Charlie's Holdings, Inc.

(a) Evaluation of disclosure controls and procedures

Our management, with the participation of our President and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Report. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our President, the principal executive officer, and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Exchange Act that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II–** OTHER INFORMATION**

As of the date, there are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

As more fully described under “Risks and Uncertainties” (above), and in our 2025 Annual Report in “RISK FACTORS,” the Company’s wholly owned subsidiary, Charlie’s Chalk Dust LLC (“CCD”), is a petitioner in two proceedings challenging Marketing Denial Orders (“MDOs”) issued by the U.S. Food and Drug Administration (“FDA”) with respect to certain premarket tobacco product applications (“PMTAs”).

On April 1, 2026, the FDA issued an MDO to CCD covering certain products included in CCD’s timely submitted 2020 PMTA. On May 1, 2026, CCD and Toro Imports LLC filed a petition for review challenging the MDO in the U.S. Court of Appeals for the Fifth Circuit,Charlie’s Chalk Dust LLC, et al. v. U.S. Food and Drug Administration, et al., Case No. 26-60320. On May 11, 2026, the petitioners moved to stay the MDO pending judicial review, and the Fifth Circuit granted that motion on June 8, 2026. Merits briefing is underway. The petitioners filed their opening brief on August 3, 2026; the FDA’s response brief is currently due on October 2, 2026, after which the petitioners may file a reply brief. Although the affected products represent only a small percentage of the Company’s current sales, CCD intends to vigorously pursue its challenge to the MDO while continuing to supplement the applicable PMTA with the latest scientific evidence.

On October 28, 2025, the FDA issued MDOs to CCD covering certain products included in CCD’s timely submitted 2022 PMTAs. CCD and FOK of Houma LLC, doing business as Nocko’s, filed a petition for review challenging the MDOs in the U.S. Court of Appeals for the Fifth Circuit,Charlie’s Chalk Dust LLC, et al. v. U.S. Food and Drug Administration, et al., Case No. 25-60609. On November 5, 2025, the petitioners filed an emergency motion for a temporary administrative stay. On November 10, 2025, the Fifth Circuit granted a temporary administrative stay pending its consideration of the petitioners’ motion to stay the MDOs pending judicial review. On December 24, 2025, a Fifth Circuit panel granted that motion. Merits briefing has been completed, and oral argument is currently scheduled for the week of October 5, 2026, subject to possible extension by the Court. As a result of the stay, the affected PMTAs were returned to pending status and continue to be treated as timely filed as of May 2022 while the litigation proceeds. Accordingly, where permitted by state law, the affected products remain eligible for inclusion on state vapor product directories, including in Louisiana, that permit the sale of products associated with timely submitted synthetic-nicotine PMTAs that remain pending before the FDA, subject to satisfaction of all other applicable state requirements.

Except for these proceedings, the Company is not a party to any material legal or administrative proceeding.

From time to time, the Company may be involved in various claims and counterclaims and legal actions arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.