Part I [Item 1. Business](index=5&type=section&id=ITEM%201.%20Business.) cbdMD, Inc. operates nationally recognized CBD brands, focusing on profitability through cost optimization, e-commerce re-platforming, and new product launches - The company owns and operates nationally recognized CBD brands including **cbdMD**, **Paw CBD**, and **hempMD**[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Recent strategic shifts focus on achieving positive earnings through cost optimization, website re-platforming, and launching new brands like **hempMD** and **ATRx**[28](index=28&type=chunk)[32](index=32&type=chunk)[35](index=35&type=chunk) - Growth strategies include product innovation (e.g., **NSF for Sport**, **Delta 9 gummies**, **ATRx**), expanding retail channels (e.g., **Sprouts Supermarkets**), and international expansion across **31 countries**[36](index=36&type=chunk)[37](index=37&type=chunk) Marketing & Sponsorships Spend | Fiscal Year | Marketing & Sponsorships Spend (Millions USD) | | :--- | :--- | | 2023 | $6.9 million | | 2022 | $16.4 million | - Sales are primarily driven by e-commerce, accounting for approximately **80% of sales in fiscal 2023**, up from **75% in 2022**[44](index=44&type=chunk) - Manufacturing is fully outsourced to third-party **cGMP certified manufacturers** following the sale of manufacturing assets in fiscal 2022 to reduce fixed overhead[46](index=46&type=chunk)[47](index=47&type=chunk) - The company completed two clinical studies in fiscal 2023, demonstrating benefits in humans for pain and mood, and improved mobility in dogs with osteoarthritis in collaboration with **Colorado State University**[50](index=50&type=chunk)[51](index=51&type=chunk) - As of December 1, 2023, the company had approximately **52 full-time employees**[68](index=68&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=ITEM%201A.%20Risk%20Factors.) The company faces significant risks including substantial operating losses, liquidity concerns, capital structure limitations, declining revenue, and an uncertain regulatory environment - The company has a history of losses, reporting an operating loss of **$24.2 million in fiscal 2023** and **$78.3 million in fiscal 2022**, raising substantial doubt about its ability to continue as a going concern[75](index=75&type=chunk)[76](index=76&type=chunk) - The outstanding **Series A Preferred Stock**, with its **$50 million liquidation preference**, significantly limits the company's ability to pursue strategic investments or M&A activities[79](index=79&type=chunk) - Net sales have declined for two consecutive years, decreasing by **32% to $24.2 million in fiscal 2023**, following a **20% decrease in 2022**[80](index=80&type=chunk) - The lack of a clear regulatory framework for CBD from the **FDA** and varying state laws creates significant uncertainty, potential compliance costs, and could slow market growth[100](index=100&type=chunk)[103](index=103&type=chunk) - The company is subject to **NYSE American's** continued listing standards, and failure to meet them could result in the delisting of its securities[105](index=105&type=chunk) - In August 2023, the board of directors suspended dividend payments on the **Series A Convertible Preferred Stock** to conserve cash[107](index=107&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments.) This item is not applicable as the company is a smaller reporting company - Not applicable to a smaller reporting company[118](index=118&type=chunk) [Item 2. Properties](index=24&type=section&id=ITEM%202.%20Properties.) The company leases a 50,000 sq ft headquarters and an 80,000 sq ft warehouse in Charlotte, NC, with the headquarters lease currently in default - The company's headquarters is a leased **50,000 sq ft facility** in Charlotte, NC, with the company behind on lease payments and having received a default notice as of September 2023[119](index=119&type=chunk) - An **80,000 sq ft warehouse** is also leased in Charlotte, NC, with a portion of the space being sublet to offset expenses[119](index=119&type=chunk) [Item 3. Legal Proceedings](index=25&type=section&id=ITEM%203.%20Legal%20Proceedings.) The company is involved in a class action lawsuit stayed pending FDA clarity and a trademark cancellation proceeding against Majik Medicine, LLC - A class action lawsuit filed by **Cynthia Davis** in California against the company has been stayed until the **FDA** or Congress provides definitive action on CBD's regulatory status[120](index=120&type=chunk) - The company's subsidiary, **CBDI**, is in a legal dispute with **Majik Medicine, LLC** to cancel their trademark for "**CBD MD**", with the case currently in discovery[121](index=121&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable to our company[123](index=123&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=ITEM%205.%20Market%20for%20Registrants%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's common stock and Series A Preferred Stock are listed on NYSE American, with common stock dividends not intended and preferred stock dividends suspended in August 2023 to conserve cash - The company's common stock (**YCBD**) and **Series A Convertible Preferred Stock** (**YCBDpA**) trade on the **NYSE American** exchange[126](index=126&type=chunk) - On August 22, 2023, the Board of Directors suspended the monthly cash dividend payment on the **8.0% Series A Cumulative Convertible Preferred Stock** to conserve cash[128](index=128&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation.) In fiscal 2023, cbdMD experienced a 32% decrease in net sales to $24.2 million, driven by market softness and reduced marketing, leading to tightened liquidity and substantial doubt about its going concern ability [Results of Operations](index=27&type=section&id=Results%20of%20operations) Fiscal 2023 saw total net sales decrease 32% to $24.2 million, driven by declines in both e-commerce and wholesale, while operating expenses were significantly reduced despite a $13.2 million intangible asset impairment | Metric | Fiscal 2023 (USD) | Fiscal 2022 (USD) | | :--- | :--- | :--- | | Total Net Sales | $24,155,362 | $35,403,224 | | Gross Profit % | 62.0% | 63.1% | | Loss from Operations | $(22,487,549) | $(78,266,515) | | Impairment of Intangibles | $13,219,000 | $60,955,970 | | Net Loss to Common Shareholders | $(26,940,209) | $(74,085,698) | | Sales Channel | Fiscal 2023 (USD) | % of Total | Fiscal 2022 (USD) | % of Total | | :--- | :--- | :--- | :--- | :--- | | E-commerce sales | $19,436,124 | 80.5% | $26,435,203 | 74.7% | | Wholesale sales | $4,719,238 | 19.5% | $8,968,021 | 25.3% | - The **32% decrease in net sales** was attributed to broader CBD category softness, macro inflationary pressures, and reduced unprofitable marketing expenses[138](index=138&type=chunk) - Operating expenses (excluding impairments) decreased by approximately **$15.1 million (37.5%) in FY2023**, primarily due to a **$5.3 million reduction in payroll** and an **$8.3 million reduction in marketing expenses**[141](index=141&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial position weakened, with cash decreasing to $1.8 million and working capital declining, raising substantial doubt about its going concern ability despite improved cash used in operations | Metric | Sept 30, 2023 (Millions USD) | Sept 30, 2022 (Millions USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $1.8 million | $6.7 million | | Working capital | $3.4 million | $10.7 million | - The company's ability to continue as a going concern is in substantial doubt due to its history of losses, current working capital, and the need for improved profitability or additional funding[156](index=156&type=chunk) - Net cash used by operating activities significantly improved, decreasing to **$4.3 million for FY2023** compared to **$15.0 million for FY2022**[157](index=157&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20accounting%20policies) Management identifies critical accounting policies including inventory valuation, revenue recognition upon shipment, and impairment of long-lived assets, with a **$13.2 million impairment loss** recognized in fiscal 2023 - Inventory is valued at the lower of cost or net realizable value, with write-offs based on analyses of inventory levels and forecasted sales[163](index=163&type=chunk) - Revenue is recognized when the performance obligation is met, which occurs upon shipment of the product to the customer (**FOB shipping**)[165](index=165&type=chunk) - Long-lived assets are reviewed for impairment when events indicate the carrying value may not be recoverable, with impairment losses of **$13,219,000 in fiscal 2023** and **$4,285,000 in fiscal 2022**[166](index=166&type=chunk)[167](index=167&type=chunk) [Item 8. Consolidated Financial Statements and Supplementary Data](index=36&type=section&id=ITEM%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data.) Audited consolidated financial statements show a decline in assets and a significant net loss, with the auditor expressing substantial doubt about the company's going concern ability due to recurring losses and a **$174 million accumulated deficit** [Report of Independent Registered Public Accounting Firm](index=44&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor, **Cherry Bekaert LLP**, expressed substantial doubt about the company's going concern ability due to historical losses and a significant accumulated deficit, identifying intangible asset impairment as a Critical Audit Matter - The auditor's report contains a paragraph expressing "**Substantial Doubt about the Company's Ability to Continue as a Going Concern**"[212](index=212&type=chunk) - The going concern doubt stems from the company's history of losses, including a net loss of approximately **$23 million in the current year**, and an accumulated deficit of approximately **$174 million as of September 30, 2023**[212](index=212&type=chunk) - The audit identified "**Intangible Asset Impairment**" as a Critical Audit Matter due to significant estimates and subjective judgments in determining asset fair value[217](index=217&type=chunk)[219](index=219&type=chunk) [Consolidated Financial Statements](index=46&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements reflect a challenging fiscal year with total assets decreasing to **$16.2 million**, a net loss of **$22.9 million**, and a net cash use of **$4.9 million**, resulting in an ending cash balance of **$1.8 million** Balance Sheet Highlights | Balance Sheet Highlights | Sept 30, 2023 (USD) | Sept 30, 2022 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,797,860 | $6,720,234 | | Total current assets | $8,070,041 | $16,011,603 | | Intangible assets | $3,219,090 | $17,834,549 | | Total assets | $16,195,283 | $40,791,909 | | Total liabilities | $7,163,999 | $9,367,478 | | Total shareholders' equity | $9,031,284 | $31,424,431 | Statement of Operations Highlights | Statement of Operations Highlights | Fiscal 2023 (USD) | Fiscal 2022 (USD) | | :--- | :--- | :--- | | Total Net Sales | $24,155,362 | $35,403,224 | | Gross Profit | $14,977,659 | $22,336,585 | | Loss from operations | $(22,487,549) | $(78,266,515) | | Net Loss | $(22,938,209) | $(70,083,693) | | Net Loss per share (Basic) | $(13.32) | $(55.80) | Cash Flow Highlights | Cash Flow Highlights | Fiscal 2023 (USD) | Fiscal 2022 (USD) | | :--- | :--- | :--- | | Cash used by operating activities | $(4,302,051) | $(14,967,150) | | Cash provided by (used) by investing activities | $702,451 | $(688,680) | | Cash provided by financing activities | $(1,322,774) | $(4,035,360) | | Net decrease in cash | $(4,922,374) | $(19,691,190) | [Notes to Consolidated Financial Statements](index=54&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes to financial statements detail substantial doubt about going concern, **$13.2 million intangible asset impairment**, suspension of preferred stock dividends, **$2.5 million** from a public offering, and a full valuation allowance against deferred tax assets - A **1-for-45 reverse stock split** was effected on April 24, 2023, with all share numbers in the report reflecting this split[242](index=242&type=chunk) - Note 5: The company recorded a total impairment charge of **$13,219,000** for its definite-lived intangible assets (tradenames and technology) during fiscal year 2023 due to market conditions and a decline in market capitalization[299](index=299&type=chunk) - Note 8: In May 2023, the company completed a public offering of **1,350,000 shares of common stock**, raising net proceeds of approximately **$2.5 million**[319](index=319&type=chunk) - Note 15: The company has established a full valuation allowance of **$16.5 million** against its net deferred tax assets due to the uncertainty of their realization[376](index=376&type=chunk)[377](index=377&type=chunk) [Item 9A. Controls and Procedures](index=36&type=section&id=ITEM%209A.%20Controls%20and%20Procedures.) Management, including the Interim CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of September 30, 2023, based on the **COSO 2013 framework** - Based on an evaluation as of September 30, 2023, the **Interim Chief Executive Officer** and **Chief Financial Officer** concluded that the company's disclosure controls and procedures were effective[174](index=174&type=chunk) - Management assessed the effectiveness of internal control over financial reporting using the **COSO 2013 framework** and concluded such controls were effective as of September 30, 2023[179](index=179&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=39&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Shareholders - The information required by this Item is incorporated by reference from the company's proxy statement for its **2024 Annual Meeting of Shareholders**[185](index=185&type=chunk) [Item 11. Executive Compensation](index=39&type=section&id=ITEM%2011.%20Executive%20Compensation.) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Shareholders - The information required by this item is incorporated by reference from the Proxy Statement[186](index=186&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=39&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters.) Information regarding security ownership of certain beneficial owners, management, and related shareholder matters is incorporated by reference from the company's definitive Proxy Statement - The information required by this item is incorporated by reference from the Proxy Statement[187](index=187&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=39&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence.) Information concerning certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement - The information required by this item is incorporated by reference from the Proxy Statement[188](index=188&type=chunk) [Item 14. Principal Accounting Fees and Services](index=39&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services.) Details regarding principal accounting fees and services are incorporated by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Shareholders - The information required by this item is incorporated by reference from the Proxy Statement[189](index=189&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=40&type=section&id=ITEM%2015.%20Exhibits%20and%20Consolidated%20Financial%20Statement%20Schedules.) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including various agreements and certifications - This item provides an index of all exhibits filed with or incorporated by reference into the annual report, including agreements, bylaws, and certifications[196](index=196&type=chunk)[199](index=199&type=chunk) [Item 16. Form 10-K Summary](index=40&type=section&id=ITEM%2016.%20Form%2010-K%20Summary.) No summary is provided under this item - None[197](index=197&type=chunk)

[General Information and Filing Details](index=1&type=section&id=General%20Information%20and%20Filing%20Details) This section provides foundational details about the company's legal status, reporting compliance, and key definitions relevant to the financial statements [Filing Information](index=1&type=section&id=Filing%20Information) This section provides the company's legal and filing details, including its name, jurisdiction, and confirmation of compliance with SEC reporting requirements - cbdMD, INC. is a North Carolina corporation, with its principal executive offices in Charlotte, NC[3](index=3&type=chunk)[4](index=4&type=chunk) - The registrant has filed all required reports during the preceding 12 months and has been subject to filing requirements for the past 90 days, and has submitted all required Interactive Data Files[4](index=4&type=chunk) - As of August 10, 2023, **2,855,230 shares of common stock** are issued and outstanding[9](index=9&type=chunk) Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | common | YCBD | NYSE American | | 8% Series A Cumulative Convertible Preferred Stock | YCBDpA | NYSE American | Registrant Filer Status | Filer Status | Selection | | :---------------------- | :-------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated Filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | [Other Pertinent Information](index=4&type=section&id=Other%20Pertinent%20Information) This section defines key terms used in the report, specifies fiscal periods, and details a significant corporate action: a reverse stock split, which impacts all share numbers presented - The terms 'Company,' 'cbdMD,' 'we,' 'us,' 'our' refer to cbdMD, Inc. and its subsidiaries CBD Industries LLC (CBDI), Paw CBD, Inc., and cbdMD Therapeutics LLC (Therapeutics)[13](index=13&type=chunk) - A reverse stock split at a ratio of **one-for-forty-five** was effected on April 12, 2023, effective April 24, 2023, with all share numbers in this report giving effect to this split[14](index=14&type=chunk) - The company maintains a corporate website at www.cbdmd.com, but information on it is not part of this report[15](index=15&type=chunk) [Cautionary Statement Regarding Forward-Looking Information](index=5&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Information) This statement alerts readers that the report contains forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties, and advises caution against undue reliance - The report contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[17](index=17&type=chunk) - Key risks include the company's history of losses, potential liquidity concerns, ability to continue as a going concern, reliance on digital marketing channels, ability to acquire new customers profitably, reliance on third-party suppliers, and risks associated with the CBD regulatory environment[19](index=19&type=chunk) - Readers are cautioned not to place undue reliance on these statements and should review the risk factors detailed in Part II, Item 1A of this report and the 2022 10-K[18](index=18&type=chunk) [PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I-FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, cash flows, and shareholders' equity, along with detailed notes explaining significant accounting policies and specific financial items [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and shareholders' equity - Total assets decreased by approximately **$7.8 million**, and total liabilities decreased by approximately **$2.1 million** from September 30, 2022, to June 30, 2023[22](index=22&type=chunk)[24](index=24&type=chunk) Condensed Consolidated Balance Sheets Summary | Item | June 30, 2023 ($) | September 30, 2022 ($) | | :------------------------ | :---------------- | :--------------------- | | Cash and cash equivalents | 2,846,739 | 6,720,234 | | Total current assets | 10,090,884 | 16,011,603 | | Total assets | 32,969,791 | 40,791,909 | | Total current liabilities | 4,384,474 | 5,285,612 | | Total liabilities | 7,238,068 | 9,367,478 | | Total shareholders' equity| 25,731,723 | 31,424,431 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods, highlighting operational performance and profitability trends - Net sales decreased by **28.8%** for the three months and **33.0%** for the nine months ended June 30, 2023, compared to the prior year periods[25](index=25&type=chunk) - Loss from operations significantly improved, decreasing from **$(33.1) million to $(1.8) million** for the three months and from **$(63.3) million to $(7.3) million** for the nine months ended June 30, 2023, primarily due to the absence of goodwill and intangible asset impairment charges in 2023[25](index=25&type=chunk) Condensed Consolidated Statements of Operations Summary | Item | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Nine Months Ended June 30, 2023 ($) | Nine Months Ended June 30, 2022 ($) | | :---------------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | :---------------------------------- | | Total Net Sales | 6,119,380 | 8,592,893 | 18,444,617 | 27,543,601 | | Gross Profit | 3,845,541 | 5,932,708 | 11,428,814 | 17,367,516 | | Loss from operations | (1,823,653) | (33,126,659) | (7,270,479) | (63,283,120) | | Net Loss | (1,770,404) | (31,634,143) | (7,063,270) | (55,453,289) | | Net Loss attributable to common shareholders | (2,770,904) | (32,634,644) | (10,064,773) | (58,454,792) | | Basic earnings per share | (1.16) | (24.81) | (4.26) | (44.41) | [Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the total comprehensive loss, which includes net loss and other comprehensive income or loss items, reflecting the overall change in equity from non-owner sources - The comprehensive loss attributable to common shareholders significantly decreased, reflecting the improved net loss for both the three and nine months ended June 30, 2023, compared to 2022[27](index=27&type=chunk) Condensed Consolidated Statements of Comprehensive Loss Summary | Item | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Nine Months Ended June 30, 2023 ($) | Nine Months Ended June 30, 2022 ($) | | :---------------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | :---------------------------------- | | Net (Loss) Income | (1,770,404) | (31,634,143) | (7,063,270) | (55,453,289) | | Comprehensive (Loss) Income | (1,770,404) | (31,634,143) | (7,063,270) | (55,453,289) | | Preferred dividends | (1,000,501) | (1,000,501) | (3,001,503) | (3,001,503) | | Comprehensive (Loss) Income attributable to cbdMD, Inc. common shareholders | (2,770,904) | (32,634,644) | (10,064,773) | (58,454,792) | [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities, providing insight into the company's liquidity and solvency - Cash used by operating activities decreased significantly from **$(13.0) million in 2022 to $(4.0) million in 2023**, primarily due to the absence of goodwill impairment and a smaller decrease in contingent liability[29](index=29&type=chunk) - Investing activities generated cash of **$822,631 in 2023**, a positive change from cash used of **$(784,238) in 2022**, partly due to **$1.0 million** from other securities[29](index=29&type=chunk) Condensed Consolidated Statement of Cash Flows Summary (Nine Months Ended June 30) | Cash Flow Activity | 2023 ($) | 2022 ($) | | :------------------------------ | :----------- | :----------- | | Net Loss | (7,063,270) | (55,453,289) | | Cash used by operating activities | (4,038,550) | (13,041,469) | | Cash flows from investing activities | 822,631 | (784,238) | | Cash flows from financing activities | (657,576) | (3,032,047) | | Net increase (decrease) in cash | (3,873,495) | (16,857,754) | | Cash and cash equivalents, end of period | 2,846,739 | 9,553,670 | [Condensed Consolidated Statements of Shareholders' (Deficit) Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20(Deficit)%20Equity) This section outlines changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit, reflecting capital transactions and retained earnings - Common stock shares outstanding increased from **1,348,125 to 2,855,230**, reflecting issuances from a public offering and agreements with A360 Media and Keystone Capital Partners[32](index=32&type=chunk) - Total shareholders' equity decreased from **$31.4 million to $25.7 million**, primarily due to net losses and preferred dividends, partially offset by capital raised through common stock issuances[32](index=32&type=chunk) Shareholders' Equity Changes (Nine Months Ended June 30, 2023) | Item | Shares (Common) | Amount (Common) ($) | Additional Paid in Capital ($) | Accumulated Deficit ($) | Total ($) | | :------------------------ | :-------------- | :------------------ | :----------------------------- | :---------------------- | :------------- | | Balance, Sept 30, 2022 | 1,348,125 | 1,348 | 178,841,646 | (147,423,563) | 31,424,431 | | Issuance of Common stock | 1,350,000 | 1,350 | 2,472,730 | - | 2,474,080 | | Issuance of Common stock - A360 | 94,277 | 94 | 1,399,906 | - | 1,400,000 | | Preferred dividend | - | - | - | (3,001,503) | (3,001,503) | | Net Loss | - | - | - | (7,063,270) | (7,063,270) | | Balance, June 30, 2023 | 2,855,230 | 2,855 | 183,212,202 | (157,488,334) | 25,731,723 | [NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the company's business operations, its subsidiaries, and the key accounting principles applied in preparing the financial statements - cbdMD, Inc. operates nationally recognized CBD brands: cbdMD, Paw CBD, and cbdMD Botanicals, sourcing cannabinoids from non-GMO hemp grown in the US, compliant with the 2018 Farm Bill[37](index=37&type=chunk) - The company's wholly-owned subsidiaries include CBD Industries LLC, Paw CBD, Inc., and cbdMD Therapeutics LLC, with DirectCBDOnline.com also acquired in July 2021[38](index=38&type=chunk)[41](index=41&type=chunk) - A **one-for-forty-five reverse stock split** was effective April 24, 2023, with all share numbers in the filing reflecting this change[40](index=40&type=chunk) [NOTE 2 – MARKETABLE SECURITIES AND INVESTMENT OTHER SECURITIES](index=22&type=section&id=NOTE%202%20%E2%80%93%20MARKETABLE%20SECURITIES%20AND%20INVESTMENT%20OTHER%20SECURITIES) This note details the company's investments in marketable and other securities, including fair value measurements and significant transactions - The company recorded **$0** in realized and unrealized gain (loss) on marketable and other securities for the nine months ended June 30, 2023, compared to **$(33,350)** in 2022[83](index=83&type=chunk) - The company sold its entire ownership interest in Adara Sponsor, LLC for **$1,000,000**, which was its original purchase price, effective February 10, 2023[85](index=85&type=chunk) - An equity investment of **$1.4 million** was made in Steady State, LLC in April 2022, classified as Level 3 for fair value measurement and included in non-current assets[86](index=86&type=chunk) [NOTE 3 - INVENTORY](index=24&type=section&id=NOTE%203%20-%20INVENTORY) This note provides a breakdown of inventory components, valuation methods, and changes in inventory levels - Total inventory decreased by approximately **$0.49 million** from September 30, 2022, to June 30, 2023[88](index=88&type=chunk) - Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average basis[49](index=49&type=chunk) Inventory Breakdown | Category | June 30, 2023 ($) | September 30, 2022 ($) | | :----------------- | :---------------- | :--------------------- | | Finished Goods | 2,682,694 | 3,198,488 | | Inventory Components | 1,350,720 | 1,213,724 | | Inventory Reserve | (201,578) | (156,298) | | Inventory prepaid | 445,121 | 511,459 | | **Total Inventory**| **4,276,957** | **4,767,373** | [NOTE 4 – PROPERTY AND EQUIPMENT](index=24&type=section&id=NOTE%204%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT) This note details the company's property and equipment, including categories, accumulated depreciation, and depreciation expense for the periods presented - Net property and equipment decreased by approximately **$123,000** from September 30, 2022, to June 30, 2023[89](index=89&type=chunk) Property and Equipment, Net | Item | June 30, 2023 ($) | September 30, 2022 ($) | | :------------------------ | :---------------- | :--------------------- | | Computers, furniture and equipment | 1,272,596 | 1,095,228 | | Manufacturing equipment | 284,275 | 284,275 | | Leasehold improvements | 487,081 | 487,081 | | Automobiles | 11,087 | 11,087 | | Less accumulated depreciation | (1,355,086) | (1,054,361) | | **Property and equipment, net** | **699,953** | **823,310** | Depreciation Expense | Period | 2023 ($) | 2022 ($) | | :---------------------- | :------- | :------- | | Three Months Ended June 30 | 98,225 | 158,555 | | Nine Months Ended June 30 | 300,726 | 770,335 | [NOTE 5 – GOODWILL AND INTANGIBLE ASSETS](index=25&type=section&id=NOTE%205%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note provides information on the company's goodwill and intangible assets, including impairment charges and amortization details - Goodwill of **$42,772,685** at March 31, 2022, was fully impaired by September 30, 2022[91](index=91&type=chunk) - The 'cbdMD' and 'HempMD' trademarks were reclassified as definite-lived intangible assets with **20-year useful lives** as of December 31, 2021, and the 'cbdMD' trademark was impaired by **$4,285,000**[94](index=94&type=chunk) Intangible Assets Breakdown | Category | June 30, 2023 ($) | September 30, 2022 ($) | | :---------------------------------------- | :---------------- | :--------------------- | | Trademark related to cbdMD | 17,300,000 | 21,585,000 | | Technology Relief from Royalty related to DirectCBDOnline.com | 667,844 | 667,844 | | Tradename related to DirectCBDOnline.com | 749,567 | 749,567 | | Amortization of definite lived intangible assets | (1,764,926) | (932,862) | | **Total** | **17,002,485** | **17,834,549** | [NOTE 6 – CONTINGENT CONSIDERATION](index=26&type=section&id=NOTE%206%20%E2%80%93%20CONTINGENT%20CONSIDERATION) This note describes the company's contingent liabilities arising from acquisitions, including earnout provisions and their fair value measurement - The contingent liability for the Cure Based Development earnout was **$122,230** at June 30, 2023, down from **$276,000** at September 30, 2022, valued using Level 3 inputs[101](index=101&type=chunk) - Up to **87,307 remaining Earnout Shares** are subject to issuance, requiring over **$162 million** in revenue during the fourth marking period (July 1, 2022 - November 2023)[102](index=102&type=chunk) - The earnout provision for the Twenty Two Capital acquisition was never met, and the obligation balance was zero at September 30, 2022[104](index=104&type=chunk) [NOTE 7 – RELATED PARTY TRANSACTIONS](index=27&type=section&id=NOTE%207%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with related parties, specifically identifying a counterparty in an earnout arrangement - A counterparty in the earnout arrangement (as described in Note 6) is identified as a related party[106](index=106&type=chunk) [NOTE 8 – SHAREHOLDERS' EQUITY](index=27&type=section&id=NOTE%208%20%E2%80%93%20SHAREHOLDERS'%20EQUITY) This note details the components of shareholders' equity, including preferred and common stock, and significant changes such as stock issuances and a reverse stock split - The company has **5,000,000 shares of 8.0% Series A Cumulative Convertible Preferred Stock** outstanding, which ranks senior to common stock for liquidation and dividends[107](index=107&type=chunk) - Common stock outstanding increased from **1,348,125 shares** at September 30, 2022, to **2,855,230 shares** at June 30, 2023, reflecting a **one-for-forty-five reverse stock split** effective April 24, 2023, and subsequent issuances[108](index=108&type=chunk)[109](index=109&type=chunk) - In May 2023, the company completed a public offering of **1,350,000 common shares at $2.10 per share**, generating approximately **$2.5 million** in net proceeds[112](index=112&type=chunk) - The company entered into agreements with Keystone Capital Partners, LLC and a360 Media, LLC, involving the issuance of common stock for commitment and advertising services, respectively[114](index=114&type=chunk)[116](index=116&type=chunk) [NOTE 9 – STOCK BASED COMPENSATION](index=29&type=section&id=NOTE%209%20%E2%80%93%20STOCK%20BASED%20COMPENSATION) This note describes the company's equity compensation plans, accounting policies for stock-based awards, and activity related to stock options - The company operates under the **2015 and 2021 Equity Compensation Plans**, which provide for awards of options, restricted stocks, and other stock grants to eligible recipients[131](index=131&type=chunk)[132](index=132&type=chunk) - Stock-based compensation is accounted for using ASC 718, recognizing fair value at the grant date over the service period, with the Black-Scholes model used for options and warrants[133](index=133&type=chunk)[137](index=137&type=chunk) - As of June 30, 2023, there was approximately **$41,031** of total unrecognized compensation cost related to non-vested stock options, vesting over approximately **2.7 years**[138](index=138&type=chunk) Stock Option Activity (Nine Months Ended June 30, 2023) | Item | Number of shares | Weighted average exercise price ($) | | :--------------------------------- | :--------------- | :---------------------------------- | | Outstanding at September 30, 2022 | 55,656 | 151.10 | | Granted | 7,233 | 11.51 | | Forfeited | (20,678) | 89.79 | | Outstanding at June 30, 2023 | 42,211 | 143.02 | | Exercisable at June 30, 2023 | 40,402 | 157.02 | [NOTE 10 - WARRANTS](index=34&type=section&id=NOTE%2010%20-%20WARRANTS) This note provides details on the company's outstanding warrants, including activity during the period and their exercise terms - The company issued a warrant to its underwriter to purchase up to **40,500 shares of common stock at $2.52 per share** as part of a public offering[130](index=130&type=chunk)[149](index=149&type=chunk) Warrant Activity (Nine Months Ended June 30, 2023) | Item | Number of shares | Weighted average exercise price ($) | | :--------------------------------- | :--------------- | :---------------------------------- | | Outstanding at September 30, 2022 | 13,204 | 210.45 | | Granted | 40,500 | 2.52 | | Forfeited | (2,226) | 337.50 | | Outstanding at June 30, 2023 | 51,478 | 41.37 | | Exercisable at June 30, 2023 | 10,978 | 41.37 | Outstanding Common Stock Purchase Warrants (June 30, 2023) | Exercise Price ($) | Number of shares | Expiration | | :----------------- | :--------------- | :------------- | | 196.88 | 1,169 | September 2023 | | 337.50 | 1,352 | May 2024 | | 176.06 | 1,079 | October 2024 | | 56.25 | 822 | January 2025 | | 2.52 | 40,500 | April 2028 | | 168.30 | 3,357 | December 2025 | | 168.75 | 3,199 | June 2026 | | **Total** | **51,478** | | [NOTE 11 – COMMITMENTS AND CONTINGENCIES](index=34&type=section&id=NOTE%2011%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's significant commitments and contingent liabilities, including separation agreements and terminated endorsement contracts - The company entered into a separation agreement with a professional athlete in November 2022, resulting in a **one-time non-cash expense of approximately $885,000** related to outstanding un-expensed stock compensation[151](index=151&type=chunk) - An endorsement agreement with another professional athlete, valued at **$1,500,000** over its term, was terminated by the company in May 2023[152](index=152&type=chunk) - The company's CEO resigned in June 2022 under a separation agreement[153](index=153&type=chunk) [NOTE 12 – NOTE PAYABLE](index=34&type=section&id=NOTE%2012%20%E2%80%93%20NOTE%20PAYABLE) This note provides details on the company's outstanding notes payable, including loan amounts, repayment status, and interest rates - A **$249,100 loan** for equipment from July 2019 was paid off in April 2022, resulting in a **$0 balance** as of December 31, 2022[154](index=154&type=chunk) - A **$35,660 loan** for equipment from January 2020 has a remaining short-term note payable of **$4,135** at June 30, 2023, with monthly payments of **$841** at a **6.2% financing rate**[154](index=154&type=chunk) [NOTE 13 – LEASES](index=36&type=section&id=NOTE%2013%20%E2%80%93%20LEASES) This note describes the company's lease agreements, including their classification, remaining terms, discount rates, and future payment obligations - All of the company's lease agreements for corporate offices and warehouses are classified as operating leases, with terms expiring between 2024 and 2026[155](index=155&type=chunk) - As of June 30, 2023, the weighted average remaining lease term was **3.44 years**, and the weighted average discount rate was **4.66%**[159](index=159&type=chunk) Future Minimum Aggregate Lease Payments (as of June 30, 2023) | For the year ended September 30, | Amount ($) | | :------------------------------- | :--------- | | 2023 | 347,385 | | 2024 | 1,421,610 | | 2025 | 1,159,949 | | Thereafter | 1,372,862 | | **Total future lease payments** | **4,301,806** | | Less interest | (319,274) | | **Total lease liabilities** | **3,982,532** | [NOTE 14 – LOSS PER SHARE](index=37&type=section&id=NOTE%2014%20%E2%80%93%20LOSS%20PER%20SHARE) This note presents the basic and diluted loss per share calculations, explaining the factors influencing these metrics and the treatment of anti-dilutive securities - The net loss attributable to common shareholders significantly decreased, leading to a substantial improvement in basic and diluted loss per share for both the three and nine months ended June 30, 2023, compared to 2022[160](index=160&type=chunk) - At June 30, 2023, **94,948 potential shares** underlying options, unvested RSUs, and warrants, along with **185,223 convertible preferred shares** and other commitment shares, were excluded from diluted loss per share calculation due to their anti-dilutive effect[160](index=160&type=chunk) Basic and Diluted Earnings Per Share | Period | Three Months Ended June 30, 2023 ($) | Three Months Ended June 30, 2022 ($) | Nine Months Ended June 30, 2023 ($) | Nine Months Ended June 30, 2022 ($) | | :---------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | :---------------------------------- | | Basic earnings per share | (1.16) | (24.81) | (4.26) | (44.41) | | Diluted earnings per share | (1.16) | (24.81) | (4.26) | (44.41) | [NOTE 15 – INCOME TAXES](index=38&type=section&id=NOTE%2015%20%E2%80%93%20INCOME%20TAXES) This note discusses the company's income tax position, including the impact of ownership changes on NOL carryovers and the valuation allowance against deferred tax assets - The company has determined that an ownership change occurred under IRC Section 382, resulting in limitations on the utilization of federal and state Net Operating Loss (NOL) carryovers[162](index=162&type=chunk) - A net deferred tax liability of approximately **$4.6 million** was established as part of the purchase price allocation for the Cure Based Development merger[163](index=163&type=chunk) - A full valuation allowance is provided against net deferred tax assets (excluding 'naked credits') as management believes it is more likely than not that the net deferred asset will not be realized, resulting in a **net deferred tax asset of zero** at June 30, 2023[164](index=164&type=chunk) [NOTE 16 – SUBSEQUENT EVENTS](index=38&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - In July 2023, the company issued **2,616 shares of common stock** for second tranche commitment shares pursuant to the Purchase Agreement[165](index=165&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook, analyzing key financial metrics, operational activities, and strategic initiatives for the three and nine months ended June 30, 2023 [Our Company (General Business Overview)](index=39&type=section&id=Our%20Company%20(General%20Business%20Overview)) This section provides an overview of cbdMD, Inc.'s business, including its brands, product offerings, distribution channels, and recent strategic initiatives - cbdMD, Inc. operates nationally recognized CBD brands (cbdMD, Paw CBD, cbdMD Botanicals) offering broad and full spectrum products derived from US-grown hemp, distributed via e-commerce and brick-and-mortar channels[169](index=169&type=chunk)[173](index=173&type=chunk) - cbdMD Therapeutics, a wholly-owned subsidiary, focuses on R&D for therapeutic applications, with recent clinical studies in dogs and healthy adults demonstrating benefits for mobility, pain, inflammation, and mood[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Recent developments include migrating to a new e-commerce platform to reduce IT costs and improve agility, engaging in industry advocacy, and launching products on Amazon UK as part of a CBD pilot program[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Growth Strategies](index=43&type=section&id=Growth%20Strategies) This section outlines the company's strategic initiatives for revenue growth, including marketing investments, wholesale expansion, product innovation, and international market penetration - The company aims to grow core revenue channels by carefully investing in direct-to-consumer marketing with strong measurable returns and focusing on channel-specific distributors for wholesale expansion in the food, drug, and mass (FDM) channels[184](index=184&type=chunk)[185](index=185&type=chunk) - Product innovation is a key strategy, with recent launches including NSF for Sport products, Delta 9 gummies, high-strength CBD products, and cbdMD Max for Pain, alongside a robust pipeline for H2 2023[186](index=186&type=chunk) - International expansion is pursued through local partnerships, with products available in **31 countries** and recent market share gains in Central America and e-commerce expansion in the UK[186](index=186&type=chunk) - Acquisitions are evaluated based on accretive customer bases, complementary channels, profitability, or cost synergies, though Series A Preferred shares' rights pose M&A challenges[186](index=186&type=chunk) [Results of Operations Analysis](index=44&type=section&id=Results%20of%20Operations%20Analysis) This section analyzes the company's financial performance over the reporting periods, focusing on net sales, gross profit, operating expenses, and other factors impacting profitability - The decrease in net sales is attributed to a **$1.5 million decline** in e-commerce sales due to reduced marketing spend and a **$960,473 decrease** in wholesale sales due to lower price structures, compounded by temporary disruptions from Meta marketing rule changes and e-commerce platform migration[189](index=189&type=chunk) - Operating expenses decreased significantly due to management's cost reduction efforts, including decreases in staff-related expenses (**$1.2 million** for three months, **$4.1 million** for nine months) and advertising/marketing expenses (**$2.0 million** for three months, **$8.6 million** for nine months)[194](index=194&type=chunk)[196](index=196&type=chunk) - Goodwill was fully impaired by September 30, 2022, and the contingent liability decreased from **$276,000 to $122,230**[204](index=204&type=chunk)[207](index=207&type=chunk) Net Sales Performance | Period | 2023 ($) | 2022 ($) | Change ($) | Change (%) | | :---------------------- | :----------- | :----------- | :----------- | :----------- | | Three Months Ended June 30 | 6,119,380 | 8,592,893 | (2,473,513) | (28.8%) | | Nine Months Ended June 30 | 18,444,617 | 27,543,601 | (9,098,984) | (33.0%) | Operating Expenses | Period | 2023 ($) | 2022 ($) | Change ($) | Change (%) | | :---------------------- | :----------- | :----------- | :----------- | :----------- | | Three Months Ended June 30 | 5,669,194 | 8,282,931 | (2,613,737) | (31.6%) | | Nine Months Ended June 30 | 18,699,293 | 31,690,915 | (12,991,622) | (41.0%) | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, discussing cash position, working capital, and capital-raising activities - Management concluded that substantial doubt exists about the company's ability to continue as a going concern for the next twelve months, citing continued losses and potential need for additional capital[213](index=213&type=chunk) - The company raised approximately **$2.5 million** in net proceeds from a public offering in May 2023 and has an agreement with Keystone Capital Partners, LLC to sell up to **281,934 common shares**[210](index=210&type=chunk)[212](index=212&type=chunk) - Cash flow from operations was a net use of **$4.0 million** for the nine months ended June 30, 2023, and the company faces challenges with preferred dividend payments under North Carolina law[215](index=215&type=chunk)[217](index=217&type=chunk) Liquidity Position | Item | June 30, 2023 ($) | September 30, 2022 ($) | | :------------------------ | :---------------- | :--------------------- | | Cash and cash equivalents | 2,800,000 | 6,700,000 | | Working capital | 5,700,000 | 10,700,000 | [Adjusted EBITDA](index=52&type=section&id=Adjusted%20EBITDA) This section defines Adjusted EBITDA as a non-GAAP financial measure and presents its performance, highlighting its use by management to evaluate core operating results - Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate core operating results, excluding items like stock-based compensation, inventory adjustments, and goodwill impairment[219](index=219&type=chunk)[220](index=220&type=chunk) - Adjusted EBITDA significantly improved, decreasing from **$(2.7) million to $(0.6) million** for the three months and from **$(11.1) million to $(3.9) million** for the nine months ended June 30, 2023, compared to the prior year periods[223](index=223&type=chunk) Adjusted EBITDA Performance | Period | 2023 ($) | 2022 ($) | | :---------------------- | :----------- | :----------- | | Three Months Ended June 30 | (608,354) | (2,745,337) | | Nine Months Ended June 30 | (3,920,016) | (11,090,903) | [Critical Accounting Policies and Recent Accounting Pronouncements](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Recent%20Accounting%20Pronouncements) This section highlights the critical accounting policies that require significant management judgment and refers to disclosures on recent accounting pronouncements - Management's discussion and analysis of financial condition and operating results require judgments, assumptions, and estimates that affect reported amounts in the financial statements[225](index=225&type=chunk) - Readers are referred to Part II, Item 7 of the 2022 10-K for critical accounting policies and Note 1 of the current report for information on recent accounting pronouncements[227](index=227&type=chunk)[228](index=228&type=chunk) [Off Balance Sheet Arrangements](index=53&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section confirms the absence of any material off-balance sheet arrangements that could significantly impact the company's financial position or results of operations - As of the report date, the company has no undisclosed off-balance sheet arrangements that are material to its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources[229](index=229&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section states that quantitative and qualitative disclosures about market risk are not applicable for the company due to its status as a smaller reporting company - This item is not applicable for a smaller reporting company[230](index=230&type=chunk) [ITEM 4. Controls and Procedures](index=53&type=section&id=ITEM%204.%20Controls%20and%20Procedures.) This section reports on the effectiveness of the company's disclosure controls and procedures and any changes in internal control over financial reporting - The interim principal executive officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[231](index=231&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[232](index=232&type=chunk) [PART II - OTHER INFORMATION](index=54&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including legal proceedings, risk factors, equity sales, defaults, and exhibits [ITEM 1. Legal Proceedings](index=54&type=section&id=ITEM%201.%20Legal%20Proceedings.) This section states that the company has no legal proceedings to report - The company has no legal proceedings to report[235](index=235&type=chunk) [ITEM 1A. Risk Factors](index=54&type=section&id=ITEM%201A.%20Risk%20Factors.) This section incorporates by reference the risk factors previously disclosed in the company's 2022 10-K and refers to the 'Liquidity and Capital Resources' section for additional risk information - The risk factors disclosed in Part I, Item 1A of the company's 2022 10-K are incorporated by reference[236](index=236&type=chunk) - Readers are also directed to the 'Liquidity and Capital Resources' section within this report for further risk considerations[236](index=236&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section confirms that the company has not engaged in any unregistered sales of equity securities during the reporting period, apart from those previously disclosed - The company has not sold any securities without registration under the Securities Act during the period covered by this report, except for those previously disclosed[237](index=237&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=54&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities.) This section reports that the company has not experienced any defaults upon senior securities - The company has no defaults upon senior securities to report[238](index=238&type=chunk) [ITEM 4. Mine Safety Disclosures](index=54&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This section states that mine safety disclosures are not applicable to the company's operations - This item is not applicable to the company's operations[239](index=239&type=chunk) [ITEM 5. Other Information](index=54&type=section&id=ITEM%205.%20Other%20Information.) This section provides the Auditor Firm ID for the company's external auditors - The Auditor Firm ID for the company's external auditors, Cherry Bekaert LLP, is **677**[240](index=240&type=chunk) [ITEM 6. Exhibits](index=55&type=section&id=ITEM%206.%20Exhibits.) This section lists all exhibits filed as part of the 10-Q report, including various agreements, corporate documents, and certifications, and notes that copies are available to stockholders upon request - The report includes various exhibits such as the Underwriting Agreement, Merger Agreement, Articles of Incorporation, and Certifications[242](index=242&type=chunk)[243](index=243&type=chunk) - Copies of this report and any exhibits will be furnished at no cost to stockholders who make a written request[244](index=244&type=chunk) [SIGNATURES](index=57&type=section&id=SIGNATURES) This section contains the required signatures, confirming the due authorization and submission of the report by the company's principal executive and financial officers [Signatures](index=57&type=section&id=Signatures) This section contains the required signatures, confirming the due authorization and submission of the report by the company's principal executive and financial officers - The report was signed on August 10, 2023, by T. Ronan Kennedy, in his capacity as Interim CEO, principal executive officer, and Chief Financial Officer, principal financial and accounting officer[249](index=249&type=chunk)

cbdMD, Inc. (NYSE:YCBD) Q2 2023 Earnings Conference Call May 15, 2023 4:15 PM ET Company Participants Brad Whitford - VP of Finance Ronan Kennedy - Interim Chief Executive Officer and Chief Financial Officer Sibyl Swift - Chief Science Officer & VP Regulatory Affairs Conference Call Participants Anthony Vendetti - Maxim Group Operator Good afternoon. Welcome to cbdMD's, Inc. March 31, 2023, Second Quarter of Fiscal '23 Earnings Call and Update. This afternoon, the company issued a press release that provide ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to _______________ Commission file number 001-38299 cbdMD, INC. (Exact Name of Registrant as Specified in its Charter) No ...

Financial Data and Key Metrics Changes - Total net sales for the first quarter of fiscal 2023 were $6.1 million, a 34% decrease from the prior year comparative quarter [19] - E-commerce sales generated $4.9 million, reflecting a 31% year-over-year decrease, while e-commerce represented 81% of total net sales compared to 76% in the prior year [20] - Operating expenses totaled $7.6 million, down from $11.9 million in the prior year, with a loss from operations of approximately $4 million compared to a $25 million loss in the prior year [22][24] - Non-GAAP adjusted operating loss was $2.6 million for the first quarter of fiscal 2023, improved from a $4.4 million loss in the prior year [26] Business Line Data and Key Metrics Changes - The wholesale business generated $1.2 million in net sales, down 46% from $2.2 million in the prior year [20] - Gross profit as a percentage of net sales increased to 59% from 54% in the prior year, with expectations to maintain gross profit margins in the mid-60s range [21] Market Data and Key Metrics Changes - The CBD market is described as a multibillion-dollar market with expected growth, and the company anticipates gaining market share [16] Company Strategy and Development Direction - The company has focused on rightsizing its cost structure and establishing a foundation for growth, emphasizing a purposeful approach to revenue generation while holding expenses flat [5][7] - A new Chief Marketing Officer has been appointed to enhance brand positioning and expand consumer demographics [11][39] - The company is pursuing strategic partnerships to improve liquidity and profitability [36] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in revenue trends but noted improvements in operating income and a focus on profitability [10][16] - The company is optimistic about its competitive product position and anticipates growth in quarterly sales throughout 2023 [34] Other Important Information - The FDA has been criticized for its lack of regulatory tools for CBD, which management believes affects the industry [17][18] - Cash and cash equivalents were approximately $3.3 million as of December 31, 2022, down from $6.7 million at the end of the previous quarter [31] Q&A Session Summary Question: Background on new CMO Shannon Charles - Management highlighted Shannon's experience in the food and supplement space and her success in expanding brand demographics [38][39] Question: Current cash position and runway - The company reported $3.3 million in cash and anticipated improvements in the upcoming quarter [40][42] - Management acknowledged the need for sales growth to sustain operations, emphasizing their focus on liquidity [45][46]

Financial Performance - Total net sales for the three months ended December 31, 2022, were $6.1 million, a decrease of 34.7% from $9.3 million in the same period of 2021[161]. - The company reported a net loss attributable to common shareholders of $4.96 million for Q4 2022, compared to a net loss of $20.16 million in Q4 2021, an improvement of $15.2 million[161]. - The company reported a net cash consumption of $2.1 million for Q4 2022, compared to $5.5 million for Q4 2021, indicating an improvement in cash flow[184]. Sales and Revenue - E-commerce sales accounted for 80.6% of total net sales in Q4 2022, down from 76.3% in Q4 2021, with a decline of $2.2 million year-over-year[162]. Cost Management - Gross profit as a percentage of net sales increased to 58.6% in Q4 2022 from 53.6% in Q4 2021, reflecting improved cost management[161]. - Operating expenses decreased by $4.3 million or 36.3% year-over-year, driven by reductions in staff-related expenses and marketing costs[169]. - Corporate overhead expenses decreased from $1,857,959 in Q4 2021 to $726,649 in Q4 2022, a reduction of approximately 62.0%[173]. - R&D and regulatory expenses for Therapeutics dropped significantly from $267,529 in Q4 2021 to $75,213 in Q4 2022, a decrease of approximately 71.9%[175]. Strategic Initiatives - The company is focusing on product innovation, with plans to launch new clinically proven products, including cbdMD Max for Pain, in fiscal 2023[159]. - The company is expanding its international presence, with products currently available in 31 countries and ongoing efforts to enter markets in the EU, Israel, and Japan[159]. - The company aims to improve its cost structure by lowering facility costs and reassessing marketing expenses, with a focus on achieving profitability by the end of 2022[158]. - The company has engaged third parties to assess strategic alternatives to enhance operational efficiency and revenue growth[171]. - The company is exploring acquisitions that could provide a complementary customer base or profitable business synergies to accelerate profitability[160]. Financial Position - Cash and cash equivalents decreased from $6.7 million at September 30, 2022, to $3.4 million at December 31, 2022, a decline of approximately 49.0%[181]. - Working capital decreased from $10.7 million at September 30, 2022, to $6.0 million at December 31, 2022, a reduction of approximately 44.0%[181]. - The non-cash contingent liability decreased from $276,000 at September 30, 2022, to $215,000 at December 31, 2022, a reduction of approximately 22.1%[179]. - Goodwill was fully impaired by September 30, 2022, after being valued at $42,772,685 on December 31, 2021[176]. - The company does not have any commitments for capital expenditures as of December 31, 2022[182]. - The company’s ability to continue as a going concern is dependent on improving profitability and acquiring additional funding[183]. Staffing and Expenses - Staff-related expenses for Therapeutics increased from $80,235 in Q4 2021 to $87,198 in Q4 2022, a rise of 8.7%[175].

PART 1 [ITEM 1. DESCRIPTION OF BUSINESS](index=5&type=section&id=ITEM%201.%20DESCRIPTION%20OF%20BUSINESS) cbdMD, Inc. operates nationally recognized CBD brands, focusing on product innovation, channel expansion, and global presence in a fragmented and regulated CBD market - cbdMD operates nationally recognized CBD brands: **cbdMD**, **Paw CBD**, **cbdMD Botanicals**, and **cbdMD Therapeutics** for R&D[22](index=22&type=chunk)[29](index=29&type=chunk)[229](index=229&type=chunk) - The company produces **broad spectrum** (THC-free) and **full spectrum/Delta 9** CBD products, sourced from non-GMO US-grown hemp, complying with 2018 Farm Act limits[22](index=22&type=chunk)[31](index=31&type=chunk)[228](index=228&type=chunk) - In fiscal 2022, cbdMD products received 'Product of the Year Awards' and 'Sleeping Beauty Award', while Paw CBD won two Pet Innovations awards[29](index=29&type=chunk)[30](index=30&type=chunk) - Growth strategies include product innovation (e.g., **NSF for Sport**, **Delta 9**, **cbdMD Max for Pain**), expanding revenue channels (e.g., **GNC**, **Wegmans**, international), and international expansion to **31 countries** with UK/EU Novel Food validation[31](index=31&type=chunk)[32](index=32&type=chunk) - **E-commerce** accounted for approximately **75% of sales** in fiscal 2022, with B2B brick-and-mortar locations expanding to **3,366**[40](index=40&type=chunk) - Manufacturing assets were sold to Steady State, LLC in 2022, shifting to an outsourced, variable cost structure, while maintaining strict quality control with **cGMP certified suppliers** and **third-party testing**, achieving **NSF** and **NASC certifications**[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - R&D efforts include clinical studies showing improved mobility and quality of life in dogs with osteoarthritis, and reduced pain, inflammation, and improved mood in healthy adults, informing future product development[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - cbdMD holds US and foreign trademarks (e.g., **CBDMD**, **PAWCBD**) and has a patent application for novel formulations and delivery systems[50](index=50&type=chunk)[51](index=51&type=chunk) - The CBD market is fragmented with over **2,000 brands**; cbdMD ranked **3rd in Online Brand Share** and **5th in Revenue** in 2022[54](index=54&type=chunk) - The company had approximately **90 full-time employees** as of December 1, 2022[63](index=63&type=chunk) [ITEM 1A. RISK FACTORS.](index=11&type=section&id=ITEM%201A.%20RISK%20FACTORS.) The company faces significant risks including operating losses, liquidity concerns, operational challenges, an uncertain regulatory environment, and equity ownership risks - The company reported operating losses of **$78.2 million** in fiscal 2022 and **$19.6 million** in 2021, including significant goodwill and trade name impairments in 2022[69](index=69&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern due to insufficient working capital and reliance on improved profitability and additional funding[70](index=70&type=chunk) - Net sales decreased by **$9 million (20%)** in 2022, primarily due to reduced direct-to-consumer and wholesale orders, impacted by marketing effectiveness, channel access, and inflationary pressures[71](index=71&type=chunk) - International expansion plans face significant costs and risks, including brand identity establishment, increased operational costs, compliance with foreign laws, currency fluctuations, and intellectual property protection challenges[80](index=80&type=chunk)[81](index=81&type=chunk) - Reliance on third-party raw material suppliers and manufacturers without long-term contracts poses risks of production delays and increased costs if relationships are disrupted[83](index=83&type=chunk) - The regulatory environment for industrial hemp and cannabinoids is uncertain, with potential changes in federal or state laws, increased compliance costs, and litigation risks[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - The fair value of non-cash contingent liabilities for Earnout Shares can materially impact financial results and shareholders' equity, with a **decrease of $8.47 million** in fiscal 2022[95](index=95&type=chunk) - The company is subject to NYSE American listing standards, and failure to meet criteria could result in delisting, impacting liquidity and financing[96](index=96&type=chunk) - Issuance of remaining Earnout Shares (up to **3,928,797 shares**) and conversion of Series A Convertible Preferred Stock (**8,335,000 shares**) could significantly dilute existing common shareholders[97](index=97&type=chunk)[107](index=107&type=chunk) - Series A Convertible Preferred Stock ranks junior to all indebtedness and liabilities, and the company may not be able to pay dividends on it[98](index=98&type=chunk)[99](index=99&type=chunk) [ITEM 1B. Unresolved Staff Comments.](index=17&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments.) This item is not applicable to cbdMD, Inc. as a smaller reporting company - Not applicable to a smaller reporting company[110](index=110&type=chunk) [ITEM 2. Properties.](index=17&type=section&id=ITEM%202.%20Properties.) cbdMD's headquarters and a warehouse are located in Charlotte, NC, under sub-lease and lease agreements, respectively - Headquarters: **50,000 sq ft** in Charlotte, NC, sub-leased until December 2026, with an annual base monthly rent of **$76,041** (3% annual escalation)[111](index=111&type=chunk) - Warehouse: **80,000 sq ft** in Charlotte, NC, leased until December 2024, with an annual base monthly rent of **$34,766** (3% annual escalation)[111](index=111&type=chunk) [ITEM 3. LEGAL PROCEEDINGS.](index=18&type=section&id=ITEM%203.%20Legal%20Proceedings.) cbdMD is involved in a class action lawsuit, a trademark cancellation proceeding, and a recently settled data breach class action - Cynthia Davis filed a class action lawsuit in California alleging violations of Unfair Competition Law and False Advertising Law, currently stayed pending FDA/Congress action on CBD regulation[113](index=113&type=chunk) - CBDI filed a cancellation proceeding against Majik Medicine, LLC for the 'CBD MD' trademark, with TTAB proceedings suspended pending a Federal Court determination[114](index=114&type=chunk) - A class action lawsuit regarding a data breach was globally settled within policy limits and approved by the Court, with dismissal expected in Q2 2023[115](index=115&type=chunk) [ITEM 4. Mine Safety Disclosures.](index=18&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to cbdMD, Inc - Not applicable to our company[116](index=116&type=chunk) PART II [ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=19&type=section&id=ITEM%205.%20Market%20for%20Registrants%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) cbdMD's common and preferred stock are listed on NYSE American, with no common stock dividends planned, but monthly cash dividends on preferred stock - Common stock (**YCBD**) and Series A Convertible Preferred Stock (**YCBDpA**) are listed on the NYSE American[119](index=119&type=chunk) - As of December 9, 2022, there were **104 record owners of common stock** and **one record holder of Series A Convertible Preferred Stock**[119](index=119&type=chunk) - The company does not currently intend to pay dividends on common stock[120](index=120&type=chunk) - Monthly cumulative cash dividends of **8.0% ($0.0667 per share)** are paid on Series A Convertible Preferred Stock[121](index=121&type=chunk) [ITEM 6. [Reserved]](index=19&type=section&id=ITEM%206.%20%5BReserved%5D) This item is reserved and contains no information [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.](index=20&type=section&id=ITEM%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation.) cbdMD faced a challenging fiscal 2022 with decreased net sales and a significant net loss, impacted by goodwill impairments, leading to liquidity concerns and a going concern warning - Fiscal 2022 was challenging due to inflation and reduced marketing, leading to a **20% decrease in total net sales**[126](index=126&type=chunk)[129](index=129&type=chunk) - The company launched new high-strength CBD products, Delta 9 products, and achieved **NSF certification** for certain products, including **NSF for Sport**[126](index=126&type=chunk) Selected Consolidated Financial Information (Fiscal Years Ended September 30) | Metric | 2022 | 2021 | Change (2022 vs 2021) | | :--------------------------------------- | :----------- | :----------- | :---------------------- | | Total net sales | $35,403,224 | $44,480,763 | $(9,077,539) | | Cost of sales | $13,066,639 | $14,495,063 | $(1,428,424) | | Gross profit as a percentage of net sales | 63.1% | 67.4% | (4.3)% | | Operating expenses | $39,647,130 | $49,601,690 | $(9,954,560) | | Impairment of goodwill and other intangible assets | $60,955,970 | $- | $60,955,970 | | Operating loss from operations | $(78,266,515) | $(19,615,990) | $(58,650,525) | | (Increase) decrease on contingent liability | $8,473,999 | $(6,687,439) | $15,161,438 | | Net loss before taxes | $(70,083,693) | $(24,289,889) | $(45,793,804) | | Net loss attributable to cbdMD Inc. common shareholders | $(74,085,698) | $(25,949,498) | $(48,136,200) | Net Sales by Channel (Fiscal Years Ended September 30) | Sales Channel | Fiscal 2022 | % of total | Fiscal 2021 | % of total | | :-------------- | :------------ | :--------- | :------------ | :--------- | | E-commerce sales | $26,435,203 | 74.7% | $32,907,956 | 74.0% | | Wholesale sales | $8,968,021 | 25.3% | $11,572,807 | 26.0% | | Total Net Sales | $35,403,224 | | $44,480,763 | | - Paw CBD net sales declined from **$5,659,796** in FY2021 to **$3,748,779** in FY2022 due to increasing competition and rationalized marketing[130](index=130&type=chunk) - Cost of sales as a percentage of net sales increased to **36.1%** in FY2022 from **32.6%** in FY2021, impacted by inventory adjustments, lower overhead absorption, and discounting[131](index=131&type=chunk) - Operating expenses decreased by approximately **$10 million (20%)** in FY2022 due to cost rationalization efforts, partially offset by **$0.8 million** in intangibles amortization[132](index=132&type=chunk) Corporate Overhead Expenses (Fiscal Years Ended September 30) | Expense Category | Fiscal 2022 | Fiscal 2021 | Change | | :------------------------ | :---------- | :---------- | :------- | | Staff related expense | $1,066,428 | $1,725,535 | $(659,107) | | Accounting/Legal expense | $728,250 | $866,876 | $(138,626) | | Professional outside services | $330,633 | $333,666 | $(3,033) | | Travel expense | $3,932 | $7,381 | $(3,449) | | Business insurance | $703,107 | $607,288 | $95,819 | | Non-cash stock compensation | $1,124,130 | $3,161,805 | $(2,037,675) | | Totals | $3,956,480 | $6,702,551 | $(2,746,071) | - Corporate overhead decreased **41%** in FY2022, primarily due to lower non-cash stock compensation and reduced staffing, legal, and accounting costs[135](index=135&type=chunk) - Cash and cash equivalents decreased from **$26.4 million** in FY2021 to **$6.7 million** in FY2022, while working capital decreased from **$29.6 million** to **$10.7 million**[142](index=142&type=chunk) - The company's ability to continue as a going concern depends on improving profitability and securing additional funding, as current working capital may not support operations for the next twelve months[145](index=145&type=chunk)[146](index=146&type=chunk) Non-GAAP Adjusted Operating Income (Fiscal Years Ended September 30) | Metric | Year Ended 2022 | Year Ended 2021 | | :----------------------------------- | :-------------- | :-------------- | | GAAP (loss) from operations | $(78,266,515) | $(19,615,990) | | Adjustments: | | | | Depreciation & Amortization | $1,833,326 | $1,017,408 | | Employee and director stock compensation | $1,124,130 | $3,149,688 | | Inventory adjustment | $878,142 | $671,669 | | Impairment of Goodwill and other intangible assets | $60,955,970 | $- | | Accrual for severance | $129,761 | $703,022 | | Accrual / expenses for discretionary bonus | $150,000 | $300,000 | | Non-GAAP adjusted (loss) from operations | $(13,195,186) | $(13,676,481) | [ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=25&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This item is not applicable to cbdMD, Inc. as a smaller reporting company - Not applicable for a smaller reporting company[162](index=162&type=chunk) [ITEM 8. Financial Statements and Supplementary Data.](index=25&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section refers to the consolidated financial statements and supplementary data, starting on page 31, with Cherry Bekaert LLP as the external auditor - Financial Statements and Report of Independent Registered Accounting Firm are listed in the 'Index to Financial Statements and Schedules' beginning on page **31**[163](index=163&type=chunk)[183](index=183&type=chunk) - The Auditor Firm ID for Cherry Bekaert LLP is **677**[163](index=163&type=chunk) [ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.](index=25&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) There have been no changes in or disagreements with accountants on accounting and financial disclosure - None[164](index=164&type=chunk) [ITEM 9A. Controls and Procedures.](index=25&type=section&id=ITEM%209A.%20Controls%20and%20Procedures.) Management concluded that cbdMD's disclosure controls and internal control over financial reporting were effective as of September 30, 2022, with no material changes during the fiscal year - Disclosure controls and procedures were evaluated and concluded to be effective as of **September 30, 2022**[166](index=166&type=chunk) - Management's assessment of internal control over financial reporting, based on COSO criteria, concluded it was effective as of **September 30, 2022**[171](index=171&type=chunk) - No material changes in internal control over financial reporting occurred during the last fiscal year[172](index=172&type=chunk) [ITEM 9B. Other Information.](index=26&type=section&id=ITEM%209B.%20Other%20Information.) This item reports that there is no other information to disclose - None[173](index=173&type=chunk) PART III [ITEM 10. Directors, Executive Officers and Corporate Governance.](index=27&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) Information for this item will be incorporated by reference from the company's 2023 Proxy Statement, expected by January 28, 2023 - Information will be incorporated by reference from the **2023 Proxy Statement**, expected by **January 28, 2023**[176](index=176&type=chunk) [ITEM 11. Executive Compensation.](index=27&type=section&id=ITEM%2011.%20Executive%20Compensation.) Information for this item will be incorporated by reference from the company's Proxy Statement - Information will be incorporated by reference from the Proxy Statement[177](index=177&type=chunk) [ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.](index=27&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters.) Information for this item will be incorporated by reference from the company's Proxy Statement - Information will be incorporated by reference from the Proxy Statement[178](index=178&type=chunk) [ITEM 13. Certain Relationships and Related Transactions, and Director Independence.](index=27&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence.) Information for this item will be incorporated by reference from the company's Proxy Statement - Information will be incorporated by reference from the Proxy Statement[179](index=179&type=chunk) [ITEM 14. Principal Accounting Fees and Services.](index=27&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services.) Information for this item will be incorporated by reference from the company's Proxy Statement - Information will be incorporated by reference from the Proxy Statement[180](index=180&type=chunk) PART IV [ITEM 15. Exhibits and Financial Statement Schedules.](index=28&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists consolidated financial statements and the auditor's report, confirms schedules are included or not applicable, and provides a detailed Exhibit Index - Consolidated financial statements and Report of Independent Registered Accounting Firm are listed in the 'Index to Financial Statements and Schedules' beginning on page **31**[183](index=183&type=chunk) - All financial statement schedules are either not required, not applicable, or their disclosures are contained in the consolidated financial statements[184](index=184&type=chunk) - A detailed Exhibit Index is provided, listing various agreements, corporate documents, and certifications[186](index=186&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [ITEM 16. Form 10-K Summary](index=28&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - None[187](index=187&type=chunk) SIGNATURES This section contains the signatures of cbdMD, Inc.'s President, CFO, and Board of Directors, all dated December 15, 2022, along with a power of attorney - The report is signed by **Kevin MacDermott** (President) and **T. Ronan Kennedy** (CFO) on **December 15, 2022**[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - Board of Directors, including Chairman **Scott Stephen**, **Raymond S. Coffman**, **Bakari Sellers**, **Peter Ghiloni**, **William Raines III**, and **Sibyl Swift, PhD**, also signed on **December 15, 2022**[199](index=199&type=chunk) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Cherry Bekaert LLP issued an unqualified opinion on cbdMD's financial statements but highlighted substantial doubt about the company's ability to continue as a going concern - Cherry Bekaert LLP issued an **unqualified opinion** on the consolidated financial statements for FY2022 and FY2021[201](index=201&type=chunk) - The audit report includes a 'Substantial Doubt about the Company's Ability to Continue as a Going Concern' due to historical losses (**$74.1 million net loss** in FY2022) and an accumulated deficit of **$147.4 million** as of September 30, 2022[202](index=202&type=chunk) - The financial statements do not include adjustments for the possible future effects of this uncertainty[202](index=202&type=chunk) PART 1 – FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS.](index=33&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS.) This section presents cbdMD's consolidated financial statements for FY2022 and FY2021, reflecting a significant net loss, decreased liquidity, and a going concern warning, with detailed notes on accounting policies and financial items - The consolidated financial statements include Balance Sheets, Statements of Operations, Comprehensive Income (Loss), Cash Flows, and Shareholders' (Deficit) Equity for FY2022 and FY2021[208](index=208&type=chunk)[211](index=211&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk) - The company reported a net loss of **$74,085,698** for the fiscal year ended September 30, 2022, compared to **$25,949,498** in 2021[214](index=214&type=chunk) - Cash and cash equivalents decreased from **$26,411,424** in FY2021 to **$6,720,234** in FY2022[209](index=209&type=chunk) - Total assets decreased from **$124,883,376** in FY2021 to **$40,791,909** in FY2022, primarily due to the impairment of goodwill and intangible assets[209](index=209&type=chunk) - Total liabilities decreased from **$21,741,189** in FY2021 to **$9,367,478** in FY2022[212](index=212&type=chunk) - Shareholders' equity decreased from **$103,142,187** in FY2021 to **$31,424,431** in FY2022[212](index=212&type=chunk) [NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=40&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details cbdMD's organization, accounting policies, and going concern considerations, covering revenue recognition, asset impairment, and stock-based compensation - cbdMD, Inc. was formed in 2015, changed its name to cbdMD, Inc. in 2019, and acquired Cure Based Development, LLC in 2018, establishing its core CBD brands[226](index=226&type=chunk)[227](index=227&type=chunk) - The company's products comply with the **2018 Farm Bill**, offering both **broad spectrum** (non-detectable THC) and **full spectrum** (trace THC) cannabinoids[228](index=228&type=chunk) - Consolidated financial statements include wholly-owned subsidiaries **CBDI**, **Paw CBD**, and **cbdMD Therapeutics**[231](index=231&type=chunk) - Significant estimates are made for allowances for doubtful accounts, inventory valuation, sales returns, investments, intangible assets, income taxes, and contingent liabilities[232](index=232&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually or when triggering events occur; trademarks 'cbdMD' and 'HempMD' were reclassified to definite-lived assets with **20-year useful lives** in FY2022[243](index=243&type=chunk)[245](index=245&type=chunk)[285](index=285&type=chunk) - Revenue is recognized when products are shipped (FOB shipping) for both E-commerce and wholesale channels, with E-commerce sales representing the majority[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - Advertising and related marketing costs are expensed as incurred, totaling **$14.3 million** in FY2022[257](index=257&type=chunk) - The company has a valuation allowance against net deferred tax assets due to uncertainty of realization and faces a going concern risk due to historical losses and insufficient working capital[266](index=266&type=chunk)[267](index=267&type=chunk)[376](index=376&type=chunk) [NOTE 2 – MARKETABLE SECURITIES AND INVESTMENT OTHER SECURITIES](index=45&type=section&id=NOTE%202%20%E2%80%93%20MARKETABLE%20SECURITIES%20AND%20INVESTMENT%20OTHER%20SECURITIES) This note describes the accounting for marketable and other investment securities, including a realized/unrealized loss in FY2022 and an equity investment in Steady State, LLC - Marketable securities and other investment securities are recorded at fair value using a **three-level hierarchy** (Level 1, 2, 3 inputs)[240](index=240&type=chunk)[241](index=241&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - The company recorded a realized and unrealized loss of **$(33,350)** in FY2022, compared to a gain of **$546,878** in FY2021[274](index=274&type=chunk) - An investment in **Adara Sponsor LLC** (a SPAC) was made, contingent on Adara's acquisition of Alliance Entertainment, Inc., with risk of loss if the business combination is not completed by **February 2023**[275](index=275&type=chunk) - In April 2022, cbdMD invested **$1.4 million** in **Steady State, LLC** as an equity investment, following the sale of its manufacturing assets[277](index=277&type=chunk) [NOTE 3 – INVENTORY](index=48&type=section&id=NOTE%203%20%E2%80%93%20INVENTORY) Inventory is valued at the lower of cost or net realizable value, with a significant write-down in FY2022 due to product line rationalization - Inventory is stated at the lower of cost or net realizable value, using a weighted average basis[237](index=237&type=chunk) Inventory Breakdown (September 30) | Category | 2022 | 2021 | | :---------------- | :----------- | :----------- | | Finished Goods | $3,198,488 | $3,362,897 | | Inventory Components | $1,213,724 | $1,729,176 | | Inventory Reserve | $(156,298) | $(70,206) | | Inventory prepaid | $511,459 | $551,519 | | Total Inventory | $4,767,373 | $5,573,386 | - The company recorded an inventory write-down of **$878,142** in FY2022, mainly due to product line rationalization and elimination of slow-moving SKUs[279](index=279&type=chunk) [NOTE 4 – PROPERTY AND EQUIPMENT](index=48&type=section&id=NOTE%204%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT) Property and equipment are recorded at cost less depreciation, with a significant decrease in net value in FY2022 due to the sale of manufacturing assets - Property and equipment are stated at cost less accumulated depreciation, using the straight-line method over estimated useful lives (**3-5 years**)[239](index=239&type=chunk) Property and Equipment, Net (September 30) | Category | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | | Computers, furniture and equipment | $1,095,228 | $549,910 | | Manufacturing equipment | $284,275 | $2,968,838 | | Leasehold improvements | $487,081 | $870,621 | | Automobiles | $11,087 | $35,979 | | Total Gross Property and Equipment | $1,877,671 | $4,425,348 | | Less accumulated depreciation | $(1,054,361) | $(1,863,774) | | Property and equipment, net | $823,310 | $2,561,574 | - Net property and equipment decreased significantly in FY2022 due to the sale of substantially all manufacturing assets[280](index=280&type=chunk) - Depreciation expense was **$948,962** in FY2022, down from **$1,017,408** in FY2021[280](index=280&type=chunk) [NOTE 5 – GOODWILL AND INTANGIBLE ASSETS](index=48&type=section&id=NOTE%205%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill was fully impaired in FY2022, and certain trademarks were reclassified to definite-lived intangible assets, with an additional impairment recorded for the 'cbdMD' trademark - Goodwill of **$56,670,970** at September 30, 2021, was fully impaired in fiscal 2022 through multiple charges, resulting in a zero balance[281](index=281&type=chunk)[287](index=287&type=chunk) - Trademarks 'cbdMD' and 'HempMD' were reclassified from indefinite to definite-lived intangible assets with a **20-year useful life**, effective **January 1, 2022**[285](index=285&type=chunk) - An impairment charge of **$4,285,000** was recorded for the 'cbdMD' trademark in FY2022[285](index=285&type=chunk) Intangible Assets (September 30) | Category | 2022 | 2021 | | :------------------------------------------ | :----------- | :----------- | | Trademark related to cbdMD | $21,585,000 | $21,585,000 | | Trademark for HempMD | $50,000 | $50,000 | | Technology Relief from Royalty related to DirectCBDOnline.com | $667,844 | $667,844 | | Tradename related to DirectCBDOnline.com | $749,567 | $749,567 | | Impairment of definite lived intangible assets | $(4,285,000) | $- | | Amortization of definite lived intangible assets | $(932,862) | $(48,482) | | Total | $17,834,549 | $23,003,929 | - Amortization expense for definite-lived intangible assets was **$932,862** for the year ended September 30, 2022[286](index=286&type=chunk) [NOTE 6 – CONTINGENT LIABILITY](index=50&type=section&id=NOTE%206%20%E2%80%93%20CONTINGENT%20LIABILITY) This note details contingent liabilities primarily related to Earnout Shares from the 2018 acquisition, which significantly decreased in FY2022 due to changes in stock price and unmet targets - The company has a contractual obligation to issue up to **15,250,000 Earnout Shares** based on aggregate net revenue criteria from the 2018 acquisition[288](index=288&type=chunk)[291](index=291&type=chunk) - As of September 30, 2022, **3,928,797 Earnout Shares** remain subject to issuance[292](index=292&type=chunk) - The contingent liability for Earnout Shares decreased from **$9,856,000** in FY2021 to **$276,000** in FY2022, primarily due to changes in the common stock share price[212](index=212&type=chunk)[140](index=140&type=chunk)[293](index=293&type=chunk) - The measurement period for the Twenty Two Earnout Shares ended in **September 2022**, with no further obligation as revenue targets were not met[294](index=294&type=chunk) - Other contingent obligations for RSUs and options to employees were terminated or valued at zero due to unmet revenue targets or employee resignation[295](index=295&type=chunk)[296](index=296&type=chunk) [NOTE 7 – RELATED PARTY TRANSACTIONS](index=51&type=section&id=NOTE%207%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note briefly mentions related party investments in Adara and the counterparty in the earnout arrangement - The company, its directors, and affiliates have invested in Adara through **Adara Sponsor LLC**[297](index=297&type=chunk) - The counterparty in the earnout arrangement (Note 6) is a related party[297](index=297&type=chunk) [NOTE 8 – SHAREHOLDERS' EQUITY](index=51&type=section&id=NOTE%208%20%E2%80%93%20SHAREHOLDERS%27%20EQUITY) This note details cbdMD's preferred and common stock, including authorized and outstanding shares, preferred dividends, and various common stock issuances in FY2022 and FY2021 - Authorized preferred stock: **50,000,000 shares** (**$0.001 par value**)[298](index=298&type=chunk) - Outstanding **8.0% Series A Cumulative Convertible Preferred Stock**: **5,000,000 shares** at September 30, 2022 (vs **500,000** in 2021)[298](index=298&type=chunk) - Total preferred dividends declared: **$4,002,005** in FY2022 (vs **$2,554,609** in FY2021)[299](index=299&type=chunk) - Authorized common stock: **150,000,000 shares** (**$0.001 par value**)[299](index=299&type=chunk) - Outstanding common stock: **60,665,595 shares** at September 30, 2022 (vs **57,783,340** in 2021)[299](index=299&type=chunk) - Common stock issuances in FY2022 included restricted stock for a new board member (**5,000 shares**), a consultant (**100,000 shares**), and Earnout Shares (**409,505**, **458,887**, **444,243**, **466,713 shares**)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[308](index=308&type=chunk) - In FY2021, the company completed a public offering of **2,200,000 shares** of Series A Convertible Preferred Stock for **$15.3 million** net proceeds[301](index=301&type=chunk) [NOTE 9 -STOCK-BASED COMPENSATION](index=55&type=section&id=NOTE%209%20-STOCK-BASED%20COMPENSATION) This note details stock-based compensation under equity plans, including option and restricted stock activity, and a significant decrease in compensation expense in FY2022 - Stock-based compensation is accounted for under **ASC 718**, recognizing fair value at grant date over the service period[339](index=339&type=chunk) - The **2015 and 2021 Equity Compensation Plans** allow for awards of options, restricted stocks, and other stock grants to eligible recipients[337](index=337&type=chunk)[338](index=338&type=chunk) Stock Option Activity (Fiscal Years Ended September 30) | Metric | 2022 | 2021 | | :-------------------------- | :----------- | :----------- | | Outstanding at Sep 30, beginning | 2,702,500 | 1,750,000 | | Granted | 1,060,000 | 1,380,000 | | Exercised | - | (147,953) | | Forfeited | (1,260,000) | (279,547) | | Outstanding at Sep 30, end | 2,502,500 | 2,702,500 | | Weighted-average exercise price (end) | $3.36 | $4.42 | | Weighted-average remaining contractual term (end) | 4.55 years | 5.13 years | - As of September 30, 2022, **$301,126** of total unrecognized compensation cost related to non-vested stock options remains, vesting over approximately **2.3 years**[343](index=343&type=chunk) - Restricted stock compensation expense was **$373,610** in FY2022, a decrease from **$1,626,613** in FY2021[360](index=360&type=chunk) - In FY2022, **400,000 restricted common shares** were issued for a former executive officer's separation agreement, while **500,000 unvested RSUs** and **500,000 unvested options** were forfeited[346](index=346&type=chunk) [NOTE 10 – WARRANTS](index=58&type=section&id=NOTE%2010%20%E2%80%93%20WARRANTS) This note summarizes equity-classified warrant activity, showing no grants or exercises in FY2022, but 70,500 forfeitures, with 589,917 warrants outstanding Warrant Activity (Fiscal Years Ended September 30) | Metric | 2022 | 2021 | | :-------------------------- | :----------- | :----------- | | Outstanding at Sep 30, beginning | 660,417 | 914,184 | | Granted | - | 293,984 | | Exercised | - | (323,444) | | Forfeited | (70,500) | (224,307) | | Outstanding at Sep 30, end | 589,917 | 660,417 | | Weighted-average exercise price (end) | $4.68 | $4.60 | | Weighted-average remaining contractual term (end) | 2.30 years | 3.05 years | - As of September 30, 2022, **589,917 warrants** were outstanding and exercisable, with exercise prices ranging from **$1.25 to $7.50** and expiration dates up to **June 2026**[361](index=361&type=chunk) [NOTE 11 – COMMITMENTS AND CONTINGENCIES](index=58&type=section&id=NOTE%2011%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines commitments related to athlete endorsement agreements, including a new agreement and the CEO's resignation due to SEC action - An endorsement agreement with a professional athlete was separated in November 2022 with a final cash payment, incurring a one-time non-cash expense of approximately **$850,000**[362](index=362&type=chunk) - A new endorsement agreement with another professional athlete, effective **February 2022 through February 2025**, includes potential base payments of **$1,500,000** and sales incentives[363](index=363&type=chunk) - The company's CEO resigned in **June 2022** due to SEC action against him, with cbdMD not named as a defendant[364](index=364&type=chunk) [NOTE 12 – NOTE PAYABLE](index=58&type=section&id=NOTE%2012%20%E2%80%93%20NOTE%20PAYABLE) This note details the company's note payable obligations, including a $249,100 equipment loan paid off in FY2022 and a remaining $3,000 balance on another loan - A **$249,100** equipment loan from July 2019 was paid off in **April 2022**[365](index=365&type=chunk) - A **$35,660** equipment loan from January 2020 has a long-term note payable balance of **$3,000** at September 30, 2022, with monthly payments of **$841** at a **6.2%** financing rate[365](index=365&type=chunk) [NOTE 13 – PAYCHECK PROTECTION PROGRAM LOAN](index=60&type=section&id=NOTE%2013%20%E2%80%93%20PAYCHECK%20PROTECTION%20PROGRAM%20LOAN) This note confirms cbdMD received a $1,456,100 PPP loan in April 2020, which was fully forgiven by the SBA in May 2021, resulting in a gain - The company received a **$1,456,100 PPP loan** in **April 2020**[367](index=367&type=chunk) - The PPP loan was fully forgiven by the SBA in **May 2021**, resulting in a **$1,466,113 gain**[367](index=367&type=chunk) [NOTE 14 – LEASES](index=60&type=section&id=NOTE%2014%20%E2%80%93%20LEASES) This note outlines cbdMD's operating lease agreements for offices, with total costs of $1,391,856 in FY2022 and future payments totaling $5,334,625 - The company has operating lease agreements for corporate, warehouse, and laboratory offices, expiring between **2024 and 2026**[368](index=368&type=chunk) - Operating lease ROU assets and liabilities are recognized based on the present value of lease payments, using the incremental borrowing rate[369](index=369&type=chunk) - Total operating lease costs for FY2022 were **$1,391,856**[371](index=371&type=chunk) - As of September 30, 2022, the weighted average remaining lease term was **3.91 years**, and the weighted average discount rate was **4.66%**[371](index=371&type=chunk) Future Minimum Aggregate Lease Payments (September 30, 2022) | For the year ended September 30, | Amount | | :------------------------------- | :------- | | 2023 | $1,380,204 | | 2024 | $1,421,610 | | 2025 | $1,159,949 | | Thereafter | $1,372,862 | | Total future lease payments | $5,334,625 | | Less interest | $(475,567) | | Total lease liabilities | $4,859,058 | [NOTE 15 – LOSS PER SHARE](index=61&type=section&id=NOTE%2015%20%E2%80%93%20LOSS%20PER%20SHARE) This note presents basic and diluted loss per share for cbdMD, which was $(1.24) in FY2022, with potential dilutive securities excluded due to anti-dilutive effects Loss Per Share (Fiscal Years Ended September 30) | Metric | 2022 | 2021 | | :------------------------------------------ | :----------- | :----------- | | Net income (loss) attributable to common shareholders | $(74,085,698) | $(25,949,498) | | Weighted average number of shares Basic | 59,750,301 | 54,938,128 | | Basic earnings per share | $(1.24) | $(0.47) | | Diluted earnings per share | $(1.24) | $(0.47) | - **3,335,750 potential shares** underlying options, unvested RSUs, and warrants, as well as **8,335,000 convertible preferred shares**, were excluded from diluted EPS calculation in FY2022 because their effect was anti-dilutive[373](index=373&type=chunk) [NOTE 16 – INCOME TAXES](index=62&type=section&id=NOTE%2016%20%E2%80%93%20INCOME%20TAXES) This note details cbdMD's income tax accounting, including operating losses, a full valuation allowance against deferred tax assets, and significant NOL carryforwards - The company generated operating losses in FY2022 and FY2021, leading to a **full valuation allowance** against net deferred tax assets[375](index=375&type=chunk)[376](index=376&type=chunk) - The effective income tax rate was **0.0%** in FY2022[375](index=375&type=chunk) Significant Components of Deferred Income Taxes (September 30) | Category | 2022 | 2021 | | :-------------------------- | :----------- | :----------- | | **Deferred tax assets:** | | | | Net operating loss carryforwards | $12,909,000 | $9,160,000 | | ROU - Liability | $1,087,000 | $1,342,000 | | Capital loss carryforward | $702,000 | $716,000 | | Stock compensation | $833,000 | $1,107,000 | | Total deferred tax assets | $16,373,000 | $13,046,000 | | **Deferred tax liabilities:** | | | | Prepaid Expenses | $(257,000) | $(219,000) | | ROU - Assets | $(1,002,000) | $(1,254,000) | | Intangibles | $(3,426,000) | $(4,481,000) | | Total deferred tax liabilities | $(4,685,000) | $(6,116,000) | | Net deferred tax assets | $11,688,000 | $6,930,000 | | Valuation allowance | $(11,688,000) | $(6,930,000) | | Net deferred tax liability | $- | $- | - Due to **IRC Section 382** ownership changes, approximately **$11.4 million** of pre-ownership change NOL carryforwards from FY2019 will expire[377](index=377&type=chunk) - The total valuation allowance increased by **$4,758,000** in FY2022[378](index=378&type=chunk) - As of September 30, 2022, the company has utilizable federal NOL carryforwards of approximately **$57.7 million**, which carry forward indefinitely[379](index=379&type=chunk) [NOTE 17 – ACQUISITIONS](index=63&type=section&id=NOTE%2017%20%E2%80%93%20ACQUISITIONS) This note details the July 2021 acquisition of directcbdonline.com, including purchase consideration and the non-fulfillment of Earnout Share contingencies - In **July 2021**, cbdMD acquired **directcbdonline.com** from Twenty Two Capital, LLC[384](index=384&type=chunk) - Consideration included **$2,000,000 cash** and up to **600,000 shares** of restricted common stock[384](index=384&type=chunk) - The measurement period for the Twenty Two Earnout Shares ended in **September 2022**, with the revenue threshold not met, resulting in no further obligation[385](index=385&type=chunk) Final Purchase Price Allocation for DirectCBDOnline.com Acquisition | Consideration | Amount | | :-------------- | :----------- | | Total Consideration | $3,552,529 | | **Assets Acquired:** | | | Undeposited Funds | $18,155 | | Inventory | $79,895 | | Inventory - Prepaid Shipping | $31,094 | | Property and equipment, net | $5,000 | | Intangible Assets | $3,418,383 | | Total assets acquired | $3,552,529 | [NOTE 18 – SUBSEQUENT EVENTS](index=64&type=section&id=NOTE%2018%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note states that no material subsequent events occurred between September 30, 2022, and the financial statement issuance date, beyond those disclosed - No material subsequent events occurred between **September 30, 2022**, and the financial statement issuance date, beyond those already disclosed[388](index=388&type=chunk)

cbdMD, Inc. (NYSE:YCBD) Q3 2022 Results Conference Call August 11, 2022 4:30 PM ET Company Participants Ronan Kennedy - CFO and COO Scott Stephen - Chairman Kevin MacDermott - President Dr. Sibyl Swift - Vice President of Scientific and Regulatory Affairs Conference Call Participants Jeff Porter - Porter Capital Management Operator Good afternoon. Welcome to the cbdMD Inc.'s June 30, 2022 Third Quarter of Fiscal 2022 Earnings Call and Update. This afternoon, the Company issued a press release that provided ...

Table of Contents Commission file number 001-38299 cbdMD, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to _______________ (Exact Name of Registrant as Specified in its Charter) Nor ...

cbdMD, Inc. (NYSE:YCBD) Q2 2022 Earnings Conference Call May 13, 2022 4:30 PM ET Company Participants Ronan Kennedy - CFO and COO Marty Sumichrast - Chairman and Co-CEO Sibyl Swift - VP, Scientific & Regulatory Affairs Conference Call Participants Operator Good afternoon, and welcome to cbdMD, Inc.'s March 31, 2022, Second Quarter of Fiscal 2022 Earnings Call and Update. This afternoon, the company issued a press release that provided an overview of its second quarter of fiscal year 2022 results, which foll ...