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Charlotte's Web Holdings Reports Q4-2020 Results

March 25, 2021

Quarterly growth and market share gains

BOULDER, Colo., March 25, 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 and a certified B Corp, today reported financial results for the fourth quarter and year ended December 31, 2020. All amounts are expressed in United States dollars unless otherwise noted. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures, see "Non-IFRS Measures" below.

2020 12-Month Financial Highlights

  • Total net revenue increased to $95.2 million vs. $94.6 million in 2019
  • Direct-to-Consumer ("DTC") eCommerce sales grew 27.6% in 2020 contributing 67.0% of total revenue, substantially offsetting a decline of 29.5% in B2B sales impacted by the COVID-19 pandemic
  • Gross profit, excluding the impact attributable to the inventory provision, of $60.3 million was 63.3% of consolidated revenue
  • Adjusted EBITDA loss was $20.2 million
  • $52.8 million cash and $113.6 million working capital at December 31, 2020

2020 12-Month Business Highlights

  • Completed acquisition of Abacus Health to become the market share leader in CBD topicals1
  • Invested $28.3 million capex including new facilities to expand capacity for production, extraction, R&D, and distribution
  • Launched CW Labs R&D division to advance hemp science and clinical studies
  • Secured 3 U.S. Patents for the Company's proprietary hemp cultivars bringing total patents to 5 in 2021
  • Increased distribution from 10,000 doors to more than 22,000 unique retail doors
  • Sponsored a third-party liver health study to address FDA need for quantitative data
  • Drove federal and state legislative actions to help develop comprehensive regulatory framework
  • Earned B Corp certification

Q4-2020 Financial Highlights  

  • Revenue increased 17.9% to $26.9 million vs. Q4-2019 and increased 7.0% vs. Q3-2020
  • DTC sales increased 21.2% year-over-year, contributing $17.4 million or 64.8% of Q4 revenue
  • Net revenue increased quarter-over-quarter for both DTC 4.2% and B2B 12.7%
  • Gross profit, excluding the impact attributable to a Q4 inventory provision, was $16.8 million, or 62.2% of consolidated revenue
  • Adjusted EBITDA loss of $2.1 million vs. loss of $6.7 million in Q3-2020

Q4-2020 Business Highlights

  • Increased DTC eCommerce transactions, conversion rates, subscriptions and unit volume
  • Commenced Phase III extraction infrastructure and R&D expansion in new 137,000 sq ft facility to build out production capacity ahead of anticipated growth. Related Q4 capex of $5.9 million.
  • Secured 5-year exclusive distribution partnership with Intercare/Canndoc in Israel as first step in international expansion strategy
  • Exited 2020 as market share leader in total food/drug/mass retail ("F/D/M"), US natural specialty retail, and DTC channel

"We turned a challenging start to 2020 into a strong finish, taking multiple actions and outperforming much of the competitive set to extend our brand and market share leadership," said Deanie Elsner, CEO of Charlotte's Web. "We filled product and channel gaps with competitive offerings and advanced the science of hemp CBD through CW Labs and collaborative studies with top tier institutions. We have now protected our intellectual property with 5 patents awarded for our proprietary cultivars and have defended our trademarked Charlotte's Web™ brand though a recent judgement. In 2021 we are positioning for long-term growth and shareholder value creation as we evolve towards establishing Charlotte's Web as a leading global botanicals wellness company by expanding into cannabis wellness where federally permissible. To support our international growth we have an exclusive agreement with one of Israel's largest medical cannabis producers, and in the U.S. we secured future optionality through a strategic option to acquire Stanley Brothers cannabis business pending US federal legalization of cannabis."

Q4-2020 Financial Review
The following table sets forth selected financial information for the periods indicated.



Three months ended


Year ended



December 31,


December 31,

U.S. $ millions, except per share data


2020


2019


2020


2019










Revenue


$

26.9


$

22.8


$

95.2


$

94.6

Gross profit (loss) before biological assets
adjustment


10.6


(1.7)


52.3


50.5

Net impact, fair value of biological assets


(0.4)


0.4



(0.2)

Gross profit (loss)


10.9


(2.1)


52.3


50.6

Operating expenses


23.6


26.4

104.7


75.4

Change in fair value of warrants and other
expense (income), net


2.1


(2.9)


(11.6)


(3.6)

Loss before taxes


(14.7)


(25.5)


(40.9)


(21.2)

Net loss and comprehensive loss


$

(14.7)


$

(18.8)


$

(47.2)


$

(15.6)

EPS basic


$

(0.11)


$

(0.19)


$

(0.38)


$

(0.16)

EPS diluted


$

(0.11)


$

(0.19)


$

(0.38)


$

(0.16)

Adjusted EBITDA1


$

(2.1)


$

(10.1)


$

(20.2)


$

(1.3)



















Assets:


December 31, 2020


December 31, 2019





Cash and cash equivalents


$

52.8


$

68.6





Total assets


$

310.9


$

222.9





Liabilities:









Long-term liabilities


$

27.7


$

39.8





Total liabilities


$

56.7


$

69.2





The following information sets forth selected quarterly revenue information for the Company's recent fiscal quarters.

U.S. $ millions

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1


2020

2020

2020

2020

2019

2019

2019

2019

Revenue

$

26.9

$

25.2

$

21.7

$

21.5

$

22.8

$

25.1

$

25.0

$

21.7

Consolidated fourth quarter revenue increased to $26.9 million, as compared to $22.8 million in 2019, an increase of 17.9% compared to the same period in 2019, and 7.0% compared to the prior three months ended September 30, 2020. During 2020 the Company implemented a competitive pricing realignment strategy across its product portfolio resulting in increased unit sales and expanded market share in the second half offsetting some of the headwinds created by COVID-19.  B2B net sales increased 12.4% year-over-year supported by expanded topical product offerings. DTC net sales grew by 21.2% year-over-year supported by the pricing realignment and higher conversion rates through ongoing marketing and social media programs. Year-over-year new consumer acquisitions increased 52% and conversion rates increased 98%. DTC net revenue accounted for 64.8% of total revenue in the fourth quarter compared to 63.0% for the same period in the prior year.



Three months ended




Year ended





December 31,




December 31,





2020


2019


% Increase
(Decrease) of
Revenue


2020


2019


% Increase
(Decrease) of
Revenue















Revenue - U.S. $ millions


$

26.9


$

22.8


17.9

%


$

95.2


$

94.6


0.7

%















Direct-to-consumer ("DTC")


$

17.4


$

14.4

1

21.2

%


$

63.8


$

50.0

1

27.6

%

Business-to-business ("B2B")


$

9.5


$

8.4

1

12.4

%


$

31.4


$

44.6

1

(29.5)

%



1

Revenues for the three months and year ended December 31, 2019 were recategorized to conform with 2020 categorization.

Gross profit for the fourth quarter was 40.6% compared to (9.0)% last year. Gross profit, excluding the impact attributable to an inventory provision, was 62.2% compared to 52.0% last year.

Operating expenses were $23.6 million, a 10.4% year-over-year decrease from $26.4 million. High operating expenses reflect the Company's investments in capacity expansion and transition to a consumer-packaged goods ("CPG") operating company capable of supporting mass retail channel growth. In response to lower B2B retail sales growth during the pandemic, in Q4-2020 management took actions to better align operating expenses through an expense optimization program successfully achieving reductions of more than 10% of the consolidated expense run rate by the end of 2020. This was achieved despite the addition of the CW Labs R&D division and the Abacus acquisition during the year. As a percent of revenue operating expenses improved from 136%, to 113% and 88% for Q2, Q3 and Q4, respectively in 2020.

Adjusted EBITDA for the quarter was negative $2.1 million, or (7.7)% of consolidated revenue, compared to Adjusted EBITDA of negative $10.1 million, or (44.4)% of revenue, for the fourth quarter of 2019. The improved Adjusted EBITDA ratio  reflects higher revenue combined with the expense optimization program.

Balance Sheet and Cash Flow
The Company used $5.1 million of cash in operations during the fourth quarter of 2020 compared to $8.6 million of cash used in operations during the fourth quarter of 2019. The Company's cash and working capital at December 31, 2020 were $52.8 million and $113.6 million, respectively, compared to $68.6 million and $116.9 million at December 31, 2019.


Three months ended


December 31


2020


2019


$Change


% Change

Cash beginning of period

$65.9


$35.0


$30.9


88.3

%

Cash flows from (used in):









Operating activities

(5.1)


(8.6)


3.5


(40.7)

%

Investing activities

(7.6)


(4.9)


(2.7)


55.1

%

Financing activities

(0.4)


47.1


(47.5)


(100.8)

%

Cash, end of period

$52.8


$68.6


$(15.8)


(23.0)

%

Consolidated Financial Statements and Management's Discussion and Analysis
The Company's audited consolidated financial statements and accompanying notes for the periods ended December 31, 2020 and 2019, 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 fourth quarter 2020 results at 8:30a.m. ET on Thursday, March 25, 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 7397494. A recording of the call will be available through April 1, 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 is the number one CBD brand in the USA and is distributed through more than 22,000 retail locations, select distributors and online through the Company's website at www.CharlottesWeb.com.  

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 its 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.

Subscribe to Charlotte's Web investor news.

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 March 22, 2021 Charlotte's Web had 108,912,326 Common Shares outstanding and 77,243.34 Proportional Voting Shares convertible at 400:1 into Common Shares, for an effective equivalent totaling 139,809,661 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, acquisition 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 better assessment of the Company's operations on a continuing basis by eliminating certain non-cash charges and charges or gains that are nonrecurring. 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


Year ended



December 31,


December 31,

U.S. $ millions


2020


2019


2020


2019

Net loss and comprehensive loss


$

(14.7)


$

(18.8)


$

(47.2)


$

(15.6)

Depreciation of property and equipment and
amortization of intangibles


3.0


1.4


9.8


4.0

Financing costs


0.3


0.1


1.3


0.3

Interest income



(0.1)


(0.2)


(1.0)

Income tax expense (benefit)



(6.7)


6.3


(5.6)

EBITDA


$

(11.4)


$

(24.1)


$

(30.0)


$

(17.9)

Mark-to-market fair value of warrants and stock
appreciation rights


1.9


(2.1)


(11.4)


(2.1)

Fair value changes of biological assets, net


(0.4)


0.4



(0.2)

Share-based compensation


1.6


1.7


5.9


3.0

Impairment of assets


5.8


13.9


8.0


15.5

Acquisition costs


0.2



3.9


Legal settlement




2.1


Restructuring charges


0.2


0.1


1.3


0.4

Adjusted EBITDA1


$

(2.1)


$

(10.1)


$

(20.2)


$

(1.3)



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 Adjusted EBITDA.  

Forward-Looking Statements
In the interest of providing the shareholders and potential investors of Charlotte's Web Holdings, Inc. with information about the Company, including management's assessment of the Company's future plans and operations, certain information provided in this press release 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.

Forward-looking statements are not historical facts but instead represent management's expectations, estimates and projections regarding the future of our business, future plans, strategies, projections, anticipated events and trends, the economy and other future conditions. Although the Company believes there is a reasonable basis for the expectations and assumptions reflected on the forward-looking statements, undue reliance should not be placed on the forward-looking statements because the Company can give no assurances that they will prove to be correct. The forward-looking statements contained in this press release speak only as of the date hereof and are expressly qualified by this cautionary statement.

Specifically, this news 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; 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 hemp-based wellness products will continue to 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 in 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 in this press release, 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.

These foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Company's operations or financial results are included in the Company's most recent annual information form and other public documents  on file with the Canadian Securities regulatory authorities on www.sedar.com.

The above summary of assumptions and risks related to forward-looking statements in this news release has been provided in order to provide shareholders and potential investors with a more complete perspective on the Company's current and future operations and such information may not be appropriate for other purposes. There is no representation by the Company that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

CHARLOTTE'S WEB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In thousands of United States dollars)








December 31, 2020

December 31, 2019

ASSETS






Current assets:



Cash

$

52,803

$

68,553

Trade and other receivables, net

6,274

5,462

Note receivable

1,753

1,421

Note receivable - related party

1,004

Inventories

61,936

64,054

Prepaid expenses and other current assets

7,390

3,592

Income taxes receivable

11,440

3,273


142,600

146,355

Non-current assets:



Property and equipment, net

60,269

42,949

Intangible assets, net

25,376

1,596

Goodwill

77,454

Deferred tax assets

4

30,417

Other long-term assets

5,178

1,625


$

310,881

$

222,942




LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:



Accounts payable

$

4,891

$

8,798

Accrued liabilities

11,519

7,323

Deferred revenue

615

550

Current cultivation liabilities

9,304

10,803

Current notes payable

629

9

Current lease obligations

2,015

1,945


28,973

29,428

Non-current liabilities:



Long-term cultivation liabilities

2,513

14,289

Long-term notes payable

144

3

Long-term lease obligations

20,567

22,116

Warrant liabilities

4,304

3,408

Other long-term liabilities

151


56,652

69,244

Shareholders' equity:



Share capital

279,308

123,927

Contributed surplus

19,849

27,513

(Accumulated deficit) Retained earnings

(44,928)

2,258


$

310,881

$

222,942

 

CHARLOTTE'S WEB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE LOSS

(In thousands of United States dollars, except per share amounts)












Three months ended

Year ended


December 31,

December 31,


2020

2019

2020

2019






Revenue

$

26,927

$

22,830

$

95,226

$

94,594

Cost of sales

16,364

24,532

42,937

44,144

Gross profit before (gain) loss on fair value of biological
assets

10,563

(1,702)

52,289

50,450

Realized fair value (gain) included in inventory sold

(203)

(432)

(289)

(994)

Unrealized fair value loss on growth of biological assets

(178)

794

323

842

Gross profit

10,944

(2,064)

52,255

50,602






Expenses:





General and administrative

13,809

14,961

68,764

45,546

Sales and marketing

8,131

10,739

30,010

28,107

Research and development

1,668

655

5,951

1,754

Operating expenses

23,608

26,355

104,725

75,407

Operating loss

(12,664)

(28,419)

(52,470)

(24,805)

Financing costs

357

85

1,260

326

Interest income

(6)

(141)

(185)

(994)

Change in fair value of warrants and other income, net

1,716

(2,869)

(12,671)

(2,928)

Loss before taxes

(14,731)

(25,494)

(40,874)

(21,209)

Income tax expense (benefit)

(13)

(6,716)

6,312

(5,642)

Net loss and comprehensive loss

$

(14,718)

$

(18,778)

$

(47,186)

$

(15,567)






Weighted average number of common shares - basic

139,230,803

100,380,496

125,012,249

96,539,194

Weighted average number of common shares - diluted

139,230,803

100,380,496

125,012,249

96,539,194






Loss earnings per share - basic

$

(0.11)

$

(0.19)

$

(0.38)

$

(0.16)

Loss earnings per share - diluted

$

(0.11)

$

(0.19)

$

(0.38)

$

(0.16)


 

CHARLOTTE'S WEB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(In thousands of United States dollars)











Year ended December 31, 2019

Share capital

Contributed
surplus

Retained
earnings

Total

Balance - December 31, 2018

$

78,316

$

25,357

$

17,825

$

121,498

Exercise of common stock options

2,850

(1,264)

1,586

Exercise of common stock warrants

1,328

(842)

486

Accumulated effect of income tax from stock options

1,284

1,284

Share-based compensation expense

2,978

2,978

2019 Share offering, net of warrants

44,295

44,295

Share issuance costs

(2,862)



(2,862)

Net loss and comprehensive loss

(15,567)

(15,567)

Balance - December 31, 2019

$

123,927

$

27,513

$

2,258

$

153,698






Year ended December 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

4,001

(1,534)

2,467

Withholding of common stock upon vesting of restricted share
awards

1,328

(1,347)

(19)

Accumulated effect of income tax from stock options

(16,087)

(16,087)

Share-based compensation expense

5,897

5,897

2020 Share Offering, net of warrants

47,959

47,959

Share issuance costs

(3,368)

(3,368)

Abacus Acquisition

105,461

5,407

110,868

Net loss and comprehensive loss

(47,186)

(47,186)

Balance - December 31, 2020

$

279,308

$

19,849

$

(44,928)

$

254,229


 

CHARLOTTE'S WEB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of United States dollars)





Year ended December 31,


2020

2019




Cash flows from operating activities:



Net loss

$

(47,186)

$

(15,567)

Items not involving cash:



Depreciation

7,746

3,666

Amortization

2,008

300

Change in fair value of biological assets

34

(152)

Change in fair value of warrant liabilities

(11,167)

(2,107)

Expected credit losses

834

422

Inventory provision, net

8,025

15,474

Share-based compensation

5,897

2,978

Loss on disposal of assets

(5)

18

Deferred income taxes

14,348

(5,684)




Changes in working capital:



Trade and other receivables, net

2,276

(1,010)

Inventories

(1,782)

(53,498)

Prepaid expenses and other current assets

(3,673)

325

Accounts payable

(8,594)

3,460

Accrued liabilities

829

840

Income taxes

(8,132)

(1,486)

Cultivation liabilities

(11,289)

18,275

Other operating assets and liabilities, net

1,239

270


(48,592)

(33,476)




Cash flows from investing activities:



Cash acquired in business combinations

11,181

Purchases of property and equipment

(25,904)

(13,775)

Purchases of intangible assets

(2,353)

(1,278)

Proceeds from sale of assets

91

54

Funding of note receivable

(1,400)

(1,400)

Collections on note receivable

1,125

Funding of note receivable - related party

(1,000)

Proceeds from loans due from related parties

128

Other investing activities

(1,181)

(1,444)


(19,441)

(17,715)




Cash flows from financing activities:



Proceeds from public offering

57,165

49,810

Proceeds from common stock option exercises

2,467

1,586

Withholding of common stock upon vesting of restricted share awards

(19)

Proceeds from common stock warrant exercises

486

Payments on notes payable

(809)

(9)

Payments on lease obligations

(3,153)

(2,671)

Share issuance costs

(3,368)

(2,862)


52,283

46,340







Decrease in cash and cash equivalents

(15,750)

(4,851)

Cash and cash equivalents, beginning of year

68,553

73,404

Cash and cash equivalents, end of period

$

52,803

$

68,553






Supplemental disclosures of cash flows from operating activities:





Cash paid for interest

$

(145)

$

(45)

Cash paid for interest on lease obligations


(1,115)


(281)

Cash received from interest


185


994

Cash received (paid) for taxes


14


(1,765)

Non-cash purchases of property and equipment


(1,291)


(1,932)

Non-cash purchases of intangibles


(35)


Non-cash inventory provision


(2,073)



 

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SOURCE Charlotte's Web Holdings, Inc.

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