The future of Charlotte’s Web Holdings CWBHF, a Colorado-based company that produces and markets high-CBD, low-THC products, is under scrutiny as co-founders and brothers Jesse and Joel Stanley expressed concerns about the company’s direction and called for changes to the board of directors.
The Stanleys urged shareholders to withhold their votes for four out of the six director nominees in the annual general meeting held on June 15.
The dissenting shareholders, collectively hold a significant 24.66% of the company’s voting shares, indicating a substantial opposition to the nominated directors.
Urgent Action To Protect The Company
The co-founders cited the decline in share value and the company’s low stock price as indicators of the current leadership’s shortcomings.
Joel Stanley emphasized the need for urgent action to protect the company’s future, stating that the incumbent directors who fail to secure majority support should step down to avoid delaying necessary changes and restore shareholder value.
“The significant cash burn rate with decreasing revenues must end immediately. The current leadership blames the general industry decline and regulatory headwinds to avoid taking responsibility for their actions. The truth is that the actions of this Board have clearly contributed to the destruction of shareholder value,” Jesse Stanley stated in a press release.
Conflict Of Interest
In response to the co-founders’ demands, Charlotte’s Web rejected the call for board replacements, citing conflicts of interest and their fiduciary responsibility to shareholders.
The company emphasized the importance of proper vetting of board nominees through its advance notice by-laws and indicated its commitment to addressing the concerns raised by seeking legal, proxy solicitation, and communications advisors.
Annual General Meeting
During the annual general meeting, the incumbent directors were re-elected, and all other matters detailed in the company’s Proxy Statement were approved.
However, due to receiving less than majority support, certain directors followed the company’s Majority Voting Policy and submitted offers to resign from the board.
The board will review these offers and provide an update on its decision in due course.
Charlotte’s stocks were trading 7.85% lower, at $0.1788 per share after the market close on Tuesday.
Image and article originally from www.benzinga.com. Read the original article here.