Charlotte's Web Holdings, Inc. (TSX:CWEB) entered into a definitive arrangement agreement to acquire Abacus Health Products, Inc. (CNSX:ABCS) from KR Group Ltd, Perry Antelman and others for CAD 87.7 million on March 22, 2020. Pursuant to the agreement, Charlotte's Web proposes to acquire all of the issued and outstanding subordinate voting shares of Abacus (the “Abacus shares”), after conversion of all outstanding proportionate voting shares of Abacus into Abacus shares (the “transaction”). Under the terms of the arrangement agreement, shareholders of Abacus (“Abacus shareholders”) will receive 0.85 of a common share of Charlotte's Web (“Charlotte's Web share”) for each Abacus share held (the “Exchange Ratio”). The exchange ratio implies a price per Abacus share of CAD 4.39, for implied total equity consideration of approximately CAD 99 million. After giving effect to the transaction, Abacus shareholders will hold approximately 19.2 million Charlotte's Web Shares (representing approximately 15% of the issued and outstanding). The termination fee in the amount equal to CAD 4.0 million, payable by Abacus in the event that the arrangement agreement is terminated in certain circumstances. As part of the agreement, Perry Antelman, Chief Executive Officer of Abacus, is expected to fill a key leadership role in Charlotte's Web.

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, has executed a new employment agreement, as well as a lock-up agreement in connection with the transaction. The transaction is subject to, among other things, the approval of Abacus shareholders, receipt of required regulatory and court approvals, final order from the Ontario Superior Court of Justice (Commercial List) and other customary conditions of closing. Approval of Charlotte's Web shareholders is not required. A special meeting of shareholders of Abacus will be held on June 4, 2020 to approve the transaction. On June 4, 2020, shareholders of Abacus approved the transaction. As of June 8, 2020, the Ontario Superior Court of Justice (Commercial List) has issued a final order approving the transaction. The transaction will be completed in the second quarter of 2020. As of May 14, 2020, transaction is expected to close in late Q2 or early Q3 2020. As of June 4, 2020, the transaction is expected to close in the second quarter of 2020. As of June 8, 2020, the transaction is expected to close on June 11, 2020. The transaction is anticipated to be accretive to Charlotte's Web shareholders on an Adjusted EBITDA basis.

Canaccord Genuity Corp. acted as financial advisor and Jarrod Isfeld, Russel W. Drew, Jeff Baglio, Kevin Fritz, Sangeetha Punniyamoorthy, Ute Krudewagen, SeoJung Park, Stefanie Jill Fogel, Maggie Craig, Paolo Morante, Julia T. Kovacs, Andrew L. Much, Amanda Vogeli, Mackenzie Clark and Steffani Stevens of DLA Piper acted as legal advisors 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 Eric Levy, Bastien Gauthier, Jason Comerford, Manon Thivierge and Kevin Colan of Osler, Hoskin & Harcourt LLP acted as legal advisors to Abacus. Greenhill & Co. Canada Ltd. provided a fairness opinion to the Board of Directors of Abacus. Gryphon Advisors Inc. acted as proxy solicitation agent for Abacus and will receive a fee of CAD 40,000. Odyssey Trust Company is the transfer agent of Abacus. Institutional Shareholder Services Inc. and Glass Lewis &Co. have each recommended that shareholders of Abacus vote for the proposed acquisition.

Charlotte's Web Holdings, Inc. (TSX:CWEB) completed the acquisition of Abacus Health Products, Inc. (CNSX:ABCS) from KR Group Ltd, Perry Antelman and others on June 11, 2020. All the outstanding proportionate voting shares of Abacus were converted into Abacus Shares prior to closing of the arrangement. With the completion of the transaction, the Abacus Shares and common share purchase warrants of Abacus listed under the symbol "ABCS.WT" on the Canadian Securities Exchange (the "Abacus Warrants") are expected to be de-listed from the Canadian Securities Exchange at the close of trading on or about June 11, 2020. On close of the arrangement, each Abacus Warrant outstanding immediately prior to closing was exchanged for a common share purchase warrant of Charlotte's Web that entitles the holder to acquire common shares of Charlotte's Web in lieu of Abacus Shares, subject to adjustment in number and exercise price to give effect to the Exchange Ratio. Charlotte's Web has applied to list the Replacement Warrants on the Toronto Stock Exchange and it is anticipated that, subject to satisfaction of the TSX listing requirements, the Replacement Warrants will begin trading on the TSX under the symbol "CWEB.WS" at market open on or about June 15, 2020. Perry Antelman, Chief Executive Officer of Abacus will join Charlotte's Web as Executive Vice President and President of Topicals effective June 11, 2020. John Emanoilidis and Daniel Masliyah of Torys LLP acted as legal advisor to Canaccord Genuity Corp.