cbdMD, Inc 8-K, filed Aug 12, 2020

cbdMD, Inc. (YCBD)

8-K 2020-08-12 For: 2020-08-12

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Added on April 08, 2026

About this 8-K

cbdMD, Inc filed this 8-K on August 12, 2020.

Items reported

Item 7.01: Regulation FD disclosure
Item 9.01: Financial statements and exhibits

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North Carolina	001-38299	47-3414576
(State or Other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	YCBD	NYSE American
8.0% Series A Cumulative Convertible Preferred Stock	YCBD PR A	NYSE American

		Incorporated by Reference			Filed or Furnished Herewith
No.	Exhibit Description	Form	Date Filed	Number	Filed or Furnished Herewith
99.1	Press release dated August 12, 2020				Furnished

	cbdMD, INC.

Date: August 12, 2020	By:	/s/ Mark S. Elliott
		Mark S. Elliott, Chief Financial Officer and Chief Operating Officer

CONFERENCE CALL DETAILS
Wednesday, August 12, 2020, 4:15 p.m. Eastern Time
Domestic:	1-844-407-9500
International:	1-862-298-0850
Replay dial in – Available through September 12, 2020
Domestic:	1-877-481-4010
International:	1-919-882-2331
Replay ID:	36267

	(Unaudited)
	June 30,	September 30,
	2020	2019
Assets

Current assets:
Cash and cash equivalents	$15,006,319	$4,689,966
Accounts receivable	715,205	1,425,697
Accounts receivable other	-	160,137
Accounts receivable – discontinued operations	700,884	1,080,000
Marketable securities	52,527	198,538
Investment other securities	-	600,000
Deposits	-	6,850
Merchant reserve	-	519,569
Inventory	6,397,326	4,301,586
Inventory prepaid	281,885	903,458
Deferred issuance costs	-	93,954
Prepaid software	-	206,587
Prepaid equipment deposits	201,698	868,589
Prepaid expenses and other current assets	755,906	688,104
Total current assets	24,111,750	15,743,035

Other assets:
Property and equipment, net	3,067,909	1,715,557
Operating lease assets	7,119,289	-
Deposits for facilities	706,852	754,533
Intangible assets, net	21,635,000	21,635,000
Goodwill	54,669,997	54,669,997
Total other assets	87,199,047	78,775,087

Total assets	$111,310,797	$94,518,122

	Three months	Three months	Nine months	Nine months
	Ended	Ended	Ended	Ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019

Total Gross Sales	10,809,387	9,734,459	30,925,678	18,170,667
Allowances	(172,842)	(1,729,310)	(741,861)	(4,063,252)
Total Net Sales	10,636,545	8,005,149	30,183,817	14,107,414
Cost of sales	3,748,024	2,929,160	10,180,637	5,009,187

Gross Profit	6,888,521	5,075,989	20,003,180	9,098,228

Operating expenses	8,226,029	11,542,628	33,053,962	18,683,905
Income (Loss) from operations	(1,337,508)	(6,466,639)	(13,050,782)	(9,585,677)
Realized and Unrealized gain (loss) on marketable securities	(30,849)	(13,162)	(146,011)	(77,802)
(Increase) Decrease of contingent liability	(7,580,000)	(21,547,606)	30,580,000	(52,461,680)
Impairment on investment other securities	-	-	(600,000)	-
Impairment accounts receivable other		-	(160,000)	-
Interest income (expense)	3,436	6,229	46,311	50,189
Income (loss) before provision for income taxes	(8,944,921)	(28,021,178)	16,669,518	(62,074,970)

Benefit (Provision) for income taxes	-	1,088,000	2,240,300	2,296,000
Net Income (Loss) from continuing operations	(8,944,921)	(26,933,178)	18,909,818	(59,778,970)
Net Income (Loss) from discontinued operations, net of tax (Note 16)	(7,781)	(2,269,778)	(48,983)	(3,463,123)
Net Income (Loss)	(8,952,702)	(29,202,956)	18,860,835	(63,242,093)
Net Gain (Loss) attributable to noncontrolling interest	-	(1,503,707)	-	(1,641,391)
Preferred dividends	100,050	-	266,800	-

Net Income (Loss) attributable to cbdMD, Inc. common shareholders	$(9,052,752)	$(27,699,249)	$18,594,035	$(61,600,702)

Net Income (Loss) per share:
Basic earnings per share	$(0.18)	$(1.19)	$0.45	$(4.22)
Diluted earnings per share	$-	$-	$0.44	$-

Weighted average number of shares Basic:	51,335,648	23,193,793	41,411,261	14,585,619
Weighted average number of shares Diluted:			42,534,519

	Nine Months Ended June 30,	Nine Months Ended June 30,
	2020	2019
Cash flows from operating activities:
Net Income (loss)	$18,860,835	$(63,242,093)
Adjustments to reconcile net (income) loss to net
cash used by operating activities:
Stock based compensation	1,391,271	2,022,812
Restricted stock expense	138,001	92,000
Issuance of stock / warrants for service	84,450	289,750
Intangible impairment	-	2,114,334
Inventory and materials impairment	233,372	-
Impairment on discontinued operations asset	45,783	-
Depreciation and amortization	499,394	272,121
Gain on settlement of Note	-	(20,000)
Other than temporary impairment other securities and other accounts receivable	760,000	-
Increase/(Decrease) in contingent liability	(30,580,000)	52,461,680
Realized and unrealized loss of marketable securities	146,011	1,705,069
Merchant reserve settlement	132,657	-
Non-cash consideration received for services	-	(470,000)
Non-cash lease expense	878,986	-
Changes in operating assets and liabilities:
Accounts receivable	710,629	399,074
Accounts receivable – related party	-	204,902
Other accounts receivable	-	(298,754)
Note receivable	-	(27,000)
Note receivable – related party	-	156,147
Deposits	(147,166)	-
Merchant reserve	386,912	(199,907)
Inventory	(2,329,112)	(2,581,958)
Prepaid inventory	621,573	-
Prepaid expenses and other current assets	1,007,374	(717,894)
Marketable securities	-	701,593
Accounts payable and accrued expenses	(480,424)	1,073,211
Accounts payable and accrued expenses – related party	-	(313,591)
Operating lease liability	(766,289)	-
Note payable	42,968	-
Deferred revenue / customer deposits	(7,339)	(380,804)
Collection on discontinued operations accounts receivable	333,333	-
Deferred tax liability	(2,240,300)	(2,296,000)
Cash used by operating activities	(10,277,081)	(9,055,308)

Cash flows from investing activities:
Net cash used for merger	-	(1,167,295)
Purchase of intangible assets	-	(79,999)
Purchase of property and equipment	(1,851,746)	(359,421)
Cash used by investing activities	(1,851,746)	(1,606,715)

Cash flows from financing activities:
Proceeds from issuance of common stock	16,771,756	19,009,897
Proceeds from issuance of preferred stock	4,421,928	-
PPP loan	1,456,100	-
Note Payable – related party	-	(764,300)
Preferred dividend distribution	(266,800)	-
Deferred issuance costs	62,197	(232,914)
Cash provided by financing activities	22,445,180	18,012,683
Net increase (decrease) in cash	10,316,353	7,350,660
Cash and cash equivalents, beginning of period	4,689,966	4,282,553
Cash and cash equivalents, end of period	$15,006,319	$11,633,213

	(Unaudited)
	June 30,	September 30,
	2020	2019
Liabilities and shareholders' equity

Current liabilities:
Accounts payable	$1,825,135	$3,021,271
Accrued expenses	1,396,983	681,269
Operating leases – short term liabilities	1,109,585	-
Note payable	54,720	-
Customer deposit – related party	-	7,339
Total current liabilities	4,386,423	3,709,878

Long term liabilities:
Long term liabilities	-	363,960
Note payable	182,714	-
Paycheck Protection Program loan	1,456,100	-
Operating leases - long term liabilities	6,305,422	-
Contingent liability	15,400,000	50,600,000
Deferred tax liability	-	2,240,300
Total long term liabilities	23,344,236	53,204,260

Total liabilities	27,730,659	56,914,138

cbdMD, Inc. shareholders' equity:
Preferred stock, authorized 50,000,000 shares, $0.001 par value, 500,000 and 0 shares issued and outstanding, respectively	500	-
Common stock, authorized 150,000,000 shares, $0.001 par value,
51,345,648 and 27,720,356 shares issued and outstanding, respectively	51,346	27,720
Additional paid in capital	124,558,046	97,186,524
Accumulated deficit	(41,029,754)	(59,610,260)
Total cbdMD, Inc. shareholders’ equity	83,580,138	37,603,984

Total liabilities and shareholders' equity	$111,310,797	$94,518,122

	Nine Months ended June 30,	Nine Months Ended June 30,
	2020	2019

Cash Payments for:
Interest expense	$26,126	$36,418

Non-cash financial activities:
Warrants issued to secondary selling agent	$524,113	$309,592
Stock received for prior period services, adjusted for other accounts receivable write down prior to receipt	$-	$1,352,000
Adoption of ASU 2016-01	$-	$2,512,539