UK Nicotine Company Chill Brands Posts £164,000 Half-Year Revenue, Shuts U.S. Subsidiary to Focus on Distribution

Key Points:

·Chill Brands reported half-year revenue of only $210,000, with cash reserves dwindling to around $410,000. 

·The company successfully regained the domain name chill.com through litigation and will fully withdraw from the US market by December 2024. 

·Chill Brands has launched a new distribution platform, Chill Connect, with the first batch of third-party brand clients already signed on. 

·In April 2025, the company completed a $1.35 million convertible bond financing to fund operations for the next 12 months.

【2Firsts News Flash】According to a report by the London Stock Exchange on July 11th, the UK consumer goods distribution company Chill Brands Group Plc ("Chill Brands") has released its unaudited half-year financial report for the period ending September 30, 2024. During the period, the company generated revenue of £164,000 (approximately $210,000) and recorded an operating loss of £2.448 million (approximately $3.1 million), primarily due to challenges such as governance issues within the previous management team, legal fees, and market volatility.

Key financial data:

·Revenue: £164,001 (approximately $220,000, compared to £143,938, approximately $190,000 in the same period of 2023) 

·Gross loss: £376,186 (approximately $510,000, compared to gross profit of £61,699, approximately $80,000 in the same period of 2023) 

·Cash balance: £326,666 (approximately $440,000, compared to £1,315,000, approximately $1.77 million at the end of March 2024)

·Loss per share: 0.51 pence (compared to 0.57 pence in the same period of 2023)

Key event:

·Crisis Management and Asset Recovery: The former management team transferred the company domain chill.com and approximately $400,000 in cash during the period of April-May 2024. The new board of directors successfully recovered the core assets through a settlement reached in December 2024 via a lawsuit in the United States. 

·Strategic Transformation: 

1.Exiting the U.S. Market: Due to complex regulations (FDA PMTA process, flavor bans in various states) and high tariff costs, the operations of the U.S. subsidiary were terminated. 

2.The establishment of the distribution department, Chill Connect, utilizes existing retail networks to provide channel services for third-party brands (e-cigarettes, nicotine pouches, energy drinks, etc.), with initial clients already signed on, transitioning to a light asset service model. 

·Financing and Compliance: 

1.In January 2024, the company raised £2.4 million (approximately $3.27 million) through share subscriptions and debt capitalization. 

2.In April 2025, £1 million (approximately $1.348 million) convertible bonds were issued (with an annual interest rate of 10% and a conversion price of 1.5 pence per share) to supplement operational funds. The company's stock has been suspended since June 2024 due to audit delays, with plans to apply for trading resumption after the release of this interim report.

Market Outlook:

·British policy impact: Starting in June 2025, disposable e-cigarettes will be completely banned. The company has gradually phased out the Chill ZERO product line and shifted towards distribution services to mitigate inventory risks. 

·E-commerce strategy: Continued optimization of the chill.com platform, with the first Meta ads planned for 2025 to drive traffic, positioning the company as a vertical e-commerce platform for healthy consumer goods. 

·Management stated: "Despite the challenges of the past 12 months, the company has established a more sustainable business model by focusing on distribution services and selective brand partnerships. In the future, we will continue to expand the Chill Connect business and cautiously move forward with our own brand products.