Charlie's Holdings, Inc.

Charlie’s Holdings, Inc.

Company at a glance

• Type: Nevada corporation (originally incorporated 2001)
• Headquarters: 1007 Brioso Drive, Costa Mesa, CA 92627
• Public status: Files Form 10-K; trades on the OTCQB Venture Market
• Primary focus: Premium vapor products for adult smokers, development of product access and compliance IP, and age-gating technology

Business model and strategic focus

• Objective: Become a sales leader in two categories — non-combustible nicotine-related products and alternative alkaloid (non-nicotine) vapor products.
• Regulatory strategy: Invests in IP and age-verification/access-control technologies to support PMTA submissions and regulatory compliance. Signed a licensing agreement with IKE Tech LLC for an AI-powered, blockchain-based age-gating solution to support FDA considerations.
• Regulatory posture: Operates in a regulatory environment with exposure to FDA actions, PMTA pathways, synthetic nicotine regulation, and enforcement risks.

Product lines and offerings

• Metatine-based Alternative Alkaloid (SBX Disposable line)
  • Ingredient: Metatine (proprietary, nicotine salt analogue; non-nicotine)
  • Devices: SBX Disposables, 20 mL devices
  • Features: 17,000–25,000 puffs; three firing modes; active battery and e-liquid monitoring
  • Availability: 18 flavors; zero-nicotine device; not a tobacco product and not subject to certain nicotine/tobacco regulations
  • Market positioning: Offers satisfaction similar to nicotine vapes without nicotine; not subject to New York flavor ban outside Manhattan
• Nicotine-based disposable vapes
  • Brands: Pacha (4 mL, 8 mL, 12 mL) and PACHAMAMA (20 mL)
  • Nicotine: Synthetic nicotine and, in some cases, tobacco-derived nicotine
  • Formats: Compact disposables with various puff counts and flavor options
• E-liquids (refillable/open-system)
  • Brands: Pacha (domestic) and PACHAMAMA (international)
  • Nicotine concentrations: 0 mg, 3 mg, 6 mg/mL
  • Ingredients: Proprietary flavors and PG/VG blends
  • 2024 product launch: PACHAMAMA PLUS+ e-liquid line (hybrid/open-pod aesthetics with boosted flavor)
• Nicotine salts (NIC salts)
  • Intended for lower-wattage open, semi-open, and closed systems
  • Concentrations available: 25 mg/mL and 50 mg/mL

Manufacturing, sourcing, and operations

• Contract manufacturing: Uses both U.S.-based and Chinese partners; SBX lines are manufactured in China.
• Domestic production: Opened an ENDS filling operation in Huntington Beach, California (2025) to reduce production costs, limit import disruptions, and meet domestic manufacturing requirements.
• Sourcing: Proprietary Metatine sourced through a domestic supply/distribution agreement and shipped to China for SBX production; e-liquids and NIC salts manufactured by multiple ISO Class 7 U.S. manufacturers.
• Distribution and packaging: Disposables sold with flavor-specific consumer display units (CDUs); products are sold through third-party retailers rather than direct-to-consumer e-commerce.
• Employees: 35 full-time employees as of March 31, 2026.
• Distribution footprint: Available through more than 3,000 specialty retailers via direct sales, distributors, and wholesalers; some exclusive distribution arrangements in certain markets. Corporate marketing sites include charlieschalkdust.com, sbxvape.com, enjoypachamama.com, and pacha.co.

Age-gating and technology

• Agreement: Master Hardware, Software, and Cloud Subscription Agreement with IKE Tech LLC dated December 18, 2025.
• Technology: BLE chips embedded in devices and a cloud-based platform for device authentication, age-gating, and pre-activation verification.
• Scope: Access to a subscription software platform, development services, and potential white-labeled app.
• Strategic aim: Use age-gating and device access controls to support regulatory submissions and demonstrate product access safeguards to the FDA.

Intellectual property

• Trademarks: Registered federal trademarks for Charlie’s product lines and international registrations in several markets.
• Patents: No patents on product formulations; IP protection relies on trade secrets, trademarks, and contractual safeguards with manufacturers.
• Trade secrets: Formulations are treated as critical IP and protected through supplier and manufacturing contracts.

Financial and capitalization highlights

• Revenue
  • Net revenue: approximately $20.9 million for year ended December 31, 2025
  • Net revenue: approximately $7.8 million for year ended December 31, 2024
• Cash flow
  • Cash used in operating activities from continuing operations: approximately $6.3 million in 2025; $2.0 million in 2024
• Equity and securities (as of December 31, 2025)
  • Common stock outstanding: 270,653,242 shares
  • Outstanding options: 4,647,814 shares (weighted average exercise price $0.46)
  • Convertible/Senior securities: up to 21,190,885 shares issuable upon conversion of outstanding Series A Preferred
  • Authorized common stock: up to 500.0 million shares
  • Preferred stock designations: 300,000 shares Series A Preferred; 1.5 million shares Series B Preferred
• Market and governance
  • Trading market: OTCQB Venture Market
  • Forum selection: Exclusive Nevada forum provision for certain actions (with caveats)
• Dividends: No cash dividends historically; none anticipated in the foreseeable future

Sales and marketing

• Sales team: U.S.-based sales organization targeting distributors and retail partners with account visits and collaborative promotions.
• Marketing channels: Industry trade shows, store promotions, and product placements in convenience stores, liquor stores, and gas stations.

Regulatory and risk context

• The company operates in a highly regulated sector with FDA PMTA pathways, flavor restrictions, and potential product standards.
• The SBX line is positioned as non-tobacco/non-nicotine to avoid certain tobacco-related regulatory requirements, but regulatory classification could affect that posture.
• The company has ongoing PMTA activity for several products and has been involved in litigation and administrative processes affecting some submissions.
• International and local regulatory changes (flavor bans, licensing requirements, taxes) could materially affect operations.
• Product safety and liability: Faces standard product liability risks and maintains quality standards and supplier controls.

Summary takeaway

Charlie’s Holdings is a premium vapor products company with a diversified product portfolio—zero-nicotine Metatine-based SBX disposables, nicotine-based Pacha and PACHAMAMA disposables, a range of e-liquids including PACHAMAMA PLUS+, and NIC salts. The company expanded domestic manufacturing with a 2025 ENDS filling operation in Huntington Beach and is pursuing product access and compliance technology through an IKE Tech LLC license. Revenue grew to approximately $20.9 million in 2025, cash used in operating activities was about $6.3 million that year, and the company employed 35 full-time staff as of March 31, 2026. Distribution covers over 3,000 specialty retailers, the company does not currently sell direct-to-consumer online, and it remains exposed to equity-linked dilution and regulatory risk.