Charlie’s Holdings Reports 24.4% Revenue Decline and $1.2 Million Net Loss in Q1 2025

Charlie’s Holdings, Inc. reported a decline in financial performance for the first quarter of 2025, with total revenues of approximately $2.3 million, a decrease of 24.4% from $3.1 million in the same period of 2024. The drop in revenue was primarily attributed to a significant reduction in sales of nicotine-based vapor products, which fell by $2.9 million, although this was partially offset by a $551,000 increase in sales of alternative products distributed through its subsidiary, Don Polly. The company recorded a net loss of $1.2 million for the quarter, compared to a net loss of $1.0 million in the prior year.

Operating costs also decreased, totaling $3.1 million for the quarter, down from $4.0 million in the previous year. This reduction was driven by lower costs of goods sold, which fell by 15.6% to $1.8 million, and a 26.6% decrease in general and administrative expenses to $1.1 million. Despite these reductions, the company’s loss from operations improved slightly, decreasing from $941,000 to $826,000 year-over-year. However, other expenses, including interest and debt extinguishment losses, contributed to the overall increase in net loss.

In terms of strategic developments, Charlie’s Holdings has been actively pursuing regulatory compliance and product innovation. The company has invested approximately $6.5 million in its Premarket Tobacco Application (PMTA) process, which is crucial for maintaining its market presence in the U.S. Additionally, the company launched its SBX line of non-nicotine disposable vapor products, which it believes will not be subject to FDA review, potentially providing a competitive edge in the market. The company also entered into an Asset Purchase Agreement with R.J. Reynolds Vapor Company, selling 15 PACHA synthetic products for a total of $6.5 million, which is expected to improve its cash position and address short-term debt concerns.

Operationally, Charlie’s Holdings has faced challenges, including a working capital deficit that increased to $2.8 million as of March 31, 2025, compared to $1.9 million at the end of 2024. The company’s cash balance at the end of the quarter was approximately $112,000. The management has implemented cost-cutting measures, including salary reductions and headcount reductions, to navigate the financial difficulties. Looking ahead, the company aims to enhance its market position through continued product development and potential geographic expansion, while also addressing regulatory risks that could impact its ability to sell products in the future.