Charlotte's Web Holdings, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

**Charlotte's Web Holdings, Inc. filed its 2023 10-K report on March 21, 2024, detailing its fiscal year performance ending December 31, 2023.**

AI Summary

Charlotte's Web Holdings, Inc. (CWBHF) filed a Annual Report (10-K) with the SEC on March 21, 2024. The company reported its 2023 fiscal year results on March 21, 2024. The filing covers the period ending December 31, 2023. Charlotte's Web Holdings, Inc. is incorporated in Delaware. The company's principal business address is in Louisville, Colorado. The filing is a 10-K annual report.

Why It Matters

For investors and stakeholders tracking Charlotte's Web Holdings, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Charlotte's Web Holdings, Inc.'s financial performance, operational activities, and risk factors for the fiscal year 2023, which is crucial for investors to assess the company's current standing and future prospects. The detailed financial statements and disclosures within the 10-K are essential for understanding the company's revenue streams, profitability, debt levels, and overall financial health, enabling informed investment decisions.

Risk Assessment

Risk Level: CWBHF — Charlotte's Web Holdings, Inc. shows moderate risk based on this filing. The company's financial performance and market position are subject to the evolving regulatory landscape for CBD products and intense competition within the industry, as detailed in the risk factors section of the 10-K.

Analyst Insight

Investors should carefully review the detailed financial statements and risk factors in the 10-K filing to understand Charlotte's Web Holdings, Inc.'s performance and potential challenges in the CBD market.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period Of Report)
• 2024-03-21 — Filing Date (Filed As Of Date)
• 10-K — Form Type (Filing Type)
• USD — Currency (Reporting Currency)

Key Players & Entities

• Charlotte's Web Holdings, Inc. (company) — Filer Name
• 2023 (date) — Fiscal Year End
• March 21, 2024 (date) — Filed As Of Date
• December 31, 2023 (date) — Conformed Period Of Report
• Louisville, Colorado (location) — Business Address
• 700 Tech Court (location) — Business Address Street 1
• 0001750155-24-000027 (other) — Accession Number
• CWBHF (company) — Ticker Symbol

FAQ

Risk Factors

• Regulatory Environment [high — regulatory]: The company operates in a rapidly evolving regulatory environment for hemp-derived CBD products, which could impact its business operations and financial results.
• Competition [medium — market]: The market for CBD products is highly competitive, with numerous players and potential new entrants, which could affect the company's market share and profitability.
• Liquidity and Capital Resources [medium — financial]: The company's ability to fund its operations and strategic initiatives depends on its liquidity and access to capital, which could be affected by market conditions and its financial performance.

Industry Context

Charlotte's Web Holdings operates in the agricultural production sector, specifically focusing on hemp-derived products. The industry is characterized by evolving regulations and significant market competition.

Regulatory Implications

The company's operations are subject to the regulatory framework governing hemp-derived CBD products, which can vary by jurisdiction and is subject to change, potentially impacting market access and product compliance.

What Investors Should Do

1. Review the detailed financial statements for revenue, net income, and cash flow.
2. Analyze the risk factors section for potential impacts on future operations.
3. Assess the company's competitive positioning and market strategies.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 2023 fiscal year.
• 2024-03-21: Filing Date — Date the 10-K report was filed with the SEC.

Year-Over-Year Comparison

This filing is the company's annual 10-K report for the fiscal year 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $23 million — , 2027, with an aggregate rights fee of $23 million for the remainder of the term. In Octo
• $56.8 million — ng for the issuance of an approximately $56.8 million ("Canadian Dollar" C$75.3 million) conv
• $75.3 million — ately $56.8 million ("Canadian Dollar" C$75.3 million) convertible debenture (the "debenture"

Filing Documents

• cweb-20231231.htm (10-K) — 1728KB
• ex43.htm (EX-4.3) — 62KB
• ex10181.htm (EX-10.18 1) — 183KB
• ex10281.htm (EX-10.28 1) — 4KB
• ex10321.htm (EX-10.32 1) — 22KB
• ex211.htm (EX-21.1) — 3KB
• ex231.htm (EX-23.1) — 4KB
• ex311.htm (EX-31.1) — 10KB
• ex312.htm (EX-31.2) — 10KB
• ex321.htm (EX-32.1) — 5KB
• ex322.htm (EX-32.2) — 5KB
• ex10281001.jpg (GRAPHIC) — 173KB
• ex10281002.jpg (GRAPHIC) — 102KB
• 0001750155-24-000027.txt ( ) — 9220KB
• cweb-20231231.xsd (EX-101.SCH) — 59KB
• cweb-20231231_cal.xml (EX-101.CAL) — 99KB
• cweb-20231231_def.xml (EX-101.DEF) — 275KB
• cweb-20231231_lab.xml (EX-101.LAB) — 736KB
• cweb-20231231_pre.xml (EX-101.PRE) — 562KB
• cweb-20231231_htm.xml (XML) — 1016KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 26 Item 1B. Unresolved Staff Comments 54

C

Item 1 C . Cyber security 54 Item 2.

Properties

Properties 56 Item 3.

Legal Proceedings

Legal Proceedings 57 Item 4. Mine Safety Disclosures 57 Part II Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases 58 Item 6. [Reserved] 59 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A.

Quantitative and Qualitative Disclosures Account Market Risk

Quantitative and Qualitative Disclosures Account Market Risk 70 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 72 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 104 Item 9A.

Controls and Procedures

Controls and Procedures 104 Item 9B. Other Information 104 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 104 Part III Item 10. Directors, Executive Officers and Corporate Governance 105 Item 11.

Executive Compensation

Executive Compensation 105 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 105 Item 13. Certain Relationships and Related Transactions, and Director Independence 105 Item 14. Principal Accountant Fees and Services 105 Part IV. Item 15. Exhibit and Financial Statement Schedules 106 Item 16. Form 10-K Summary 110

SIGNATURES

SIGNATURES 112 PART I * * * * * * *

Business

Item 1. Business General Charlotte's Web Holdings, Inc., ("Charlotte's Web", the "Company" or "we"), a benefit company under the Business Corporations Act (British Columbia) ("BCBCA"), S.B.C. 2002, c. 57, as amended, including the regulations promulgated thereunder, and a Certified B Corp headquartered in Louisville, Colorado, was incorporated under the BCBCA on May 18, 2018 under the name Stanley Brothers Holdings Inc. On July 12, 2018, the Company changed its name to Charlotte's Web Holdings, Inc. On August 29, 2018, the Company filed articles of amendment to amend its share capital in connection with its initial public offering to authorize the issuance of common shares ("Common Shares"), preferred shares and proportionate voting shares ("Proportionate Voting Shares") of the Company. On November 3, 2021, all outstanding Proportionate Voting Shares of the Company were converted by way of mandatory conversion in accordance with the Company's Articles and at the discretion of the Company, into Common Shares. Pursuant to the Company's Articles, the Company is no longer authorized to issue additional Proportionate Voting Shares. The Company's Common Shares are listed on the Toronto Stock Exchange ("TSX") under the symbol, "CWEB". The Company's Common Shares are also quoted on the over-the-counter stock market, the OTCQX, in the United States under the symbol, "CWBHF". The Company is a market leader in the United States in innovative hemp extract wellness products under a family of brands which includes Charlotte's Web, ReCreate(TM), CBD Medic, and CBD Clinic. Charlotte's Web branded premium quality products start with proprietary hemp genetics that are 100% North American farm grown and manufactured into hemp extracts containing naturally occurring phytocannabinoids including cannabidiol ("CBD"), cannabichromene ("CBC"), cannabigerol ("CBG"), cannabinol ("CBN"), terpenes, flavonoids and other beneficial hemp compounds. The Company operates from its cGMP (current go

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