Company: CHUC
Filing Date: 2025-06-27
Form Type: 10-Q
Source: 0001437749-25-021440
Chunk: 11

Company: Charlie's Holdings, Inc.
Filing Date: 2025-06-27
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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as of the issuance date (see Note 11). As a result, the Company recognized a debt extinguishment loss of $23,000during the three months ended March 31, 2025.

As part of the closing of the Asset Purchase Agreement (see Note 16 - Subsequent Events) on April 16, 2025, R. J. Reynolds Vapor Company wired directly to Chemular approximately $319,000to satisfy the Chemular Note in full.

September 2024 and January 2025 Pinnacle Receivables Financing

On September 6, 2024, the Company entered into a future receivables sale agreement (“ Pinnacle Receivables Financing Agreement”) with Pinnacle Business Funding (“ Pinnacle”) by which Pinnacle purchases from the Company its future accounts receivable and contract rights arising from the sale of goods or services to the Company’s customers. The purchase price, as defined by the Pinnacle Receivables Financing Agreement, was $750,000which was paid to the Company on September 12, 2024, net of a1% origination fee. The Pinnacle Receivables Financing Agreement requires forty equal payments of $25,687.50to be paid weekly for a total repayment of $1,027,500over the term of the agreement.

On January 10, 2025, the Company entered into another future receivables sale agreement (“ Amended Pinnacle Receivables Financing Agreement”) with Pinnacle pursuant to which Pinnacle restructured the existing Pinnacle Receivables Financing Agreement as described the above by amending the outstanding amount to $1,644,000for gross proceeds to the Company of $1,188,000, less the outstanding balance under the Pinnacle Receivables Financing Agreement of $591,000, resulting in net proceeds to the Company of $597,000. The Amended Pinnacle Receivables Financing Agreement shall be repaid by the Company in 52 weekly installments of $31,615. The amendment to the Pinnacle Receivables Financing Agreement was accounted for as a debt extinguishment, which resulted a debt extinguishment loss of approximately $126,000during the three months ended March 31, 2025.

On April 16, 2025 the Company issued a payment of approximately $1,250,000to satisfy all outstanding principal and interest owed to Pinnacle. By satisfying the balance in full prior to April 16, 2025, the Company was able to secure a discount of