Charlie’s Holdings, Inc. reported ordinary revenue of $7.1 million for the three months ended September 30 2025, a 336% increase from $1.6 million in the same period a year earlier. The jump is driven almost entirely by the rollout of the SBX disposable line, which entered test‑marketing in seven states during Q3 and now accounts for the majority of the company’s sales.
Gross margin fell to 24.9% from 38.8% in Q3 2024, a compression of 13.9 percentage points. The decline reflects higher cost of goods sold as the company scales production of the new SBX product, coupled with first‑order placement costs—display, commission, and promotional expenses—that were not present in the prior year. While revenue surged, the mix shift toward lower‑margin SBX units and the need for aggressive marketing to establish brand presence have eroded profitability.
Operating expenses rose 40% year‑over‑year, driven by increased marketing spend and the cost of building a U.S. manufacturing facility slated for Q4 2025. Cash on hand stood at $1.1 million, and the company remains reliant on a $2 million credit facility from a board member to fund growth. Management has signaled substantial doubt about the company’s ability to continue as a going concern without additional revenue or financing, underscoring the financial fragility that accompanies rapid expansion.
The SBX line, built on the company’s proprietary Metatine platform, is positioned outside the scope of current FDA tobacco regulations, giving Charlie’s a regulatory advantage over traditional nicotine products. Early sales data show strong demand: two days of sales at a convenience‑store trade‑show generated revenue equivalent to 75% of the company’s total 2024 sales, and management expects the product to drive a record revenue run in Q4.
Management remains cautiously optimistic. Chief Operating Officer Ryan Stump highlighted that early SBX sales “continue to exceed expectations by a wide margin,” while President Henry Sicignano noted that with additional financing and manufacturing capacity, Q3 sales could have surpassed $10 million and that Q4 could eclipse that milestone. The company has no formal guidance for the next quarter, but the leadership signals confidence that the momentum will carry into 2025, provided cash flow and regulatory hurdles are managed.
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