Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective for the period ending December 31, 2021.
Management’s Annual Report on Internal Control Over Financial Reporting
This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ending December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
151
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information relating to this item will be included in an amendment to this Annual Report on Form 10-K or in the proxy statement for our 2021 annual stockholders' meeting and is incorporated by reference in this Annual Report on Form 10-K. Certain information concerning our executive officers is included in Item 1 of Part I of this Annual Report on Form 10-K and is hereby incorporated by reference.
Item 11. Executive Compensation
Information relating to this item will be included in an amendment to this Annual Report on Form 10-K or in the proxy statement for our 2021 annual stockholders' meeting and is hereby incorporated by reference in this Annual Report on Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Information relating to this item will be included in an amendment to this Annual Report on Form 10-K or in the proxy statement for our 2021 annual stockholders' meeting and is hereby incorporated by reference in this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information relating to this item will be included in an amendment to this Annual Report on Form 10-K or in the proxy statement for our 2021 annual stockholders' meeting and is hereby incorporated by reference in this Annual Report on Form 10-K.
Item 14. Principal Accountant Fees and Services
Information relating to this item will be included in an amendment to this Annual Report on Form 10-K or in the proxy statement for our 2021 annual stockholders' meeting and is hereby incorporated by reference in this Annual Report on Form 10-K.
152
PART IV
Item 15. Exhibit and Financial Statement Schedules
Documents filed as part of this report
(1) All Financial Statements
Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
(2) Financial Statement Schedules
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements and notes thereto included in this Form 10-K.
(3) Exhibits Required by Item 601 of Regulation S-K
Exhibit No. Description Location
2.2.
∔Arrangement Agreement Between Abacus Health Products, Inc. and Charlotte’s Web Holdings, Inc. dated March 22, 2020.
Exhibit 2.2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
3.1
Articles
Exhibit 3.1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
3.2
Notice of Articles
Exhibit 3.2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
4.1
∔ S upplemental Warrant Indenture between Charlotte’s Web Holdings, Inc. , Abacus Health Products, Inc. , and Odyssey Trust Company dated as of June 11, 2020.
Exhibit 4.2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
4.2
∔ Warrant Indenture between Charlotte’s Web Holdings, Inc. and Odyssey Trust Company dated as of June 18, 2020.
Exhibit 4.3 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
4.3
Description of Capital Stock
Filed herewith.
10.1
Name and Likeness and License Agreement by and between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company and CWB Holdings, Inc. and Charlotte's Web Holdings Inc. dated August 1, 2018.
Exhibit 10.1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
153
10.2
Amending Agreement dated April 16, 2021 to the Name and Likeness and License Agreement by and between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company and CWB Holdings, Inc. and Charlotte's Web Holdings Inc. dated August 1, 2018.
Exhibit 10.2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.3
∔ Option Purchase Agreement Among Charlotte’s Web Holdings, Inc. and Stanley Brothers USA Holdings, Inc. dated March 2, 2021.
Exhibit 10.3 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.4
∔ Credit Agreement dated as of March 23, 2020 among Charlotte’s Web, Inc., the Lenders Party Hereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Exhibit 10.4 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.5
Limited Waiver to JP Morgan Credit Agreement, dated as of November 10, 2020.
Exhibit 10.5 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.6
Limited Waiver and Amendment No. 1 to JP Morgan Credit Agreement dated March 1, 2021 .
Exhibit 10.6 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.7
Lease of Space made as of May 7, 2019 between EJ 700 Tech Court LLC and Charlotte’s Web, Inc.
Exhibit 10.7 to Amendment No. 1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.
10.8
∔ Sublease made as of May 31, 2019 between Boulder Brands USA, Inc. and Charlotte’s Web, Inc.
Exhibit 10.8 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.9
First Amendment to Sublease dated as of August 30, 2019 between Boulder Brands USA, Inc. and Charlotte’s Web, Inc.
Exhibit 10.9 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.10
Sublease made as of May 12, 2021 by and among Charlotte’s Web, Inc. and Outside Interactive, Inc.
Exhibit 10.10 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.11
Sublease Agreement made as of May 11, 2021 by and between Molson Coors Beverage Company and Charlotte’s Web, Inc.
Exhibit 10.11 to Amendment No. 1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.
10.12
First Amendment to Sublease Agreement made as of June 15, 2021 by and between Molson Coors Beverage Company and Charlotte’s Web, Inc.
Exhibit 10.12 to Amendment No. 1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.
10.13
† CWB Holdings, Inc. 2015 Stock Option Plan dated as February 2, 2016.
Exhibit 10.13 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
154
10.13.1
† CWB Holdings, Inc. Amendment No. 1 to 2015 Stock Option Plan (incorporated by reference to).
Exhibit 99.2 to the Registration Statement on Form S-8 (File No. 333-262006) filed with the SEC on January 5, 2022 is incorporated herein by reference.
10.14
† Charlotte's Web Holdings, Inc. 2018 Long-Term Incentive Plan dated August 23, 2018.
Exhibit 10.14 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.15
† Charlotte's Web Holdings, Inc. Amended 2018 Long-Term Incentive Plan dated April 29, 2021.
Exhibit 10.15 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.16
† Form of Restricted Stock Unit Agreement for Employees to the 2018 Long Term Incentive Plan.
Exhibit 10.16 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.16.1
† Form of Restricted Stock Unit Agreement for Employees to the 2018 Long-Term Incentive Plan (2021 amendment)
Exhibit 10.16.1 to Amendment No. 1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.
10.17
† Form of Restricted Stock Unit Agreement for Directors to the 2018 Long Term Incentive Plan.
Exhibit 10.17 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.17.1
† Form of Restricted Stock Unit Agreement for Directors to the 2018 Long Term Incentive Plan (2021 amendment).
Exhibit 10.17.1 to Amendment No. 2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on January 25, 2022 is incorporated herein by reference.
10.18
† Form of Nonqualified Stock Option Award to the 2018 Long-Term Incentive Plan.
Exhibit 10.18 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.18.1
† Form of Nonqualified Stock Option Award to the 2018 Long-Term Incentive Plan (2021 amendment).
Exhibit 10.18.1 to Amendment No. 1 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.
10.19
†+ Offer Letter from Charlotte's Web Holdings, Inc. to Adrienne Elsner dated April 26, 2019.
Exhibit 10.19 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.20
†+ Offer Letter from Charlotte's Web Holdings, Inc. to Russell Hammer dated August 15, 2019.
Exhibit 10.20 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.21
†+ Offer Letter from Charlotte's Web Holdings, Inc. to Tony True dated June 4, 2019.
Exhibit 10.21 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
155
10.22
†+ Amendment to Offer Letter between Charlotte's Web Holdings, Inc. and Adrienne Elsner dated October 2, 2020.
Exhibit 10.22 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.23
†+ Transition Employment Agreement and Release of All Claims with Separation Agreement and Final Release of Claims between Russell Hammer and Charlotte’s Web, Inc., dated June 14, 2021.
Exhibit 10.23 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.24
† Employment Agreement between Wessel Booysen and Charlotte's Web Inc. dated June 14, 2021
Exhibit 10.24 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.25
† Confidentiality Agreement between Adrienne Elsner and Charlotte's Web Inc. dated May 15, 2019.
Exhibit 10.25 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.26
† Confidentiality Agreement between Russell Hammer and Charlotte's Web Inc. dated August 15, 2019.
Exhibit 10.26 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.27
† Confidentiality Agreement between William A. True and Charlotte's Web Inc. dated June 5, 2019.
Exhibit 10.27 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.28
†+ Form of Director’s Service Agreement, with Form of Director’s Indemnification Agreement.
Exhibit 10.28 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.29
†+ Consulting Agreement dated April 16, 2021, by and between Leeland & Sig, LLC d/b/a Stanley Brothers Brand Company, the Stanley Brothers, and Charlotte's Web Inc.
Exhibit 10.29 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.30
†+ Secured Promissory Note between Jesse Stanley and the Master and a Hound Revocable Trust, as borrower, and Charlotte's Web Holdings, Inc., as Lender, dated November 13, 2020.
Exhibit 10.30 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.31
Amended and Restated Underwriting Agreement dated November 25, 2019 between Canaccord Genuity Corp., as Lead Underwriter, Cormark Securities, Inc., Eight Capital, and PI Financial Corp. as Underwriters and Charlotte's Web Holdings, Inc.
Exhibit 10.31 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.32
Underwriting Agreement dated June 16, 2020 between Canaccord Genuity Corp., as Lead Underwriter, and Cormark Securities, Inc., Eight Capital and PI Financial Corp, as Underwriters, and Charlotte's Web Holdings, Inc.
Exhibit 10.32 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
156
10.33
Equity Distribution Agreement dated June 3, 2021.
Exhibit 10.33 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.
10.34
†+ Offer Letter from Charlotte’s Web Holdings, Inc. to Jacques Tortoroli, dated December 16, 2021
Exhibit 10.34 to Amendment No. 2 to the Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on January 25, 2022 is incorporated herein by reference.
10.35
† Off e r Letter and Promotion Letter fro m Char lotte' s Web Holdings, Inc. to An dr é s de Gortari , dated June 28, 2021 and February 3, 2022 , respectively.
Filed herewith
10.36
∔ Amendment to Secured Promissory Note between Jesse Stanley and the Master and a Hound Revocable T rust and Charlotte's Web Holdings, Inc. dated March 22, 2022.
Filed herewith
21.1
Subsidiaries of the Company
Filed herewith
23.1
Consent of Ernst & Young LLP
Filed herewith
31.1
Certification of Periodic Report by Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith
31.2
Certification of Periodic Report by Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith
32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith
32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document Filed herewith
101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) Filed herewith
157
† Indicates a management contract or compensatory plan or arrangement.
∔ Certain identified information has been excluded from the exhibit pursuant to Item 601(a)(6) and/or Item 601(b)(10)(iv) of Regulation S-K.
Item 16. Form 10-K Summary
None.
158
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHARLOTTE'S WEB HOLDINGS, INC.
March 24, 2022 By: /s/ Wessel Booysen
(Date) Wessel Booysen
(Chief Financial and Operating Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signatures Title Date
/s/ Jacques Tortoroli Chief Executive Officer (Principal Executive Officer) March 24, 2022
Jacques Tortoroli
/s/ Wessel Booysen Chief Financial and Operating Officer (Principal Financial Officer) March 24, 2022
Wessel Booysen
/s/ Andrés de Gortari Chief Accounting Officer (Principal Accounting Officer) March 24, 2022
Andrés de Gortari
/s/ John Held Director March 24, 2022
John Held
/s/ Tim Saunders Director March 24, 2022
Tim Saunders
/s/ Jean Birch Director March 24, 2022
Jean Birch
/s/ Susan Vogt Director March 24, 2022
Susan Vogt
159