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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 001-37763

TURNING POINT BRANDS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-0709285
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

5201 Interchange Way, Louisville, KY	40229
(Address of principal executive offices)	(Zip Code)

(502) 778-4421

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report: not applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	TPB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

At ~~November~~May 1, ~~2024~~2025, there were 17,~~697~~900,~~007~~ 955 shares outstanding of the registrant’s voting common stock, par value $0.01 per share.

Table of Contents

TURNING POINT BRANDS, INC.

TABLE OF CONTENTS

			Page No.
PART I—FINANCIAL INFORMATION
	ITEM 1	Financial Statements (Unaudited)
		Consolidated Balance Sheets as of September 30, 2024, and December 31, 2023	5
		Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024	5
		Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023	6
		Consolidated Statements of Income for the three months ended March 31, 2025 and 2024	6
		Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023	7
		Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025 and 2024	7
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	8
		Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	8
		Consolidated Statements of Changes in Stockholders’ Equity for the three months ended September 30, 2024 and 2023	9
		Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024	9
		Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2024 and 2023	10
		Notes to Consolidated Financial Statements	10
		Notes to Consolidated Financial Statements	11
	ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
	ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	40
	ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	46
	ITEM 4	Controls and Procedures	40
	ITEM 4	Controls and Procedures	46
PART II—OTHER INFORMATION
	ITEM 1	Legal Proceedings	4741
	ITEM 1A	Risk Factors	4741
	ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	4741
	ITEM 3	Defaults Upon Senior Securities	4741
	ITEM 4	Mine Safety Disclosures	4741
	ITEM 5	Other Information	4741
	ITEM 6	Exhibits	4842
	Signatures		4943

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended March ~~September 30~~31, ~~2024~~2025 (this “Quarterly Report”), contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that may or may not occur in the future. As a result, actual events may differ materially from those expressed in, or suggested by, the forward-looking statements. Any forward-looking statement made by Turning Point Brands, Inc. (“TPB”), in this Quarterly Report on Form 10-Q speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to:

●

declining sales of tobacco products, and expected continuing decline of sales in the tobacco industry overall;

●

our dependence on a small number of third-party suppliers and producers;

●

the possibility that we will be unable to identify or contract with new suppliers or producers in the event of a supply or product disruption, as well as other supply chain concerns, including delays in product shipments and increases in freight cost;

●

the possibility that our licenses to use certain brands or trademarks will be terminated, challenged or restricted;

● failure to maintain consumer brand recognition and loyalty of our customers and in anticipating and responding to changes in consumer preferences and purchase behavior;

●

our reliance on relationships with several large retailers and national chains for distribution of our products;

●

intense competition and our ability to compete effectively;

●

competition from illicit sources and the damage caused by illicit products to our brand equity;

●

contamination of our tobacco supply or products;

●

uncertainty and continued evolution of the markets for our products;

● complications with the design or implementation of our new enterprise resource planning system could adversely impact our business and operations; ● recalls of our products;

●

substantial and increasing regulation and changes in U.S. Food and Drug Administration (“FDA”) enforcement priorities;

●

regulation or marketing denials of our products by the FDA, which has broad regulatory powers;

●

many of our products contain nicotine, which is considered to be a highly addictive substance;

●

requirement to maintain compliance with master settlement agreement escrow account;

●

possible significant increases in federal, state and local municipal tobacco- and nicotine-related taxes;

●

our products are marketed pursuant to a policy of FDA enforcement priorities which could change, and our products could become subject to increased regulatory burdens by the FDA;

● uncertainty related to the PMTA application process;

●

our products are subject to developing and unpredictable regulation, such as court actions that impact obligations;

● ~~increases~~increase in ~~state~~the ~~and~~taxation ~~local regulation~~ of our products ~~have~~could ~~been~~adversely ~~proposed~~affect ~~and/or~~our ~~enacted~~business;

● increases in the taxation of our products could adversely affect our business;

●

sensitivity of end-customers to increased sales taxes and economic conditions, including as a result of inflation and other declines in purchasing power;

●

possible increasing international control and regulation;

●

failure to comply with environmental, health and safety regulations;

● imposition of ~~or increases to~~ significant tariffs on imports into the U.S.;

Table of Contents

●

the scientific community’s lack of information regarding the long-term health effects of certain substances contained in some of our products;

●

significant product liability litigation;

● our amount of indebtedness; ● our credit rating and ability to access well-functioning capital markets;

●

the terms of our indebtedness, which may restrict our current and future operations;

●

our ability to establish and maintain effective internal controls over financial reporting;

●

identification of material weaknesses in our internal control over financial reporting, which, if not remediated appropriately or timely, could result in loss of investor confidence and adversely impact our stock price;

●

our certificate of incorporation and bylaws, as well as Delaware law and certain regulations, could discourage or prohibit acquisition bids or merger proposals, which may adversely affect the market price of our common stock;

● our certificate of incorporation limits the ownership of our common stock by individuals and entities that are Restricted Investors (as defined in our Certificate of Incorporation). These restrictions may affect the liquidity of our common stock and may result in Restricted Investors ~~(as defined in our Certificate of Incorporation)~~ being required to sell or redeem their shares at a loss or relinquish their voting, dividend and distribution rights;

●

future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us;

Table of Contents

●

we may issue preferred stock whose terms could adversely affect the voting power or value of our common stock;

● our business may be damaged by events outside of our or our suppliers’ control, such as the impact of epidemics ~~(e.g.,~~or ~~coronavirus)~~pandemics, political upheavals, or natural disasters;

● adverse impact of climate change and legal and regulatory requirements related to climate change and environmental sustainability;

●

our reliance on information technology;

● cybersecurity and privacy breaches, ~~which~~including ~~have increased in part~~ due to artificial intelligence;

●

failure to manage our growth;

● failure to successfully identify, negotiate and complete suitable acquisition opportunities, integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions;

●

fluctuations in our results;

●

exchange rate fluctuations;

●

adverse U.S. and global economic conditions;

●

departure of key management personnel or our inability to attract and retain talent;

●

infringement on or misappropriation of our intellectual property;

●

third-party claims that we infringe on their intellectual property; and

● ~~failure~~impairment toof ~~meet~~intangible ~~expectations relating to environmental~~assets, ~~social~~including trademarks and ~~governance factors~~goodwill.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Turning Point Brands, Inc.

Consolidated Balance Sheets

(dollars in thousands except share data)

	(unaudited)
	September 30,			December 31,
	March 31,			December 31,
ASSETS	2024			2023
	2025			2024
ASSETS
Current assets:
Cash	$	3399,~~557~~640		$	~~117~~46,~~886~~158
Accounts receivable, net of allowances of $59 in 2024 and $78 in 2023		10,582			9,989
Accounts receivable, net of allowances of $75 in 2025 and $66 in 2024		14,861			9,624
Inventories, net		~~106~~104,~~416~~440			9896,~~960~~253
Other current assets		34,197			40,781
Current assets held for sale		-			11,470
Total current assets		184,752			267,616
Other current assets		40,072			34,700
Property, plant, and equipment, net		26,082			25,300
Total current assets		259,013			198,205
Deferred income taxes		919			1,468
Property, plant, and equipment, net		27,659			26,337
Right of use assets		10,788			11,480
Deferred tax assets, net		-			995
Deferred financing costs, net		1,984			2,450
Right of use assets		10,788			11,610
Goodwill		136,413			136,250
Deferred financing costs, net		1,662			1,823
Other intangible assets, net		78,621			80,942
Goodwill		135,780			135,932
Master Settlement Agreement (MSA) escrow deposits		29,482			28,684
Other intangible assets, net		64,939			65,254
Other assets		18,968			15,166
Master Settlement Agreement (MSA) escrow deposits		29,317			28,676
Total assets	$	488,009		$	569,356
Noncurrent assets held for sale		-			3,859
Other assets		35,394			20,662
Total assets	$	564,552		$	493,353
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1327,~~436~~007		$	811,~~407~~675
Accrued liabilities		3031,~~475~~596			3331,~~635~~096
Current portion of long-term debt		–			58,294
Current liabilities held for sale		-			2,049
Total current liabilities		4358,~~911~~603			~~100~~44,~~336~~820
Notes payable and long-term debt		248,282			307,064
Deferred tax liabilities, net		885			-
Lease liabilities		9,057			9,950
Notes payable and long-term debt		293,062			248,604
Total liabilities	$	301,250		$	417,350
Lease liabilities		8,565			9,549
Total liabilities	$	361,115		$	302,973
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0-		–-			–-
Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,167,180 issued shares and 17,716,847 outstanding shares at September 30, 2024, and 19,922,137 issued shares and 17,605,677 outstanding shares at December 31, 2023		202			199
Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,366,910 issued shares and 17,895,505 outstanding shares at March 31, 2025, and 20,200,886 issued shares and 17,729,481 outstanding shares at December 31, 2024		204			202
Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0-		–-			–-
Additional paid-in capital		~~123~~124,~~833~~811			~~119~~126,~~075~~662
Cost of repurchased common stock (2,450,333 shares at September 30, 2024 and 2,316,460 shares December 31, 2023)		(82,263	)		(78,093	)
Cost of repurchased common stock (2,471,405 shares at March 31, 2025 and December 31, 2024)		(83,144	)		(83,144	)
Accumulated other comprehensive loss		(2,~~112~~363	)		(2,~~648~~903	)
Accumulated earnings		~~146~~160,~~014~~182			~~112~~147,~~443~~164
Non-controlling interest		13,~~085~~747			12,~~030~~399
Total stockholders’ equity		~~186~~203,~~759~~437			~~152~~190,~~006~~380
Total liabilities and stockholders’ equity	$	~~488~~564,~~009~~552		$	~~569~~493,~~356~~353

The accompanying notes are an integral part of the consolidated financial statements.

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Turning Point Brands, Inc.

Consolidated Statements of Income

(dollars in thousands except share and per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended
	2024			2023			2024			2023
	March 31,
Net sales (1)	$	105,617		$	101,722		$	311,187		$	308,273
	2025			2024
Cost of sales		51,918			50,100			151,735			155,556
Net sales	$	106,436		$	83,064
Gross profit		53,699			51,622			159,452			152,717
Cost of sales		46,826			34,710
Selling, general, and administrative expenses		33,169			31,385			98,568			94,093
Gross profit		59,610			48,354
Other operating income		–			–			(1,674	)		–
Selling, general, and administrative expenses		36,421			29,084
Operating income		2023,~~530~~189			2019,~~237~~270			~~62,558~~			~~58,624~~
Interest expense, net		34,~~773~~414			3,~~984~~479			~~10,243~~			~~12,013~~
Investment (gain) loss		(203	)		2,101			2,117			10,980
Investment gain		(291	)		(119	)
Gain on extinguishment of debt		–			(481	)		–			(1,858	)
Loss on extinguishment of debt		1,235			-
Income before income taxes		16,960			14,633			50,198			37,489
Income from continuing operations before income taxes		17,831			15,910
Income tax expense		42,~~601~~040			3,~~767~~729			~~12,743~~			~~9,573~~
Consolidated net income		12,359			10,866			37,455			27,916
Income from continuing operations		15,791			12,181
Net (loss) income attributable to non-controlling interest		(16	)		35			66			(437	)
Loss from discontinued operations, net of tax		-			(2	)
Net income attributable to Turning Point Brands, Inc.	$	12,375		$	10,831		$	37,389		$	28,353
Consolidated net income		15,791			12,179
Basic income per common share:
Net income attributable to non-controlling interest		1,396			169
Net income attributable to Turning Point Brands, Inc.	$	~~0.70~~14,395		$	~~0.62~~12,010		$	~~2.11~~		$	~~1.61~~
Diluted income per common share:
Basic income per common share:
Net income attributable to Turning Point Brands, Inc.	$	0.68		$	0.58		$	1.99		$	1.51
Continuing operations	$	0.81		$	0.68
Weighted average common shares outstanding:
Discontinued operations		-			-
Basic		17,722,855			17,595,980			17,678,257			17,569,493
Basic earnings per share	$	0.81		$	0.68
Diluted		18,448,720			20,098,450			19,600,650			20,415,786
Diluted income per common share:
Continuing operations	$	0.79		$	0.63
Discontinued operations		-			-
Diluted earnings per share	$	0.79		$	0.63
Weighted average common shares outstanding:
Basic		17,795,243			17,654,684
Diluted		18,249,306			20,170,314

~~(1)~~The ~~Net~~accompanying ~~sales~~notes ~~include~~are ~~excise~~an ~~taxes~~integral ~~billed~~part ~~to customers~~ of ~~$0.8 million and $1.0 million for~~ the ~~three~~consolidated ~~months~~financial ~~ended September 30, 2024 and 2023, respectively~~statements. ~~Net sales include excise taxes billed to customer of $2.3 million and $3.4 million for the nine months ended September 30, 2024 and 2023, respectively.~~

~~The accompanying notes are an integral part of the consolidated financial statements.~~ 6

6 Table of Contents

Turning ~~Table~~Point ofBrands, ~~Contents~~ Inc.

~~Turning~~Consolidated ~~Point~~Statements ~~Brands,~~of ~~Inc.~~Comprehensive Income

~~Consolidated~~(dollars ~~Statements~~in ~~of Comprehensive Income~~thousands)

(~~dollars in thousands~~unaudited)

(unaudited)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Consolidated net income	$	15,791		$	12,179

Other comprehensive income (loss), net of tax
Unrealized gain (loss) on MSA investments, net of tax of $146 in 2025 and $15 in 2024		495			(242	)
Foreign currency translation, net of tax of $0 in 2025 and 2024		(44	)		13
Unrealized gain (loss) on derivative instruments, net of tax of $18 in 2025 and $57 in 2024		62			(185	)
Unrealized (loss) gain on investments, net of tax of $0 in 2025 and 2024		(21	)		6
		492			(408	)

Consolidated comprehensive income		16,283			11,771
Comprehensive income attributable to non-controlling interest		1,396			169
Comprehensive income attributable to Turning Point Brands, Inc.	$	14,887		$	11,602

	Three Months Ended September 30,
	2024			2023
Consolidated net income	$	12,359		$	10,866
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on MSA investments, net of tax of $245 in 2024 and $168 in 2023		829			(527	)
Foreign currency translation, net of tax of $0 in 2024 and 2023		18			270
Unrealized gain (loss) on derivative instruments, net of tax of $27 in 2024 and $102 in 2023		92			(320	)
Unrealized gain on investments, net of tax of $0 in 2024		27			–
		966			(577	)
Consolidated comprehensive income		13,325			10,289
Comprehensive (loss) income attributable to non-controlling interest		(16	)		35
Comprehensive income attributable to Turning Point Brands, Inc.	$	13,341		$	10,254

The accompanying notes are an integral part of the consolidated financial statements.

	Nine Months Ended September 30,
	2024			2023
Consolidated net income	$	37,455		$	27,916
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on MSA investments, net of tax of $226 in 2024 and $108 in 2023		572			(339	)
Foreign currency translation, net of tax of $0 in 2024 and 2023		5			23
Unrealized loss on derivative instruments, net of tax of $26 in 2024 and $361 in 2023		(79	)		(1,136	)
Unrealized gain on investments, net of tax of $0 in 2024		27			–
		525			(1,452	)
Consolidated comprehensive income		37,980			26,464
Comprehensive income (loss) attributable to non-controlling interest		66			(437	)
Comprehensive income attributable to Turning Point Brands, Inc.	$	37,914		$	26,901

~~The~~ Table ~~accompanying notes are an integral part~~ of ~~the consolidated financial statements.~~Contents

7Turning Point Brands, Inc.

Consolidated ~~Table~~Statements of ~~Contents~~ Cash Flows

~~Turning~~(dollars ~~Point~~in ~~Brands, Inc.~~thousands)

~~Consolidated Statements of Cash Flows~~(unaudited)

(dollars in thousands)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Cash flows from operating activities:
Consolidated net income	$	15,791		$	12,179
Loss from discontinued operations, net of tax		-			2
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on extinguishment of debt		1,235			-
Loss on sale of property, plant, and equipment		40			1
Depreciation and other amortization expense		1,309			848
Amortization of other intangible assets		307			305
Amortization of deferred financing costs		448			696
Deferred income tax expense		1,716			114
Stock compensation expense		1,664			2,062
Noncash lease income		(380	)		(42	)
Loss on MSA investments		-			6
Changes in operating assets and liabilities:
Accounts receivable		(5,539	)		1,846
Inventories		(8,310	)		(7,488	)
Other current assets		(5,399	)		1,050
Other assets		(1,418	)		(270	)
Accounts payable		15,433			10,800
Accrued liabilities and other		512			(2,933	)
Operating cash flows from continuing operations		17,409			19,176
Operating cash flows from discontinued operations		-			3,463
Net cash provided by operating activities	$	17,409		$	22,639

Cash flows from investing activities:
Capital expenditures	$	(2,185	)	$	(366	)
Payment for equity investments		(2,783	)
Purchases of investments		(714	)		(7,119	)
Proceeds from sale of investments		500			-
Purchases of non-marketable equity investments		-			(500	)
MSA escrow deposits, net		(48	)		(1	)
Investing cash flows from continuing operations		(5,230	)		(7,986	)
Investing cash flows from discontinued operations		-			-
Net cash used in investing activities	$	(5,230	)	$	(7,986	)

Cash flows from financing activities:
Redemption of 2026 Notes	$	(250,000	)	$	-
Proceeds from 2032 Notes		300,000			-
Payment of dividends		(1,385	)		(1,149	)
Payment of financing costs		(6,582	)		-
Exercise of options		973			3
Redemption of options		(33	)		-
Redemption of restricted stock units		(1,828	)		(136	)
Redemption of performance based restricted stock units		(2,625	)		(1,212	)
Common stock repurchased		-			(2,079	)
Financing cash flows from continuing operations		38,520			(4,573	)
Financing cash flows from discontinued operations		-			-
Net cash provided by (used in) financing activities	$	38,520		$	(4,573	)

Net increase in cash	$	50,699		$	10,080
Effect of foreign currency translation on cash	$	(48	)	$	(58	)

Cash, beginning of period:
Unrestricted	$	48,941		$	117,886
Restricted		1,961			4,929
Total cash at beginning of period	$	50,902		$	122,815

Cash, end of period:
Unrestricted	$	99,640		$	130,903
Restricted		1,913			1,934
Total cash at end of period	$	101,553		$	132,837

Supplemental schedule of noncash investing activities:
Accrued capital expenditures	$	-		$	10
Investment acquired in exchange for net assets held for sale	$	10,496		$	-

Supplemental schedule of noncash financing activities:
Dividends declared not paid	$	1,377		$	1,261

~~(unaudited)~~The accompanying notes are an integral part of the consolidated financial statements

	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Consolidated net income	$	37,455		$	27,916
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on extinguishment of debt		–			(1,858	)
Loss on sale of property, plant, and equipment		38			34
Gain on MSA investments		(14	)		–
Depreciation and other amortization expense		3,393			2,388
Amortization of other intangible assets		2,337			2,315
Amortization of deferred financing costs		1,947			1,795
Deferred income tax expense		349			694
Stock compensation expense		5,720			4,660
Noncash lease income		(317	)		(48	)
Loss on investments		2,722			11,162
Changes in operating assets and liabilities:
Accounts receivable		(412	)		(2,112	)
Inventories		(7,281	)		3,036
Other current assets		3,075			(1,384	)
Other assets		(1,031	)		(5,110	)
Accounts payable		5,019			2,865
Accrued liabilities and other		(3,679	)		(6,348	)
Net cash provided by operating activities	$	49,321		$	40,005
Cash flows from investing activities:
Capital expenditures	$	(3,516	)	$	(4,206	)
Purchases of investments		(8,865	)		(200	)
Proceeds from sale of investments		4,520			–
Purchases of non-marketable equity investments		(1,250	)		–
Proceeds on the sale of property, plant and equipment		3			3
MSA escrow deposits, net		44			–
Net cash used in investing activities	$	(9,064	)	$	(4,403	)
Cash flows from financing activities:
Convertible Senior Notes repurchased	$	–		$	(41,794	)
Payment of Convertible Senior Notes		(118,541	)		–
Proceeds from call options		–			114
Payment of financing costs		(133	)		–
Payment of dividends		(3,644	)		(3,354	)
Exercise of options		1,341			419
Redemption of options		(328	)		(346	)
Redemption of restricted stock units		(840	)		–
Redemption of performance based restricted stock units		(1,212	)		(995	)
Common stock repurchased		(4,170	)		–
Net cash used in financing activities	$	(127,527	)	$	(45,956	)
Net decrease in cash	$	(87,270	)	$	(10,354	)
Effect of foreign currency translation on cash	$	(29	)	$	22
Cash, beginning of period:
Unrestricted	$	117,886		$	106,403
Restricted		4,929			4,929
Total cash at beginning of period	$	122,815		$	111,332
Cash, end of period:
Unrestricted	$	33,557		$	96,071
Restricted		1,959			4,929
Total cash at end of period	$	35,516		$	101,000
Supplemental schedule of noncash investing activities:
Accrued capital expenditures	$	23		$	66
Accrued consideration for acquisition of investments	$	–		$	250
Supplemental schedule of noncash financing activities:
Dividends declared not paid	$	1,278		$	1,187

~~The~~ Table ~~accompanying notes are an integral part~~ of ~~the consolidated financial statements~~Contents

8Turning Point Brands, Inc.

Consolidated ~~Table~~Statements of ~~Contents~~ Changes in Stockholders’ Equity

~~Turning~~For ~~Point~~the ~~Brands~~Three Months Ended March 31, ~~Inc.~~2025 and 2024

~~Consolidated~~(dollars ~~Statements~~in ~~of Changes~~thousands ~~in Stockholders’~~except ~~Equity~~share data)

~~For the Three Months Ended September 30, 2024 and 2023~~(unaudited)

(dollars in thousands except share data)

									*Cost of*			*Accumulated*
				*Common*		*Additional*			*Repurchased*			*Other*						*Non-*
	*Voting*			*Stock,*		*Paid-In*			*Common*			*Comprehensive*			*Accumulated*			*Controlling*
	*Shares*			*Voting*		*Capital*			*Stock*			*Income (Loss)*			*Earnings*			*Interest*			*Total*
Beginning balance January 1, 2025		17,729,481		$	202	$	126,662		$	(83,144	)	$	(2,903	)	$	147,164		$	2,399		$	190,380

Unrealized gain on MSA investments, net of tax of $146		-			-		-			-			495			-			-			495
Unrealized gain on derivative instruments, net of tax of $18		-			-		-			-			62			-			-			62
Foreign currency translation, net of tax of $0		-			-		-			-			4			-			(48	)		(44	)
Unrealized loss on investments, net of tax of $0		-			-		-			-			(21	)		-			-			(21	)
Stock compensation expense		-			-		1,664			-			-			-			-			1,664
Exercise of options		25,104			-		973			-			-			-			-			973
Redemption of options		(572	)		-		(33	)		-			-			-			-			(33	)
Issuance of performance based restricted stock units		118,482			1		(2	)		-			-			-			-			(1	)
Redemption of performance based restricted stock units		(37,327	)		-		(2,625	)		-			-			-			-			(2,625	)
Issuance of restricted stock units		87,102			1		-			-			-			-			-			1
Redemption of restricted stock units		(26,765	)		-		(1,828	)		-			-			-			-			(1,828	)
Dividends		-			-		-			-			-			(1,377	)		-			(1,377	)
Net income		-			-		-			-			-			14,395			1,396			15,791
Ending balance March 31, 2025		17,895,505		$	204	$	124,811		$	(83,144	)	$	(2,363	)	$	160,182		$	3,747		$	203,437

Beginning balance January 1, 2024		17,605,677		$	199	$	119,075		$	(78,093	)	$	(2,648	)	$	112,443		$	1,030		$	152,006

Unrealized loss on MSA investments, net of tax of $15		-			-		-			-			(242	)		-			-			(242	)
Unrealized loss on derivative instruments, net of tax of $57		-			-		-			-			(185	)		-			-			(185	)
Foreign currency translation, net of tax of $0		-			-		-			-			21			-			(8	)		13
Unrealized gain on investments, net of tax of $0		-			-		-			-			6			-			-			6
Stock compensation expense		-			-		2,062			-			-			-			-			2,062
Exercise of options		198			-		3			-			-			-			-			3
Redemption of options																						-
Issuance of performance based restricted stock units		126,109			1		-			-			-			-			-			1
Redemption of performance based restricted stock units		(48,177	)		-		(1,212	)		-			-			-			-			(1,212	)
Issuance of restricted stock units		21,697			-		-			-			-			-			-			-
Redemption of restricted stock units		(5,142	)		-		(136	)		-			-			-			-			(136	)
Cost of repurchased common stock		(72,545	)		-		-			(2,079	)		-			-			-			(2,079	)
Dividends		-			-		-			-			-			(1,261	)		-			(1,261	)
Net income		-			-		-			-			-			12,010			169			12,179
Ending balance March 31, 2024		17,627,817		$	200	$	119,792		$	(80,172	)	$	(3,048	)	$	123,192		$	1,191		$	161,155

~~(unaudited)~~The accompanying notes are an integral part of the consolidated financial statements.

									Cost of			Accumulated
				Common		Additional			Repurchased			Other						Non-
	Voting			Stock,		Paid-In			Common			Comprehensive			Accumulated			Controlling
	Shares			Voting		Capital			Stock			Income (Loss)			Earnings			Interest			Total
Beginning balance July 1, 2024		17,703,166		$	201	$	121,948		$	(81,144	)	$	(3,072	)	$	134,917		$	1,095		$	173,945
Unrealized gain on MSA investments, net of tax of $245		–			–		–			–			829			–			–			829
Unrealized gain on derivative instruments, net of tax of $27		–			–		–			–			92			–			–			92
Foreign currency translation, net of tax of $0		–			–		–			–			12			–			6			18
Unrealized gain on investments, net of tax of $0		–			–		–			–			27			–			–			27
Stock compensation expense		–			–		1,769			–			–			–			–			1,769
Exercise of options		38,104			1		440			–			–			–			–			441
Redemption of options		(9,055	)		–		(324	)		–			–			–						(324	)
Cost of repurchased common stock		(26,978	)		–		–			(1,119	)		–			–			–			(1,119	)
Issuance of restricted stock units		11,610			–		–			–			–			–			–			–
Dividends		–			–		–			–			–			(1,278	)		–			(1,278	)
Net income		–			–		–			–			–			12,375			(16	)		12,359
Ending balance September 30, 2024		17,716,847		$	202	$	123,833		$	(82,263	)	$	(2,112	)	$	146,014		$	1,085		$	186,759
Beginning balance July 1, 2023		17,595,579		$	199	$	115,272		$	(78,093	)	$	(3,181	)	$	93,873		$	1,176		$	129,246
Unrealized loss on MSA investments, net of tax of $168		–			–		–			–			(527	)		–			–			(527	)
Unrealized loss on derivative instruments, net of tax of $102		–			–		–			–			(320	)		–			–			(320	)
Foreign currency translation, net of tax of $0		–			–		–			–			173			–			97			270
Stock compensation expense		–			–		1,824			–			–			–			–			1,824
Exercise of options		843			–		13			–			–			–			–			13
Settlement of call options, net of tax of $11		–			–		34			–			–			-			-			34
Dividends		–			–		–			–			–			(1,187	)		–			(1,187	)
Net income		–			–		–			–			–			10,831			35			10,866
Ending balance September 30, 2023		17,596,422		$	199	$	117,143		$	(78,093	)	$	(3,855	)	$	103,517		$	1,308		$	140,219

~~The accompanying notes~~ ~~are~~ Table ~~an integral part~~ of ~~the consolidated financial statements.~~Contents

9Turning Point Brands, Inc.

Notes ~~Table~~to ofConsolidated ~~Contents~~ Financial Statements (Unaudited)

~~Turning~~(dollars ~~Point~~in ~~Brands~~thousands, ~~Inc.~~except where designated and per share data)

~~Consolidated~~Note ~~Statements~~1. ofBusiness ~~Changes~~and inBasis ~~Stockholders’ Equity~~of Presentation

~~For~~Description ~~the~~of ~~Nine Months Ended September 30, 2024 and 2023~~Business

Turning Point Brands, Inc., including its subsidiaries (~~dollars~~collectively inreferred ~~thousands~~to ~~except~~herein ~~share~~as ~~data~~the “Company,” “we,” “our,” or “us”), is a leading manufacturer, marketer and distributor of branded consumer products. The Company sells a wide range of products to adult consumers consisting of staple products with its iconic brands Zig-Zag® and Stoker’s® and its next generation products to fulfill evolving consumer preferences. The Company's segments are led by its core proprietary and iconic brands: Zig-Zag® and Stoker’s® along with FRE®, Beech-Nut® and Trophy®. The Company’s products are available in more than 220,000 retail outlets in North America. The Company operates two segments, Zig-Zag products and Stoker’s products.

~~(unaudited)~~Discontinued Operations

												Accumulated
				Common		Additional			Cost of			Other						Non-
	Voting			Stock,		Paid-In			Repurchased			Comprehensive			Accumulated			Controlling
	Shares			Voting		Capital			Common Stock			Income (Loss)			Earnings			Interest			Total
Beginning balance January 1, 2024		17,605,677		$	199	$	119,075		$	(78,093	)	$	(2,648	)	$	112,443		$	1,030		$	152,006
Unrealized gain on MSA investments, net of tax of $226		–			–		–			–			572			–			–			572
Unrealized loss on derivative instruments, net of tax of $26		–			–		–			–			(79	)		–			–			(79	)
Foreign currency translation, net of tax of $0		–			–		–			–			16			–			(11	)		5
Unrealized gain on investments, net of tax of $0		–			–		–			–			27			–			–			27
Stock compensation expense		–			–		5,720			–			–			–			–			5,720
Exercise of options		99,551			1		1,340			–			–			–			–			1,341
Redemption of options		(9,223	)		–		(328	)		–			–			–			–			(328	)
Cost of repurchased common stock		(133,873	)		–		–			(4,170	)		–			–			–			(4,170	)
Issuance of performance based restricted stock units		129,323			1		–			–			–			–			–			1
Redemption of performance based restricted stock units		(48,177	)		–		(1,212	)		–			–			–			–			(1,212	)
Issuance of restricted stock units		101,650			1		78			–			–			–			–			79
Redemption of restricted stock units		(28,081	)		–		(840	)		–			–			–			–			(840	)
Dividends		–			–		–			–			–			(3,818	)		–			(3,818	)
Net income		–			–		–			–			–			37,389			66			37,455
Ending balance September 30, 2024		17,716,847		$	202	$	123,833		$	(82,263	)	$	(2,112	)	$	146,014		$	1,085		$	186,759
Beginning balance January 1, 2023		17,485,163		$	198	$	113,242		$	(78,093	)	$	(2,393	)	$	78,691		$	1,735		$	113,380
Unrealized loss on MSA investments, net of tax of $108		–			–		–			–			(339	)		–			–			(339	)
Unrealized loss on derivative instruments, net of tax of $361		–			–		–			–			(1,136	)		–			–			(1,136	)
Foreign currency translation, net of tax of $0		–			–		–			–			13			–			10			23
Stock compensation expense		–			–		4,660			–			–			–			–			4,660
Exercise of options		30,214			–		419			–			–			–			–			419
Redemption of options		(15,985	)		–		(346	)		–			–			–			–			(346	)
Issuance of performance based restricted stock units		140,324			1		77			–			–			–			–			78
Redemption of performance based restricted stock units		(43,294	)		–		(995	)		–			–			–			–			(995	)
Settlement of call options, net of tax of $28		–			–		86			–			–			–			–			86
Dividends		–			–		–			–			–			(3,527	)		–			(3,527	)
Net income		–			–		–			–			–			28,353			(437	)		27,916
Ending balance September 30, 2023		17,596,422		$	199	$	117,143		$	(78,093	)	$	(3,855	)	$	103,517		$	1,308		$	140,219

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company’s former Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc. (“GWO”) in exchange for 49% of the issued and outstanding GWO common stock. GWO is a joint venture between the Company and Standard General, LP entered into in December 2018.

~~The~~As ~~accompanying notes~~of December ~~are~~31, an2024, ~~integral~~the ~~part~~assets and liabilities associated with the CDS segment have been classified as held for sale. Accordingly, the financial results of the CDS segment were classified as discontinued operations and reported separately for all periods presented herein. Following the discontinued operations classification, the Company has two reportable segments, which are reflected herein. Unless otherwise noted, disclosures in the notes to these consolidated financial statements relate solely to the Company's continuing operations, comprised of the Zig-Zag and Stoker’s segments. See Note 3, "Assets and Liabilities Held for Sale and Discontinued Operations" for additional information regarding the CDS divestiture, including the assets and liabilities held for sale and the income or losses from discontinued operations.

10Basis of Presentation

The ~~Table~~accompanying unaudited, interim, consolidated financial statements have been prepared in accordance with the accounting practices described in the Company’s audited, consolidated financial statements as of ~~Contents~~ and for the year ended December 31, 2024. In the opinion of management, the unaudited, interim, consolidated financial statements included herein contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows of the Company for the periods presented. Such adjustments, other than nonrecurring adjustments separately disclosed, are of a normal and recurring nature. The operating results for interim periods are not necessarily indicative of results to be expected for a full year or future interim periods. The unaudited, interim, consolidated financial statements should be read in conjunction with the Company’s audited, consolidated financial statements and accompanying notes as of and for the year ended December 31, 2024. The accompanying interim, consolidated financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States (“GAAP”) with respect to annual financial statements.

~~Turning~~Certain ~~Point~~prior ~~Brands~~year amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated financial position, ~~Inc~~results of operations, or cash flows in any of the periods presented.

~~Notes to~~ 10 ~~Consolidated Financial Statements~~

~~(dollars~~ Table inof ~~thousands, except where designated and per share data)~~Contents

Note 12. ~~Business~~Summary ~~and~~of ~~Basis~~Significant ofAccounting ~~Presentation~~Policies

~~Description of Business~~Consolidation

~~Turning~~The ~~Point~~consolidated ~~Brands,~~financial ~~Inc.,~~statements ~~including~~include ~~its~~the ~~subsidiaries~~accounts ~~(collectively~~of ~~referred to herein as~~ the “Company,” ~~“we,”~~its ~~“our~~subsidiaries,” orall ~~“us”), is a leading manufacturer, marketer and distributor~~ of ~~branded~~which consumer products. The Company sells a wide range of products to adult consumers consisting of staple products with its iconic brands Zig-Zag® and Stoker’s® and its next generation products to fulfill evolving consumer preferences. Its segments are ~~led by its core proprietary and iconic brands: Zig~~wholly-~~Zag®~~owned, and ~~Stoker’s®~~variable ~~along~~interest ~~with~~entities ~~FRE®,~~(“VIEs”) ~~Beech-Nut®~~for ~~and~~which ~~Trophy®. The~~the Company’s ~~products~~is ~~are~~considered ~~available~~to inhave ~~more~~a ~~than~~controlling ~~217,000~~interest ~~retail~~based ~~outlets~~on inthe ~~North~~voting ~~America.~~interest ~~The~~entity ~~Company~~model ~~operates~~or ~~three~~the ~~segments:~~variable ~~(i)~~interest ~~Zig-Zag~~entity ~~products,~~model. ~~(ii)~~All ~~Stoker’s~~significant ~~products,~~intercompany ~~and~~transactions ~~(iii)~~have ~~Creative~~been ~~Distribution Solutions (“CDS”, formerly known as NewGen)~~eliminated.

~~Basis~~U.S. GAAP requires the Company to identify entities for which control is achieved through means other than voting rights and to determine whether the Company is the primary beneficiary of ~~Presentation~~VIEs. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

The ~~accompanying unaudited,~~primary ~~interim,~~beneficiary ~~consolidated~~of ~~financial~~a ~~statements~~VIE ~~have~~is ~~been prepared in accordance with~~ the ~~accounting~~entity ~~practices~~that ~~described~~has inboth: ~~the~~(i) ~~Company’s audited, consolidated financial statements as of and for~~ the ~~year~~power ~~ended December 31, 2023. In the opinion of management, the unaudited, interim, consolidated financial statements included herein contain all adjustments necessary~~ to ~~present~~direct ~~fairly~~ the ~~financial~~activities ~~position, results~~ of ~~operations, and cash flows of~~ the ~~Company~~VIE ~~for~~that ~~the~~most ~~periods~~significantly ~~presented.~~impact Such adjustments, other than nonrecurring adjustments separately disclosed, are of a normal and recurring nature. The operating results for interim periods are not necessarily indicative of results to be expected for a full year or future interim periods. The unaudited, interim, consolidated financial statements should be read in conjunction with the ~~Company~~entity’s ~~audited,~~economic ~~consolidated~~performance; ~~financial statements~~ and ~~accompanying~~(ii) ~~notes as of and for~~ the ~~year~~obligation ~~ended~~to ~~December~~absorb ~~31,~~losses ~~2023.~~or ~~The accompanying interim, consolidated financial statements are presented in accordance with~~ the ~~rules~~right ~~and~~to ~~regulations~~receive benefits of the ~~Securities~~VIE ~~and~~that ~~Exchange~~could ~~Commission~~be ~~(the~~significant ~~“SEC”)~~to ~~and, accordingly, do not include all~~ the ~~disclosures~~entity. ~~required~~The byCompany ~~generally~~performs ~~accepted~~this ~~accounting principles~~analysis inon ~~the~~an ~~United~~ongoing ~~States (“GAAP”) with respect to annual financial statements~~basis.

~~Recent~~Management ~~accounting~~of ~~pronouncements~~the Company has determined that Turning Point Brands Canada and ALP Supply Co, LLC ("ALP") are VIEs for which the Company is required to consolidate. The Company has a controlling financial interest of 65% equity in Turning Point Brands Canada, provides additional subordinated financing, and has a distribution agreement for the sale of the Company’s products that makes up a significant portion of Turning Point Brands Canada’s business activities. The Company has a 50% equity interest in ALP, provides additional financing, has a supply agreement to be the exclusive provider of product and is the primary beneficiary due to the power the Company has over the activities that most significantly impact the economic performance, and the right to receive benefits and the obligation to absorb losses.

~~Issued~~Revenue ~~but not yet adopted~~Recognition

InThe ~~November~~Company ~~2023,~~recognizes ~~the~~revenues ~~Financial~~in accordance with Accounting Standards ~~Board~~Codification (“~~FASB~~ASC”) ~~issued~~606, ~~guidance~~Revenue ~~that~~from ~~enhances~~Contracts ~~reportable~~with ~~segment~~Customers ~~disclosures by requiring disclosure of significant reportable segment expenses and other items regularly provided to the Chief Operating Decision Maker~~ (~~“CODM”~~Topic 606), ~~and~~which ~~included~~includes ~~within~~excise ~~measures~~taxes ~~of a segment’s profit or loss. Additional requirements include the title~~ and ~~position~~shipping ~~of the CODM~~ and anhandling ~~explanation~~charges ofbilled ~~how the~~to ~~CODM~~customers, ~~uses~~net ~~the reported measure~~ of acash ~~segment’s~~discounts ~~profit~~for orprompt ~~loss~~payment, tosales ~~assess~~returns ~~performance~~ and ~~allocate resources~~incentives, ~~and~~upon ~~the~~delivery ~~amount and composition~~ of ~~other~~goods ~~segment items necessary~~ to ~~reconcile~~the ~~segment~~customer ~~revenue,~~– ~~significant~~at ~~expenses,~~which ~~and~~time the ~~reported measure~~Company’s ofperformance ~~profit~~obligation oris ~~loss.~~satisfied ~~The~~- ~~guidance~~at ~~also~~an ~~expands~~amount ~~interim disclosure requirements such~~ that ~~nearly~~the ~~all~~Company ~~annual~~expects ~~quantitative~~to ~~segment disclosures will~~ be ~~made~~entitled ~~on an interim basis. This guidance must be applied retrospectively~~ to ~~all~~in ~~prior periods~~exchange ~~presented and will become effective~~ for ~~the~~those ~~Company~~goods ~~beginning with its fiscal 2024 annual financial statements and interim periods starting~~ in ~~fiscal~~accordance ~~2025,~~ with ~~early adoption permitted. The Company is currently evaluating~~ the ~~impact~~five-step ~~of this~~analysis ~~guidance~~outlined ~~and~~in ~~expects~~Topic ~~that~~606: ~~enhanced~~(i) ~~disclosures~~identify ~~will~~the ~~likely~~contract bewith ~~required~~the ~~upon~~customer, ~~adoption. In~~(ii) ~~December~~identify ~~2023,~~ the ~~FASB~~performance ~~issued~~obligations ~~guidance~~in ~~which~~the ~~enhances income tax disclosures to require reporting entities to disclose annual income taxes paid~~contract, ~~net~~(iii) ofdetermine ~~refunds,~~the ~~disaggregated~~transaction ~~by federal~~price, ~~state,~~(iv) ~~and~~allocate ~~foreign~~the ~~taxes~~transaction ~~and~~price to ~~provide additional disaggregated information for individual jurisdictions under certain conditions. The guidance also requires disclosure of amounts and percentages in~~ the ~~annual~~performance ~~rate reconciliation table~~obligations, ~~rather than amounts or percentages,~~ and ~~will~~(v) ~~eliminate~~recognize ~~certain~~revenue ~~existing~~when ~~disclosure~~(or ~~requirements~~as) ~~related~~performance toobligations ~~uncertain~~are ~~tax positions and unrecognized deferred tax liabilities~~satisfied. ~~This~~The ~~guidance will be effective for the~~ Company ~~beginning~~includes ~~with~~in its ~~fiscal~~transaction ~~2025~~price ~~annual~~excise ~~financial~~taxes ~~statements,~~on ~~with~~smokeless ~~early~~tobacco, ~~adoption~~cigars ~~permitted.~~or ~~The~~other ~~guidance~~nicotine ~~may~~products bebilled ~~applied~~to ~~prospectively~~customers, ~~while~~and ~~retrospective~~excludes ~~application~~sales istaxes ~~permitted.~~and ~~The~~value-added ~~Company~~taxes isimposed ~~currently~~at ~~assessing~~ the ~~impact~~time of ~~this guidance and expects its incremental disclosures will likely be provided on a prospective basis upon adoption~~sale.

11The Company records an allowance for sales returns, based principally on historical volume and return rates, which is included in accrued liabilities on the consolidated balance sheets. The Company records sales incentives, which consist of consumer incentives and trade promotion activities, as a reduction in revenues (a portion of which is based on amounts estimated to be due to wholesalers, retailers and consumers at the end of the period) based principally on historical volume and utilization rates. Expected payments for sales incentives are included in accrued liabilities on the consolidated balance sheets.

A ~~Table~~further requirement of ~~Contents~~ ASC 606 is for entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company’s management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of the Company’s contract revenue for decision making purposes is the disaggregation by segment which can be found in Note 16, “Segment Information”.

~~Note~~Held 2.for ~~Summary~~Sale ofand ~~Significant~~Discontinued ~~Accounting Policies~~Operations

~~Consolidation~~The Company classifies assets and liabilities to be sold (the “disposal group”) as held for sale in the period when all of the applicable criteria are met, including: (i) management commits to a plan to sell, (ii) the disposal group is available to sell in its present condition, (iii) there is an active program to locate a buyer, (iv) the disposal group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the disposal group is generally probable of being completed within one year.

~~The~~Assets ~~consolidated~~and ~~financial~~liabilities ~~statements~~held ~~include~~for sale are presented separately within the ~~accounts~~Consolidated ofBalance Sheets with any adjustments necessary to measure the ~~Company,~~disposal group at the lower of its ~~subsidiaries~~carrying value or fair value less costs to sell. Depreciation of property, ~~all~~plant and equipment and amortization of ~~which~~intangible ~~are~~and ~~wholly~~right-~~owned,~~of-use ~~and~~assets ~~variable~~are not recorded ~~interest~~while ~~entities~~these assets are classified as held for ~~which~~sale. For each period the ~~Company~~ disposal group remains classified as held for sale, its recoverability is ~~considered~~reassessed, ~~the~~and ~~primary~~any ~~beneficiary.~~necessary ~~All~~adjustments ~~significant~~are ~~intercompany~~made ~~transactions~~to ~~have~~its ~~been~~carrying ~~eliminated~~value.

~~Revenue~~The ~~Recognition~~Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that will have a major effect on its operations and financial results. The results of discontinued operations are reported as Loss from discontinued operations, net of tax in the Consolidated Statements of Income for the prior periods commencing in the period in which the held for sale criteria are met. Loss from discontinued operations includes direct costs attributable to the divested business and excludes any cost allocations associated with any shared or corporate functions. Loss from discontinued operations includes any gain or loss recognized upon disposition or from any adjustment of the carrying amount of the assets and liabilities of the discontinued operations to fair value less costs to sell while classified as held for sale.

~~The~~Shipping Company recognizes revenues in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (Topic 606), which includes excise taxes and shipping and handling charges billed to customers, net of cash discounts for prompt payment, sales returns and incentives, upon delivery of goods to the customer – at which time the Company’s performance obligation is satisfied - at an amount that the Company expects to be entitled to in exchange for those goods in accordance with the five-step analysis outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. The Company includes in its transaction price excise taxes on smokeless tobacco, cigars or other nicotine products billed to customers, and excludes sales taxes and value-added taxes imposed at the time of sale.Costs

The Company records anshipping ~~allowance~~costs ~~for~~incurred sales returns, based principally on historical volume and return rates, which is included in accrued liabilities on the consolidated balance sheets. The Company records sales incentives, which consist of consumer incentives and trade promotion activities, as a ~~reduction~~component ~~in revenues (a portion~~ of ~~which~~selling, ~~is based on amounts estimated to be due to wholesalers~~general, ~~retailers~~ and ~~consumers~~administrative atexpenses. ~~the~~Shipping ~~end~~costs ofincurred ~~the~~were ~~period)~~approximately ~~based~~$7.4 million ~~principally on historical volume~~ and ~~utilization rates~~$4.2 million ~~Expected payments~~ for ~~sales~~the ~~incentives~~three ~~are~~months ~~included~~ending March in31, ~~accrued~~2025 ~~liabilities~~and on2024, ~~the consolidated balance sheets~~respectively.

A further requirement of ASC 606 is for entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company’s management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of the Company’s contract revenue for decision making purposes is the disaggregation by segment which can be found in Note 16, “Segment Information”. An additional disaggregation of contract revenue by sales channel can be found within Note 16 as well. Inventories

~~Shipping~~Inventories ~~Costs~~are stated at the lower of cost or net realizable value using the first-in, first-out method. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for the purpose of curing.

~~The Company records shipping costs incurred as a component of~~ ~~selling, general, and administrative expenses. Shipping costs incurred were approximately $5.5 million and $5.1 million for the three months~~ 11 ~~ending September 30, 2024 and 2023, respectively. Shipping costs incurred were approximately $16.3 million and $17.0 million for the nine months ending September 30, 2024 and 2023, respectively.~~

~~Inventories~~ Table of Contents

~~Inventories~~Fair are stated at the lower of cost or net realizable value using the first-in, first-out method. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for the purpose of curing.Value

~~Fair~~GAAP ~~Value~~establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

~~GAAP~~The ~~establishes~~three alevels ~~framework~~of ~~for measuring fair value. That framework provides a fair value hierarchy that prioritizes~~ the ~~inputs to valuation techniques used to measure~~ fair value. ~~The~~ hierarchy ~~gives~~under ~~the~~GAAP ~~highest~~are ~~priority~~described ~~to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).~~below:

~~The~~● ~~three~~Level ~~levels~~1 of– Inputs to the ~~fair~~valuation ~~value~~methodology ~~hierarchy~~are ~~under~~unadjusted ~~GAAP~~quoted ~~are~~prices ~~described~~for ~~below:~~identical assets or liabilities in active markets at the measurement date.

● Level 12 – Inputs to the valuation methodology ~~are~~include ~~unadjusted~~quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in ~~active~~inactive markets, atinputs other than quoted prices that are observable for the ~~measurement~~asset ~~date~~or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

● Level 23 – ~~Inputs~~Unobservable toinputs ~~the~~that ~~valuation~~reflect ~~methodology~~management’s ~~include~~best ~~quoted~~estimate ~~prices~~of ~~for~~what ~~similar~~market ~~assets~~participants orwould ~~liabilities~~use in ~~active~~pricing ~~markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for~~ the asset or liability, ~~and~~at ~~inputs~~the ~~that~~measurement ~~are derived principally from or corroborated by observable market data by correlation or other means~~date.

●Derivative ~~Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.~~Instruments

12The Company enters into foreign currency forward contracts to hedge a portion of its exposure to changes in foreign currency exchange rates on inventory purchase commitments. The Company accounts for its forward contracts under the provisions of ASC 815, Derivatives and Hedging. Under the Company’s policy, the Company may hedge up to 100% of its anticipated purchases of inventory in the denominated invoice currency over a forward period not to exceed twelve months. The Company may also, from time to time, hedge up to 100% of its non-inventory purchases (e.g., production equipment) in the denominated invoice currency. Forward contracts that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on the measurement date, except any hedge ineffectiveness which is recognized currently in income. Gains and losses on these forward contracts are reclassified from other comprehensive income into inventory as the related inventories are received and are transferred to net income as inventory is sold. Changes in fair value of any contracts that do not qualify for hedge accounting or are not designated as hedges are recognized currently in income.

Risks ~~Table~~and ~~of Contents~~ Uncertainties

~~Derivative~~Manufacturers ~~Instruments~~and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In a number of states targeted flavor bans have been proposed or enacted legislatively or by the administrative process. Depending on the number and location of such bans, such legislation or regulation could have a material adverse effect on the Company’s financial position, results of operations or cash flows. The U.S. Food and Drug Administration (“FDA”) continues to consider various restrictive regulations around our products, including targeted flavor bans; however, the details, timing, and ultimate implementation of such measures remain unclear.

The ~~Company~~tobacco ~~enters~~industry ~~into~~has ~~foreign~~experienced, ~~currency~~and ~~forward~~is ~~contracts~~experiencing, tosignificant ~~hedge~~product aliability ~~portion~~litigation. ofMost ~~its~~tobacco ~~exposure~~liability tolawsuits ~~changes~~have inbeen ~~foreign~~brought ~~currency~~against ~~exchange~~manufacturers ~~rates~~and onsellers ~~inventory purchase~~of ~~commitments.~~cigarettes ~~The Company accounts~~ for ~~its~~injuries ~~forward~~allegedly ~~contracts~~caused ~~under~~by ~~the~~smoking ~~provisions~~or ofexposure ~~ASC 815,~~to ~~Derivatives and Hedging~~smoke. ~~Under the Company’s policy~~However, ~~the~~several ~~Company~~lawsuits ~~may~~have ~~hedge~~been upbrought toagainst ~~100%~~manufacturers ofand ~~its anticipated~~sellers ~~purchases~~ of ~~inventory~~smokeless inproducts ~~the~~for ~~denominated~~injuries ~~invoice~~to ~~currency~~health ~~over~~allegedly acaused ~~forward~~by ~~period~~use ~~not~~of tosmokeless ~~exceed twelve months~~products. ~~The Company may also~~Typically, ~~from~~such ~~time~~claims toassert ~~time,~~that ~~hedge~~use ~~up to 100%~~ of ~~its~~smokeless ~~non-inventory~~products ~~purchases~~is ~~(e.g.,~~addictive ~~production~~and ~~equipment)~~causes inoral ~~the denominated invoice currency~~cancer. There ~~Forward~~can ~~contracts~~be no assurance ~~that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on~~ the ~~measurement~~Company ~~date,~~will not sustain ~~except~~losses ~~any~~in ~~hedge~~connection ~~ineffectiveness~~with ~~which~~such islawsuits ~~recognized~~and ~~currently~~that ~~in income.~~such ~~Gains and~~ losses onwill not have ~~these~~a ~~forward~~material ~~contracts~~adverse ~~are~~effect ~~reclassified~~on ~~from other comprehensive income into inventory as~~ the ~~related~~Company’s ~~inventories~~financial ~~are~~position, ~~received~~results ~~and are transferred to net income as inventory is sold. Changes in fair value~~ of ~~any contracts~~operations, ~~that do not qualify for hedge accounting~~ or ~~are~~cash ~~not designated as hedges are recognized currently in income~~flows.

~~Risks~~Master ~~and~~Settlement ~~Uncertainties~~Agreement (MSA)

~~Manufacturers~~Pursuant ~~and~~to ~~sellers~~the ofMaster ~~tobacco~~Settlement ~~products~~Agreement ~~are~~(the ~~subject~~“MSA”) toentered ~~regulation~~into atin November ~~the~~1998 ~~federal,~~by ~~state,~~most ~~and~~states ~~local~~(represented ~~levels.~~by ~~Such~~their ~~regulations~~attorneys ~~include,~~general ~~among others,~~acting ~~labeling~~through ~~requirements,~~the ~~limitations~~National onAssociation ~~advertising,~~of ~~and~~Attorneys ~~prohibition~~General) ofand ~~sales~~subsequent tostates’ ~~minors.~~statutes, ~~The~~a ~~tobacco~~“cigarette ~~industry~~manufacturer” (which is ~~likely~~defined to ~~continue~~include toa bemanufacturer ~~heavily~~of ~~regulated.~~make-your-own ~~There~~(“MYO”) ~~can~~cigarette betobacco) nohas ~~assurance~~the asoption of either becoming a signatory to the ~~ultimate~~MSA ~~content~~or opening, ~~timing~~funding, orand ~~effect~~maintaining ofan ~~any regulation~~escrow ofaccount to have funds available for certain potential tobacco-related ~~products~~liabilities bywith ~~any~~sub-accounts ~~federal,~~on behalf of each settling state,. orSuch ~~local~~companies ~~legislative~~are orentitled ~~regulatory~~to ~~body,~~direct ~~nor~~the ~~can~~investment ~~there~~of bethe ~~any~~escrowed ~~assurance~~funds ~~that~~and withdraw any ~~such~~appreciation ~~legislation~~but orcannot ~~regulation~~withdraw ~~would~~the ~~not~~principal ~~have~~for atwenty-five ~~material~~years ~~adverse~~from ~~effect~~the onyear ~~the~~of ~~Company~~each annual deposit, except to withdraw funds deposited pursuant to an individual state’s ~~financial~~escrow ~~position, results~~statute to pay a final judgement to that state’s plaintiffs in the event of ~~operations,~~such ora ~~cash~~final ~~flows~~judgement against the Company. InThe aCompany ~~number~~chose ofto ~~states~~open ~~targeted~~and ~~flavor~~fund ~~bans~~an ~~have~~escrow ~~been~~account ~~proposed~~as orits ~~enacted~~method ~~legislatively~~of orcompliance. byIt is the ~~administrative~~Company’s ~~process.~~policy ~~Depending~~to record amounts on deposit in the ~~number~~escrow ~~and~~account ~~location~~for prior years as a non-current asset. As of March ~~such~~31, ~~bans~~2025, ~~that~~the ~~legislation~~Company orhad ~~regulation~~on ~~could have~~deposit aapproximately ~~material~~$32.1 ~~adverse~~million, ~~effect~~the onfair value of which was approximately $29.3 million. At December 31, 2024, the Company’s ~~financial~~had ~~position~~on deposit approximately $32.1 million, ~~results~~the fair value of ~~operations~~which orwas ~~cash~~approximately ~~flows~~$28.7 million. The ~~U.S.~~Company ~~Food~~discontinued ~~and~~its ~~Drug~~generic ~~Administration~~category ~~(“FDA”)~~of ~~continues~~MYO toin ~~consider~~2019 ~~various~~and ~~restrictive~~its Zig-Zag branded ~~regulations~~MYO ~~around~~cigarette ~~our~~smoking ~~products~~tobacco in 2017. Thus, ~~including~~pending ~~targeted~~a ~~flavor~~change ~~bans;~~in ~~however~~MSA legislation, the ~~details,~~Company ~~timing,~~has no remaining product lines covered by the MSA and ~~ultimate implementation~~will ofnot ~~such~~be ~~measures~~required ~~remain~~to ~~unclear~~make future escrow deposits.

The ~~tobacco industry~~Company has ~~experienced,~~chosen ~~and~~to isinvest ~~experiencing,~~a ~~significant~~portion ~~product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers~~ of ~~cigarettes~~the ~~for~~MSA ~~injuries~~escrow, ~~allegedly~~from ~~caused~~time ~~by smoking or exposure~~ to ~~smoke.~~ ~~However~~time, ~~several~~in ~~lawsuits~~U.S. ~~have~~Government ~~been~~securities ~~brought~~including ~~against~~TIPS, ~~manufacturers~~Treasury ~~and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically~~Notes, ~~such claims assert that use of smokeless products is addictive~~ and ~~causes~~Treasury ~~oral cancer~~Bonds. ~~Additionally,~~These ~~several~~investments ~~lawsuits~~are ~~have~~classified ~~been~~as ~~brought~~available-for-sale ~~against manufacturers~~ and ~~distributors~~carried ofat ~~Creative~~fair ~~Distribution Solutions products due to malfunctioning devices~~value. ~~There~~Realized ~~can~~losses beare noprohibited ~~assurance~~under the ~~Company~~MSA; ~~will~~any ~~not~~investment ~~sustain losses~~ in ~~connection~~an ~~with~~unrealized ~~such~~loss ~~lawsuits~~position ~~and that such losses~~ will ~~not~~ ~~have~~be aheld ~~material~~until ~~adverse effect on~~ the ~~Company’s~~value ~~financial~~is ~~position~~recovered, ~~results of operations,~~ or ~~cash~~until ~~flows~~maturity.

~~Master Settlement Agreement (MSA)~~ 12

~~Pursuant~~ to Table ~~the Master Settlement Agreement (the “MSA”) entered into in November 1998 by most states (represented by their attorneys general acting through the National Association~~ of ~~Attorneys General) and subsequent states’ statutes, a “cigarette~~Contents manufacturer” (which is defined to include a manufacturer of make-your-own (“MYO”) cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account to have funds available for certain potential tobacco-related liabilities with sub-accounts on behalf of each settling state. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgement to that state’s plaintiffs in the event of such a final judgement against the Company. The Company chose to open and fund an escrow account as its method of compliance. It is the Company’s policy to record amounts on deposit in the escrow account for prior years as a non-current asset. As of September 30, 2024, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $29.5 million. At December 31, 2023, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.7 million. The Company discontinued its generic category of MYO in 2019 and its Zig-Zag branded MYO cigarette smoking tobacco in 2017. Thus, pending a change in MSA legislation, the Company has no remaining product lines covered by the MSA and will not be required to make future escrow deposits.

~~The~~Fair ~~Company~~values ~~has~~for ~~chosen to invest a portion of~~ the ~~MSA escrow, from time to time, in~~ U.S. ~~Government~~Governmental ~~securities~~agency ~~including~~obligations ~~TIPS,~~are ~~Treasury~~Level ~~Notes,~~2 ~~and Treasury~~in ~~Bonds.~~the ~~These~~fair ~~investments~~value ~~are~~hierarchy. ~~classified~~The asfollowing ~~available-for-sale~~tables ~~and~~show ~~carried~~cost atand estimated fair value. ~~Realized~~of ~~losses~~the ~~are~~assets ~~prohibited~~held ~~under~~in the MSA; ~~any~~account, ~~investment~~respectively, inas anwell ~~unrealized~~as ~~loss~~the ~~position~~maturities ~~will~~of bethe U.S. Governmental agency obligations held ~~until~~in ~~the~~such ~~value~~account isfor ~~recovered,~~the orperiods ~~until maturity~~indicated.

	As of March 31, 2025									As of December 31, 2024
			Gross		Gross			Estimated				Gross		Gross			Estimated
			Unrealized		Unrealized			Fair				Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
Cash and cash equivalents	$	1,913	$	-	$	-		$	1,913	$	1,961	$	-	$	-		$	1,961
U.S. Governmental agency obligations (unrealized position < 12 months)		3,740		44		(8	)		3,776		4,168		11		(48	)		4,131
U.S. Governmental agency obligations (unrealized position > 12 months)		26,420		27		(2,819	)		23,628		25,944		95		(3,455	)		22,584
	$	32,073	$	71	$	(2,827	)	$	29,317	$	32,073	$	106	$	(3,503	)	$	28,676

Table of Contents

	*As of*
Maturities:	*March 31, 2025*
One to five years	$	14,771
Five to ten years		13,434
Greater than ten years		1,955
Total	$	30,160

~~Fair values for the U.S. Governmental agency obligations are Level 2 in the fair value hierarchy.~~ The following ~~tables show~~shows ~~cost and estimated fair value of~~ the ~~assets~~amount ~~held in the MSA account, respectively, as well as the maturities~~ of ~~the~~deposits ~~U.S.~~by ~~Governmental~~sales ~~agency~~year ~~obligations held in such account~~ for the ~~periods~~MSA ~~indicated.~~escrow account:

	As of September 30, 2024							As of December 31, 2023
	Deposits as of
			Gross			Estimated				Gross			Estimated
Sales	March 31,		December 31,
			Unrealized			Fair				Unrealized			Fair
Year	2025		2024
	Cost		Gains (Losses)			Value		Cost		Losses			Value
1999	$	211	$	211
Cash and cash equivalents	$	1,959	$	–		$	1,959	$	1,929	$	–		$	1,929
2000		1,017		1,017
U.S. Governmental agency obligations (unrealized position < 12 months)		2,170		57			2,227		–		–			–
2001		1,673		1,673
U.S. Governmental agency obligations (unrealized position > 12 months)		27,944		(2,648	)		25,296		30,144		(3,389	)		26,755
2002		2,271		2,271
	$	32,073	$	(2,591	)	$	29,482	$	32,073	$	(3,389	)	$	28,684
2003		4,249		4,249
2004		3,714		3,714
2005		4,553		4,553
2006		3,847		3,847
2007		4,167		4,167
2008		3,364		3,364
2009		1,619		1,619
2010		406		406
2011		193		193
2012		199		199
2013		173		173
2014		143		143
2015		101		101
2016		91		91
2017		82		82
Total	$	32,073	$	32,073

	As of
Maturities:	September 30, 2024
Less than one year	$	2,250
One to five years		14,771
Five to ten years		11,138
Greater than ten years		1,955
Total	$	30,114

~~The~~ Table ~~following shows the amount~~ of ~~deposits by sales year for the MSA escrow account:~~Contents

	Deposits as of
Sales Year	September 30, 2024		December 31, 2023
1999	$	211	$	211
2000		1,017		1,017
2001		1,673		1,673
2002		2,271		2,271
2003		4,249		4,249
2004		3,714		3,714
2005		4,553		4,553
2006		3,847		3,847
2007		4,167		4,167
2008		3,364		3,364
2009		1,619		1,619
2010		406		406
2011		193		193
2012		199		199
2013		173		173
2014		143		143
2015		101		101
2016		91		91
2017		82		82
Total	$	32,073	$	32,073

Recent accounting pronouncements

14Issued but not yet adopted

In December ~~Table~~2023, the FASB issued guidance which enhances income tax disclosures to require reporting entities to disclose annual income taxes paid, net of ~~Contents~~ refunds, disaggregated by federal, state, and foreign taxes and to provide additional disaggregated information for individual jurisdictions under certain conditions. The guidance also requires disclosure of amounts and percentages in the annual rate reconciliation table, rather than amounts or percentages, and will eliminate certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. This guidance will be effective for the Company beginning with its fiscal 2025 annual financial statements, with early adoption permitted. The guidance may be applied prospectively, while retrospective application is permitted. The Company is currently assessing the impact of this guidance and expects its incremental disclosures will likely be provided on a prospective basis upon adoption.

~~Note~~In November 32024, the FASB issued guidance requiring reporting entities to disclose in the notes to the financial statements, specified information about certain categories of expenses including purchases of inventory, employee compensation, depreciation and amortization for each caption on the income statement where such expenses are included. This ~~Derivative~~guidance ~~Instruments~~will be effective for the Company beginning with its fiscal 2027 annual financial statements and interim periods thereafter. Early adoption is permitted, in addition to either prospective or retrospective application. The Company is currently assessing the impact and extent to which this guidance will affect its disclosures.

~~Foreign~~Note 3. Assets ~~Currency~~and Liabilities Held for Sale and Discontinued Operations

~~During~~On January 2, 2025, the ~~nine~~Company ~~months~~contributed ~~ended~~100% ~~September~~of ~~30,~~its ~~2024~~interest in SBB, the subsidiary that owned and operated the Company’s ~~executed~~former ~~various~~CDS segment, ~~foreign~~to GWO in exchange ~~contracts~~ for 49% of the ~~purchase~~issued and ~~sale~~outstanding GWO common stock on a fully-diluted basis. Under certain circumstances the Company has the right to redeem the contribution of €1SBB from GWO at fair market value.5 In ~~million~~addition, the Company received an option with ~~maturity~~a 15-year ~~dates~~term ~~ranging~~to ~~from~~purchase ~~October~~the remaining 51% of GWO at an exercise price initially set at $22.0 million, which decreases over time based on certain tax sharing payments to ~~December~~Standard ~~2024~~General, LP.

AtThe ~~September~~assets ~~30,~~and ~~2024,~~liabilities of the ~~Company~~CDS ~~had~~business ~~foreign~~were ~~currency~~classified ~~contracts~~as ~~outstanding~~held for ~~the~~sale ~~purchase~~as of December ~~€1.5 million~~31, 2024, and ~~sale~~its offinancial ~~€1.5~~results ~~million.~~were ~~The~~classified ~~foreign~~as ~~currency~~discontinued ~~contracts’~~operations ~~fair~~and ~~value~~reported atseparately ~~September~~for ~~30,~~all ~~2024,~~periods ~~resulted~~presented inherein. Upon anmeeting ~~asset~~the ofcriteria ~~$0.0~~for held for sale classification ~~million included~~ in ~~Other~~2024, ~~current~~the ~~assets~~Company ~~and~~recorded a ~~liability~~non-cash charge of $08.0 8 million ~~included~~with inan ~~Accrued~~equivalent ~~liabilities.~~valuation Atallowance ~~December~~against ~~31,~~net ~~2023,~~assets ~~the~~held ~~Company~~for ~~had~~sale ~~foreign~~to ~~currency~~reduce ~~contracts~~the ~~outstanding~~carrying ~~for~~value of the ~~purchase~~disposal ofgroup ~~€15.2~~to ~~million~~fair ~~and~~value. ~~sale~~There ofwas no ~~€15.2~~additional ~~million.~~loss ~~The~~upon ~~foreign~~completion ~~currency contracts’~~of ~~fair~~the ~~value~~sale atin ~~December~~the ~~31,~~first ~~2023,~~quarter ~~resulted~~of in2025. anFair ~~asset~~value of ~~$0.3~~the ~~million~~disposal ~~included~~group utilized ininputs ~~Other~~within ~~current~~Level 3 of ~~assets~~the fair value hierarchy, and awas ~~liability~~determined ofusing ~~$0.1~~both ~~million~~a ~~included~~market inand ~~Accrued~~an ~~liabilities~~income approach.

~~Note~~The 4.following ~~Fair~~table ~~Value~~summarizes the loss from discontinued operations included in the Consolidated Statements of ~~Financial~~Income ~~Instruments~~for the three month ended March 31, 2024. The Company incurred no income or loss from discontinued operations for the three months ended March 31, 2025.

The estimated fair value amounts have been determined by the Company using the methods and assumptions described below. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

	*Three Months Ended*
	*March 31, 2024*
Net sales	$	13,994
Cost of sales		10,435
Gross profit		3,559
Selling, general, and administrative expenses		2,992
Depreciation		96
Amortization of other intangible assets		474
Operating loss from discontinued operations before income taxes		(3	)
Income tax benefit		(1	)
Loss from discontinued operations	$	(2	)

~~Cash~~A summary of the held for sale assets and ~~Cash~~liabilities ~~Equivalents~~included in the Consolidated Balance Sheets follows:

Cash and cash equivalents are, by definition, short-term. Thus, the carrying amount is a reasonable estimate of fair value.

	*As of December 31, 2024*
Current assets:
Cash	$	2,783
Inventories, net		5,813
Other current assets		2,874
Current assets held for sale		11,470

Noncurrent assets:
Right of use assets		51
Other intangible assets, net		12,609
Allowance to adjust held for sale assets to fair value		(8,801	)
Noncurrent assets held for sale		3,859
Total assets held for sale	$	15,329

Current liabilities:
Accounts payable	$	532
Accrued liabilities		1,517
Current liabilities held for sale		2,049
Total liabilities held for sale	$	2,049

~~Accounts Receivable~~ 14

~~The~~ Table ~~fair value~~ of ~~accounts receivable approximates their carrying value due to their short-term nature.~~Contents

~~Long-Term~~Note ~~Debt~~4. Derivative Instruments

The Company’s Senior Secured Notes (as defined in Note 10) bear interest at a rate of 5.625% per year. As of September 30, 2024, the fair value approximated $249.0 million, with a carrying value of $250 million. As of December 31, 2023, the fair value of the Senior Secured ~~Notes~~ Foreign ~~approximated $234.9 million, with a carrying value of $250~~Currency ~~million.~~

At March 31, 2025, the Company had foreign currency contracts outstanding for the purchase of €0.9 million and sale of €0.9 million. The ~~Convertible~~foreign ~~Senior~~currency ~~Notes~~contracts’ ~~(as~~fair ~~defined~~value at March 31, 2025, resulted in ~~Note~~an ~~10)~~asset ~~matured~~of $0.0 onmillion ~~July~~included ~~15,~~in ~~2024~~Other current assets and ~~were~~a ~~retired~~liability ~~with~~of ~~cash~~ $0.0 Asmillion ofincluded in Accrued liabilities. At December 31, ~~2023~~2024, the ~~fair~~Company ~~value~~had offoreign ~~the~~currency ~~Convertible~~contracts ~~Senior~~outstanding ~~Notes~~for ~~without~~ the ~~conversion~~purchase ~~feature~~of €2.1 million ~~approximated~~and ~~$114.7~~sale of €2.1 million,. ~~with~~The aforeign ~~carrying~~currency contracts’ fair value at December 31, 2024, resulted in an asset of $0.0 million included in Other current assets and a liability of $~~118~~0.51 million included in Accrued liabilities.

~~See~~ Note ~~10,~~5. ~~“Notes~~Fair ~~Payable~~Value ~~and~~of ~~Long-Term~~Financial ~~Debt”, for further information regarding the Company’s long-term debt.~~Instruments

~~Note~~The 5estimated fair value amounts have been determined by the Company using the methods and assumptions described below. ~~Inventories~~However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

~~The~~Cash ~~components~~and ofCash ~~inventories are as follows:~~Equivalents

	September 30,		December 31,
	2024		2023
Raw materials and work in process	$	7,324	$	5,201
Leaf tobacco		37,761		34,894
Finished goods - Zig-Zag products		40,267		41,783
Finished goods - Stoker’s products		12,753		8,090
Finished goods - Creative Distribution Solutions		6,394		7,281
Other		1,917		1,711
Inventories	$	106,416	$	98,960

Cash and cash equivalents are, by definition, short-term. Thus, the carrying amount is a reasonable estimate of fair value.

~~The~~Accounts ~~inventory valuation allowance was $19.9 million as of September 30, 2024 and $20.6 million as of December 31, 2023.~~Receivable

15The fair value of accounts receivable approximates their carrying value due to their short-term nature.

Long-Term ~~Table of Contents~~ Debt

InThe ~~December 2023, a third-party warehouse in Tennessee used to store some of the~~ Company’'s ~~leaf~~2032 ~~tobacco~~Notes ~~incurred~~bear ~~significant~~interest ~~tornado~~at ~~damage resulting~~a inrate ~~damage~~of to7.625% ~~the~~per ~~leaf tobacco~~year. As aof March ~~result~~31, 2025, the ~~Company~~fair ~~recorded~~value aapproximated $15306.21 million ~~inventory reserve related to its leaf tobacco inventory which is included in Other operating income~~, ~~net~~with ina ~~the~~carrying ~~consolidated~~value ~~statement~~ of ~~income for the quarter ended December 31, 2023~~$300.0 ~~The leaf tobacco inventory is covered by the Company’s stock throughput insurance policy and the Company believes the inventory loss is probable of being fully recovered under the policy~~million. ~~The Company has not incurred, and does not expect to incur, any delays in customer deliveries as a result of the damage.~~

~~Note~~The 6Company’s 2026 Notes were retired at par on February 20, 2025. As ~~Other~~of December ~~Current~~31, ~~Assets~~2024, the fair value of the 2026 Notes approximated $251.2 million, with a carrying value of $250.0 million.

~~Other~~See ~~current~~Note ~~assets~~11, ~~consist~~“Notes ~~of:~~Payable and Long-Term Debt”, for further information regarding the Company’s long-term debt.

	September 30,		December 31,
	2024		2023
Inventory deposits	$	6,118	$	5,707
Insurance deposit		–		3,000
Prepaid taxes		877		153
Settlement receivable		–		4,000
Insurance recovery receivable		15,181		15,181
Other		12,021		12,740
Total	$	34,197	$	40,781

Note 6. Inventories

~~Note~~The 7.components ~~Property,~~of ~~Plant,~~inventories ~~and~~are ~~Equipment~~as follows:

Property, plant, and equipment consists of:

	*March 31,*		*December 31,*
	*2025*		*2024*
Raw materials and work in process	$	7,595	$	7,699
Leaf tobacco		46,765		35,622
Finished goods - Zig-Zag products		35,454		38,042
Finished goods - Stoker’s products		12,545		12,966
Other		2,081		1,924
Inventories, net	$	104,440	$	96,253

	September 30,			December 31,
	2024			2023
Land	$	22		$	22
Buildings and improvements		4,217			3,956
Leasehold improvements		7,955			5,440
Machinery and equipment		30,258			29,751
Furniture and fixtures		8,204			8,391
Gross property, plant and equipment		50,656			47,560
Accumulated depreciation		(24,574	)		(22,260	)
Property, plant and equipment, net	$	26,082		$	25,300

The valuation allowance to write inventory down to its net realizable value was $17.8 million as of March 31, 2025 and $17.6 million as of December 31, 2024.

~~Note 8. Other Assets~~ 15

~~Other~~ Table ~~assets consist~~ of: Contents

	September 30,		December 31,
	2024		2023
Non-marketable equity investments	$	1,887	$	2,405
Debt security investments		6,274		6,750
Capitalized software		6,347		5,923
Available-for-sale marketable securities		4,372		–
Other		88		88
Total	$	18,968	$	15,166

In December 2023, a third-party warehouse in Tennessee used to store some of the Company’s leaf tobacco incurred significant tornado damage resulting in damage to the leaf tobacco. The leaf tobacco inventory is covered by the Company’s stock throughput insurance policy and the Company believes the inventory loss is probable of being fully recovered under the policy. As a result, the Company recorded a $15.2 million receivable related to its leaf tobacco inventory which is included in Other current assets on the consolidated balance sheets.

16Note 7. Other Current Assets

Other ~~Table~~current ofassets ~~Contents~~ consist of:

Debt and Non-Marketable Equity Investments

	*March 31,*		*December 31,*
	*2025*		*2024*
Inventory deposits	$	10,883	$	5,981
Prepaid taxes		3,214		3,586
Insurance recovery receivable		15,181		15,181
Other		10,794		9,952
Total	$	40,072	$	34,700

~~The~~Note ~~Company records~~8. ~~its non-marketable equity investments without a readily determinable fair value~~Property, ~~that are not accounted for under the equity method~~Plant, ~~at cost, with adjustments for impairment~~ and observable price changes. Should assumptions underlying the determination of the fair values of the Company’s non-marketable equity and debt security investments change, it could result in material future impairment charges.Equipment

~~In January 2024~~Property, ~~the Company invested $0.8 million to acquire an 18.744% stake in Teaza Energy~~plant, ~~LLC (“TeaZa”). TeaZa is an innovative brand of flavorful oral pouch products that can be dipped or sipped, designed as a health-conscious alternative to high energy drinks~~ and ~~other~~equipment ~~conventional~~consists ~~oral stimulants. The investment was comprised~~ of $0.5 million in cash and a $0.3 million payable to be offset against the Company’s allocated portion of future profit distributions. The Company also has options to purchase, at fair value, up to 51.744% of the equity interest in TeaZa between September 30, 2024 and January 31, 2025, and up to 100% of the equity interest from February 1, 2025, to June 30, 2026. The Company accounts for its investment in TeaZa using the equity method of accounting.:

In July 2021, the Company invested $8.0 million in Old Pal Holding Company, LLC (“Old Pal”). In July 2022, the Company invested an additional $1.0 million in Old Pal. The Company invested in the form of a convertible note which includes additional follow-on investment rights. Interest on the convertible note is payable annually in arrears in July of each year. The accrued interest of $0.2 million, $0.3 million and $0.3 million was rolled into the convertible note in July 2022, 2023 and 2024, respectively, resulting in a total investment of $9.8 million. Old Pal is a leading brand in the cannabis lifestyle space that operates a non-plant touching licensing model. The convertible note bears an interest rate of 3.0% per year and matures July 31, 2027. Interest and principal not paid to date are receivable at maturity. Old Pal has the option to extend the maturity date of the convertible note in one-year increments. The interest rate is subject to change based on Old Pal reaching certain sales thresholds. The weighted average interest rate on the convertible note was 3.0% for the three and nine months ended September 30, 2024 and 2023. Old Pal has the option to convert the note into shares once sales reach a certain threshold. The conditions required to allow Old Pal to convert the note were not met as of September 30, 2024. Additionally, the Company has the right to convert the note into shares at any time. The Company has classified the debt security with Old Pal as available for sale. The Company reports interest income on available for sale debt securities in interest income in our Consolidated Statements of Income. The Company performs a qualitative assessment on a quarterly basis to determine if the fair value of the investment could be less than the amortized cost basis. In addition, the Company utilizes a third-party to perform a quantitative assessment to determine fair value using a Monte Carlo simulation (Level 3) when indicated, and at least bi-annually. In the second quarter of 2023, based on a quantitative assessment of the fair value, the Company determined the fair value to be $7.7 million and recorded an allowance for credit losses of $0.3 million which is included in investment loss for the nine months ended September 30, 2023. In the fourth quarter of 2023, the Company determined the fair value to be $6.9 million and recorded an allowance for credit losses of $1.0 million included in investment loss at December 31, 2023. In the second quarter of 2024, based upon a quantitative fair value assessment, the Company determined the fair value to be $6.3 million and recorded an allowance for credit losses of $0.8 million included in investment loss for the nine months ended September 30, 2024. The Company has recorded an accrued interest receivable of $0.1 million and $0.1 million at September 30, 2024 and December 31, 2023, respectively, in Other current assets on our Consolidated Balance Sheets.

	*March 31,*			*December 31,*
	*2025*			*2024*
Land	$	22		$	22
Buildings and improvements		3,788			4,216
Leasehold improvements		7,983			7,983
Machinery and equipment		32,342			31,207
Furniture and fixtures		4,814			4,723
Gross property, plant and equipment		48,949			48,151
Accumulated depreciation		(21,290	)		(21,814	)
Property, plant and equipment, net	$	27,659		$	26,337

~~In April 2021, the Company invested in Docklight Brands, Inc. In the first half of 2023, based on Docklight’s financial results, a decline in the revenue multiples for comparable~~ public companies, and a significant change in Docklight’s business model, the Company deemed the investment in Docklight was fully impaired resulting in a loss of $8.7 million which was recorded in investment loss for the nine months ended September 30, 2023. Fair value for all periods presented was determined using a valuation derived from 16 ~~relevant revenue multiples (Level 3).~~

~~In October 2020, the Company acquired a 20%~~ ~~stake~~ Table ~~in Wild Hempettes, LLC. In the third quarter~~ of ~~2023, based on Wild Hempettes financial~~Contents results, the Company deemed its investment in Wild Hempettes to be impaired resulting in a $2.2 million impairment charge included in investment loss for the three and nine months ended September 30, 2023. In June 2024, the Company reached an agreement to return its 20% equity stake to Wild Hempettes for no consideration resulting in an impairment charge of $0.3 million recorded in investment loss for the nine months ended September 30, 2024. The investment was returned in the third quarter of 2024. The Company accounted for its 20% share of Wild Hempettes using the equity method of accounting. Fair value for the Company’s share of investment in Wild Hempettes was determined using a valuation derived from relevant revenue multiples (Level 3).

~~In October~~Note ~~2020, the Company invested in BOMANI Cold Buzz, LLC (“Bomani”)~~9. InOther the second quarter of 2024, due to market conditions in the cold brew, alcohol-infused caffeinated beverages industry, the Company has determined that the fair value of Bomani is zero, and thus recorded a $1.8 million impairment which is included in investment loss for the nine months ended September 30, 2024. Assets

17Other assets consist of:

Table of Contents

	*March 31,*		*December 31,*
	*2025*		*2024*
Non-marketable equity investments	$	14,659	$	1,231
Debt security investments		6,276		6,276
Capitalized software		8,331		7,409
Captive investments - available-for-sale marketable securities		5,724		5,487
Other		404		259
Total	$	35,394	$	20,662

~~Available-for-Sale~~Debt and Non-Marketable ~~Securities~~Equity Investments

The InCompany ~~December~~records ~~2023,~~its ~~the~~non-marketable ~~Company~~equity ~~formed~~investments without a ~~captive~~readily ~~insurance~~determinable ~~company,~~fair ~~Interchange~~value, ~~IC,~~that ~~incorporated~~are innot ~~the~~accounted ~~District~~for ofunder ~~Columbia,~~the toequity ~~write~~method, aat ~~portion of its insurance coverage~~cost, ~~including~~ with ~~respect~~adjustments tofor ~~general~~impairment ~~product,~~ and ~~officer~~observable ~~and~~price ~~director liability coverages under deductible reinsurance policies~~changes. Should ~~Interchange,~~assumptions ICunderlying isthe adetermination ~~fully licensed captive insurance company holding a certificate~~ of ~~authority from~~ the ~~District~~fair ofvalues ~~Columbia Department~~ of ~~Insurance,~~the ~~Securities~~Company’s ~~and Banking. Interchange, IC is a wholly~~non-~~owned~~marketable ~~subsidiary~~equity ofand ~~Turning~~debt ~~Point~~security ~~Brands~~investments ~~and~~change, isit ~~consolidated~~could result in ~~the~~material ~~Company’s~~future ~~financial~~impairment ~~statements~~charges.

~~The~~In December ~~investments~~2018, the ~~held~~Company ~~within~~acquired ~~the~~a ~~captive~~minority ~~are~~interest ~~not~~in ~~available~~General Wireless Operations, Inc. ("GWO") from SG Gaming LLC for ~~operating~~$0.4 million. ~~activities~~GWO is a joint venture between the Company and ~~are~~Standard ~~carried~~General, LP. On January 2, 2025, the Company contributed 100% of its interest in SBB, the subsidiary that owned and operated the Company’s former CDS reportable segment, to GWO in exchange for a 49% equity interest. In connection with the transaction, the Company has the right to redeem the contribution of SBB from GWO at fair market value onunder certain circumstances. The Company also received a purchase option with a 15-year term to acquire the ~~consolidated~~remaining 51% ~~balance~~equity ~~sheet~~interest in GWO. ~~They~~The ~~consist~~purchase option includes an initial exercise price of ~~money~~ $22.0 million, ~~market~~which may decrease over time based on certain tax sharing payments to Standard General, ~~stocks~~LP. As a result of this transaction, ~~corporate~~the Company ~~bonds~~determined that it no longer has a controlling financial interest in SBB and, as ~~government~~a ~~securities~~result, deconsolidated SBB on January 2, 2025, and ~~real~~accounts ~~estate~~for ~~investment~~its ~~trusts~~interest in GWO under the equity method of accounting. ~~The~~On January ~~Company~~2, ~~believes~~2025, ~~any~~the ~~investments~~Company ~~held~~contributed ~~with~~net ~~gross~~assets ~~unrealized~~valued ~~losses~~at $13.3 million to beGWO ~~temporary~~as part of the transaction. Fair value of the Company's interest in GWO was determined utilizing the market approach and ~~not~~the income approach in the ~~result~~form of ~~credit~~the ~~risk~~discount cash flow method.

In July 2021, the Company invested $8.0 million in Old Pal Holding Company, LLC (“Old Pal”), with an additional $1.0 million invested in July 2022. The Company’s ~~captive~~invested ~~investments~~in the form of a convertible note which includes additional follow-on investment rights. Interest on the convertible note is payable annually in arrears in July of each year. Accrued interest of $0.2 million, $0.3 million and $0.3 million was rolled into the convertible note in July 2022, 2023 and 2024, respectively, resulting in a total investment of $9.8 million. Old Pal is a leading brand in the cannabis lifestyle space that operates a non-plant touching licensing model. The convertible note bears an interest rate of 3.0% per year and matures July 31, 2027. Interest and principal not paid to date are ~~summarized~~receivable at maturity, and Old Pal has the option to extend the maturity date of the convertible note in one-year increments. The interest rate is subject to change based on Old Pal reaching certain sales thresholds. The weighted average interest rate on the ~~following~~convertible ~~table~~note ~~(excludes~~was 3.0% ~~money~~for ~~market~~the ~~funds~~three months ended March 31, 2025 and 2024. Old Pal has the option to convert the note into shares once sales reach a certain threshold. The conditions required to allow Old Pal to convert the note were not met as of March 31, 2025. Additionally, the Company has the right to convert the note into shares at any time. The Company has classified the debt security with Old Pal as available for sale. The Company reports interest income on available for sale debt securities in interest income in its Consolidated Statements of Income. The Company performs a qualitative assessment on a quarterly basis to determine if the fair value of the Old Pal investment could be less than the amortized cost basis. In addition, the Company utilizes a third-party to perform a quantitative assessment to determine fair value using a Monte Carlo simulation (Level 3): when indicated, and at least bi-annually. Based upon its fair value assessments, the Company determined the fair value of Old Pal to be $6.5 million and $6.4 million as of March 31, 2025 and December 31, 2024, respectively. The Company has recorded an accrued interest receivable of $0.2 million and $0.1 million at March 31, 2025 and December 31, 2024, respectively, in Other current assets on its Consolidated Balance Sheets.

	As of September 30, 2024
				Gross				Estimated
	Amortized			Unrealized				Fair
	Cost			Gains (Losses)				Value
Stocks		$	747		$	(21	)		$	726
Corporate bonds			2,383			27				2,410
U.S. Governmental agency obligations			900			–				900
Real estate investment trusts			334			2				336
		$	4,364		$	8			$	4,372

~~The~~ Table ~~following table summarizes the fair value~~ of ~~the Company’s captive investments by contractual maturity.~~Contents

	As of
	September 30, 2024
Due within one year	$	2,231
Due in one to five years		179
Due after ten years		900
Stocks and real estate investment trusts		1,062
Total investments at fair value	$	4,372

Available-for-Sale Marketable Securities

~~Note~~In December 92023, the Company formed a captive insurance company, Interchange, IC, incorporated in the District of Columbia, to write a portion of its insurance coverage, including with respect to general product, and officer and director liability coverages under deductible reinsurance policies. ~~Accrued~~Interchange, ~~Liabilities~~IC is a fully licensed captive insurance company holding a certificate of authority from the District of Columbia Department of Insurance, Securities and Banking. Interchange, IC is a wholly-owned subsidiary of Turning Point Brands and is consolidated in the Company’s financial statements.

~~Accrued~~The ~~liabilities~~investments held within the captive are not available for operating activities and are carried at fair value on the consolidated balance sheet. They consist of: money market, stocks, corporate bonds, government securities and real estate investment trusts. The Company believes any investments held with gross unrealized losses to be temporary and not the result of credit risk.

	September 30,		December 31,
	2024		2023
Accrued payroll and related items	$	7,493	$	7,085
Customer returns and allowances		6,264		5,239
Taxes payable		2,024		3,821
Lease liabilities		2,830		2,678
Accrued interest		1,943		6,682
Other		9,921		8,130
Total	$	30,475	$	33,635

The Company’s captive investments are summarized in the following table (excludes money market funds):

	As of March 31, 2025							As of December 31, 2024
			Gross			Estimated				Gross			Estimated
	*Amortized*		*Unrealized*			*Fair*		*Amortized*		*Unrealized*			*Fair*
	*Cost*		*Gains (Losses)*			*Value*		*Cost*		*Gains (Losses)*			*Value*
Stocks	$	1,658	$	35		$	1,693	$	1,517	$	9		$	1,526
Exchange traded funds		1,754		(26	)		1,728		1,189		(5	)		1,184
Corporate bonds		1,918		28			1,946		2,383		50			2,433
Real estate investment trusts		351		6			357		343		1			344
Total	$	5,681	$	43		$	5,724	$	5,432	$	55		$	5,487

The ~~Table~~following table summarizes the fair value of ~~Contents~~ the Company’s captive investments by contractual maturity.

Note 10. Notes Payable and Long-Term Debt

	*As of*
	*March 31, 2025*
Due within one year	$	1,765
Due in one to five years		181
Stocks, real estate investment trusts and exchange traded funds		3,778
Total investments at fair value	$	5,724

~~Notes payable and long-term debt consists of the following in order of preference:~~ 18

	September 30,			December 31,
	2024			2023
Senior Secured Notes	$	250,000		$	250,000
Convertible Senior Notes		–			118,541
Gross notes payable and long-term debt		250,000			368,541
Less deferred finance charges		(1,718	)		(3,183	)
Less current maturities		–			(58,294	)
Notes payable and long-term debt	$	248,282		$	307,064

Table of Contents

~~The~~Note ~~components~~10. ofAccrued ~~interest expense, net consists of the following:~~Liabilities

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Interest expense	$	4,594		$	5,221		$	15,199		$	15,911
Interest income		(821	)		(1,237	)		(4,956	)		(3,898	)
Interest expense, net	$	3,773		$	3,984		$	10,243		$	12,013

Accrued liabilities consist of:

Senior Secured Notes

	*March 31,*		*December 31,*
	*2025*		*2024*
Accrued payroll and related items	$	7,283	$	9,564
Customer returns and allowances		7,621		5,160
Taxes payable		850		358
Lease liabilities		3,235		3,121
Accrued interest		2,877		5,473
Other		9,730		7,420
Total	$	31,596	$	31,096

OnNote ~~February~~ 11~~, 2021, the Company closed a private offering (the “Offering”) of $250~~.0 ~~million aggregate principal amount of its 5.625% senior secured notes due 2026 (the “Senior Secured~~ Notes” orPayable ~~the “Notes”). The Senior Secured Notes bear interest at a rate of 5.625%~~ and ~~will mature on February 15, 2026. Interest on the Senior Secured Notes is payable semi~~Long-~~annually~~Term in arrears on February 15 and August 15 of each year, commencing on August 15, 2021. The Company used the proceeds from the Offering (i) to repay all obligations under and terminate the 2018 First Lien Credit Facility, (ii) to pay related fees, costs, and expenses and (iii) for general corporate purposes.Debt

~~Obligations under the Senior Secured~~ Notes ~~are~~payable ~~guaranteed by the Company’s existing~~ and ~~future wholly~~long-~~owned~~term domestic subsidiaries (the “Guarantors”) that guarantee any credit facility (as defined in the indenture governing the Senior Secured Notes or the “Senior Secured Notes Indenture”) or capital markets debt ~~securities~~consists of the ~~Company~~ orfollowing ~~Guarantors~~ in ~~excess~~order of $15.0 million. The Senior Secured Notes and the related guarantees are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.preference:

The Company may redeem the Senior Secured Notes, in whole or in part, at any time at the redemption prices (expressed as a percentage of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, on the Senior Secured Notes to be redeemed to (but not including) the applicable redemption date if redeemed during the period indicated below:

	*March 31,*			*December 31,*
	*2025*			*2024*
2032 Notes	$	300,000		$	-
2026 Notes		-			250,000
Gross notes payable and long-term debt		300,000			250,000
Less deferred finance charges		(6,938	)		(1,396	)
Notes payable and long-term debt	$	293,062		$	248,604

On or after February 15, 2024			101.406	%
On or after February 15, 2025 and thereafter			100.000	%

The components of interest expense, net consists of the following:

If the Company experiences a change of control (as defined in the Senior Secured Notes Indenture), the Company must offer to repurchase the Senior Secured Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest.

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Interest expense	$	5,680		$	5,253
Interest income		(1,266	)		(1,774	)
Interest expense, net	$	4,414		$	3,479

~~The Senior Secured Notes Indenture contains covenants that, among other things, restrict the ability of the Company and its restricted~~ subsidiaries to: (i) grant or incur liens; (ii) incur, assume or guarantee additional indebtedness; (iii) sell or otherwise dispose of assets, including capital stock of subsidiaries; (iv) make certain investments; (v) pay dividends, make 19 distributions or redeem or repurchase capital stock; (vi) engage in certain transactions with affiliates; and (vii) consolidate or merge with or into, or sell substantially all of our assets to another entity. These covenants are subject to a number of limitations and exceptions set forth in the Senior Secured Notes Indenture. For instance, the Company is generally permitted to make restricted payments, including the payment of dividends to shareholders, provided that, at the time of payment, or as a result of payment, the Company is not in default on its debt covenants; however, there are earnings and market capitalization requirements that if not met could limit the aggregate amount of quarterly dividends payable during a fiscal year. The Senior Secured Notes Indenture provides for customary events of default. The Company was in compliance with all covenants as of September 30, 2024.

~~The~~ Table ~~Company incurred debt issuance costs attributable to the issuance~~ of ~~the Senior Secured Notes of $6.4 million which are amortized to interest expense using the straight-line method over the expected life of the Senior Secured Notes.~~Contents

192032 Notes

On February ~~Table~~19, 2025, the Company entered into an indenture relating to the issuance and sale of ~~Contents~~ $300.0 million aggregate principal amount of its 7.625% Senior Secured Notes due 2032 (the “2032 Notes”), by and among the Company, the guarantors party thereto and GLAS Trust Company LLC, as trustee and notes collateral agent. The 2032 Notes incur interest at a rate of 7.625%, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2025. Proceeds from the offering were approximately $293.0 million and were used to redeem the 2026 Notes (as defined below) and for general corporate purposes.

~~2021~~The ~~Revolving~~2032 ~~Credit~~Notes ~~Facility~~are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by each existing and future wholly-owned domestic restricted subsidiary of the Company (collectively, the “Guarantors”). The 2032 Notes and the related guarantees are secured by first-priority liens on substantially all of the existing and future assets of the Company and the Guarantors that do not secure the 2023 ABL, subject to certain exceptions. The 2032 Notes Indenture contains covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to: (i) grant or incur liens; (ii) incur, assume or guarantee additional indebtedness; (iii) sell or otherwise dispose of assets, including capital stock of subsidiaries; (iv) make certain investments; (v) pay dividends, make distributions or redeem or repurchase capital stock; (vi) engage in certain transactions with affiliates; and (vii) consolidate or merge with or into, or sell substantially all of our assets to another entity. These covenants are subject to several limitations and exceptions set forth in the 2032 Notes Indenture. For instance, the Company is generally permitted to make restricted payments, including the payment of dividends to shareholders, provided that, at the time of payment, or as a result of payment, the Company is not in default on its debt covenants; however, there are earnings and market capitalization requirements that if not met could limit the aggregate amount of quarterly dividends payable during a fiscal year. The 2032 Notes Indenture provides for customary events of default.

InThe ~~connection with the Offering, the~~ Company ~~also~~incurred ~~entered~~debt ~~into~~issuance acosts ~~$25.0 million~~attributable ~~senior~~to ~~secured revolving credit facility (~~the ~~“2021~~2032 Notes Revolving Credit Facility”) with the lenders party thereto and Barclays Bank PLC, as administrative agent and collateral agent (in such capacity, the “Agent”). On May 10, 2023, the Company and certain of ~~its subsidiaries, as guarantors, entered into an amendment (the “Amendment”) to the 2021 Revolving Credit Facility (as amended, the “Amended Revolving Credit Facility”)~~$7.1 ~~The~~million ~~Amendment~~which ~~includes~~are ~~certain~~amortized ~~modifications~~ to ~~the~~interest ~~2021~~expense ~~Revolving~~using ~~Credit Facility relating to~~ the ~~replacement of the London Inter~~straight-~~Bank~~line ~~Offered~~method ~~Rate~~over ~~with a Secured Overnight Financing Rate (“SOFR”) as~~ the ~~interest~~expected ~~rate~~life ~~benchmark~~of ~~under~~ the ~~2021 Revolving~~2032 ~~Credit Facility and adjusts certain other provisions to reflect current documentation standards and other agreed modifications~~Notes.

On2026 November 7, 2023, in connection with the entry by a subsidiary of the Company in a new asset-backed revolving credit facility, the Company terminated the Amended Revolving Credit Facility. See “2023 ABL Facility” below.Notes

On February ~~The~~11, 2021, the Company ~~incurred~~closed ~~debt~~a ~~issuance~~private ~~costs~~offering ~~attributable~~of to$250.0 million ~~the~~aggregate ~~issuance~~principal amount of its 5.625% senior secured notes due 2026 (the “2026 Notes”). ~~Amended~~The 2026 Notes ~~Revolving~~incurred ~~Credit~~interest ~~Facility~~at ofa ~~$0.~~rate of 5.625%, ~~million~~payable semi-annually in arrears on February 15 and August 15 of each year, ~~with~~commencing on August 15, 2021. The Company used the ~~remaining~~proceeds ~~$0.2~~from ~~million~~the ~~written~~offering ~~off~~(i) to ~~gain~~repay onall ~~debt extinguishment~~obligations ~~upon~~under ~~termination~~and ofterminate the 2018 First ~~facility.~~Lien Credit Facility, (ii) to pay related fees, costs and expenses and (iii) for general corporate purposes.

~~2023~~Obligations ~~ABL~~under ~~Facility~~the 2026 Notes were guaranteed by the Company’s existing and future wholly-owned domestic subsidiaries that guarantee any credit facility (as defined in the indenture governing the 2026 Notes or the “2026 Notes Indenture”) or capital markets debt securities of the Company or Guarantors in excess of $15.0 million. The 2026 Notes and the related guarantees were secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions. The Company was in compliance with all covenants under the 2026 Notes as of December 31, 2024.

On February ~~November 7~~20, ~~2023,~~2025 ~~TPB Specialty Finance, LLC, a wholly-owned subsidiary of the Company~~ (the “~~ABL~~Redemption ~~Borrower~~Date”), ~~entered~~the ~~into~~Company used a ~~new~~portion ~~$75.0~~of ~~million asset-backed revolving credit facility (~~the ~~“2023~~proceeds ~~ABL Facility”),~~from ~~with~~ the ~~several~~issuance ~~lenders thereunder,~~ and ~~Barclays~~sale ~~Bank~~of ~~Plc, as administrative agent (~~the 2032 Notes ~~“Administrative~~to ~~Agent”)~~redeem ~~and~~all as$250.0 million ~~collateral~~of ~~agent~~its ~~(the~~outstanding 2026 Notes ~~“Collateral~~at ~~Agent”)~~a ~~and~~redemption ~~First-Citizens~~price ~~Bank~~equal &to 100% ~~Trust~~of ~~Company as additional collateral agent (~~the ~~“Additional~~aggregate ~~Collateral~~principal ~~Agent”).~~amount ~~Under~~of the ~~2023 ABL Facility~~ 2026 Notes, ~~the~~plus ~~ABL~~accrued ~~Borrower~~and ~~may~~unpaid ~~draw~~interest upthereon to, ~~$75.0~~but ~~million~~excluding ~~under~~the ~~Revolving Credit~~Redemption ~~Loans and Last In Last Out (“LILO”) Loans~~Date. ~~The~~Upon ~~2023~~redemption ~~ABL~~of ~~Facility includes a $40.0 million accordion feature. In connection with~~ the ~~2023 ABL Facility~~ 2026 Notes, ~~Turning~~the ~~Point~~indenture ~~Brands~~governing ~~contributed certain existing inventory to~~ the 2026 Notes ~~ABL~~was ~~Borrower.~~satisfied ~~The~~and ~~2023~~discharged ~~ABL~~in ~~Facility~~accordance iswith ~~secured~~its ~~on a first priority basis (subject to customary exceptions) by all assets of the ABL Borrower~~terms.

The ~~2023~~Company ~~ABL~~incurred ~~Facility~~debt ~~contains~~issuance ~~customary~~costs ~~borrowing~~attributable ~~conditions including a borrowing base equal~~ to the ~~sum~~issuance of ~~(a)~~ the 2026 Notes ~~lesser~~ of ~~(1) 85% of the lower of (A) the market value (on a first in first out basis) of the sum of eligible inventory~~$6.4 million, ~~plus~~with ~~eligible in-transit inventory of~~ the remaining ABL Borrower and (B) 85% of the cost of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (2) 85% of the net orderly liquidation value (“NOLV”) percentage of the lower of ($1~~)(A) or (1)(B); plus (b) 85% of the face value of all eligible accounts of the ABL Borrower minus (c) the amount of all eligible reserves~~. ~~The~~2 ~~2023~~million ~~ABL~~written ~~Facility~~off ~~also includes a LILO borrowing base equal~~ to ~~the~~loss ~~sum of (a) the lesser of: (1) 10% of the lower of (A) the market value (~~on adebt ~~first~~extinguishment inupon first out basis) of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (B) the cost of the sum of eligible inventory, plus eligible in-transit inventory and (2) 10% of the NOLV percentage of the lower of (1)(A) or (1)(B); plus (b) 10% of the face amount of eligible account; minus (c) the amount of all eligible reservestermination.

~~Amounts borrowed under the~~ 2023 ABL Facility are subject to an interest rate margin per annum equal to (a) from and after the closing date until the last day of the first full fiscal quarter ended after the closing date, (i) 1.25% per annum, in the case base rate loans, and (ii) 2.25% per annum, in the case of revolving credit loans that are SOFR Loans, (b)(i) 2.25% per annum, in the case of LILO loans that are base rate loans, and (ii) 3.25% per annum, in the case of LILO loans that are SOFR loans, (c) on the first day of each fiscal quarter, the applicable interest rate margins will be determined from the pricing grid below based upon the historical excess availability for the most recent fiscal quarter ended immediately prior to the relevant date, as calculated by the Administrative Agent.

Level	Historical Excess Availability	Applicable Margin for SOFR Loans	Applicable Margin for Base Rate Loans
I	Greater than or equal to 66.66%	1.75%	0.75%
II	Less than 66.66%, but greater than or equal to 33.33%	2.00%	1.00%
III	Less than 33.33%	2.25%	1.25%

On November 7, 2023, TPB Specialty Finance, LLC, a wholly-owned subsidiary of the Company (the “ABL Borrower”), entered into a new $75.0 million asset-backed revolving credit facility (the “2023 ABL Facility”), with the several lenders thereunder, and Barclays Bank Plc, as administrative agent (the “Administrative Agent”) and as collateral agent and First-Citizens Bank & Trust Company as additional collateral agent (the “Additional Collateral Agent”). Under the 2023 ABL Facility, the ABL Borrower may draw up to $75.0 million under Revolving Credit Loans and Last In Last Out (“LILO”) loans. The 2023 ABL Facility includes a $40.0 million accordion feature. In connection with the 2023 ABL Facility, Turning Point Brands contributed certain existing inventory to the ABL Borrower. The 2023 ABL Facility is secured on a first priority basis (subject to customary exceptions) by all assets of the ABL Borrower.

20The 2023 ABL Facility contains customary borrowing conditions including a borrowing base equal to the sum of (a) the lesser of (1) 85% of the lower of (A) the market value (on a first in first out basis) of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (B) 85% of the cost of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (2) 85% of the net orderly liquidation value (“NOLV”) percentage of the lower of (1)(A) or (1)(B); plus (b) 85% of the face value of all eligible accounts of the ABL Borrower minus (c) the amount of all eligible reserves. The 2023 ABL Facility also includes a LILO borrowing base equal to the sum of (a) the lesser of: (1) 10% of the lower of (A) the market value (on a first in first out basis) of the sum of eligible inventory, plus eligible in-transit inventory of the ABL Borrower and (B) the cost of the sum of eligible inventory, plus eligible in-transit inventory and (2) 10% of the NOLV percentage of the lower of (1)(A) or (1)(B); plus (b) 10% of the face amount of eligible account; minus (c) the amount of all eligible reserves.

Amounts ~~Table~~borrowed under the 2023 ABL Facility are subject to an interest rate margin per annum equal to (a) from and after the closing date until the last day of ~~Contents~~ the first full fiscal quarter ended after the closing date, (i) 1.25% per annum, in the case base rate loans, and (ii) 2.25% per annum, in the case of revolving credit loans that are secured overnight financing rate (“SOFR”) loans, (b)(i) 2.25% per annum, in the case of LILO loans that are base rate loans, and (ii) 3.25% per annum, in the case of LILO loans that are SOFR loans, (c) on the first day of each fiscal quarter, the applicable interest rate margins will be determined from the pricing grid below based upon the historical excess availability for the most recent fiscal quarter ended immediately prior to the relevant date, as calculated by the Administrative Agent.

The 2023 ABL Facility also requires the Company and its restricted subsidiaries to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the end of any four consecutive fiscal quarters if excess availability shall be less than the greater of (a) 12.5% of the line cap and (b) $9.4 million, at any time and continuing until excess availability is equal to or exceeds the greater of (i) 12.5% of the line and (ii) $9.4 million for thirty (30) consecutive calendar days; provided that such $9.4 million level shall automatically increase in proportion to the amount of any increase in the aggregate revolving credit commitments thereunder in connection with any incremental facility.

		Applicable Margin	Applicable Margin
Level	Historical Excess Availability	for SOFR Loans	for Base Rate Loans
I	Greater than or equal to 66.66%	1.75%	0.75%
II	Less than 66.66%, but greater than or equal to 33.33%	2.00%	1.00%
III	Less than 33.33%	2.25%	1.25%

The 2023 ABL Facility shall mature on the earlier of (x) November 7, 2027 and (y) the date that is 91 days prior to the maturity date of any material debt of the ABL Borrower or the Company or any of its restricted subsidiaries (subject to customary extensions agreed by the lenders thereunder); provided that clause (y) shall not apply to the extent that on any applicable date of determination (on any date prior to the date set forth in clause (y)), (A) the sum of (x) cash that is held in escrow for the 20 repayment of such material debt pursuant to arrangements satisfactory to the Administrative Agent, (y) cash that is held in accounts with the Administrative Agent and/or the Additional Collateral Agent, plus (z) excess availability, is sufficient to repay such material debt and (B) the ABL Borrower has excess availability of at least $15.0 million after giving effect to such repayment of material debt, including any borrowings under the commitments in connection therewith.

~~The Company has not drawn any borrowings under the 2023 ABL~~ ~~Facility~~ Table ~~but has letters~~ of ~~credit of approximately $2.3 million outstanding under the facility and has an available balance of $58.8 million based on the borrowing base as of September 30, 2024.~~Contents

The 2023 ABL Facility also requires the Company ~~incurred~~and ~~debt~~its ~~issuance~~restricted ~~costs~~subsidiaries ~~attributable~~to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the ~~2023~~end ~~ABL~~of ~~Facility~~any four consecutive fiscal quarters if excess availability shall be less than the greater of (a) 12.5% of the line cap and (b) $29.64 million, ~~which~~at ~~are~~any ~~amortized~~time and continuing until excess availability is equal to ~~interest expense~~or ~~using~~exceeds the ~~straight-line~~greater ~~method~~of ~~over~~(i) 12.5% of the ~~expected~~line ~~life~~and (ii) $9.4 million for thirty (30) consecutive calendar days; provided that such $9.4 million level shall automatically increase in proportion to the amount of any increase in the ~~2023~~aggregate ~~ABL~~revolving ~~Facility~~credit commitments thereunder in connection with any incremental facility.

~~Convertible~~The ~~Senior~~2023 ~~Notes~~ ABL Facility shall mature on the earlier of (x) November 7, 2027 and (y) the date that is 91 days prior to the maturity date of any material debt of the ABL Borrower or the Company or any of its restricted subsidiaries (subject to customary extensions agreed by the lenders thereunder); provided that clause (y) shall not apply to the extent that on any applicable date of determination (on any date prior to the date set forth in clause (y)), (A) the sum of (x) cash that is held in escrow for the repayment of such material debt pursuant to arrangements satisfactory to the Administrative Agent, (y) cash that is held in accounts with the Administrative Agent and/or the Additional Collateral Agent, plus (z) excess availability, is sufficient to repay such material debt and (B) the ABL Borrower has excess availability of at least $15.0 million after giving effect to such repayment of material debt, including any borrowings under the commitments in connection therewith.

InThe ~~July~~Company ~~2019,~~has ~~the~~not ~~Company~~drawn ~~closed~~any anborrowings ~~offering~~under ofthe ~~$172.5 million~~2023 inABL ~~aggregate~~Facility ~~principal~~but ~~amount~~has letters of ~~its~~credit of approximately $2.~~50%~~3 ~~Convertible~~million ~~Senior~~outstanding ~~Notes~~under ~~due July 15, 2024 (~~the ~~“Convertible~~facility ~~Senior~~and ~~Notes”).~~has ~~The~~an ~~Convertible~~available ~~Senior~~balance ~~Notes~~of ~~were~~$62.2 million ~~senior~~based ~~unsecured~~on ~~obligations of~~ the ~~Company~~borrowing ~~and~~base ~~were~~as ~~retired~~of March ~~with cash on July 15~~31, ~~2024~~2025.

InThe ~~the first~~Company ~~half~~incurred ~~and~~debt ~~third~~issuance ~~quarter~~costs ofattributable ~~2023,~~to athe ~~wholly~~2023 ~~owned~~ABL ~~subsidiary~~Facility of ~~the Company repurchased~~ $292.06 million ~~and~~which ~~$15.0~~are ~~million,~~amortized ~~respectively,~~to ininterest ~~aggregate~~expense ~~principal~~using ~~amount of~~ the ~~Convertible~~straight-line ~~Senior~~method ~~Notes~~over on the ~~open~~expected ~~market~~life ~~resulting in gains on extinguishment~~ of ~~debt~~ ~~of $1.3 million and $0.6 million, respectively. Including amounts repurchased in 2022, a total of $54.0 million in aggregate principal amount of~~ the ~~Convertible~~ ~~Senior Notes had been repurchased as of September 30,~~ 2023. ~~The~~ABL ~~repurchased notes were retired on July 1, 2024, with no principal amounts remaining outstanding or held by third parties as of September 30, 2024~~Facility. ~~As of December 31, 2023, $118.5 million aggregate principal was recorded in current liabilities on the Company’s Consolidated Balance Sheet.~~

~~Note~~Convertible ~~11.~~Senior ~~Leases~~Notes

~~The~~In July ~~Company’s leases consist primarily of leased property for manufacturing~~2019, ~~warehouse, corporate offices and retail space as well as vehicle leases. At lease inception,~~ the Company ~~recognizes~~closed aan ~~lease~~offering ~~right~~ of ~~use~~$172.5 million ~~asset~~in ~~and~~aggregate ~~lease~~principal ~~liability~~amount ~~calculated as the present value~~ of ~~future minimum lease payments~~its 2.50% ~~Some~~convertible ~~leases~~senior ~~may~~notes ~~require~~due July ~~payment of other components such as taxes~~15, ~~insurance,~~2024 (the ~~maintenance~~“Convertible ~~and~~Senior ~~operating expenses~~Notes”). ~~When~~The ~~payments~~Convertible ~~related~~Senior toNotes ~~these~~were ~~other~~senior ~~components~~unsecured ~~are~~obligations ~~considered fixed, they are included in the determination~~ of the ~~lease liability due to the~~ Company’s ~~election to combine lease~~ and ~~non-lease components~~the ~~and~~remaining ~~account~~outstanding ~~for~~balance ~~them~~of ~~as a single lease component~~$118.5 million ~~Otherwise,~~was ~~they~~retired ~~are~~with ~~recognized~~cash ason July ~~variable payments~~15, ~~along~~2024 with no principal ~~variable~~amounts ~~payments~~remaining ~~not~~outstanding ~~based on a rate~~ or ~~index,~~held ~~in the period in which the obligation for those payments is incurred~~by third parties.

InNote ~~general, the Company does not recognize any renewal periods within the lease terms as there are no significant barriers to ending the lease at the initial term. Leases with an initial term of~~ 12 ~~months or less are not recorded on the balance sheet~~. ~~Lease~~Income ~~expense for these leases is recognized on a straight-line basis over the lease term.~~Taxes

21The Company’s effective income tax rate for the three months ended March 31, 2025 and 2024 was 11.4% and 23.4%, respectively. The effective tax rate for the three months ended March 31, 2025 includes permanent tax differences related to the Company's restricted stock units that were issued during the three months ended March 31, 2025.

The ~~Table~~Company follows the provisions of ~~Contents~~ ASC 740-10-25, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company has determined that the Company did not have any uncertain tax positions requiring recognition under the provisions of ASC 740-10-25. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of interest expense. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In general, the Company is no longer subject to U.S. federal and state tax examinations for years prior to 2021.

~~The components of lease expense consisted of the following:~~ 21

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost
Cost of sales	$	123	$	125	$	376	$	382
Selling, general and administrative		473		496		1,413		1,520
Variable lease cost		287		301		871		933
Short-term lease cost		–		7		–		20
Total	$	883	$	929	$	2,660	$	2,855

Table of Contents

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Financing lease cost
Selling, general and administrative	$	261	$	397	$	585	$	1,083
Interest expense, net		81		–		116		–
Variable lease cost		22		–		58		–
Total	$	364	$	397	$	759	$	1,083

Note 13. Share Incentive Plans

	September 30,		December 31,
	2024		2023
Assets:
Right of use assets - Operating	$	7,665	$	8,950
Right of use assets - Financing		3,123		2,530
Total lease assets	$	10,788	$	11,480
Liabilities:
Current lease liabilities - Operating (1)	$	1,797	$	1,991
Current lease liabilities - Financing (1)		1,033		687
Long-term lease liabilities - Operating		6,954		8,374
Long-term lease liabilities - Financing		2,103		1,576
Total lease liabilities	$	11,887	$	12,628

On March 22, 2021, the Company’s Board of Directors adopted the Turning Point Brands, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which awards may be granted to employees, non-employee directors, and consultants. In addition, the 2021 Plan provides for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Pursuant to the 2021 Plan, 1,290,000 shares, plus 100,052 shares remaining available for issuance under the 2015 Equity Incentive Plan (the “2015 Plan”), of TPB Common Stock are reserved for issuance as awards to employees, non-employee directors, and consultants as compensation for past or future services or the attainment of certain performance goals. The 2021 Plan is scheduled to terminate on March 21, 2031. The 2021 Plan is administered by the compensation committee (the “Committee”) of the Company’s Board of Directors. The Committee determines the vesting criteria for the awards, with such criteria to be specified in the award agreement. As of March 31, 2025, net of forfeitures, there were 433,481 Restricted Stock Units (“RSUs”), 122,570 options and 107,978 Performance Based Restricted Stock Units (“PRSUs”) granted under the 2021 Plan. There are 726,023 shares available for future grant under the 2021 Plan.

~~(1)~~On April ~~Reported~~28, ~~within~~2016, the ~~accrued~~Board ~~liabilities~~of onDirectors of the ~~balance~~Company ~~sheets~~adopted the 2015 Plan, pursuant to which awards could have been granted to employees, non-employee directors, and consultants. In addition, the 2015 Plan provided for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Upon adoption of the 2021 Plan, the 2015 Plan was terminated, and the Company determined no additional grants would be made under the 2015 Plan. However, all awards issued under the 2015 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2015 Plan.

	Nine Months Ended September 30,
	2024		2023
Right of use assets obtained in exchange for lease obligations
Operating leases	$	–	$	143
Finance leases	$	1,413	$	1,970

Stock option activity for the 2015 and 2021 Plans is summarized below:

				*Weighted*		*Weighted*
	*Stock*			*Average*		*Average*
	*Option*			*Exercise*		*Grant Date*
	*Shares*			*Price*		*Fair Value*
Outstanding, December 31, 2023		656,951		$	29.79	$	9.18

Granted		54,289			27.19		9.21
Exercised		(132,572	)		21.36		6.97
Forfeited		(42,878	)		38.11		11.94
Outstanding, December 31, 2024		535,790		$	30.69	$	9.51

Exercised		(25,104	)		38.77		12.27
Forfeited		(2,643	)		36.11		10.88
Outstanding, March 31, 2025		508,043		$	30.26	$	9.36

~~Table of Contents~~ 22

~~Note~~ Table ~~12.~~of ~~Income Taxes~~Contents

~~The~~Under ~~Company’s effective income tax rate for~~ the ~~three~~2015 and ~~nine~~2021 ~~months ended September 30~~Plans, ~~2024~~the ~~was~~total ~~27.1%~~intrinsic ~~and~~value ~~25.4%, respectively.~~of ~~The~~options ~~Company’s~~exercised ~~effective~~during ~~income tax rate for~~ the three ~~and nine~~ months ended March ~~September 30~~31, ~~2023~~2025 and 2024, was 25$0.7%6 million, and 25$0.5%0 million, respectively.

~~The~~At March ~~Company~~31, ~~follows~~2025, under the ~~provisions~~2015 ofand ~~ASC~~2021 ~~740-10-25~~Plans, ~~which~~the ~~prescribes~~risk-free ainterest ~~recognition~~rate ~~threshold~~is ~~and~~based ~~measurement~~on ~~attribute~~the U.S. Treasury rate for the ~~financial~~expected ~~statement recognition~~life ~~and~~at ~~measurement~~the time of agrant. ~~tax~~The ~~position~~expected ~~taken~~volatility oris ~~expected~~based toon bethe ~~taken~~average inlong-term ahistorical ~~tax~~volatilities ~~return.~~of ~~For~~peer ~~those~~companies. ~~benefits~~We intend to becontinue ~~recognized,~~to aconsistently ~~tax~~use ~~position~~the ~~must~~same begroup ~~more-likely-than-not~~of topublicly betraded ~~sustained~~peer ~~upon~~companies ~~examination~~to bydetermine ~~taxing~~expected ~~authorities.~~volatility ~~The~~until ~~amount recognized~~sufficient isinformation ~~measured~~regarding asvolatility ~~the~~of ~~largest~~our ~~amount~~share ofprice ~~benefit~~becomes ~~that~~available isor ~~greater~~until ~~than~~the 50selected ~~percent~~companies ~~likely~~are ofno ~~being~~longer ~~realized~~suitable ~~upon~~for ~~ultimate~~this ~~settlement~~purpose. ~~The~~Due ~~Company~~to ~~has~~our ~~determined~~limited ~~that~~trading ~~the~~history, ~~Company~~we ~~did~~are ~~not~~using ~~have~~the ~~any~~simplified ~~uncertain~~method ~~tax~~presented ~~positions~~by ~~requiring~~SEC ~~recognition under~~Staff ~~the~~Accounting ~~provisions~~Bulletin ~~of ASC 740-10-25~~No. ~~The~~107 ~~Company’s~~to ~~policy~~calculate isexpected toholding ~~recognize~~periods, ~~interest~~which ~~and~~represent ~~penalties~~the ~~accrued~~periods onof ~~uncertain~~time ~~tax~~for ~~positions,~~which ifoptions ~~any,~~granted asare ~~part~~expected ofto ~~interest~~be ~~expense~~outstanding. ~~The~~We ~~Company~~will ~~files~~continue ~~income~~to ~~tax~~use ~~returns~~this inmethod ~~the~~until ~~U.S.~~we ~~federal~~have ~~jurisdiction~~sufficient ~~and various~~historical ~~state~~exercise ~~jurisdictions.~~experience Into ~~general,~~give ~~the~~us ~~Company~~confidence isin nothe ~~longer~~reliability ~~subject~~of toour Ucalculations.S. ~~federal~~The ~~and~~fair ~~state~~values ~~tax~~of ~~examinations~~these ~~for~~options ~~years~~were ~~prior~~determined tousing ~~2021~~the Black-Scholes option pricing model.

~~Note~~The ~~13.~~following ~~Share~~table ~~Incentive~~outlines ~~Plans~~the assumptions based on the number of options granted under the 2015 Plan.

On March 22, 2021, the Company’s Board of Directors adopted the Turning Point Brands, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which awards may be granted to employees, non-employee directors, and consultants. In addition, the 2021 Plan provides for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Pursuant to the 2021 Plan, 1,290,000 shares, plus 100,052 shares remaining available for issuance under the 2015 Equity Incentive Plan (the “2015 Plan”), of TPB Common Stock are reserved for issuance as awards to employees, non-employee directors, and consultants as compensation for past or future services or the attainment of certain performance goals. The 2021 Plan is scheduled to terminate on March 21, 2031. The 2021 Plan is administered by the compensation committee (the “Committee”) of the Company’s Board of Directors. The Committee determines the vesting criteria for the awards, with such criteria to be specified in the award agreement. As of September 30, 2024, net of forfeitures, there were 384,037 Restricted Stock Units (“RSUs”), 132,703 options and 75,244 Performance Based Restricted Stock Units (“PRSUs”) granted under the 2021 Plan. There are 798,068 shares available for future grant under the 2021 Plan.

	*February 10,*			*May 17,*			*March 7,*			*March 20,*			*March 18,*			*February 18,*
	*2017*			*2017*			*2018*			*2019*			*2020*			*2021*
Number of options granted		40,000			93,819			98,100			155,780			155,000			100,000
Options outstanding at March 31, 2025		20,000			30,969			47,767			87,607			58,214			64,900
Number exercisable at March 31, 2025		20,000			30,969			47,767			87,607			58,214			64,900
Exercise price	$	13.00		$	15.41		$	21.21		$	47.58		$	14.85		$	51.75
Remaining lives		1.87			2.13			2.94			3.97			4.97			5.89
Risk free interest rate		1.89	%		1.76	%		2.65	%		2.34	%		0.79	%		0.56	%
Expected volatility		27.44	%		26.92	%		28.76	%		30.95	%		35.72	%		28.69	%
Expected life		6.000			6.000			6.000			6.000			6.000			6.000
Dividend yield		-			-			0.83	%		0.42	%		1.49	%		0.55	%
Fair value at grant date	$	3.98		$	4.60		$	6.37		$	15.63		$	4.41		$	13.77

OnThe ~~April~~following ~~28,~~table ~~2016,~~outlines the ~~Board~~assumptions ofbased ~~Directors~~on of the ~~Company~~number ~~adopted the 2015 Plan, pursuant to which awards could have been granted to employees, non-employee directors, and consultants. In addition, the 2015 Plan provided for the granting~~ of ~~nonqualified stock~~ options togranted ~~employees~~under of the ~~Company or any subsidiary of the Company. Upon adoption of the~~ 2021 Plan~~, the 2015 Plan was terminated, and the Company determined no additional grants would be made under the 2015 Plan~~. However, all awards issued under the 2015 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2015 Plan.

On February 8, 2006, the Board of Directors of the Company adopted the 2006 Equity Incentive Plan (the “2006 Plan”) of North Atlantic Holding Company, Inc., pursuant to which nonqualified stock options and restricted stock awards may be granted to employees. Upon the adoption of the Company’s 2015 Equity Incentive Plan in connection with its IPO, the Company determined no additional grants would be made under the 2006 Plan. However, all awards issued under the 2006 Plan that had not been previously terminated or forfeited remained outstanding and continued unaffected. There are no shares available for grant under the 2006 Plan and all outstanding options have been exercised as of September 30, 2024.

	*May 17,*			*March 14,*			*April 29,*			*May 12,*			*March 11,*
	*2021*			*2022*			*2022*			*2023*			*2024*
Number of options granted		7,500			100,000			14,827			77,519			54,289
Options outstanding at March 31, 2025		7,500			53,005			6,273			77,519			54,289
Number exercisable at March 31, 2025		7,500			53,005			6,273			77,519			54,289
Exercise price	$	45.05		$	30.46		$	31.39		$	20.71		$	27.19
Remaining lives		6.13			6.96			7.08			8.12			8.95
Risk free interest rate		0.84	%		2.10	%		2.92	%		3.41	%		4.06	%
Expected volatility		31.50	%		35.33	%		35.33	%		34.51	%		35.09	%
Expected life		6.000			6.000			6.000			5.186			5.186
Dividend yield		0.63	%		1.01	%		0.98	%		1.61	%		1.26	%
Fair value at grant date	$	13.23		$	10.23		$	11.07		$	6.45		$	9.21

~~Stock~~The ~~option~~Company ~~activity~~has recorded compensation expense related to the options based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the options on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the options of approximately $0.0 million and $0.3 million for the ~~2006~~three months ended March 31, ~~2015~~2025 and ~~2021~~2024, ~~Plans~~respectively. At March 31, 2025, there is ~~summarized~~no ~~below:~~remaining compensation expense related to options.

				Weighted		Weighted
	Stock			Average		Average
	Option			Exercise		Grant Date
	Shares			Price		Fair Value
Outstanding, December 31, 2022		683,214		$	29.74	$	9.24
Granted		77,519			20.71		6.45
Exercised		(33,851	)		13.30		4.24
Forfeited		(69,931	)		27.51		9.11
Outstanding, December 31, 2023		656,951		$	29.79	$	9.18
Granted		54,289			27.19		9.21
Exercised		(99,551	)		13.48		4.64
Forfeited		(35,388	)		37.77		11.94
Outstanding, September 30, 2024		576,301		$	31.63	$	9.80

23 Table of Contents

PRSUs ~~Table~~are restricted stock units subject to both performance-based and service-based vesting conditions. The number of ~~Contents~~ shares of TPB Common Stock a recipient will receive upon vesting of a PRSU will be calculated by reference to certain performance metrics related to the Company’s performance over a five-year period. PRSUs will vest on the measurement date, which is no more than 65 days after the performance period provided the applicable service and performance conditions are satisfied. As of March 31, 2025, there are 286,655 PRSUs outstanding. The following table outlines the PRSUs granted and outstanding as of March 31, 2025.

Under the 2006, 2015 and 2021 Plans, the total intrinsic value of options exercised during the nine months ended September 30, 2024 and 2023, was $2.0 million, and $0.2 million, respectively.

	*February 18,*		*March 14,*		*May 4,*		*March 1,*		*April 1,*		*March 3,*
	*2021*		*2022*		*2023*		*2024*		*2024*		*2025*
Number of PRSUs granted		100,000		49,996		133,578		111,321		8,242		41,137
PRSUs outstanding at March 31, 2025		69,190		21,745		69,972		78,017		6,594		41,137
Fair value as of grant date	$	51.75	$	30.46	$	22.25	$	26.52	$	29.12	$	70.34
Remaining lives		0.75		1.75		0.75		1.75		1.75		2.75

AtThe ~~September~~Company ~~30,~~recorded ~~2024,~~compensation ~~under~~expense ~~the~~related ~~2015~~to ~~and 2021 Plans,~~ the ~~risk-free~~PRSUs ~~interest~~of ~~rate~~approximately ~~is based~~$0.7 million onand ~~the U~~$0.S.9 million ~~Treasury~~in ~~rate for~~ the ~~expected~~consolidated ~~life~~statements ~~at the time~~ of ~~grant.~~income ~~The~~for ~~expected volatility is based on~~ the ~~average~~three ~~long-term~~months ~~historical~~ended March ~~volatilities~~31, of2025 ~~peer~~and ~~companies.~~2024, Werespectively, ~~intend~~based toon ~~continue to consistently use~~ the ~~same~~probability ~~group~~ of ~~publicly traded~~achieving ~~peer companies to determine expected volatility until sufficient information regarding volatility of our share price becomes available or until~~ the ~~selected~~performance ~~companies~~condition. ~~are~~Total nounrecognized ~~longer~~compensation ~~suitable~~expense ~~for~~related ~~this purpose. Due~~ to ~~our~~these ~~limited~~awards ~~trading~~at March ~~history~~31, we ~~are~~2025, ~~using~~is ~~the simplified method presented by SEC Staff Accounting Bulletin No~~$4.3 million ~~107 to calculate expected holding periods,~~ which ~~represent~~will ~~the periods of time for which options granted are expected to~~ be ~~outstanding.~~expensed Weover ~~will~~the ~~continue~~service toperiods ~~use~~based ~~this method~~on ~~until we have sufficient historical exercise experience to give us confidence in~~ the ~~reliability~~probability of ~~our~~achieving ~~calculations. The fair values of these options were determined using~~ the ~~Black-Scholes~~performance ~~option pricing model~~condition.

The ~~following~~Company ~~table~~has ~~outlines~~granted ~~the~~186,669 RSUs ~~assumptions~~which ~~based~~are onoutstanding ~~the~~and ~~number~~vest ofover ~~options~~one ~~granted~~to ~~under~~five years. The following table outlines the ~~2015~~RSUs ~~Plan~~granted and outstanding as of March 31, 2025.

	February 10,			May 17,			March 7,			March 20,			March 18,			February 18,
	March 14,			April 29,			May 5,			March 1,			April 1,			May 8,			March 3,		March 5,
	2017			2017			2018			2019			2020			2021
	2022			2022			2023			2024			2024			2024			2025		2025
Number of options granted		40,000			93,819			98,100			155,780			155,000			100,000
Number of RSUs granted		50,004			4,522			130,873			105,257			5,495			16,905			36,843		14,921
Options outstanding at September 30, 2024		20,000			32,136			49,267			122,544			64,723			79,550
RSUs outstanding at March 31, 2025		21,113			1,263			34,564			57,433			3,627			16,905			36,843		14,921
Number exercisable at September 30, 2024		20,000			32,136			49,267			122,544			64,723			79,550
Fair value as of grant date	$	30.46		$	31.39		$	22.25		$	26.52		$	29.12		$	33.13		$	70.34	$	67.02
Exercise price	$	13.00		$	15.41		$	21.21		$	47.58		$	14.85		$	51.75
Remaining lives		1.75			1.75			1.00			2.00			2.00			0.25			3.00		1.00
Remaining lives		2.36			2.63			3.44			4.47			5.47			6.39
Risk free interest rate		1.89	%		1.76	%		2.65	%		2.34	%		0.79	%		0.56	%
Expected volatility		27.44	%		26.92	%		28.76	%		30.95	%		35.72	%		28.69	%
Expected life		6.000			6.000			6.000			6.000			6.000			6.000
Dividend yield		–			–			0.83	%		0.42	%		1.49	%		0.55	%
Fair value at grant date	$	3.98		$	4.60		$	6.37		$	15.63		$	4.41		$	13.77

The ~~following~~Company ~~table~~has ~~outlines~~recorded compensation expense related to the ~~assumptions~~RSUs based on the ~~number~~provisions of ~~options~~ASC ~~granted~~718 under which the ~~2021~~fixed ~~Plan~~portion of such expense is determined as the fair value of the RSUs on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the RSUs of approximately $1.0 million and $0.9 million for the three months ended March 31, 2025 and 2024. Total unrecognized compensation expense related to RSUs at March 31, 2025, is $4.7 million, which will be expensed over 2.22 years.

	May 17,			March 14,			April 29,			May 12,			March 11,
	2021			2022			2022			2023			2024
Number of options granted		7,500			100,000			14,827			77,519			54,289
Options outstanding at September 30, 2024		7,500			62,500			6,273			77,519			54,289
Number exercisable at September 30, 2024		7,500			41,782			4,203			77,519			40,717
Exercise price	$	45.05		$	30.46		$	31.39		$	20.71		$	27.19
Remaining lives		6.63			7.46			7.58			8.62			9.45
Risk free interest rate		0.84	%		2.10	%		2.92	%		3.41	%		4.06	%
Expected volatility		31.50	%		35.33	%		35.33	%		34.51	%		35.09	%
Expected life		6.000			6.000			6.000			5.186			5.186
Dividend yield		0.63	%		1.01	%		0.98	%		1.61	%		1.26	%
Fair value at grant date	$	13.23		$	10.23		$	11.07		$	6.45		$	9.21

Note 14. Contingencies

~~The~~Other ~~Company~~major ~~has~~tobacco ~~recorded~~companies ~~compensation~~are ~~expense~~defendants ~~related~~in toproduct ~~the~~liability ~~options~~claims. ~~based~~In ona ~~the provisions~~number of ~~ASC~~these ~~718~~cases, ~~under which~~ the ~~fixed~~amounts ~~portion~~ of ~~such~~punitive ~~expense~~and iscompensatory ~~determined~~damages assought ~~the~~are ~~fair~~significant ~~value~~and, ofif ~~the~~such ~~options~~a onclaim ~~the~~were ~~date~~brought ofagainst ~~grant and amortized over~~ the ~~vesting~~Company, ~~period.~~could ~~The~~have ~~Company~~a ~~recorded~~material ~~compensation~~adverse ~~expense~~effect ~~related~~on toour ~~the~~business ~~options~~and results of ~~approximately~~ $0operations.1 ~~million~~In ~~and~~addition ~~$0.2 million~~to ~~for~~potential ~~the~~future ~~three~~claims ~~months~~related ~~ended~~to ~~September~~our ~~30,~~core ~~2024~~tobacco ~~and 2023~~products, ~~respectively.~~we ~~For~~are ~~the~~subject ~~nine~~to ~~months~~certain lawsuits ~~ended~~alleging ~~September~~personal ~~30,~~injuries ~~2024~~resulting ~~and~~from ~~2023,~~malfunctioning ~~compensation~~vaporizer ~~expense~~devices ~~related~~sold toby ~~the~~our ~~options~~former ~~was~~Creative ~~approximately~~Distribution ~~$0.5 million~~Solutions ~~and $0~~business.6 The ~~million,~~potential ~~respectively.~~losses ~~Total~~associated ~~unrecognized~~with ~~compensation~~any ~~expense~~such ~~related~~lawsuits toare ~~options~~not atcurrently ~~September~~reasonably ~~30,~~estimable ~~2024~~and istherefore ~~$0.1~~are ~~million,~~not ~~which will be expensed over 0~~accrued.~~25 years.~~

Table of Contents

~~PRSUs~~Note ~~are restricted stock units subject to both performance-based and service-based vesting conditions~~15. ~~The~~Income ~~number~~Per of shares of TPB Common Stock a recipient will receive upon vesting of a PRSU will be calculated by reference to certain performance metrics related to the Company’s performance over a five-year period. PRSUs will vest on the measurement date, which is no more than 65 days after the performance period provided the applicable service and performance conditions are satisfied. As of September 30, 2024, there are 380,645 PRSUs outstanding. The following table outlines the PRSUs granted and outstanding as of September 30, 2024.Share

	March 18,		February 18,		March 14,		May 4,		March 1,		April 1,
	2020		2021		2022		2023		2024		2024
Number of PRSUs granted		94,000		100,000		49,996		133,578		111,321		8,242
PRSUs outstanding at September 30, 2024		71,710		71,790		35,574		94,670		98,659		8,242
Fair value as of grant date	$	14.85	$	51.75	$	30.46	$	22.25	$	26.52	$	29.12
Remaining lives		0.25		1.25		2.25		1.25		2.25		2.25

The Company calculates earnings per share using the treasury stock method for its options and non-vested restricted stock units, and the if-converted method for its Convertible Senior Notes.

The ~~Company~~following ~~recorded~~is ~~compensation~~a ~~expense~~reconciliation ~~related to the PRSUs~~ of ~~approximately $0.8 million and $0.8 million in~~ the ~~consolidated~~ ~~statements~~numerators ~~of income for the three months ended September 30, 2024~~ and ~~2023,~~denominators ~~respectively, based on the probability~~ of ~~achieving~~ the ~~performance~~basic ~~condition. The Company recorded compensation expense related to the PRSUs of approximately $2.5 million~~ and ~~$1.9 million~~diluted inEPS ~~the~~computations ~~consolidated statements~~ of ~~income~~net for the nine months ended September 30, 2024 and 2023, respectively, based on the probability of achieving the performance condition. Total unrecognized compensation expense related to these awards at September 30, 2024, is $3.5 million which will be expensed over the service periods based on the probability of achieving the performance condition. income:

The Company has granted 234,420 RSUs which are outstanding and vest over one to five years. The following table outlines the RSUs granted and outstanding as of September 30, 2024.

	*Three Months Ended March 31,*
	*2025*						*2024*
					*Per*							*Per*
	*Income*		*Shares*		*Share*		*Income*			*Shares*		*Share*
Basic EPS:
Numerator
Income from continuing operations less non-controlling interest	$	14,395			$	0.81	$	12,012				$	0.68
Loss from discontinued operations, net of tax		-				-		(2	)				-
Net income attributable to Turning Point Brands, Inc.	$	14,395			$	0.81	$	12,010				$	0.68

Denominator
Weighted average				17,795,243							17,654,684

Diluted EPS:
Numerator
Income from continuing operations less non-controlling interest	$	14,395					$	12,010
Interest expense related to Convertible Senior Notes, net of tax		-						731
Diluted income from continuing operations	$	14,395			$	0.79	$	12,741				$	0.63
Loss from discontinued operations, net of tax		-				-		(2	)				-
Diluted net income	$	14,395			$	0.79	$	12,739				$	0.63

Denominator
Basic weighted average				17,795,243							17,654,684
Convertible Senior Notes				-							2,218,018
Stock options and restricted stock units ⁽¹⁾				454,063							297,612
				18,249,306							20,170,314

	March 14,		March 14,		April 29,		May 5,		March 1,		March 11,		April 1,		May 8,
	2022		2022		2022		2023		2024		2024		2024		2024
Number of RSUs granted		50,004		28,726		4,522		130,873		105,257		18,389		5,495		16,905
RSUs outstanding at September 30, 2024		34,616		9,481		1,913		71,731		89,681		4,598		5,495		16,905
Fair value as of grant date	$	30.46	$	30.46	$	31.39	$	22.25	$	26.52	$	27.19	$	29.12	$	33.13
Remaining lives		2.25		0.25		2.25		1.50		2.50		0.25		2.50		0.50

⁽¹⁾	There were 0.0 million and 0.3 million outstanding stock options not included in the computation of diluted earnings per share in the three months ended March 31, 2025 and 2024, respectively, because the effect would have been antidilutive.

~~The~~Note Company has recorded compensation expense related to the RSUs based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the RSUs on the date of grant and amortized over the vesting period16. ~~The~~Segment Company recorded compensation expense related to the RSUs of approximately $0.9 million and $0.8 million for the three months ended September 30, 2024 and 2023. The Company recorded compensation expense related to the RSUs of approximately $2.7 million and $2.2 million for the nine months ended September 30, 2024 and 2023, respectively. Total unrecognized compensation expense related to RSUs at September 30, 2024, is $3.0 million, which will be expensed over 2.01 years.Information

~~Note~~In 14accordance with ASC 280, Segment Reporting, the Company has two reportable segments, Zig-Zag products and Stoker’s products. ~~Contingencies~~The Zig-Zag products segment markets and distributes (i) rolling papers, tubes, and related products; (ii) finished cigars and MYO cigar wraps; and (iii) lighters and other accessories. The Stoker’s products segment (i) manufactures and markets moist snuff, (ii) contracts for and markets loose-leaf chewing tobacco products, and (iii) contracts for and markets its modern oral product. The Company's products are distributed primarily through wholesale distributors in the U.S. and Canada. Corporate unallocated includes the costs and assets of the Company not assigned to one of the two reportable segments and includes corporate overhead expense, including executive management, finance, legal and information technology salaries, and professional services such as audit, external legal costs and information technology services, as well as costs related to the FDA premarket tobacco product application.

OnThe ~~October~~Company’s 9,CODM ~~2020,~~is aits ~~purported~~President ~~stockholder~~and ofChief ~~Turning~~Executive ~~Point~~Officer and ~~Brands,~~uses ~~Inc.,~~segment ~~Paul-Emile~~operating ~~Berteau,~~income ~~filed~~as ~~a complaint in~~ the ~~Delaware~~measure ~~Court~~ of ~~Chancery~~earnings ~~relating~~ to evaluate the ~~merger~~ performance of ~~Standard~~each ~~Diversified,~~segment ~~Inc.~~and ~~(“SDI”) with a TPB subsidiary (“Merger Sub”)pursuant~~ to ~~the~~make ~~Agreement~~decisions ~~and~~about ~~Plan of Merger and Reorganization~~allocating resources, ~~dated~~including ~~as of April 7~~employees, ~~2020~~property, by plant and ~~among TPB~~ equipment, ~~SDI~~as ~~and~~well ~~Merger~~as ~~Sub.~~financial ~~The~~and ~~parties~~capital ~~attended a mediation in late November 2022 where a settlement was reached~~resources. On ~~December~~a ~~12,~~quarterly ~~2023~~basis, the ~~Court~~CODM ~~approved~~reviews ~~the~~segment ~~settlement~~operating ~~and~~income ~~dismissed~~budget-to-actual ~~the~~variances ~~action~~to ~~with~~assess ~~prejudice.~~segment Asperformance ofand ~~December~~make ~~31,~~resource ~~2023,~~allocation ~~the Company recorded a $4~~decisions.~~0 million~~ ~~receivable~~For inboth ~~other current assets~~reportable segments, ~~and~~cost ~~a corresponding gain on settlement in other income on its Consolidated Statement~~ of ~~Income~~sales ~~for~~is the ~~year~~significant ~~ended~~segment ~~December~~expense ~~31,~~that ~~2023.~~is ~~These~~regularly ~~funds~~provided ~~were~~to ~~received~~the ~~in January 2024~~CODM.

~~Other~~The ~~major~~accounting ~~tobacco~~policies ~~companies are defendants in product liability claims. In a number~~ of these ~~cases,~~segments ~~the amounts of punitive and compensatory damages sought~~ are ~~significant and, if such a claim were brought against~~ the ~~Company,~~same ~~could~~as ~~have~~those ~~a material adverse effect on our business and results~~ of ~~operations. The Company is subject to several lawsuits alleging personal injuries resulting from malfunctioning vaporizer devices or batteries and may be subject to claims in~~ the ~~future relating to our other Creative Distribution Solutions products. The~~ Company ~~is still evaluating these claims and the potential defenses to them~~. ~~For~~ ~~example,~~Corporate ~~the~~costs ~~Company did~~ are not directly ~~design~~charged ~~or manufacture~~to the ~~products at issue; rather, the Company was merely the distributor.~~ ~~Nonetheless,~~two reportable ~~there~~segments ~~can be no assurance that the Company will prevail~~ in ~~these cases, and they could have a material adverse effect on~~ the ~~financial~~ordinary ~~position,~~course ~~results~~ of operations ~~or cash flows of the Company~~.

Table of Contents

The Wetables ~~have~~below ~~several~~present ~~subsidiaries~~financial ~~engaged~~information inabout ~~making,~~reportable distributing, and selling liquid nicotine products. As a result of the overall publicity and controversy surrounding the industry generally, many companies have received informational subpoenas from various regulatory bodies and in some jurisdictions regulatory lawsuits have been filed regarding marketing practices and possible underage sales. We expect that our subsidiaries will be subject to some such cases and investigative requests. To the extent that litigation becomes necessary, we believe that the subsidiaries have strong factual and legal defenses against claims that they unfairly marketed products.segments:

The potential losses associated with any such lawsuits are not currently reasonably estimable and therefore are not accrued.

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Net sales
Zig-Zag products	$	47,265		$	46,697
Stoker’s products		59,171			36,367
Total	$	106,436		$	83,064

Cost of Sales
Zig-Zag products	$	21,700		$	19,158
Stoker’s products		25,126			15,552
Total	$	46,826		$	34,710

Gross profit
Zig-Zag products	$	25,565		$	27,539
Stoker’s products		34,045			20,815
Total	$	59,610		$	48,354

Other segment items ⁽¹⁾
Zig-Zag products	$	8,635		$	9,539
Stoker’s products		9,911			5,419
Total	$	18,546		$	14,958

Operating income (loss)
Zig-Zag products	$	16,930		$	18,000
Stoker’s products		24,134			15,396
Total segment operating income	$	41,064		$	33,396
Corporate unallocated ⁽²⁾⁽³⁾		(17,875	)		(14,126	)
Total	$	23,189		$	19,270

Interest expense, net		4,414			3,479
Investment gain		(291	)		(119	)
Loss on extinguishment of debt		1,235			-

Income from continuing operations before income taxes	$	17,831		$	15,910

Capital expenditures
Zig-Zag products	$	17		$	166
Stoker’s products		2,168			200
Total	$	2,185		$	366

Depreciation and amortization
Zig-Zag products	$	276		$	274
Stoker’s products		1,340			903
Total	$	1,616		$	1,177

Note 15. Income Per Share

⁽¹⁾	Includes primarily selling and marketing costs
⁽²⁾	Includes corporate costs that are not allocated to any of the two reportable segments

~~The~~(3) ~~Company~~Includes ~~calculates~~costs ~~earnings~~related ~~per~~to ~~share~~PMTA ~~using~~of ~~the~~$1.6 ~~treasury~~million ~~stock~~and ~~method~~$0.8 million for ~~its~~the ~~options~~three ~~and~~months ~~non-vested~~ended ~~restricted~~March ~~stock units~~31, 2025 and ~~the~~2024, ~~if-converted method for its Convertible Senior Notes~~respectively.

~~The following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations of net income:~~ 26

	Three Months Ended September 30,
	2024						2023
					Per						Per
	Income		Shares		Share		Income		Shares		Share
Basic EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	12,375					$	10,831
Denominator
Weighted average				17,722,855	$	0.70				17,595,980	$	0.62
Diluted EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	12,375					$	10,831
Interest expense related to Convertible Senior Notes, net of tax		143						743
Diluted net income attributable to Turning Point Brands. Inc.	$	12,518					$	11,574
Denominator
Basic weighted average				17,722,855						17,595,980
Convertible Senior Notes				345,562						2,311,086
Stock options and restricted stock units (1)				380,303						191,384
				18,448,720	$	0.68				20,098,450	$	0.58

Table of Contents

	*March 31,*		*December 31,*
	*2025*		*2024*
Assets
Zig-Zag products	$	223,656	$	224,052
Stoker’s products		218,136		197,038
Assets held for sale		-		15,329
Corporate unallocated ⁽¹⁾		122,760		56,934
Total	$	564,552	$	493,353

(1) ~~Table~~Includes ofassets ~~Contents~~ not assigned to the two reportable segments. All goodwill has been allocated to the reportable segments.

	Nine Months Ended September 30,
	2024						2023
					Per						Per
	Income		Shares		Share		Income		Shares		Share
Basic EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	37,389					$	28,353
Denominator
Weighted average				17,678,257	$	2.11				17,569,493	$	1.61
Diluted EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	37,389					$	28,353
Interest expense related to Convertible Senior Notes		1,566						2,546
Diluted net income attributable to Turning Point Brands. Inc.	$	38,955					$	30,899
Denominator
Basic weighted average				17,678,257						17,569,493
Convertible Senior Notes				1,594,546						2,637,252
Stock options and restricted stock units (1)				327,847						209,041
				19,600,650	$	1.99				20,415,786	$	1.51

Net Sales: Domestic and Foreign

~~(1)~~The ~~There~~following ~~were~~table ~~0.2~~shows ~~million~~a ~~and~~breakdown ~~0.3 million outstanding stock options not included in the computation~~ of ~~diluted~~consolidated ~~earnings~~net ~~per~~sales ~~share~~between indomestic ~~the three months ended September 30, 2024~~ and ~~2023,~~foreign ~~respectively, and 0.2 million and 0.3 million in the nine months ended September 30, 2024 and 2023, respectively, because the effect would have been antidilutive.~~customers:

Note 16. Segment Information

	*Three Months Ended*
	*March 31,*
	*2025*		*2024*
Domestic	$	100,488	$	75,963
Foreign		5,948		7,101
Total	$	106,436	$	83,064

InNote ~~accordance with ASC 280, Segment Reporting, the Company has three reportable segments: (1) Zig-Zag products; (2) Stoker’s products; and (3) Creative Distribution Solutions~~17. ~~The~~Dividends ~~Zig-Zag products segment markets~~ and ~~distributes~~Share (a) rolling papers, tubes, and related products; (b) finished cigars and MYO cigar wraps; and (c) lighters and other accessories. The Stoker’s products segment (a) manufactures and markets moist snuff, (b) contracts for and markets loose leaf chewing tobacco products, and (c) FRE, its modern oral product. The Creative Distribution Solutions segment (a) markets and distributes liquid nicotine products and certain other products without tobacco and/or nicotine; (b) distributes a wide assortment of products to non-traditional retail outlets via Beast Distribution (formerly known as VaporBeast); and (c) markets and distributes a wide assortment of products to individual consumers via the Company’s B2C online platform. Products in the Zig-Zag products and Stoker’s products segments are distributed primarily through wholesale distributors in the U.S. and Canada while products in the Creative Distribution Solutions segment are distributed primarily through e-commerce to non-traditional retail outlets and direct to consumers in the U.S. Corporate unallocated includes the costs and assets of the Company not assigned to one of the three reportable segments and includes corporate overhead expense, including executive management, finance, legal and information technology salaries, and professional services, such as audit, external legal costs and information technology services, as well as costs related to the FDA premarket tobacco product application.Repurchases

~~The~~A ~~accounting~~dividend ~~policies~~ of ~~these segments are the same as those of the Company~~$0.075 ~~Corporate~~per ~~costs~~common ~~are~~share ~~not~~was ~~directly~~paid ~~charged~~on April 11, 2025, to ~~the~~shareholders ~~three reportable segments in the ordinary course~~ of ~~operations.~~record ~~The~~at ~~Company evaluates~~ the ~~performance~~close of ~~its~~business ~~segments and allocates resources to them based~~ on March ~~operating~~21, ~~income~~2025.

27The Company currently pays a quarterly cash dividend. Dividends are considered restricted payments under the 2032 Notes Indenture. The Company is generally permitted to make restricted payments provided that, at the time of payment, or as a result of payment, the Company is not in default on its debt covenants; however, there are earnings and market capitalization requirements that if not met could limit the aggregate amount of restricted, quarterly dividends during a fiscal year.

On February ~~Table~~25, 2020, the Company’s Board of ~~Contents~~ Directors approved a $50.0 million share repurchase program which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board of Directors. On October 25, 2021, the Board of Directors increased the approved share repurchase program by $30.7 million, and by an additional $24.6 million on February 24, 2022. On November 6, 2024, the Board of Directors of the Company increased the Company’s share repurchase authorization by $77.9 million to an aggregate amount of $100.0 million. For the three months ended March 31, 2025 there were no shares repurchased under the share repurchase program.

~~The tables below present financial information about reportable segments:~~ 27

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net sales
Zig-Zag products	$	49,324		$	46,754		$	146,502		$	135,363
Stoker’s products		41,380			36,916			120,491			106,634
Total Zig-Zag and Stoker’s products	$	90,704		$	83,670		$	266,993		$	241,997
Creative Distribution Solutions		14,913			18,052			44,194			66,276
Total	$	105,617		$	101,722		$	311,187		$	308,273
Gross profit
Zig-Zag products	$	27,327		$	26,745		$	81,736		$	75,557
Stoker’s products		23,071			20,572			67,410			60,005
Total Zig-Zag and Stoker’s products	$	50,398		$	47,317		$	149,146		$	135,562
Creative Distribution Solutions		3,301			4,305			10,306			17,155
Total	$	53,699		$	51,622		$	159,452		$	152,717
Operating income (loss)
Zig-Zag products	$	17,378		$	16,672		$	53,637		$	47,313
Stoker’s products		17,162			15,703			50,420			45,375
Total Zig-Zag and Stoker’s products	$	34,540		$	32,375		$	104,057		$	92,688
Creative Distribution Solutions		(278	)		(460	)		(388	)		261
Total segment operating income	$	34,262		$	31,915		$	103,669		$	92,949
Corporate unallocated (1)(2)		(13,732	)		(11,678	)		(41,111	)		(34,325	)
Total	$	20,530		$	20,237		$	62,558		$	58,624
Interest expense, net		3,773			3,984			10,243			12,013
Investment (gain) loss		(203	)		2,101			2,117			10,980
Gain on extinguishment of debt		–			(481	)		–			(1,858	)
Income before income taxes	$	16,960		$	14,633		$	50,198		$	37,489
Capital expenditures
Zig-Zag products	$	212		$	3		$	2,659		$	1,088
Stoker’s products		5			1,211			857			3,118
Total Zig-Zag and Stoker’s products	$	217		$	1,214		$	3,516		$	4,206
Creative Distribution Solutions		–			–			–			–
Total	$	217		$	1,214		$	3,516		$	4,206
Depreciation and amortization
Zig-Zag products	$	481		$	269		$	1,096		$	803
Stoker’s products		1,191			795			2,999			2,210
Total Zig-Zag and Stoker’s products	$	1,672		$	1,064		$	4,095		$	3,013
Creative Distribution Solutions		513			562			1,635			1,690
Total	$	2,185		$	1,626		$	5,730		$	4,703

Table of Contents

~~(1)~~Item ~~Includes~~2. ~~corporate~~Management’s ~~costs~~Discussion ~~that~~and ~~are~~Analysis ~~not~~of ~~allocated~~Financial toCondition ~~any~~and Results of ~~the three reportable segments.~~Operations

~~(2)~~You ~~Includes~~should ~~costs~~read ~~related~~the tofollowing ~~PMTA~~discussion of ~~$1.2~~the ~~million~~historical financial conditions and ~~$0.3~~results ~~million~~of ~~for~~operations ~~the~~in ~~three~~conjunction ~~months~~with ~~ended~~our ~~September~~consolidated ~~30,~~financial ~~2024~~statements and ~~2023~~accompanying notes, ~~respectively~~which are included elsewhere in this Quarterly Report on Form 10-Q. ~~Includes~~In ~~costs~~addition, ~~related~~this discussion includes forward-looking statements which are subject to ~~PMTA~~risks ofand $3uncertainties that may result in actual results differing from statements we make.1 ~~million~~See ~~and~~“Cautionary $1Note Regarding Forward-Looking Statements.1” ~~million~~Factors ~~for~~that ~~the~~could ~~nine~~cause ~~months~~actual ~~ended~~results ~~September~~to ~~30,~~differ ~~2024~~include those risks and ~~2023~~uncertainties discussed in “Risk Factors” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, ~~respectively~~2024.

28The following Management’s Discussion and Analysis (“MD&A”) relates to the unaudited financial statements of Turning Point Brands, Inc., included elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to enable the reader to understand the Company’s financial condition and results of operations, including any material changes in the Company’s financial condition and results of operations since December 31, 2024, and as compared with the three months ended March 31, 2025. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report”).

In ~~Table~~this MD&A, unless the context requires otherwise, references to “our Company” “we,” “our,” or “us” refer to Turning Point Brands, Inc., and its consolidated subsidiaries. References to “TPB” refer to Turning Point Brands, Inc., without any of ~~Contents~~ its subsidiaries. Many of the amounts and percentages in this discussion have been rounded for convenience of presentation.

	September 30,		December 31,
	2024		2023
Assets
Zig-Zag products	$	234,741	$	177,135
Stoker’s products		187,281		174,994
Corporate unallocated (1)		38,608		190,223
Total Zig-Zag and Stoker’s products	$	460,630	$	542,352
Creative Distribution Solutions		27,379		27,004
Total	$	488,009	$	569,356

Overview

Turning Point Brands, Inc. is a leading manufacturer, marketer and distributor of branded consumer products. We sell a wide range of products to adult consumers consisting of staple products with our iconic brands Zig-Zag® and Stoker’s® to fulfill evolving consumer preferences. Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (1“OTP”) ~~Includes~~industries. ~~cash~~The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S. and ~~assets~~Canada, ~~not~~and ~~assigned~~positively toevolving consumer perception and acceptance in North America. The OTP industry, which consists of non-cigarette tobacco products, exhibited low-single-digit consumer unit annualized declines during the ~~three~~year ~~reportable~~ended December 31, 2024, as reported by Management Science Associates, Inc. (“MSAi”) a third-party analytics and information company. Our segments are led by our core proprietary and iconic brands: Zig-Zag® in the Zig-Zag products segment, and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment. ~~All~~Our ~~goodwill~~businesses ~~has~~generate ~~been~~solid ~~allocated~~cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position. We currently ship to approximately 900 distributors with an additional 600 secondary, indirect wholesalers in the ~~reportable~~U.S. ~~segments~~that carry and sell our products. Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions, and acquisitions while concurrently improving operational efficiency.

~~Revenue~~We ~~Disaggregation—Sales~~believe ~~Channel~~there are meaningful opportunities to grow through investing in organic growth, acquisitions and joint ventures across all product categories. Our products are available in approximately 200,000 U.S. retail locations which, with the addition of retail stores in Canada, brings our total North American retail presence to an estimated 220,000 points of distribution. Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business.

~~Revenues~~Discontinued of the Zig-Zag products and Stoker’s products segments are primarily comprised of sales made to wholesalers while Creative Distribution Solutions sales are made business-to-business and business-to-consumer primarily through the Company’s online platforms. Creative Distribution Solutions net sales are broken out by sales channel below. Operations

	Creative Distribution Solutions
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Business to Business	$	13,661	$	16,089	$	40,155	$	58,620
Business to Consumer		1,243		1,912		3,974		7,247
Other		9		51		65		409
Total	$	14,913	$	18,052	$	44,194	$	66,276

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company's former Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc. (“GWO”) in exchange for 49% of the issued and outstanding GWO common stock. GWO is a joint venture between the Company and Standard General, LP entered into in December 2018. CDS marketed and distributed liquid nicotine and ancillary products without tobacco and/or nicotine primarily through non-traditional retail and B2C online platforms, and included widely recognized names such as Vapor Beast® and VaporFi®.

~~Net~~Refer ~~Sales—Domestic~~to ~~vs.~~Note ~~Foreign~~3 of the Notes to Consolidated Financial Statements included in Item 1 of Part 1 in this Quarterly Report on Form 10-Q for further details regarding the CDS divestiture.

~~The following table shows a breakdown of consolidated net sales between domestic and foreign customers.~~Products

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Domestic	$	97,634	$	93,533	$	287,663	$	285,514
Foreign		7,983		8,189		23,524		22,759
Total	$	105,617	$	101,722	$	311,187	$	308,273

We operate in two segments: Zig-Zag products and Stoker’s products segments. In our Zig-Zag products segment, we principally market and distribute (i) rolling papers, tubes, and related products; (ii) finished cigars and make-your-own (“MYO”) cigar wraps; and (iii) lighters and other accessories. In addition, we have a majority stake in Turning Point Brands Canada which is a specialty marketing and distribution firm focused on building brands in the Canadian cannabis accessories, tobacco and alternative products categories. In our Stoker’s products segment, we (i) manufacture and market moist snuff tobacco (“MST”); (ii) contract for and market modern oral products; and (iii) contract for and market loose-leaf chewing tobacco products.

29 28

Table of Contents

~~Note 17. Additional Information with Respect to Unrestricted Subsidiaries~~Operations

~~Under~~Our ~~the~~core ~~terms~~Zig-Zag ofproducts ~~the~~and ~~Senior~~Stoker’s ~~Secured~~products ~~Notes~~segments ~~Indenture~~primarily ~~and~~generate ~~Senior~~revenues ~~Secured~~from ~~Notes,~~ the ~~Company~~sale ~~has~~of ~~designated~~our ~~its~~products ~~subsidiaries,~~to ~~South~~wholesale ~~Beach~~distributors ~~Brands LLC~~who, ~~TPB~~in ~~Beast LLC and Intrepid Brands~~turn, ~~LLC~~resell ~~as “Unrestricted Subsidiaries”. South Beach Brands LLC is a holding company under which~~ the ~~Company’s~~products ~~liquid~~to ~~nicotine~~retail ~~business TPB Beast LLC operating as Creative Distribution Solutions sits~~operations. Our ~~The~~net ~~Company designated Interchange~~sales, ICwhich asinclude anfederal ~~“Unrestricted~~excise ~~Subsidiary” as of April 1~~taxes, ~~2024.~~consist ~~The Company is required under the terms~~ of ~~the~~gross ~~Senior~~sales ~~Secured~~net ~~Notes Indenture and the Senior Secured Notes to present additional information that reflects the financial condition and results~~ of ~~operations~~cash ofdiscounts, ~~the~~returns, ~~Company~~ and ~~its~~selling ~~Restricted Subsidiaries separate from the financial condition~~ and ~~results~~marketing ~~of operations of the Company’s Unrestricted Subsidiaries as of and for the periods presented~~allowances. ~~This additional information is below.~~

~~Income~~We ~~Statements~~rely ~~for~~on long-standing relationships with high-quality, established manufacturers to provide the ~~Three~~majority of our produced products. Approximately 75% of our production, as measured by net sales, is outsourced to suppliers. The remaining production consists primarily of our moist snuff tobacco operations located in Dresden, Tennessee and ~~Nine~~Louisville, ~~Months~~Kentucky. ~~Ended~~Our ~~September~~principal 30operating expenses include the cost of raw materials used to manufacture the limited number of our products which we produce in-house; the cost of finished products, ~~2024~~which are generally purchased goods; federal excise taxes; legal expenses; and ~~2023~~compensation ~~(unaudited):~~expenses, including benefits and costs of salaried personnel.

	Three Months Ended September 30
	2024									2023
	Company and Restricted Subsidiaries			Unrestricted Subsidiaries			Consolidated			Company and Restricted Subsidiaries			Unrestricted Subsidiaries			Consolidated
Net sales	$	90,704		$	14,913		$	105,617		$	83,670		$	18,052		$	101,722
Cost of sales		40,306			11,612			51,918			36,353			13,747			50,100
Gross profit		50,398			3,301			53,699			47,317			4,305			51,622
Selling, general, and administrative expenses		29,748			3,421			33,169			26,620			4,765			31,385
Other operating (income) expense		(5	)		5			–			–			–			–
Operating income (loss)		20,655			(125	)		20,530			20,697			(460	)		20,237
Interest expense (income), net		3,978			(205	)		3,773			3,984			–			3,984
Investment (gain) loss		(143	)		(60	)		(203	)		2,101			–			2,101
Gain on extinguishment of debt		–			–			–			(481	)		–			(481	)
Income (loss) before income taxes		16,820			140			16,960			15,093			(460	)		14,633
Income tax expense		4,563			38			4,601			3,885			(118	)		3,767
Consolidated net income (loss)		12,257			102			12,359			11,208			(342	)		10,866
Net (loss) income attributable to non-controlling interest		(16	)		–			(16	)		35			–			35
Net income (loss) attributable to Turning Point Brands, Inc.	$	12,273		$	102		$	12,375		$	11,173		$	(342	)	$	10,831

Key Factors Affecting Our Results of Operations

	Nine Months Ended September 30,
	2024									2023
	Company and Restricted Subsidiaries			Unrestricted Subsidiaries			Consolidated			Company and Restricted Subsidiaries			Unrestricted Subsidiaries		Consolidated
Net sales	$	266,993		$	44,194		$	311,187		$	241,997		$	66,276	$	308,273
Cost of sales		117,847			33,888			151,735			106,435			49,121		155,556
Gross profit		149,146			10,306			159,452			135,562			17,155		152,717
Selling, general, and administrative expenses		88,352			10,216			98,568			77,199			16,894		94,093
Other operating income		(1,682	)		8			(1,674	)		–			–		–
Operating income		62,476			82			62,558			58,363			261		58,624
Interest expense (income), net		10,499			(256	)		10,243			12,013			–		12,013
Investment loss (gain)		2,334			(217	)		2,117			10,980			–		10,980
Gain on extinguishment of debt		–			–			–			(1,858	)		–		(1,858	)
Income before income taxes		49,643			555			50,198			37,228			261		37,489
Income tax expense		12,602			141			12,743			9,506			67		9,573
Consolidated net income		37,041			414			37,455			27,722			194		27,916
Net income (loss) attributable to non-controlling interest		66			–			66			(437	)		–		(437	)
Net income attributable to Turning Point Brands, Inc.	$	36,975		$	414		$	37,389		$	28,159		$	194	$	28,353

We consider the following to be the key factors affecting our results of operations:

30● Our ability to further penetrate markets with our existing products;

● ~~Table~~Our ofability ~~Contents~~ to introduce new products and product lines that complement our core business;

~~Balance~~● ~~Sheet~~Decreasing asinterest ofin ~~September~~some ~~30,~~tobacco ~~2024~~products ~~(unaudited):~~among consumers;

ASSETS	Company and Restricted Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated
Current assets:
Cash	$	25,978	$	7,579	$	–		$	33,557
Accounts receivable, net		10,582		–		–			10,582
Inventories		100,022		6,394		–			106,416
Other current assets		31,990		2,207		–			34,197
Total current assets		168,572		16,180		–			184,752
Property, plant, and equipment, net		26,067		15		–			26,082
Deferred income taxes		919		–		–			919
Right of use assets		10,719		69		–			10,788
Deferred financing costs, net		1,984		–		–			1,984
Goodwill		136,413		–		–			136,413
Other intangible assets, net		65,593		13,028		–			78,621
Master Settlement Agreement (MSA) escrow deposits		29,482		–		–			29,482
Other assets		13,879		5,089		–			18,968
Investment in unrestricted subsidiaries		61,446		–		(61,446	)		–
Total assets	$	515,074	$	34,381	$	(61,446	)	$	488,009
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,369	$	1,067	$	–		$	13,436
Accrued liabilities		28,909		1,566		–			30,475
Total current liabilities		41,278		2,633		–			43,911
Notes payable and long-term debt		248,282		–		–			248,282
Lease liabilities		9,057		–		–			9,057
Total liabilities		298,617		2,633		–			301,250
Commitments and contingencies
Stockholders’ equity:
Total Turning Point Brands, Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries		215,372		31,748		(61,446	)		185,674
Non-controlling interest		1,085		–		–			1,085
Total stockholders’ equity		216,457		31,748		(61,446	)		186,759
Total liabilities and stockholders’ equity	$	515,074	$	34,381	$	(61,446	)	$	488,009

●

Price sensitivity in our end-markets;

31● Marketing and promotional initiatives, which cause variability in our results;

● ~~Table~~Cost related to increasing regulation of ~~Contents~~ promotional and advertising activities;

~~Balance~~● ~~Sheet~~General economic conditions, including consumer access to disposable income and other conditions affecting purchasing power such as ofinflation ~~December~~and ~~31,~~the ~~2023:~~interest rate environment;

ASSETS	Company and Restricted Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated
Current assets:
Cash	$	116,725	$	1,161	$	–		$	117,886
Accounts receivable, net		9,989		–		–			9,989
Inventories, net		91,679		7,281		–			98,960
Other current assets		36,937		3,844		–			40,781
Total current assets		255,330		12,286		–			267,616
Property, plant, and equipment, net		25,142		158		–			25,300
Deferred income taxes		1,468		–		–			1,468
Right of use assets		11,359		121		–			11,480
Deferred financing costs, net		2,450		–		–			2,450
Goodwill		136,250		–		–			136,250
Other intangible assets, net		66,490		14,452		–			80,942
Master Settlement Agreement (MSA) escrow deposits		28,684		–		–			28,684
Other assets		15,166		–		–			15,166
Investment in unrestricted subsidiaries		48,229		–		(48,229	)		–
Total assets	$	590,568	$	27,017	$	(48,229	)	$	569,356
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,781	$	626	$	–		$	8,407
Accrued liabilities		32,052		1,583		–			33,635
Current portion of long-term debt		58,294		–		–			58,294
Total current liabilities		98,127		2,209		–			100,336
Notes payable and long-term debt		307,064		–		–			307,064
Lease liabilities		9,898		52		–			9,950
Total liabilities		415,089		2,261		–			417,350
Commitments and contingencies
Stockholders’ equity:
Total Turning Point Brands, Inc. Stockholders’ Equity/Net parent investment in unrestricted subsidiaries		174,449		24,756		(48,229	)		150,976
Non-controlling interest		1,030		–		–			1,030
Total stockholders’ equity		175,479		24,756		(48,229	)		152,006
Total liabilities and stockholders’ equity	$	590,568	$	27,017	$	(48,229	)	$	569,356

●

Labor and production costs;

~~Note~~● ~~18.~~Cost ~~Dividends~~of ~~and~~complying ~~Share~~with ~~Repurchases~~regulation, including the “deeming regulation”, as well as the unpredictable nature of the regulatory regimes;

A● ~~dividend~~Changes ofto $0U.07S. ~~per~~trade ~~common share was paid on October 4~~policies, ~~2024,~~including ~~to shareholders of record at the close of business on September 13, 2024.~~tariffs;

~~The~~● ~~Company~~Counterfeit ~~currently~~and ~~pays~~other aillegal ~~quarterly~~products cash dividend. Dividends are considered restricted payments under the Senior Secured Notes Indenture. The Company is generally permitted to make restricted payments provided that, at the time of payment, or as a result of payment, the Company is not in ~~default~~our ~~on its debt covenants~~end-markets; ~~however, there are earnings and market capitalization requirements that if not met could limit the aggregate amount of restricted, quarterly dividends during a fiscal year.~~

On● ~~February~~Currency 25, 2020, the Company’s Board of Directors approved a $50.0 million share repurchase program which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board of Directors. On October 25, 2021, the Board of Directors increased the approved share repurchase program by $30.7 million, and by an additional $24.6 million on February 24, 2022, in each case bringing the aggregate approval back to $50.0 million. On November 6, 2024, the Board of Directors of the Company increased the Company’s share repurchase authorization by $77.9 million to an aggregate amount of $100.0 million. The total number of shares repurchased for the three months ended September 30, 2024 was 26,978 shares for a total cost of $1.1 million and an average price per share of $41.46. The total number of shares repurchased for the nine months ended September 30, 2024 was 133,873 shares for a total cost of $4.2 million at an average price per share of $31.15.fluctuations;

32● Our ability to identify attractive acquisition opportunities; and

● ~~Table~~Our ofability ~~Contents~~ to successfully integrate acquisitions.

~~Item~~Critical 2.Accounting ~~Management’s~~Policies ~~Discussion~~ and ~~Analysis~~Uses of ~~Financial Condition and Results of Operations~~Estimates

~~You~~There ~~should~~have ~~read~~been ~~the~~no ~~following~~material ~~discussion~~changes ofto ~~the~~our ~~historical~~critical ~~financial~~accounting ~~conditions~~policies and ~~results~~estimates offrom ~~operations~~the information provided in ~~conjunction~~“Management’s ~~with~~Discussion ~~our~~and ~~consolidated~~Analysis ~~financial~~of ~~statements~~Financial Condition and ~~accompanying~~ ~~notes,~~Results ~~which~~of ~~are~~Operations” included ~~elsewhere~~ in ~~this~~our 2024 ~~Quarterly~~Annual Report on Form 10-QK. In addition, this discussion includes forward-looking statements which are subject to risks and uncertainties that may result in actual results differing from statements we make. See “Cautionary Note Regarding Forward-Looking Statements.” Factors that could cause actual results to differ include those risks and uncertainties discussed in “Risk Factors.”

~~The~~Recent ~~following~~Accounting Management’s Discussion and Analysis (“MD&A”) relates to the unaudited financial statements of Turning Point Brands, Inc., included elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to enable the reader to understand the Company’s financial condition and results of operations, including any material changes in the Company’s financial condition and results of operations since December 31, 2023, and as compared with the three and nine months ended September 30, 2024. The MD&A is provided as a supplement to and should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”).Pronouncements

InSee ~~this~~Item ~~MD&A,~~1 ~~unless~~of ~~the~~Part ~~context requires otherwise~~I, ~~references~~“Notes to ~~“our~~Consolidated ~~Company”~~Financial ~~“we,”~~Statements ~~“our,”~~- orNote ~~“us”~~1 ~~refer~~- toBusiness ~~Turning Point Brands, Inc.,~~ and ~~its~~Basis ~~consolidated subsidiaries. References to “TPB” refer to Turning Point Brands, Inc., without any~~ of ~~its~~Presentation ~~subsidiaries.~~- ~~Many~~Recent ofAccounting ~~the amounts and percentages in this discussion have been rounded for convenience of presentation~~Pronouncements.”

~~Overview~~ 29

~~Turning Point Brands, Inc. is a leading manufacturer, marketer and distributor of branded consumer products. We sell a wide range of products to adult consumers consisting of staple products with~~ ~~our~~ Table iconic brands Zig-Zag® and Stoker’s® and our next generation products to fulfill evolving consumer preferences. Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries. The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S. and Canada, and positively evolving consumer perception and acceptance in North America. The OTP industry, which consists of ~~non-cigarette tobacco products, exhibited low-single-digit consumer unit annualized growth over the four-year period ended 2023 as reported by Management Science~~Contents Associates, Inc. a third-party analytics and information company. Our segments are led by our core proprietary and iconic brands: Zig-Zag® in the Zig-Zag products segment and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment. Our businesses generate solid cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position. We currently ship to approximately 820 distributors with an additional 650 secondary, indirect wholesalers in the U.S. that carry and sell our products. Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions, and acquisitions while concurrently improving operational efficiency.

WeResults believe there are meaningful opportunities to grow through investing in organic growth, acquisitions and joint ventures across all product categories. Our products are currently available in approximately 197,000 U.S. retail locations which, with the addition of retail stores in Canada, brings our total North American retail presence to an estimated 217,000 points of distribution. Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business.Operations

~~Products~~Summary

WeThe ~~operate~~table ~~in three segments: Zig-Zag products, Stoker’s products~~ and ~~Creative~~discussion ~~Distribution~~set ~~Solutions~~forth ~~(“CDS”).~~below Inrelates ~~our~~to Zig-Zag products segment, we principally market and distribute (i) rolling papers, tubes, and related products; (ii) finished cigars and make-your-own (“MYO”) cigar wraps; and (iii) lighters and other accessories. In addition, we have a majority stake in Turning Point Brands Canada which is a specialty marketing and distribution firm focused on building brands in the Canadian cannabis accessories, tobacco and alternative products categories. In our ~~Stoker’s~~consolidated ~~products~~results segment, we (i) manufacture and market moist snuff tobacco (“MST”) and (ii) contract for and market FRE, our modern oral product; and (iii) contract for and market loose leaf chewing tobacco products. In our Creative Distribution Solutions segment, we (i) market and distribute liquid nicotine products and certain other products without tobacco and/or nicotine; (ii) distribute a wide assortment of ~~products~~continuing to non-traditional retail via Beast Distribution (formerly known as VaporBeast), and (iii) market and distribute a wide assortment of products to individual consumers via the Company’s B2C online platform.operations:

(in thousands)		Three Months Ended March 31,
	2025			2024			% Change
Consolidated Results of Operations Data:
Net sales
Zig-Zag products	$	47,265		$	46,697			1.2	%
Stoker’s products		59,171			36,367			62.7	%
Total net sales		106,436			83,064			28.1	%
Cost of sales		46,826			34,710			34.9	%
Gross profit
Zig-Zag products		25,565			27,539			-7.2	%
Stoker’s products		34,045			20,815			63.6	%
Total gross profit		59,610			48,354			23.3	%

Selling, general, and administrative expenses		36,421			29,084			25.2	%

Operating income
Zig-Zag products		16,930			18,000			-5.9	%
Stoker’s products		24,134			15,396			56.8	%
Total segment operating income		41,064			33,396			23.0	%
Corporate unallocated		(17,875	)		(14,126	)		26.5	%
Total operating income		23,189			19,270			20.3	%
Interest expense, net		4,414			3,479			26.9	%
Investment gain	<

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