Business Context and Reporting Period
This Form 8-K is a current report filed by cbdMD, Inc. on August 16, 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 and YCBDpA.
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 the quarter ended June 30, 2021, which was $10,560,523. This figure was used to calculate earnout share issuance.
Material Changes
- Equity Issuance: On August 16, 2021, the company issued an aggregate of 503,275 shares of common stock.
- Trigger Event: The issuance was triggered by the satisfaction of net revenue criteria for the quarter ended June 30, 2021, under the terms of the Merger Agreement with Cure Based Development, LLC.
- Recipients: Shares were issued to members of CBD Holding, LLC, including affiliates of executive officers Martin A. Sumichrast and R. Scott Coffman.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future outlook, or discussion of general business risks. The document notes that the issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933 as the recipients were accredited investors. It references a prior amendment (Addendum No. 1) to the Merger Agreement that changed the measurement period for earnout calculations to a quarterly basis.
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 identity of the "members" of CBD Holding, LLC receiving the shares to evaluate related-party transaction implications.
- Check subsequent filings for the company's full quarterly financial results for the period ended June 30, 2021.