Business Context and Reporting Period
Company: cbdMD, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 2, 2020
Reporting Period: Fiscal year ended September 30, 2020 (Fiscal 2020)
Context: The Company, an emerging growth company, is providing preliminary financial estimates for Fiscal 2020 and disclosing an investor presentation related to an offering of 8.0% Series A Cumulative Convertible Preferred Stock.
Key Financial Metrics
The filing provides preliminary, unaudited estimates for Fiscal 2020. Actual audited figures will be reported in the Form 10-K.
- Net Sales Revenue: Estimated between $41.7 million and $41.8 million.
- Operating Loss: Estimated between $17.5 million and $17.9 million.
- One-Time Operating Expenses: Approximately $2.8 million included in the operating loss.
- Debt, Cash Flow, and Liquidity: The filing text does not provide clear values for cash flow, debt levels, or liquidity metrics.
- Margins: The filing text does not provide clear values for gross or net margins.
Material Changes and Unusual Items
The estimated operating loss includes approximately $2.8 million in one-time operating expense adjustments. These adjustments are attributable to:
- Final adjustments to sponsorship agreements.
- Patent and trademark work.
- Bonuses and severance.
- IT contracts.
- Inventory impairments.
- Adjustments in non-cash compensation items.
- Write-downs of aged receivables.
The filing notes that these figures are preliminary internal calculations and have not been reviewed by the independent registered public accounting firm.
Guidance, Outlook, and Risks
Outlook: The Company states there can be no assurance that actual results for Fiscal 2020 will not differ materially from the preliminary data presented. The preliminary data is not a substitute for GAAP financial statements and is not necessarily indicative of future results.
Regulatory Disclosure: The filing incorporates by reference an investor presentation (Exhibit 99.1) regarding the offering of 8.0% Series A Cumulative Convertible Preferred Stock. Information in Items 2.02 and 7.01 is not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.
Investor Verification Checklist
- Verify the final audited net sales and operating loss figures in the upcoming Form 10-K for the year ended September 30, 2020.
- Confirm the specific breakdown of the $2.8 million in one-time expenses once the audit is complete.
- Review the full investor presentation (Exhibit 99.1) for details on the 8.0% Series A Cumulative Convertible Preferred Stock offering.
- Monitor for any material changes to the preliminary revenue and loss estimates prior to the 10-K filing.