SEC Form 4 · accession 0000899243-15-003520

Charlie's Holdings, Inc. · CHUC

Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗

A later amendment supersedes this filing — read the amendment. The figures below are kept as originally reported (version chain, not an overwrite).

Reporting owner

Vincent C Smith

10% Owner

Period of report

Aug 14, 2015

Accepted (ET)

Aug 18, 2015 · 9:41 pm EDT

Rule 10b5-1 plan

unknown — predates the checkbox

Issuer CIK

0001134765

Table I — non-derivative securities

No Table I lines on this filing.

Table II — derivative securities

Security	Conv. / exercise price	Date	Code	Shares	A/D	Exercisable	Expires	Underlying	Underlying shares	Owned after	D/I
Series C Convertible Preferred Stock^F1,F2,F4,F3	—	Aug 14, 2015	P	14,119	A	—	—	Common Stock	8,305,294	14,119	I
Common Stock Warrant (Right to Acquire)^F5,F4	$0.17	Aug 14, 2015	P	2,906,852	A	—	—	Common Stock	2,906,852	2,906,852	I
Option to Acquire Series C Convertible Preferred Stock^F6,F4	$113.33	Aug 14, 2015	P	1	A	—	—	Series C Convertible Preferred Stock	3,529	17,648	I

Explanation of responses

F1On August 13, 2015, the Issuer entered into a Securities Purchase Agreement (the "Purchase Agreement") with Red Beard Holdings, LLC, a Delaware limited liability company ("Red Beard"), pursuant to which Red Beard (i) purchased 7,942 shares of the Issuer's Series C Convertible Preferred Stock (the "Series C Preferred") effective as of August 13, 2015 (the "Initial Investment"), and (ii) agreed to purchase an additional 6,177 shares of the Series C Preferred on August 28, 2015 (the "Second Investment"), in each case for $113.33 per share.
F2(Continued from Footnote 1) Because the Reporting Person has completed the Initial Investment and is irrevocably committed to complete the Second Investment, the Reporting Person is reporting the ownership of an aggregate of 14,119 shares of Series C Preferred. Each share of Series C Preferred has a stated value of $100 per share and is convertible into that number of shares of the Issuer's Common Stock (the "Common Stock") equal to the stated value, divided by $0.17 per share. As a result, the 14,119 shares of Series C Preferred are convertible into 8,305,294 shares of the Common Stock.
F3The shares of Series C Preferred are exercisable immediately upon issuance and have no expiration date.
F4The securities reported in this row are held by Red Beard. The Reporting Person is the Manager of Red Beard and has sole power to vote and dispose of the Common Stock held by Red Beard.
F5Pursuant to the Purchase Agreement, Red Beard also acquired warrants (the "Warrants") to purchase that number of shares of Common Stock equal to 35% of the number of shares of Common Stock underlying the shares of Series C Preferred acquired in the Initial Investment and to be acquired in the Second Investment. Because the Reporting Person has completed the Initial Investment and is irrevocably committed to complete the Second Investment, the Reporting Person is reporting the ownership of Warrants to purchase an aggregate of 2,906,852 shares of the Common Stock. The Warrants have a five-year term and are immediately exercisable for $0.17 per share.
F6Pursuant to the Purchase Agreement, Red Beard also acquired an option to purchase an additional 3,529 shares of the Series C Preferred for $113.33 per share, which is exercisable on or before September 15, 2015 (the "Option"). The 3,529 shares of Series C Preferred would be convertible into 2,075,882 shares of the Common Stock. If the Option is exercised in full, the Reporting Person would also receive an additional Warrant to purchase 35% of the number of shares of Common Stock underlying the shares of Series C Preferred purchased upon exercise of the Option. Accordingly, if the Option is exercised in full, the Reporting Person would receive Warrants to purchase an aggregate of 726,558 shares of the Common Stock. Upon issuance, the Warrants would have a five-year term and would be immediately exercisable for $0.17 per share.