(Exact name of registrant as specified in its charter.)
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
(Address of principal executive offices)
(Registrant's Telephone number)
(Former Name or Former Address, if Changed Since Last Report)
N/A
CHUC
N/A
The information set forth below under Item 2.03 is hereby incorporated by reference into this Item 1.01.
On April 30, 2020, Charlies' Chalk Dust, LLC ("CCD"), a wholly owned subsidiary of Charlie's Holdings, Inc. (the "Company"), received approval to enter into a U.S. Small Business Administration ("SBA") Promissory Note (the "PPP Loan") with TBK Bank, SSB (the "Lender"), pursuant to the Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") as administered by the SBA (the "Loan Agreement").
The PPP Loan provides for working capital to CCD in the amount of $650,761. The PPP Loan will mature on April 30, 2022, and will accrue interest at a rate of 1.00% per annum. Payments of principal and interest will be deferred for six months from the date of the PPP Loan, or until November 30, 2020. Interest, however, will continue to accrue during this time.
On April 14, 2020, Don Polly LLC ("Don Polly"), a related company, which is consolidated as a Variable Interest Entity (VIE) of the Company, also obtained a PPP Loan from Community Banks of Colorado, a division of NBH Bank (the "Polly Lender"). The PPP Loan obtained by Don Polly provides for working capital to Don Polly in the amount of $215,600. The PPP Loan will mature on April 14, 2022, and will accrue interest at a rate of 1.00% per annum. Payments of principal and interest will be deferred for six months from the date of the PPP Loan, or until November 14, 2020. Interest, however, will continue to accrue during this time.
The aforementioned PPP Loans were made under the Paycheck Protection Program (15 U.S.C. 636(a)(36)) enacted by Congress under the CARES Act. The CARES Act (including the guidance issued by SBA and U.S. Department of the Treasury related thereto) provides that all or a portion of the PPP Loans may be forgiven upon request from the Company to Lender or the Polly Lender, as the case may be, subject to requirements in the PPP Loans and under the CARES Act.
The foregoing summary of the PPP Loans to CCD and Don Polly are qualified in their entirety by reference to the Loan Agreements, which are attached hereto as Exhibits 10.1 and 10.2, respectively.
(d) Exhibits.
Exhibit No. | Description | |
Promissory Note by and between Charlie’s Chalk Dust LLC and TBK Bank, SSB dated April 30, 2020. | ||
Promissory Note by and between Don Polly LLC and Community Banks of Colorado, a division of NBH Bank, dated April 14, 2020. |
Charlie's Holdings, Inc. |
By: | /s/ David Allen |
Name: David Allen | |
Title: Chief Financial Officer |