Company: CHUC
Filing Date: 2025-08-21
Form Type: 10-Q
Source: 0001437749-25-027482
Chunk: 1

Company: Charlie's Holdings, Inc.
Filing Date: 2025-08-21
Form: 10-Q
Item: Part I, Item 1
Chunk 1
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 costs. Additionally, the Company was required to obtain approval from the United States Food and Drug Administration (“ FDA”) to continue selling and marketing certain of products used for the vaporization of nicotine in the United States. For the six months ended June 30, 2025, the Company’s revenue declined. The Company generated a loss from operations of approximately $1,703,000, and had a consolidated net income of approximately $3,744,000. Net cash used in operating activities was approximately $3,063,000. The Company had a stockholders’ equity of $2,190,000at June 30, 2025. During the six months ended June 30, 2025, the Company’s working capital was increased to $2,211,000from deficit of $1,855,000as of December 31, 2024. Regulatory risks, and other industry-specific challenges, as well as a fluctuating working capital and cash position remain factors that raise substantial doubt about the Company’s ability to continue as a going concern. During the second quarter of 2025, the Company entered into and closed an Asset Purchase Agreement (the “ Agreement”) and subsequent amendment with R. J. Reynolds Vapor Company (the “ Buyer”) pursuant to which the Buyer purchased 15 of the Company’s PACHA synthetic products and related assets (the “ Assets”) that are covered by a premarket tobacco application (“ PMTA”) first submitted by the Company in 2022. The combined purchase price for the Assets was $6.5million paid at closings in April and May 2025, plus a contingent one-time payment of up to $4.2million based on product sold by the Buyer during the one year following the first day of commercialization of the Assets. These asset sales have substantially improved the Company’s debt and working capital short-term concerns, and the Company’s cash position.

Our plans and growth depend on our ability to increase revenues, procure cost-effective financing, and continue our business development efforts, including the cumulative expenditures related to our premarket tobacco product application (“ PMTA”) process of obtaining FDA approval. The Company has undergone cost-cutting measures including salary reductions of up to 50% for officers and certain managers and a reduction in headcount for certain departments. During the fourth quarter of 2024, the Company launched SBX, a non-nicotine, disposable vapor product which is not subject to FDA review. The Company may require additional financing in the future to support the development of