Charlotte's Web Holdings, Inc 8-K, filed Jul 27, 2022
Charlotte's Web Holdings, Inc. (CWBHF)
About this 8-K
Charlotte's Web Holdings, Inc filed this 8-K on July 27, 2022.
Items reported
- Item 1.02: Ended a material agreement
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| Item 1.02. | Termination of a Material Definitive Agreement. |
As previously disclosed, on March 23, 2020, Charlotte’s Web Holdings, Inc. (the “Company”), entered into a Credit Agreement, dated as of March 23, 2020 (as amended by that certain Limited Waiver and Amendment No. 1 to Credit Agreement, dated March 1, 2021, and that certain Limited Waiver and Amendment No. 2 to Credit Agreement, dated November 11, 2021) with J.P. Morgan Chase Bank, N.A. (“J.P. Morgan”), as administrative agent, the lenders party thereto, and the other loan parties party thereto (collectively, the “Credit Agreement”). The Credit Agreement provided the Company with an asset backed line of credit for $10 million and with an accordion feature to extend the line to $20 million with a three-year maturity. In addition to the Credit Agreement, the Company also engaged J.P. Morgan for commercial banking services, including merchant processing services to support the Company’s global growth.
On July 27, 2022, the Company entered into a payoff letter with J.P. Morgan to voluntarily terminate all commitments and obligations under the Credit Agreement, with termination to be effective as of July 27, 2022. In connection with the execution of the payoff letter, the Company paid J.P. Morgan approximately $20,000 in commitment fees and legal fees and expenses. As of March 31, 2022, and December 31, 2021, the Company was not in compliance with certain debt covenants and the line of credit has been on hold since March 9, 2022. There were no outstanding borrowings under the Credit Agreement at the time the Company entered into the payoff letter or at the time of termination.
The foregoing summary of the Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to (i) the Credit Agreement, which was filed as Exhibit 10.4 to the Company’s Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021, (ii) the Limited Waiver to J.P. Morgan Credit Agreement, dated as of November 11, 2021, which was filed as Exhibit 10.5 to the Company’s Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021, and (iii) the Limited Waiver and Amendment No. 1 to JP Morgan Credit Agreement dated March 1, 2021, which was filed as Exhibit 10.6 to the Company’s Registration Statement on Form 10 (File No. 000-56364) filed with the SEC on November 5, 2021, all of which are incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CHARLOTTE’S WEB HOLDINGS, INC. | |||
| Date: July 27, 2022 | By: | /s/ Stephen Rogers | |
| Stephen Rogers | |||
| Senior Vice President - General Counsel and Corporate Secretary | |||