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Item 9A. Controls and Procedures

2023-03-23 compared with 2022-03-24 · 78 added, 88 removed, 156 unchanged (52% of the section changed)

3 unchanged sentences

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.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to the Company being considered an emerging growth company.

Changes in Internal Control Over Financial Reporting

26 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

Exhibit 3.1 to the Registration Statement on Form 10 (File No.

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.

Notice of Articles

Exhibit 3.2 to the Registration Statement on Form 10 (File No.

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.

∔ S upplemental Warrant Indenture between Charlotte’s Web Holdings, Inc.

, Abacus Health Products, Inc.

, and Odyssey Trust Company dated as of June 11, 2020.

4.1∔ Supplemental Warrant Indenture between Charlotte’s Web Holdings, Inc.

and Abacus Health Products, Inc.

Odyssey Trust Company dated as of June 11, 2020.

Exhibit 4.2 to the Registration Statement on Form 10 (File No.

4 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

Description of Capital Stock

4.3 Description of Securities

Filed herewith.

9 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

10.3∔ Extension and Second Amending Agreement to Name and Likeness and License Agreement, effective as of July 31, 2022, by and between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company, a Colorado limited liability company, Charlotte’s Web, Inc., and Charlotte’s Web Holdings, Inc.

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on August 4, 2022.

10.4∔ Extension and Third Amending Agreement to Name and Likeness and License Agreement, effective as of August 31, 2022, by and between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company, a Colorado limited liability company, Charlotte’s Web, Inc., and Charlotte’s Web Holdings, Inc.

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on September 2, 2022.

10.5∔ Option Purchase Agreement Among Charlotte’s Web Holdings, Inc.

3 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

∔ 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.

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.

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.

10.6 Extension and Fourth Amending Agreement to Name and Likeness and License Agreement, effective as of September 30, 2022, by and between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company, a Colorado limited liability company, Charlotte's Web, Inc., and Charlotte's Web Holdings, Inc.

Exhibit 10.1 to the Current Report on Form 8-K (File No.

000-56364) filed with the SEC on October 4, 2022 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.

28 unchanged sentences

Amendment No.

1 to 2015 Stock Option Plan (incorporated by reference to).

1 to 2015 Stock Option Plan.

Exhibit 99.2 to the Registration Statement on Form S-8 (File No.

8 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

† Form of Restricted Stock Unit Agreement for Employees to the 2018 Long Term Incentive Plan.

10.17† Form of Restricted Stock Award 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.

† Form of Restricted Stock Unit Agreement for Employees to the 2018 Long-Term Incentive Plan (2021 amendment)

Exhibit 10.16.1 to Amendment No.

10.18† Form of Restricted Stock Award 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.

† Form of Restricted Stock Unit Agreement for Directors to the 2018 Long Term Incentive Plan.

10.19† Form of Restricted Stock Award 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.

† Form of Restricted Stock Unit Agreement for Directors to the 2018 Long Term Incentive Plan (2021 amendment).

10.20† Form of Restricted Stock Award Agreement for Directors to the 2018 Long Term Incentive Plan (2021 amendment).

Exhibit 10.17.1 to Amendment No.

8 unchanged sentences

000-56364) filed with the SEC on December 22, 2021 is incorporated herein by reference.

†+ 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.

†+ 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.

†+ 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.

†+ 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.

†+ 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.

† 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.

† 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.

† 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.

† 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.

10.23† Form of Director’s Service Agreement, with Form of Director’s Indemnification Agreement.

4 unchanged sentences

000-56364) filed with the SEC on November 5, 2021 is incorporated herein by reference.

†+ 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.

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.

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.

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.

Brand License and Option Agreement, dated as of January 5, 2023 by and between JMS Brands LLC, and Charlotte’s Web, Inc.

Filed herewith.

10.26†∔ Offer Letter from Charlotte’s Web Holdings, Inc.

to Jacques Tortoroli, dated December 16, 2021

Exhibit 10.34 to Amendment No.

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.

† 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.

10.27†∔ Letter dated as of August 2, 2022 to Jacques Tortoroli re:

Amendment to Offer of Employment with Charlotte’s Web Holdings, Inc.

Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on August 4, 2022.

10.28†∔ Offer Letter from Charlotte’s Web Holdings, Inc.

to Jared Stanley, dated June 1 2022 (and accepted as of June 2, 2022).

Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on June 6, 2022.

10.29++ Manufacturing and Sales License Agreement, effective November 1, 2022 by and among Aphria, Inc.

and Charlotte’s Web, Inc.

Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on November 4, 2022.

++ Subscription Agreement, dated as of October 11, 2022, by and among MLB Advanced Media, L.P.

and Charlotte’s Web Holdings, Inc.

Filed herewith

∔ 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.

10.31++ Promotional Rights Agreement, dated as of October 11, 2022, by and among MLB Advanced Media L.P., on its own behalf and on behalf of Major League Baseball Properties, Inc., the Office of the Commissioner of Baseball, The MLB Network, LLC and the Major League Baseball Clubs and Charlotte’s Web Holdings, Inc.

Filed herewith

++ Subscription Agreement, dated as of November 14, 2022, by and among BT DE Investments, Inc.

and Charlotte’s Web Holdings, Inc.

Exhibit 10.1 to Amendment No.

1 to the Current Report on Form 8-K/A (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on November 14, 2022.

++ Convertible Debenture, dated as of November 14, 2022, by and among BT DE Investments, Inc.

and Charlotte’s Web Holdings, Inc.

Exhibit 10.2 to Amendment No.

1 to the Current Report on Form 8-K/A (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on November 14, 2022.

++ Investor Rights Agreement, dated November 14, 2022, by and between Charlotte’s Web Holdings, Inc.

and BT DE Investments, Inc.

a wholly-owned subsidiary of BAT Group.

Exhibit 10.3 to Amendment No.

1 to the Current Report on Form 8-K/A (File No.

000-56364) filed with the U.S.

Securities and Exchange Commission on November 14, 2022.

21.1 Subsidiaries of the Company

21 unchanged sentences

∔ 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.

++ Exhibits, schedules and annexes have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be supplementally provided to the SEC upon request.

* Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.

Form 10-K Summary

2 unchanged sentences

March 23, 2023 By:

/s/ Wessel Booysen

(Date) Wessel Booysen

(Chief Financial and Operating Officer)

/s/ Jessica Saxton

(Date) Jessica Saxton

(Chief Financial 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.

2 unchanged sentences

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/ Jessica Saxton Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 23, 2023

Jessica Saxton

/s/ John Held Director March 23, 2023

/s/ Tim Saunders Director March 24, 2022

/s/ Jean Birch Director March 24, 2022

/s/ Tom Lardieri Director March 23, 2023

/s/ Alicia Morga Director March 23, 2023

/s/ Susan Vogt Director March 23, 2023

/s/ Jonathan Atwood

Director March 23, 2023

Jonathan Atwood

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures