Business Context and Reporting Period
This Form 8-K Current Report was filed by cbdMD, Inc. on October 5, 2021, covering events occurring on October 1, 2021. The company is incorporated in North Carolina and trades on the NYSE American under the symbols YCBD and YCBD PR A. The filing primarily addresses the renewal of an executive employment agreement.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation terms.
Material Changes
The material change reported is the execution of a new Executive Employment Agreement with T. Ronan Kennedy, who serves as Chief Financial Officer and Chief Operating Officer. This agreement supersedes his initial one-year term effective October 1, 2020.
Guidance, Outlook, and Management Commentary
There is no forward-looking guidance, financial outlook, or management commentary regarding business strategy or risks in this filing. The document details the following compensation terms for Mr. Kennedy:
- Base Salary: $275,000 annually.
- Performance Bonus: Eligible for a bonus based on annual goals, payable in cash and/or common stock.
- Discretionary Bonus: Eligible for a discretionary bonus.
- Equity Grants:
- 25,000 restricted stock shares vesting on January 1, 2022.
- Options to purchase 75,000 shares at $1.96 per share, vesting on October 1, 2022.
- Severance Provisions:
- Termination without cause: Entitled to remaining base salary for the term, with a minimum of six months' salary.
- Change of Control: Entitled to a lump sum equal to the greater of 1.5x base salary or remaining base salary for the term.
Investor Verification Checklist
- Verify the total number of shares outstanding to assess the dilution impact of the 25,000 restricted shares and 75,000 options granted.
- Review the specific annual performance goals established by the board to understand the potential cash and stock bonus liability.
- Confirm the company's current cash position to ensure it can meet the minimum six-month severance obligation if the executive is terminated without cause.
- Examine the full text of Exhibit 10.1 for any additional covenants or definitions regarding "Change of Control" that may affect future M&A scenarios.