CHUC Announces $2 Million Financing to Fuel Expansion of "Nicotine-Free" E-Cigarette SBX

Aug.28.2025
CHUC Announces $2 Million Financing to Fuel Expansion of "Nicotine-Free" E-Cigarette SBX
Charlie's Holdings, Inc. (CHUC) secured a $2 million credit agreement with independent director Michael D. King to expand its nicotine-free SBX product. Early sales in the U.S. Southeast exceeded expectations, with the product being legal and popular nationwide. Funds will boost inventory and convenience store presence. CHUC has also sold 16 PACHA-related assets to Reynolds in three deals.

Key points:

 

·Market Performance: CHUC stated that sales of SBX products in several regions in the southeast exceeded company expectations. Non-nicotine SBX products are legal in most parts of the United States and are popular among adult users. 

·Credit Support: CHUC received $2 million in credit support from independent director Michael D. King, with the funds being disbursed in three installments over a 12-month period at a 13% interest rate. 

·Market Performance: CHUC stated that sales of SBX products in several regions in the southeast exceeded company expectations. Non-nicotine SBX products are legal in most parts of the United States and are popular among adult users. 

·User Preferences: CHUC reported that non-nicotine SBX disposable products are preferred over Juul tobacco e-cigarette products by a ratio of 15:1. 

·External Collaboration: CHUC has sold assets related to PACHA products to Reynolds, a subsidiary of British American Tobacco, in three transactions totaling 16 assets.

 


 

According to a report from Access Newswire on August 26, Charlie's Holdings, Inc. (OTCQB: CHUC) announced that the company has entered into a highly favorable $2 million credit agreement with Michael D. King, an independent director on Charlie's board who currently holds over 2.5% of the company's shares.

 

CHUC stated that early sales of SBX in several southeastern regions have exceeded the company's expectations. SBX, which does not contain nicotine (Metatine, which is actually a form of nicotine known as 6-Methyl Nicotine), provides adult users of traditional e-cigarette products or combustible cigarettes with a unique new option that allows them to enjoy the taste of traditional nicotine products. The product is legal in most areas of the United States.

 

CHUC also stated that in a sponsored focus group study targeting adult e-cigarette product users, Charlie's nicotine-free SBX disposable product was preferred over Juul's tobacco-flavored e-cigarette product at a ratio of 15:1.

 

In order to facilitate an increase in SBX inventory purchases and drive the company's growth in the mass market convenient store channels, Michael has agreed to borrow up to $2 million from Charlie at an interest rate of 13% (to be disbursed in three installments). Each loan will have a term of 12 months, with interest and principal repayment due on the first anniversary of each loan disbursement.

 

Therefore, with the initial $1 million loan and subsequent two $500,000 loans, this debt/credit instrument gives the company the discretion to borrow as needed to meet the growing demands of the SBX product line. This credit instrument is non-convertible to equity, does not include warrants, and is extremely favorable to the company.

 

In addition, Michael has expressed willingness to consider providing additional loans in the coming months if the company's sales situation requires.

 

We are fortunate to have encountered the challenge of needing more funds to meet the demands of the SBX market... We are determined to grow cautiously," explained President Charlie Henry Sicignano.

 

Despite being in a position where most public companies may initiate dilutive equity financing, take on convertible debt, or borrow at high-interest rates from private lenders, Chief Operating Officer Ryan Stump and I are determined to secure the best financing terms for Charlie. In fact, we believe that Michael Jin's credit tools will be extremely beneficial to CHUC shareholders.

 

Michael commented, "CHUC has a striking strategic plan, a solid competitive advantage, and a management team with more favorable interests compared to any other publicly traded company I know of. I look forward to CHUC being listed on the national stock exchange... hopefully at a higher market value. Henry and Ryan will have my unwavering support.

 

Prior to this, CHUC had already announced the completion of a third asset transaction with Reynolds e-cigarette company, a subsidiary of British American Tobacco. The latter acquired an additional PACHA product and its related assets from CHUC for $1 million, including the PMTA application submitted for the first time in 2022. Statistics show that Reynolds e-cigarette company has now acquired a total of 16 related assets from CHUC.

 

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