Company Plans to Launch SPREE BAR™ – “the Single Largest, Most Important Commercial Product in Charlie’s History” – in September
COSTA MESA, CA / ACCESSWIRE / August 14, 2023 / Charlie’s Holdings, Inc. (OTCQB:CHUC) (“Charlie’s” or the “Company“), an industry leader in the premium vapor products space, today reported results for the second quarter and six months ended June 30, 2023, and provided an update on recent business highlights.
Key Financial Highlights for Q2 2023 (compared with Q2 2022)
Key Financial Highlights for First Half 2023 (compared with First Half 2022)
Key Business Highlights During and Subsequent to Q2 2023
Management Commentary
“As previously stated, we anticipated, and have been experiencing, continued weakness in our legacy business,” stated Matt Montesano, Charlie’s Holdings, Inc. Chief Financial Officer. “Accordingly, we acted promptly with aggressive expense reductions and all of the Company’s executives elected to reduce their current compensation. These measures resulted in a dramatic decrease in operating expenses and a significant reduction in operating loss, allowing us to generate cash from operations during the three months ended June 30, 2023.”
Ryan Stump, Charlie’s Chief Operating Officer, commented, “We are very excited about our upcoming launch of SPREE BAR; we plan to begin shipping our new Metatine™ disposable vape products in September. We believe that our transition to the SPREE BAR product line will provide us an extraordinary opportunity to capture significant sales and market share in the vapor products marketplace in 2024 and beyond. SPREE BAR is indistinguishable from a conventional disposable vape and provides adult consumers with the same cerebral satisfaction that typical disposable vapes provide, but without nicotine. As a disposable pod system, with a reusable battery, our 6,000-puff SPREE BAR flavor pods will have a retail price that is less than half that of the industry-leading 5,500-puff disposables. Stay tuned for our SPREE BAR launch!”
Henry Sicignano III, Charlie’s President, explained, “We believe SPREE BAR will be a game-changer for Charlie’s and we are fast approaching its launch. To date, we have awarded Master Distributor and Distributor contracts to six large customers. As part of these agreements, we have accepted purchase orders, and corresponding 50% up-front deposits, for each distributor’s initial order. It is our plan to sign additional Master Distributor agreements with as many as ten new SPREE BAR distributors before the end of 2023. Given the novelty of the product, its compelling value in the marketplace as a disposable pod system (with a reusable battery), and its very significant regulatory advantages, SPREE BAR represents the single largest, most important commercial opportunity in Charlie’s history.”
Financial Results for the Three Months Ended March 31, 2023:
The decrease in Charlie’s nicotine-based vapor product sales was primarily driven by decreased sales of its Pacha Disposable line as well by periodic, strategic stockouts of its e-liquid products. Pacha Disposables became Charlie’s flagship product line in the disposable e-cigarette market and offer adult users a variety of premium flavors containing synthetic nicotine (not derived from tobacco) in a compact, discrete format. Despite a strong performance during its initial launch, this category has faced challenges including increased competition from low-priced Chinese products, the requirement for synthetic nicotine products to obtain marketing authorization from the FDA, as well as continued uncertainty surrounding the FDA’s issuance of Marketing Denial Orders (“MDO’s”) and Refuse-to-File designations. The FDA enhanced enforcement efforts during the quarter, including the periodic halting of shipments into U.S. shipping ports, which caused supply chain issues and further marketplace unrest. Strategic stockouts of e-liquid products were the result of diverting working capital to the launch of the Company’s new SPREE BAR line of nicotine substitute vapor products.
The increase in sales for Charlie’s hemp-derived business was directly related to an increase in market share for its PINWEEL brand of hemp-derived cannabinoid products. The hemp-derived products market is also currently experiencing a confluence of challenges including an influx of low-cost brands, potential for regulatory challenges in the third quarter, as well as an increasingly rapid product development cycle which requires corporate agility and swift market penetration; however, the Company continues to believe that this category offers significant growth potential and will place enhanced focus on growing this segment as a portion of overall sales.
Financial Results for the Six Months Ended June 30, 2022:
The decrease in sales for Charlie’s hemp-derived business was directly related to an eight-week pause in manufacturing, and a subsequent lack of inventory, when the Company changed some of the ingredients in its PINWEEL products in order to avoid compounds that were newly deemed “controlled substances.” However, inventory was restored during the second quarter, resulting in a modest rise in sales.
About Charlie’s Holdings, Inc.
Charlie’s Holdings, Inc. (OTCQB: CHUC) is an industry leader in the premium vapor products space. The Company’s products are sold around the world to select distributors, specialty retailers, and third-party online resellers through subsidiary companies Charlie’s Chalk Dust, LLC and Don Polly, LLC. Charlie’s Chalk Dust, LLC has developed an extensive portfolio of brand styles, flavor profiles, and innovative product formats. Don Polly, LLC creates innovative hemp-derived products and brands.
For additional information, please visit Charlie’s corporate website at: Chuc.com and the Company’s branded online websites: CharliesChalkDust.com, Pacha.co, and Pinweel.com.
Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company’s overall business, existing and anticipated markets and expectations regarding future sales and expenses. Words such as “expect,” “anticipate,” “should,” “believe,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “could,” “intend,” variations of these terms or the negative of these terms, and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. The Company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the Company’s ongoing ability to quote its shares on the OTCQB; whether the Company will meet the requirements to uplist to a national securities exchange in the future; the Company’s ability to successfully increase sales and enter new markets; whether the Company’s PMTA’s will be approved by the FDA, and the FDA’s decisions with respect to the Company’s future PMTA’s; the Company’s ability to manufacture and produce products for its customers; the Company’s ability to formulate new products; the acceptance of existing and future products; the complexity, expense and time associated with compliance with government rules and regulations affecting nicotine, synthetic nicotine, and products containing cannabidiol; litigation risks from the use of the Company’s products; risks of government regulations, including recent regulation of synthetic nicotine; the impact of competitive products; and the Company’s ability to maintain and enhance its brand, as well as other risk factors included in the Company’s most recent quarterly report on Form 10-Q, annual report on Form 10-K, and other SEC filings. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.
Investors Contact:
Phone: 949-570-0691
SOURCE: Charlie’s Holdings, Inc.
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