DEF: Charlotte's Web Holdings Sets Date for 2025 Annual General Meeting, Outlines Key Proposals

Charlotte's Web Holdings will hold its annual general meeting virtually on June 12, 2025, to vote on director elections, auditor appointments, and other business matters.

Summary

• Charlotte's Web Holdings, Inc. will hold its annual general meeting virtually on June 12, 2025, at 10:00 a.m. (Mountain Time).
• Shareholders will vote on setting the number of directors at six, electing directors, and appointing PKF O'Connor Davies LLP as auditors.
• The board recommends voting for all proposed resolutions.
• The record date for determining shareholders eligible to vote is April 15, 2025.
• Proxy materials are available online and were first made available to shareholders on or about April 30, 2025.
• The company is using notice-and-access to deliver proxy materials, reducing printing and mailing costs.
• Shareholders can vote online, by phone, or by mail, with a deadline of 11:59 p.m. (Eastern Time) on June 11, 2025.
• The meeting will be held entirely online, allowing for greater participation.
• The company is an emerging growth company and is permitted to conform with certain reduced public company reporting requirements.
• The company's annual burn rate for the LTIP was 1.94% for fiscal year 2024.
• As of April 15, 2025, the Share Pool is 14,791,212.
• As of April 15, 2025, the number of Common Shares remaining available for issuance pursuant to new Grants under the LTIP is 6,646,885 Common Shares.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral to slightly positive tone due to the company's commitment to responsible and sustainable business practices.

Positives

• The company is using notice-and-access to deliver proxy materials, reducing printing and mailing costs and is environmentally friendly.
• The meeting will be held entirely online, allowing for greater participation.
• The company has implemented a formal recoupment or clawback policy on the incentive compensation of its executive officers.
• The company is committed to effective practices in corporate governance.
• The company is committed to promoting health and well-being through botanical-based products grown sustainably and in harmony with nature.

Negatives

• The company is an emerging growth company and is permitted to conform with certain reduced public company reporting requirements.
• The company's annual burn rate for the LTIP was 1.94% for fiscal year 2024.

Risks

• Conflicts of interest may arise as a result of the directors, officers and promoters of the Company also holding positions as directors or officers of other companies.
• Conflicts of interests may arise in respect of Jared Stanley's ownership interests in persons that the Company has, or may in the future, do business with, including, but not limited to, DeFloria, Inc., AJNA LLC and Stanley Brothers USA.
• The conversion of the debenture in whole in accordance with its terms could result in a change of control of the Company.

Future Outlook

The company aims to unearth the science of nature and revolutionize wellness, guided by principles of discovery, bridging nature and science, catalyzing a movement, and making wellbeing within reach.

Management Comments

• At Charlotte's Web, our mission has always been rooted in a deep reverence for nature's boundless potential.
• From our humble beginnings as a family endeavor, we have grown into a company driven by a commitment to unlocking the power of botanicals for wellness.
• Today, our mission has evolved: to unearth the science of nature and revolutionize wellness.
• We are guided by a set of principles that serve as our compass in this journey: The Spirit of Discovery, Bridging Nature and Science, Catalyzing a Movement, Wellbeing within Reach.
• At the forefront of all we do is a commitment to creating industry-leading standards for product quality, safety, and consistency.
• We believe our extracts harness powerful botanical benefits, and we serve as nature's humble stewards, ensuring that these gifts are delivered with the utmost care and respect.

Industry Context

This announcement is typical for publicly traded companies, providing shareholders with necessary information and voting opportunities related to the company's governance and operations.

Comparison to Industry Standards

• The company's approach to corporate governance aligns with standard practices for publicly traded companies in Canada and the United States.
• The use of notice-and-access for proxy materials is a common practice to reduce costs and environmental impact, similar to strategies employed by other companies like Canopy Growth Corporation and Aurora Cannabis.
• The composition of the board and its committees, including the presence of independent directors, reflects corporate governance standards comparable to those of Cronos Group and Tilray.
• The company's compensation policies and clawback provisions are in line with industry norms aimed at aligning executive incentives with shareholder value, similar to practices at GW Pharmaceuticals before its acquisition.

Related Party Transactions

• Effective November 13, 2020, the Company entered into a secured promissory note with Jesse Stanley and Master and A Hound Irrevocable Trust, as borrowers, where $1,000,000 was loaned to Jesse Stanley, one of the Company's founders.
• On March 2, 2021, the Company entered into the option purchase agreement (the SBH Purchase Option) with Stanley Brothers USA Holdings, Inc. (Stanley Brothers USA), a Delaware corporation whose majority shareholders are certain founders of the Company or entities controlled by such founders or their affiliates.
• Effective January 5, 2023, the Company entered into a Brand License and Option Agreement with JMS Brands LLC, an entity owned by Jesse Stanley, one of the Company's founders.
• On April 6, 2023, the Company announced the formation of an entity, DeFloria, Inc. (DeFloria), with AJNA BioSciences PBC (AJNA), and a subsidiary of British American Tobacco PLC (LSE: BATS and NYSE: BTI) (BAT).
• Effective February 12, 2024, the Company and DeFloria entered into a Master Services Agreement (Services Agreement) pursuant to which the Company is compensated for the provision of certain services to DeFloria.
• On June 21, 2024, the Company entered into a consulting agreement with Jared Stanley.

Stakeholder Impact

• Shareholders are provided with information and voting rights regarding key company decisions.
• Employees are subject to the company's Code of Ethics and Insider Trading and Reporting Policy.
• The company's commitment to responsible and sustainable practices impacts the environment and communities in which it operates.
• The company's compensation policies aim to align executive incentives with shareholder value.

Next Steps

• Shareholders to review proxy materials and vote on proposed resolutions.
• Company to hold annual general meeting on June 12, 2025.
• Company to continue implementing corporate governance and compensation policies.
• Company to continue assessing and reporting on its performance as a benefit company.

Key Dates

Keywords

annual general meeting, proxy statement, directors, auditors, shareholders, voting, compensation, corporate governance, PKF O'Connor Davies, emerging growth company, LTIP, B Corp