Company: CHUC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001437749-25-035731
Chunk: 1

Company: Charlie's Holdings, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 1
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 to wind down and close permanently the Don Polly division. (See Subsequent Events.)

The Company's common stock, par value $0.001per share (the “ Common Stock”), trades under the symbol "CHUC" on the OTCQB Venture Market.

Substantial Doubt to Continue as a Going Concern

Our consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months ended September 30, 2025, the Company’s revenue increased, the Company generated loss from operations of approximately $2,042,000, and a consolidated net income of approximately $4,368,000. Net cash used in operating activities was approximately $6,172,000. The Company had a stockholders’ equity of $3,239,000at September 30, 2025. During the nine months ended September 30, 2025, the Company’s working capital was increased to $3,079,000from a deficit of $1,855,000as of December 31, 2024. Given these factors, there remains a substantial doubt about the Company’s ability to continue as a going concern. During the nine months ended September 30, 2025, the Company entered into and closed an Asset Purchase Agreement (the “ Agreement”) and subsequent amendment with R. J. Reynolds Vapor Company (the “ Buyer”) pursuant to which the Buyer purchased 16 of the Company’s PACHA synthetic products and related assets (the “ Assets”) that are covered by a premarket tobacco application (“ PMTA”) first submitted by the Company in 2022. The combined purchase price for the Assets was $6.5million paid at closings in April and May 2025, and an additional $1.0million paid at closings in August 2025, plus a contingent one-time payment of up to $4.2million based on product sold by the Buyer during the one year following the first day of commercialization of the Assets. These asset sales have substantially improved the Company’s debt and working capital short-term concerns, and the Company’s cash position.

Our plans and growth depend on our ability to increase revenues, procure cost-effective financing, and continue our business development efforts. The Company may require additional financing in the future to support the development of new product categories as well as general operations. There can be no assurance that additional financing will be available on acceptable terms,