CWBHF Charlottes Web Holdings Inc (QX)

On April 6, 2023, Charlotte’s Web Holdings, Inc. (the “Company”), issued a press release announcing the formation of a joint venture with AJNA BioSciences PBC (“AJNA”), and a subsidiary of British American Tobacco PLC (LSE: BATS and NYSE: BTI) (“BAT”). BAT holds a 20% equity interest in the joint venture in the form of preferred units following its US$10 million investment and has the right to participate in future equity issuances to maintain its pro rata equity position. The Company and AJNA each hold 40% of the joint venture’s voting common units.

The Company’s contribution to the joint venture is a license permitting the use certain proprietary hemp intellectual properties, including clinical and consumer data and BAT is contributing US$10 million as the JV’s initial investor. AJNA is contributing laboratory and regulatory services, clinical expertise and the provision of clinical services. The joint venture is expected to use the initial US$10 million investment for the clinical development of a novel hemp botanical Investigational New Drug application and to commence Phase I clinical development in 2023.

BT DE Investments, Inc., a wholly-owned subsidiary of BAT, holds approximately $56.8 million (Canadian Dollar C$75.3 million) in convertible debenture convertible into 19.9% ownership of the Company’s Common Shares at a conversion price of C$2.00 per Common Share of the Company. AJNA, a botanical drug development company focused on mental health and neurological disorders, is partially owned and was co-founded by Joel Stanley, AJNA’s president and the former CEO and Chairman of the board of Company, together with certain other founding members of the Company.

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.