Company: CHUC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001437749-25-035731
Chunk: 9

Company: Charlie's Holdings, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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 to be the primary beneficiary, that is, the enterprise has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE. The Company evaluates its relationships with a VIE to determine whether it is the primary beneficiary of a VIE at the time it becomes involved with the entity and it re-evaluates that conclusion each reporting period. Effective April 25, 2019, the Company began consolidating the financial statements of Don Polly and it is still considered a VIE of the Company.

Don Polly operates under exclusive licensing and service contracts with the Company whereby the Company receives100% of the net income, or incurs100% of the net loss of the VIE. There are no non-controlling interests recorded. In October 2025, the Company’s Board of Directors unanimously approved a resolution to wind down and close permanently the Don Polly division. (See Subsequent Events.)

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2025 and December 31, 2024, are as follows (amounts in thousands):

                              September 30,                 December 31,             
                              2025                          2024                     
 ─────────────────────────────────────────────────────────────────────────────────────
  Accounts payable            $                  2,228      $                 2,131  
  Accrued compensation                             507                          555  
  Accrued income taxes                             555                          128  
  Customer deposits                                123                          106  
  Other accrued expenses                           331                          476  
                              $                  3,744      $                 3,396  

NOTE 9 - NOTES PAYABLE

February 2025 Short-Term Loan - Related Party

On February 27, 2025, the Company entered into a two-month short-term loan agreement (the “ Loan”) with the Company’s President, Henry Sicignano III for principal amount of $100,000which bears interest at the rate of10% per annum. The Loan was fully repaid in April 2025.

January 2025 Chemular Secured Promissory Note

On January 7, 2025, the Company issued a secured promissory note (“ Chemular Note”) to one of its vendors Chemular, Inc. (“ Chemular”) to settle the