Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Resignation of David Allen as Chief Financial Officer; Appointment to Board of
Directors
Effective May 10, 2021, David Allen resigned from his position as Chief
Financial Officer of Charlie's Holdings, Inc. (the "Company"), and was
concurrently appointed to fill one of two current vacancies on the Company's
Board of Directors (the "Board"). Mr. Allen will serve on the Board until the
next annual meeting of stockholders of the Company, or until his successor is
elected and qualified. Mr. Allen's resignation was not due to any disagreements
with respect to the Company's operations, policies, or practices.
As compensation for serving as a director, Mr. Allen will be entitled to
compensation pursuant to the Company's Director Compensation Plan, which
currently provides that non-employee directors receive (a) a $60,000 annual
retainer, payable in equal monthly installments in cash and (b) reimbursement
for expenses related to Board meeting attendance and committee participation. In
addition, directors receive a one-time grant of an option to purchase 25.0
million shares of the Company's common stock, par value $0.001 per share
("Common Stock") at an exercise price equal to the closing price of the
Company's Common Stock on the date of issuance, as reported on the OTC Pink
Market.
For Mr. Allen's biography, please see the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2020, filed with the Securities and
Exchange Commission on April 5, 2021.
Appointment of Matt Montesano as Chief Financial Officer
On May 10, 2021, following Mr. Allen's resignation and appointment on the Board,
Matthew Montesano was appointed as Chief Financial Officer of the Company.
Since 2014, Mr. Montesano has served as Chief Financial Officer of Charlie's
Chalk Dust, LLC, the Company's largest and most profitable operating division.
Beginning in 2019, he also began serving as the Chief Financial Officer of Don
Polly, LLC, the Company's hemp-derived products division. Prior to joining the
Company, Mr. Montesano worked for L'Oreal USA in a variety of corporate finance
positions for the company's Professional Products and Salon Centric divisions.
Prior to L'Oreal USA, Mr. Montesano worked for KeyBanc Capital Markets as an
investment banker where he focused on debt, equity and merger and acquisitions
transactions in the industrials space.
Mr. Montesano's salary as Chief Financial Officer will be $225,000 per year
("Base Salary"), with the potential of earning 20% of his Base Salary at the
discretion of the Board. There are no familial relationships between Mr.
Montesano and any director or executive officer of the Company, and there are no
related party transactions between the Company and Mr. Montesano that would
require disclosure under Item 404(a) of Regulation S-K under the Securities and
Exchange Act of 1934, as amended.
A copy of the press release announcing Mr. Allen's resignation and appointment,
and the appointment of Mr. Montesano is attached to this Current Report on Form
8-K as Exhibit 99.1.
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CHARLIE'S HOLDINGS, INC. 
