Tag: Charlie's Holdings

  • Study: Nicotine Alternatives May Be More Addictive

    Study: Nicotine Alternatives May Be More Addictive

    Photo: Alexey Stiop

    Nicotine alternatives, such as 6-methyl nicotine, may be more potent and addictive than nicotine itself, reports Reuters, citing U.S. Food and Drug Administration scientists and independent researchers.

    Traditional nicotine found in many vapes and pouches is extracted from tobacco leaves; 6-methyl nicotine, in contrast, is made in a laboratory.

    While chemically similar to nicotine, the synthetic substances are not subject to U.S. tobacco and vaping regulations, allowing manufacturers to sell vapes with nicotine analogues without seeking FDA authorization.

    Tobacco and vape companies have criticized that the FDA product authorization process is costly and time-consuming. Only a handful of applications have been approved.

    In response to questions from Reuters, the FDA said it was reviewing the available data on nicotine alternatives to inform potential actions.

    Three academic researchers told the news agency that current studies of 6-methyl nicotine are too limited to draw definite conclusions on the health impact or to what degree it is addictive.

    The limitations of existing research, the researchers said, included that some papers were industry funded while others focused on the short-term impact on animals or cells and were insufficient to understand 6-methyl nicotine’s effects on human bodies.

    The FDA has yet to approve any flavored vape using traditional nicotine for sale in the United States, saying companies have not been able to show that the health benefits they offer to smokers outweigh the known risks to young people, who may be more attracted by the flavors.

    The Spree Bar vaporizer, which uses a 6-methyl nicotine solution branded as “Metatine,” notes on its website that Metatine “may have a toxicity profile similar to nicotine.”

    Sven Jordt, a professor at Duke University who has authored papers on products like Spree Bar, said 6-methyl nicotine could me more addictive and toxic than its traditional cousin.

    “Do we want to have such a chemical as a recreational product, available to anyone?” he asked. “That’s really questionable.”

  • Charlie’s Holdings: 58% Revenue Growth First Half 2022

    Charlie’s Holdings: 58% Revenue Growth First Half 2022

    Charlie’s Holdings, parent to Charlie’s Chalk Dust e-liquids, says its best-selling e-liquids are in the substantive review phase of the U.S. Food and Drug Administration’s premarket tobacco product application (PMTA) process.

    The company remains in the select minority of 2020 PMTA submissions that are still viable; the company also submitted PMTAs for more than 700 additional products prior to the May 14, 2022 FDA deadline, according to a press release. Prior to the FDA’s May 14 deadline, Charlie’s successfully filed new PMTAs for its synthetic nicotine Pacha Syn products.

    “Charlie’s positive momentum continued in the second quarter and first half of 2022, highlighted by our 36 percent and 58 percent year-over-year revenue growth,” stated Matt Montesano, CFO for Charlie’s Holdings. “We continued to diversify and expand Charlie’s robust product line, as represented by our new 12ml Pacha Syn Disposable line and our refreshed Pacha Syn e-liquid line, both of which launched in the second quarter of 2022.

    “At the same time, we continued to operate the business with tight fiscal controls, as demonstrated by our further reduction of operating expenses, as a percentage of revenue, to 46 percent during the second quarter.”

    Financial Results for the Six Months Ended June 30, 2022:

    • Revenue: For the six months ended June 30, 2022, revenue was $15.5 million, an increase of $5.7 million, or 58%, compared with $9.8 million for the same period last year. The increase in revenue was primarily due to a $4.8 million increase in sales of our nicotine-based vapor products and a $0.9 million increase in sales of our hemp derived products. The increase in our nicotine-based vapor product sales was driven by sales of our new 8ml Pacha Syn Disposable line, which launched in December 2021, as well as our 12ml Pacha Syn Disposable and refreshed Pacha Syn e-liquid lines, both of which launched in the second quarter of 2022.
    • Gross Profit: For the six months ended June 30, 2022, gross profit was $6.5 million, an increase of $1.4 million, or 28%, compared with $5.1 million for the same period last year. The resulting gross margin was 41.9%, compared with 51.6% for the same period in 2021. The decrease in gross margin is primarily due to an increased percentage of our sales coming from Charlie’s Pacha Syn Disposable product line, which carries a lower unit margin relative to the Company’s other products, as well as comparatively higher freight and delivery expenses and a larger reserve for inventory obsolescence related to certain of our retired hemp-derived wellness products.
    • Total Operating Expenses: For the six months ended June 30, 2022, total operating expense, including general and administrative, sales and marketing expense and research and development costs, were $6.7 million, an increase of $1.2 million, or 22%, compared with $5.5 million for the six months ended June 30, 2021. The increase in operating expenses was primarily attributable to sales and marketing costs related to enhanced trade-show activity during the quarter in furtherance of our plan to grow market share across the nicotine and hemp-derived product categories and $0.8 million in research and development costs associated with our 2022 PMTA submissions. Operating expenses as a percentage of revenue decreased to 43%, from 56%, for the periods compared.
    • Operating Loss: For the six months ended June 30, 2022, operating loss was $0.2 million, a decrease of $0.2 million, or 51%, compared with an operating loss of $0.4 million for the six months ended June 30, 2021.
    • Net Income/Loss: For the six months ended June 30, 2022, net income was $0.1 million, compared with a net loss of $0.4 million for the six months ended June 30, 2021.
  • Charlie’s Holdings Confirms its PMTAs Still Under Review

    Charlie’s Holdings Confirms its PMTAs Still Under Review

    Charlie’s Holding’s, parent to e-liquid manufacturer Charlie’s Chalk Dust, confirmed that it premarket tobacco product applications (PMTA) remain under scientific review by the U.S. Food and Drug Administration. The company has not received a marketing denial orders (MDOs) or refuse-to-file letters for any of its submitted products.

    “Including product-specific scientific data, thorough perception studies, and detailed environmental assessments, Charlie’s PMTA’s cost more than $5 million and are among the most comprehensive PMTA’s in the entire industry,” a press release states. “The Company has publicly expressed its commitment to full regulatory compliance and youth access prevention and believes its submissions to the FDA will be recognized as both distinguished and suitable for approval.”

    Ryan Stump, Charlie’s COO, explained that in addition to human clinical trials that measured the nicotine delivery efficiency of the company’s products via pharmacokinetic studies, Charlie’s PMTA’s also included “product-specific, scientific evidence” that demonstrates the marketing of Charlie’s products meets the statutory standard of appropriate for the protection of the public health that is required for an FDA marketing order.

    “This is an important reason why we are highly confident that the FDA will recognize Charlie’s PMTA submissions as both distinguished and suitable for approval,” said Stump. “As a result of the painstaking efforts we invested in our PMTA’s, when others are forced to withdraw their products from the market, Charlie’s will be one of a very select group still legally allowed to operate in the flavored nicotine product space. We look forward to the competitive advantage – and to the corresponding increases in sales, profits, and market share – that will result from our steadfast commitment to providing Charlie’s customers with a trusted product portfolio in full regulatory compliance.”

    To date, the FDA has now issued 168 companies MDOs for an estimated 992,000 products. According to a press release, the regulatory agency released a revised listing of MDOs that includes 125 company names but not any specific products that were denied. There were no updates provided on several high-profile submissions, such as those submitted by Juul Labs, BAT and Japan Tobacco International. The agency also offered no response to any submitted open-system hardware products or tobacco-flavored e-liquids.

  • Charlie’s Holdings Profits Increase to Start 2021

    Charlie’s Holdings Profits Increase to Start 2021

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust brand, announced the company’s financial results for the first quarter (Q1) ending March 31, 2021. Charlie’s reported that revenue, gross profit, gross margin, and cash balance all increased from Q4 2020 to Q1 2021, according to a release.

    Revenue for the 1Q of 2021 was $4,361,000, an increase of $131,000 compared to Q4 2020, and a decrease of $44,000 or 1 percent, compared to $4,405,000 for the same time the previous year. Gross profit for Q1 2021 was $2,418,000, an increase of $305,000 compared to Q4 2020 and a decrease of $24,000, or 1 percent, compared to $2,442,000 for the same period 2020.

    Other announcments include:

    • Operating loss decreased 95 percent year-over-year, and 70 percent from Q4 2020, to $229,000,
    • Cash balance of $3.5 million,
    • Total assets of $8.1 million,
    • Closed a $3 million capital raise in common stock (priced at $0.0085) with company founders,
    • Introduced Pachamama Disposables, Charlie’s first-ever entrant into the rapidly expanding U.S. disposable e-cigarette market,
    • Successfully assembled a solution “network” in order to meet the requirements of both the Consolidated Appropriations Act of 2021 and the Prevent All Cigarette Trafficking (PACT) Act to ensure uninterrupted service to the company’s distributor partners.

    The company announced in mid-2020 that its premarket tobacco product application (PMTA) had entered the substantive review phase of the U.S Food and Drug Administration (FDA) regulatory process. “Having engaged a team of more than 200 professionals and invested nearly $5 million to compile and submit Charlie’s initial PMTA submission, the company is confident that the FDA will recognize that Charlie’s submission is both distinguished and suitable for approval,” the release states. “The company believes its comprehensive PMTA will ultimately prove a competitive advantage for Charlie’s. Most of the company’s competitors did not have the desire, the technical expertise, or the financial resources to complete the PMTA process. As a result, in fewer than 12 months’ time, when others are forced to withdraw their products from the market, Charlie’s may be one of a very select group still legally allowed to operate in the premium e-liquid product space.”

  • Charlie’s Pachamama Disposables Sell Out in 21 Days

    Charlie’s Pachamama Disposables Sell Out in 21 Days

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust and Pachamama brands of vapor and CBD products, announced today that its Pachamama Disposables e-cigarettes are the fastest selling new product in the company’s history. Introduced to the U.S. market last month,  the company says it sold out of its entire initial stock in fewer than 21 days, according to a press release.

    “It is estimated that more than 20 percent of the world’s population consumes nicotine in some format. As a company, we believe that our new technologies and products can provide adult consumers with a better, more responsible and therefore more enjoyable means of experiencing nicotine,,” Brandon Stump, CEO of Charlie’s Holdings, said. “Now that we have launched Pachamama Disposables in the United States, later this year our distribution will expand into more than 75 international markets where we expect to introduce millions of adult consumers to the extraordinary Pachamama sensory experience. We are very excited about what this launch – and the new $600 million market opportunity – will mean for our customers and our company.”

    Market share data shows that disposable e-cigarettes already represent a $600 million – and growing – market in the $7 billion total U.S. e-cigarette market, according to the release. The company launched the disposable product to meet the needs of consumers by providing an “adult-only, recreational use, consumer product that is simple to use, discreet, and immensely satisfying.”

    Earlier this month, Charlie’s Holdings announced that it has closed a $3 million capital raise through the private sale of 351,669,883 shares of common stock to the company’s founders, Brandon Stump, CEO, and Ryan Stump, COO, according to a press release. The company intends to use the proceeds from the offering to drive substantial future growth, facilitate new product launches, increase working capital, retire outstanding debt, and for other general corporate purposes.

    David Allen, CFO said the proceeds from the private placement will strengthen the company’s balance sheet, accelerate European growth, allow for expansion into the Middle East, and facilitate the company reaching several important near-term milestones, including the FDA’s anticipated announcement of Charlie’s successful PMTA.

  • Charlie’s Holdings Raises $3 Million in Private Stock Sale

    Charlie’s Holdings Raises $3 Million in Private Stock Sale

    Charlie’s Holdings, Inc., parent to the Charlie’s Chalk Dust and Pacha Mama brands, announced that it has closed a $3 million capital raise through the private sale of 351,669,883 shares of common stock to the company’s founders, Brandon Stump, CEO, and Ryan Stump, COO, according to a press release. The company intends to use the proceeds from the offering to drive substantial future growth, facilitate new product launches, increase working capital, retire outstanding debt, and for other general corporate purposes.

    “The extensive process required to compile and submit a comprehensive premarket tobacco product application (PMTA) to the FDA will ultimately prove a huge differentiating factor for Charlie’s; but it was also very expensive. Charlie’s invested nearly $5 million for its initial PMTA submission and the company was in need of additional capital,” explained Jeff Fox, a member of Charlie’s board of directors. “After lengthy negotiations with numerous other potential investors did not produce acceptable terms, we are pleased that our founders, Brandon and Ryan Stump, chose to personally fund this $3 million common stock only investment. This financing does not include warrants or any other inducements. It will provide Charlie’s with sufficient proceeds to meet all of the Company’s current financial obligations and to drive substantial future growth opportunities.”

    David Allen, CFO said the proceeds from the private placement will strengthen the company’s balance sheet, accelerate European growth, allow for expansion into the Middle East, and facilitate the company reaching several important near-term milestones, including the FDA’s anticipated announcement of Charlie’s successful PMTA.

    “Such an accomplishment will allow Charlie’s to benefit tremendously as one of only a select group of companies operating responsibly in the premium e-liquid product space,” said Allen. “Combined with our international growth, a domestic PMTA approval will dramatically increase Charlie’s sales, profits, and market share. We expect 2021 will be a very exciting year for our shareholders.”