Business Context and Reporting Period
This Form 8-K is a current report filed by cbdMD, Inc. on December 28, 2021. The filing addresses Item 3.02 regarding unregistered sales of equity securities. The company is incorporated in North Carolina and trades on the NYSE American under the symbols YCBD (common stock) and YCBDpA (preferred stock).
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue totals, profit margins, cash flow, or debt levels for the reporting period. The only specific financial metric disclosed is the net revenue for a specific quarter used to calculate an earnout:
- Net Revenue (Q3 2021): $9,793,327 (for the quarter ended September 30, 2021).
Material Changes and Transactions
The primary event reported is the issuance of earnout shares pursuant to a 2018 Merger Agreement with Cure Based Development, LLC. Key details include:
- Transaction: Issuance of 466,713 shares of common stock.
- Recipients: Members of CBD Holding, LLC (including affiliates of executive officers Martin A. Sumichrast and R. Scott Coffman).
- Trigger: Satisfaction of aggregate net revenue criteria for the quarter ended September 30, 2021, within the third marking period of the earnout agreement.
- Amendment Context: An addendum signed in March 2021 changed the measurement period for the third marking period to a quarterly basis, enabling this specific issuance.
- Regulatory Status: The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933 as the recipients were accredited investors.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or discussion of general business risks. The document is strictly a disclosure of a completed equity transaction.
Investor Verification Checklist
- Verify the total number of outstanding shares post-issuance to assess dilution impact.
- Review the full Merger Agreement and Addendum No. 1 to understand remaining earnout thresholds and potential future share issuances.
- Confirm the relationship between the recipients (affiliates of executives) and the company's insider trading policies.
- Check subsequent filings for the company's full quarterly financial results to contextualize the $9.8 million revenue figure.