What changed in this filing

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Item 1A. Risk Factors

2021-05-17 compared with 2020-11-13 · 349 added, 350 removed, 908 unchanged (43% of the section changed)

Investing in our Common Stock) involves a high degree of risk.

should carefully consider the risks in our Annual Report on Form

10-K for our fiscal year ended December 31, 2019, filed on April

14, 2020, in addition to the other information contained in this

Report, before making an investment decision.

Our business,

financial condition or results of operations could be harmed by any

of these risks.

As a result, you could lose some or all of your

investment in our Common Stock.

These risks and uncertainties are

not the only ones we face.

Additional risks not currently known to

us or other factors not perceived by us to present significant

risks to our business at this time also may impair our business

are subject to various risks that could have a negative effect on

the Company and its financial condition.

These risks could cause

actual operating results to differ from those expressed in certain

“forward looking statements”

contained in this

Quarterly Report on Form 10-Q as well as in other

communications.

Risks Related to the Company

Our operations are now primarily dependent on the business of

Charlie’s and Don Polly, and our ability to achieve positive

cash flow under our new business plan is uncertain.

a result of the Share Exchange (as defined in Note 1 of Item 1,

Part 1 of this Report), our continued operations are now primarily

dependent on the business of Charlie’s and Don Polly.

Although Charlie’s and Don Polly generated net revenue of

approximately $12.5 million during the nine months ended September

30, 2020 and $22.7 million for the year ended December 31, 2019,

there can be no guarantee that the Company will continue to grow

revenue or achieve positive cash flow in the future.

Charlie’s, and our ability to achieve positive cash flow

under our new business plan is uncertain.

a result of the Share Exchange (see Note 3 of Part 1, Item 1 of

this Report), our continued operations are now primarily dependent

on the business of Charlie’s.

Although Charlie’s

generated net revenue of approximately $4.4 million during the

three months ended March 31, 2021 and $16.7 million during the year

ended December 31, 2020, there can be no guarantee that the Company

can continue to grow revenue or achieve positive cash flow in the

Our operating results in the past will not reflect our operating

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future, to our revenue stream;

our decision in early 2018 to discontinue the production and sale

of AquaBall®, that in the year ended December 31, 2018,

contributed approximately $1,767,802 in revenue;

our previous sole reliance on sales of Bazi®, that in the

years ended December 31, 2019 and 2018, contributed approximately

$22,207 and $179,250 in revenue to the Company, respectively;

the restructuring of substantially all of our previously

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requirements.

As of September 30, 2020, we had negative working

As of December 31, 2020, we had negative working

capital of approximately $6,020,000, which consisted of current

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Applications (" PMTAs ") with

the FDA is approximately $4.4 million in to date. 

We therefore currently believe that

our cash resources will be insufficient to fund our operations for

the next twelve months.

As a result, we will be required to seek

additional financing in the future in order to fund our operations,

further invest in the PMTA application process and otherwise carry

out our business plan.

There can be no assurance that such

financing will be available on acceptable terms, or at all, and

there can be no assurance that any such arrangement, if required or

otherwise sought, would be available on terms deemed to be

commercially acceptable and in our best

the FDA is approximately $4.4 million to date.

As a result, in

March 2021 we issued shares of the Company’s Common Stock

worth $3.0 million, which provided additional financing in order to

reduce debt, further invest in the

PMTA application process, and otherwise carry out our business

There can be no assurance that the Company will not require

additional financing in the future, or that the financing will be

available on acceptable terms, or at all, and there can be no

assurance that any such arrangement, if required or otherwise

sought, would be available on terms deemed to be commercially

acceptable and in our best interests.

The failure of the Company to pay a required one-time dividend on

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Company’s financial condition.

August 13, 2020, the Company received a formal notice of default

from a holder of its Series A Preferred requesting full payment of

dividends due and payable with respect to the Series A Preferred

held by such holder on or before August 23, 2020

On August 13, 2020,

the Company received a formal notice of default from a holder of

its Series A Preferred requesting full payment of dividends due and

payable with respect to the Series A Preferred held by such holder

on or before August 23, 2020 (“

Default ”).

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dividends due and payable to holders of the Series A Preferred is

result of the Dividend Default, all amounts due and payable under

the terms of the Amended Note (as defined in Note 14 of Item 1,

Part 1 of this Report) issued to Red Beard (as defined in Note 9 of

Item 1, Part 1 of this Report), shall, at the election of Red

Beard, bear interest at the lesser of a rate equal to 20% per annum

or the maximum lawful rate authorized under applicable law, until

the Amended Note is paid in full.

The Amended Note is due and

payable on or before the earlier date of (i) a Liquidity Event, as

defined under the terms of the Note, or (ii) December 1, 2020, as

defined in the Amended Note.

While no assurances can be given,

management is currently negotiating with the Lender regarding

repayment of the Note in full.

$ 1,560,000 .

Our auditors have issued a going concern opinion on our financial

statements as of December 31, 2020.

Our financial statements have been prepared

assuming that the Company will continue as a going concern, which

Our financial statements have been prepared assuming

that the Company will continue as a going concern, which

contemplates the realization of assets and satisfaction of

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Additionally, the

Company is required to obtain FDA approval to continue selling and

marketing its products used for the vaporization of nicotine in the

United States.

Company is required to apply for FDA approval to continue selling

and marketing its products used for the vaporization of nicotine in

the United States.

There is significant cost associated with the

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approve the application(s).

In addition, the recent outbreak of a

novel strain of the coronavirus disease (“

COVID-19 ”) which was identified in Wuhan, China

In addition, the outbreak of a novel

strain of COVID-19 (“

Coronavirus ”) which was identified in Wuhan, China

around December 2019 and continues to spread globally, has had a

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impact the Company’s supply chain and/or sales.

months ended September 30, 2020, the Company has incurred losses

from operations of $6,030,000 and a consolidated net loss of

approximately $11,384,000, and the Company has negative

For the three

months ended March 31, 2021, the Company has incurred losses from

operations of $229,000, and a consolidated net loss of

approximately $20,137,000.

The Company has negative

stockholders’

equity of $10,548,000 as of September 30, 2020.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

The financial statements do

not include any adjustments to the carrying amount and

classification of recorded assets and liabilities should the

Company be unable to continue operations.

equity of $22,684,000 at March 31, 2021.

factors raise substantial doubt about the Company’s ability

to continue as a going concern.

The financial statements do not

include any adjustments to the carrying amount and classification

of recorded assets and liabilities should the Company be unable to

continue operations.

Our business is difficult to evaluate because we have recently

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respectively, collectively own approximately 39% of our issued and

outstanding voting securities as a result of the Share

Exchange. As a result, Ryan Stump and Brandon Stump have the

ability to exert influence over both the actions of our Board of

Directors, the outcome of issues requiring approval by our

stockholders, as well as the execution of management’s plans.

This concentration of ownership may have effects such as delaying

or preventing a change in control of the Company that may be

favored by other stockholders or preventing transactions in which

stockholders might otherwise recover a premium for their shares

over current market prices.

We will need to hire additional qualified accounting and

administrative personnel in order to remediate material weaknesses

in our internal control over financial accounting, and we will need

to expend additional resources and efforts to establish and

maintain the effectiveness of our internal control over financial

reporting and our disclosure controls and procedures.

As a public company, we are subject to the

reporting requirements of the Securities Exchange Act of 1934, as

amended (the “

Act ”), and the

Sarbanes-Oxley Act of 2002.

Our management is required to evaluate

and disclose its assessment of the effectiveness of our internal

control over financial reporting as of each year-end, including

disclosing any “material weakness”

in our internal

control over financial reporting.

A material weakness is a control

deficiency, or combination of control deficiencies, that results in

more than a remote likelihood that a material misstatement of the

annual or interim financial statements will not be prevented or

As a result of its assessment, management has determined

that there were material weaknesses due to the lack of segregation

of duties and sufficient internal controls (including

technology-based general controls) that encompass our Company as a

whole with respect to entity and transactions level controls in

order to ensure complete documentation of complex and non-routine

transactions and adequate financial reporting.

If we continue to

experience material weaknesses in our internal controls or fail to

maintain or implement required new or improved controls, such

circumstances could cause us to fail to meet our periodic reporting

obligations or result in material misstatements in our financial

statements, or adversely affect the results of periodic management

evaluations and, if required, annual auditor attestation

to these material weaknesses, management concluded that, as of

December 31, 2019 and 2018, our internal control over financial

reporting was ineffective. Management also concluded that our

disclosure controls and procedures were ineffective as of December

31, 2019 and 2018, as well as for the quarters ended September 30,

2020, June 30, 2020 and March 31, 2020.

These weaknesses were first

identified in our Annual Report on Form 10-K for the year ended

December 31, 2012.

In 2018, we reduced our staff to one

employee, and outsourced our accounting and financial

functions, further exacerbating our weaknesses in our

internal control over financial reporting and our disclosure

controls and procedures.

Although the number of employees has grown

as a result of the Share Exchange and the addition of

Charlie’s operations, including the hiring of a new Chief

Executive Officer, Chief Financial Officer and additional

accounting and information technology staff, no assurances can be

provided that we will have sufficient resources to resolve these

material weaknesses.

These weaknesses have the

potential to adversely impact our financial reporting

process and our financial reports.

We will need to hire additional

qualified accounting and administrative personnel in order to

resolve these material weaknesses.

outstanding voting securities. As a result, Ryan Stump and

Brandon Stump have the ability to exert influence over both the

actions of our Board of Directors, the outcome of issues requiring

approval by our stockholders, as well as the execution of

management’s plans.

This concentration of ownership may have

effects such as delaying or preventing a change in control of the

Company that may be favored by other stockholders or preventing

transactions in which stockholders might otherwise recover a

premium for their shares over current market prices.

The loss of one or more of our key personnel or our failure to

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Ryan Stump, Charlie’s founders and our Chief Executive

Officer and Chief Operating Officer, respectively, and David Allen,

our Chief Financial Officer.  If we cannot call upon them

or other key management personnel for any reason, our operations

and development could be harmed.

We have not yet developed a

succession plan.

Furthermore, as we grow, we will be required to

hire and attract additional qualified professionals such as

accounting, legal, finance, production, market and sales experts.

We may not be able to locate or attract qualified individuals for

such positions, which will affect our ability to grow and expand

our business.

Officer and Chief Operating Officer, respectively, Matt Montesano,

our Chief Financial Officer, and Henry Sicignano our

President.  If we cannot call upon them or other key

management personnel for any reason, our operations and development

could be harmed.

We have not yet developed a succession plan.

Furthermore, as we grow, we will be required to hire and attract

additional qualified professionals such as accounting, legal,

finance, production, market and sales experts.

We may not be able

to locate or attract qualified individuals for such positions,

which will affect our ability to grow and expand our

We rely on contractual arrangements with Don Polly, our

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The CCPA went into effect in January

We are affected by extensive laws, governmental regulations,

administrative determinations, court decisions and similar other

constraints, which can make compliance costly and subject us to

enforcement actions by governmental agencies.

formulation, manufacturing, packaging, labeling, holding, storage,

distribution, advertising and sale of our products are affected by

extensive laws, governmental regulations and policies,

administrative determinations, court decisions and similar

constraints at the federal, state and local levels, both within the

United States and in any country where we conduct business.

can be no assurance that we, or our independent distributors, will

be in compliance with all of these regulations.

A failure by us or

our distributors to comply with these laws and regulations could

lead to governmental investigations, civil and criminal

prosecutions, administrative hearings and court proceedings, civil

and criminal penalties, injunctions against product sales or

advertising, civil and criminal liability for us and/or our

principals, bad publicity, and tort claims arising out of

governmental or judicial findings of fact or conclusions of law

adverse to us or our principals.

In addition, the adoption of new

regulations and policies or changes in the interpretations of

existing regulations and policies may result in significant

new compliance costs or discontinuation of product sales, and may

adversely affect the marketing of our products, resulting in

decreases in revenue.

The business that we conduct outside the United States may be

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international markets, including, without limitation:

Potentially reduced protection for intellectual property

Unexpected changes in tariffs, trade barriers and regulatory

reduced protection for intellectual property rights;

changes in tariffs, trade barriers and regulatory

requirements;

Economic weakness, including inflation or political instability, in

weakness, including inflation or political instability, in

particular foreign economies and markets;

Business interruptions resulting from geo-political actions,

including war and terrorism or natural disasters, including

earthquakes, hurricanes, typhoons, floods and fires;

Failure to comply with Office of Foreign Asset Control rules and

regulations and the Foreign Corrupt Practices Act (“

interruptions resulting from geo-political actions, including war

and terrorism or natural disasters, including earthquakes,

hurricanes, typhoons, floods and fires;

Failure to comply with Office of Foreign Asset

Control rules and regulations and the Foreign Corrupt Practices Act

FCPA ”).

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our revenue or our overall financial performance.

The recent outbreak of COVID-19, or coronavirus, may adversely

affect our business.

The outbreak of COVID-19, or coronavirus, has adversely affected

our business.

the event of a pandemic, epidemic or outbreak of an infectious

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supply chain.

These conditions have begun to negatively affect our

sales and revenue, specifically relating to our CBD products,

although the magnitude of such a negative impact cannot be

determined at this time.

However, if repercussions of the outbreak

are prolonged, it will have a further adverse impact on our

These conditions have negatively affected our sales

and revenue, although the magnitude of such a negative impact

cannot be determined at this time.

However, if repercussions of the

outbreak are prolonged, it will have a further adverse impact on

our business.

outbreak and persistence of COVID-19 in international markets that

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September 9, 2020.

Additionally, on January 2, 2020 the

FDA issued an enforcement policy effectively banning the sale

of flavored cartridge-based e-cigarettes marketed primarily by

large manufacturers in the United States without prior

authorization from the FDA.

According to the FDA, it is expected

that the new policy will have minimal impact on small

manufacturers, such as vape shops, that sell non-cartridge based

We believe that any ban on flavored e-cigarettes, or

similar enforcement action by the FDA, would have a significant

material adverse impact on Charlie’s products, which would,

in turn, have a material adverse impact on our overall

See "-The regulation of tobacco products by the

FDA in the United States and the issuance of Deeming Regulations

may materially adversely affect the Company." Additionally, on

January 2, 2020 the FDA issued an enforcement policy

effectively banning the sale of flavored cartridge-based

e-cigarettes marketed primarily by large manufacturers in the

United States without prior authorization from the FDA.

to the FDA, it is expected that the new policy will have minimal

impact on small manufacturers, such as vape shops, that sell

non-cartridge based products.

We believe that any ban on

flavored e-cigarettes, or similar enforcement action by the FDA,

would have a significant adverse impact on Charlie’s

products, which would, in turn, have a material adverse impact on

our overall business material.

regulatory challenges may come in future months and years,

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preferences, which could have a material adverse effect on our

Certain of our products contain nicotine, which is considered to be

a highly addictive substance.

of our products contain nicotine, a chemical found in cigarettes,

e-cigarettes, certain other vapor products and other tobacco

products, which is considered to be highly addictive.

Smoking Prevention and Tobacco Control Act empowers the FDA to

regulate the amount of nicotine found in vapor products, but may

not require the reduction of nicotine yields of a vapor product to

Any FDA regulation may require us to reformulate, recall and

or discontinue certain of the products we may sell from time to

time, which may have a material adverse effect on our ability to

market our products and have a material adverse effect on our

business, financial condition, results of operations, cash flows

and or future prospects.

Recent bans on the sales of flavored e-cigarettes directly impacts

the markets in which we may sell Charlie’s products, and may

have a material adverse impact on our business.

January 2, 2020 the FDA issued an enforcement policy

effectively banning the sale of flavored cartridge-based

e-cigarettes marketed primarily by large manufacturers in the

United States without prior authorization from the FDA. 

addition, Utah,

Washington, Rhode Island, New York and Massachusetts

have temporarily banned the sale of

flavored e-cigarettes, while previously imposed bans in Michigan

and Oregon have been temporarily halted by judicially imposed

In addition, other states and municipalities are

considering implementing similar restrictions, and some cities have

implemented more restrictive measures than their state

counterparts, such as San Francisco, which in June 2019, approved a

new ban on the sale of flavored nicotine products, including vaping

liquids and menthol cigarettes.

Any ban of on the sale of flavored

e-cigarettes directly limits the markets in which we may sell

Charlie’s products.

In the event the prevalence of such bans

increases across the United States, our business, results of

operations and financial condition will be materially

There is uncertainty related to the regulation of flavored

e-cigarette liquid and vaporization products and certain other

consumption accessories, including the possibility that flavored

e-cigarette liquid and vaporization products may be recalled or

removed from the market entirely.

Any increased regulatory

compliance burdens will have a material adverse impact on our

operations and future business development efforts.

has been increasing activity on the federal, state, and local

levels with respect to scrutiny of flavored e-cigarette liquid and

vaporizer products, and there is uncertainty regarding whether and

in what circumstances federal, state, or local regulatory

authorities will seek to develop and/or enforce regulations

relative to products used for the vaporization of nicotine. 

Federal, state, and local governmental bodies across the United

States have indicated that flavored e-cigarette liquid,

vaporization products and certain other consumption accessories may

become subject to new laws and regulations at the state and local

In addition to the initiatives taken by the FDA at the

federal level, over 25 states have implemented statewide

regulations that prohibit vaping in public places, and, as of

January 21, 2020, Utah,

Washington, Rhode Island, New York and Massachusetts

have temporarily banned the sale of

flavored e-cigarettes, while previously imposed bans in Michigan

and Oregon have been temporarily halted by judicially imposed

Many states, provinces, and some cities have passed

laws restricting the sale of e-cigarettes and certain other

nicotine vaporizer products.

to the application of existing laws and regulations, and/or the

implementation of any new laws or regulations that may be adopted

in the future, at a federal, state, or local level, directly or

indirectly implicating flavored e-cigarette liquid and products

used for the vaporization of nicotine would materially limit our

ability to sell such products, result in additional compliance

expenses, and require us to change our labeling and methods of

distribution, any of which would have a material adverse effect on

our business, results of operations and financial

We are affected by extensive laws, governmental regulations,

administrative determinations, court decisions and similar other

constraints, which can make compliance costly and subject us to

enforcement actions by governmental agencies.

formulation, manufacturing, packaging, labeling, holding, storage,

distribution, advertising and sale of our products are affected by

extensive laws, governmental regulations and policies,

administrative determinations, court decisions and similar

constraints at the federal, state and local levels, both within the

United States and in any country where we conduct business.

Moreover, the current trend is toward increasing regulation of the

tobacco industry, which is likely to differ between the various

states in which we currently conduct the majority of our

Extensive and inconsistent regulation by multiple states

and at different governmental levels could prove to be particularly

disruptive to our business as we may be unable to accommodate such

regulations in a cost-effective manner that allows us to continue

to compete in an economically viable way.

Regulations are often

introduced without the tobacco industry’s input and have been

a significant reason behind reduced industry sales volumes and

increased illicit trade.

can be no assurance that we, or our independent distributors, will

be in compliance with all of these regulations.

A failure by us or

our distributors to comply with these laws and regulations could

lead to governmental investigations, civil and criminal

prosecutions, administrative hearings and court proceedings, civil

and criminal penalties, injunctions against product sales or

advertising, civil and criminal liability for us and/or our

principals, bad publicity, and tort claims arising out of

governmental or judicial findings of fact or conclusions of law

adverse to us or our principals.

In addition, the adoption of new

regulations and policies or changes in the interpretations of

existing regulations and policies may result in significant new

compliance costs or discontinuation of product sales, and may

adversely affect the marketing of our products, resulting in

decreases in revenue.

1986, federal legislation was enacted regulating smokeless tobacco

products (including dry and moist snuff and chewing tobacco) by,

among other things, requiring health warnings on smokeless tobacco

packages and prohibiting the advertising of smokeless tobacco

products on media subject to the jurisdiction of the Federal

Communications Commission (“

FCC ”).

Since 1986, other

proposals have been made at the federal, state, and local levels

for additional regulation of tobacco products.

It is likely that

additional proposals will be made in the coming years.

the Prevent All Cigarette Trafficking Act (“

PACT Act ”) initially prohibited

the use of the U.S.

Postal Service to mail cigarette and smokeless

tobacco products and also amended the Jenkins Act, which

established cigarette sales reporting requirements for state excise

tax collection, to require individuals and businesses that make

interstate sales of certain cigarette or smokeless tobacco comply

with state tax laws.

The PACT Act was recently amended expanding

the definition of “cigarette”

“electronic nicotine delivery systems,”

or "ENDS", and

requires that the United States Postal Service (" USPS ") promulgate regulations

clarifying the applicability of the prohibition on delivery sales

of cigarettes to ENDS.

This amendment to the PACT Act applies to

certain products manufactured and sold by the Company, which has

impacts at the federal and state levels.

Failure to comply with the

PACT Act could result in significant financial or criminal

To the extent we are unable to respond to, or comply

with, these new requirements, there could be a material adverse

effect on our business, results of operations and financial

22, 2009, the Family Smoking Prevention and Tobacco Control Act

(the “

Tobacco Control

Act ”) granted the FDA regulatory authority over

tobacco products.

The Act also amended the Federal Cigarette

Labeling and Advertising Act, which governs how cigarettes can be

advertised and marketed, as well as the Comprehensive Smokeless

Tobacco Health Education Act (“

CSTHEA ”), which governs how

smokeless tobacco can be advertised and marketed.

In addition to

the FDA and FCC, we are subject to regulation by numerous other

federal agencies, including the Federal Trade Commission

FTC ”), the

Department of Justice (“

DOJ ”), the Alcohol and Tobacco

Tax and Trade Bureau (“

TTB ”), the U.S.

Environmental

Protection Agency (“

EPA ”), the U.S.

Department of

Agriculture (“

USDA ”), the Consumer Product

Safety Commission (“

CPSC ”), the U.S.

Border Protection (“

CBP ”) and the U.S.

Disease Control and Prevention’s (“

CDC ”) Office on Smoking and

There have also been adverse legislative and political

decisions and other unfavorable developments concerning cigarette

smoking and the tobacco industry, which we believe have received

widespread public attention.

The FDA has, and other governmental

entities have, expressed concerns about the use of flavors in

tobacco products and an interest in significant regulation of such

use, up to and including de facto bans in certain products.

can be no assurance as to the ultimate content, timing or effect of

any regulation of tobacco products by governmental bodies, nor can

there be any assurance that potential corresponding declines in

demand resulting from negative media attention would not have a

material adverse effect on our business, results of operations and

financial condition.

The regulation of tobacco products by the FDA in the United States

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However, any Deemed Tobacco Products such as certain products from

our Charlie's Chalk Dust and Pachamama product lines that were

on the market in the United States prior to August 8, 2016 have a

our Charlie's Chalk Dust and Pachamama product lines that were on

the market in the United States prior to August 8, 2016 have a

grace period to continue to market such products, ending on

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the PMTA pathway, must be completed and filed with the FDA.

submission of a PMTA, products would then be able to be

marketed pending the FDA’s review of the submission.

obtaining marketing authorization by the FDA prior to September 9,

2020 or having submitted a PMTA by such date,

non-authorized products would be required to be removed from the

market in the United States until such authorization could be

obtained, although such products may continue to be sold if a PMTA

is pending as of the September 9, 2020 deadline.

at the date of this Report, we have submitted PMTAs for certain of

our traditional nicotine vapor products, including, but not limited

to menthol and/or tobacco products with the assistance of Avail,

submission of a PMTA, products would then be able to be marketed

pending the FDA’s review of the submission.

Without obtaining

marketing authorization by the FDA prior to September 9, 2020 or

having submitted a PMTA by such date, non-authorized products would

be required to be removed from the market in the United States

until such authorization could be obtained, although such products

may continue to be sold if a PMTA is pending as of the September 9,

2020 deadline.

the date of this Report, we have submitted PMTAs for certain of our

traditional nicotine vapor products, including, but not limited to

menthol and/or tobacco products with the assistance of Avail,

pursuant to the terms of the Avail Agreement.

We estimate the cost

associated with these PMTAs to be approximately $4.4 million in

The costs to date

associated with these PMTAs are approximately $4.4 million in

We are also evaluating the potential market perception and

clinical studies that may be required in connection with each PMTA.

If we do not submit a PMTA for any Charlie’s

products considered to be Deemed Tobacco Products prior to the

lapse of the grace period or if any PMTA submitted by the

Company is denied, we will be required to cease the marketing and

distribution of such Charlie’s products, which, in turn,

would have a material adverse effect on the Company’s

business, results of operations and financial

condition. Furthermore, there can be no assurance that if the

Company were to complete a PMTA for any of the affected Charlie's

products, that any application would be approved by the

If we do not submit a PMTA for any Charlie’s products

considered to be Deemed Tobacco Products prior to the lapse of the

grace period or if any PMTA submitted by the Company is denied, we

will be required to cease the marketing and distribution of such

Charlie’s products, which, in turn, would have a material

adverse effect on the Company’s business, results of

operations and financial condition.

Furthermore, there can be no

assurance that if the Company were to complete a PMTA for any of

the affected Charlie's products, that any application would be

approved by the FDA.