8-K 1 ycbd_8k.htm FORM 8-K ycbd_8k
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) June 28, 2021
 
 
cbdMD, INC.
(Exact Name of Registrant as Specified in Charter)
 
North Carolina
001-38299
47-3414576  
(State or Other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)  
 
8845 Red Oak Boulevard, Charlotte, NC 28217
(Address of Principal Executive Offices)(Zip Code)
 
Registrant's telephone number, including area code: (704) 445-3060
 
not applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐            
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐            
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐            
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐            
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
 
Emerging growth company ☒
 
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
common
YCBD
NYSE American
8.0% Series A Cumulative Convertible Preferred Stock
YCBDpA
NYSE American
 

 
 
 
Item 1.01 Entry into a Material Definitive Agreement.
 
On June 28, 2021, cbdMD, Inc. (“cbdMD” or the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with ThinkEquity, a division of Fordham Financial Management, Inc. as representative of the underwriters (the “Representative”), pursuant to which the Company agreed to sell to the underwriters in a firm commitment underwritten public offering (the “Offering”) an aggregate of 1,913,100 shares of its 8.0% Series A Cumulative Convertible Preferred Stock, par value $0.001 per share (the “Series A Convertible Preferred Stock”), at an Offering price of $7.50 per share. The Company granted the underwriters a 45-day option to purchase up to an additional 286,900 shares of Series A Convertible Preferred Stock to cover over-allotments, which was exercised on June 29, 2021.
 
The net proceeds to the Company from the Offering are expected to be approximately $15.1 million (including the over-allotment option), after deducting underwriting discounts and commissions and estimated expenses payable by the Company. The transactions contemplated by the Underwriting Agreement are expected to close on July 1, 2021.
 
The Offering was registered pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-228773) (the “Registration Statement”) and the related base prospectus included in the Registration Statement, as supplemented by the prospectus supplement dated June 24, 2021 (the “Preliminary Prospectus Supplement”) and the final prospectus supplement dated June 28, 2021 (the “Final Prospectus Supplement” and collectively with the Preliminary Prospectus Supplement, the “Prospectus Supplement”)). The legal opinion and consent of Pearlman Law Group LLP addressing the validity of the securities sold in the Offering is filed as Exhibit 5.1 hereto and is incorporated into the Registration Statement, and the legal opinion and consent of Gavigan Law, PLLC related to certain matters under North Carolina law is filed as Exhibit 5.2 hereto and is incorporated by reference into the Registration Statement.
 
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions.
 
The underwriters will receive discounts and commissions of 7.25% of the gross cash proceeds received by the Company from the sale of the shares of Series A Convertible Preferred Stock in the Offering. The Company will issue the Representative a warrant to purchase 143,482 shares of the Company’s common stock (equal to 3.0% of the quotient of the gross proceeds from the Offering divided by $3.00 which was the last closing price per share of the Company’s common stock on the NYSE American prior to the execution of the Underwriting Agreement for the Offering), exercisable at $3.75 per share. The Company has agreed to reimburse the Representative for all reasonable and actual out-of-pocket accountable fees and costs incurred by the Representative in connection with this Offering up to a maximum of $105,000 in the aggregate, including the fees and expenses of the underwriters’ legal counsel. The Company estimates the total expenses of this Offering, which will be payable by it, excluding the underwriters’ discounts and commissions, will be approximately $215,000. The Company intends to use the net proceeds of the Offering for general working capital.
 
The Company and certain of its executive officers have entered into Lock-Up Agreements with the Representative pursuant to which they have agreed not to sell, transfer, assign or otherwise dispose of the shares of the Company’s securities beneficially owned by them, subject to certain exclusions as set forth therein, for a period ending 60 days from the closing date of the Offering.
 
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference. The Underwriting Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Underwriting Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. The foregoing description of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement. Investors should review that document as well as the Registration Statement and Prospectus Supplement for a complete understanding of the terms and conditions associated with the Offering.
 
This Current Report contains forward-looking statements that involve risk and uncertainties, such as statements related to the amount of net proceeds expected from the Offering. The risks and uncertainties involved include various risks detailed in the Company’s SEC filings from time to time.
 
 
 
 
Item 8.01
Other Events.
 
On June 28, 2021, the Company issued a press release announcing pricing of the Offering. A copy of this press release is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.
 
Item 9.01
Financial Statements and Exhibits.
 
 
 
 
 
Incorporated by Reference
 
Filed or
Furnished
Herewith
No.
 
Exhibit Description
 
Form
 
Date Filed
 
Number
 
 
Underwriting Agreement dated June 28, 2021 by and between cdbMD, Inc. and ThinkEquity, a Division of Fordman Financial Management, Inc.
 
 
 
 
 
 
 
Filed
 
Form of Representative’s Warrant
 
 
 
 
 
 
 
Filed
 
Opinion of Pearlman Law Group LLP
 
 
 
 
 
 
 
Filed
 
Opinion of Gavigan Law, PLLC
 
 
 
 
 
 
 
Filed
 
Form of Lock-Up Agreement
 
 
 
 
 
 
 
Filed
 
Consent of Pearlman Law Group LLP (included in Exhibit 5.1)
 
 
 
 
 
 
 
Filed
 
Consent of Gavigan Law, PLLC (included in Exhibit 5.2)
 
 
 
 
 
 
 
Filed
 
Press release dated June 28, 2021
 
 
 
 
 
 
 
Furnished
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
cbdMD, INC.
 
 
 
Date: June 29, 2021
By:
/s/ T. Ronan Kennedy
 
 
T. Ronan Kennedy, Chief Financial Officer and Chief Operating Officer