Company: CHUC
Filing Date: 2025-06-27
Form Type: 10-Q
Source: 0001437749-25-021440
Chunk: 18

Company: Charlie's Holdings, Inc.
Filing Date: 2025-06-27
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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, a former member of the Company’s Board of Directors. The Stumps purchased the property that is the subject of the Lease in July 2019. The Lease, which was effective as of September 1, 2019, on a month-to-month basis, was then formalized on November 1, 2019 to have a term of fiveyears and a base rent rate of $22,940per month, which rate is subject to annual adjustments based on the consumer price index, as may be mutually agreed upon by the parties to the Lease. The terms of the Lease were negotiated and approved by the independent members of the Board of Directors, after reviewing a detailed analysis of comparable properties and rent rates compiled by an independent, third-party consultant. Effective October 1, 2024, the lease was on a month-to-month basis. The total rent paid to related parties for the three months ended March 31, 2025 and 2024 was approximately $69,000and $69,000, respectively.

Effective June 1, 2022, the Company’s lease at 5331 Production Drive, Huntington Beach, CA was renewed for an additional three-year term, concluding May 31, 2025. The Company is currently operating in this facility on a month to month basis and is working with the landlord to renew the lease.

At March 31, 2025, the Company had operating lease liabilities of approximately $30,000and right of use assets of approximately $29,000which were included in the condensed consolidated balance sheet.

The following table summarizes quantitative information about the Company’s operating leases for the three months ended March 31, 2025 and 2024 (amounts in thousands):

                                     For the three months ended                             
                                     March 31,                                              
                                     2025                                    2024           
 ────────────────────────────────────────────────────────────────────────────────────────────
  Operating leases                                                                          
  Operating lease cost               $                               44      $         113  
  Variable lease cost                                                 -                  -  
  Operating lease expense                                            44                113  
  Short-term lease rent expense                                       5                  5  
  Total rent expense                 $                               49      $         118  

                                                                           For the three months ended                                
                                                                           March 31,                                                 
                                                                           2025                                      2024            
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Operating cash flows from operating leases                               $