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

Company: Charlie's Holdings, Inc.
Filing Date: 2025-06-27
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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-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 March 31, 2025 and December 31, 2024, are as follows (amounts in thousands):

                              March 31,                 December 31,             
                              2025                      2024                     
 ─────────────────────────────────────────────────────────────────────────────────
  Accounts payable            $              1,617      $                 2,131  
  Accrued compensation                         520                          555  
  Accrued income taxes                         128                          128  
  Customer deposits                             64                          106  
  Other accrued expenses                       354                          476  
                              $              2,683      $                 3,396  

NOTE 9 - NOTES PAYABLE

February 2025 Short-Term Loan - Related Party

On February 27, 2025, the Company entered into a two-month short-term loan agreement (the “ Loan”) with the Company’s President, Henry Sicignano III for principal amount of $100,000which bears interest at the rate of10% per annum.

January 2025 Chemular Secured Promissory Note

On January 7, 2025, the Company issued a secured promissory note (“ Chemular Note”) to one of its vendors Chemular, Inc. (“ Chemular”) to settle the outstanding accounts payable of $495,000, in the principal amount of $370,000which bears interest at the rate of10% per annum. Commencing on January 15, 2025 and continuing on the first (1st) day and the fifteenth (15th) day of each month thereafter until June 15, 2025, (the “ Maturity Date”), the Company shall pay $10,000in accordance with the repayment schedule. The Company also issued3,700,000warrants (“ Chemular Warrants”) to Chemular in conjunction with the Chemular Note. The fair value of the Chemular Warrants was $148,000