Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 17, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-32420 | ||
Entity Registrant Name | CHARLIE’S HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 84-1575085 | ||
Entity Address, Address Line One | 1007 Brioso Drive | ||
Entity Address, City or Town | Costa Mesa | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92627 | ||
City Area Code | 949 | ||
Local Phone Number | 531-6855 | ||
Title of 12(b) Security | Common Stock ($0.001 par value) | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8 | ||
Entity Common Stock, Shares Outstanding (in shares) | 224,112,168 | ||
Auditor Firm ID | 23 | ||
Auditor Name | Baker Tilly US LLP | ||
Auditor Location | Irvine, California | ||
Entity Central Index Key | 0001134765 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 257,000 | $ 866,000 |
Accounts receivable, net | 1,161,000 | 1,368,000 |
Inventories, net | 3,652,000 | 5,005,000 |
Prepaid expenses and other current assets | 780,000 | 755,000 |
Total current assets | 5,850,000 | 7,994,000 |
Non-current assets: | ||
Property, plant and equipment, net | 311,000 | 431,000 |
Right-of-use asset, net | 799,000 | 755,000 |
Other assets | 101,000 | 68,000 |
Total non-current assets | 1,211,000 | 1,254,000 |
TOTAL ASSETS | 7,061,000 | 9,248,000 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,333,000 | 4,068,000 |
Note payable | 1,000,000 | 0 |
Note payable, net - related party | 300,000 | 0 |
Derivative liability | 629,000 | 899,000 |
Lease liabilities | 373,000 | 329,000 |
Deferred revenue | 148,000 | 238,000 |
Total current liabilities | 4,783,000 | 5,534,000 |
Non-current liabilities: | ||
Notes payable, net of current portion | 150,000 | 150,000 |
Lease liabilities, net of current portion | 428,000 | 433,000 |
Total non-current liabilities | 578,000 | 583,000 |
Total liabilities | 5,361,000 | 6,117,000 |
Stockholders' equity (deficit): | ||
Common stock ($0.001 par value); 500,000,000 shares authorized; 219,163,631 and 210,890,930 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 219,000 | 211,000 |
Additional paid-in capital | 7,928,000 | 7,775,000 |
Accumulated deficit | (6,447,000) | (4,855,000) |
Total stockholders' equity | 1,700,000 | 3,131,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 7,061,000 | 9,248,000 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Series A, 300,000 shares designated, 133,423 and 141,873 shares issued and outstanding as of December 31, 2022 2021, respectively | 0 | 0 |
Series B Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Series A, 300,000 shares designated, 133,423 and 141,873 shares issued and outstanding as of December 31, 2022 2021, respectively | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized (in shares) | 1,800,000 | 1,800,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized (in shares) | 500,000,000 | 500,000,000 |
Common Stock, Shares, Outstanding, Ending Balance (in shares) | 219,163,631 | 210,890,930 |
Common Stock, Shares, Issued (in shares) | 219,163,631 | 210,890,930 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized (in shares) | 300,000 | 300,000 |
Preferred Stock, Shares Outstanding, Ending Balance (in shares) | 133,423 | 141,873 |
Preferred Stock, Shares Issued (in shares) | 133,423 | 141,873 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized (in shares) | 1,500,000 | 1,500,000 |
Preferred Stock, Shares Outstanding, Ending Balance (in shares) | 0 | 0 |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||
Product revenue, net | $ 26,424,000 | $ 21,496,000 |
Operating costs and expenses: | ||
Cost of goods sold - product revenue | 16,439,000 | 10,423,000 |
General and administrative | 8,381,000 | 8,750,000 |
Sales and marketing | 2,605,000 | 1,734,000 |
Research and development | 804,000 | 24,000 |
Total operating costs and expenses | 28,229,000 | 20,931,000 |
Income (loss) from operations | (1,805,000) | 565,000 |
Other income (expense): | ||
Interest expense | (155,000) | (34,000) |
Change in fair value of derivative liabilities | 270,000 | 3,545,000 |
Gain on debt extinguishment | 0 | 1,060,000 |
Other income | 6,000 | 14,000 |
Total other income | 121,000 | 4,585,000 |
(Loss) income before income taxes | (1,684,000) | 5,150,000 |
Income taxes (benefit) provision | (92,000) | 342,000 |
Net (loss) income | $ (1,592,000) | $ 4,808,000 |
Net earnings (loss) per share | ||
Basic (in dollars per share) | $ (0.01) | $ 0.02 |
Diluted (in dollars per share) | $ (0.01) | $ 0.01 |
Weighted average number of common shares outstanding | ||
Basic (in shares) | 212,269,453 | 203,589,531 |
Diluted (in shares) | 212,269,453 | 237,686,875 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands | Preferred Stock [Member] Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at January 1, 2021 (in shares) at Dec. 31, 2020 | 204 | 189,907 | |||
Balance at January 1, 2021 at Dec. 31, 2020 | $ 0 | $ 190,000 | $ 3,477,000 | $ (9,663,000) | $ (5,996,000) |
Issuance of common stock to related parties for cash (in shares) | 0 | 3,517 | |||
Issuance of common stock to related parties for cash | $ 0 | $ 3,000 | 2,997,000 | 0 | 3,000,000 |
Conversion of Series A convertible preferred stock (in shares) | (62) | 13,977 | |||
Conversion of Series A convertible preferred stock | $ 0 | $ 14,000 | (14,000) | 0 | 0 |
Issuance of common stock for dividend payment (in shares) | 0 | 1,736 | |||
Issuance of common stock for dividend payment | $ 2,000 | 768,000 | 0 | 770,000 | |
Accrue dividends payable on Series A convertible preferred stock | $ 0 | $ 0 | (3,000) | 0 | (3,000) |
Stock compensation (in shares) | 0 | 1,750 | |||
Stock compensation | $ 0 | $ 2,000 | 550,000 | 0 | 552,000 |
Fraction shares adjustment due to reverse split (in shares) | 0 | 3 | |||
Net income | $ 0 | $ 0 | 0 | 4,808,000 | 4,808,000 |
Balance at December 31, 2021 (in shares) at Dec. 31, 2021 | 142 | 210,890 | |||
Balance at December 31, 2021 at Dec. 31, 2021 | $ 0 | $ 211,000 | 7,775,000 | (4,855,000) | 3,131,000 |
Conversion of Series A convertible preferred stock (in shares) | (9) | 1,907 | |||
Conversion of Series A convertible preferred stock | $ 0 | $ 2,000 | (2,000) | 0 | 0 |
Stock compensation (in shares) | 0 | 6,366 | |||
Stock compensation | $ 0 | $ 6,000 | 155,000 | 0 | 161,000 |
Net income | $ 0 | $ 0 | 0 | (1,592,000) | (1,592,000) |
Balance at December 31, 2021 (in shares) at Dec. 31, 2022 | 133 | 219,163 | |||
Balance at December 31, 2021 at Dec. 31, 2022 | $ 0 | $ 219,000 | $ 7,928,000 | $ (6,447,000) | $ 1,700,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating Activities: | ||
Net income | $ (1,592,000) | $ 4,808,000 |
Reconciliation of net income to net cash used in operating activities: | ||
Allowance for doubtful accounts | 269,000 | 109,000 |
Depreciation and amortization | 296,000 | 210,000 |
Accretion of debt discount | 3,000 | 0 |
Loss on disposal of fixed assets | 13,000 | 0 |
Change in fair value of derivative liabilities | (270,000) | (3,545,000) |
Amortization of operating lease right-of-use asset | 396,000 | 445,000 |
Stock based compensation | 161,000 | 552,000 |
Gain from debt extinguishment | 0 | (1,060,000) |
Subtotal of non-cash charges | 868,000 | (3,289,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (62,000) | (219,000) |
Inventories | 1,353,000 | (3,412,000) |
Prepaid expenses and other current assets | 20,000 | (305,000) |
Other assets | (33,000) | 3,000 |
Accounts payable and accrued expenses | (1,783,000) | 1,553,000 |
Deferred revenue | (90,000) | (30,000) |
Lease liabilities | (401,000) | (456,000) |
Net cash used in operating activities | (1,720,000) | (1,347,000) |
Cash Flows from Investing Activities: | ||
Purchase of property, plant and equipment | (189,000) | (110,000) |
Net cash used in investing activities | (189,000) | (110,000) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of common stock to related parties | 0 | 3,000,000 |
Proceeds from issuance of notes payable | 1,000,000 | 184,000 |
Proceeds from issuance of note payable to related party | 300,000 | 0 |
Repayment of notes payable | 0 | (1,400,000) |
Dividend payment | 0 | (883,000) |
Net cash provided by financing activities | 1,300,000 | 901,000 |
Net decrease in cash | (609,000) | (556,000) |
Cash, beginning of the year | 866,000 | 1,422,000 |
Cash, end of the year | 257,000 | 866,000 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 90,000 | 150,000 |
Cash paid for interest to related party | 10,000 | 0 |
Cash paid for income taxes | 106,000 | 0 |
Conversion of Series A convertible preferred stock | 2,000 | 14,000 |
Issuance of common stock for dividend payment | 0 | 770,000 |
Recognize minimum accrued interest | $ 45,000 | $ 0 |
Note 1 - Description of the Bus
Note 1 - Description of the Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Business Description and Basis of Presentation [Text Block] | NOTE 1 DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Description of the Business Charlie’s Holdings, Inc., a Nevada corporation, together with its wholly owned subsidiaries and consolidated variable interest entity (collectively, the “ Company we Charlie’s Chalk Dust, LLC (“ Charlie s CCD The Company's Common Stock, par value $0.001 per share (the " Common Stock Reverse Stock Split The Company’s Board of Directors approved a reverse stock split of the Company’s authorized, issued and outstanding shares of Common Stock, par value $0.001 per share, at a ratio of 1-for-100 (the “Reverse Split”). The Reverse Split was effective as of June 16, 2021 ( Effective Date Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“ GAAP SEC Going Concern Uncertainty Regarding the Legal and Regulatory Environment, Liquidity and Management s plan of operation The accompanying 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. The Company operates in a rapidly changing legal and regulatory environment; new laws and regulations or changes to existing laws and regulations could significantly limit the Company’s ability to sell its products, and/or result in additional costs. Additionally, the Company was required to obtain approval from the United States Food and Drug Administration (" FDA Management's plans depend on its ability to increase revenues, procure cost-effective financing, and continue its business development efforts, including the expenditure of approximately $5.1 million to date, to support the Pre-Market Tobacco Application (“ PMTA Farm Bill Risks and Uncertainties The Company operates in an environment that is subject to rapid changes and developments in laws and regulations that could have a significant impact on the Company’s ability to sell its products. Beginning in September 2019, may June 2022, may ENDS may September 2020 August 2021, MDO not no March 15, 2022, May 14, 2022 May 13, 2022, May 14, 2022 November 3, 2022, November 4, 2022, no may In addition, the impact from COVID- has affected our supply chain, and if disruptions from the COVID- outbreak persist and are prolonged, it will continue to have an adverse impact on our business. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and its 100% wholly owned subsidiary, Charlie’s Chalk Dust, LLC and Don Polly, LLC, a consolidated variable interest for which the Company is the primary beneficiary. All inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Fair Value of Financial Instruments U.S. GAAP requires disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. The fair value of derivative liabilities was estimated using a Monte Carlo simulation method, based on both observable and unobservable inputs. For certain instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments. The Company determined that the carrying amounts of the current portion of outstanding notes payable approximate fair value due to the short-term nature of borrowings and current market interest rates. The Company determined the carrying amounts of the non-current portion of outstanding notes payable approximate fair value due to the current interest rates payable in relation to current market conditions. Revenue Recognition The Company recognizes revenues in accordance with Accounting Standards Codification (“ ASC In circumstances where shipping and handling activities occur after the customer has obtained control of the product, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than an additional promised service. Contract durations are generally less than one year and, therefore, costs paid to obtain contracts, which generally consist of sales commissions, are recognized as expenses in the period incurred. Revenue is measured by the transaction price, which is defined as the amount of consideration expected to be received in exchange for providing goods to customers. The transaction price is adjusted for estimates of known or expected variable consideration, which includes refunds and returns as well as incentive offers, volume rebates and promotional discounts on current orders. Our volume rebates are short-term in nature and reset on a quarterly basis. Estimates for sales returns are based on, among other things, an assessment of historical trends, information from customers, and anticipated returns related to current sales activity. These estimates are established in the period of sale and reduce revenue in the period of the sale. Variable consideration related to incentive offers and promotional programs are recorded as a reduction to revenue based on amounts the Company expects to collect. Estimates are regularly updated and the impact of any adjustments are recognized in the period the adjustments are identified. In many cases, key sales terms such as pricing and quantities ordered are established at the time an order is placed and incentives have very short-term durations. Amounts billed and due from customers are short term in nature and are classified as receivables since payments are unconditional and only the passage of time related to credit terms is required before payments are due. The Company does not grant payment financing terms greater than one year. Payments received in advance of revenue recognition are recorded as deferred revenue. Cash and Cash Equivalents The Company considers all liquid investments purchased with original maturities of ninety days or less to be cash equivalents. Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. We determine the allowance for doubtful accounts by regularly evaluating historical customer information and individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions and establish an allowance for doubtful accounts when collection is uncertain. Customers’ accounts are written off against the allowance when all attempts to collect have been exhausted. Recoveries of accounts receivable previously written off are recorded as income when received. As of December 31, 2022 and 2021, the allowance for bad debt totaled $158,000 and $109,000, respectively. Inventories Inventories primarily consist of finished goods and are stated at the lower of cost (determined by the average cost method) or net realizable value. We calculate estimates of excess and obsolete inventories determined primarily by reviewing inventory on hand, historical sales activity, industry trends and expected net realizable value. As of December 31, 2022 and 2021, the reserve for excess and obsolete inventories totaled $733,000 and $156,000, respectively. Plant, Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided for using the straight-line method, in amounts sufficient to charge the cost of depreciable assets to operations over their estimated service lives. Repairs and maintenance costs are charged to operations as incurred. Costs for capital assets not yet placed into service are capitalized as construction in progress on the consolidated balance sheets and will be depreciated once placed into service. The Company assesses its long-lived assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets. If these projected undiscounted net future cash flows are less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amounts and the fair values of the assets. Leases The Company recognizes a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. The Company determines whether an arrangement is, or contains a lease at contract inception. Operating leases with a duration greater than one year are included in right-of-use assets, lease liabilities, and lease liabilities, net of current portion in the Company’s consolidated balance sheets. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the net present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date. The incremental borrowing rate represents the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company considers a lease term to be the noncancelable period that it has the right to use the underlying asset. The operating lease right-of-use assets also include any lease payments made and exclude lease incentives. Lease expense is recognized on a straight-line basis over the expected lease term. Variable lease expenses are recorded when incurred. Stock-Based Compensation The Company accounts for all stock-based compensation using a fair value-based method. The fair value of equity-classified awards granted to employees is estimated on the date of the grant using the Black-Scholes option-pricing model and the related stock-based compensation expense is recognized over the vesting period during which an employee is required to provide service in exchange for the award. Income Taxes Income taxes are computed under the liability method. This method requires the recognition of deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. A valuation allowance is recorded when it is more likely than not that some, or all of the deferred tax assets will not be realized. Financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that meets the more-likely-than-not threshold of being realized upon ultimate settlement with a taxing authority. We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense. Research and Development We expense the cost of research and development as incurred. Research and development expenses include costs incurred in funding research and development activities, license fees, and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one The following table disaggregates revenue from our single operating segment by geographic market and customer type for the periods ending December 31, 2022 and 2021, respectively: December 31, 2022 December 31, 2021 Geographic Market International 16 % 17 % United States 84 % 83 % Customer Type Retailer 30 % 38 % Distribution 70 % 62 % Recently Issued Accounting Pronouncements Measurement of Credit Losses on Financial Instruments In June 2016 the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which supersedes current guidance requiring recognition of credit losses when it is probable that a loss has been incurred. The standard requires the establishment of an allowance for estimated credit losses on financial assets, including trade and other receivables, at each reporting date. The ASU will result in earlier recognition of allowances for losses on trade and other receivables and other contractual rights to receive cash. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. The Company does not believe the impact of adopting this standard will be material to its consolidated financial statements and related disclosures. Income Taxes In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. On January 1, 2021, the Company adopted this standard without any material impact on its consolidated financial statements and related disclosures. Debt – Debt with conversion and Other Options In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The ASU is effective for the Company on December 1, 2022, Early adoption is permitted, but no earlier than December 1, 2021. The Company elected to early adopt this guidance on January 1, 2022 with no impact on its consolidated financial statements and related disclosures. Earnings per Share In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. This ASU will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. On October 1, 2022, the Company adopted this standard with no impact on its consolidated financial statements and related disclosures. |
Note 3 - Fair Value Measurement
Note 3 - Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | NOTE 3 FAIR VALUE MEASUREMENTS In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the outstanding warrants on a recurring basis to determine the fair value of the liability. ASC 820 also establishes a hierarchy categorizing inputs into three levels used to measure and disclose fair value. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to unobservable inputs. An explanation of each level in the hierarchy is described below: Level 1 – Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date Level 2 – Quoted prices in markets that are not active or inputs which are either directly or indirectly observable Level 3 – Unobservable inputs for the instrument requiring the development of assumptions by the Company The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2022 and 2021 (amounts in thousands): Fair Value at December 31, 2022 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability – Warrants 629 - - 629 Total liabilities $ 629 $ - $ - $ 629 Fair Value at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability – Warrants 899 - - 899 Total liabilities $ 899 $ - $ - $ 899 There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2022 and 2021. The following table presents changes in Level 3 liabilities measured at fair value for the years ended December 31, 2022 and 2021. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (amounts in thousands). Derivative liability - Warrants Balance at January 1, 2021 4,444 Change in fair value (3,545 ) Balance at December 31, 2021 899 Change in fair value (270 ) Balance at December 31, 2022 $ 629 A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in the Monte Carlo simulation measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy as of December 31, 2022 and 2021 is as follows: Warrant Liability December 31, December 31, 2022 2021 Exercise price $ 0.4431 $ 0.4431 Contractual term (years) 1.32 2.32 Volatility (annual) 100.0 % 90.0 % Risk-free rate 4.6 % 0.8 % Dividend yield (per share) 0 % 0 % On April 26, 2019 (the “ Closing Date Share Exchange Members Direct Investors Charlie s Financing Series A Preferred Investor Warrants Placement Agent Warrants five-year ASC 815 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 PROPERTY AND EQUIPMENT Property and Equipment detail as of December 31, 2022, and 2021 are as follows (amounts in thousands): PP&E December 31, December 31, 2022 2021 Estimated Useful Life (in years) Machinery and equipment $ 41 $ 42 5 Trade show booth 202 171 5 Office equipment 539 511 5 Leasehold improvements 254 380 Lesser of lease term or estimated useful life 1,036 1,104 Accumulated depreciation (725 ) (673 ) $ 311 $ 431 Depreciation and amortization expense totaled $296,000 and $210,000, respectively, during the years ended December 31, 2022 and 2021. |
Note 5 - Concentrations
Note 5 - Concentrations | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | NOTE 5 CONCENTRATIONS Vendors The Company’s concentration of purchases are as follows: For the years ended December 31, 2022 2021 Vendor A 40 % 42 % Vendor B 36 % 31 % During the year ended December 31, 2022, purchases from two two As of December 31, 2022, and 2021, amounts owed to these vendors totaled $200,000 and $1,494,000 respectively, which are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. Accounts Receivable The Company’s concentration of accounts receivable are as follows: For the years ended December 31, 2022 2021 Customer A 15 % 27 % Customer B 11 % - Two |
Note 6 - Don Polly, LLC.
Note 6 - Don Polly, LLC. | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Variable Interest Entity Disclosure [Text Block] | NOTE 6 DON POLLY, LLC. Don Polly, LLC is a Nevada limited liability company that is owned by entities controlled by Brandon and Ryan Stump, a former and current executive officer of the Company, respectively, and a consolidated variable interest for which the Company is the primary beneficiary. Don Polly formulates, sells and distributes the Company’s hemp-derived product lines. Don Polly is classified as a variable interest entity (“ VIE Don Polly operates under exclusive licensing and service contracts with the Company whereby the Company receives 100% of net income, or incurs 100% of the net loss of the VIE. There are no non-controlling interests recorded. |
Note 7 - Accounts Payable and A
Note 7 - Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | NOTE 7 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of December 31, 2022, and 2021 are as follows (amounts in thousands): ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, December 31, 2022 2021 Accounts payable $ 1,222 $ 2,476 Accrued compensation 631 902 Accrued income taxes 137 342 Other accrued expenses 343 348 $ 2,333 $ 4,068 |
Note 8 - Notes Payable
Note 8 - Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE 8 NOTES PAYABLE April 2022 Note Financing On April 6, 2022, the Company issued a secured promissory note (the “ Note Lender Note Financing On March 28, 2023, the Company entered into a second modification to the Note to extend the maturity date to April 28, 2024, contingent upon the payment of all interest accrued under the Note through March 28, 2023 and certain other modifications to the Note. Principal shall be payable on the 28th day of each month in installments of $25,000, commencing April 28, 2023, continuing up to and including April 28, 2024 whereby a balloon payment for the remaining principal balance will be paid. Interest shall accrue on the aggregate outstanding principal amount at a rate equal to 20% simple interest per annum and shall be payable on the same day as installments of principal are payable. The Company may prepay all or any portion of the principal amount, together with all accrued but unpaid interest thereon, at any time without premium or penalty. All outstanding principal and interest are due earlier of April 28, 2024, or a liquidity event. The Company used the proceeds from the Note for general corporate purposes, and its working capital requirements, pending the availability of alternative debt financing. August 2022 Note Financing Related Party On August 17, 2022, the Company and its Chief Operating Officer and Director, Ryan Stump (the " Stump Lender Loan Economic Injury Disaster Loan On June 24, 2020, SBA authorized (under Section 7(b) of the Small Business Act, as amended) an Economic Injury Disaster Loan (“ EID Loan The following summarizes the Company’s notes payable maturities as of December 31, 2022 ( Year Ending December 31, 2023 1,300 Year Ending December 31, 2024 - Year Ending December 31, 2025 - Year Ending December 31, 2026 Year Ending December 31, 2027 Thereafter 150 Total $ 1,450 |
Note 9 - Earnings (Loss) Per Sh
Note 9 - Earnings (Loss) Per Share Basic and Fully Diluted | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | NOTE 9 EARNINGS (LOSS) PER SHARE BASIC AND FULLY DILUTED Basic (loss) earnings per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the reporting period. Diluted (loss) earnings per common share is computed similar to basic (loss) earnings per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Diluted weighted average common shares include common stock potentially issuable under the Company’s convertible preferred stock, warrants and vested and unvested stock options. For the years ended December 31, 2022, and 2021, net (loss) income is adjusted for gain (loss) from changes in the fair value of warrant liabilities. The following table sets forth the computation of (loss) earnings per share (amounts in thousands, except share and per share amounts): For the years ended December 31, 2022 2021 Net (loss) income - basic $ (1,592 ) $ 4,808 Reversal of gain due to change in fair value of warrant liability - (3,545 ) Net (loss) income - diluted $ (1,592 ) $ 1,263 Weighted average shares outstanding - basic 212,269,453 203,589,531 Diluted stock options - 168,309 Diluted warrants - 1,912,544 Diluted preferred shares - 32,016,491 Weighted average shares outstanding - diluted 212,269,453 237,686,875 Basic (loss) earnings per share $ (0.01 ) $ 0.02 Diluted (loss) earnings per share $ (0.01 ) $ 0.01 The following securities were not included in the diluted (loss) earnings per share calculation because their effect was anti-dilutive as of the periods presented (amounts in thousands): For the years ended December 31, 2022 2021 Options 6,003 6,955 Warrants 40,338 38,425 Total 46,341 45,380 |
Note 10 - Stockholders' Equity
Note 10 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 10 STOCKHOLDERS EQUITY Series A Preferred Share Dividend & Share Waiver On April 25, 2020 , Dividend Amount . On August 13, 2020 , ( Dividend Default On April 21, 2021 , Waiver Agreement Stock Payees "Stock Payee Indebtedness" "Stock Payment" "Exchange" Shares On May 25, 2021 , Exchange Agreement Series A Holders Series A Preferred Dividend Amount Common Stock Shares During the year ended December 31, 2021 , As of December 31, 2021 , Conversion of Series A Preferred Shares For the year ended December 31 , , March 2021 Private Placement On March 19, 2021 , Purchase Agreements Common Stock Private Placement . , 1 , |
Note 11 - Stock-based Compensat
Note 11 - Stock-based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | NOTE 11 STOCK-BASED COMPENSATION On May 8, 2019, our Board of Directors approved the Charlie’s Holdings, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”), and the 2019 Plan was subsequently approved by holders of a majority of our outstanding voting securities on the same date. Up to 11,072,542 stock options were originally grantable under the 2019 Plan. On December 22, 2021, our Board of Directors unanimously adopted resolutions by written consent approving an amendment to increase the number of shares of Common Stock available for issuance under the 2019 Plan by 15.0 million shares, from 11,072,542 to 26,072,542 shares (the “2019 Plan Amendment Non-Qualified Stock Options The following table summarizes stock option activities during the year ended December 31, 2022 and 2021 (all option amounts are in thousands): Options Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2021 7,503 $ 0.54 8.5 $ - Options granted 80 0.44 10.0 - Options forfeited/expired (460 ) 0.44 - - Outstanding at December 31, 2021 7,123 0.54 7.5 $ - Options forfeited/expired (1,120 ) 0.44 - - Outstanding at December 31, 2022 6,003 $ 0.56 6.4 $ - Options vested and exercisable at December 31, 2022 5,986 $ 0.56 6.4 $ - During the year ended December 31, 2022, no options were granted and 1,120,000 were forfeited under the 2019 Plan. During the year ended December 31, 2021, 80,000 options were granted and 460,000 were forfeited under the 2019 Plan. During the year ended December 31, 2021, the fair value of options granted on the issuance date totaled approximately $12,000 based on the following weighted average assumptions: For the years ended December 31, 2021 Exercise price $ 0.4431 Contractual term (years) 6.00 Volatility (annual) 85.0 % Risk-free rate 0.9 % Dividend yield (per share) 0 % As of December 31, 2022, there was approximately $340 of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the 2019 Plan. That cost is expected to be recognized by December 31, 2023. For the year ended December 31, 2022, and 2021, the Company recorded compensation expense of $11,000 and $151,000, respectively, related to the issuance of stock options. Common Stock Awards Prior to the Share Exchange, Charlie’s employees held Member units, which were automatically converted into 71,000 shares of common stock and 69,815 shares of Series B Preferred (or 6.98 million shares of common stock equivalents) due to the effect of the Share Exchange. The 7.1 million shares of common stock vested over a two-year period. The fair value of a share of common stock was $0.32 which is based upon a valuation prepared by the Company on the date of the Share Exchange. The Company recognized the remaining stock-based compensation of approximately $376,000 during the year ended December 31, 2021. Restricted Stock Awards The following table summarizes restricted stock awards activities during the years ended December 31, 2022 and 2021 (all share amounts are in thousands). Number of Shares Weighted Average Grant Date Fair Value per Share Nonvested at January 1, 2021 - $ - Restricted stock granted 1,750 0.044 Nonvested at December 31, 2021 1,750 0.044 Restricted stock granted 7,142 0.041 Vested (1,500 ) - Forfeited (776 ) - Nonvested at December 31, 2022 6,616 $ 0.041 During the year ended December 31, 2022, the Company granted approximately 7,142,000 restricted shares (subject to forfeiture) ( RSAs On April 1, 2021, the Board of Directors of the Company entered into an Employment Agreement (the " Agreement two On November 1, 2021 (“ Grant Date Fox Shares As of December 31, 2022, there was approximately $165,000 of total unrecognized compensation expense related to non-vested restricted share-based compensation arrangements granted under the 2019 Plan, as amended. That cost is expected to be recognized over a weighted average period of 2.5 years. The Company recorded total stock-based compensation of approximately $150,000 and $26,000 during the years ended December 31, 2022 and 2021 related to the RSAs, respectively. |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 12 - COMMITMENTS AND CONTINGENCIES Leases The Company leases office space under agreements classified as operating leases that expire on various dates through 2024. All of the Company’s lease liabilities result from the lease of its headquarters in Costa Mesa, California, which expires in 2024, its warehouse in Santa Ana, California, which was renewed in May 2022 and expires May 2025, its office and warehouse in Denver, Colorado, which expired in May 2022, and its warehouse space in Huntington Beach, California, which was renewed in June 2022. On April 29, 2022, the Company entered into a commercial lease agreement for the Company’s sales and marketing operations in Williamsville, New York (“ Williamsville Lease Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases. The Company excludes short-term leases having initial terms of 12 months or less from Topic 842 as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company entered into a commercial lease for the Company’s corporate headquarters (the “ Lease Effective June 1, 2022, the Company’s lease at 5331 Production Drive, Huntington Beach, CA was renewed for an additional three-year term, concluding May 31, 2025. The renewal was not reflected in the Company’s June 30, 2022 interim financial statements, but was corrected during the quarter ended September 30, 2022. Had it been properly recorded during the quarter ended June 30, 2022, the effect on the Company’s financial statements would have included an additional $429,000 in right-of-use assets, $430,000 in lease liabilities as well as an additional $1,000 in rent expense. The Company performed a thorough assessment to determine the significance of the prior period error and concluded that it was neither quantitatively or qualitatively material to the Company’s financial position, results of operations or cash flows for the quarters ended June 30, 2022 and September 30, 2022. At December 31, 2022, the Company had operating lease liabilities of approximately $801,000 and right of use assets of approximately $799,000, which were included in the consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases (amounts in thousands): For the years ended December 31, 2022 2021 Operating leases Operating lease cost $ 480 $ 566 Variable lease cost - - Operating lease expense 480 566 Short-term lease rent expense 13 - Total rent expense $ 493 $ 566 For the years ended December 31, 2022 2021 Operating cash flows from operating leases $ 484 $ 456 Right-of-use assets exchanged for operating lease liabilities $ 440 $ - Weighted-average remaining lease term – operating leases (in years) 2.06 2.38 Weighted-average discount rate – operating leases 12.0 % 12.0 % Maturities of our operating leases, excluding short-term leases, are as follows (amounts in thousands): Year Ending December 31, 2023 449 Year Ending December 31, 2024 385 Year Ending December 31, 2025 75 Total 909 Less present value discount (108 ) Operating lease liabilities as of December 31, 2022 $ 801 Legal proceedings From time to time, the Company may be involved in various claims and counterclaims and legal actions arising in the ordinary course of business. There are not material pending or threatened legal proceedings at this time. |
Note 13 - Income Taxes
Note 13 - Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | NOTE 13- INCOME TAXES The Company is taxed as a C corporation and files a consolidated return with Charlie's Holdings, Inc. This tax footnote also includes the tax impact of the Company's VIE, Don Polly LLC, which is also taxed as a C corporation, but which files a separate return from Charlie's Holdings, Inc. The table below presents the components of the (benefit) provision for income taxes. The Company's (benefit) provision is driven primarily current year operating income, nontaxable derivative fair value adjustments, and state taxes (in thousands). As of December 31, 2022 2021 Current US Federal $ (89 ) $ 110 US State (3 ) 232 Total current (benefit) provision (92 ) 342 Deferred US Federal - - US State - - Total deferred (benefit) provision - - Total (benefit) provision for income taxes $ (92 ) $ 342 The tax effects of temporary differences and tax loss carryovers that give rise to significant portions of deferred tax assets and liabilities at December 31, 2022 and 2021 are comprised of the following (in thousands): As of December 31, 2022 2021 Deferred tax assets: Bad debt $ 50 $ 47 Inventory 190 43 Accrued expenses 128 222 Lease liability 218 208 Research and development credits 141 - Stock compensation 156 255 Net operating loss carryovers 1,642 1,224 Other 7 9 Derivatives 39 56 Total deferred income tax assets 2,571 2,064 Deferred income tax liabilities: ROU assets (217 ) (206 ) Fixed assets (27 ) (18 ) Total deferred income tax liabilities (244 ) (224 ) Net deferred income tax assets 1,840 Valuation allowance (2,327 ) (1,840 ) Deferred tax asset, net of allowance $ - $ - The Company recognizes Federal, and state deferred tax assets or liabilities based on the Company's estimate of future tax effects attributable to temporary differences and carryovers. The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. As of December 31, 2022, as a result of a three-year cumulative loss and lack of sufficient positive evidence, we concluded that a full valuation allowance was necessary to offset our deferred tax assets. We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal. The Company will continue to evaluate its deferred tax balances to determine any assets that are more likely than not to be realized. At December 31, 2022, the Company had federal and state net operating loss carryovers for income tax purposes of approximately $5,704,000 and $7,458,000, respectively. The Federal net operating losses can be carried forward indefinitely but are limited to offsetting only 80% of taxable income each year. The state net operating losses expire at various dates through 2042, if not utilized beforehand. At December 31, 2022, the Company had federal research and development credit carryovers of approximately $218,000. The federal research credits expire by 2040 if not utilized beforehand. The utilization of net operating loss carryforwards and research tax credit carryovers could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state tax provisions, due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percent points over a three-year period. The Company has not conducted an analysis of an ownership change under section 382. The Company experienced an ownership change in 2019. Absent an analysis, the Company has assumed that net operating losses generated prior to the change are not available to offset income subsequent to the ownership change date. To the extent that a study is completed, and certain pre-acquisition losses are deemed to be available to be utilized to offset taxable income, the Company's tax liabilities could be reduced. To the extent that a study is completed and additional or future ownership changes are deemed to occur, the Company's net operating losses and tax credits could be further limited. A reconciliation of the statutory income tax rates and the Company's effective tax rate for the years ended December 31, 2022 and December 31, 2021, are as follows: Year ended December 31, 2022 Year ended December 31, 2021 Statutory federal income tax rate 21.0 % 21.0 % Non-taxed loss from VIE 0.0 % 0.0 % Research credits 13.5 % 0.0 % State taxes, net of federal tax benefit 5.3 % 3.3 % Stock compensation (4.5 )% 10.1 % Permanent Items 0.1 % (4.3 )% Section 382 NOL Adjustments 0.0 % 3.1 % Derivatives 2.6 % (11.1 )% Return to provision adjustments 0.1 % (2.2 )% Other (3.9 )% (1.3 )% Change in valuation allowance (28.8 )% (12.0 )% Total effective tax rate 5.4 % 6.6 % ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits at the beginning and end of the years ended December 31, 2022 and December 31, 2021 (in thousands): Year ended December 31, 2022 Year ended December 31, 2021 Gross unrecognized tax benefits at the beginning of the year $ 32 $ - Increases related to current year positions - - Increases related to prior year positions 77 32 Decreases related to prior year positions - - Expiration of unrecognized tax benefits - - Gross unrecognized tax benefits at the end of the year $ 109 $ 32 The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance. The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months. The Company policy is to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2022 and December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations. The Company’s tax years from 2019 2018 |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | NOTE 14- SUBSEQUENT EVENTS The Company evaluated subsequent events for their potential impact on the consolidated condensed financial statements and disclosures through the date the consolidated condensed financial statements were available to be issued and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the consolidated condensed financial statements presented herein. Future Receivables Sale Agreement On January 19, 2023 the Company entered into a future receivables sale agreement (“ Receivables Financing Receivables Financing Agreement Austin Purchaser twenty Preferred A Shareholders Consent The Board of Directors and the holders of a majority of our Series A Preferred approved an amendment (the “ Amendment Certificate of Designations |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments |
Revenue [Policy Text Block] | Revenue Recognition ASC |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents |
Accounts Receivable [Policy Text Block] | Accounts Receivable |
Inventory, Policy [Policy Text Block] | Inventories |
Property, Plant and Equipment, Policy [Policy Text Block] | Plant, Property and Equipment |
Lessee, Leases [Policy Text Block] | Leases |
Share-Based Payment Arrangement [Policy Text Block] | Stock-Based Compensation |
Income Tax, Policy [Policy Text Block] | Income Taxes F-10 |
Research and Development Expense, Policy [Policy Text Block] | Research and Development |
Segment Reporting, Policy [Policy Text Block] | Segments one December 31, 2022 December 31, 2021 Geographic Market International 16 % 17 % United States 84 % 83 % Customer Type Retailer 30 % 38 % Distribution 70 % 62 % |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements Measurement of Credit Losses on Financial Instruments Income Taxes F-11 Debt – Debt with conversion and Other Options Earnings per Share |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | December 31, 2022 December 31, 2021 Geographic Market International 16 % 17 % United States 84 % 83 % Customer Type Retailer 30 % 38 % Distribution 70 % 62 % |
Note 3 - Fair Value Measureme_2
Note 3 - Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | Fair Value at December 31, 2022 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability – Warrants 629 - - 629 Total liabilities $ 629 $ - $ - $ 629 Fair Value at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability – Warrants 899 - - 899 Total liabilities $ 899 $ - $ - $ 899 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Derivative liability - Warrants Balance at January 1, 2021 4,444 Change in fair value (3,545 ) Balance at December 31, 2021 899 Change in fair value (270 ) Balance at December 31, 2022 $ 629 |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | Warrant Liability December 31, December 31, 2022 2021 Exercise price $ 0.4431 $ 0.4431 Contractual term (years) 1.32 2.32 Volatility (annual) 100.0 % 90.0 % Risk-free rate 4.6 % 0.8 % Dividend yield (per share) 0 % 0 % |
Note 4 - Property and Equipme_2
Note 4 - Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | PP&E December 31, December 31, 2022 2021 Estimated Useful Life (in years) Machinery and equipment $ 41 $ 42 5 Trade show booth 202 171 5 Office equipment 539 511 5 Leasehold improvements 254 380 Lesser of lease term or estimated useful life 1,036 1,104 Accumulated depreciation (725 ) (673 ) $ 311 $ 431 |
Note 5 - Concentrations (Tables
Note 5 - Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable [Member] | |
Notes Tables | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | For the years ended December 31, 2022 2021 Customer A 15 % 27 % Customer B 11 % - |
Inventory Purchases [Member] | |
Notes Tables | |
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | For the years ended December 31, 2022 2021 Vendor A 40 % 42 % Vendor B 36 % 31 % |
Note 7 - Accounts Payable and_2
Note 7 - Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, December 31, 2022 2021 Accounts payable $ 1,222 $ 2,476 Accrued compensation 631 902 Accrued income taxes 137 342 Other accrued expenses 343 348 $ 2,333 $ 4,068 |
Note 8 - Notes Payable (Tables)
Note 8 - Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Maturities of Long-Term Debt [Table Text Block] | Year Ending December 31, 2023 1,300 Year Ending December 31, 2024 - Year Ending December 31, 2025 - Year Ending December 31, 2026 Year Ending December 31, 2027 Thereafter 150 Total $ 1,450 |
Note 9 - Earnings (Loss) Per _2
Note 9 - Earnings (Loss) Per Share Basic and Fully Diluted (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the years ended December 31, 2022 2021 Net (loss) income - basic $ (1,592 ) $ 4,808 Reversal of gain due to change in fair value of warrant liability - (3,545 ) Net (loss) income - diluted $ (1,592 ) $ 1,263 Weighted average shares outstanding - basic 212,269,453 203,589,531 Diluted stock options - 168,309 Diluted warrants - 1,912,544 Diluted preferred shares - 32,016,491 Weighted average shares outstanding - diluted 212,269,453 237,686,875 Basic (loss) earnings per share $ (0.01 ) $ 0.02 Diluted (loss) earnings per share $ (0.01 ) $ 0.01 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | For the years ended December 31, 2022 2021 Options 6,003 6,955 Warrants 40,338 38,425 Total 46,341 45,380 |
Note 11 - Stock-based Compens_2
Note 11 - Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Options Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2021 7,503 $ 0.54 8.5 $ - Options granted 80 0.44 10.0 - Options forfeited/expired (460 ) 0.44 - - Outstanding at December 31, 2021 7,123 0.54 7.5 $ - Options forfeited/expired (1,120 ) 0.44 - - Outstanding at December 31, 2022 6,003 $ 0.56 6.4 $ - Options vested and exercisable at December 31, 2022 5,986 $ 0.56 6.4 $ - |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the years ended December 31, 2021 Exercise price $ 0.4431 Contractual term (years) 6.00 Volatility (annual) 85.0 % Risk-free rate 0.9 % Dividend yield (per share) 0 % |
Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block] | Number of Shares Weighted Average Grant Date Fair Value per Share Nonvested at January 1, 2021 - $ - Restricted stock granted 1,750 0.044 Nonvested at December 31, 2021 1,750 0.044 Restricted stock granted 7,142 0.041 Vested (1,500 ) - Forfeited (776 ) - Nonvested at December 31, 2022 6,616 $ 0.041 |
Note 12 - Commitments and Con_2
Note 12 - Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Lease, Cost [Table Text Block] | For the years ended December 31, 2022 2021 Operating leases Operating lease cost $ 480 $ 566 Variable lease cost - - Operating lease expense 480 566 Short-term lease rent expense 13 - Total rent expense $ 493 $ 566 For the years ended December 31, 2022 2021 Operating cash flows from operating leases $ 484 $ 456 Right-of-use assets exchanged for operating lease liabilities $ 440 $ - Weighted-average remaining lease term – operating leases (in years) 2.06 2.38 Weighted-average discount rate – operating leases 12.0 % 12.0 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Year Ending December 31, 2023 449 Year Ending December 31, 2024 385 Year Ending December 31, 2025 75 Total 909 Less present value discount (108 ) Operating lease liabilities as of December 31, 2022 $ 801 |
Note 13 - Income Taxes (Tables)
Note 13 - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | As of December 31, 2022 2021 Current US Federal $ (89 ) $ 110 US State (3 ) 232 Total current (benefit) provision (92 ) 342 Deferred US Federal - - US State - - Total deferred (benefit) provision - - Total (benefit) provision for income taxes $ (92 ) $ 342 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | As of December 31, 2022 2021 Deferred tax assets: Bad debt $ 50 $ 47 Inventory 190 43 Accrued expenses 128 222 Lease liability 218 208 Research and development credits 141 - Stock compensation 156 255 Net operating loss carryovers 1,642 1,224 Other 7 9 Derivatives 39 56 Total deferred income tax assets 2,571 2,064 Deferred income tax liabilities: ROU assets (217 ) (206 ) Fixed assets (27 ) (18 ) Total deferred income tax liabilities (244 ) (224 ) Net deferred income tax assets 1,840 Valuation allowance (2,327 ) (1,840 ) Deferred tax asset, net of allowance $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 Statutory federal income tax rate 21.0 % 21.0 % Non-taxed loss from VIE 0.0 % 0.0 % Research credits 13.5 % 0.0 % State taxes, net of federal tax benefit 5.3 % 3.3 % Stock compensation (4.5 )% 10.1 % Permanent Items 0.1 % (4.3 )% Section 382 NOL Adjustments 0.0 % 3.1 % Derivatives 2.6 % (11.1 )% Return to provision adjustments 0.1 % (2.2 )% Other (3.9 )% (1.3 )% Change in valuation allowance (28.8 )% (12.0 )% Total effective tax rate 5.4 % 6.6 % |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | Year ended December 31, 2022 Year ended December 31, 2021 Gross unrecognized tax benefits at the beginning of the year $ 32 $ - Increases related to current year positions - - Increases related to prior year positions 77 32 Decreases related to prior year positions - - Expiration of unrecognized tax benefits - - Gross unrecognized tax benefits at the end of the year $ 109 $ 32 |
Note 1 - Description of the B_2
Note 1 - Description of the Business and Basis of Presentation (Details Textual) | 12 Months Ended | |||||
Jun. 16, 2021 $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | May 25, 2021 $ / shares | Mar. 22, 2021 $ / shares | Dec. 31, 2020 USD ($) | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | ||||
Operating Income (Loss), Total | $ 1,805,000 | $ (565,000) | ||||
Net Income (Loss) Attributable to Parent, Total | 1,592,000 | (4,808,000) | ||||
Net Cash Provided by (Used in) Operating Activities, Total | 1,720,000 | 1,347,000 | ||||
Stockholders' Equity Attributable to Parent, Ending Balance | 1,700,000 | 3,131,000 | $ (5,996,000) | |||
Assets, Current, Total | 5,850,000 | 7,994,000 | ||||
Liabilities, Current, Total | 4,783,000 | $ 5,534,000 | ||||
Premarket Tobacco Application Registration [Member] | ||||||
Cost of Revenue, Total | $ 5,100,000 | |||||
Reverse Stock Split [Member] | ||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 100 | |||||
Series B Preferred Stock [Member] | ||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounts Receivable, Allowance for Credit Loss, Ending Balance | $ 158,000 | $ 109,000 |
Inventory Valuation Reserves | $ 733,000 | $ 156,000 |
Number of Operating Segments | 1 | |
Charlie's Chalk Dust, LLC and Bazi, Inc [Member] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 100% |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retailer [Member] | ||
Percentage of Revenue | 30% | 38% |
Distribution [Member] | ||
Percentage of Revenue | 70% | 62% |
Non-US [Member] | ||
Percentage of Revenue | 16% | 17% |
UNITED STATES | ||
Percentage of Revenue | 84% | 83% |
Note 3 - Fair Value Measureme_3
Note 3 - Fair Value Measurements (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Mar. 22, 2021 | Apr. 26, 2019 |
Proceeds from Issuance of Private Placement | $ 3 | $ 27.5 |
Warrants and Rights Outstanding, Term | 5 years | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.44313 | |
Investor Warrants [Member] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 31,028,996 | |
Placement Agent Warrants [Member] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 9,308,699 |
Note 3 - Fair Value Measureme_4
Note 3 - Fair Value Measurements - Fair Value Hierarchy on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative liability – Warrants | $ 629 | $ 899 |
Fair Value, Recurring [Member] | ||
Derivative liability – Warrants | 629 | 899 |
Total liabilities | 629 | 899 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability – Warrants | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability – Warrants | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability – Warrants | 629 | 899 |
Total liabilities | $ 629 | $ 899 |
Note 3 - Fair Value Measureme_5
Note 3 - Fair Value Measurements - Changes in Level 3 Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Balance | $ 899 | $ 4,444 |
Change in fair value | (270) | (3,545) |
Balance | $ 629 | $ 899 |
Note 3 - Fair Value Measureme_6
Note 3 - Fair Value Measurements - Unobservable Inputs Assumptions (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Measurement Input, Exercise Price [Member] | ||
Derivitave liability, measurement input | 0.4431 | 0.4431 |
Measurement Input, Expected Term [Member] | ||
Derivitave liability, measurement input | 1.32 | 2.32 |
Measurement Input, Price Volatility [Member] | ||
Derivitave liability, measurement input | 1 | 0.900 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Derivitave liability, measurement input | 0.046 | 0.008 |
Measurement Input, Expected Dividend Rate [Member] | ||
Derivitave liability, measurement input | 0 | 0 |
Note 4 - Property and Equipme_3
Note 4 - Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Depreciation, Depletion and Amortization, Nonproduction, Total | $ 296,000 | $ 210,000 |
Note 4 - Property and Equipme_4
Note 4 - Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and equipment, gross | $ 1,036 | $ 1,104 |
Accumulated depreciation | (725) | (673) |
Property, Plant and Equipment, Net, Total | 311 | 431 |
Machinery and Equipment [Member] | ||
Property and equipment, gross | $ 41 | 42 |
Estimated useful life (Year) | 5 years | |
Trade Show Booth [Member] | ||
Property and equipment, gross | $ 202 | 171 |
Estimated useful life (Year) | 5 years | |
Office Equipment [Member] | ||
Property and equipment, gross | $ 539 | 511 |
Estimated useful life (Year) | 5 years | |
Leasehold Improvements [Member] | ||
Property and equipment, gross | $ 254 | $ 380 |
Leasehold improvements | Lesser of lease term or estimated useful life |
Note 5 - Concentrations (Detail
Note 5 - Concentrations (Details Textual) | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounts Payable and Accrued Liabilities, Current, Total | $ 2,333,000 | $ 4,068,000 |
Customer A [Member] | ||
Accounts Receivable, after Allowance for Credit Loss, Total | 184,000 | 454,000 |
Customer B [Member] | ||
Accounts Receivable, after Allowance for Credit Loss, Total | 136,000 | |
Four Vendors [Member] | ||
Accounts Payable and Accrued Liabilities, Current, Total | $ 200,000 | $ 1,494,000 |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | ||
Number of Major Vendors | 2 | 4 |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Two Vendors [Member] | ||
Concentration Risk, Percentage | 76% | 73% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Number of Major Customers | 1 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customers [Member] | ||
Concentration Risk, Percentage | 10% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer A [Member] | ||
Concentration Risk, Percentage | 15% | 27% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer B [Member] | ||
Concentration Risk, Percentage | 11% | 0% |
Note 5 - Concentrations - Conce
Note 5 - Concentrations - Concentration Risk Inventory Purchases (Details) - Supplier Concentration Risk [Member] - Inventory Purchases [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Vendor A [Member] | ||
Concentration risk, percentage | 40% | 42% |
Vendor B [Member] | ||
Concentration risk, percentage | 36% | 31% |
Note 5 - Concentrations - Con_2
Note 5 - Concentrations - Concentration Risk Accounts Receivable (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A [Member] | ||
Concentration risk, percentage | 15% | 27% |
Customer B [Member] | ||
Concentration risk, percentage | 11% | 0% |
Note 6 - Don Polly, LLC. (Detai
Note 6 - Don Polly, LLC. (Details Textual) | 12 Months Ended |
Dec. 31, 2022 | |
Don Polly, LLC [Member] | |
Percent of Net Income Received, Variable Interest Entity | 100% |
Note 7 - Accounts Payable and_3
Note 7 - Accounts Payable and Accrued Expenses - Accounts Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts payable | $ 1,222 | $ 2,476 |
Accrued compensation | 631 | 902 |
Accrued income taxes | 137 | 342 |
Other accrued expenses | 343 | 348 |
Accounts Payable and Accrued Liabilities, Current, Total | $ 2,333 | $ 4,068 |
Note 8 - Notes Payable (Details
Note 8 - Notes Payable (Details Textual) - USD ($) | Mar. 28, 2023 | Aug. 17, 2022 | Jun. 24, 2020 | Apr. 06, 2022 |
The “Loan” [Member] | ||||
Debt Instrument, Face Amount | $ 300,000 | |||
Debt Instrument, Interest Rate During Period | 10% | |||
Debt Issuance Costs, Gross | $ 3,000 | |||
EID Loan [Member] | Don Polly [Member] | ||||
Proceeds from Issuance of Debt | $ 150,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | |||
Michael King [Member] | Notes Payable, Other Payables [Member] | ||||
Debt Instrument, Face Amount | $ 1,000,000 | |||
Michael King [Member] | Notes Payable, Other Payables [Member] | Subsequent Event [Member] | ||||
Debt Instrument, Periodic Payment, Principal | $ 25,000 | |||
Debt Instrument, Interest Rate During Period | 20% |
Note 8 - Notes Payable - Notes
Note 8 - Notes Payable - Notes Payable Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Year Ending December 31, 2023 | $ 1,300 |
Year Ending December 31, 2024 | 0 |
Year Ending December 31, 2025 | 0 |
Thereafter | 150 |
Total | $ 1,450 |
Note 9 - Earnings (Loss) Per _3
Note 9 - Earnings (Loss) Per Share Basic and Fully Diluted - Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 30, 2021 | |
Net (loss) income - basic | $ (1,592) | $ 4,808 | |
Reversal of gain due to change in fair value of warrant liability | 0 | (3,545) | |
Net (loss) income - diluted | $ (1,592) | $ 1,263 | |
Weighted average shares outstanding - basic (in shares) | 212,269,453 | 203,589,531 | 203,589,531 |
Diluted stock options (in shares) | 0 | 168,309 | |
Diluted warrants (in shares) | 0 | 1,912,544 | |
Diluted preferred shares (in shares) | 0 | 32,016,491 | |
Weighted average shares outstanding - diluted (in shares) | 212,269,453 | 237,686,875 | 237,686,875 |
Basic (loss) earnings per share (in dollars per share) | $ (0.01) | $ 0.02 | $ 0.02 |
Diluted (loss) earnings per share (in dollars per share) | $ (0.01) | $ 0.01 | $ 0.01 |
Note 9 - Earnings (Loss) Per _4
Note 9 - Earnings (Loss) Per Share Basic and Fully Diluted - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive securities (in shares) | 46,341 | 45,380 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive securities (in shares) | 6,003 | 6,955 |
Warrant [Member] | ||
Antidilutive securities (in shares) | 40,338 | 38,425 |
Note 10 - Stockholders' Equity
Note 10 - Stockholders' Equity (Details Textual) - USD ($) | 12 Months Ended | |||||
May 25, 2021 | Mar. 22, 2021 | Apr. 25, 2020 | Apr. 26, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||
Common Stock Dividends, Shares | 1,736,501 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Shares Issued, Price Per Share | $ 0.44313 | $ 0.853 | ||||
Proceeds from Issuance of Private Placement | $ 3,000,000 | $ 27,500,000 | ||||
Private Placement [Member] | ||||||
Stock Issued During Period, Shares, New Issues | 3,517,000 | |||||
Conversion of Series A Preferred Stock to Common Stock [Member] | ||||||
Conversion of Stock, Shares Issued | 1,907,000 | 13,977,000 | ||||
Conversion of Stock, Shares Converted | 8,450 | 61,937 | ||||
Series A Preferred Stock [Member] | ||||||
Preferred Stock, Dividend Rate, Percentage | 8% | |||||
Dividends, Total | $ 1,650,000 | $ 1,650,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |||||
Dividends, Cash, Total | $ 880,000 | |||||
Series A Preferred Stock [Member] | Dividend Paid [Member] | ||||||
Dividends, Cash, Total | $ 3,000 |
Note 11 - Stock-based Compens_3
Note 11 - Stock-based Compensation (Details Textual) - USD ($) | 12 Months Ended | |||||||
Dec. 22, 2021 | Nov. 01, 2021 | Apr. 01, 2021 | Apr. 26, 2019 | Dec. 31, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | May 08, 2019 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 80,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period, Total | 1,120,000 | 460,000 | ||||||
Common Stock Awards, Unvested | 7,100,000 | |||||||
Common Stock Awards, Fair Value Per Share | $ 0.32 | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total | 1,500,000 | |||||||
Shares, Restricted Stock Award, Subject to Annual Forfeiture | 750,000 | |||||||
Series B Preferred Stock [Member] | ||||||||
Preferred Stock, Convertible, Shares Issuable | 6,980,000 | |||||||
Conversion of Membership Units Into Common Stock [Member] | ||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 71,000 | |||||||
Conversion of Membership Units Into Series B Convertible Preferred Stock [Member] | ||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 69,815 | |||||||
Common Stock [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 376,000 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 2 years | |||||||
Restricted Stock [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted | 1,500,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Granted | $ 65,000 | |||||||
The 2019 Omnibus Incentive Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 26,072,542 | 11,072,542 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized | 15,000,000 | |||||||
Ownership Percentage | 50.30% | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 0 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures and Expirations in Period, Total | 1,120,000 | 460,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options Grant Date Fair Value | $ 80,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Fair Value | 12,000 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 340,000 | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total | 7,142,000 | |||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 6 months | |||||||
The 2019 Omnibus Incentive Plan [Member] | Director [Member] | ||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | |||||||
The 2019 Omnibus Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||||||
Share-Based Payment Arrangement, Expense | $ 11,000 | 151,000 | ||||||
The 2019 Omnibus Incentive Plan [Member] | Restricted Stock [Member] | ||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | 165,000 | |||||||
Share-Based Payment Arrangement, Expense | 150,000 | $ 26,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Other Than Options, Grants in Period, Grant Date Fair Value | $ 290,000 | |||||||
The 2019 Omnibus Incentive Plan [Member] | Restricted Stock [Member] | Director [Member] | ||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | |||||||
Stock Issued During Period, Shares Subject to Forfeiture, Increments | 125,000 | |||||||
Stock Issued During Period, Value, Issued for Services | $ 12,775 |
Note 11 - Stock-based Compens_4
Note 11 - Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Outstanding at January 1, 2021 (in shares) | 7,123 | 7,503 | |
Outstanding at January 1, 2021 (in dollars per share) | $ 0.54 | $ 0.54 | |
Outstanding at January 1, 2021 (Year) | 6 years 4 months 24 days | 7 years 6 months | 8 years 6 months |
Outstanding at January 1, 2021 | $ 0 | $ 0 | |
Options granted (in shares) | 80 | ||
Options granted (in dollars per share) | $ 0.44 | ||
Options granted (Year) | 10 years | ||
Options forfeited/expired (in shares) | (1,120) | (460) | |
Options forfeited/expired (in dollars per share) | $ 0.44 | $ 0.44 | |
Outstanding at December 31, 2021 (in shares) | 6,003 | 7,123 | 7,503 |
Outstanding at December 31, 2021 (in dollars per share) | $ 0.56 | $ 0.54 | $ 0.54 |
Options vested and exercisable at December 31, 2022 (in shares) | 5,986 | ||
Options vested and exercisable at December 31, 2022 (in dollars per share) | $ 0.56 | ||
Options vested and exercisable at December 31, 2022 (Year) | 6 years 4 months 24 days | ||
Options vested and exercisable at December 31, 2022 | $ 0 |
Note 11 - Stock-based Compens_5
Note 11 - Stock-based Compensation - Fair Value of Options Assumptions (Details) - Share-Based Payment Arrangement, Option [Member] | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Exercise price (in dollars per share) | $ 0.4431 |
Contractual term (years) (Year) | 6 years |
Volatility (annual) | 85% |
Risk-free rate | 0.90% |
Dividend yield (per share) | 0% |
Note 11 - Stock-based Compens_6
Note 11 - Stock-based Compensation - Restricted Stock Awards Activities (Details) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Nonvested at January 1, 2021 (in shares) | 1,750 | 0 |
Nonvested at January 1, 2021 (in dollars per share) | $ 0.044 | $ 0 |
Restricted stock granted (in shares) | 7,142 | 1,750 |
Restricted stock granted (in dollars per share) | $ 0.041 | $ 0.044 |
Vested (in shares) | (1,500) | |
Forfeited (in shares) | (776) | |
Nonvested at December 31, 2021 (in shares) | 6,616 | 1,750 |
Nonvested at December 31, 2021 (in dollars per share) | $ 0.041 | $ 0.044 |
Note 12 - Commitments and Con_3
Note 12 - Commitments and Contingencies (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended | |||
May 01, 2022 | Nov. 01, 2019 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Lease, Expense | $ 480,000 | $ 566,000 | |||
Operating Lease, Right-of-Use Asset | 799,000 | 755,000 | |||
Operating Lease, Liability, Total | 801,000 | ||||
Williamsville Lease [Member] | |||||
Lease, Monthly Rent | $ 1,650 | ||||
Corporate Headquarters Lease [Member] | |||||
Lease, Monthly Rent | $ 22,940 | ||||
Operating Lease, Expense | 293,536 | $ 278,040 | |||
Operating Lease, Right-of-Use Asset | 799,000 | ||||
Operating Lease, Liability, Total | $ 801,000 | ||||
Lease at 5331 Production Drive, Huntington Beach, Ca [Member] | Revision of Prior Period, Adjustment [Member] | |||||
Operating Lease, Expense | $ 1,000 | ||||
Operating Lease, Right-of-Use Asset | 429,000 | ||||
Operating Lease, Liability, Total | $ 430,000 |
Note 12 - Commitments and Con_4
Note 12 - Commitments and Contingencies - Operating Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating cash flows from operating leases | $ 484 | $ 456 |
Operating lease cost | 480 | 566 |
Right-of-use assets exchanged for operating lease liabilities | 440 | 0 |
Variable lease cost | $ 0 | $ 0 |
Weighted-average remaining lease term – operating leases (in years) (Year) | 2 years 21 days | 2 years 4 months 17 days |
Operating lease expense | $ 480 | $ 566 |
Weighted-average discount rate – operating leases | 12% | 12% |
Short-term lease rent expense | $ 13 | $ 0 |
Total rent expense | $ 493 | $ 566 |
Note 12 - Commitments and Con_5
Note 12 - Commitments and Contingencies - Maturities of Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Year Ending December 31, 2023 | $ 449 |
Year Ending December 31, 2024 | 385 |
Year Ending December 31, 2025 | 75 |
Total | 909 |
Less present value discount | (108) |
Operating lease liabilities as of December 31, 2022 | $ 801 |
Note 13 - Income Taxes (Details
Note 13 - Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards, Incurred Before the Closing Date | $ 5,704,000,000,000 |
Open Tax Year | 2019 2020 2021 2022 |
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | |
Tax Credit Carryforward, Amount | $ 218,000 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards | $ 7,458,000,000,000 |
Open Tax Year | 2018 2019 2020 2021 2022 |
Note 13 - Income Taxes - Income
Note 13 - Income Taxes - Income Tax Expense (Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
US Federal | $ (89) | $ 110 |
US State | (3) | 232 |
Total current (benefit) provision | (92) | 342 |
US Federal | 0 | 0 |
US State | 0 | 0 |
Total deferred (benefit) provision | 0 | 0 |
Total (benefit) provision for income taxes | $ (92) | $ 342 |
Note 13 - Income Taxes - Deferr
Note 13 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Bad debt | $ 50 | $ 47 |
Inventory | 190 | 43 |
Accrued expenses | 128 | 222 |
Lease liability | 218 | 208 |
Research and development credits | 141 | 0 |
Stock compensation | 156 | 255 |
Net operating loss carryovers | 1,642 | 1,224 |
Other | 7 | 9 |
Derivatives | 39 | 56 |
Total deferred income tax assets | 2,571 | 2,064 |
ROU assets | (217) | (206) |
Fixed assets | (27) | (18) |
Total deferred income tax liabilities | (244) | (224) |
Net deferred income tax assets | 1,840 | |
Valuation allowance | (2,327) | (1,840) |
Deferred tax asset, net of allowance | $ 0 | $ 0 |
Note 13 - Income Taxes - Reconc
Note 13 - Income Taxes - Reconciliations of Federal Statutory Rate to Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statutory federal income tax rate | 21% | 21% |
Non-taxed loss from VIE | 0% | 0% |
Research credits | 13.50% | 0% |
State taxes, net of federal tax benefit | 5.30% | 3.30% |
Stock compensation | (4.50%) | 10.10% |
Permanent Items | 0.10% | (4.30%) |
Section 382 NOL Adjustments | 0% | 3.10% |
Derivatives | 2.60% | (11.10%) |
Return to provision adjustments | 0.10% | (2.20%) |
Other | (3.90%) | (1.30%) |
Change in valuation allowance | (28.80%) | (12.00%) |
Total effective tax rate | 5.40% | 6.60% |
Note 13 - Income Taxes - Unreco
Note 13 - Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Gross unrecognized tax benefits at the beginning of the year | $ 32 | $ 0 |
Increases related to current year positions | 0 | 0 |
Increases related to prior year positions | 77 | 32 |
Decreases related to prior year positions | 0 | 0 |
Expiration of unrecognized tax benefits | 0 | 0 |
Gross unrecognized tax benefits at the end of the year | $ 109 | $ 32 |
Note 14 - Subsequent Events (De
Note 14 - Subsequent Events (Details Textual) - Subsequent Event [Member] | Jan. 19, 2023 USD ($) | Mar. 29, 2023 USD ($) | Mar. 28, 2023 USD ($) |
Permitted Indebtedness | $ 6,000,000 | $ 2,500,000 | |
Receivables Financing Agreement [Member] | Austin Purchaser [Member] | |||
Proceeds from Collection of Finance Receivables | $ 650,000 | ||
Finance Receivables, Percentage of Origination Fee | 3% | ||
Financing Receivable, Number of Payments | 26 | ||
Financing Receivable, Weekly Repayments | $ 29,500 | ||
Financing Receivable, Total Repayments | $ 760,500 |