| Item 1.01. | Entry Into a Material Definitive Agreement. |
On October 11, 2022, Charlotte’s
Web Holdings, Inc. (the “Company”) entered into a Promotional Rights Agreement (the “MLB Promotional Rights Agreement”)
with MLB Advanced Media L.P., on its own behalf and on behalf of Major League Baseball Properties, Inc., the Office of the Commissioner
of Baseball, The MLB Network, LLC and the Major League Baseball Clubs (collectively, the “MLB”), pursuant to which the Company
entered into an exclusive strategic partnership with MLB to promote the Company’s new NSF-Certified for Sport® product line.
In consideration for the MLB
Promotional Rights Agreement, which expires on December 31, 2025, the Company shall pay MLB over the term of the MLB Promotional Rights
Agreement, an aggregate rights fee of $30.5 million and a 10% royalty on the Company’s gross revenue from MLB branded products of
the Company sold after prior sales of all such branded products exceed $18.0 million. The Company has also entered into a subscription
agreement (the “Subscription Agreement”) pursuant to which the Company has agreed to issue to MLB, subject to customary closing
conditions, common shares equal to four percent (4%) of the Company’s fully diluted outstanding common shares and proportional voting
shares (calculated on the basis of post-conversion to common shares) as of the day prior to the date of issue (such common shares, the
“MLB Shares”). The total number of MLB Shares to be issued to MLB is expected to be 6,119,121 common shares of the Company,
which will be issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D promulgated under the Securities Act. The Company will not receive any proceeds in respect of
the MLB Shares. If the Company fails to issue the MLB Shares in accordance with the MLB Promotional Rights Agreement and the Subscription
Agreement, the Company is obligated to pay MLB an additional amount pursuant to the rights fee provisions of the MLB Promotional Rights
Agreement.
Other than the MLB Promotional
Rights Agreement and the Subscription Agreement, there are no other agreements or relationship between the Company and MLB.
The foregoing description of the MLB Promotional Rights
Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the MLB Promotional Rights
Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K to be filed for the year ending December
31, 2022.
Forward-Looking Statements
Certain statements 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
cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward-looking terminology such
as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity
exists", "is positioned", "estimates", "intends", "assumes", "anticipates"
or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might", "will" or "will be taken",
"occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations
of future events or circumstances contain forward-looking statements. Forward looking statements in this Current Report on
Form 8-K include expectations with respect to the consideration payable by the Company to MLB under the MLB Promotional Rights Agreement
and the subscription agreement.
Forward looking statements are not historical facts
but instead 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 that, while considered reasonable by the Company as of the
date of this Current Report on Form 8-K, are subject to known and unknown risks, uncertainties, assumptions and other factors that
may cause the actual results, level of activity, performance or achievements to be materially different 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 indicated in the forward-looking statements include, among others, the factors discussed throughout the "Risk Factors"
section in the Company's most recently filed Annual Report on Form 10-K and quarterly report on Form 10-Q and other filings with the Securities
and Exchange Commission available on www.SEC.com and the Company's most recently filed annual information form available on www.SEDAR.com.
Except as required by applicable securities laws, the Company undertakes no obligation to publicly update any forward-looking statements,
whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.