Business Context and Reporting Period
This Form 8-K Current Report was filed by Level Brands, Inc. (now transitioning to cbdMD, Inc.) on April 19, 2019. The filing details the results of the company's 2019 annual meeting of shareholders held on the same date. The company is an emerging growth company incorporated in North Carolina.
Key Financial Metrics
This filing is a current report regarding corporate governance and equity transactions; it does not contain financial statements, revenue, profit, cash flow, margin, debt, or liquidity data. The filing text does not provide a clear value for any financial performance metrics.
Material Changes and Corporate Actions
- Share Issuance Approval: Shareholders approved the issuance of 15,250,000 shares of common stock as consideration for the December 2018 merger with Cure Based Development, LLC. This includes 6,500,000 "First Tranche Shares" and 8,750,000 "Second Tranche Shares" subject to a four-year vesting schedule.
- Name Change: Shareholders approved changing the company name from Level Brands, Inc. to cbdMD, Inc. The change is effective May 1, 2019, with stock trading under the new symbol "YCBD" on the NYSE American.
- Equity Plan Amendment: Shareholders approved an amendment to the 2015 Equity Compensation Plan to increase the number of shares available for issuance.
- Board Elections: Nine directors were elected to serve until the 2020 annual meeting. All director nominees received significant majority support, though some faced notable abstentions.
Guidance, Outlook, and Risks
The filing does not provide forward-looking financial guidance or management commentary on market outlook. Key contingencies and restrictions noted include:
- Lock-Up Agreements: The newly issued shares are subject to lock-up agreements limiting sales to the lesser of Rule 144(e) volume limitations or 20% of shares in any 90-day period.
- Voting Proxy: The Second Tranche Shares are subject to an irrevocable voting proxy agreement until they vest, with the Audit Committee Chairman serving as the proxyholder.
- Regulatory Status: The share issuances are exempt from registration under Section 4(a)(2) of the Securities Act as they were issued to accredited investors.
Investor Verification Checklist
- Verify the effective date of the name change and ticker symbol update (May 1, 2019, "YCBD").
- Confirm the vesting schedule for the 8,750,000 Second Tranche Shares issued to CBD Holding, LLC.
- Review the definitive proxy statement (Schedule 14A) for details on the Equity Compensation Plan amendment.
- Monitor the filing of articles of amendment with the State of North Carolina to confirm the legal name change.
- Check the updated CUSIP number (12482W101) for the company's common stock post-name change.