8-K - Charlotte's Web Holdings, Inc. | StockGist

AI Analysis

AI-generated analysis. Always verify with the original filing.

Charlotte's Web entered a subscription agreement with BAT for a US$10 million equity investment and amended a convertible debenture, resulting in BAT holding approximately 40.8% ownership post-transaction.

Key Takeaways

1BAT will invest US$10 million for up to 14.76 million Common Shares at C$0.94 per share, closing on or around May 28, 2026.

2The C$75.3 million Convertible Debenture conversion price was amended from C$2.00 to C$0.94, resulting in 95.3 million shares issued to BAT.

3The ownership cap for BAT was increased from 19.9% to 40.8%, allowing BAT to become the largest shareholder with approx. 110 million shares.

4BAT secured governance rights including board nomination proportional to ownership (minimum two seats) and minority protections on debt and delisting.

5A standstill provision restricts BAT from acquiring over 49% ownership or pursuing a business combination for two years without Company consent.

Current Report Details

Event Type

Material Agreement

Disclosure

Mandatory

Variant

8-K

Items Reported

1.01

. Entry Into a Material Definitive Agreement. On November 14, 2022, Charlotte's Web Holdings, Inc. (the "Company"), entered into a subscription agreement with B

Material Agreement

$75.3M$54.0M$2.00$10.0M

Source Document

Transaction Details

Material Agreement

Agreement: Subscription Agreement
Parties: Charlotte's Web Holdings, Inc., BT DE Investments Inc.

•Investment amount of US$10,000,000 (approx. C$13.9 million) for Common Shares.
•Purchase price per share is the greater of C$0.94 or the maximum discount pursuant to TSX Company Manual section 607.
•Maximum of 14,760,638 Common Shares to be issued.
•Closing expected on or around May 28, 2026.
•Convertible Debenture principal of C$75,341,080 (US$54 million) to be converted.
•Debenture Conversion Price amended from C$2.00 to C$0.94 per share.
•Interest Conversion Price amended to C$0.94 per share.
•Conversion Cap increased from 19.9% to 40.8%.
•BAT to receive total of approx. 110 million Common Shares (Investment + Conversion).
•BAT total equity commitment approx. C$103 million (US$75 million).

Debt / Financing

Instrument: Convertible Debenture
Principal: 75341080
Rate: 5% annually (reduces to 1.5% following federal CBD regulation)
Maturity: 2029-11-14

Exhibits (2)

10.1

EX-10.1

8-K