Company: CHUC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001437749-25-035731
Chunk: 10

Company: Charlie's Holdings, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 outstanding accounts payable of $495,000, in the principal amount of $370,000which bears interest at the rate of10% per annum. Commencing on January 15, 2025 and continuing on the first (1st) day and the fifteenth (15th) day of each month thereafter until September 15, 2025, (the “ Maturity Date”), the Company shall pay $10,000in accordance with the repayment schedule. The Company also issued3,700,000warrants (“ Chemular Warrants”) to Chemular in conjunction with the Chemular Note. On September 24, 2025, the Vendor exercised the Warrants entirely. The Vendor issued the Company a $370,000vendor credit as the purchase price consideration for the warrant exercise. The Company recognized the $370,000vendor credit in prepaid expenses and other current assets on the consolidated balance sheet as of September 30, 2025.

The fair value of the Chemular Warrants was $148,000as of the issuance date (see Note 11). As a result, the Company recognized a debt extinguishment loss of $23,000during the nine months ended September 30, 2025.

As part of the closing of the Asset Purchase Agreement on April 16, 2025, R. J. Reynolds Vapor Company wired directly to Chemular approximately $319,000to satisfy the Chemular Note in full.

September 2024 and January 2025 Pinnacle Receivables Financing

On September 6, 2024, the Company entered into a future receivables sale agreement (“ Pinnacle Receivables Financing Agreement”) with Pinnacle Business Funding (“ Pinnacle”) by which Pinnacle purchased from the Company its future accounts receivable and contracted rights arising from the sale of goods or services to the Company’s customers. The purchase price, as defined by the Pinnacle Receivables Financing Agreement, was $750,000which was paid to the Company on September 12, 2024, net of a1% origination fee. The Pinnacle Receivables Financing Agreement required forty equal payments of $25,687.50to be paid weekly for a total repayment of $1,027,500over the term of the agreement.

On January 10, 2025, the Company entered into another future receivables sale agreement (“ Amended Pinnacle Receivables Financing Agreement”) with Pinnacle pursuant to which Pinnacle restructured the existing Pinnacle Receivables Financing