Tag: chill brands

Chill Brands Suspends Trading Amid Board Turmoil

Struggling UK CBD company Chill Brands Group PLC has halted trading of its shares due to internal conflicts among board members and executives.
In a June 10 announcement, the company said it has launched an investigation into two directors who it claims tried to “defraud” the business. Chill has accused Antonio Russo, chief commercial officer, and Trevor Taylor, chief operating officer, of seizing the company’s Chill.com website and transferring £314,000 ($400,000) to their private bank accounts in the United States without approval from the board.
That was after the company said in a June 3 announcement that it halted trading to deal with “allegations that had been raised around the use of inside information” by CEO Callum Sommerton. The allegations left its board “unable to currently provide the market with an accurate update of its financial and trading position,” the company said, according to media reports.
Russo and Taylor were left in control of Chill after Sommerton was suspended in April. Following an investigation, Sommerton was reinstated as chief executive on June 4 and launched a subsequent probe which discovered the domain and money transfers were made during his suspension.
Chill Brands said investigations ongoing regarding a number of deals related to its vape business, a sector the company entered with new products last year, also contributed to the trading stoppage.
Harry Chathli, non-executive chairman of Chill Brands, said the company’s board was “totally shocked by the extent of destructive behavior and actions of Mr. Taylor and Mr Russo.”
“It is evident that they have not acted in good faith and their actions have been motivated by self-interest rather than for the benefit of the company or its shareholders,” said Chathli. Chill is also investigating to see “if any professional advisers or persons had assisted them in their actions to defraud the business.”
According to the June 10 announcement, Eric Schrader, a non-executive director who had worked as an independent contractor for the company, has stepped down effective June 30.
Chill said it will try to recover the money transferred to Russo’s and Taylor’s bank accounts “through all legal means available” and “the Board will take appropriate action in relation to any misfeasance.”
June 11, 2024
Insider Info Allegations Lead Chill Brands to Suspend CEO

The UK-based vape maker Chill Brands said on Monday that Callum Sommerton had been suspended as its CEO after allegations were raised around the company’s use of inside information.
The company said law firm Fieldfisher had been appointed to investigate the allegations, but it added that Sommerton’s suspension did not imply that he was guilty of misconduct.
Chill Brands’ share price plunged as much as 31 percent in Monday morning trading after the announcement, according to media reports.
“This suspension does not constitute disciplinary action or a disciplinary penalty and does not imply any assumption that Mr Sommerton is guilty of any misconduct or that any decision has been made,” Chill Brands stated in a release.
The company added that it will engage with the Financial Conduct Authority over the investigation, and the findings will be reported “in due course.”
April 22, 2024
Ban Forces Chill Brands to Pivot From Disposables

Callum Sommerton, CEO of Chill Brands Group, told media outlets that his company is already pivoting towards a post-disposable product landscape after the UK government announced its plans to ban disposable vaping products.
Sommerton highlighted the company’s focus on compliance and innovation, emphasizing its development of a fully compliant, reusable pod system, which is being accelerated in response to the proposed regulations.
Sommerton also raised concerns about the potential unintended consequences of the ban, such as the growth of a black market for disposable vapes and a possible resurgence in tobacco use, in media reports. Citing studies and opinions from health and industry organizations, he argued for regulation over outright prohibition.
“The government’s ban, or proposed ban, I should say, is frustrating but not entirely surprising. We have prepared ourselves. At this stage, we don’t exactly know what the ban will specifically include or not include,” Sommerton said. “We can take a good guess at that, but this is, at the moment, policy and PR as opposed to draft legislation.
“So, we will have to wait and see. But that being said, regardless, we are already starting to, if we hadn’t already, pivot ourselves and position ourselves within the market for a post-disposables landscape, which we’re now sort of careering towards.”
The new rules are expected to provide retailers with a six-month moratorium once any prohibition occurs. Sommerton said there is a clear opportunity to bring to market a product that is compliant, reusable, rechargeable, and contains a degree of novelty.
“That novelty for us focuses on actually helping people quit nicotine and tobacco rather than just keeping them hooked in a cycle of addiction. We’ll be revealing much more about the products that we intend to place on the market in due course,” he said. “But beyond that, I do think this is a sort of watershed moment for the industry, albeit the government’s measures are likely to have the unintended consequence of supporting a black market in disposable vapes.
“In the legitimate market, I fully anticipate that we will see certain brands that are perhaps only interested in turning a quick buck and moving on, leaving the market, while those that are interested in longevity, building a business, and building a brand will stay in place.”
February 4, 2024
Chill to Pull All Synthetic Products From U.S. Market

Chill Brands Group PLC said Wednesday that it will end future development and U.S. sales of its tobacco-free nicotine product line in response to additional U.S. regulatory restrictions for synthetic nicotine products.
The London-listed cannabidiol-products company said the additional restrictions for the products would incur substantial costs to manufacturers and retailers, and that it is working with international partners to transfer remaining synthetic nicotine inventory for sale, according to Market Watch.
All of Chill’s other products are unaffected.
The company said a federal funding bill amending the definition of a tobacco product was passed by U.S. Congress in March, giving the U.S. Food and Drug Administration authority over synthetic nicotine–including Chill’s “tobacco-free nicotine” chew pouch products, launched in December.
As a result, Chill would have been required to submit premarket tobacco product applications for its products to legally remain on sale, a process that could exceed a full-cost of $400,000 per flavor and which it views as commercially unviable.
“Naturally this is disappointing, but this decision will at least allow us to avoid expending further capital which will be better allocated to developing other products and potential revenue streams,” Chief Executive Callum Sommerton said.
August 4, 2022