NCSU NCSU NCSU NCSU

Countries Pending Exclusive International U.S. Patent/ Patents are Patent Licensee Application Application Granted Applications
22nd Century WO 1998/056923 22nd Century WO 1997/005261 22nd Century WO 2002/038588 22nd Century WO 2002/018607 22nd Century WO 2002/100199 7,605,308 5,837,876 7,189,570 7,192,771 6,907,887 20070240728 20080120737 20080292735 8,410,341 20100192244 20070034220 5,713,376 N/A 73 15 2 9 6 5 2 0 1 1 19 1 2 6 0 0 0 0 10 4 including EU U.S. US, CA, China US, CA, China, HK 7 0 Brazil

22nd Century 22nd Century WO 2006/109197 22nd Century 22nd Century WO 2007/072224 22nd Century 22nd Century NRC NRC N/A 22nd Century WO 2008/020333 22nd Century WO 2009/063312

22nd Century 22nd Century WO 2005/018307 Berger 22nd Century N/A 22nd Century 22nd Century WO 2002/098208

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Non-Traditional Application of Nicotine-free Tobacco

Verfola
A novel high-yield leaf crop for integrated production of bioproducts with high aggregate value Rubisco A protein with excellent nutritional quality
Better than Soy in essential amino acid content Tasteless, odorless and colorless when mixed with water As a plant-based protein, ideal to displace casein (about 70,000 metric tons imported to the U.S. annually)

Biofuels Fuels that are environmentally sustainable

Ethanol, Butanol, Biogas and Bio-oil

Animal Feed Substitutes for soy and alfalfa protein

Ideal for aquaculture

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