8-K
Charlie's Holdings, Inc. (CHUC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 2, 2022
Commission File Number: 001-32420
Charlie's Holdings, Inc.
(Exact name of registrant as specified in its charter.)
| Nevada | 84-1575085 |
|---|---|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1007 Brioso Drive, Costa Mesa, California 92627
(Address of principal executive offices)
949-203-3500
(Registrant's Telephone number)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
|---|---|---|
| N/A | CHUC | N/A |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of Dr. Edward Carmines, Ph.D.
On March 2, 2022, Charlies Holdings, Inc. (the “Company”) appointed Edward Carmines, Ph.D., to the Company's Board of Directors (the “Board”), to serve until the Company’s next annual meeting of stockholders or until his successor is duly elected and qualified.
Dr. Carmines, 67, is the Chief Scientific Officer of Chemular, Inc., where he designs and directs scientific and regulatory programs for Pre-Market Tobacco Applications for a host of contract clients across a wide range of tobacco product categories. Dr. Carmines also serves as the Principal for Carmines Consulting, LLC, a position he has held since 2011, consulting for the regulated tobacco industry in the field of toxicology and regulatory affairs. Dr. Carmines also serves as an Advisory Board Member of Sparq Life, Inc. a position he has held since 2016, focusing on the science of inhalation of non-tobacco products. Dr. Carmines received a Bachelor’s of Science degree in Chemistry, and a Ph.D. degree in Toxicology from the Medical College of Virginia (Virginia Commonwealth University).
As compensation as independent director, Dr. Carmines will receive (i) a $60,000 annual cash retainer, payable in equal quarterly installments, and (ii) a one-time grant (“Award”) of 400,000 restricted shares of the Company’s common stock, $0.001 par value per share (“Common Stock”). The Award will vest as follows, subject to acceleration upon certain events, (a) 200,000 shares will vest on March 2, 2023, and (b) 200,000 shares will vest on March 2, 2024.
Except as disclosed herein, there are no related party transactions between the Company and Dr. Carmines that would require disclosure under Item 404(a) of Regulation S-K, nor are there any further arrangements or understandings in connection with the appointment of Dr. Carmines as a member of the Company’s Board.
A copy of the press release announcing Dr. Carmine’s appointment is attached to this Current Report on Form 8-K as Exhibit 99.1.
Grant of Restricted Stock Awards to Henry Sicignano
On March 2, 2022 (the “Grant Date”), the Board approved a one-time grant of 500,000 restricted shares of the Company’s Common Stock to the Company’s President, Henry Sicignano (the “Sicignano Award”), pursuant to the Charlie’s Holdings, Inc. 2019 Omnibus Equity Incentive Plan. The Sicignano Award will vest as follows: (i) 166,667 shares will vest upon the earlier to occur of (a) the first anniversary of the Grant Date, (b) a Change in Control of the Company (as defined below), (c) Mr. Sicignano’s death or Disability (as defined below), (d) termination by Mr. Sicignano of his employment with the Company for Good Reason (as defined below), (e) the Company’s termination of Mr. Sicignano’s employment without Cause (as defined below) (subsections (b) through (e) of this paragraph are collectively, the “Acceleration Events”); (ii) 166,667 shares will vest on the second anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event; and (iii) 166,666 shares will vest on the third anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event.
If Mr. Sicignano’s services are terminated for any reason other than death, Disability, termination by Mr. Sicignano of his employment for Good Reason, or termination of Mr. Sicignano’s employment by the Company without Cause, all unvested shares shall be automatically forfeited upon such termination.
Grant of Restricted Stock Awards to Matthew Montesano
On the Grant Date, the Board approved a one-time grant of 565,000 restricted shares of the Company’s Common Stock to the Company’s Chief Financial Officer, Matthew Montesano (the “Montesano Award”), pursuant to the Charlie’s Holdings, Inc. 2019 Omnibus Equity Incentive Plan. The Montesano Award will vest as follows: (i) 188,334 shares will vest on the first anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event; (ii) 188,333 shares will vest on the second anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event; and (iii) 188,333 shares will vest on the third anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event.
If Mr. Montesano’s services are terminated for any reason other than death, Disability, termination by Mr. Montesano of his employment for Good Reason, or termination of Mr. Montesano’s employment by the Company without Cause, all unvested shares shall be automatically forfeited upon such termination.
Grant of Restricted Stock Awards to Adam Mirkovich
On the Grant Date, the Board approved a one-time grant of 465,000 restricted shares of the Company’s Common Stock to the Company’s Chief Information Officer, Adam Mirkovich (the “Mirkovich Award”), pursuant to the Charlie’s Holdings, Inc. 2019 Omnibus Equity Incentive Plan. The Mirkovich Award will vest as follows: (i) 155,000 shares will vest on the first anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event; (ii) 155,000 shares will vest on the second anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event; and (iii) 155,000 shares will vest on the third anniversary of the Grant Date, or on the earlier date of the occurrence of any Acceleration Event.
If Mr. Mirkovich’s services are terminated for any reason other than death, Disability, termination by Mr. Mirkovich of his employment for Good Reason, or termination of Mr. Mirkovich’s employment by the Company without Cause, all unvested shares shall be automatically forfeited upon such termination.
For each of the Sicignano Award, Montesano Award, and the Mirkovich Award: (A) termination by the Company for “Cause” shall be limited to termination of the respective officer based on any of the following grounds (i) fraud, misappropriation, embezzlement or acts of similar dishonesty, (ii) conviction of a felony crime, (iii) intentional and willful misconduct that subjects the Company to criminal liability, (iv) breach of the respective officer’s duty of loyalty to the Company or diversion or usurpation of corporate opportunities properly belonging to the Company, (v) material breach of this Agreement and/or any other agreement entered into between the Company and the respective officer, and/or (vi) willful and/or continued failure to satisfactorily perform the duties of Executive’s position; (B) “Good Reason” means the occurrence of any of the following, without the prior written consent of the respective officer, (i) failure of the Company to pay the respective officer’s compensation, (ii) a change in the location of the respective officer’s principal place of employment without the consent of the respective officer, (iii) a change in job title, reporting, and/or duties of the respective officer without the consent of such officer, and/or (iv) a material breach of any provision of the respective officer’s employment agreement; (C) “Change of Control” means (i) a corporation, a partnership or a person, as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, acquires twenty five percent (25%) or more of the combined voting power of the outstanding securities of the Company or any entity which directly or indirectly controls the Company, which securities have the right to vote in elections of directors of the Company or any entity which directly or indirectly controls the Company, or (ii) the current members of the Board shall for any reason cease to constitute a majority of the Board, or (iii) the Company or any entity which directly or indirectly controls the Company disposes, by sale of stock, assets or otherwise, of all or substantially all of the business of the Company or the business of any entity which directly or indirectly controls the Company to a party or parties other than a subsidiary or other affiliate of the Company or any entity which directly or indirectly controls the Company pursuant to a partial or complete liquidation of the Company or any entity which directly or indirectly controls the Company, or (iv) the Board or any entity which directly or indirectly controls the Company approves the consolidation or merger of the Company or any entity which directly or indirectly controls the Company with or into any other person or entity (other than a wholly-owned subsidiary of the Company or any other entity which is directly or indirectly controlled by the Company), or any other person’s consolidation or merger with or into the Company or any entity which directly or indirectly controls the Company, which results in all or part of the outstanding shares of common stock of the Company or any entity which directly or indirectly controls the Company being changed in any way or converted into or exchanged for stock or other securities or cash or any other property; and (D) “Disability” means the respective officer’s failure, due to a mental or physical condition, to perform the essential functions of Executive’s position for more than 120 days in any 365 day period.
Item 9.01 Financial Statements and Exhibits.
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Charlie's Holdings, Inc. | ||
|---|---|---|
| Date: March 3, 2022 | By: | /s/ Ryan Stump |
| Ryan Stump | ||
| Chief Operating Officer |
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release issued by Charlie’s Holdings, Inc., dated March 2, 2022 |
ex_342773.htm
Exhibit 99.1
Charlie’s Holdings Appoints Edward Carmines, Ph.D., Accomplished Scientist and PMTA Expert, to Board of Directors
Carmines has submitted hundreds of PMTAs to the FDA and spearheaded the successful MRTPA submitted by 22nd Century Group (NASDAQ: XXII) that won an FDA marketing order in December 2021.
COSTA MESA, CA – March 2, 2022 – Accesswire – Charlie’s Holdings, Inc. (OTCQB: CHUC) (“Charlie’s” or the “Company”), an industry leader in the premium, nicotine-based, e-cigarette space, today announced the appointment of Edward Carmines, Ph.D., to its Board of Directors. Dr. Carmines is an accomplished scientist and regulatory affairs expert with extensive experience working with the Center for Tobacco Products at the U.S. Food and Drug Administration (“FDA”). In addition to an extraordinary record of success with Premarket Tobacco Applications (“PMTAs”), Modified Risk Tobacco Product Applications (“MRTPAs”), and Substantial Equivalence and Exemptions Requests with the FDA, Dr. Carmines maintains collaborative relationships with tobacco industry executives and public health advocates around the globe.
“At a time when the FDA has issued hundreds of Marketing Denial Orders for more than one million non-tobacco flavored electronic nicotine delivery system products, and Refuse-to-File letters for approximately 4.5 million other products, we are very fortunate to welcome Ed Carmines to Charlie’s Board of Directors. Having successfully navigated the FDA’s Substantial Equivalence, PMTA and MRTP regulatory pathways for literally hundreds of products, Ed Carmines is a world-renowned expert in the technical aspects of all types of e-cigarettes, oral tobacco, tobacco-free products, cigars, and cigarettes,” explained Ryan Stump, Charlie’s Chief Operating Officer and Director. “Overlaying Ed Carmines’ skills and experience with Charlie’s existing PMTAs – that are among the most comprehensive in the entire industry and remain in ‘substantive review’ with the FDA – we believe our Company’s submissions will ultimately be recognized by the FDA as both distinguished and suitable for approval.”
Jeff Fox, independent Director of Charlie’s Holdings, commented, “Ed has an uncanny ability to understand complex scientific problems and to develop business-relevant solutions. He was the lead scientist and primary architect behind 22nd Century Group’s VLN® reduced nicotine content cigarettes, which, in December 2021, became only the third product in history to be granted a MRTP marketing order by the FDA. We look forward to benefiting from Ed’s scientific leadership as Charlie’s pushes forward with both the Company’s existing PMTAs and intellectual property-related special projects that we believe could represent an important part of Charlie’s sales and profits in the years to come.”
Dr. Carmines is currently Chief Scientific Officer of Chemular, Inc., where he designs and directs scientific and regulatory programs for PMTAs for a host of contract clients across a wide range of tobacco product categories. He also currently serves as an Advisory Board Member of Sparq Life, Inc, focusing on the science of inhalation of non-tobacco products, and Principal for Carmines Consulting, LLC, where Dr. Carmines consults to the regulated tobacco industry in the field of toxicology and regulatory affairs. Previously, Dr. Carmines managed the safety of novel and oral tobacco products as a scientist with R.J. Reynolds Tobacco Co. From 1996-2009, Dr. Carmines served as a principal scientist for Philip Morris USA (Altria Client Services, Inc.), where he developed guidelines for safely testing cigarette ingredients and components based on the FDA Red Book. Dr. Carmines received a B.S. degree in Chemistry and a Ph.D. degree in Toxicology from the Medical College of Virginia (Virginia Commonwealth University).
About Charlie’s Holdings, Inc.
Charlie's Holdings, Inc. (OTCQB: CHUC) is an industry leader in the premium, nicotine-based, 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 our corporate website at: CharliesHoldings.com and our branded online websites: CharliesChalkDust.com, PachamamaCBD.com, and Pacha.co.
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 onto 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 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, 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:
IR@charliesholdings.com
Phone: 949-570-0691