Expands #1 leadership position
BOULDER, Colo., May 11, 2021 /CNW/ - (TSX: CWEB) (OTCQX: CWBHF), Charlotte's Web Holdings, Inc. ("Charlotte's Web" or the "Company") the market share leader in full spectrum cannabidiol (CBD) hemp extract wellness products, today reported financial results for the first quarter ended March 31, 2021. All amounts are expressed in United States' dollars, unless otherwise noted. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures.
Q1-2021 Financial Highlights
- Consolidated revenue increased 9.1% to $23.4 million vs. $21.5 million in Q1-2020
- DTC eCommerce sales increased 14.5% year-over-year and contributed 68.9% of Q1 revenue
- B2B net revenue decreased 1.4% year-over-year. Excluding non-retail B2B hemp drying services, comparable B2B retail sales increased 11.0% and expanded market share
- Gross profit of $13.7 million, or 58.4% of consolidated revenue
- Operating expenses were 2.9% higher year-over-year and 15.2% lower from Q3-2020 in line with the cost reduction plan implemented Q4-2020
- Adjusted EBITDA loss of $4.7 million vs. loss of $5.7 million in Q1-2020
- $35.0 million cash (plus $10.8 million pending IRS tax receivable) and $95.6 million working capital on March 31, 2021
- $10 million unused line of credit with JPMorgan extendable to $20 million
Business Highlights
- Expanded its number one market share position across major retail channels including total food/drug/mass retail ("F/D/M") and US natural specialty retail
- Completed clinical study reaffirming the liver health safety of Charlotte's Web™ hemp derived CBD extracts and shared quantitative data study's results with the U.S. FDA
- Secured future optionality to enter the US cannabis wellness category through a purchase option agreement to acquire Stanley Brothers cannabis business pending US federal legalization of cannabis
- Three proprietary hemp cultivars approved for cultivation in Canada in 2021
- Secured three U.S. Patents for proprietary hemp cultivars bringing total patents to five
- Successfully enforced its Charlotte's Web trademark
- CW Labs announced a scientific collaboration researching hemp CBD efficacy with Harvard Medical School's Dr. Staci Gruber, Ph.D.
- Invested $1.6 million capex to substantially complete phase III expansion of new 137,000 sq. ft. facility with extraction infrastructure and R&D expansion
- Launched Charlotte's Web first THC-free broad spectrum extract tinctures and topicals
- Supported federal and state legislative actions to help develop comprehensive regulatory framework with Federal Bill H.R. 841 and proposed regulations in CA and NY
"Despite reduced retail activity due to the pandemic, our directly comparable B2B retail sales showed year-over-year growth. Our B2B retail sales and velocities further strengthened in March and April as US vaccination programs support reopening of the economy, and our DTC sales continued to grow demonstrating long-term secular strength for our products in the e-commerce channel," said Deanie Elsner, CEO of Charlotte's Web. "We continued to expand our leading market position with quarterly market share gains across all of our channels. Internationally we have made our first moves into Israel and Canada with initial product sales planned for early 2022. We are pleased with our progress and believe that Charlotte's Web is well positioned to drive continued growth in the US and new growth in key international markets as we expand outside of the US."
Q1-2021 Financial Review
The following table sets forth selected financial information for the periods indicated.
|
|
Three months ended March 31,
|
|
U.S. $ millions, except per share data
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Revenue
|
|
$
|
23.4
|
|
$
|
21.5
|
|
Gross profit before biological assets adjustment
|
|
|
13.6
|
|
|
15.0
|
|
Net impact, fair value of biological assets
|
|
|
—
|
|
|
(0.1)
|
|
Gross profit
|
|
|
13.7
|
|
|
15.1
|
|
Operating expenses
|
|
|
24.0
|
|
|
23.3
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(10.3)
|
|
|
(8.3)
|
|
Change in fair value of warrants and other expense (income), net
|
|
|
3.2
|
|
|
(3.1)
|
|
Net loss and comprehensive loss
|
|
|
(13.9)
|
|
|
(11.5)
|
|
Loss per share - basic
|
|
$
|
(0.10)
|
|
$
|
(0.11)
|
|
Loss per share - diluted
|
|
$
|
(0.10)
|
|
$
|
(0.11)
|
|
Adjusted EBITDA¹
|
|
$
|
(4.7)
|
|
$
|
(5.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
March 31, 2021
|
|
December 31, 2020
|
|
Cash and cash equivalents
|
|
$
|
35.0
|
|
$
|
52.8
|
|
Total assets
|
|
$
|
295.6
|
|
$
|
310.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
$
|
27.8
|
|
$
|
27.7
|
|
Total liabilities
|
|
$
|
53.3
|
|
$
|
56.7
|
The following information sets forth selected quarterly revenue information for the Company's recent fiscal quarters.
|
U.S. $ millions
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|
2021
|
2020
|
2020
|
2020
|
2020
|
2019
|
2019
|
2019
|
|
Revenue
|
$
|
23.4
|
$
|
26.9
|
$
|
25.2
|
$
|
21.7
|
$
|
21.5
|
$
|
22.8
|
$
|
25.0
|
$
|
25.0
|
Consolidated net revenue for the three months ended March 31, 2021 increased 9.1% year-over-year to $23.4 million. DTC ecommerce net sales increased 14.5% reflecting increased marketing, targeted promotions as well as incremental demand for the Company's new topical and THC-free ingestible products. Year-over-year new consumer acquisitions increased 51% and conversion rates increased 27%. DTC accounted for 68.9% of total revenue in the first quarter of 2021 versus 65.6% for the same period in 2020.
Consolidated B2B revenue was consistent with the same period in 2020, however prior year B2B revenue included hemp drying services revenue which was not repeated in Q1-2021. In addition, during Q1-2021 the Company accepted product returns from a retail partner due to reduced shelf life as a result of extended time on shelves with the pandemic reducing retail traffic. Excluding these items, comparable net B2B retail sales increased 11.0% year-over-year. Higher volumes are primarily the result of the Company's expanding retail footprint and a successful competitive pricing realignment implemented in the second quarter of 2020, which together have somewhat offset COVID-19 related headwinds.
Higher retail volumes have been producing incremental quarterly gains in retail market share and Charlotte's Web holds the number one market share position across major retail channels including total US food/drug/mass retail, total US natural specialty retail, and ecommerce.
|
|
|
Three months ended
|
|
Year-over-year
|
|
|
|
March 31,
|
|
|
|
|
|
2021
|
|
|
2020
|
|
% Increase
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - U.S. $ millions
|
|
$
|
23.4
|
|
$
|
21.5
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Direct-to-consumer ("DTC")
|
|
$
|
16.1
|
|
$
|
14.1
|
|
14.5
|
%
|
|
Business-to-business ("B2B")
|
|
$
|
7.3
|
|
$
|
7.4
|
|
(1.4)
|
%
|
Gross profit of $13.7 million was 58.4% of revenue compared to $15.1 million, or 70.3% of revenue last year. Lower gross profit primarily reflects product mix and a competitive pricing realignment implemented across the Company's product portfolio beginning in Q2-2020. The Company's leading gummy product line carries lower gross margins and contributed a larger portion of total revenue in Q1-2021. The Company anticipates gross profit improvements through pending production cost reductions in 2021.
Operating expenses were $24.0 million, a 2.9% year-over-year increase from $23.3 million. In response to lower B2B retail sales during the pandemic, in Q4-2020 management took actions to better align operating expenses through an expense optimization program targeting reductions of more than 10% of the Q3-2020 consolidated expense run rate. Q1-2021 operating expenses were 15.2% lower compared to Q3-2020, ahead of plan, and were achieved despite the additional expenses in Q1-2021 from the CW Labs R&D division and the acquisition of Abacus Health, which were not present for the full quarter in Q1-2020.
Adjusted EBITDA for the quarter was negative $4.7 million, or (19.9)% of consolidated revenue, compared to negative EBITDA of $5.7 million, or (26.5)% of revenue, for the first quarter of 2020.
Balance Sheet and Cash Flow
The Company used $7.7 million of cash in operations during the first quarter of 2021 compared to $14.9 million of cash used in operations during the first quarter of 2020. During the quarter the Company paid total consideration of $8.0 million cash for an Option Purchase Agreement with Stanley Brothers USA Holdings, Inc. providing the optionality to acquire or own warrants Stanley Brothers USA upon federal legalization of cannabis in the United States. The Company's cash and working capital at March 31, 2021 were $35.0 million and $95.6 million, respectively, compared to $52.8 million and $113.6 million at December 31, 2020.
|
Three months ended
|
|
|
|
|
|
|
March 31
|
|
|
|
|
|
|
U.S. $ millions
|
2021
|
|
2020
|
|
$ Change
|
|
% Change
|
|
Cash beginning of period
|
$
|
52.8
|
|
$
|
68.6
|
|
$
|
(15.8)
|
|
(23.0)
|
%
|
|
Cash flows from (used in):
|
|
|
|
|
|
|
|
|
Operating activities
|
(7.7)
|
|
(14.9)
|
|
7.2
|
|
(48.3)
|
%
|
|
Investing activities
|
(9.1)
|
|
(1.6)
|
|
(7.5)
|
|
468.8
|
%
|
|
Financing activities
|
(1.0)
|
|
0.9
|
|
(1.9)
|
|
(211.1)
|
%
|
|
Cash, end of period
|
$
|
35.0
|
|
$
|
53.0
|
|
$
|
(18.0)
|
|
(34.0)
|
%
|
Consolidated Financial Statements and Management's Discussion and Analysis
The Company's unaudited financial statements and accompanying notes for the periods ended March 31, 2021 and 2020 and related management's discussion and analysis of financial condition and results of operations ("MD&A") are available under the Company's profile on SEDAR at www.sedar.com and on the Investor Relations section of the Company's website at https://investors.charlottesweb.com.
Conference Call
Management will host a conference call to discuss the Company's first quarter 2021 results at 8:30a.m. ET on May 11, 2021. To participate in the call, please dial 1-647-427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call and provide conference ID 5365736. A recording of the call will be available through May 18, 2021. To listen to the rebroadcast please dial 1-416-849-0833 and provide the same conference ID.
A webcast of the call can be accessed through the investor relations section of the Charlotte's Web website.
About Charlotte's Web Holdings, Inc.
Charlotte's Web Holdings, Inc., a Certified B Corporation headquartered in Boulder, Colorado, is the market leader in the production and distribution of innovative hemp-derived cannabidiol ("CBD") wellness products under a family of brands which includes Charlotte's Web™, CBD Medic™, CBD Clinic™, and Harmony Hemp. The Company's premium quality products start with proprietary hemp genetics that are 100-percent American farm grown and manufactured into whole-plant hemp extracts containing a full spectrum of naturally occurring phytocannabinoids including CBD, CBC, CBG, terpenes, flavonoids and other beneficial hemp compounds. Charlotte's Web product categories include CBD oil tinctures (liquid products), CBD gummies (sleep, stress, inflammation recovery), CBD capsules, CBD topical creams and lotions, as well as CBD pet products for dogs. Charlotte's Web products are distributed to more than 14,000 retail, over 8,000 health care practitioners, and online through the Company's website at www.CharlottesWeb.com. Through its vertically integrated business model, Charlotte's Web strives to improve customers' lives and meet their demands for stringent product quality, efficacy and consistency.
Charlotte's Web was founded by the Stanley Brothers with a mission to unleash the healing powers of botanicals through compassion and science, benefiting the planet and all who live upon it. Charlotte's Web is a socially and environmentally conscious company and is committed to using business as a force for good and a catalyst for innovation. The Company weighs sound business decisions with consideration for how its efforts affect employees, customers, the environment, and diverse communities. The rate the Company pays for agricultural products reflects a fair and sustainable rate driving higher quality yield, encouraging regenerative farming practices, and supporting U.S. farming communities. Management believes that its socially oriented and environmentally responsible actions have a positive impact on its customers, suppliers, employees and stakeholders. Charlotte's Web donates a portion of its pre-tax earnings to charitable organizations.
Shares of Charlotte's Web trade on the Toronto Stock Exchange (TSX) under the symbol "CWEB" and are quoted in U.S. Dollars in the United States on the OTCQX under the symbol "CWBHF." As of May 10, 2021, Charlotte's Web had 109,378,169 Common Shares outstanding and 76,264.43 Proportional Voting Shares convertible at 400:1 into Common Shares, for an effective equivalent of 139,883,938 Common Shares outstanding.
|
Non-IFRS Measures
|
|
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is not a recognized performance measure under International Financial Reporting Standards ("IFRS"). Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The term EBITDA consists of net loss and excludes interest ("financing costs"), taxes, depreciation and amortization. Adjusted EBITDA also excludes share-based compensation, impairment of assets, transaction costs, legal settlement costs, restructuring charges, and adjustments for fair value of biological assets, warrant liabilities, and stock appreciation rights. Adjusted EBITDA is included as a supplemental disclosure because Management believes that such measurement provides a more meaningful assessment of the Company's operations on a continuing basis by eliminating certain non-cash charges and charges or gains that are infrequent. The most directly comparable measure to Adjusted EBITDA calculated in accordance with IFRS is net loss. See "Adjusted EBITDA" in the MD&A for a reconciliation of Adjusted EBITDA to net loss.
|
|
|
Three months ended
|
|
|
March 31,
|
|
U.S. $ millions
|
|
2021
|
|
2020
|
|
Net loss and comprehensive loss
|
|
$
|
(13.9)
|
|
$
|
(11.5)
|
|
Depreciation of property and equipment and amortization of intangibles
|
|
|
3.4
|
|
|
1.8
|
|
Financing costs
|
|
|
0.3
|
|
|
0.2
|
|
Interest income
|
|
|
—
|
|
|
(0.1)
|
|
Income tax benefit
|
|
|
—
|
|
|
6.3
|
|
EBITDA
|
|
$
|
(10.2)
|
|
$
|
(3.3)
|
|
Mark-to-market fair value of warrants and stock appreciation rights
|
|
|
3.4
|
|
|
(3.0)
|
|
Net impact, fair value of biological assets
|
|
|
—
|
|
|
(0.1)
|
|
Share-based compensation
|
|
|
1.6
|
|
|
0.3
|
|
Impairment of assets
|
|
|
0.3
|
|
|
—
|
|
Transaction costs
|
|
|
0.1
|
|
|
0.4
|
|
Restructuring charges
|
|
|
0.1
|
|
|
—
|
|
Adjusted EBITDA1
|
|
$
|
(4.7)
|
|
$
|
(5.7)
|
|
|
|
1
|
Adjusted EBITDA presented in prior periods has been reclassified to conform with the current period presentation to include interest income as a reduction of EBITDA and restructuring charges as an addition to Adjusted EBITDA.
|
Forward-Looking Information
In the interest of providing the shareholders and potential investors of Charlotte's Web Holdings, Inc. with information about the Company, certain information provided constitutes forward-looking statements or information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "may", "will", "should", "could", "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Although these forward-looking statements are based on assumptions the Company considers to be reasonable based on the information available on the date such statements are made, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. The forward-looking statements contained in this press release are based on certain assumptions and analysis by management of the Company ("Management") in light of its experience and perception of historical trends, current conditions and expected future development and other factors that it believes are appropriate.
Specifically, this press release contains forward-looking statements relating to, but not limited to: potential capacity expansion for production, extraction, R&D and distribution; international expansion activities and strategy; capacity expansion and transition to a CPG operating company capable of supporting mass retail channel growth; the impact of certain activities on the Company's business and financial condition; suggested regulatory developments; possible equity and debt financing; the Company's anticipated trajectory, long-term growth expectations and shareholder value creation; and product expansion, including into cannabis wellness where federally permissible.
The material factors and assumptions used to develop the forward-looking statements herein include, but are not limited to, the following: (i) the impact of the COVID-19 pandemic; (ii) the regulatory climate in which the Company operates; (iii) the continued sales success of the Company's products; (iv) the continued success of sales and marketing activities; (v) the Company's ability to complete the conversion or buildout of its facilities on time and on budget; (vi) there will be no significant delays in the development and commercialization of the Company's products; (vii) the Company will continue to maintain sufficient and effective production and research and development capabilities to compete on the attributes and cost of its products; (viii) the Company's ability to deal with adverse growing conditions (due to pests, disease, fungus, climate or other factors) in a timely and cost-effective manner; (ix) there will be no significant reduction in the availability of qualified and cost-effective human resources; * new products will continue to be added to the Company's portfolio; (xi) demand for the Company's products will grow in the foreseeable future; (xii) there will be no significant barriers to the acceptance of the Company's products in the market; (xiii) the Company will be able to maintain compliance with applicable contractual and regulatory obligations and requirements; (xiv) there will be adequate liquidity available to the Company to carry out its operations; and (xv) products do not develop that would render the Company's current and future product offerings undesirable and the Company is otherwise able to minimize the impact of competition and keep pace with changing consumer preferences; and (xvi) the Company will be able to successfully manage and integrate acquisitions and take advantage of synergies from acquisitions.
The Company's forward-looking statements are subject to risks and uncertainties pertaining to, among other things, the adverse impact of the COVID-19 pandemic to the Company's operations, supply chain, distribution chain, and to the broader market for the Company's products, revenue fluctuations, nature of government regulations (both domestic and foreign), economic conditions, loss of key customers, retention and availability of executive talent, competing products, common share price volatility, loss of proprietary information, product acceptance, internet and system infrastructure functionality, information technology security, cash available to fund operations, crop risk, availability of capital, international and political considerations, the successful integration of acquired businesses, and including but not limited to those risks and uncertainties discussed under the heading "Risks and Uncertainties" in MD&A, the AIF, and the Company's other filings with securities regulators. The impact of any one risk, uncertainty, or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent, and the Company's future course of action depends on Management's assessment of all information available at the relevant time. Except to the extent required by law, the Company assumes no obligation to publicly update or revise any forward-looking statements made, whether as a result of new information, future events, or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.
|
CHARLOTTE'S WEB HOLDINGS, INC.
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
(In thousands of United States dollars)
|
|
|
March 31, 2021
|
December 31, 2020
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
35,048
|
$
|
52,803
|
|
Trade and other receivables, net
|
5,686
|
6,274
|
|
Note receivable
|
1,500
|
1,753
|
|
Note receivable - related party
|
1,012
|
1,004
|
|
Inventories
|
61,974
|
61,936
|
|
Prepaid expenses and other current assets
|
5,037
|
7,390
|
|
Income taxes receivable
|
10,776
|
11,440
|
|
121,033
|
142,600
|
|
Non-current assets:
|
|
|
|
Property and equipment, net
|
61,787
|
60,269
|
|
Intangible assets, net
|
24,588
|
25,376
|
|
Goodwill
|
77,454
|
77,454
|
|
SBH Purchase Option
|
8,000
|
—
|
|
Deferred tax assets
|
3
|
4
|
|
Other long-term assets
|
2,712
|
5,178
|
|
$
|
295,577
|
$
|
310,881
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
|
6,180
|
$
|
4,891
|
|
Accrued liabilities
|
7,885
|
11,519
|
|
Deferred revenue
|
509
|
615
|
|
Current cultivation liabilities
|
8,520
|
9,304
|
|
Current notes payable
|
373
|
629
|
|
Current lease obligations
|
1,999
|
2,015
|
|
25,466
|
28,973
|
|
Non-current liabilities:
|
|
|
|
Long-term cultivation liabilities
|
—
|
2,513
|
|
Long-term notes payable
|
58
|
144
|
|
Long-term lease obligations
|
19,971
|
20,567
|
|
Warrant liabilities
|
7,625
|
4,304
|
|
Other long-term liabilities
|
186
|
151
|
|
53,306
|
56,652
|
|
Shareholders' equity:
|
|
|
|
Share capital
|
280,183
|
279,308
|
|
Contributed surplus
|
20,942
|
19,849
|
|
Accumulated deficit
|
(58,854)
|
(44,928)
|
|
242,271
|
254,229
|
|
|
|
|
$
|
295,577
|
$
|
310,881
|
|
CHARLOTTE'S WEB HOLDINGS, INC.
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE LOSS
|
|
(In thousands of United States dollars, except per share amounts)
|
|
|
Three months ended March 31,
|
|
2021
|
2020
|
|
|
|
|
Revenue
|
$
|
23,407
|
$
|
21,463
|
|
Cost of sales
|
9,770
|
6,466
|
|
Gross profit before (gain) loss on fair value of biological assets
|
13,637
|
14,997
|
|
Realized fair value (gain) included in inventory sold
|
(206)
|
(82)
|
|
|
|
|
Unrealized fair value loss on growth of biological assets
|
165
|
—
|
|
Gross profit
|
13,678
|
15,079
|
|
|
|
|
Expenses:
|
|
|
|
General and administrative
|
14,968
|
16,031
|
|
Sales and marketing
|
7,720
|
6,532
|
|
Research and development
|
1,308
|
766
|
|
Operating expenses
|
23,996
|
23,329
|
|
Operating loss
|
(10,318)
|
(8,250)
|
|
Financing costs
|
348
|
170
|
|
Interest income
|
(19)
|
(129)
|
|
|
|
|
Change in fair value of warrants and other expense (income), net
|
3,245
|
(3,079)
|
|
Loss before taxes
|
(13,892)
|
(5,212)
|
|
Income tax expense
|
34
|
6,287
|
|
Net loss and comprehensive loss
|
$
|
(13,926)
|
$
|
(11,499)
|
|
|
|
|
Weighted average number of common shares - basic
|
139,697,474
|
107,436,794
|
|
Weighted average number of common shares - diluted
|
139,697,474
|
107,436,794
|
|
|
|
|
Loss per share - basic
|
$
|
(0.10)
|
$
|
(0.11)
|
|
Loss per share - diluted
|
$
|
(0.10)
|
$
|
(0.11)
|
|
CHARLOTTE'S WEB HOLDINGS, INC.
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
(In thousands of United States dollars)
|
|
|
|
Three months ended March 31, 2020
|
Share capital
|
Contributed
surplus
|
Accumulated
deficit
|
Total
|
|
Balance - December 31, 2019
|
$
|
123,927
|
$
|
27,513
|
$
|
2,258
|
$
|
153,698
|
|
Exercise of common stock options
|
1,860
|
(491)
|
—
|
1,369
|
|
Accumulated effect of income tax from stock options
|
—
|
(16,087)
|
—
|
(16,087)
|
|
Share-based compensation expense
|
—
|
266
|
—
|
266
|
|
Net loss and comprehensive loss
|
—
|
—
|
(11,499)
|
(11,499)
|
|
Balance - March 31, 2020
|
$
|
125,787
|
$
|
11,201
|
$
|
(9,241)
|
$
|
127,747
|
|
|
|
|
|
|
Three months ended March 31, 2021
|
Share capital
|
Contributed
surplus
|
Accumulated
deficit
|
Total
|
|
Balance - December 31, 2020
|
$
|
279,308
|
$
|
19,849
|
$
|
(44,928)
|
$
|
254,229
|
|
Exercise of common stock options
|
61
|
(31)
|
—
|
30
|
|
Exercise of common stock warrants
|
485
|
(45)
|
—
|
440
|
|
Withholding of common stock upon vesting of restricted share awards
|
329
|
(441)
|
—
|
(112)
|
|
Share-based compensation expense
|
—
|
1,610
|
—
|
1,610
|
|
Net loss and comprehensive loss
|
—
|
—
|
(13,926)
|
(13,926)
|
|
Balance - March 31, 2021
|
$
|
280,183
|
$
|
20,942
|
$
|
(58,854)
|
$
|
242,271
|
|
CHARLOTTE'S WEB HOLDINGS, INC.
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands of United States dollars)
|
|
Three months ended March 31,
|
|
2021
|
2020
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
Net loss
|
$
|
(13,926)
|
$
|
(11,499)
|
|
Items not involving cash:
|
|
|
|
Depreciation
|
2,533
|
1,654
|
|
Amortization
|
889
|
150
|
|
Change in fair value of biological assets
|
(41)
|
(82)
|
|
Change in fair value of warrant liabilities
|
3,321
|
(2,968)
|
|
Expected credit losses
|
(23)
|
105
|
|
Inventory provision, net
|
333
|
(5)
|
|
Share-based compensation
|
1,610
|
266
|
|
Loss on disposal of assets
|
76
|
—
|
|
Deferred income taxes
|
1
|
14,331
|
|
|
|
|
Changes in working capital:
|
|
|
|
Trade and other receivables, net
|
611
|
(3,113)
|
|
Inventories
|
(261)
|
(349)
|
|
Prepaid expenses and other current assets
|
2,173
|
(479)
|
|
Accounts payable
|
1,289
|
(3,437)
|
|
Accrued liabilities
|
(3,906)
|
(364)
|
|
Income taxes
|
664
|
(8,046)
|
|
Cultivation liabilities
|
(3,320)
|
(1,142)
|
|
Other operating assets and liabilities, net
|
242
|
114
|
|
(7,735)
|
(14,864)
|
|
Cash flows from investing activities:
|
|
|
|
Purchases of property and equipment
|
(1,659)
|
(1,270)
|
|
Purchases of intangible assets
|
(64)
|
(254)
|
|
Proceeds from sale of assets
|
8
|
1
|
|
Collections on note receivable
|
266
|
—
|
|
Investment in SBH Purchase Option
|
(8,000)
|
—
|
|
Other investing activities
|
384
|
(31)
|
|
(9,065)
|
(1,554)
|
|
Cash flows from financing activities:
|
|
|
|
Proceeds from common stock option exercises
|
30
|
1,369
|
|
Proceeds from common stock warrant exercises
|
440
|
—
|
|
Withholding of common stock upon vesting of restricted share awards
|
(112)
|
—
|
|
Payments on notes payable
|
(342)
|
(2)
|
|
Payments on lease obligations
|
(971)
|
(466)
|
|
(955)
|
901
|
|
|
|
|
|
|
|
(Decrease) increase in cash
|
(17,755)
|
(15,517)
|
|
Cash and cash equivalents, beginning of year
|
52,803
|
68,553
|
|
Cash and cash equivalents, end of period
|
$
|
35,048
|
$
|
53,036
|
|
|
|
|
Supplemental disclosures of cash flows from operating activities:
|
|
|
|
Cash paid for interest
|
$
|
(36)
|
$
|
(5)
|
|
Cash paid for interest on lease obligations
|
(312)
|
(165)
|
|
Cash received from interest
|
19
|
129
|
|
Cash received (paid) for taxes
|
662
|
(2)
|
|
Non-cash purchases of property and equipment
|
(235)
|
(1,341)
|
|
Non-cash purchases of intangible assets
|
(37)
|
—
|
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SOURCE Charlotte's Web Holdings, Inc.