Company: CHUC
Filing Date: 2025-08-21
Form Type: 10-Q
Source: 0001437749-25-027482
Chunk: 31

Company: Charlie's Holdings, Inc.
Filing Date: 2025-08-21
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 income (loss)                                                            6,264                 (231                  6,495      -2,811.7  
  Income (loss) before provision for income taxes                                      5,387                 (967                  6,354        -657.1  
  Income tax provision                                                                  (426                    -                   (426           100  
  Net income (loss)                                    $                               4,961      $          (967      $           5,928        -613.0  

Revenue

Revenue for the three months ended June 30, 2025, increased by approximately $501,000 or 24.5%, to approximately $2,544,000, as compared to approximately $2,043,000 for same period in 2024 due to an increase of $658,000 in sales of other alternative products distributed through Don Polly. The increase in alternative products primarily consisted of products distributed through Don Polly on behalf of other brands. These partnerships have allowed us to leverage existing customer relationships and sales infrastructure to generate incremental revenue, but are not a primary focus for the Company. Sales of existing nicotine and nicotine alternative based products decreased $157,000 when compared to the same period in 2024.

Cost of Revenue

Cost of revenue, which consists of direct costs of materials, direct labor, third party subcontractor services, and other overhead costs increased by approximately $615,000 or 48.6%, to approximately $1,880,000, or 73.9% of revenue, for the three months ended June 30, 2025, as compared to approximately $1,265,000, or 61.9% of revenue, for the same period in 2024. This cost increased compared to last year due primarily to an increase in the volume of products sold during the period. Sales of third-party brands carry a lower overall margin and therefore dilute the Company’s margin overall.

General and Administrative Expenses

For the three months ended June 30, 2025, total general and administrative expenses were $1,412,000 as compared to approximately $1,423,000 for the same period in 2024, which were generally consistent compared to the same period in 2024. Professional fees decreased approximately $171,000 when compared to the previous period but largely offset by increases in wages and benefits and other general and administrative expenses.

22

Sales and Marketing Expense

For the three months ended June 30, 2025, total sales and marketing expense was approximately