RJ Reynolds Vapor Company and CHUC Complete Third-Round Deal: $1 Million Acquisition of a PMTA-Pending Product

Key Points:

Acquirer: British American Tobacco (BAT) subsidiary Reynolds American, Inc. 

Seller: Charlie's Holdings, Inc. Date of transaction: August 8, 2025 

Transaction details: R.J. Reynolds purchases an additional PACHA synthetic product and related assets from Charlie's Holdings, Inc., which includes a pre-market tobacco application (PMTA) submitted by Charlie's Holdings in 2022. 

Transaction amount: $1 million.

According to an 8-K report released by Charlie's Holdings, Inc. (hereinafter referred to as "CHUC"), on August 8, 2025, CHUC announced that it had reached and completed an amendment to the acquisition agreement with R.J. Reynolds Vapor Company, a subsidiary of British American Tobacco (BAT), for additional tobacco products and related assets.

According to the agreement, R.J. Reynolds purchased an additional PACHA product and related assets provided by CHUC. These assets include a pre-market tobacco application (PMTA) submitted by CHUC for the first time in 2022. The purchase price of the additional assets was $1 million, which was paid at the time of delivery.

After the completion of this transaction, R.J. Reynolds has purchased a total of sixteen related assets from CHUC.

According to publicly available information, R.J. Reynolds had previously entered into two transactions with CHUC.

·On April 16, R.J. Reynolds acquired 12 PACHA synthetic nicotine disposable e-cigarette products that have been submitted for PMTA (Pre-Market Tobacco Product Application) from CHUC, along with related assets. The deal structure includes a fixed cash payment of $5 million, as well as a up to $4.2 million in disposable earnout payments. 

·On May 28, the two parties revised the original asset purchase agreement, with CHUC agreeing to sell an additional 3 PACHA brand synthetic nicotine products and related assets for $1.5 million, which will be paid out in disposable at closing.

From the three transaction data sets, the price trend of individual assets can be observed.

April 16th: 

Transaction amount: fixed at 5 million dollars + maximum 4.2 million dollars (based on fixed portion) 

Quantity: 12 items • Unit price (fixed portion) = 5 million ÷ 12 = 41.67 thousand dollars/item 

If the maximum of 4.2 million is added, the total amount is 9.2 million ÷ 12 = 76.67 thousand dollars/item (maximum)

May 28th: - Transaction amount: $1.5 million - Quantity: 3 items - Unit price = $1.5 million / 3 = $500,000 per item

August 8th: - Transaction amount: $1 million - Quantity: 1 item - Unit price = $1 million ÷ 1 = $1 million per item