Replies to post #21065 on Charlotte's Web Holdings Inc (CWBHF)

[Wolf-man jack]

THE TWO STANLEY BROTHERS ARE NOW FOCUSING ON THEIR NEW PRIVATE DELAWARE COMPANY AJNA BIOSCIENCES INC. AND APPARENTLY NOT ON THE STANLEY BROTHERS USA HOLDING CORPORATION. IMO

FEBRUARY 3, 2023 UPDATE


https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171087371

WISE WQLF SAYS; Of course they are stereotyping them selves as Incubators. This way they can utilize and exploit the fruits of the CW Labs University of Buffalo past project and now the Littleton, Colorado labs both funded and owned by Charlotte’s Web, and other resources, wherein, the CW investors will foot the bill YQU understand. The agreement between the Leeland & Sig LLC and Charlotte’s Web was amended on April 16, 2021. Anything before that date is irrelevant, unless it hasn’t been changed from the Original Option agreement and would therefore be included and valid. This is where Gladys Thong is correct in stating “I believe the relationship is that of an incubator.” This was stated in the March 3, 2021 press release as Gladys posted. In Gladys Thong’s overlooked and did not mention the April 16, 2021 Amendment. In the Amended Agreement the company has two new “Whereas” clauses included and posted in red further below. Let it be known that this Amendment was signed and agreed to a few days before AJNA Biosciences Inc was formed as a private Delaware Corporation. In the Amendment below in red the agreement listed ALL of the Companies involved Collectively as “PARTIES ”
Nowhere in the amendment does AJNA Biosciences Inc. is listed as a “PARTY” Therefore, AJNA Biosciences Inc is not a Party to the agreement. Matter of Fact, in the amendment, it is stated that The Stanley Brothers were going to form another company that does not even resemble what AJNA Biosciences Inc is now doing Business as. The description set forth in the agreement states that the Stanley Brothers Holding Company Inc would be involved in the business plan that does resemble AJNA Biosciences Inc. Two things to take away from these two statements. First and foremost, AJNA Biosciences Inc. is not a party to Stanley Brothers Holding Inc. USA and the new corporation that was set up was not the listed one SB Hemp Co. Because AJNA Biosciences Inc is a private company and not apart of the Purchase Option Agreement they are not required to disclose any and all information and details concerning any relationship to Charlotte’s Web and or Stanley Brothers Holding Inc USA. The two brothers that left Charlotte’s Web that now control the separate entity AJNA Biosciences Inc did so so they would be free of any fiduciary responsibilities and conflicts of interests. It appears YQU are much Wiser than the two in one poster YQU Understand. Good Luck Fang Fang. Have Mercy WISE WQLF Ahooooooo

From the April 16, 2021 Amendment

“ 1.2 Effect on the Original Agreement. Except as specifically amended in this Amending Agreement, the Parties hereby confirm that the Original Agreement and its terms and conditions are and shall remain in full force and effect and are hereby ratified. To the extent there is any inconsistency between the Original Agreement and this Amending Agreement, the terms of the Amending Agreement shall supersede the Original Agreement.”

5.4 Whole Agreement; Only Written Amendments. The Original Agreement (as amended hereby) and this Amending Agreement constitute the whole and entire agreement between the Parties hereto regarding the subject matter hereof and cancel and supersede any prior agreements, undertakings, declarations, commitments, representations, written or oral, in respect thereof. Any provision of this Amending Agreement may only be amended if the Parties so agree in writing.

5.5 Time. Time is of the essence for all purposes of this Amending Agreement.

https://www.sec.gov/Archives/edgar/data/1750155/000110465921134530/tm2126643d1_ex10-2.htm

The Public Release On March 3, 2021 as Referenced by Gladys Thong.

I believe the relationship is that of "Incubator-to-StartUp" and NOT "Identity". The role of Stanley Brothers USA Holdings as a "cannabis wellness incubator" was stated in the March 3, 2021 press release describing Charlotte's Web's Option Purchase Agreement with Stanley Brothers USA Holdings:
Stanley Brothers USA is a cannabis wellness incubatorcurrently operating in three states ( Colorado , California , Florida ) with expansion plans underway in eight additional states. The Option has a five-year term (extendable for an additional two years) . . .

https://investors.charlottesweb.com/press-releases/press-release-details/2021/Charlottes-Web-Positions-to-Enter-US-Cannabis-Wellness-Market/default.aspx


From The FORM 10-K 2021

MARCH 2, 2021 Purchase Option

“On March 2, 2021, the Company entered into the SBH On March 2, 2021, the Company entered into the SBH Purchase Option with Stanley Brothers USA, a privately held Delaware company, and the shareholders of Stanley Brothers USA. The SBH Purchase Option was purchased for total consideration of $8,000,000 and has a five-year term (extendable for an additional two years upon payment of additional consideration), and it provides Charlotte’s Web the option to acquire all or substantially all of Stanley Brothers USA on the earlier of February 26, 2024 and federal legalization of Cannabis in the United States, or such earlier time as Stanley Brothers USA and Charlotte’s Web may agree, at a purchase price to be determined at the time of exercise of the SBH Purchase Option. The Company is not obligated to exercise the SBH Purchase Option.

In addition to the SBH Purchase Option, Stanley Brothers USA issued the Company a warrant exercisable to purchase 10% of the outstanding Stanley Brothers USA shares and convertible securities that are considered in-the-money, subject to certain conditions and exclusions. The warrant is exercisable for a nominal exercise price of $0.001 per share in the event the Company elects not to exercise the SBH Purchase Option. Purchase Option with Stanley Brothers USA, a privately held Delaware company, and the shareholders of Stanley Brothers USA. The SBH Purchase Option was purchased for total consideration of $8,000,000 and has a five-year term (extendable for an additional two years upon payment of additional consideration), and it provides Charlotte’s Web the option to acquire all or substantially all of Stanley Brothers USA on the earlier of February 26, 2024 and federal legalization of Cannabis in the United States, or such earlier time as Stanley Brothers USA and Charlotte’s Web may agree, at a purchase price to be determined at the time of exercise of the SBH Purchase Option. The Company is not obligated to exercise the SBH Purchase Option.

In addition to the SBH Purchase Option, Stanley Brothers USA issued the Company a warrant exercisable to purchase 10% of the outstanding Stanley Brothers USA shares and convertible securities that are considered in-the-money, subject to certain conditions and exclusions. The warrant is exercisable for a nominal exercise price of $0.001 per share in the event the Company elects not to exercise the SBH Purchase Option.“

THE AMENDMENT FROM APRIL 16, 2021

The Agreement between Leeland &Sig LLC
AMENDING AGREEMENT TO NAME AND LIKENESS AND LICENSE AGREEMENT

This Amending Agreement to the Name and Likeness and License Agreement (this "Amending Agreement") is made to effective as of April 16, 2021 ("Effective Date"), by and [color=red]between Leeland & Sig LLC d/b/a Stanley Brothers Brand Company, a Colorado limited liability company ("Licensor"), Charlotte's Web, Inc., a Delaware corporation ("CWB"), and Charlotte's Web Holdings, Inc., a British Columbia corporation ("Pubco" and together with CWB, the "Licensees"). Licensor and Licensees shall be referred to herein collectively as the "Parties" and each may be referred to individually as a "Party."[/color]

“ 3.2 Two new WHEREAS clauses shall be added after the third WHEREAS clause of the Original Agreement Recitals, stating:

“WHEREAS, the Brothers have formed Stanley Brothers USA Holdings, Inc. (“SB”), which is (and/or expects to be) engaged in (i) research, development, creation, formulation, testing, manufacture, advertising, promotion, marketing, offer for sale, sale, and/or distribution of products containing or constituting Marijuana (whether medicinal, recreational, or otherwise) (“Marijuana Products”) and/or constituting non-cannabis plant medicines (“Plant Medicine”), presently and/or potentially including without limitation, in the form of foods (including chocolates and gummies), beverages, dietary and nutritional supplements (including in the form of tinctures), smoking articles (including vaporizers and cartridges), and plant material/parts, (ii) related education and outreach services, and (iii) advertising and sale of related clothing, accessories, and merchandise (subsections (i), (ii), and (iii) collectively, the “SB Business”);

“WHEREAS, the Brothers propose to form a new company for the purpose of engaging in non-dietary supplement hemp and/or CBD-based foods (including chocolates and those products more particularly described in the SB Hemp Co. Option Agreement, as defined in Section 3.16 below ), beverages, and smoking articles (including vaporizers, cartridges, and/or combustible inhalables (including cigarettes)) (“SB Hemp Co.”);


https://www.sec.gov/Archives/edgar/data/1750155/000110465921134530/tm2126643d1_ex10-2.htm

Prepaid Expenses

On April 16, 2021, pursuant to the amendment to the Name and Likeness Agreement between the Company and Stanley Brand Company was extended for a period of one year, expiring July 31, 2022. In addition, the Company executed a consulting agreement which extended the service arrangements of the seven Stanley Brothers for a period of one year, expiring July 31, 2022. Upon execution of the consulting agreement, the Company paid $2,081,000 to Stanley Brand Company, on behalf of the Stanley Brothers, as consideration for the consulting services to be provided to the Company over the term of the agreement and certain restrictive covenants. For the year ended December 31, 2021, the Company recognized $1,056,000 of selling, general, and administrative expenses in the consolidated statements of operations and comprehensive loss related to this agreement. The remaining $1,025,000 is presented in prepaid expenses on the condensed consolidated balance sheets.

Financial Instruments

On March 2, 2021, the Company entered into the SBH Purchase Option with Stanley Brothers USA. The SBH Purchase Option was purchased for total consideration of $8,000,000. Certain founders of the Company, who are or were also employees, are the majority shareholders of Stanley Brothers USA.

The SBH Purchase Option is classified as a financial asset and is remeasured at fair value at each reporting date, with changes to fair value recognized in the statements of operations and comprehensive loss for the period. The use of assumptions for the fair value determination includes a high degree of subjectivity and judgment using unobservable inputs (level 3 on the fair value hierarchy), which results in estimation uncertainty. Changes in assumptions that reasonably could have been different at the reporting date may result in a higher or lower determination of fair value. Changes in fair value measurements, if significant, may affect performance of cash
107


flows. For the year ended December 31, 2021, a $5,000,000 gain related to the SBH Purchase Option was recognized as change in fair value of financial instruments and other in the statements of operations and comprehensive loss. As of December 31, 2021, the SBH Purchase Option represents a financial asset of $13,000,000 in the condensed consolidated balance sheets.

The Monte Carlo valuation model considers multiple revenue and EBITDA outcomes for Stanley Brothers USA and other probabilities in assigning a fair value. Primary assumptions utilized include financial projections of Stanley Brothers USA and the probability and timing of exercise. Additional assumptions used in the model include expected volatility, expected term (years), risk-free interest rate, and weighted average cost of capital.


https://www.sec.gov/Archives/edgar/data/1750155/000110465921134530/tm2126643d1_ex10-2.htm