Company: CHUC
Filing Date: 2025-08-21
Form Type: 10-Q
Source: 0001437749-25-027482
Chunk: 9

Company: Charlie's Holdings, Inc.
Filing Date: 2025-08-21
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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reecustomers made up more than88% of net accounts receivable at June 30, 2025. Fourcustomers made up more than81% of net accounts receivable at December 31, 2024. No customer exceeded 10% of total net sales for the three month period ended June 30, 2025 and 2024, respectively.

NOTE 7 - DON POLLY, LLC

Don Polly is a Nevada limited liability company that is owned by entities controlled by Ryan Stump, a current executive officer of the Company, respectively, and a consolidated variable interest for which the Company is the primary beneficiary. Don Polly markets and distributes third-party product lines.

Don Polly is classified as a variable interest entity (“ VIE”) for which the Company is the primary beneficiary. Under ASC 810-10-15, Variable Interest Entities, a VIE is an entity that: (1) has an insufficient amount of equity investment at risk to permit the entity to finance its activities without additional subordinated financial support by other parties; (2) the equity investors are unable to make significant decisions about the entity’s activities through voting rights or similar rights; or (3) the equity investors do not have the obligation to absorb expected losses or the right to receive residual returns of the entity. The Company is required to consolidate a VIE if it is determined 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.

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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

                              June 30,                 December 31,