Company: CHUC
Filing Date: 2025-06-27
Form Type: 10-Q
Source: 0001437749-25-021440
Chunk: 15

Company: Charlie's Holdings, Inc.
Filing Date: 2025-06-27
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Diluted weighted average common shares include common stock potentially issuable under the Company’s convertible preferred stock, warrants and vested and unvested stock options.

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):

                                             For the three months ended                          
                                             March 31,                                           
                                             2025                                                
 ─────────────────────────────────────────────────────────────────────────────────────────────────
  Options                                                                     4,648       5,142  
  Warrants                                                                    3,700      40,338  
  Series A convertible preferred shares                                      27,614      28,588  
  Total                                                                      35,962      74,068  

NOTE 11 - STOCKHOLDERS’EQUITY

Conversion of Series A Preferred Shares

During the three months ended March 31, 2025, the Company issued approximately127,000shares of Common Stock upon conversion of564shares of Series A Preferred.

Common Stock Warrants

On January 7, 2025, the Company issued3,700,000warrants along with a promissory note to a third-party vendor to settle the outstanding accounts payable. Each warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of $0.10per share. The warrants vest immediately, and are exercisable through December 30, 2027, and are subject to the terms and conditions of the warrant agreement.

The fair value of the warrants on the issuance date was $148,000and was determined using the Black-Scholes option pricing model with the following assumptions:

  Exercise price                   0.10  
  Contractual term (years)         2.98  
  Volatility (annual)             131.5  
  Risk-free rate                    4.3  
  Dividend yield (per share)          0  

NOTE 12 - STOCK-BASED COMPENSATION

On May 8, 2019, our Board of Directors approved the Charlie’s Holdings, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”), and the 2019 Plan was subsequently approved by holders of a majority of our outstanding voting securities on the same date. Up to11,072,542stock options were originally grantable under the 2019 Plan