$CHUC: NEWS..... Q2-2019 Revenues of $6.8Million.
Annual Run rate of $27Million revenues
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Press Release: Charlie's Holdings, Inc. Announces Financial Results for 2019 Second Quarter and Year to Date
8:30 AM ET 8/15/19 | Dow Jones
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Press Release: Charlie's Holdings, Inc. Announces Financial Results for 2019 Second Quarter and Year to Date
Charlie's Holdings, Inc. Announces Financial Results for 2019 Second Quarter and Year to Date
The Company Reports Profitability from Operations, as Revenues for Nicotine and CBD Products Increase
PR Newswire
COSTA MESA, California, Aug. 15, 2019
COSTA MESA, California, Aug. 15, 2019 /PRNewswire/ -- Charlie's Holdings, Inc. (the "Company" or "Charlies") (OTC: CHUC), an industry leader in the premium e-cigarette and CBD products space, announced today that on August 14, 2019, it filed its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2019.
"This filing represents our first public quarterly financial disclosure since completing our share exchange with Charlie's Chalk Dust, LLC and the related financing on April 26, 2019. We are pleased to report that, following our transition to a public reporting company, we continue to achieve profitability and top line revenue growth from both our nicotine and CBD based products," said Brandon Stump, CEO of Charlie's. "We continue to be excited for our future and anticipate that we are now well positioned to achieve consolidated profits, as we have recognized certain non-recurring transaction related costs in our combined operating statement." Mr. Stump continued, "our CBD product line showed great success from our initial launch in June of this year, and we plan to further diversify this product line and continue to create products that our customers will enjoy."
Highlights from Second Quarter
-- In June of 2019 we successfully launched our first line of CBD products
through our related consolidated company, Don Polly, LLC. This launch
allows us to now expand our business in both the nicotine-only
e-cigarette vapor product line and hemp-derived, non-THC (less than 0.3%),
CBD wellness products.
-- Our CBD product launch included full spectrum CBD tinctures and topical
products offered in a variety of flavors and strengths, as well as
isolate CBD products in a line of CBD infused vapor products, all
marketed under our Pachamama brand.
-- The newly launched CBD products generated $1,022,000 in revenue for the
three months ended June 30, 2019.
-- Both the Company's nicotine and CBD businesses were profitable for the
three months ended June 30, 2019, generating combined revenues of
$6,819,000.
-- The Company continues to make key investments in personnel, products and
processes while remaining profitable from operations.
Financial Results for the Three Months Ended June 30, 2019
Consolidated revenue for the three months ended June 30, 2019 increased $1,332,000, or 24%, to $6,819,000, as compared to $5,486,000 for prior year period due to an increase in revenue of (i) $289,000 in our nicotine-based products sold by our wholly-owned subsidiary, Charlie's Chalk Dust, LLC, (ii) $1,022,000 from sales of our CBD products sold through our related consolidated entity, Don Polly, LLC, which launched in June 2019, and (iii) $21,000 in sales from our legacy product, Bazi(R) All Natural Energy, which we intend to discontinue.
The Company had a consolidated net loss from operations of $3,211,000 for the three months ended June 30, 2019 due primarily to operating profits of $1,169,000 generated from sales of our nicotine-based and CBD products, offset by $4,381,000 attributable to non-recurring corporate and transaction related expenses incurred in connection with the share exchange with Charlie's Chalk Dust, LLC and related financing transaction which closed on April 26, 2019.
Financial Results for the Six Months Ended June 30, 2019
Consolidated revenue for the six months ended June 30, 2019 increased $2,548,000, or 23%, to $13,466,000, as compared to $10,919,000 for same prior year period due to an increase in revenue of (i) $1,504,000 in our nicotine based products sold by our wholly-owned subsidiary, Charlie's Chalk Dust, LLC, (ii) $1,022,000 from sales of our CBD products sold through our related consolidated entity, Don Polly, LLC, which launched in June 2019, and (iii) $21,000 in sales from our legacy product, Bazi(R) All Natural Energy, which we intend to discontinue.
The Company had a consolidated net loss from operations of $736,000 for the six months ended June 30, 2019 due, primarily, to operating profits of $3,644,000 generated from the sales of our nicotine-based and CBD products, offset by $4,381,00 attributable to non-recurring corporate and transaction related expenses incurred in connection with the share exchange with Charlie's Chalk Dust, LLC and the related financing completed on April 26, 2019.
About Charlie's Holdings, Inc.
Charlie's Holdings Inc. (OTC: CHUC) is an industry leader in the premium e-cigarette and CBD liquid spaces through its subsidiary companies Charlie's Chalk Dust, LLC and Don Polly, LLC. Charlie's Chalk Dust produces high quality vapor products currently distributed in over 80 countries around the world. Charlie's Chalk Dust has developed an extensive portfolio of brand styles, flavor profiles and innovative product formats. Launched in June of 2019, Don Polly, LLC formulates innovative hemp-derived, non-THC (less than 3%), CBD wellness products. Don Polly's high quality CBD products derive from single-strain-sourced hemp extract and high purity CBD isolate crystals. Additional information about Charlie's Chalk Dust can be found at www.charlieschalkdust.com.
Cautionary Note on Forward-Looking Statements -- 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 ability to successful increase sales and enter new markets; the Company's ability to manufacture and produce product 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 and products containing cannabidiol; litigation risks from the use of the Company's products; risks of government regulations; 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 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.
Appendix:
CHARLIE'S HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
June 30, December 31,
2019 2018
ASSETS
Current assets:
Cash $5,120 $ 304
Accounts receivable, net 1,980 711
Inventories, net 1,236 658
Prepaid expenses and other current assets 973 427
Total current assets 9,309 2,100
Non-current assets:
Property, plant and equipment, net 216 45
Right-of-use asset, net 748 -
Other assets 68 42
Total non-current assets 1,032 87
TOTAL ASSETS $10,341 $ 2,187
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $1,548 $ 1,216
Derivative liability 7,584 -
Lease liabilities 249 -
Deferred revenue 142 180
Total current liabilities 9,523 1,396
Non-current liabilities:
Lease liabilities, net of current portion 519 -
Total non-current liabilities 519 -
Total liabilities 10,042 1,396
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Convertible preferred stock ($0.001 par
value); 1,800,000 shares authorized
Series A, 300,000 shares designated,
206,248 and 0 shares issued and
outstanding as of June 30, 2019 and
December 31, 2018, respectively - -
Series B, 1.5 million shares designated,
0 and 1.4 million shares issued and
outstanding as of June 30, 2019 and
December 31, 2018, respectively - 1
Common stock ($0.001 par value); 50
billion shares authorized; 18,936
million shares and 141 million shares
issued and outstanding as of June 30,
2019 and December 31, 2018,
respectively 18,936 141
Additional paid-in capital (17,749) -
Retained earnings (accumulated deficit) (888) 649
Total stockholders' equity 299 791
TOTAL LIABILITIES AND STOCKHOLDERS'
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August 15, 2019 08:30 ET (12:30 GMT)
Press Release: Charlie's Holdings, Inc. Announces -2-
EQUITY $10,341 $ 2,187
CHARLIE'S HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
For the three months For the six months
ended ended
June 30, June 30,
2019 2018 2019 2018
Revenues:
Product revenue,
net $6,819 $5,486 $13,466 $10,919
Total revenues 6,819 5,486 13,466 10,919
Operating costs
and expenses:
Cost of goods
sold - product
revenue 2,846 2,054 5,596 4,220
General and
administrative 6,374 524 7,029 1,016
Sales and
marketing 810 783 1,577 1,500
Total operating
costs and
expenses 10,030 3,361 14,202 6,736
Loss from
operations (3,211) 2,125 (736) 4,183
Other income:
Change in fair
value of
derivative
liabilities 178 - 178 -
Total other
income 178 - 178 -
Net income
(loss) $(3,033) $2,125 $(558) $4,183
Net earnings
(loss) per share
applicable to
common
stockholders
Basic $(0.00) $0.02 $(0.00) $0.03
Diluted $(0.00) $0.00 $(0.00) $0.00
Weighted average
shares used in
computing basic
earnings (loss)
per share 4,259,080 141,041 2,211,436 141,041
Weighted average
shares used in
computing
diluted
earnings (loss)
per share 4,259,080 14,104,089 2,211,436 14,104,089
CHARLIE'S HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the six months
ended
June 30,
2019 2018
Cash Flows from Operating Activities:
Net (loss) income $ (558) $4,183
Reconciliation of net (loss) income to net
cash provided by operating activities:
Bad debt recoveries (35) -
Depreciation and amortization 12 10
Change in fair value of derivative
liabilities (178) -
Amortization of operating lease right-of-use
asset 46 -
Stock based compensation 3,077 -
Subtotal of non-cash charges 2,922 10
Changes in operating assets and
liabilities:
Accounts receivable (1,235) (241)
Inventories (578) (440)
Prepaid expenses and other current assets (546) 303
Other assets (26) (4)
Accounts payable and accrued expenses 332 (326)
Deferred revenue (38) 130
Lease liabilities (26) -
Net cash provided by operating activities 247 3,615
Cash Flows from Investing Activities:
Purchase of property, plant and equipment (182) (5)
Net cash used in investing activities (182) (5)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock and
warrants in a private offering, net 23,160 -
Cash distributions to CCD Members (18,409) (3,402)
Net cash provided by (used in) financing
activities 4,751 (3,402)
Net increase in cash 4,816 208
Cash, beginning of the period 304 655
Cash, end of the period $ 5,120 $863
Supplemental disclosure of cash flow
information
Cash paid for interest $ - $-
Cash paid for income taxes $ - $-
Supplemental disclosure of cash flow
information
Effect of reverse merger $ 2,378 $-
Conversion of Series B convertible preferred
stock $ 13,963 $-
The accompanying notes are an integral part of these condensed
consolidated financial statements.
For more information, contact:
Investor Relations
Charlie's Holdings, Inc.
1007 Brioso Dr.
Costa Mesa, CA 92627
ir@charliesholdings.com
View original content:www.prnewswire.com/news-releases/charlies-holdings-inc-announces-financial-results-for-2019-second-quarter-and-year-to-date-300902347.html
SOURCE Charlie's Holdings, Inc.
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