Charlie's Holdings, Inc. (OTCQB:CHUC) reported financial results for the second quarter of 2026, with revenue of $3.8 million against $1.8 million in the same quarter of 2025 — an increase of 116%. Gross profit grew 130% to $1.1 million, and gross margin widened to 29.4% from 27.6%. The company attributed the growth to demand for nicotine and non-nicotine alternatives, and in particular to its SBX non-nicotine disposable products.
The company sells vapor and electronic nicotine delivery products under the SBX, Pachamama and PACHA brands. The quarter's expansion was concentrated in newer, non-nicotine formats, a mix shift that matters in a category where regulation of nicotine products is tightening. A move toward non-nicotine disposables can broaden a seller's addressable market while sidestepping some of the premarket-authorization burden that applies to nicotine-containing devices.
Revenue growth did not translate into profitability. Charlie's recorded an operating loss of $1.2 million, wider than the $1.0 million operating loss a year earlier, indicating that operating costs grew faster than gross profit over the period. The balance sheet tightened: cash fell to $0.5 million from $1.3 million at year-end 2025, and shareholders' equity declined to $3.1 million from $3.4 million.
Against that backdrop, the release disclosed insider buying. Management and directors purchased 1,350,000 shares for $270,000 during the first half of 2026. Insider purchases are frequently read as a signal of management conviction, though on their own they neither add operating cash nor change the trajectory of the business; here they coincide with a period in which the company's own cash balance contracted sharply.
On the regulatory front, Charlie's said the U.S. Food and Drug Administration tentatively identified 30 PACHA SKUs for non-enforcement prioritization. In the vapor category, products generally require FDA premarket authorization to be legally marketed; a non-enforcement posture is not the same as authorization, but it indicates the agency is, for now, deprioritizing enforcement against those specific products. The distinction is material and easy to overstate.
The results as summarized leave several things unstated: a clean net income or loss figure below the operating line, any revenue guidance, and the durability of the FDA's non-enforcement stance, which the company describes as tentative. For the micro-cap consumer market, the quarter is a familiar shape — rapid top-line growth funded ahead of profitability, with a thin cash position and insiders adding to their holdings. Whether the model reaches self-funding is the open question.