CHARLOTTE’S WEB HOLDINGS, INC. : Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits (Form 8-K)

Item 1.01. Conclusion of a significant definitive agreement.

Effective from November 1, 2022, Charlotte’s Web Holdings, Inc. (the “Company”) has entered into a manufacturing and sales license agreement (the “Agreement”) with Aphria, Inc., a Ontario corporation, a subsidiary of Tilray Brands, Inc. (“Tilray”), under which the parties have entered into a strategic alliance whereby Tilray will have the rights to license, manufacture, quality, market and distribute the products of Charlotte’s WebTM CBD Hemp Extract in
Canada. Pursuant to the agreement, Tilray has the exclusive rights to sell and distribute Charlotte’s WebTM CBD hemp extract products in all channels, including medical, adult and pharmacy (where permitted) where such products may be legally sold and distributed in Canada. In addition, Tilray will have the first exclusive right to market the Company’s new products.
Canada. If Tilray does not exercise this right within 30 days of notification by the Company of the proposed introduction of the product, the Company shall have the right to seek another distributor for the introduction of this product in Canada. Under the agreement, Tilray’s responsibilities include sourcing raw materials, manufacturing the company’s products, and packaging and labeling the company’s products, all in accordance with applicable laws, quality standards and company specifications.

In consideration for the agreement, Tilray has agreed to spend in each calendar year during the term of the agreement (other than 2022) a minimum of five percent (5%) of net sales per year on advertising, marketing of retail, direct-to-consumer advertising, and similar third-party marketing expenses for the Company’s products. In addition, Tilray will spend an additional sum $250,000
(in Canadian dollars) on marketing in the first contract year following 2022 to launch the Company’s brand in the Canadian market. Tilray will also pay the Company a monthly royalty of 10% of all net sales revenue received by Tilray from sales to third-party entities during the previous month.

The agreement expires on October 31, 2026, unless terminated earlier by either party in accordance with the terms of the Agreement. The Contract may also be terminated for convenience by either party subject to 6 months’ notice given on or after October 31, 2024.

Other than the Agreement, there is no other agreement or relationship between the Company and Tilray.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is included as Schedule 10.1 to this current Report on Form 8-K.

Forward-Looking Statements

Certain statements contained in this current report on Form 8-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. In some, but not necessarily all, cases, forward-looking statements can be identified by the use of forward-looking terms such as “plans”, “target”, “expects” or “does not expect”. , “is planned”, “an opportunity exists”, ??” is positioned”, “believes”, “intends”, “presumes”, “anticipates” or “does not anticipate” or “believes”, or variations of these words and expressions or state that certain actions, events or results “could”, “could”, “will”, “could”, “will” or “will be”, “will occur” or “will be achieved”. projections or other characterizations of future events or circumstances contains forward-looking statements.The forward-looking statements contained in this Current Report on Form 8-K include expectations regarding the consideration payable to the Company by Tilray under the OK.

Forward-looking statements are not historical facts, but rather represent management’s current expectations, estimates and projections regarding the future of the company’s business, future plans, strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates which, although believed to be reasonable by the Company as of the date of this current report on Form 8-K, are subject to known risks. and unknowns, uncertainties, assumptions and other factors that may cause actual results, level of activity, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results and financial condition to differ materially from those set forth in the forward-looking statements include, among others, the factors discussed in the “Risk Factors” section of the Company’s most recent annual report filed on Form 10-K. and quarterly report on Form 10-Q and other documents filed with the Security and Exchange Commission available at and the Company’s most recently filed Annual Information Form available at Except as required by applicable securities laws, the Company undertakes no obligation to publicly update any forward-looking statements, written or oral, which may be made from time to time, whether as a result of new information, future developments or otherwise.

 Item 8.01. Other Events.

On November 2, 2022the company issued a joint press release with Tilray announcing their strategic alliance for the licensing, manufacturing, quality, marketing and distribution of Charlotte’s WebTM CBD hemp extract products in
Canada. 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.

Section 9.01. Financial statements and supporting documents.

    (d)      Exhibits:

   No.      Description

  10.1  †     Manufacturing and Sales License Agreement, effective November 1, 2022 by
            and among Aphria, Inc. and Charlotte's Web, Inc.
  99.1        Joint Press Release of Charlotte's Web Holdings, Inc. and Tilray Brands,
            Inc. dated as of November 2, 2022.
104         Cover Page Interactive Data File (embedded within the Inline XBRL document
†           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.

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