Charlotte’s Web to Acquire Abacus Health Products for Combined 35% Marketshare of CBD in Food/Drug/Mass Retail Channel

“This Transaction provides a unique opportunity to our shareholders and employees to participate in the compelling potential of the combined businesses,” said Perry Antelman , Chief Executive Officer of Abacus.   “Abacus is one of the largest suppliers and distributors in the United States of topical products infused with hemp extract to the F/D/M and healthcare practitioner markets.  By joining with Charlotte’s Web, we have the opportunity to maximize our growth by leveraging the Company’s leading brand, vertical integration, infrastructure, expertise, financial position and capital markets presence, and position the combined Company to deliver benefits for our stakeholders over the long-term.”

The Transaction has been unanimously approved by the Board of Directors of each of Charlotte’s Web and Abacus. Abacus Shareholders holding approximately 20% of the basic issued and outstanding Abacus Shares (assuming conversion of all proportionate voting shares of Abacus) have entered into voting and support agreements to vote in favor of the Transaction. Perry Antelman , CEO of Abacus, who owns approximately 4.3% of the basic issued and outstanding Abacus Shares (assuming conversion of all proportionate voting shares of Abacus), is expected to fill a key leadership role in Charlotte’s Web and has executed a new employment agreement, as well as a lock-up agreement in connection with the Transaction, which will restrict the sale of his resulting Charlotte’s Web Shares for a 15-month period post-closing with incremental release commencing in six months.

The Arrangement Agreement provides for customary representations, warranties and covenants, including a termination fee in the amount equal to C$4.0 million , payable by Abacus in the event that the Arrangement Agreement is terminated in certain circumstances. The Arrangement Agreement also provides for a non-solicitation covenant and a provision for the right to match any superior proposal in favor of Charlotte’s Web.

The Board of Directors of Abacus unanimously recommends that Abacus Shareholders vote in favor of the resolution to approve the Transaction at the Special Meeting and has determined that the consideration offered to the holders of Abacus Shares is fair, from a financial point of view, to the Abacus Shareholders. The Board of Directors of Abacus has obtained a fairness opinion from Greenhill & Co. Canada Ltd. that states that the consideration to be received by holders of Abacus shares pursuant to the Plan of Arrangement is fair, from a financial point of view, to the holders of Abacus Shares.

Canaccord Genuity Corp. acted as financial advisor and DLA Piper ( Canada ) LLP acted as legal counsel to Charlotte’s Web. Canaccord Genuity Corp. provided a fairness opinion to the Board of Directors of Charlotte’s Web.

Greenhill & Co. Canada Ltd. acted as financial advisor and Osler , Hoskin & Harcourt LLP acted as legal counsel to Abacus. Greenhill & Co. Canada Ltd. provided a fairness opinion to the Board of Directors of Abacus.

investor relations section of the Charlotte’s Web website.” data-reactid=”63″>Charlotte’s Web will discuss the transaction during its 2019 year-end conference call and webcast and answer analyst questions at 8:30 am ET on Tuesday, March 24, 2020 . Charlotte’s Web CEO Deanie Elsner and CFO Russ Hammer will host the call, followed by a question and answer period. To participate in the call, please dial 1-647-427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call.   A recording of the call will be available through March 31 , 2020.  To listen to a replay of the earnings call please dial 1-416-849-0833 and provide conference ID 3252968.  A webcast of the call will also be accessible through the investor relations section of the Charlotte’s Web website.

Abacus is engaged in the development and commercialization of over-the-counter (OTC) topical medications with active pharmaceutical ingredients and which contain organic and natural ingredients, including a cannabinoid-rich hemp extract containing CBD from the Cannabis sativa L plant. Abacus’ products are aimed at the rapidly growing markets for topical pain relief and therapeutic skincare and are based on proprietary patent-pending technologies developed by Abacus. Abacus’ formulations combine advanced science with organic and natural ingredients to provide safe relief. Abacus currently offers three lines of products: CBD CLINIC™, marketed to the professional practitioner market, and CBDMEDIC™ and Harmony Hemp™, marketed to the consumer market. Abacus’ products are offered across the United States and are produced by a contract manufacturer in an FDA registered and audited manufacturing facility.

As of March 23, 2020 , Abacus had 11,991,471 Subordinate Voting Shares outstanding and 95,873.3 Proportional Voting Shares convertible at 100:1 into Subordinate Voting Shares, for an effective equivalent of 21,578,837 Subordinate Voting Shares outstanding

www.abacushp.com ” data-reactid=”67″>To learn more about Abacus, visit www.abacushp.com 

www.CharlottesWeb.com.” data-reactid=”69″>Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-derived cannabidiol (“CBD”) wellness products. Founded by the Stanley Brothers, the Company’s premium quality products start with proprietary hemp genetics that are responsibly manufactured into hemp-derived CBD extracts naturally containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other beneficial hemp compounds. Charlotte’s Web product categories include CBD oil tinctures (liquid products), CBD capsules, CBD topicals, as well as CBD pet products. Charlotte’s Web hemp-derived CBD extracts are sold through select distributors, brick and mortar retailers, and online through the Company’s ADA compliant website at www.CharlottesWeb.com.

As of March 23, 2020 , Charlotte’s Web had 71,448,314 Common Shares outstanding and 92,455.88 Proportional Voting Shares convertible at 400:1 into Common Shares, for an effective equivalent of 108,430,544 Common Shares outstanding.

Subscribe to Charlotte’s Web news” data-reactid=”71″>Subscribe to Charlotte’s Web news

www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive.” data-reactid=”75″>Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including assumptions as to the time required to prepare and mail security holder meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; including any approval required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; the disruption to the functioning of the regulatory bodies that provide the necessary regulatory and court approvals or any ancillary disruption, anticipated or otherwise, due to the outbreak of the novel coronavirus (COVID-19) will not affect the timing or completion of the Transaction in the manner contemplated by the Arrangement Agreement; the ability of the parties to satisfy, in a timely manner, the conditions to closing; other expectations and assumptions concerning the Transaction; and such risks contained in Charlotte’s Web’s annual information form dated April 29, 2019 and in Abacus’ annual information form dated April 12, 2019 and filed with Canadian securities regulators available on Charlotte’s Web’s and Abacus’ respective issuer profiles on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive.