U.S.
SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
10-K


(Mark
One)


x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
Fiscal Year Ended: September 30, 2010


OR


o
            TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF
1934




For the
transition period from _______________ to _______________




Commission
file number:  333-130696




22nd
      Century Group, Inc.
                          (fka
      Touchstone Mining Limited)(Exact
      name of registrant as specified in its charter)Nevada
                        
                        98-0468420(State
      or other jurisdiction of
                          incorporation
      or organization)
                        
                        (IRS
      Employer Identification No.)11923
      SW 37 Terrace, Miami, FL
                        
                        33175(Address
      of principal executive offices)
                        
                        (Postal
      Code)




Issuer's
telephone number:  (305)
667-9456




Securities
registered under Section 12(b) of the Act:  None




Securities
registered under Section 12(g) of the Act:  Common
Stock, $0.0001 par value per
share




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes ̈Nox




Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Exchange Act.  Yes ̈Nox




Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the past 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.  YesxNo ̈




Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted 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
and post such files).  Yes ̈No ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   ̈




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




Large Accelerated Filer  ̈
                    Accelerated Filer  ̈
                    Non-Accelerated Filer  ̈
                    Smaller reporting company x(Do not check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes x
  No  ̈




As of
March 31, 2010, there were 17,356,590 shares of the registrant's common stock,
par value $0.00001, issued and outstanding.  Of these, 7,341,390
shares were held by non-affiliates of the registrant.  The market
value of securities held by non-affiliates was $0 as our stock did not then and
does not presently trade.




DOCUMENTS
INCORPORATED BY REFERENCE


The
registrant’sInformation Statement as filed with the Securities and Exchange
Commission on November 2, 2010 is incorporated by reference into Part I of this
Annual Report on Form 10-K.









TABLE
OF CONTENTS


PageItem
      Number and CaptionForward-Looking
      Statements
                          3PART
      I
                          41.
                          Business
                          41A.
                          Risk
      Factors
                          61B.
                          Unresolved
      Staff Comments
                          92.
                          Properties
                          93.
                          Legal
      Proceedings
                          94.
                          [Removed
      and Reserved]
                          9PART
      II
                          95.
                          Market For
      Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases
      Of Equity Securities
                          96.
                          Selected
      Financial Data
                          127.
                          Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
                          127A.
                          Quantitative
      and Qualitative Disclosures About Market Risk
                          138.
                          Financial
      Statements and Supplemental Data
                          139.
                          Changes In And
      Disagreements With Accountants On Accounting, And Financial Disclosure9A.
                          Controls
      And Procedures
                          139B.
                          Other
      Information
                          14PART
      III
                          1410.
                          Directors,
      Executive Officers, and Corporate Governance
                          1411.
                          Executive
      Compensation
                          1712.
                          Security
      Ownership Of Certain Beneficial Owners And Management And
      RelatedStockholder
      Matters
                          1813.
                          Certain
      Relationships And Related Transactions and Director
      Independence
                          1914.
                          Principal
      Accountant Fees And Services
                          19PART
      IV
                          2015.
                          Exhibits
      and Financial Statement Schedules
                          20




2




FORWARD-LOOKING
STATEMENTS




Except
for historical information, this report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.  Such forward-looking
statements involve risks and uncertainties, including, among other things,
statements regarding our business strategy, future revenues and anticipated
costs and expenses.  Such forward-looking statements include, among
others, those statements including the words “expects,” “anticipates,”
“intends,” “believes” and similar language.  Our actual results may
differ significantly from those projected in the forward-looking
statements.  Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in the sections
“Business,” “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”  You should carefully
review the risks described in this Annual Report on Form 10-K and in other
documents we file from time to time with the Securities and Exchange
Commission.  You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this
report.  We undertake no obligation to publicly release any revisions
to the forward-looking statements or reflect events or circumstances after the
date of this document.




Although
we believe that the expectations reflected in these forward-looking statements
are based on reasonable assumptions, there are a number of risks and
uncertainties that could cause actual results to differ materially from such
forward-looking statements.





All
references in this Form 10-K to the “Company,” “22nd Century
Group,” “we,” “us” or “our” are to 22nd Century
Group, Inc.




All
references in this Form 10-K to issued and outstanding shares give retroactive
effect to a 2.782:1 forward stock split in the form of a dividend which was
effected at the close of business on November 29, 2010.  In connection
therewith, all shareholders of record at the close of business on November 29,
2010 received an additional 1.782 shares of our common stock for each share held
by them.  This resulted in our issuance of an aggregate of 11,117,701
shares.  Following such issuance we had 17,356,590 shares issued and
outstanding.


3


PART
I




ITEM
      1.
            BUSINESS




Company
Overview




We were
incorporated in the State of Nevada under the name Touchstone Mining Limited on
September 12, 2005 to engage in the acquisition, exploration and development of
mineral deposits and reserves.  On November 23, 2005 we entered into a
Mineral Claim Purchase Agreement (the “Agreement”) with Mineral Exploration
Services, Ltd. (“MES”) pursuant to which we acquired an option to purchase
certain unpatented mineral mining claims.  The related property
consisted of ten lode mineral claims located on approximately 200 acres in
Humboldt County, Nevada.  Under the terms of the Agreement, we agreed
to pay MES an aggregate of $50,000 over five years and to make exploration
expenditures on the property of $50,000 over the same five year
period.  During the initial exploration, no commercial quantities of
gold or other minerals were discovered and in August 2007, we ceased exploration
on the prospect.  On August 16, 2007 we notified MES of our intention
to return the property via a quit claim deed.  At that time, MES
informed us that it no longer wanted to retain the claim or the property and MES
subsequently allowed such claim to lapse.  Our Agreement with MES was
terminated as of September 16, 2007.  At the time of the termination,
we had paid MES an aggregate of $7,000 under the Agreement.  In
October 2007, we restaked the claims in the property and paid the necessary fees
to the Bureau of Land Management.  We temporarily lost our rights in
the property for failure to pay filing and recording fees due on the property on
September 1, 2009. On February 10, 2010 we restaked our claims in the property.
The lease to the property is currently in our name.  We do not claim
to have any minerals or reserves whatsoever at this time on any of the
property.  Our management has no current plans for the property at
this time, and all of our exploration operations have been
discontinued.  Following the discontinuation of our planned mineral
acquisition, exploration and development activities through the present, we have
determined to look at other ventures of merit to enhance stockholder
value.  These ventures may involve sales of our debt or equity
security in merger, acquisition, or similar transactions.  To date, we
have achieved no operating revenues and have yet to engage in any such
ventures.




On
October 5, 2010 we entered into a non-binding Letter of Intent with 22nd Century
Limited, LLC, a Delaware limited liability corporation (“22nd
Century”) regarding a possible business combination involving the two companies.
At this stage, neither party is bound to proceed with the
transaction.  With the permission of 22nd Century
and as provided below, on November 23, 2010 we changed our name to “22nd Century
Group, Inc.” to facilitate these discussions.  If the parties
determine not to proceed with the business combination, we will change our name
back to Touchstone Mining Limited or adopt another name.




As set
forth in our Information Statement dated November 2, 2010 and filed with the
Securities and Exchange Commission on the same date, which is incorporated
herein by reference, our board of directors and stockholders owning a majority
of our outstanding common stock, pursuant to signed written consents, each dated
October 21, 2010, authorized and approved the following:




•
            Amended
      and Restated Articles of Incorporation (the “Charter Amendment”) which,
      among other things, (i) change our name to 22nd
      Century Group, Inc.; (ii) increase our authorized capitalization from
      100,000,000 shares, consisting of 100,000,000 shares of common stock,
      $0.00001 par value per share, to 310,000,000 shares, consisting of
      300,000,000 shares of common stock, $0.00001 par value per share, and
      10,000,000 shares of blank check preferred stock, $0.00001 par value per
      share; and (iii) limit the liability of our officers and directors, our
      stockholders and our creditors to the fullest extent permitted by Nevada
      law;




•
            Adoption
      of our 2010 Equity Incentive Plan (the “Plan Adoption”);
    and




•
            Transfer
      of our assets and liabilities to a split-off subsidiary to be transferred
      to our majority stockholder in consideration of the surrender of his
      shares of Company stock for cancellation (the
  “Split-Off”).


4


The
Information Statement was mailed to our stockholders on November 2, 2010. In
accordance with the regulations under the Securities Exchange Act of 1934, as
amended, the Charter Amendment was filed with the Nevada Secretary of State on
November 23, 2010. The Charter Amendment became effective upon filing. The Plan
Adoption became effective upon its approval by the Company’s Board of Directors
and a stockholder owning a majority of our common stock. The effective date of
the Split-Off is not presently known and is dependent upon our proceeding with
the business combination.




Our
common stock temporarily remains listed for quotation on OTC Markets and the OTC
Bulletin Board under the current symbol “THSM” and will continue to be listed as
such until a new symbol is assigned by Financial Industry Regulatory Authority,
Inc. (FINRA). We will publicly announce the new trading symbol when assigned by
FINRA and the effective date of the symbol change.




Patents,
Trademarks and Licenses




We do not
presently own any patents, trademarks, copyrights or other forms of intellectual
property.




Research
and Development




We have
not performed any research and development since our inception.




Competitive
Factors
  We
previously operated in the mineral exploration industry, which was very
fragmented. We were competitive with other mineral exploration companies and
were one of the smallest mineral exploration companies in operation. As we are
now seeking other business ventures to enhance stockholder value, we no longer
actively compete in the mineral exploration industry.




Employees




As of
November 29, 2010 our only employee is our sole executive officer.




On
September 24, 2010, Nanuk Warman resigned as our Director, Chief Executive
Officer, Chief Financial Officer, President, Secretary and
Treasurer.  Mr. Warman did not have any disagreement with us on any
matter relating to our operations, policies or practices.




On
September 24, 2010, our Board of Directors appointed Ronald Asirwatham as our
Director and as Chief Executive Officer, Chief Financial Officer, President,
Secretary and Treasurer.




On
November 22, 2010, Ronald Asirwatham resigned as our Director, Chief Executive
Officer, Chief Financial Officer, President, Secretary and Treasurer. Mr.
Asirwatham did not have any disagreement with us on any matter relating to our
operations, policies or practices.




On
November 22, 2010, our Board of Directors appointed David Rector as our
Director, Chief Executive Officer, Chief Financial Officer, President, Secretary
and Treasurer.




Loans




On May 8,
2009 we received an $80,000 loan from a minority shareholder and in connection
therewith issued an 8.25%, $80,000 convertible promissory note dated May 8,
2009.  On November 8, 2010 the note was amended to extend the maturity
date. Subject to prior conversion, interest and principal are due on the note on
May 8, 2011. The terms of conversion have not been determined but will be
mutually determined by us and the holder.




On
February 10, 2010 we received a $32,327 loan from a minority shareholder and
issued a 10%, $32,327 convertible promissory note dated February 10, 2010. If
not converted, interest and principal are due at maturity on August 9, 2011. The
note is convertible at any time prior to maturity at a conversion price of
approximately $0.036 per share. The conversion price and the number of shares
issuable upon conversion are subject to adjustment under certain circumstances
including mergers, consolidations, reclassifications, stock splits,
combinations, dividends and similar transactions. Further, the conversion price
is subject to downward adjustment if we issue common stock or securities
convertible into common stock at a price of less than $0.036 per share at any
time while the note remains outstanding. In such event, the conversion price
under the note shall be reduced to such lower price.


5


On
October 14, 2010 we received a $50,000 loan from a minority shareholder and
issued a 10%, $50,000 convertible promissory note dated October 14, 2010. If not
converted, interest and principal are due at maturity on April 13, 2012. The
note is convertible at any time prior to maturity at a conversion price of
approximately $0.036 per share. The conversion price and the number of shares
issuable upon conversion are subject to adjustment under certain circumstances
including mergers, consolidations, reclassifications, stock splits,
combinations, dividends and similar transactions. Further, the conversion price
is subject to downward adjustment if we issue common stock or securities
convertible into common stock at a price of less than $0.036 per share at any
time while the note remains outstanding. In such event, the conversion price
under the note shall be reduced to such lower price.




Forward
Stock Split




Effective
the close of business on November 29, 2010 we effected a 2.782:1 forward stock
split in the form of a dividend pursuant to which shareholders of record at the
close of business  on November 29, 2010 received an additional 1.782
shares of our common stock for each share of common stock held by
them.  This resulted in our issuance of an aggregate of
11,117,701 shares.




Reports
to Security Holders




We file
annual, quarterly and current reports and other information with the Securities
and Exchange Commission. You may read and copy any reports, statement or other
information that we file with the Commission at the Commission's public
reference room at 100 F Street, N.E., Washington, D.C. 20549.  Please
call the Commission at (202) 551-8090 for further information on the public
reference room. These Commission filings are also available to the public from
commercial document retrieval services and at the Internet site maintained by
the Commission at http://www.sec.gov.




Change
of Control




Not
Applicable.




ITEM
      1A.
            RISK
      FACTORS




We
have a history of operating losses which may continue.




We have a
history of losses and will continue to incur operating and net losses for the
foreseeable future. We incurred net losses of $89,933 and $55,469 during the
years ended September 30, 2010 and 2009, respectively.  As of
September 30, 2010, our accumulated deficit was $320,903. We have not achieved
revenues since our inception.   Unless and until we commence new
business operations, we may never achieve revenue or profitability.




Our
auditors have indicated that our inability to generate sufficient revenue raises
substantial doubt as to our ability to continue as a going concern.




Our
audited financial statements for the year ended September 30, 2010 were prepared
on a going concern basis in accordance with United States generally accounting
principles. The going concern basis of presentation assumes that we will
continue in operation for the foreseeable future and will be able to realize our
assets and discharge our liabilities and commitments in the normal course of
business. However, our auditors have indicated that our lack of revenues and
accumulated losses raise substantial doubt as to our ability to continue as a
going concern. In the absence of additional financing or significant revenues
and profits, we may have to cease operations. However, we cannot guarantee that
we will be able to obtain sufficient additional funds when needed, or that such
funds, if available, will be obtainable on terms satisfactory to us. In the
event that our plans cannot be effectively realized, there can be no assurance
that we will be able to continue as a going concern.




Rules
issued under the Sarbanes-Oxley Act of 2002 may make it difficult for us to
retain or attract qualified officers and directors, which could adversely affect
the management of our business and our ability to retain listing of our common
stock.




We may be
unable to attract and retain those qualified officers, directors and members of
board committees required to provide for our effective management because of
rules and regulations that govern publicly held companies, including, but not
limited to, certifications by principal executive officers. The enactment of the
Sarbanes-Oxley Act has resulted in the issuance of rules and regulations and the
strengthening of existing rules and regulations by the SEC, as well as the
adoption of new and more stringent rules by the stock exchanges and NASDAQ. The
perceived personal risk associated with these rules and regulations may deter
qualified individuals from accepting roles as directors and executive
officers.


6


If
we fail to maintain an effective system of disclosure and internal controls, we
may not be able to accurately report our financial results or detect fraud.
Consequently, investors could lose confidence in our financial reporting and
this may decrease the trading price of our stock.




We must
maintain effective disclosure and internal controls to provide reliable
financial reports and detect fraud. Based on our evaluation as of September 30,
2010, we concluded that we do maintain effective disclosure controls and
procedures. Failure to implement changes to our controls that we may identify in
the future as necessary to maintain an effective system of such controls could
harm our operating results and cause investors to lose confidence in our
reported financial information. Any such loss of confidence would have a
negative effect on the trading price of our stock.




We
have no present business operations. Accordingly, you have little basis upon
which to evaluate our ability to achieve future business success.




We were
formed to engage in the acquisition, exploration and development of mineral
deposits and reserves.  We discontinued operations in this area in
August 2007.  We are presently looking at other ventures of merit but,
to date, have not found any suitable ventures.  No assurance can be
given that we will ever locate and establish a suitable business
venture.  Our operations are therefore subject to all of the risks
inherent in the establishment of a new business enterprise and must be
considered in light of the expenses, difficulties, complications and delays
frequently encountered in connection with the formation of any new
business.




We
may be unable to obtain additional capital that we will require to implement our
business plan, which would restrict our ability to grow.




We have a
limited amount of working capital that will not be sufficient to fully fund our
planned operations. We will require additional capital to continue to operate
and expand our business. We may be unable to obtain the additional capital
required.




Future
acquisitions, as well as administrative requirements (such as salaries,
insurance expenses and general overhead expenses, as well as legal compliance
and accounting expenses) will require a substantial amount of additional capital
and cash flow. We may not be successful in locating suitable financing
transactions in the time period required or at all, and we may not be able to
obtain the capital we require by other means. If we do not succeed in raising
additional capital, we may be unable to fund our operations going
forward.




Our
ability to obtain needed financing may be impaired by such factors as the
capital markets and our status as an enterprise without a demonstrated operating
history.  If the amount of capital we are able to raise from financing
activities is not sufficient to satisfy our capital needs, we may be required to
curtail or cease our operations.




We may
incur substantial costs in pursuing future capital financing, including
investment banking fees, legal fees, accounting fees, securities law compliance
fees, printing and distribution expenses and other costs. We also may be
required to recognize non-cash expenses in connection with certain securities we
may issue, such as convertible notes and warrants, which may adversely impact
our financial condition.




We
may not be able to effectively expand operations or manage our growth, which may
harm our profitability.




Our
strategy envisions expanding our business. If we fail to effectively manage our
growth, our financial results could be adversely affected. Growth may place a
strain on our management systems and resources. We must continue to refine and
expand our business development capabilities, our systems and processes, and our
access to financing sources. As we grow, we must continue to hire, train,
supervise and manage new employees. We cannot assure you that we will be able
to:


7


·
            meet
      our capital needs;




·
            expand
      our systems effectively or efficiently or in a timely
    manner;




·
            allocate
      our human resources optimally;




·
            identify
      and hire qualified employees or retain valued employees;
  or




·
            incorporate
      effectively the components of any business that we may acquire in our
      effort to achieve growth.




If we are
unable to manage our growth, our operations and our financial results could be
adversely affected by inefficiency, which could diminish our
profitability.




Our
business may suffer if we do not attract and retain talented
personnel.




Our
success will depend in large measure on the abilities, expertise, judgment,
discretion, integrity and good faith of our management and other personnel in
conducting our intended business. We presently have a small management team
consisting of our sole executive officer that we expect to expand in conjunction
with our planned acquisition activities. The loss of a key individual or our
inability to attract suitably qualified staff could have a materially adverse
impact on our business. We presently do not maintain “key man” life insurance on
any member of our management team.  If we are unable to attract and
retain key personnel, our business may be adversely affected.




The
lack of a trading market for our common stock may impair your ability to sell
your shares.




There has
not been a trading market for our common stock since our inception. The lack of
an active market may impair your ability to sell your shares at the time you
wish to sell them or at a price that you consider reasonable. The lack of an
active market may also reduce the fair market value of your shares. An inactive
market may also impair our ability to raise capital by selling shares of capital
stock and may impair our ability to acquire other assets or companies by using
common stock as consideration.




Our
common stock is currently quoted on OTC Markets under the symbol
“THSM”.  As indicated above, our common stock is not presently
trading. As a result, investors may find it difficult to obtain accurate
quotations of the price of our common stock. This situation severely limits the
liquidity of the common stock and hampers our ability to raise additional
capital.




We
do not expect to pay dividends in the foreseeable future.




We do not
intend to declare dividends for the foreseeable future, as we anticipate that we
will reinvest future earnings in the development and growth of our business.
Therefore, investors will not receive any funds unless they sell their common
stock, and stockholders may be unable to sell their shares on favorable terms or
at all. Investors cannot be assured of a positive return on investment or that
they will not lose the entire amount of their investment in our common
stock.




Applicable
SEC rules governing the trading of “penny stocks” will limit the trading and
liquidity of our common stock, which may affect the trading price of our common
stock.




Our
common stock is considered to be a “penny stock” and is therefore subject to SEC
rules and regulations that (i) impose limitations upon the manner in which our
shares may be publicly traded and (ii) regulate broker-dealer practices in
connection with transactions in “penny stocks.” Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges such as the NASDAQ Stock
Market, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer’s
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules and may increase the difficulty investors might experience in
attempting to liquidate such securities.


8


ITEM 1B.
            UNRESOLVED
      STAFF COMMENTS




Not
Applicable.




ITEM
      2.
            PROPERTIES




Our
principal executive office is located at 11923 SW 37 Terrace, Miami, Florida
33175.  The office space is shared office space in which we have use
of a 160 square foot office.  The office is provided to us on a rent
free basis by our principal shareholder, Nanuk Warman.




ITEM
      3.
            LEGAL
      PROCEEDINGS




Legal
Proceedings




In the
ordinary course of our business, we may from time to time become subject to
routine litigation or administrative proceedings which are incidental to our
business.  We are not a party to nor are we aware of any existing,
pending or threatened lawsuits or other legal actions involving us.




ITEM
      4.
            [REMOVED
      AND RESERVED]




PART
II




ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES




Market
Information




“Bid” and
”ask” prices for our common stock are quoted on the Over-The-Counter Bulletin
Board (the “OTCBB”) under the symbol “THSM.OB”.  However, our stock
has never traded.




The
following table sets forth the high and low closing bid prices for our common
stock for the fiscal quarters indicated as reported on the OTCBB by the National
Association of Securities Dealers Composite Feed or other qualified interdealer
quotation medium. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and do not represent actual
transactions.




Quarter Ended
                            
                            High Bid
                            
                            
                            Low BidSeptember
      30, 2010
                            
                            $
                            0.005
                            
                            
                            $
                            0.005June
      30, 2010
                            
                            $
                            0.007
                            
                            
                            $
                            0.005March
      31, 2010
                            
                            $
                            0.007
                            
                            
                            $
                            0.005December
      31, 2009
                            
                            $
                            0.005
                            
                            
                            $
                            0.005September
      30, 2009
                            
                            $
                            0.005
                            
                            
                            $
                            0.005June
      30, 2009
                            
                            $
                            0.005
                            
                            
                            $
                            0.005March
      31, 2009
                            
                            $
                            0.51
                            
                            
                            $
                            0.005December
      31, 2008
                            
                            $
                            0.51
                            
                            
                            $
                            0.51


9


As of
November 29, 2010, we had 13 shareholders of record of our common
stock.




Dividends




We have
never declared any cash dividends with respect to our common
stock.  Future payment of dividends is within the discretion of our
board of directors and will depend on our earnings, capital requirements,
financial condition and other relevant factors.  Although there are no
material restrictions limiting, or that are likely to limit, our ability to pay
dividends on our common stock, we presently intend to retain future earnings, if
any, for use in our business and have no present intention to pay cash dividends
on our common stock.




Recent
Sales of Unregistered Equity Securities




During
the fiscal year ended September 30, 2010, we issued no equity
securities.




Purchases
of Equity Securities by the Issuer and Affiliated Purchasers




None




Securities
Authorized For Issuance Under Equity Compensation Plans




Effective
October 21, 2010, our Board of Directors and stockholders holding a majority of
our outstanding common stock approved our 2010 Equity Incentive Plan. The
purpose of the 2010 Equity Incentive Plan is to attract and retain the best
available personnel for positions of substantial responsibility; to provide
incentives to individuals who perform services for us; and to promote the
success of our business.




The 2010
Equity Incentive Plan reserves a total of 4,250,000 shares of our common stock
for issuance under the 2010 Equity Incentive Plan.  If an incentive
award granted under the 2010 Equity Incentive Plan expires, terminates, is
unexercised or is forfeited, or if any shares are surrendered to us in
connection with an incentive award, the shares subject to such award and the
surrendered shares will become available for further awards under the 2010
Equity Incentive Plan.




The
number of shares of our common stock subject to the 2010 Equity Incentive Plan,
any number of shares subject to any numerical limit in the Plan, and the number
of shares and terms of any incentive award will be adjusted in the event of
any change in our outstanding common stock by reason of any stock dividend,
spin-off, split-up, stock split, reverse stock split, recapitalization,
reclassification, merger, consolidation, liquidation, business combination or
exchange of shares or similar transaction.








Administration




If
formed, the compensation committee of the Board of Directors will administer the
2010 Equity Incentive Plan. In the event the compensation committee is not
formed by our Board of Directors, our entire Board of Directors will serve the
role of the committee. The administrative body will be hereinafter referred to
as the “Administrator.” Subject to the terms of the 2010 Equity Incentive Plan,
the Administrator will have complete authority and discretion to determine the
terms of awards under the 2010 Equity Incentive Plan.




Awards




The 2010
Equity Incentive Plan authorizes the grant of incentive stock options,
nonqualified stock options, stock appreciation rights, restricted stock,
restricted stock units or performance shares.


10


Stock Options. Stock options
entitle the participant, upon exercise, to purchase a specified number of shares
of the Company’s common stock at a specified price and for a specified period of
time. The exercise price for each stock option shall be determined by the
Administrator but shall not be less than 100% of the fair market value of the
Company’s common stock on the date of grant. The “fair market value” means the
value of the common stock as the Administrator may determine in good faith, by
reference to the closing price of such stock on any established stock exchange
or national market system on which the Company’s common stock is listed on the
day of determination, or if the Company’s common stock is not so listed, the
value of such stock as may be determined by the Administrator in good
faith.




Any stock
options granted in the form of an incentive stock option will be intended to
comply with the requirements of Section 422 of the Internal Revenue Code of
1986, as amended. Only options granted to employees qualify for incentive stock
option treatment.




Each
stock option shall expire at such time as the Administrator shall determine at
the time of grant. No stock option shall be exercisable later than the tenth
anniversary of its grant. A stock option may be exercised in whole or in
installments. A stock option may not be exercisable for a fraction of a share.
Shares of the Company’s common stock purchased upon the exercise of a stock
option must be paid for in full at the time of exercise in cash or such other
consideration determined by the Administrator.




Stock Appreciation Rights. A
stock appreciation right (“SAR”) is the right to receive a payment equal to the
excess of the fair market value of a specified number of shares of common stock
on the date the SAR is exercised over the exercise price of the SAR. The
exercise price for each SAR shall not be less than 100% of the fair market value
of the Company’s common stock on the date of grant, and the term shall be no
more than ten years from the date of grant. At the discretion of the
Administrator, the payment upon an SAR exercise may be in cash, in shares
equivalent thereof, or in some combination thereof.




Upon
exercise of an SAR, the participant shall be entitled to receive payment from
the Company in an amount determined by multiplying the excess of the fair market
value of a share of the Company’s common stock on the date of exercise over the
exercise price of the SAR by the number of shares with respect to which the SAR
is exercised. The payment may be made in cash or stock, at the discretion of the
Administrator.




Restricted Stock and Restricted
Stock Units. Restricted stock and restricted stock units may be awarded
or sold to participants under such terms and conditions as shall be established
by the Administrator. Restricted stock and restricted stock units shall be
subject to such restrictions as the Administrator determines, including a
prohibition against sale, assignment, transfer, pledge or hypothecation, and a
requirement that the participant forfeit such shares or units in the event of
termination of employment. A restricted stock unit provides a participant the
right to receive payment at a future date after the lapse of restrictions or
achievement of performance criteria or other conditions determined by the
Administrator.




Performance Stock. The
Administrator shall designate the participants to whom long-term performance
stock are to be awarded and determine the number of shares, the length of the
performance period and the other vesting terms and conditions of each such
award; provided the stated performance period will not be less than twelve (12)
months. Each award of performance stock shall entitle the participant to a
payment in the form of shares of common stock of the Company upon the attainment
of performance goals and other vesting terms and conditions specified by the
Administrator. The Administrator may, in its discretion, make a cash payment
equal to the fair market value of shares of common stock otherwise required to
be issued to a participant pursuant to a Performance Stock Award.




All
awards are discussed in more detail in the 2010 Equity Incentive Plan. All
awards made under the 2010 Equity Incentive Plan may be subject to vesting and
other contingencies as determined by the Administrator and will be evidenced by
agreements approved by the Administrator which set forth the terms and
conditions of each award.


11


Duration, Amendment and
Termination




Unless
sooner terminated by the Administrator, the 2010 Equity Incentive Plan will
terminate on October 20, 2020.  The Board of Directors will have the
power to amend, alter, suspend or terminate the 2010 Equity Incentive Plan at
any time or from time to time without stockholder approval or ratification,
unless necessary and desirable to comply with applicable law.  No
change may be made that increases the total number of shares of common stock
reserved for issuance pursuant to the Plan or reduces the minimum exercise price
for options or exchange of options for other incentive awards, unless such
change is authorized by our stockholders within one year.  However,
before an amendment may be made that would adversely affect a participant who
has already been granted an award, the participant’s consent must be
obtained.




ITEM
      6.
            SELECTED
      FINANCIAL DATA




Not
applicable.




ITEM
7.         MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




The
following discussion should be read in conjunction with our audited consolidated
financial statements and the accompanying notes included elsewhere in this
Annual Report on Form 10-K.




The
following discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in the forward-looking statements as a result of various factors, including
those discussed elsewhere in this annual report.




Results
of Operations




We
conducted no material operations during the year ended September 30, 2010 and do
not have any present operations.




Revenues




We have
had no revenues since our inception.




Expenses




We had
operating expenses of $81,279 and $52,862 for the years ended September 30, 2010
and 2009 respectively.  The increase in operating expenses during the
year ended September 30, 2010 was primarily attributable to an increase in
professional fees.




Net Loss




We
incurred net losses for the years ended September 30, 2010 and 2009 of $89,933
and $55,469, respectively.  The increase in net loss during the year
ended September 30, 2010 was directly attributable to an increase in
professional fees.




Liquidity
and Capital Resources




The
report of our auditors on our audited financial statements for the fiscal year
ended September 30, 2010 contains a going concern qualification as we have
suffered losses since our inception.  We have minimal assets and have
achieved no operative revenues since our inception.  We have depended
on loans and sales of equity securities to conduct operations.  As of
September 30, 2010 and 2009, we had cash of $323 and $0, current assets of $323
and $4 and current liabilities of $179,054 and $88,802,
respectively.  Unless and until we commence material operations and
achieve material revenues, we will remain dependent on financings to continue
our operations.




Plan
of Operation




We were
formed to engage in the acquisition, exploration and development of minimal
deposits and reserves.  We conducted minimal operations in this line
of business and in August 2007 decided to discontinue operations in this
area.  We are presently inactive, but we are looking at ventures of
merit for corporate participation as means of enhancing shareholder value. This
may involve sales of our equity or debt securities in merger or acquisition
transactions.


12


We have
minimal operating costs and expenses at the present time due to our limited
business activities.  Accordingly, absent changed circumstances, we
will not be required to raise significant capital over the next twelve months,
although we may do so in connection with or in anticipation of possible
acquisition transactions.  We do not currently engage in any product
research and development and have no plans to do so in the foreseeable
future.  We have no present plans to purchase or sell any plant or
significant equipment.  We also have no present plans to add employees
although we may do so in the future if we engage in any merger or acquisition
transactions.




Recent Accounting
Pronouncements




’




Off
Balance Sheet Arrangements




None.




Contractual
Obligations




Not
applicable.




ITEM
      7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Not
applicable.




ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTAL DATA




Our
audited financial statements are included beginning immediately following the
signature page to this report.  See Item 15 for a list of the
financial statements included herein.




ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




Not
applicable.




ITEM
      9A.
            CONTROLS
      AND PROCEDURES




Evaluation
of Our Disclosure Controls




Under the
supervision and with the participation of our senior management, including our
Chief Executive Officer and Chief Financial Officer, we conducted an evaluation
of the effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the
period covered by this Annual Report on Form 10-K (the “Evaluation
Date”).  Based on this evaluation, our Chief Executive Officer and
Chief Financial Officer concluded as of the Evaluation Date that our disclosure
controls and procedures were effective such that the information relating to us,
including our consolidated subsidiaries, required to be disclosed in our
Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms, and (ii) is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure.


Management’s
Annual Report on Internal Control Over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally
accepted in the United States.  Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.  Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives.  With the participation of our Chief Executive and
Financial Officer, our management conducted an evaluation of the effectiveness
of our internal control over financial reporting as of September 30, 2010 based
on the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in Internal Control – Integrated
Framework.  Based upon such evaluation, our management concluded that
we did maintain effective internal control over financial reporting as of
September 30, 2010 based on the COSO framework criteria.




13




This
Annual Report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to a permanent exemption for non-accelerated
filers from the internal control audit requirements of Section 404(b) of the
Sarbanes-Oxley Act of 2002.




Officers’
Certifications




Appearing
as exhibits to this Annual Report are “Certifications” of our Chief Executive
Officer and Chief Financial Officer.  The Certifications are required
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302
Certifications”).  This section of the Annual Report contains
information concerning the Controls Evaluation referred to in the Section 302
Certification.  This information should be read in conjunction with
the Section 302 Certifications for a more complete understanding of the topics
presented.




Changes
in Internal Control Over Financial Reporting




There
have been no changes in our internal control over financial reporting that
occurred during the quarter ended September 30, 2010 that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.




ITEM
      9B.
            OTHER
      INFORMATION




Not
applicable.




PART
III




ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE




Executive
Officers, Directors and Key Employees




Directors
serve until the next annual meeting of the stockholders; until their successors
are elected or appointed and qualified, or until their prior resignation or
removal.  Officers serve for such terms as determined by our board of
directors.  Each officer holds office until such officer’s successor
is elected or appointed and qualified or until such officer’s earlier
resignation or removal.  No family relationships exist between any of
our present directors and officers.




The
following table sets forth certain information, as of November 29, 2010, with
respect to our directors and executive officers.




Name
                        
                        Positions
      Held
                        
                        Age
                        
                        Date
      of Election or
                          Appointment
      as DirectorDavid
      Rector
                        
                        Chief
      Executive and Financial Officer, President, Secretary, Treasurer and
      Director
                        
                        63
                        
                        November
      22,
2010




Certain
biographical information of our directors and officers is set forth
below.


14


David Rector has served as our
Chief Executive Officer, President, Principal Accounting Officer, Secretary,
Treasurer and Director since November 22, 2010.  Mr. Rector served as
the Chief Executive Officer, President, Principal Accounting Officer, Secretary,
Treasurer and a Director of Universal Gold Mining Corp. from September 30, 2008
through November 17, 2010.  Mr. Rector served as the Chief Executive
Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director
of Nevada Gold Holdings, Inc. (formerly known as Nano Holdings International,
Inc.) from April 19, 2004 through December 31, 2008.  He has served as
the Chief Executive Officer, Chief Financial Officer, President, Secretary,
Treasurer, and Director of Standard Drilling, Inc. since November
2007.  Mr. Rector has served as President, Treasurer, Secretary and a
Director of Li3 Energy, Inc. since June 6, 2008, was also the Chief Executive
Officer and Chief Financial Officer of the same company from June 6, 2008 until
October 19, 2009 and January 13, 2010, respectively.  Mr. Rector
previously served as President, Chief Executive Officer and Chief Operating
Officer of Nanoscience from June 2004 to December 2006, when he resigned as an
officer and Director of Nanoscience.  Mr. Rector also served as
President, Chief Executive Officer, Chief Financial Officer and Treasurer of
California Gold Corp. (f/k/a US Uranium, Inc.) from June 15, 2007 to July 11,
2007 and again from August 8, 2007 to November 12, 2007.  Since June
1985, Mr. Rector has been the principal of the David Stephen Group, which
provides enterprise consulting services to emerging and developing companies in
a variety of industries. From January 1995 until June 1995, Mr. Rector served as
the General Manager of the Consumer Products Division of Bemis-Jason
Corporation. Mr. Rector was employed by Sunset Designs Inc., a manufacturer and
marketer of consumer product craft kits from June 1980 until June 1985. From
June 1983 until June 1985, Mr. Rector served as President and General Manager of
Sunset, from August 1981 until May 1985, Mr. Rector served as an Administrative
and International Director of Sunset, and from June 1980 until August 1981, Mr.
Rector served as Group Product Manager for Sunset.




Mr.
Rector currently serves, or has served during the last five years, on the Board
of Directors of each of the following public companies for the respective
tenures indicated below.




Public Company Name
              
              Tenure as DirectorSenesco
      Technologies, Inc. (AMEX:SNT)
              
              February
      2002-presentDallas
      Gold & Silver Exchange (AMEX:DSG)
              
              May
      2003-presentNevada
      Gold Holdings, Inc. (NGHI.OB)
              
              April
      2004-presentUS
      Uranium, Inc. (USUI.OB)
              
              June
      2007-presentCalifornia
      Gold Corp. (CLGL.OB)
              
              June
      2007-presentStandard
      Drilling, Inc.(STDR.PK)
              
              November
      2007-presentLi3
      Energy, Inc. (LIEG.OB)
              
              June
      2008-presentRxElite,
      Inc. (RXEI.OB)
              
              September
      2007-February 2009Superior
      Galleries, Inc. (SPGR.OB)
              
              May
      2003-May 2007Nanoscience
      Technologies, Inc. (NANS.OB)
              
              June
      2004-December 2006Universal
      Gold Mining Corp. (UGDM.OB)
              
              September
      2008-November 2010




Mr.
Rector obtained his Bachelor’s Degree in Business Administration from Murray
State University in 1969.




Employment
Agreements




We have
no formal employment agreements or arrangements with any of our
employees.  We compensate our sole officer and director at the rate of
$500 per month.




Term
of Office




Our
directors are appointed for a period of one year or until such time as their
replacements have been elected by our shareholders.  The officers of
the Company are appointed by our board of directors and hold office until their
resignation or removal.




Audit
Committee




We do not
have a standing audit committee, an audit committee financial expert, or any
committee or person performing a similar function.  We currently have
limited working capital and no revenues.  Management does not believe
that it would be in our best interests at this time to retain independent
directors to sit on an audit committee.


15


If we are
able to raise sufficient financing in the future, then we will likely seek out
and retain independent directors and form an audit, compensation committee and
other applicable committees.




Board
of Directors




Our only
director is our sole executive officer.  He is not an independent
director.  We do not pay him for attending board
meetings.  He is reimbursed, however, for his expenses, if any, for
attendance at meetings of the Board of Directors.  Our Board of
Directors may designate from among its members an executive committee and one or
more other committees but has not done so to date.  We do not have a
nominating committee or a nominating committee charter.  Further, we
do not have a policy with regard to the consideration of any director candidates
recommended by security holders.  To date this has not been a problem
as no security holders have made any such recommendations.  Our sole
director performs all functions that would otherwise be performed by
committees.  Given the present size of our Board of Directors it is
not practical for us to have committees.  If we are able to grow our
business and increase our operations we intend to expand the size of our Board
of Directors and allocate responsibilities accordingly.




Corporate
Governance




Leadership
Structure




Our board
has 1 member, David Rector.  Accordingly we have not designated a
chairman.




We are a
shell corporation which has yet to achieve operating revenues. Our sole
director, Mr. David Rector, also serves as our sole executive
officer.  We believe that our present management structure is
appropriate for a company of our size and state of development.




Our board
is actively involved in our risk oversight function and collectively undertakes
our risk oversight function. This review of our risk tolerances includes, but is
not limited to, financial, legal and operational risks and other risks
concerning our reputation and ethical standards.




Given our
size, we do not have a nominating committee or a diversity policy. Our entire
board monitors and assesses the need for and qualifications of additional
directors.  We may adopt a diversity policy in the future in
connection with our anticipated growth.




Compliance
with Section 16(a) of the Exchange Act




Section
16(a) of the Exchange Act, as amended, requires that our directors, executive
officers and persons who own more than 10% of a class of our equity securities
that are registered under the Exchange Act to file with the Commission initial
reports of ownership and reports of changes of ownership of such registered
securities.




To our
knowledge, based solely on a review of copies of such reports, no person
required to file such a report failed to file a required report for the fiscal
year covered by this report, although Nanuk Warman and Ronald Asirwatham each
filed a Form 3 on a late basis.




Code
of Ethics




In 2006
we adopted a Code of Ethics that applies to all of our employees.  A
copy of our Code of Ethics will be provided to any person requesting same
without charge.  To request a copy of our Code of Ethics, please make
written request to our President c/o 22nd Century
Group, Inc. at 11923 SW 37 Terrace, Miami, FL 33175.


16


ITEM
      11.
            EXECUTIVE
      COMPENSATION




The
following table sets forth information concerning the total compensation paid or
accrued by us during the three fiscal years ended September 30, 2010, 2009 and
2008 to (i) all individuals that served as our principal executive officer or
acted in a similar capacity for us at any time during the fiscal year ended
September 30, 2010; (ii) all individuals that served as our principal financial
officer or acted in a similar capacity for us at any time during the fiscal year
ended September 30, 2010; and (iii) all individuals that served as executive
officers of ours at any time during the fiscal year ended September 30, 2010
that received annual compensation during the fiscal year ended September 30,
2010 in excess of $100,000.




Summary
Compensation Table




Name and
                              Principal
                              Position
                            
                            Year
                            
                            Salary
                              ($)
                            
                            
                            Bonus
                              ($)
                            
                            
                            Stock
                              Awards
                              ($)
                            
                            
                            Option
                              Awards
                              ($)
                            
                            
                            Non-
                              Equity
                              Incentive
                              Plan
                              Compen-
                              sation
                              ($)
                            
                            
                            Change
                              in
                              Pension
                              Value
                              and
                              Non-
                              qualified
                              Deferred
                              Compen-
                              sation
                              Earnings
                              ($)
                            
                            
                            All
                              Other
                              Compen-
                              sation
                              ($)
                            
                            
                            Total
                              ($)(a)
                            
                            (b)
                            
                            (c)
                            
                            
                            (d)
                            
                            
                            (e)
                            
                            
                            (f)
                            
                            
                            (g)
                            
                            
                            (h)
                            
                            
                            (i)
                            
                            
                            (j)Ronald
                            
                            2010
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0Asirwatham(1),
                            
                            2009
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0Chief
      Executive Officer
                            
                            2008
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0Nanuk
                            
                            2010
                            
                            
                            8,000
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            8,000Warman(2),
                            
                            2009
                            
                            
                            8,000
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            8,000Chief
      Executive Officer
                            
                            2008
                            
                            
                            2,000
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            0
                            
                            
                            
                            2,000




(1)
            Ronald
      Asirwatham served as our sole executive officer from September 24, 2010
      through November 22, 2010. Commencing October 1, 2010 we were compensating
      Mr. Asirwatham at the rate of $500 per
month.


(2)
            Nanuk
      Warman served as our sole executive officer and as a Director from June 9,
      2008 through September 24, 2010.




We have
not issued any stock options or maintained any stock option or other incentive
plans since our inception other than the 2010 Equity Incentive Plan which was
adopted on October 21, 2010 (see “Item 5. Securities Authorized for Issuance
Under Equity Compensation Plans”). We have no plans in place and have never
maintained any plans that provide for the payment of retirement benefits or
benefits that will be paid primarily following retirement including, but not
limited to, tax qualified deferred benefit plans, supplemental executive
retirement plans, tax-qualified deferred contribution plans and nonqualified
deferred contribution plans. Similarly, we have no contracts, agreements, plans
or arrangements, whether written or unwritten, that provide for payments to the
named executive officers or any other persons following, or in connection with
the resignation, retirement or other termination of a named executive officer,
or a change in control of us or a change in a named executive officer’s
responsibilities following a change in control.




Compensation
of Directors




None of
our directors receive any compensation for serving as such, for serving on
committees of the board of directors or for special assignments. During the
fiscal year ended September 30, 2010 there were no other arrangements between us
and our directors that resulted in our making payments to any of our directors
for any services provided to us by them as directors.


17


ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The
following table sets forth information with respect to the beneficial ownership
of our common stock known by us as of November 29, 2010 by:




·
            each
      person or entity known by us to be the beneficial owner of more than 5% of
      our common stock;




·
            each
      of our directors;




·
            each
      of our executive officers; and




·
            all
      of our directors and executive officers as a
  group.




The
percentages in the table have been calculated on the basis of treating as
outstanding for a particular person, all shares of our common stock outstanding
on such date and all shares of our common stock issuable to such holder in the
event of exercise of outstanding options, warrants, rights or conversion
privileges owned by such person at said date which are exercisable within 60
days of November 29, 2010.  Except as otherwise indicated, the persons
listed below have sole voting and investment power with respect to all shares of
our common stock owned by them, except to the extent such power may be shared
with a spouse.




Name and Address of
                                      Beneficial Owner
                                    
                                    Title of Class
                                    
                                    Amount and Nature
                                      of Beneficial
                                      Ownership(1)
                                    
                                    Percentage
                                      of
                                      Class(2)David
      Rector (3)
                                    
                                    Common
      Stock, par value $0.00001 per share
                                    
                                    0
      Shares
                                    
                                    
                                    0
                                    %Nanuk
      Warman (4)
                                    
                                    Common
      Stock, par value $0.00001 per share
                                    
                                    10,015,200
      Shares (Direct)
                                    
                                    
                                    57.7
                                    %All
      officers and directors as a group (1 person)
                                    
                                    Common
      Stock, par value $0.00001 per share
                                    
                                    0
      Shares
                                    
                                    
                                    0
                                    %





(1)
            As
      used herein, the term beneficial ownership with respect to a security is
      defined by Rule 13d-3 under the Securities Exchange Act of 1934 as
      consisting of sole or shared voting power (including the power to vote or
      direct the vote) and/or sole or shared investment power (including the
      power to dispose or direct the disposition of) with respect to the
      security through any contract, arrangement, understanding, relationship or
      otherwise, including a right to acquire such power(s) during the next 60
      days.  Unless otherwise noted, beneficial ownership consists of
      sole ownership, voting and investment
rights.




(2)
            There
      were 17,356,590 shares of common stock issued and outstanding on November
      29, 2010.




(3)
            The
      address for Mr. Rector is 1640 Terrace Way, Walnut Creek, CA
      94597




(4)
            The
      address for Mr. Warman is 11923 SW 37 Terrace, Miami, Florida
      33175.




Securities
Authorized for Issuance Under Equity Compensation Plans




Effective
October 21, 2010 our Board of Directors and stockholders owning a majority of
our outstanding shares of common stock authorized and approved our 2010 Equity
Incentive Plan (see Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities – Securities
Authorized for Issuance Under Equity Compensation Plans).


18


ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





David
Rector, our sole director, is not an independent director as he also serves as
our sole executive officer.




ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




Audit
Fees.




The
aggregate fees billed to us by our principal accountant for services rendered
during the fiscal years ended September 30, 2010 and 2009 are set forth in the
table below:




Fee Category
                
                Fiscal year ended
                  September 30, 2010
                
                
                Fiscal year ended
                  September 30, 2009Audit
      fees (1)
                
                $
                12,000
                
                
                $
                10,500Audit-related
      fees (2)
                
                
                0
                
                
                
                0Tax
      fees (3)
                
                
                900
                
                
                
                300All
      other fees (4)
                
                
                0
                
                
                
                0Total
      fees
                
                $
                12,900
                
                
                $
                10,800




(1)
              Audit
      fees consist of fees incurred for professional services rendered for the
      audit of our financial statements, for reviews of our interim financial
      statements included in our quarterly reports on Form 10-Q and for services
      that are normally provided in connection with statutory or regulatory
      filings or engagements.(2)
              Audit-related
      fees consist of fees billed for professional services that are reasonably
      related to the performance of the audit or review of our consolidated
      financial statements, but are not reported under “Audit
fees.”(3)
              Tax
      fees consist of fees billed for professional services relating to tax
      compliance, tax planning, and tax advice.(4)
              All
      other fees consist of fees billed for all other
  services.




Audit Committee’s
Pre-Approval Practice.




We do not
have an audit committee.  Our board of directors performs the function
of an audit committee.  Section 10A(i) of the Securities Exchange Act
of 1934, as amended, prohibits our auditors from performing audit services for
us as well as any services not considered to be audit services unless such
services are pre-approved by our audit committee or, in cases where no such
committee exists, by our board of directors (in lieu of an audit committee) or
unless the services meet certain de minimis standards.


19


PART
IV




ITEM
      15.
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES




Financial Statements
                      
                      PageReport
      of Independent Registered Public Accounting Firm
                      
                      F-2Balance
      Sheets as of September 30, 2010 and 2009
                      
                      F-3Statements
      of Operations for the years ended September 30, 2010 and
    2009and
      for the period from September 12, 2005 (Inception) to September 30,
      2010
                      
                      F-4Statements
      of Changes in Stockholders’ Equity (Deficit) for the period
      fromSeptember
      12, 2005 (Inception) to September 30, 2010
                      
                      F-5Statements
      of Cash Flows for the years ended September 30, 2010 and
    2009and
      for the period from September 12, 2005 (Inception) to September 30,
      2010
                      
                      F-6Notes
      to Financial Statements
                      
                      F-7
      –
F-14




Financial
Statement Schedules





All
financial statement schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.





Exhibits





In
reviewing the agreements included as exhibits to this Form 10-K, please remember
that they are included to provide you with information regarding their terms and
are not intended to provide any other factual or disclosure information about
the Company or the other parties to the agreements. The agreements may contain
representations and warranties by each of the parties to the applicable
agreement. These representations and warranties have been made solely for the
benefit of the parties to the applicable agreement and:





•
            should
      not in all instances be treated as categorical statements of fact, but
      rather as a way of allocating the risk to one of the parties if those
      statements prove to be inaccurate;





•
            have
      been qualified by disclosures that were made to the other party in
      connection with the negotiation of the applicable agreement, which
      disclosures are not necessarily reflected in the
  agreement;





•
            may
      apply standards of materiality in a way that is different from what may be
      viewed as material to you or other investors;
  and





•
            were
      made only as of the date of the applicable agreement or such other date or
      dates as may be specified in the agreement and are subject to more recent
      developments.





Accordingly,
these representations and warranties may not describe the actual state of
affairs as of the date they were made or at any other time. Additional
information about the Company may be found elsewhere in this Form 10-Q and the
Company’s other public filings, which are available without charge through the
SEC’s website at http://www.sec.gov.





The
following exhibits are included as part of this report:





Exhibit No.
                                      
                                      SEC Report
                                        Reference No.
                                      
                                      Description3.1
                                      
                                      3.1
                                      
                                      Articles
      of Incorporation of Registrant (1)3.2
                                      
                                      *
                                      
                                      Amended
      and Restated Articles of Incorporation of Registrant filed with the Nevada
      Secretary of State on November 23, 20103.3
                                      
                                      3.2
                                      
                                      By-Laws
      of Registrant (1)4.1
                                      
                                      4.1
                                      
                                      $80,000
      Promissory Note dated May 8, 2009 (2)4.2
                                      
                                      *
                                      
                                      Amendment
      dated November 8, 2010 to $80,000 Promissory Note dated May 8,
      2009


20





4.3
                      
                      4.2
                      
                      $32,327
      Promissory Note dated February 10, 2010 (5)4.4
                      
                      *
                      
                      $50,000
      Promissory Note dated October 14, 201010.1
                      
                      10.1
                      
                      Stock
      Purchase Agreement dated September 26, 2007 between Registrant and Douglas
      Scheving (3)14.1
                      
                      14.1
                      
                      Code
      of Ethics (4)20
                      
                      N/A
                      
                      Information
      Statement of Registrant dated November 2, 2010 (6)21
                      
                      *
                      
                      List
      of Subsidiaries31.1
      / 31.2
                      
                      *
                      
                      Rule
      13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial
      Officer32.1
      / 32.2
                      
                      *
                      
                      Rule
      1350 Certification of Chief Executive and Financial
  Officer




(1)
            Filed
      with the Securities and Exchange Commission on December 27, 2005 as an
      exhibit, numbered as indicated above, to the Registrant’s registration
      statement on the Registrant’s Registration Statement on Form SB-2 (file
      no. 333-130696), which exhibit is incorporated herein by
      reference.




(2)
            Filed
      with the Securities and Exchange Commission on May 20, 2009 as an exhibit,
      numbered as indicated above, to the Registrant’s Quarterly Report on Form
      10-Q for the quarter ended March 31, 2009, which exhibit is incorporated
      herein by reference.




(3)
            Filed
      with the Securities and Exchange Commission on October 1, 2007 as an
      exhibit, numbered as indicated above, to the Registrant’s Current Report
      on Form 8-K, which exhibit is incorporated herein by
      reference.




(4)
            Filed
      with the Securities and Exchange Commission on December 22, 2006 as an
      exhibit, numbered as indicated above, to the Registrant’s Annual Report on
      Form 10-KSB for the year ended September 30, 2006, which exhibit is
      incorporated herein by reference.




(5)
            Filed
      with the Securities and Exchange Commission on December 23, 2009 as an
      exhibit, numbered as indicated above, to the Registrant’s Annual Report on
      Form 10-K for the year ended September 30, 2009, which exhibit is
      incorporated herein by reference.




(6)
            Filed
      with the Securities and Exchange Commission on November 2, 2010, which
      exhibit is incorporated herein by
reference.




* Filed
herewith.


21


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.





22ND
      CENTURY GROUP, INC.Dated:  December
      1, 2010
              
              By:
              /s/ David RectorDavid
      Rector, President, Chief Executive Officerand
      Financial Officer, and Principal AccountingOfficer





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on this 1st day of
December, 2010.





/s/ David RectorDavid
      Rector, President, Chief Executive Officer, Chief Financial
                    Officer,
      Principal Accounting Officer, and
Director


22




PART
IV – FINANCIAL INFORMATION




ITEM
      15.
              FINANCIAL
      STATEMENTS





PageReport
      of Independent Registered Public Accounting Firm
              
              F-2Balance
      Sheets as of September 30, 2010 and 2009
              
              F-3Statements
      of Operations for the years ended September 30, 2010 and 2009 and for the
      period from September 12, 2005 (Inception) to September 30,
      2010
              
              F-4Statement
      of Changes in Stockholders’ Equity (Deficit) for the period from September
      12, 2005 (Inception) to September 30, 2010
              
              F-5Statements
      of Cash Flows for the years ended September 30, 2010 and 2009 and for the
      period from September 12, 2005 (Inception) to September 30,
      2010
              
              F-6Notes
      to Financial Statements
              
              F-7
      – F-14


F-1




REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                    
                    To
      The Board of Directors and Stockholders
                    22nd
      Century Group, Inc. (fka Touchstone Mining, Ltd.)
                    Las
      Vegas, NV
                    
                    We
      have audited the accompanying balance sheets of 22nd
      Century Group, Inc. (fka Touchstone Mining, Ltd.) (a development stage
      company) (the “Company”) as of September 30, 2010 and 2009, and the
      related statements of operations, changes in stockholders' equity
      (deficit), and cash flows for the years then ended. These financial
      statements are the responsibility of the Company's management. Our
      responsibility is to express an opinion on these financial statements
      based on our audits.
                    
                    We
      conducted our audits in accordance with the standards of the Public
      Company Accounting Oversight Board (United States of America). Those
      standards require that we plan and perform the audits to obtain reasonable
      assurance about whether the financial statements are free of material
      misstatement. The Company is not required to have, nor were we engaged to
      perform, an audit of its internal control over financial reporting. Our
      audits included consideration of internal control over financial reporting
      as a basis for designing audit procedures that are appropriate in the
      circumstances, but not for the purpose of expressing an opinion on the
      effectiveness of the Company's internal control over financial reporting.
      Accordingly, we express no such opinion. An audit also includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits
      provide a reasonable basis for our opinion.
                    
                    In
      our opinion, based on our audits, the financial statements referred to
      above present fairly, in all material respects, the financial position of
      the Company as of September 30, 2010 and 2009, and the results of its
      operations and cash flows for years then ended, in conformity with
      accounting principles generally accepted in the United States of
      America.
                    
                    The
      accompanying financial statements have been prepared assuming that the
      Company will continue as a going concern. As discussed in Note 7 to the
      financial statements, the Company has not generated revenues from
      operations and has incurred net losses since inception. This raises
      substantial doubt about the Company's ability to meet its obligations and
      to continue as a going concern. Management's plans in regard to this
      matter are described in Note 7. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.
                    
                    /s/ Child, Van Wagoner & Bradshaw,
      PLLC
                    
                    Child,
      Van Wagoner & Bradshaw, PLLC
                    Salt
      Lake City, UT
                    November
      29, 2010


F-2


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)


(A
Development Stage Company)





Balance
Sheets


As
of September 30,





2010
                                                              
                                                              
                                                              2009ASSETSCurrent
      AssetsCash
      and cash equivalents
                                                              
                                                              $
                                                              323
                                                              
                                                              
                                                              $
                                                              -Withholding
      tax receivable
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              4Total
      current assets
                                                              
                                                              
                                                              323
                                                              
                                                              
                                                              
                                                              4Non-Current
      AssetsMineral property
      reclamation bond (Note
      5)
                                                              
                                                              
                                                              4,330
                                                              
                                                              
                                                              
                                                              4,330TOTAL
      ASSETS
                                                              
                                                              $
                                                              4,653
                                                              
                                                              
                                                              $
                                                              4,334LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
                                                              
                                                              $
                                                              55,450
                                                              
                                                              
                                                              $
                                                              6,180Notes payable –
      stockholders (Note
      6)
                                                              
                                                              
                                                              112,327
                                                              
                                                              
                                                              
                                                              80,000Accrued interest,
      notes payable – stockholders (Note
      6)
                                                              
                                                              
                                                              11,277
                                                              
                                                              
                                                              
                                                              2,622Total
      current liabilities
                                                              
                                                              
                                                              179,054
                                                              
                                                              
                                                              
                                                              88,802TOTAL
      LIABILITIES
                                                              
                                                              
                                                              179,054
                                                              
                                                              
                                                              
                                                              88,802STOCKHOLDERS’
      DEFICITCapital Stock (Note
      3)Authorized:10,000,000
      preferred shares, $0.00001 par value300,000,000
      common shares, $0.00001 par valueIssued
      and outstanding shares:0
      preferred shares
                                                              
                                                              
                                                              -
                                                              
                                                              
                                                              
                                                              -17,356,590 common
      shares
                                                              
                                                              
                                                              174
                                                              
                                                              
                                                              
                                                              174Capital
      in excess of par value
                                                              
                                                              
                                                              146,328
                                                              
                                                              
                                                              
                                                              146,328Deficit
      accumulated during the development stage
                                                              
                                                              
                                                              (320,903
                                                              )
                                                              
                                                              
                                                              (230,970
                                                              )Total
      stockholders’ deficit
                                                              
                                                              
                                                              (174,401
                                                              )
                                                              
                                                              
                                                              (84,468
                                                              )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                                                              
                                                              $
                                                              4,653
                                                              
                                                              
                                                              $
                                                              4,334





The
accompanying notes are an integral part of these financial
statements.


F-3


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Statements
of Operations





Cumulativefrom Inception(September 12, 2005)Year Ended September 30,
                                      
                                      
                                      to September 30,2010
                                      
                                      
                                      2009
                                      
                                      
                                      2010(Unaudited)Income
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -ExpensesMineral
      property costs
                                      
                                      
                                      2,713
                                      
                                      
                                      
                                      1,900
                                      
                                      
                                      
                                      38,434Professional
      fees
                                      
                                      
                                      70,550
                                      
                                      
                                      
                                      42,922
                                      
                                      
                                      
                                      242,055Office
      and administrative
                                      
                                      
                                      8,016
                                      
                                      
                                      
                                      8,040
                                      
                                      
                                      
                                      28,683Total
      Operating Expenses
                                      
                                      
                                      81,279
                                      
                                      
                                      
                                      52,862
                                      
                                      
                                      
                                      309,172Other
      Income (Expense)Foreign
      currency transaction loss
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (470
                                      )Interest
      income
                                      
                                      
                                      1
                                      
                                      
                                      
                                      15
                                      
                                      
                                      
                                      16Interest
      expense
                                      
                                      
                                      (8,655
                                      )
                                      
                                      
                                      (2,622
                                      )
                                      
                                      
                                      (11,277
                                      )Total
      Other Income (Expense)
                                      
                                      
                                      (8,654
                                      )
                                      
                                      
                                      (2,607
                                      )
                                      
                                      
                                      (11,731
                                      )Net
      Loss Applicable to Common Shares
                                      
                                      $
                                      (89,933
                                      )
                                      
                                      $
                                      (55,469
                                      )
                                      
                                      $
                                      (320,903
                                      )Basic
      and Diluted Loss per Common Share
                                      
                                      $
                                      (0.01
                                      )
                                      
                                      $
                                      (0.00
                                      )Weighted
      Average Number of Common Shares Outstanding
                                      
                                      
                                      17,356,590
                                      
                                      
                                      
                                      17,356,590





The
accompanying notes are an integral part of these financial
statements.


F-4


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Statement
of Changes in Stockholders’ Equity (Deficit)


For
the Period of Inception (September 12, 2005) to September 30, 2010








Common Shares
                              
                              
                              Capital in
                                Excess of
                              
                              
                              Deficit
                                Accumulated
                                During the
                                DevelopmentShares
                              
                              
                              Amount
                              
                              
                              Par Value
                              
                              
                              Stage
                              
                              
                              TotalInception
      – September 12, 2005
                              
                              
                              –
                              
                              
                              $
                              –
                              
                              
                              $
                              –
                              
                              
                              $
                              –
                              
                              
                              $
                              –Common
      shares issued for cash at $0.007 per share, September 12,
    2005
                              
                              
                              1,669,200
                              
                              
                              
                              17
                              
                              
                              
                              11,983
                              
                              
                              
                              –
                              
                              
                              
                              12,000Loss
      for the period
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              (3,897
                              )
                              
                              
                              (3,897
                              )Balance – September
      30, 2005 (Unaudited)
                              
                              
                              1,669,200
                              
                              
                              
                              17
                              
                              
                              
                              11,983
                              
                              
                              
                              (3,897
                              )
                              
                              
                              8,103Common
      shares issued for cash at $0.007 per share, June 22, 2006
                              
                              
                              6,955,000
                              
                              
                              
                              70
                              
                              
                              
                              49,930
                              
                              
                              
                              –
                              
                              
                              
                              50,000Loss
      for the year
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              (59,786
                              )
                              
                              
                              (59,786
                              )Balance – September
      30, 2006 (Unaudited)
                              
                              
                              8,624,200
                              
                              
                              
                              87
                              
                              
                              
                              61,913
                              
                              
                              
                              (63,683
                              )
                              
                              
                              (1,683
                              )Common
      shares issued for $34,502 in debt, September 26, 2007
                              
                              
                              8,346,000
                              
                              
                              
                              83
                              
                              
                              
                              34,419
                              
                              
                              
                              –
                              
                              
                              
                              34,502Loss
      for the year
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              –
                              
                              
                              
                              (29,672
                              )
                              
                              
                              (29,672
                              )Balance
      – September 30, 2007
                              
                              
                              16,970,200
                              
                              
                              
                              170
                              
                              
                              
                              96,332
                              
                              
                              
                              (93,355
                              )
                              
                              
                              3,147Common
      shares issued for cash at $0.13 per share, February 6,
2008
                              
                              
                              386,390
                              
                              
                              
                              4
                              
                              
                              
                              49,996
                              
                              
                              
                              -
                              
                              
                              
                              50,000Loss
      for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (82,146
                              )
                              
                              
                              (82,146
                              )Balance
      – September 30, 2008
                              
                              
                              17,356,590
                              
                              
                              
                              174
                              
                              
                              
                              146,328
                              
                              
                              
                              (175,501
                              )
                              
                              
                              (28,999
                              )Loss
      for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (55,469
                              )
                              
                              
                              (55,469
                              )Balance
      – September 30, 2009
                              
                              
                              17,356,590
                              
                              
                              
                              174
                              
                              
                              
                              146,328
                              
                              
                              
                              (230,970
                              )
                              
                              
                              (84,468
                              )Loss
      for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (89,933
                              )
                              
                              
                              (89,933
                              )Balance
      – September 30, 2010
                              
                              
                              17,356,590
                              
                              
                              $
                              174
                              
                              
                              $
                              146,328
                              
                              
                              $
                              (320,903
                              )
                              
                              $
                              (174,401
                              )





The
accompanying notes are an integral part of these financial
statements.





F-5


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Statements
of Cash Flows





CumulativeFrom
      Inception(September
      12, 2005)Year
      Ended September 30,
                  
                  
                  to
      September 30,2010
                  
                  
                  2009
                  
                  
                  2010(Unaudited)Cash
      Flow from Operating Activities:Loss
      for the period
                  
                  $
                  (89,933
                  )
                  
                  $
                  (55,469
                  )
                  
                  $
                  (320,903
                  )Adjustments
      to reconcile net loss to net cash used in operations:Changes
      in operating assets and liabilities:(Increase)
      decrease in withholding tax receivable
                  
                  
                  4
                  
                  
                  
                  (4
                  )
                  
                  
                  -Increase
      (decrease) in accounts payable and accrued liabilities
                  
                  
                  49,270
                  
                  
                  
                  (34,740
                  )
                  
                  
                  55,450Increase
      in accrued interest, note payable
                  
                  
                  8,655
                  
                  
                  
                  2,622
                  
                  
                  
                  11,277Net
      cash used in operating activities
                  
                  
                  (32,004
                  )
                  
                  
                  (87,591
                  )
                  
                  
                  (254,176
                  )Cash
      Flows from Investing Activities:Mineral
      property reclamation bond
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,330
                  )Net
      cash used in investing activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,330
                  )Cash
      Flows from Financing Activities:Proceeds
      from notes payable – stockholders
                  
                  
                  32,327
                  
                  
                  
                  80,000
                  
                  
                  
                  112,327Proceeds
      from notes payable – related party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  34,502Issuance
      of common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  112,000Net
      cash provided by financing activities
                  
                  
                  32,327
                  
                  
                  
                  80,000
                  
                  
                  
                  258,829Net
      Increase in Cash and Cash Equivalents
                  
                  
                  323
                  
                  
                  
                  (7,591
                  )
                  
                  
                  323Cash
      and Cash Equivalents – Beginning of Period
                  
                  
                  -
                  
                  
                  
                  7,591
                  
                  
                  
                  -Cash
      and Cash Equivalents – End of Period
                  
                  $
                  323
                  
                  
                  $
                  -
                  
                  
                  $
                  323Supplemental
      Cash Flow Disclosure:Cash
      paid for interest
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Cash
      paid for income taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Non-Cash
      Financing and Investing Activities:Note
      payable – related party converted to common stock
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  34,502





The
accompanying notes are an integral part of these financial
statements.


F-6


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





1.
            Organization


Touchstone
Mining Limited (the “Company”) was incorporated on September 12, 2005 in the
State of Nevada, USA, and is based in Miami, Florida.  The accounting
and reporting policies of the Company conform to accounting principles generally
accepted in the United States of America, and the Company’s fiscal year end is
September 30.





The
Company was initially incorporated for the purpose of engaging in the
acquisition, exploration, and development of mineral resource
properties.  The Company has obtained the right to conduct exploration
work on ten mineral mining claims in Humboldt County, Nevada, USA. Prior to
this, the Company’s activities have been limited to its formation, the raising
of equity capital, and its mining exploration work program.  Although
the Company has not disposed of its interest in its mining properties (Note 5),
it has discontinued exploration on the property and is actively seeking other
ventures of interest that may include, but not be limited to, mergers,
acquisitions, or similar transactions.





Development
Stage Company


The
Company is considered to be in the development stage as defined in FASC
915-10-05 “Development Stage
Entities.”





2.
            Significant
      Accounting Policies





Use
of Estimates


The
preparation of the Company’s financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period.  Actual results could differ
from those estimates.  The Company’s periodic filings with the
Securities and Exchange Commission include, where applicable, disclosures of
estimates, assumptions, uncertainties, and markets that could affect the
financial statements and future operations of the Company.





Cash
and Cash Equivalents


Cash and
cash equivalents include cash in banks, money market funds, and certificates of
term deposits with maturities of less than three months, which are readily
convertible to known amounts of cash and which, in the opinion of management,
are subject to an insignificant risk of loss in value. The Company had $323 and
$0 in cash and cash equivalents at September 30, 2010 and 2009,
respectively.


F-7


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





2.
            Significant
      Accounting Policies (continued)





Mineral
Acquisition and Exploration Costs


The
Company has been in the development stage since its formation on September 12,
2005 and has not yet realized any revenue from its planned operations. It has
been primarily engaged in the acquisition, exploration, and development of
mining properties.  Mineral property acquisition and exploration costs
are expensed as incurred.  When it has been determined that a mineral
property can be economically developed as a result of establishing proven and
probable reserves, the costs incurred to develop such property are
capitalized.  Such costs will be amortized using the
units-of-production method over the estimated life of the probable
reserves.





Start-Up
Costs


In
accordance with FASC 720-15-20 “Start-up Costs,” the Company
expenses all costs incurred in connection with the start-up and organization of
the Company.





Net
Income or (Loss) Per Share of Common Stock


The
Company has adopted FASC 260-10-20, “Earnings per Share,” (“EPS”)
which requires presentation of basic and diluted EPS on the face of the
statements of operations for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation.  In the accompanying financial statements, basic earnings
(loss) per share is computed by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the period.The Company has no
potentially dilutive securities, such as options or warrants, currently issued
and outstanding.  The potential conversion of the notes payable in
Note 6 would have an antidilutive effect on EPS due to the Company’s accumulated
losses.





The
following table sets forth the computation of basic and diluted earnings per
share:





Year Ended September 30,2010
                  
                  
                  2009Net
      loss applicable to common shares
                  
                  $
                  (89,933
                  )
                  
                  $
                  (55,469
                  )Weighted
      average common sharesOutstanding
      (Basic)
                  
                  
                  17,356,590
                  
                  
                  
                  17,356,590Options
                  
                  
                  -
                  
                  
                  
                  -Warrants
                  
                  
                  -
                  
                  
                  
                  -Weighted
      average common shares outstanding (Basic and Diluted)
                  
                  
                  17,356,590
                  
                  
                  
                  17,356,590Net
      loss per share (Basic and Diluted)
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )


F-8


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





2.
            Significant
      Accounting Policies (continued)





Concentrations
of Credit Risk


The
Company’s financial instruments that are exposed to concentrations of credit
risk primarily consist of its cash and cash equivalents and related party
payables it will likely incur in the near future.  The Company places
its cash and cash equivalents with financial institutions of high credit
worthiness.  At times, its cash and cash equivalents with a particular
financial institution may exceed any applicable government insurance
limits.  The Company’s management plans to assess the financial
strength and credit worthiness of any parties to which it extends funds, and as
such, it believes that any associated credit risk exposures are
limited.





Risks
and Uncertainties


The
Company previously operated in the resource exploration industry that is subject
to significant risks and uncertainties, including financial, operational,
technological, and other risks associated with operating a resource exploration
business, including the potential risk of business failure.





Environmental
Expenditures


The
operations of the Company have been, and may in the future be, affected from
time to time in varying degree by changes in environmental regulations,
including those for future reclamation and site restoration
costs.  Both the likelihood of new regulations and their overall
effect upon the Company vary greatly and are not predictable.  The
Company’s policy is to meet or, if possible, surpass standards set by relevant
legislation by application of technically proven and economically feasible
measures.





Environmental
expenditures that relate to ongoing environmental and reclamation programs are
charged against earnings as incurred or capitalized and amortized depending on
their future economic benefits.  All of these types of expenditures
incurred since inception have been charged against earnings due to the
uncertainty of their future recoverability.  Estimated future
reclamation and site restoration costs, when the ultimate liability is
reasonably determinable, are charged against earnings over the estimated
remaining life of the related business operation, net of expected
recoveries.





Recently
Issued Accounting Pronouncements


In June
2009, the FASB established the Accounting Standards Codification (“Codification”
or “ASC”) as the source of authoritative accounting principles recognized by the
FASB to be applied by nongovernmental entities in the preparation of financial
statements in accordance with generally accepted accounting principles in the
United States (“GAAP”). Rules and interpretive releases of the Securities and
Exchange Commission (“SEC”) issued under authority of federal securities laws
are also sources of GAAP for SEC registrants. Existing GAAP was not intended to
be changed as a result of the Codification, and accordingly the change did not
impact our financial statements. The ASC does change the way the guidance is
organized and presented.


F-9


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





2
      .
            Significant
      Accounting Policies(continued)





Recently
Issued Accounting Pronouncements (continued)


Statement
of Financial Accounting Standards (“SFAS”) No. 165 (ASC Topic 855), “Subsequent Events,” SFAS No.
166 (ASC Topic 810), “Accounting for Transfers of
Financial Assets-an Amendment of FASB Statement No. 140,” SFAS No. 167
(ASC Topic 810), “Amendments
to FASB Interpretation No. 46(R),” and SFAS No. 168 (ASC Topic 105),
“The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles- a
replacement of FASB Statement No. 162” were recently issued. SFAS No.
165, 166, 167, and 168 have no current applicability to the Company or their
effect on the financial statements would not have been significant.





Accounting
Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair
Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605),
Multiple Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985),
Certain Revenue Arrangements that include Software Elements, and various other
ASU’s No. 2009-2 through ASU No. 2010-26 which contain technical corrections to
existing guidance or affect guidance to specialized industries or entities were
recently issued. These updates have no current applicability to the Company or
their effect on the financial statements would not have been
significant.





3.
            Stockholders’
      Equity





Authorized
Stock


At
inception, the Company authorized 100,000,000 common shares with a par value of
$0.00001 per share.  Each common share entitles the holder to one
vote, in person or proxy, on any matter on which action of the stockholders of
the corporation is sought.





Effective
November 23, 2010, the Company increased the number of authorized shares to
310,000,000 shares, of which 300,000,000 shares are designated as common stock
par value $0.00001 per share, and 10,000,000 shares are designated as preferred
stock, par value $0.00001 per share.




Effective
the close of business on November 29, 2010 the Company effected a 2.782:1
forward stock split in the form of a dividend. In connection therewith, all
shareholders of record at the close of business on November 29, 2010 received an
additional 1.782 shares of the Company’s common stock for each share held by
them. This resulted in the issuance of an aggregate of 11,117,701 shares.
Following such issuance, we had 17,356,590 shares issued and outstanding. All
descriptions of share issuances give retroactive effect to the forward
stock split.




Share
Issuances


Since
inception (September 12, 2005), the Company has issued 8,624,200 common shares
at $0.007 per share for $62,000 in cash, and 386,389 common shares at $0.13 per
share for $50,000 in cash, for total proceeds of $112,000.  The
Company also issued 8,346,000 common shares at $0.004 per share in satisfaction
of debt of $34,502.  There were 17,356,590 common shares issued and
outstanding at September 30, 2010 and 2009.


F-10


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





4.
            Provision
      for Income Taxes


The
Company recognizes the tax effects of transactions in the year in which such
transactions enter into the determination of net income, regardless of when
reported for tax purposes. Deferred taxes are provided in the financial
statements under FASB ASC Topic 740-10-25 to give effect to the resulting
temporary differences which may arise from differences in the bases of fixed
assets, depreciation methods, allowances, and start-up costs based on the income
taxes expected to be payable in future years.





Minimal
development stage deferred tax assets arising as a result of net operating loss
carryforwards have been offset completely by a valuation allowance due to the
uncertainty of their utilization in future periods. Operating loss carryforwards
generated during the period from September 12, 2005 (date of inception) through
September 30, 2010 of $320,903 will begin to expire in 2025. Accordingly,
deferred tax assets of approximately $112,300 (assuming an effective maximum
statutory rate of 35%) were offset by the valuation allowance, which increased
by approximately $31,500 and $19,400 during the years ended September 30, 2010
and 2009, respectively.





The
Company follows the provisions of uncertain tax positions as addressed in FASB
ASC Topic 740-10-65-1. The Company recognized approximately no increase in the
liability for unrecognized tax benefits.





The
Company has no tax positions at September 30, 2010 for which the ultimate
deductibility is highly certain but for which there is uncertainty about the
timing of such deductibility. The Company recognizes interest accrued related to
unrecognized tax benefits in interest expense and penalties in operating
expenses. No such interest or penalties were recognized during the periods
presented. The Company had no accruals for interest and penalties at September
30, 2010.





5.
            Mineral
      Property Costs


By
agreement dated November 23, 2005 with Mineral Exploration Services Ltd.
(“MES”), the Company acquired an option to acquire a 100% interest in certain
properties consisting of 10 unpatented mineral claims, known as the Boulder
Claims (the “Property”) located in Humboldt County, Nevada, USA.





Upon
execution of the agreement, MES transferred 100% interest in the mineral claims
to the Company for $50,000 to be paid, at the Company’s option, as
follows:




Cash PaymentsUpon
      signing of the agreement and transfer of title (paid)
                            
                            $
                            3,500On
      or before November 23, 2006 (paid)
                            
                            
                            3,500On
      or before November 23, 2007
                            
                            
                            8,000On
      or before November 23, 2008
                            
                            
                            10,000On
      or before November 23, 2009
                            
                            
                            10,000On
      or before November 23, 2010
                            
                            
                            15,000$
                            50,000


F-11


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





5.
            Mineral
      Property Costs(continued)


In August
2007, the Company reached an agreement with MES, whereby MES relinquished its
rights to the Property.  During the year ended September 30, 2008, the
Company proceeded to stake the claims in its own name.  The Company is
no longer obligated to make the payments outlined above for 2007 through 2010,
and is only responsible for maintaining the mineral claims in good standing by
paying all the necessary rents, taxes, and filing fees associated with the
Property.  As of September 30, 2010, the Company met these
obligations.





Although
the Company has not disposed of its interest in the Property, it has
discontinued exploration and is currently evaluating its options and is seeking
other ventures of interest.





A $4,330
reclamation bond has been paid to the Bureau of Land Management (BLM) in the
State of Nevada.  This bond will be held by the BLM until such time as
it determines that the mineral property has been properly reclaimed and
indigenous species of plants have been planted and are growing.  Given
the uncertainty of any future exploration and/or additional work on the
property, that the Company will perform and the additional time needed before a
BLM inspector can view the property, this bond has been accounted for as a
non-current asset.  Management estimates the costs to restore the
property will be nominal and that the entire bond will be recovered as a
result.





6.
            Notes
      Payable – Stockholders


On May 8,
2009 the Company received an $80,000 unsecured loan from a minority stockholder
of the Company, and in connection therewith issued an 8.25%, $80,000 convertible
promissory note dated May 8, 2009.  If not converted, interest and
principal were originally due at maturity on November 8, 2010, which date has
been extended by both parties to May 8, 2011.  The terms of conversion
have not been determined but will be mutually determined by the Company and the
holder.





On
February 10, 2010, the Company received a $32,327 unsecured loan from a minority
stockholder of the Company, and in connection therewith issued a 10% convertible
promissory note dated February 10, 2010.  If not converted, interest
and principal are due at maturity on August 9, 2011.  The note is
convertible at any time prior to maturity at a conversion price of approximately
$0.036 per share. The conversion price and the number of shares issuable upon
conversion are subject to adjustment under certain circumstances including
mergers, consolidations, reclassifications, stock splits, combinations,
dividends and similar transactions. Further, the conversion price is subject to
downward adjustment if the Company issues common stock or securities convertible
into common stock at a price of less than $0.036 per share at any time while the
note remains outstanding. In such event, the conversion price under the note
shall be reduced to such lower price.





Interest
expense and accrued interest as of and for the year ended September 30, 2010
totaled $8,655 and $11,277, respectively.  Interest expense and
accrued interest as of and for the year ended September 30, 2009 totaled
$2,622.


F-12


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





7.
            Going
      Concern and Liquidity
Considerations


The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course of
business.  As of September 30, 2010, the Company had a working capital
deficit of $178,731 and an accumulated deficit of $320,903.  The
Company intends to fund operations through debt and equity financing
arrangements, which may be insufficient to fund its capital expenditures,
working capital and other cash requirements for the next twelve
months.





The
ability of the Company to emerge from the development stage is dependent upon,
among other things, obtaining additional financing to continue
operations.  In response to these problems, management intends to
raise additional funds through public or private placement
offerings.





These
factors, among others, raise substantial doubt about the Company’s ability to
continue as a going concern.  The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.





8.
            Subsequent
      Events


On
October 5, 2010, the Company entered into a non-binding Letter of Intent with
22nd
Century Limited, LLC, a Delaware limited liability corporation regarding a
possible business combination involving the two companies. At this stage,
neither party is bound to proceed with the transaction. On October 21, 2010, the
Company’s Board of Directors and stockholders owning a majority of the Company’s
outstanding common stock, have authorized and approved to change the Company’s
name to 22nd Century
Group, Inc. to facilitate the proposed transaction.  The Board of
Directors and stockholders owning a majority of the Company’s outstanding stock
have further authorized and approved a possible transfer of our assets and
liabilities to a split-off subsidiary to be transferred to the Company’s
majority stockholder in consideration of the surrender of his shares of Company
stock for cancellation.





On
October 14, 2010, the Company received a $50,000 loan from a minority
shareholder of the Company, and issued a 10%, $50,000 convertible promissory
note dated October 14, 2010. If not converted, interest and principal are due at
maturity on April 13, 2012. The note is convertible at any time prior to
maturity at a conversion price of approximately $0.036 per share. The conversion
price and the number of shares issuable upon conversion are subject to
adjustment under certain circumstances including mergers, consolidations,
reclassifications, stock splits, combinations, dividends and similar
transactions. Further, the conversion price is subject to downward adjustment if
we issue common stock or securities convertible into common stock at a price of
less than $0.036 per share at any time while the note remains outstanding. In
such event, the conversion price under the note shall be reduced to such lower
price.





Effective
October 21, 2010, the Company adopted a 2010 Equity Incentive Plan, which
reserves a total of 4,250,000 shares of the Company’s common stock for issuance
under the 2010 Equity Incentive Plan.  If an incentive award granted under
the 2010 Equity Incentive Plan expires, terminates, is unexercised or is
forfeited, or if any shares are surrendered to us in connection with an
incentive award, the shares subject to such award and the surrendered shares
will become available for further awards under the 2010 Equity Incentive
Plan.


F-13


22nd
Century Group, Inc. (fka
Touchstone Mining Limited)
 (A
Development Stage Company)





Notes
to Financial Statements


September
30, 2010 and 2009





8.
            Subsequent
      Events(continued)


Effective
November 23, 2010, the Company filed Amended and Restated Articles of
Incorporation which, among other things, (i) changed the Company’s name to
22nd
Century Group, Inc.; (ii) increased the Company’s authorized capitalization from
100,000,000 shares, consisting of 100,000,000 shares of common stock, $0.00001
par value per share, to 310,000,000 shares, consisting of 300,000,000 shares of
common stock, $0.00001 par value per share, and 10,000,000 shares of blank check
preferred stock, $0.00001 par value per share; and (iii) limits the liability of
the Company’s officers and directors, stockholders, and creditors to the fullest
extent permitted by Nevada law.





Effective
November 22, 2010 Ronald Asirwatham resigned as the Company’s Director, Chief
Executive Officer, Chief Financial Officer, President, Secretary and Treasurer,
and David Rector was appointed to fill the vacancies created
thereby.







The
Company has evaluated subsequent events from the balance sheet date through the
date the financial statements were issued and determined there are no additional
items to disclose.


F-14