Charlotte's Web Q2 2026: BAT Conversion Cleans Balance Sheet, But Revenue Slides 15%
CWBHF has more than doubled off its 52-week low of $0.075 on elevated volume (1.8× avg).
Summary
Charlotte's Web's Q2 2026 10-Q details a 15% revenue decline but a dramatically improved balance sheet after BAT converted its debenture and invested $10 million, eliminating $50.8 million in debt and swinging equity to a $56 million surplus.
Key Events · Earnings and Guidance · CWBHF
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BAT Conversion Eliminates $50.8M Debt
On May 28, 2026, BAT converted its C$75.3 million convertible debenture plus accrued interest into 95,281,277 common shares at C$0.94 per share, extinguishing the debt and reducing total liabilities from $77.3 million to $20.3 million.
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BAT Injects Additional $10M Cash
Concurrently, BAT subscribed for 14,662,765 shares in a private placement for $10 million, bringing its total ownership to 109,944,042 shares, or 40.6% of the company.
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Revenue Declines 15.2% Year-Over-Year
Q2 2026 revenue was $10.855 million, down from $12.806 million in Q2 2025, driven by the shift to a distributor model. Gross margin improved to 47.5% from 46.8%.
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Net Loss Narrows to $4.1M
Q2 2026 net loss was $4.127 million, compared to $6.288 million a year earlier. The loss included a $4.216 million non-cash loss on debt extinguishment and a $5.557 million gain on fair value changes.
Analysis · CWBHF · Industrial Applications And Services
The 10-Q confirms the Q2 2026 results previewed in today's 8-K, adding full financial detail. Revenue fell 15.2% year-over-year to $10.9 million, but the balance sheet transformed: the $50.8 million convertible debenture was extinguished via conversion into 95.3 million shares, and BAT injected an additional $10 million in cash. Total liabilities dropped from $77.3 million to $20.3 million, and shareholders' equity swung from a $2.0 million deficit to a $56.1 million surplus. The company still lost $4.1 million in the quarter, but cash burn improved to $3.7 million for the half-year, and management states existing cash is sufficient for the next 12 months. The 40.6% BAT ownership stake is now fully reflected in the share count, which jumped from 159.4 million to 270.5 million shares.
At the time of this filing, CWBHF was trading at $0.29 on OTC in the Industrial Applications And Services sector, with a market capitalization of approximately $77.2M. The 52-week trading range was $0.08 to $0.97. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.