cbdMD, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by cbdMD, Inc. on May 14, 2019, covering events occurring on May 10, 2019, and May 13, 2019. The Company, an emerging growth company incorporated in North Carolina, announced and subsequently priced a firm commitment underwritten public offering of its common stock.
Key Financial Metrics and Transaction Details
- Offering Size: 2,000,000 shares of common stock at an offering price of $6.00 per share.
- Over-Allotment Option: Underwriters granted a 45-day option to purchase up to an additional 300,000 shares.
- Gross Proceeds: $12.0 million (based on 2,000,000 shares at $6.00).
- Net Proceeds: Approximately $10.9 million before the exercise of the over-allotment option.
- Underwriting Discounts and Commissions: 7.75% of gross cash proceeds.
- Representative's Warrant: Issued to purchase 60,000 shares (3% of the offering excluding over-allotment) at an exercise price of $7.50 per share.
- Estimated Offering Expenses: Approximately $130,000 (excluding underwriting discounts).
- Use of Proceeds: General working capital.
Note: This filing does not provide historical revenue, profit, cash flow, margin, debt, or liquidity metrics for the Company.
Material Changes and Agreements
The primary material change is the entry into an Underwriting Agreement with ThinkEquity, a division of Fordham Financial Management, Inc. The transaction was expected to close on May 15, 2019. The Company registered the offering under an effective shelf registration statement on Form S-3.
Guidance, Risks, and Contingencies
- Lock-Up Agreements: Executive officers, directors, and 5% or greater shareholders entered into 90-day lock-up agreements. Joseph Gunnar & Co., LLC entered into a 180-day lock-up agreement regarding shares issued as compensation in January 2019.
- Forward-Looking Statements: The filing contains forward-looking statements regarding expected net proceeds, which are subject to risks and uncertainties detailed in the Company's other SEC filings.
- Legal Opinions: Legal opinions regarding the validity of the securities were provided by Pearlman Law Group LLP and the Law Offices of Jason H. Scott.
Investor Verification Checklist
- Verify the final closing date of the offering (expected May 15, 2019) and whether the over-allotment option was exercised.
- Review the Final Prospectus Supplement for a complete list of risk factors and use of proceeds.
- Confirm the exact amount of net proceeds received after deducting all underwriting discounts and estimated expenses.
- Check subsequent filings for any changes in the Company's capital structure or liquidity position resulting from this offering.