v3.26.1
DEBT
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
DEBT DEBT
Convertible Debenture
On November 14, 2022, the Company entered into the Subscription Agreement with BT DE Investments, Inc., providing for the issuance of a $56.8 million (C$75.3 million) Convertible Debenture. The Convertible Debenture was denominated in Canadian Dollars ("CAD" or "C$"). The Convertible Debenture was convertible into 19.9% ownership of the Company’s common shares at a conversion price of C$2.00 per Common Share of the Company. The Convertible Debenture accrued interest at a stated annualized rate of 5% until such time that there was federal regulation permitting the use of CBD as an ingredient in food products and dietary supplements in the United States. Following federal regulation of CBD, the stated annualized rate of interest shall reduce to 1.5%. Interest accrued annually and payable on the maturity date or date of earlier conversion.
On May 28, 2026, the Company completed a transaction with BT DE comprised of two components: (i) amendment and conversion of BAT’s outstanding C$75.3 million Convertible Debenture, as well as, all accrued interest, into Charlotte’s Web's common shares at a
conversion price of C$0.94 per share; and (ii) a concurrent additional equity investment by BT DE of $10 million (approximately C$13.9 million at the then applicable exchange rate) by way of a private placement at a price equal to C$0.94 per share, and (b) a dollar amount equal to the maximum discount available pursuant to section 607 of the TSX Company Manual applied to the 5-day volume weighted average price of the Company’s common shares on the TSX prior to the closing date provided that the maximum number of common shares of the Company to be issued to BT DE under the Investment would not exceed 14,760,638 common shares of the Company.
On May 28, 2026, the Company and BT DE entered into the Amendment and Conversion Notice. Pursuant to the Amendment and Conversion Notice: (i) the interest conversion price of the Convertible Debenture was reduced from C$2.00 to C$0.94 per share; (ii) the interest conversion price of the Convertible Debenture was amended to C$0.94 per share; and (iii) the applicable threshold for purposes of the Conversion Cap (as defined in the Convertible Debenture) was increased from 19.9% to 40.8%. At the closing and immediately following the effectiveness of the Amendment and Conversion Notice, BT DE converted the principal amount of, and all accrued but unpaid interest on, the Convertible Debenture into 95,281,277 common shares of the Company. As of the closing of the Transaction and upon the conversion of the Convertible Debenture and the Investments, BT DE holds an aggregate of 109,944,042 common shares of the Company, representing approximately 40.6% of the issued and outstanding Common Shares (calculated on a non-diluted basis) of the Company based on 270,549,931 Common Shares issued and outstanding as of May 28, 2026.
The retirement of the debt obligations was accounted for as an extinguishment of debt. In accordance with applicable accounting standards, the Company recognized $65.0 million in additional paid-in capital in connection with the transaction, including $52.9 million attributable to the fair value of the conversion feature and $12.0 million related to unamortized debt discount. As a result, the Company recognized a loss on extinguishment of debt of $4.2 million, which was recorded in Loss from extinguishment of debt on the Company’s condensed consolidated statements of operations.
Following this conversion, the outstanding balance of the Convertible Debenture and its associated accrued interest represents a zero balance in the Company's condensed consolidated balance sheets statement.
The following is a summary of the Company's convertible debenture as of December 31, 2025:
As of December 31, 2025
Principal Amount
Unamortized Debt Discount and Costs
Net Carrying Amount
Convertible Debenture
Convertible debenture
$
63,944 
$
(13,095)
$
50,849 
The Convertible Debenture, prior to extinguishment, was C$75.3 million per the subscription agreement and translated to USD on the transaction date. For the three months ended June 30, 2026 and June 30, 2025, the Company recognized a foreign currency loss of $498 and $2,600, respectively, related to the net carrying value of the Convertible Debenture within the condensed consolidated statement of operations. Additionally, for the six months ended June 30, 2026 and June 30, 2025, the Company recognized a foreign currency gain of $227 and a loss $2,538, respectively, related to the net carrying value of the Convertible Debenture within the condensed consolidated statement of operations.
As of June 30, 2026 and June 30, 2025, the principal amount of the Convertible Debenture, prior to extinguishment, included $10,378 and $7,549, respectively, of accrued interest expense. The following is a summary of the interest expense and amortization expense, recorded
within the condensed consolidated statements of operations, of the Company's convertible debenture for the three and six months ended June 30, 2026 and June 30, 2025:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Interest expense
$
528 
$
749 
$
1,321 
$
1,471 
Amortization of debt discounts and costs
411 
514 
999 
977 
Total interest and amortization expense
$
939 
$
1,263 
$
2,320 
$
2,448