cbdMD, Inc 8-K, filed Feb 9, 2021
cbdMD, Inc. (YCBD)
8-K
2021-02-09
For: 2021-02-09
View Original
Added on
April 08, 2026
About this 8-K
cbdMD, Inc filed this 8-K on February 9, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported)
February 9,
2021
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cbdMD, INC.
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(Exact name of registrant as specified in its charter)
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North Carolina
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001-38299
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47-3414576
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(State or other jurisdiction of incorporation or
organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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8845 Red Oak Blvd, Charlotte, NC 28217
(Address of principal executive offices)(Zip Code)
Registrant's
telephone number, including area code: (704) 445-3060
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_______________________________________
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(Former name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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common
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YCBD
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NYSE
American
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8.0%
Series A Cumulative Convertible Preferred Stock
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YCBDpA
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NYSE
American
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Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
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Emerging
growth company ☑
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If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange
Act. ☐
Item
7.01 Regulation
FD Disclosure.
On
February 9, 2021 cbdMD, Inc. issued a press release announcing its
first quarter fiscal 2021 results. A copy of this press release is
furnished as Exhibit 99.1 to this report.
Pursuant to General
Instruction B.2 of Form 8-K, the information in this Item 7.01 of
Form 8-K, including Exhibit 99.1, is being furnished and shall not
be deemed “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise be subject to the
liabilities of that section, nor is it incorporated by reference
into any filing of cbdMD, Inc. under the Securities Act of 1933 or
the Securities Exchange Act of 1934, whether made before or after
the date hereof, regardless of any general incorporation language
in such filing.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits.
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Incorporated by Reference
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Filed or
Furnished
Herewith
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No.
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Exhibit Description
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Form
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Date Filed
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Number
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Press
release dated February 9, 2021
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Furnished
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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cbdMD,
Inc.
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Date:
February 9, 2021
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By:
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/s/ T.
Ronan Kennedy
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T.
Ronan Kennedy, Chief Financial Officer
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Exhibit 99.1
cbdMD Reports First Quarter Fiscal 2021 Results
YOY Net Sales Increased 22% to Record $12.3 Million
YOY e-Commerce Direct-to-Consumer Sales Jump 41% to Record $9.7
Million
Pet Brand, Paw CBD, YOY Net Sales Up 83%
Gross Profit Margin Hits All Time High of 72 %
February 9, 2021, cbdMD, Inc. (NYSE American: YCBD,
YCBDpA), one of the
nation’s leading and most highly trusted and recognized
cannabidiol (CBD) brands, today announced its financial results for
its first quarter ended December 31, 2020.
Financial Highlights for the Quarter Ended December 31,
2020:
●
Our
net sales for the first quarter of fiscal 2021 increased by 22%
year-over-year to a record of $12.3 million from $10.1 million from
the prior year’s quarter.
●
Our
gross profit margin for the quarter increased to 72.2% from 63.5%
in the prior year’s quarter.
●
We
reported record quarterly E-commerce, direct-to-consumer, net sales
of $9.7 million, an increase of $2.8 million, or 41%, from the
prior year’s quarter and 13% sequential quarterly
growth.
●
Our
CBD pet brand, Paw CBD, reported in net sales in quarter increased
83%, to $1.5 million compared to $820,000 from the prior
year’s quarter.
●
Our
quarterly operating expenses decreased by 15% YOY to $10.7 million
from $12.6 million from the prior year’s quarter, a
sequential quarterly decrease of 2%.
●
Our
loss from operations decreased by 71% to $1.8 million compared to
$6.1 million from the prior year’s quarter.
●
Our
non-GAAP adjusted operating loss decreased by 90% to $523,841,
compared to $5.0 million from the prior year’s
quarter.
●
Our
net loss attributable to common shareholders for the quarter was
approximately $9.5 million, or ($0.18) per share, as compared to
net income of approximately $12.9 million, or $0.45 per share from
the prior year’s quarter. Our net loss attributable to common
shareholders was principally attributable to an increase of
approximately $8.5 million in the non-cash contingent liability
which is associated with earnout shares which may be issued under
the terms of the December 2018 acquisition of Cure Based
Development (which owned the cbdMD brand).
●
At
December 31, 2020, we had working capital of approximately $30.6
million and cash on hand of approximately $28.8 million as compared
to working capital of approximately $16.0 million and cash on hand
of approximately $14.8 million at September, 2020. Our working
capital position was bolstered during the quarter following our
receipt of approximately $15.8 million in net proceeds from our
December 2020 sale of shares of our 8.0% Series A Cumulative
Convertible Preferred Stock in a firm commitment underwritten
public offering.
cbdMD, Inc. will host a conference call at 4:15 p.m., Eastern time,
on Tuesday, February 9, 2021, to discuss the company’s first
quarter fiscal 2021 financial results and business
progress.
CONFERENCE CALL DETAILS
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Title:
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cbdMD
First Quarter 2021 Earnings Call
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Event Date:
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Tuesday,
February 9, 2021 - 4:15 PM Eastern Time
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Event Link:
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Webcast
URL https://www.webcaster4.com/Webcast/Page/2206/39768
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Webcast Replay Expiration:
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Wednesday,
February 9, 2022
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Participant Numbers:
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Toll
Free: 888-506-0062International: 973-528-0011
Entry
code (not required): 117414
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Replay Number:
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Toll
Free: 877-481-4010International: 919-882-2331Replay Passcode:
39768
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About cbdMD, Inc.
cbdMD, Inc. is one of the leading, most highly trusted, and most
recognized cannabidiol (CBD) brands, whose current products include
CBD tinctures, CBD capsules, CBD gummies, CBD topicals, CBD bath
bombs and CBD pet products. To learn more about cbdMD and our
comprehensive line of over 130 SKUs of U.S. produced,
Non-THC1 CBD
products, please visit www.cbdMD.com,
follow cbdMD on Instagram and Facebook, or
visit one of the 6,000 retail outlets that carry cbdMD and Paw CBD
products.
1 Non-THC is defined as
below the level of detection using validated scientific analytical
tools.
Forward-Looking Statements
This press release contains certain forward-looking statements that
are based upon current expectations and involve certain risks and
uncertainties within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can
be identified by the use of words such as ''should,'' ''may,''
''intends,'' ''anticipates,'' ''believes,'' ''estimates,''
''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and
''proposes.'' These forward-looking statements are not guarantees
of future performance and are subject to risks, uncertainties, and
other factors, some of which are beyond our control and difficult
to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
You are urged to carefully review and consider any cautionary
statements and other disclosures, including the statements made
under the heading "Risk Factors" in cbdMD, Inc.'s Annual Report on
Form 10-K for the fiscal year ended September 30, 2020 as filed
with the Securities and Exchange Commission (the "SEC") on December
22, 2020, Item 1A. Risk Factors, contained in our Quarterly Report
on Form 10-Q for the period ended December 31, 2020 as filed with
the SEC on February 9, 2021 and our other filings with the SEC. All
forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements, many of which are
generally outside the control of cbdMD, Inc. and are difficult to
predict. cbdMD, Inc. does not undertake any duty to update any
forward-looking statements except as may be required by law. The
information which appears on our websites and our social media
platforms, including, but not limited to, Instagram and Facebook,
is not part of this press release.
Non-GAAP Financial Measures
This press release includes a financial measure that excludes the
impact of certain items and therefore has not been calculated in
accordance with U.S. generally accepted accounting principles
("GAAP"). cbdMD, Inc. has included adjusted loss from operations
because management uses this measure to assess operating
performance in order to highlight trends in our business that may
not otherwise be apparent when relying on financial measures
calculated in accordance with GAAP. The adjusted operating loss has
not been prepared in accordance with GAAP. This non-GAAP financial
measure should not be considered as an alternative to, or more
meaningful than, net loss from operations as an indicator of our
operating performance. Further, this non-GAAP financial measure, as
presented by cbdMD, Inc., may not be comparable to similarly titled
measures reported by other companies. cbdMD, Inc. has attached to
this press release a reconciliation of this non-GAAP financial
measure to its most directly comparable GAAP financial
measure.
Contacts
PR:
5W
Public Relations
cbdMD@5wpr.com
(212) 999-5585
Investors:
cbdMD, Inc.
John Weston
Director
of Investor Relations
John.Weston@cbdMD.com
(704)
249-9515
cbdMD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND SEPTEMBER 30, 2020
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(Unaudited)
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December
31,
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September
30,
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2020
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2020
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Assets
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Current
assets:
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Cash
and cash equivalents
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$28,763,812
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$14,824,644
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Accounts
receivable
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1,021,554
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911,482
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Accounts
receivable – discontinued operations
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24,717
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447,134
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Marketable
securities
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29,181
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26,472
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Investment
other securities
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250,000
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250,000
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Deposits
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-
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40,198
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Inventory
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4,383,501
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4,603,360
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Inventory
prepaid
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336,362
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288,178
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Prepaid
software
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-
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174,308
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Prepaid
equipment deposits
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-
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40,197
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Prepaid
sponsorship
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1,069,600
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1,203,300
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Prepaid
expenses and other current assets
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1,496,721
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902,979
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Total
current assets
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37,375,449
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23,712,252
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Other
assets:
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Property
and equipment, net
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3,084,321
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3,183,487
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Operating
lease assets
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6,547,278
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6,851,357
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Deposits
for facilities
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766,708
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790,708
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Intangible
assets, net
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21,635,000
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21,635,000
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Goodwill
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54,669,997
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54,669,997
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Total
other assets
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86,703,304
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87,130,549
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Total
assets
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$124,078,753
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$110,842,801
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CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND SEPTEMBER 30, 2019
(continued)
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(Unaudited)
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December
31,
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September
30,
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2020
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2020
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Liabilities
and shareholders' equity
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Current
liabilities:
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Accounts
payable
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$2,174,529
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$2,850,421
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Deferred
revenue
|
22,440
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45,141
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Accrued
expenses
|
2,301,154
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2,724,779
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Operating
leases – current portion
|
1,242,608
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1,159,098
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Paycheck
Protection Program loan, current portion
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939,826
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854,000
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Note
payable
|
56,573
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55,639
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Total
current liabilities
|
6,737,130
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7,689,078
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Long term
liabilities:
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Long
term liabilities
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-
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264,367
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Note
payable
|
153,957
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-
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Paycheck
Protection Program loan
|
516,274
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602,100
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Operating
leases - long term portion
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5,688,746
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6,010,208
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Contingent
liability
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24,700,000
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16,200,000
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Deferred
tax liability
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563,000
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895,300
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Total
long term liabilities
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31,621,977
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23,971,675
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Total
liabilities
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38,359,107
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31,660,753
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cbdMD, Inc.
shareholders' equity:
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Preferred stock,
authorized 50,000,000 shares, $0.001 par value, 2,800,000 and
500,000 shares issued and outstanding, respectively
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2,800
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500
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Common stock,
authorized 150,000,000 shares, $0.001 par value,
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52,130,870 and
52,130,870 shares issued and outstanding, respectively
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52,131
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52,131
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Additional paid in
capital
|
142,548,752
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126,517,784
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Accumulated
deficit
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(56,884,037)
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(47,388,367)
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Total
cbdMD, Inc. shareholders' equity
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85,719,646
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79,182,048
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Total
liabilities and shareholders' equity
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$124,078,753
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$110,842,801
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cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
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Three
months
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Three
months
|
|
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Ended
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Ended
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December
31,
2020
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December
31,
2019
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Gross
Sales
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$13,131,946
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$10,412,491
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Allowances
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(803,643)
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(264,255)
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Total
Net Sales
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12,328,303
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10,148,236
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Cost of
sales
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3,430,274
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3,700,537
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Gross Profit
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8,898,028
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6,447,699
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Operating
expenses
|
10,657,973
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12,560,297
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(Loss)
from operations
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(1,759,945)
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(6,112,598)
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Realized
and Unrealized gain (loss) on marketable & other
securities
|
542,710
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(62,010)
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(Increase)
decrease of contingent liability
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(8,500,000)
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16,898,006
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Interest
(expense) income
|
(10,386)
|
7,267
|
|
Income (loss) before provision for income
taxes
|
(9,727,621)
|
10,730,665
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|
|
|
|
|
Benefit
for income taxes
|
332,000
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2,240,300
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Net (Loss) Income from continuing
operations
|
(9,395,621)
|
12,970,965
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Net
(Loss) from discontinued operations, net of tax (Note
13)
|
-
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(41,202)
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|
Net
(Loss) Income
|
(9, 395,621)
|
12,929,763
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Preferred
dividends
|
100,050
|
66,734
|
|
|
|
|
|
Net
(Loss) Income attributable to cbdMD, Inc. common
shareholders
|
$(9,495,671)
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$12,863,029
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|
|
|
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|
Net
(Loss) Income per share:
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|
|
|
Basic earnings
per share
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$(0.18)
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$0.46
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Diluted
earnings per share
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(0.18)
|
0.45
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Weighted average number
of shares Basic:
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52,130,870
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27,720,356
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Weighted average number
of shares Diluted:
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52,130,870
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28,553,856
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cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
(Unaudited)
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|
Three
months
|
Three
months
|
|
|
Ended
|
Ended
|
|
|
December
31,
2020
|
December
31,
2019
|
|
|
|
|
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Net (Loss)
Income
|
$(9,395,621)
|
$12,929,763
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|
Comprehensive (Loss)
Income
|
(9,395,621)
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12,929,763
|
|
|
|
|
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Preferred
dividends
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(100,050)
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(66,734)
|
|
Comprehensive
(Loss) Income attributable to cbdMD, Inc. common
shareholders
|
$(9,495,671)
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$12,863,029
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|
|
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cbdMD, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2020 AND 2019
(unaudited)
|
|
Three Months
Ended December 31,
|
Three Months
Ended December 31,
|
|
|
2020
|
2019
|
|
Cash
flows from operating activities:
|
|
|
|
Net (Loss)
Income
|
$(9,395,621)
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$12,929,763
|
|
Adjustments
to reconcile net (income) loss to net
|
|
|
|
cash
used by operating activities:
|
|
|
|
Stock
based compensation
|
248,894
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542,574
|
|
Restricted
stock expense
|
15,279
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138,000
|
|
Issuance
of stock / warrants for service
|
35,712
|
-
|
|
Impairment
on discontinued operations asset
|
-
|
38,002
|
|
Depreciation
and amortization
|
232,658
|
113,252
|
|
Increase/(Decrease)
in contingent liability
|
8,500,000
|
(16,898,006)
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Realized
and unrealized loss of marketable and other securities
|
(542,709)
|
62,011
|
|
Termination
benefit
|
305,326
|
-
|
|
Non-cash
lease expense
|
304,080
|
382,432
|
|
Changes
in operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
(110,072)
|
755,515
|
|
Deposits
|
24,000
|
(22,365)
|
|
Merchant
reserve
|
-
|
106,590
|
|
Inventory
|
219,859
|
(1,005,631)
|
|
Prepaid
inventory
|
(48,184)
|
(237,753)
|
|
Prepaid
expenses and other current assets
|
(310,268)
|
(100,803)
|
|
Accounts
payable and accrued expenses
|
(1,500,755)
|
454,490
|
|
Operating
lease liability
|
(237,952)
|
(318,758)
|
|
Note
payable
|
-
|
268,115
|
|
Deferred
revenue / customer deposits
|
(22,701)
|
(7,339)
|
|
Collection
on discontinued operations accounts receivable
|
422,417
|
166,667
|
|
Deferred
tax liability
|
(332,000)
|
(2,240,300)
|
|
Cash used by
operating activities
|
(2,192,038)
|
(4,873,544)
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
Proceeds
from the sale of other investment securities
|
540,000
|
-
|
|
Purchase
of property and equipment
|
(93,294)
|
(555,674)
|
|
Cash provided
(used) by investing activities
|
446,706
|
(555,674)
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
Proceeds
from issuance of preferred stock
|
15,798,115
|
4,421,928
|
|
Note
payable
|
(13,564)
|
-
|
|
Preferred
dividend distribution
|
(100,050)
|
(66,734)
|
|
Deferred
issuance costs
|
-
|
45,368
|
|
Cash provided by
financing activities
|
15,684,500
|
4,400,562
|
|
Net increase
(decrease) in cash
|
13,939,168
|
(1,028,656)
|
|
Cash and cash
equivalents, beginning of period
|
14,824,644
|
4,689,966
|
|
Cash
and cash equivalents, end of period
|
$28,763,812
|
$3,661,310
|
Supplemental Disclosures of Cash Flow Information:
|
|
Three Months
ended December 31,
|
Three Months
Ended December 31,
|
|
|
2020
|
2019
|
|
|
|
|
|
Cash Payments
for:
|
|
|
|
Interest
expense
|
$3,672
|
$8,221
|
|
|
|
|
|
Non-cash financial
activities:
|
|
|
|
Warrants issued to
underwriter
|
$254,950
|
$178,513
|
cbdMD, Inc.
SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP ADJUSTED INCOME (LOSS) FROM
OPERATIONS
(Unaudited)
|
GAAP (loss) from operations
|
$(1,759,945)
|
$(6,112,597)
|
|
Adjustments:
|
|
|
|
Depreciation
|
232,806
|
113,251
|
|
Employee
and director stock compensation (1)
|
264,174
|
680,574
|
|
Other
non-cash stock compensation for services (2)
|
35,713
|
91,069
|
|
Accrual
for severance
|
403,412
|
-
|
|
Accrual
/ expenses for discretionary bonus
|
300,000
|
222,500
|
|
Non-GAAP adjusted (loss) from operations
|
$(523,841)
|
$(5,005,203)
|
(1)
Represents non-cash
expense related to options, warrants, restricted stock expenses
that have been amortized during the period.
(2)
Represents non-cash
expense related to options, warrants, restricted stock expenses
that have been amortized during the period.