NOTE 12 – 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”). Furthermore, the Company received written consents approving the 2019 Plan Amendment from holders of approximately 50.3% of our outstanding voting securities. In accordance with Rule 14c of the Exchange Act, our Board of Directors’ authority to implement the 2019 Plan Amendment became effective February 28, 2022, twenty calendar days after notification of our shareholders.

On April 6, 2026, the Company's Board of Directors unanimously approved an amendment (the "Second Amendment") to the 2019 Plan, subject to stockholder approval, to increase the number of shares of common stock reserved for issuance thereunder by 15,000,000 shares, from 26,072,542 shares to 41,072,542 shares. The Second Amendment was approved by the Company's stockholders at the 2026 Annual Meeting of Stockholders held on June 4, 2026.

Non-Qualified Stock Options

The following table summarizes stock option activities during the three months ended June 30, 2026 (all option amounts are in thousands):

Restricted Stock Awards

The following table summarizes restricted stock awards activities during the three months ended June 30, 2026 (all share amounts are in thousands):

As of June 30, 2026, there was approximately $57,000 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 2.1 years. The Company recorded total stock-based compensation of approximately $18,000 and $38,000 during the three months ended June 30, 2026 and 2025 related to the RSAs, respectively. The Company recorded total stock-based compensation of approximately $43,000 and $78,000 during the six months ended June 30, 2026 and 2025 related to the RSAs, respectively.