BAT lifts stake to ~40% in Charlotte’s Web (CWBHF) via US$75M recap
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Charlotte’s Web Holdings, Inc. entered into a major recapitalization transaction with BT DE Investments, Inc. (BAT) that will convert BAT’s C$75.3 million convertible debenture plus accrued interest into common shares and add a new US$10 million equity investment via private placement.
Together these steps will issue up to about 110 million new shares, eliminate approximately US$65 million of debt, stop future interest accrual and, if approved, leave the company with no long‑term debt and a simplified capital structure. After closing, BAT is expected to own about 40% of Charlotte’s Web’s common shares, and the company plans to use the new capital to support near‑term operating priorities, including anticipated participation in the CMMI Medicare pilot program.
Positive
- Elimination of major debt load: Converting approximately C$89.6 million (about US$65 million) of debenture principal and accrued interest into equity removes the company’s largest liability and stops roughly US$3 million per year of interest expense.
- New equity capital to fund strategy: A concurrent US$10 million private placement from BAT provides liquidity to support participation in the anticipated CMMI Medicare pilot program and other near‑term operating priorities.
- Simplified balance sheet with no long‑term debt: Upon completion, Charlotte’s Web expects to operate with no long‑term debt and a more straightforward equity structure, which can enhance financial flexibility.
Negative
- Significant shareholder dilution: Issuing up to approximately 110 million new common shares to BAT will increase total shares to about 270 million, materially diluting existing shareholders’ ownership percentages.
- Increased ownership concentration: BAT’s stake is expected to rise to roughly 40% of outstanding common shares, giving it substantial influence and director nomination rights, which may concern some minority shareholders.
Insights
Large debt-for-equity swap plus new capital strengthens the balance sheet but significantly dilutes existing holders.
The transaction converts BAT’s C$75.3 million convertible debenture plus C$14.2 million of accrued interest into common shares at C$0.94, and adds a US$10M private placement. This removes roughly US$65M of debt and future interest, while injecting fresh cash.
Post‑closing, BAT would hold about 110 million shares, or roughly 40% of the company, with rights to nominate directors in line with ownership. Existing shareholders face substantial dilution and greater ownership concentration, though the company highlights improved liquidity and readiness for the CMMI Medicare pilot program and other strategic initiatives.
8-K Event Classification
Item 8.01 — Other Events
1 item
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Key Figures
Convertible debenture principal: C$75.3 million
Accrued interest converted: C$14.2 million
Total debenture amount converted: C$89.6 million (~US$65M)
+5 more
8 metrics
Convertible debenture principal
C$75.3 million
Outstanding BAT debenture before conversion
Accrued interest converted
C$14.2 million
Interest at 5.0% per annum through conversion date
Total debenture amount converted
C$89.6 million (~US$65M)
Principal plus accrued interest to be converted into shares
New equity investment
US$10 million
Concurrent non-brokered private placement by BAT
New shares to BAT from conversion
Up to 95,281,277 shares
Issued at C$0.94 per share on debenture conversion
Additional placement shares
Up to 14,760,638 shares
Shares issued in US$10M private placement
Post-transaction BAT ownership
≈40–40.8% of shares
Approximate stake after receiving about 110M shares
Interest savings to maturity
≈US$12 million
Future interest avoided from June 2026 to November 2029
Key Terms
convertible debenture, private placement, CMMI Medicare pilot program, Phase 2 clinical trial, +2 more
6 terms
convertible debenture financial
"conversion of BAT’s outstanding C$75.3 million principal amount ... of the convertible debenture"
A convertible debenture is a long-term loan a company issues that pays interest like a bond but can be turned into a set number of the company’s shares under pre-agreed terms. For investors it matters because it mixes safety and upside: you get regular interest and higher repayment priority like a lender, yet you also hold an option to become a shareholder if the stock rises, which can dilute existing owners and change risk and return profiles.
private placement financial
"a concurrent additional equity investment by BAT of US$10 million by way of a private placement"
A private placement is a way for companies to raise money by selling securities directly to a small group of investors instead of through a public offering. This process is often quicker and less regulated, making it similar to offering a special, exclusive investment opportunity to select individuals or institutions. For investors, it can provide access to unique investment options that are not available on public markets.
CMMI Medicare pilot program medical
"preparing for anticipated participation in the Centers for Medicare & Medicaid Innovation (CMMI) Medicare pilot program"
Phase 2 clinical trial medical
"DeFloria continues to advance its FDA Phase 2 clinical trial program led by Ajna BioSciences"
A phase 2 clinical trial is a research study that tests a new medical treatment or drug to see if it is effective and safe for a specific condition. It involves a larger group of people than earlier trials and helps determine whether the treatment should move forward to more extensive testing. For investors, successful phase 2 results can signal potential for future approval and commercial success, while setbacks may indicate challenges ahead.
Investor Rights Agreement financial
"will enter into an amended and restated investor rights agreement (the “A&R Investor Rights Agreement”)"
A legally binding contract between a company and its investors that spells out investors’ core protections and privileges—such as voting rights, how and when shares can be sold, information access, and steps for resolving disputes. Think of it like a rulebook or homeowner association agreement for ownership: it clarifies who gets a say, how value can be realized, and what protections exist if things go wrong, making investment risks and expectations clearer for shareholders.
early warning report regulatory
"An early warning report will be electronically filed with the applicable securities commission"
An early warning report is a regulatory filing that publicly discloses when an investor or insider has taken a large or potentially influential position in a company's shares or plans significant actions with those shares. It matters to investors because it flags possible shifts in control, takeover attempts, or concentrated influence—like a neighborhood notice that someone is buying several houses on the block—helping readers reassess risk, valuation, and trading strategy.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2026
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of Principal Executive Offices) | (Zip Code) | ||||
Registrant’s Telephone Number, Including Area Code: (720) 617-7303
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||||||
| N/A | N/A | N/A | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Matters..
On March 30, 2026, Charlotte’s Web Holdings, Inc. (the “Company”) issued a press release announcing the entry into a transaction with BT DE Investments, Inc. (“BAT”), a subsidiary of British American Tobacco plc (LSE: BATS and NYSE: BTI). A copy of the press release is attached hereto and incorporated herein by reference as Exhibit 99.1.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company will file with the U.S. Securities and Exchange Commission (the "SEC") a preliminary proxy statement and a definitive proxy statement, each on Schedule 14A and may file other documents with the SEC regarding the proposed transaction. This release is not a substitute for the proxy statement or any other document that the Company may file with the SEC. INVESTORS IN, AND SECURITY HOLDERS OF, THE COMPANY ARE URGED TO READ, WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT, THE DEFINITIVE PROXY STATEMENT AND DOCUMENTS INCORPORATED BY REFERENCE THEREIN AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CHARLOTTE’S WEB AND THE PROPOSED TRANSACTION AND RELATED MATTERS. When available, the definitive proxy statement and other relevant materials for the proposed transaction will be mailed or otherwise made available to stockholders of the Company as of April 6, 2026. Investors and security holders may obtain free copies of the proxy statement (when available) and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov or by contacting the Company at 700 Tech Court, Louisville, CO 80027 or by telephone at (720) 484-8930.
Participants in the Solicitation
The Company and its directors and executive officers, and other members of management and employees, may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction under the rules of the SEC. Information regarding the persons who may be deemed participants in the solicitation of proxies in connection with the proposed transaction will be set forth in the proxy statement when it is filed with the SEC. You can find more information about the Company's directors and executive officers in its Annual Report for the year ended December 31, 2024, on Form 10-K filed with the SEC on March 19, 2025 and the Company's Definitive Annual Meeting Proxy Statement filed with the SEC on April 29, 2025. You may obtain a free copy of these documents as indicated above.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Exhibit No. | Description | |||||||
99.1 | Press Release dated March 30, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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. | |||||||||||
| Date: March 30, 2026 | By: | /s/ Erika Lind | |||||||||
| Erika Lind | |||||||||||
| Chief Financial Officer and Corporate Secretary | |||||||||||
FOR IMMEDIATE RELEASE
Charlotte's Web Announces Transaction with BAT: Debenture Conversion and US$10M Equity Investment to Strengthen Balance Sheet
Transaction Addresses Capital Structure and Supports Near-Term Operating Priorities, Including Anticipated CMMI Medicare Pilot Program Participation
Louisville, Colo – March 30, 2026 – (TSX: CWEB) (OTCQB: CWBHF) Charlotte’s Web Holdings, Inc., a botanical wellness innovation company and the market leader in cannabidiol (“CBD”) hemp extract wellness products, today announced a transaction with BT DE Investments, Inc. (“BAT”), a subsidiary of British American Tobacco plc (LSE: BATS and NYSE: BTI), comprising two components: (i) amendment and conversion of BAT’s outstanding C$75.3 million principal amount (approximately US$54 million) of the convertible debenture, as well as all accrued interest, into common shares of Charlotte’s Web at a conversion price of C$0.94 (approximately US$0.67 at the Bank of Canada exchange rate on March 27, 2026 for estimation purposes); and (ii) a concurrent additional equity investment by BAT of US$10 million by way of a private placement at a price (the “Subscription Price”) equal to the greater of (a) C$0.94, or (b) a dollar amount equal to the maximum discount available pursuant to section 607 of the TSX Company Manual applied to the 5-day volume weighted average price of the Company’s common shares on the TSX prior to the closing date (collectively, the “Transaction”). Together, the Transaction results in the issuance of approximately 110 million common shares of Charlotte’s Web to BAT and represents a total equity commitment of approximately US$75 million.
Upon completion of the Transaction, approximately US$65 million of total debt will be eliminated from the Company’s balance sheet, interest on the debenture will stop accruing, and liquidity will increase for near-term operations. Charlotte’s Web would operate with no long-term debt and with a simplified equity structure.
The Company is preparing for anticipated participation in the Centers for Medicare & Medicaid Innovation (CMMI) Medicare pilot program. In parallel, DeFloria continues to advance its FDA Phase 2 clinical trial program led by Ajna BioSciences. These initiatives require internal investment to optimize execution.
“In addition to this being an important balance sheet event, it also reflects support for Charlotte’s Web and its strategic direction,” said Bill Morachnick, Chief Executive Officer of Charlotte’s Web. “BAT’s decision to convert its debenture to equity and invest additional capital removes our largest remaining liability and strengthens our shareholders’ equity. The additional US$10 million in new capital reinforces our financial position and provides greater flexibility to participate in the upcoming CMMI Medicare pilot program, subject to receipt of all regulatory approvals. We look forward to seeking shareholder approval to complete this Transaction.”
“Removing the debenture simplifies our capital structure and avoids approximately US$12 million in future interest, in addition to repayment of the principal,” Erika Lind, Chief Financial Officer, stated. “We have worked aggressively over the last two years to reduce and optimize our cost structure. With these changes to our balance sheet and new infusion of capital, we are better positioned to fund near-term priorities.”
Transaction Rationale
The Board of Directors evaluated the Transaction in the context of the Company’s current financial position, capital structure, and strategic priorities.
Subsequent trading levels have rendered voluntary conversion at the original conversion price unlikely in the near term, which risks leaving a US$67 million liability on the balance sheet and the resulting impact on shareholders’ equity value. In the interim, the debenture continues to accrue interest at 5.0% per annum, amounting to approximately US$3 million annually to the Company and up to approximately US$12 million in aggregate interest from June 2026 to the November 2029 debenture maturity date. The Company believes a conversion at C$0.94 is consistent with current market values, and successfully eliminates the Company’s largest outstanding liability, removes ongoing interest obligations, and strengthens the balance sheet. Moreover, BAT’s concurrent equity investment provides immediate liquidity to support long-term strategic execution. This investment further reinforces the Company’s strategic plans to expand its existing medical channel and participate in the CMMI program, subject to regulatory approvals, and underscores BAT’s continued support of Charlotte’s Web’s strategy and leadership.
Charlotte’s Web shareholders will be asked to approve the Transaction at the annual general and special meeting of the shareholders to be held on or about May 28, 2026. The Company plans to deliver an information circular and proxy statement in connection with the Meeting and will provide additional updates with respect to the Transaction at that time.
Transaction Overview
Conversion of Outstanding Debenture
Subject to shareholder and regulatory approvals, the convertible debenture issued by Charlotte’s Web to BAT on November 14, 2022, in the original amount of C$75,341,080 (approximately US$54 million), with an original maturity date of November 14, 2029, will be converted in full into common shares of Charlotte’s Web at the Subscription Price. The converted amount will include the full principal of C$75,341,080 together with C$14,223,321 (approximately US$10 million) in accrued interest at 5.0% per annum from the original issuance date of November 14, 2022 through the conversion date, for a total converted amount of C$89,564,401 (approximately US$65 million), resulting in the issuance of up to 95,281,277 common shares to BAT. All accrued and unpaid interest will be settled through the issuance of common shares at the Subscription Price.
US$10 Million Concurrent Private Placement
Concurrently with the debenture conversion, BAT will subscribe for an additional non-brokered private placement of up to 14,760,638 common shares of Charlotte’s Web at the Subscription Price, for gross proceeds of US$10 million (approximately C$13.9 million). The net proceeds of the cash will be used to support the Company’s participation in the anticipated CMMI Medicare pilot program and other permitted purposes if the CMMI program does not proceed.
Combined Transaction Summary
In aggregate, the Transaction results in the issuance of up to approximately 110 million common shares to BAT at the Subscription Price, representing a total equity commitment of approximately C$103.4 million (approximately US$75 million). Following completion, BAT will hold up to approximately 110 million common shares of Charlotte’s Web, representing approximately 40% of the Company’s then-issued and outstanding common shares on a non-diluted basis, based on 159,683,953 shares currently outstanding and expected to be issued prior to the closing of the Transaction, and up to approximately 270 million shares outstanding immediately following the Transaction.
The C$0.94 per share price represents a discount of approximately 5% to the 5-day volume-weighted average price of the Company’s common shares on the TSX as of March 27, 2026, for estimation purposes.
Investor Rights Agreement
On closing of the Transaction, the Company and BAT will enter into an amended and restated investor rights agreement (the “A&R Investor Rights Agreement”), amending and restating the investor rights agreement entered into on November 14, 2022, in connection with the original debenture agreement. The A&R Investor Rights Agreement will provide, among other things, (i) that BAT will have the right to nominate directors in line with its pro rata equity ownership (provided BAT will in any case have the right to nominate at least two directors) for so long as they hold at least 10% of the Company’s equity, (ii) for certain restrictions on equity issuances and indebtedness, and (iii) for certain changes to BAT’s existing customary top-up rights. Neither the A&R Investor Rights Agreement nor BAT’s director nomination rights confer on BAT or any BAT‑nominated director any right to direct or control the management or day‑to‑day operations of the Company, which will continue to be managed by its board and executive management in the ordinary course.
Shareholder Approval and Special Meeting
Completion of the Transaction is subject to, among other conditions, TSX approval and shareholder approval. Charlotte’s Web shareholders will be asked to approve the Transaction at an annual general and special meeting of the shareholders to be held on or about May 28, 2026.
Subject to the receipt of shareholder and TSX approval, the Transaction is expected to close on or about May 28, 2026.
Additional Information and Where to Find It
In connection with the Transaction, Charlotte’s Web will file with the SEC a preliminary proxy statement and a definitive proxy statement, each on Schedule 14A and may file other documents with the SEC regarding the Transaction. This release is not a substitute for the proxy statement or any other document that Charlotte’s Web may file with the SEC. INVESTORS IN, AND SECURITY HOLDERS OF, CHARLOTTE’S WEB ARE URGED TO READ, WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT, THE DEFINITIVE PROXY STATEMENT AND DOCUMENTS INCORPORATED BY REFERENCE THEREIN AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CHARLOTTE’S WEB AND THE PROPOSED TRANSACTION AND RELATED MATTERS. When available, the definitive proxy statement and other relevant materials for the Transaction will be mailed or otherwise made available to stockholders of Charlotte’s Web as of April 6, 2026. Investors and security holders may obtain free copies of the proxy statement (when available) and other documents filed with the SEC by Charlotte’s Web through the website maintained by the SEC at www.sec.gov or by contacting Charlotte’s Web at 700 Tech Court, Louisville, CO 80027 or by telephone at (720) 484-8930.
Participants in the Solicitation
Charlotte’s Web and its directors and executive officers, and other members of management and employees, may be deemed to be participants in the solicitation of proxies in connection with the Transaction under the rules of the SEC. Information regarding the persons who may be deemed participants in the solicitation of proxies in connection with the Transaction will be set forth in the proxy statement when it is filed with the SEC. You can find more information about Charlotte’s Web’s directors and executive officers in its Annual Report for the year ended December 31, 2025, on Form 10-K filed with the SEC on [March 31, 2026] and Charlotte’s Web’s Definitive Annual Meeting Proxy Statement filed with the SEC on April 29, 2025. You may obtain a free copy of these documents as indicated above.
Required Early Warning Disclosure
Immediately prior to completion of the Transaction, assuming the Convertible Debenture had been converted in full (including all accrued but unpaid interest thereon as of the date hereof) at C$2.00, BAT had the right to acquire beneficial ownership of up to 44,782,800 common shares, subject to a cap of 19.9% of the issued and outstanding common shares (calculated on a non-diluted basis)..
Immediately after the Transaction, BAT will have beneficial ownership of up to approximately 110 million common shares, representing approximately 40.8% of the issued and outstanding common shares (calculated on a non-diluted basis) based on 269,725,868 common shares that are expected to be issued and outstanding on completion of the Transaction..
BAT undertook the Transaction as part of a strategic investment in Charlotte’s Web. BAT intends to review its investment in the Company on a continuing basis and may, subject to the terms of the A&R Investor Rights Agreement, depending upon a number of factors, including market and other
conditions, increase or decrease its beneficial ownership, control, direction or economic exposure over securities of the Company.
An early warning report will be electronically filed with the applicable securities commission in each jurisdiction where the Company is reporting and will be available under the Company’s profile on SEDAR+ at www.sedarplus.ca. For further information or to obtain a copy of the early warning report, please contact the Company’s representative at the end of this press release.
The Company is a corporation existing under the laws of the province of British Columbia with its head office located at 700 Tech Court, Louisville, Colorado 80027, USA. BAT is a corporation existing under the laws of the state of Delaware with its head office located at 401 North Main Street, Winston-Salem, North Carolina 27010, USA.
No Offer or Solicitation
This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Transaction. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
About Charlotte’s Web Holdings, Inc.
Charlotte’s Web Holdings, Inc., a Certified B Corporation headquartered in Louisville, Colorado, is a botanical wellness innovation company and market leader in hemp extract wellness. The Company’s product categories include CBD oil tinctures (liquid products), CBD gummies (sleep, calming, exercise recovery), CBN gummies, CBG gummies, hemp-derived THC microdose gummies, functional mushroom gummies, CBD capsules, CBD topical creams and lotions, as well as CBD pet products for dogs. Through its substantially vertically integrated business model, Charlotte’s Web maintains stringent control over product quality and consistency with analytic testing for quality assurance. Charlotte’s Web products are distributed to retailers and healthcare practitioners throughout the U.S.A. and are available online at www.charlottesweb.com.
Forward-Looking Information
Certain information provided herein constitutes forward-looking statements or information (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements are typically identified by words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “project,” “estimate,” “forecast,” “plan,” “intend,” “target,” “believe” and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. Specifically, this press release contains forward-looking statements relating to, but not limited to: completion of the Transaction with BAT, including obtaining the necessary TSX approval and shareholder approval of the Transaction; benefits to the Company of completing the Transaction with BAT; use of proceeds of the Transaction; timing of completion of the Transaction; the Company’s participation in the CMMI pilot program; financial impacts to the Company of completing the Transaction; and scheduled timing of the annual general and special meeting of shareholders.
By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. The forward-looking statements contained in this press release are based on certain assumptions and analysis by management of the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors that management believes are appropriate and reasonable. The material factors and assumptions used to develop the forward-looking statements herein include, but are not limited to: the receipt of TSX approval and
shareholder approval at the special meeting and the satisfaction of all other conditions to completion of the Transaction; the anticipated timing of the special meeting and Transaction closing; the anticipated impact of the debenture conversion and private placement on the Company’s balance sheet, shareholders’ equity, and financial position; the intended use of private placement proceeds; expectations around hemp wellness distribution through the CMMI Medicare pilot program; the progress and potential outcomes of DeFloria’s Phase 2 clinical trials for AJA001; anticipated cost reductions and their impact on the Company’s improving cash flow outlook; regulatory regime changes and federal hemp policy developments; anticipated product development and sales; the success of sales and marketing activities; availability of adequate liquidity and capital to support operations and business plans; and expectations around consumer product demand. In addition, the forward-looking statements are subject to risks and uncertainties pertaining to, among other things: the risk that the Transaction does not receive required shareholder or regulatory approvals or that closing conditions are not satisfied; supply and distribution chains; the market for the Company’s products; revenue fluctuations; regulatory changes; loss of customers and retail partners; retention and availability of talent; competing products; share price volatility; loss of proprietary information; product acceptance; internet and system infrastructure functionality; information technology security; available capital to fund operations and business plans; crop risk; economic and political considerations; and including but not limited to those risks and uncertainties discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ending December 31, 2024, and other risk factors contained in other filings with the Securities and Exchange Commission available at http://www.sec.gov and filings with Canadian securities regulatory authorities available at www.sedarplus.ca. The impact of any one risk, uncertainty, or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent, and the Company’s future course of action depends on management’s assessment of all information available at the relevant time.
Any forward-looking statement in this press release is based only on information currently available to the Company and speaks only as of the date on which it is made. Except as required by applicable law, the Company assumes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. All forward-looking statements, whether written or oral, attributable to the Company or persons acting on the Company’s behalf, are expressly qualified in their entirety by these cautionary statements.
Charlotte’s Web Shareholder Contact:
Cory Pala
Director of Investor Relations
(720) 484-8930
Cory.Pala@CharlottesWeb.com
FAQ
What is the BAT transaction announced by Charlotte’s Web (CWBHF)?
Charlotte’s Web agreed a two‑part deal with BAT: conversion of BAT’s C$75.3 million convertible debenture plus accrued interest into shares, and a new US$10 million private placement. Together, this issues about 110 million shares, removes roughly US$65 million of debt, and adds fresh capital.
How will the BAT transaction affect Charlotte’s Web’s balance sheet?
The transaction converts approximately C$89.6 million (about US$65 million) of debenture principal and interest into equity and adds US$10 million in new cash. Management states this will eliminate long‑term debt, stop interest accrual on the debenture, and strengthen liquidity for near‑term operations.
How much of Charlotte’s Web will BAT own after the transaction?
After completion, BAT is expected to beneficially own up to about 110 million common shares, or roughly 40% of Charlotte’s Web on a non‑diluted basis. Total shares outstanding are expected to rise to approximately 269.7 million following completion of the deal.
What are the terms of the debenture conversion with BAT?
BAT’s convertible debenture of C$75.34 million, plus about C$14.22 million in accrued interest at 5% per year, will convert into common shares at C$0.94 per share. This totals roughly C$89.56 million, resulting in issuance of up to 95,281,277 new common shares upon conversion, subject to approvals.
What are the terms of BAT’s US$10 million equity investment in Charlotte’s Web?
BAT will invest US$10 million through a non‑brokered private placement of up to 14,760,638 common shares. The subscription price will be the greater of C$0.94 or the maximum‑discount price allowed under TSX rules based on the 5‑day volume‑weighted average trading price before closing.
How does this transaction support Charlotte’s Web’s CMMI Medicare pilot program plans?
Management states that the debt conversion and US$10 million cash infusion will increase liquidity and financial flexibility. They specifically highlight using proceeds to support anticipated participation in the CMMI Medicare pilot program and related strategic initiatives, subject to required regulatory approvals.
What approvals are required for the Charlotte’s Web and BAT transaction to close?
Completion of the transaction requires Toronto Stock Exchange approval and shareholder approval at Charlotte’s Web’s annual general and special meeting, expected on or about May 28, 2026. Closing is expected on or about the same date, assuming all conditions and approvals are satisfied.