CHARLOTTE, N.C.–()–cbdMD, Inc. (NYSE American: YCBD, YCBD PR A) (the “Company”), one of many main, extremely trusted, and most acknowledged cannabidiol (CBD) manufacturers, reported at present file web gross sales of $10.6 million in its third fiscal 2020 quarter ended June 30, 2020.

“cbdMD reported its single biggest quarterly net sales in its history. Our decisions to concentrate on building brand equity for award winning cbdMD and Paw CBD brands, as well as and focus on our e-commerce strength, has paid off. We have separated ourselves from our competitors and demonstrated that we can grow market share and be fiscally responsible at the same time, with our GAAP and non-GAAP operating results improving by 80% and 96%, respectively, from the comparable periods in fiscal 2019. With $15 million in cash on hand at June 30, 2020, we believe we have more than enough financial strength to grow our operations for the foreseeable future, absent any additional unforeseen impact from COVID-19,” stated Martin Sumichrast, the Company’s Chairman and co-Chief Executive Officer.

The highlights from the June 2020 quarter have been:

  • The Company reported web gross sales of $10.6 million for the three months ended June 30, 2020, a year-over-year quarterly enhance of roughly 33% and a sequential quarterly enhance from the three months ended March 31, 2020 of roughly 13%.
  • The Company reported file quarterly e-commerce, direct to shopper (DTC) web gross sales of $8.2 million, a rise of 77% year-over-year and a sequential quarterly enhance of roughly 21%. The Company’s e-commerce, direct to shopper (DTC) gross sales accounted for in extra of 77% of whole web gross sales within the June 2020 quarter, a rise from 58% from prior 12 months’s quarter.
  • The Company’s CBD pet model, Paw CBD, reported an approximate 64% enhance in web gross sales from its March 2020 quarter of roughly $750,000 to roughly $1,229,000 for its June 2020 quarter.
  • The Company reported a gross revenue margin of 64.7% as a p.c of web gross sales as in comparison with 63.4% for the comparable interval in fiscal 2019 and adjusted non-GAAP gross revenue margin as a p.c of web gross sales was 67.7% as in comparison with a 65% within the comparable interval in fiscal 2019.
  • The Company reported an 80% year-over-year enchancment in its GAAP loss from operations of ($1,337,508) as in comparison with ($6,466,639) within the comparable 2019 interval.
  • The Company reported a 96% year-over-year enchancment in its non GAAP adjusted loss from operations of ($187,092) as in comparison with ($5,019,541) within the comparable fiscal 2019 interval after adjusting for the next: a non-cash stock adjustment of $311,000, a non-cash inventory choice expense of $388,000, a depreciation expense of $233,000 and a non-cash cost of $233okay for previous stock.
  • The Company reported a web lack of ($9,052,752), or $(0.18) per share, which was primarily as a consequence of a non-cash expense of roughly $7.58 million within the Company’s contingent legal responsibility which is related to earnout shares which can be issued beneath the phrases of the December 2018 acquisition of Cure Based Development.
  • Working capital was $19.7 million and money readily available was roughly $15 million at June 30, 2020, respectively.
  • CBD Industries, LLC, the Company’s wholly owned manufacturing and distribution subsidiary, was lately added to NSF International’s dietary dietary supplements Good Manufacturing Practice (GMP) registration.

CONFERENCE CALL DETAILS

Wednesday, August 12, 2020, 4:15 p.m. Eastern Time

Domestic:

1-844-407-9500

International:

1-862-298-0850

Replay dial in – Available by means of September 12, 2020

Domestic:

1-877-481-4010

International:

1-919-882-2331

Replay ID:

36267

Webcast Replay hyperlink – accessible by means of September 12, 2020:

https://www.webcaster4.com/Webcast/Page/2206/36267

About cbdMD, Inc.

cbdMD, Inc. is a nationally acknowledged shopper cannabidiol (CBD) model whose present merchandise embody CBD tinctures, CBD capsules, CBD gummies, CBD topicals, CBD tub bombs, and CBD pet merchandise. cbdMD can also be a proud companion of Bellator MMA and Life Time, Inc., and has one of many largest rosters {of professional} sports activities athletes who’re a part of “Team cbdMD.” To study extra about cbdMD and our complete line of over 100 SKUs of U.S. produced, THC-free1 CBD merchandise, please go to www.cbdMD.com, comply with cbdMD on Instagram and Facebook, or go to one of many 6,000 stores that carry cbdMD merchandise.

Forward-Looking Statements

This press launch accommodates sure forward-looking statements which are primarily based upon present expectations and contain sure dangers and uncertainties inside the that means of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements will be recognized by way of phrases similar to ”ought to,” ”might,” ”intends,” ”anticipates,” ”believes,” ”estimates,” ”tasks,” ”forecasts,” ”expects,” ”plans,” and ”proposes.” These forward-looking statements are usually not ensures of future efficiency and are topic to dangers, uncertainties, and different elements, a few of that are past our management and tough to foretell and will trigger precise outcomes to vary materially from these expressed or forecasted within the forward-looking statements, together with, with out limitation, statements made with respect to the enlargement of the patron marketplace for CBD merchandise and our skill to extend our market share, our restricted working historical past, our skill to broaden our enterprise and considerably enhance our web gross sales, our skill to successfully leverage our model partnerships and sponsorships, our skill to successfully compete in our market, and our skill to report worthwhile operations sooner or later. You are urged to rigorously overview and contemplate any cautionary statements and different disclosures, together with the statements made beneath the heading “Risk Factors” in cbdMD, Inc.’s Annual Report on Form 10-Okay for the fiscal 12 months ended September 30, 2019, as amended, as filed with the Securities and Exchange Commission (the “SEC”) and our different filings with the SEC. All forward-looking statements contain vital dangers and uncertainties that might trigger precise outcomes to vary materially from these within the forward-looking statements, lots of that are usually outdoors the management of cbdMD, Inc. and are tough to foretell. cbdMD, Inc. doesn’t undertake any obligation to replace any forward-looking statements besides as could also be required by regulation. The info which seems on our web sites and our social media platforms, together with, however not restricted to, Instagram and Facebook, will not be a part of this press launch.

_________________________

1 Non-THC is outlined as beneath the extent of detection utilizing validated scientific analytical instruments.

Non-GAAP Financial Measures

This press launch contains sure monetary measures that exclude the influence of sure objects and due to this fact haven’t been calculated in accordance with U.S. usually accepted accounting rules (“GAAP”). The Company has included adjusted earnings (loss) from operations and adjusted gross revenue as a result of administration makes use of this measure to evaluate working efficiency, as a way to spotlight tendencies within the Company’s enterprise that won’t in any other case be obvious when counting on monetary measures calculated in accordance with GAAP. Neither adjusted earnings (loss) from operations nor adjusted gross revenue has not been ready in accordance with GAAP. These non-GAAP monetary measures shouldn’t be thought of as options to, or extra significant than, web earnings (loss) and gross revenue margins as indicators of the Company’s working efficiency. Further, these non-GAAP monetary measures, as offered by the Company, might not be akin to equally titled measures reported by different corporations. The Company has connected to this press launch a reconciliation of those non-GAAP monetary measures to their most straight comparable GAAP monetary measures.

cbdMD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020 AND SEPTEMBER 30, 2019

 

 

(Unaudited)

 

 

 

June 30,

 

September 30,

2020

 

2019

Assets

 

Current belongings:

Cash and money equivalents

$

15,006,319

$

4,689,966

Accounts receivable

 

715,205

 

1,425,697

Accounts receivable different

 

 

160,137

Accounts receivable – discontinued operations

 

700,884

 

1,080,000

Marketable securities

 

52,527

 

198,538

Investment different securities

 

 

600,000

Deposits

 

 

6,850

Merchant reserve

 

 

519,569

Inventory

 

6,397,326

 

4,301,586

Inventory pay as you go

 

281,885

 

903,458

Deferred issuance prices

 

 

93,954

Prepaid software program

 

 

206,587

Prepaid tools deposits

 

201,698

 

868,589

Prepaid bills and different present belongings

 

755,906

 

688,104

Total present belongings

 

24,111,750

 

15,743,035

 

 

 

Other belongings:

 

 

Property and tools, web

 

3,067,909

 

1,715,557

Operating lease belongings

 

7,119,289

 

Deposits for services

 

706,852

 

754,533

Intangible belongings, web

 

21,635,000

 

21,635,000

Goodwill

 

54,669,997

 

54,669,997

Total different belongings

 

87,199,047

 

78,775,087

 

 

 

Total belongings

$

111,310,797

$

94,518,122

cbdMD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020 AND SEPTEMBER 30, 2019

(continued)

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

June 30,

 

September 30,

 

 

2020

 

2019

Liabilities and shareholders’ fairness

 

Current liabilities:

Accounts payable

$

1,825,135

 

$

3,021,271

 

Accrued bills

 

1,396,983

 

 

681,269

 

Operating leases – quick time period liabilities

 

1,109,585

 

 

 

Note payable

 

54,720

 

 

 

Customer deposit – associated get together

 

 

 

7,339

 

Total present liabilities

 

4,386,423

 

 

3,709,878

 

 

Long time period liabilities:

 

 

Long time period liabilities

 

 

 

363,960

 

Note payable

 

182,714

 

 

 

Paycheck Protection Program mortgage

 

1,456,100

 

 

 

Operating leases – long run liabilities

 

6,305,422

 

 

 

Contingent legal responsibility

 

15,400,000

 

 

50,600,000

 

Deferred tax legal responsibility

 

 

 

2,240,300

 

Total long run liabilities

 

23,344,236

 

 

53,204,260

 

 

 

 

Total liabilities

 

27,730,659

 

 

56,914,138

 

 

 

 

cbdMD, Inc. shareholders’ fairness:

Preferred inventory, licensed 50,000,000 shares, $0.001 par worth, 500,000 and Zero shares issued and excellent, respectively

 

500

 

 

 

Common inventory, licensed 150,000,000 shares, $0.001 par worth, 51,345,648 and 27,720,356 shares issued and excellent, respectively

 

51,346

 

 

27,720

 

Additional paid in capital

 

124,558,046

 

 

97,186,524

 

Accumulated deficit

 

(41,029,754

)

 

(59,610,260

)

Total cbdMD, Inc. shareholders’ fairness

 

83,580,138

 

 

37,603,984

 

 

Total liabilities and shareholders’ fairness

$

111,310,797

 

$

94,518,122

 

cbdMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Three months

 

Nine months

 

Nine months

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

 

 

 

 

 

Total Gross Sales

 

10,809,387

 

 

9,734,459

 

 

30,925,678

 

 

18,170,667

 

Allowances

 

(172,842

)

 

(1,729,310

)

 

(741,861

)

 

(4,063,252

)

Total Net Sales

 

10,636,545

 

 

8,005,149

 

 

30,183,817

 

 

14,107,414

 

Cost of gross sales

 

3,748,024

 

 

2,929,160

 

 

10,180,637

 

 

5,009,187

 

 

 

 

 

 

Gross Profit

 

6,888,521

 

 

5,075,989

 

 

20,003,180

 

 

9,098,228

 

 

 

 

 

 

Operating bills

 

8,226,029

 

 

11,542,628

 

 

33,053,962

 

 

18,683,905

 

Income (Loss) from operations

 

(1,337,508

)

 

(6,466,639

)

 

(13,050,782

)

 

(9,585,677

)

Realized and Unrealized acquire (loss) on marketable securities

 

(30,849

)

 

(13,162

)

 

(146,011

)

 

(77,802

)

(Increase) Decrease of contingent legal responsibility

 

(7,580,000

)

 

(21,547,606

)

 

30,580,000

 

 

(52,461,680

)

Impairment on funding different securities

 

 

 

 

 

(600,000

)

 

 

Impairment accounts receivable different

 

 

 

 

 

(160,000

)

 

 

Interest earnings (expense)

 

3,436

 

 

6,229

 

 

46,311

 

 

50,189

 

Income (loss) earlier than provision for earnings taxes

 

(8,944,921

)

 

(28,021,178

)

 

16,669,518

 

 

(62,074,970

)

 

 

 

 

 

Benefit (Provision) for earnings taxes

 

 

 

1,088,000

 

 

2,240,300

 

 

2,296,000

 

Net Income (Loss) from persevering with operations

 

(8,944,921

)

 

(26,933,178

)

 

18,909,818

 

 

(59,778,970

)

Net Income (Loss) from discontinued operations, web of tax (Note 16)

 

(7,781

)

 

(2,269,778

)

 

(48,983

)

 

(3,463,123

)

Net Income (Loss)

 

(8,952,702

)

 

(29,202,956

)

 

18,860,835

 

 

(63,242,093

)

Net Gain (Loss) attributable to noncontrolling curiosity

 

 

 

(1,503,707

)

 

 

 

(1,641,391

)

Preferred dividends

 

100,050

 

 

 

 

266,800

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to cbdMD, Inc. frequent shareholders

$

(9,052,752

)

$

(27,699,249

)

$

18,594,035

 

$

(61,600,702

)

 

 

 

 

 

Net Income (Loss) per share:

 

 

 

 

Basic earnings per share

$

(0.18

)

$

(1.19

)

$

0.45

 

$

(4.22

)

Diluted earnings per share

$

 

$

 

$

0.44

 

$

 

 

 

 

 

 

Weighted common variety of shares Basic:

 

51,335,648

 

 

23,193,793

 

 

41,411,261

 

 

14,585,619

 

Weighted common variety of shares Diluted:

 

 

 

 

 

42,534,519

 

 

 

cbdMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Three months

 

Nine months

 

Nine months

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

June 30,

2020

 

June 30,

2019

 

June 30,

2020

 

June 30,

2019

 

 

 

 

 

Net Income (Loss)

$

(8,952,702

)

$

(29,202,956

)

$

18,860,835

 

$

(63,242,093

)

Comprehensive Income (Loss)

 

(8,952,702

)

 

(29,202,956

)

 

18,860,835

 

 

(63,242,093

)

 

 

 

 

 

Comprehensive Income (loss) attributable to non-controlling curiosity

 

 

 

(1,503,707

)

 

 

 

(1,641,391

)

Preferred dividends

 

(100,050

)

 

 

 

(266,800

)

 

 

Comprehensive Income (Loss) attributable to cbdMD, Inc. frequent shareholders

$

(9,052,752

)

$

(27,699,249

)

$

18,594,035

 

$

(61,600,702

)

cbdMD, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019

(unaudited)

 

 

 

 

 

 

 

Nine Months Ended

June 30,

 

Nine Months Ended

June 30,

 

 

2020

 

2019

Cash flows from working actions:

Net Income (loss)

$

18,860,835

 

$

(63,242,093

)

Adjustments to reconcile web (earnings) loss to web money utilized by working actions:

Stock primarily based compensation

 

1,391,271

 

 

2,022,812

 

Restricted inventory expense

 

138,001

 

 

92,000

 

Issuance of inventory / warrants for service

 

84,450

 

 

289,750

 

Intangible impairment

 

 

 

2,114,334

 

Inventory and supplies impairment

 

233,372

 

 

 

Impairment on discontinued operations asset

 

45,783

 

 

 

Depreciation and amortization

 

499,394

 

 

272,121

 

Gain on settlement of Note

 

 

 

(20,000

)

Other than momentary impairment different securities and different accounts receivable

 

760,000

 

 

 

Increase/(Decrease) in contingent legal responsibility

 

(30,580,000

)

 

52,461,680

 

Realized and unrealized lack of marketable securities

 

146,011

 

 

1,705,069

 

Merchant reserve settlement

 

132,657

 

 

 

Non-cash consideration obtained for providers

 

 

 

(470,000

)

Non-cash lease expense

 

878,986

 

 

 

Changes in working belongings and liabilities:

Accounts receivable

 

710,629

 

 

399,074

 

Accounts receivable – associated get together

 

 

 

204,902

 

Other accounts receivable

 

 

 

(298,754

)

Note receivable

 

 

 

(27,000

)

Note receivable – associated get together

 

 

 

156,147

 

Deposits

 

(147,166

)

 

 

Merchant reserve

 

386,912

 

 

(199,907

)

Inventory

 

(2,329,112

)

 

(2,581,958

)

Prepaid stock

 

621,573

 

 

 

Prepaid bills and different present belongings

 

1,007,374

 

 

(717,894

)

Marketable securities

 

 

 

701,593

 

Accounts payable and accrued bills

 

(480,424

)

 

1,073,211

 

Accounts payable and accrued bills – associated get together

 

 

 

(313,591

)

Operating lease legal responsibility

 

(766,289

)

 

 

Note payable

 

42,968

 

 

 

Deferred income / buyer deposits

 

(7,339

)

 

(380,804

)

Collection on discontinued operations accounts receivable

 

333,333

 

 

 

Deferred tax legal responsibility

 

(2,240,300

)

 

(2,296,000

)

Cash utilized by working actions

 

(10,277,081

)

 

(9,055,308

)

 

Cash flows from investing actions:

Net money used for merger

 

 

 

(1,167,295

)

Purchase of intangible belongings

 

 

 

(79,999

)

Purchase of property and tools

 

(1,851,746

)

 

(359,421

)

Cash utilized by investing actions

 

(1,851,746

)

 

(1,606,715

)

 

Cash flows from financing actions:

Proceeds from issuance of frequent inventory

 

16,771,756

 

 

19,009,897

 

Proceeds from issuance of most well-liked inventory

 

4,421,928

 

 

 

PPP mortgage

 

1,456,100

 

 

 

Note Payable – associated get together

 

 

 

(764,300

)

Preferred dividend distribution

 

(266,800

)

 

 

Deferred issuance prices

 

62,197

 

 

(232,914

)

Cash supplied by financing actions

 

22,445,180

 

 

18,012,683

 

Net enhance (lower) in money

 

10,316,353

 

 

7,350,660

 

Cash and money equivalents, starting of interval

 

4,689,966

 

 

4,282,553

 

Cash and money equivalents, finish of interval

$

15,006,319

 

$

11,633,213

 

cbdMD, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30, 2020 AND 2019

(unaudited) (continued)

 

Supplemental Disclosures of Cash Flow Information:

 

 

Nine Months ended

June 30,

 

Nine Months Ended

June 30,

 

2020

 

2019

 

 

 

Cash Payments for:

 

 

Interest expense

$

26,126

$

36,418

 

 

 

Non-cash monetary actions:

Warrants issued to secondary promoting agent

$

524,113

$

309,592

Stock obtained for prior interval providers, adjusted for different accounts receivable write down previous to receipt

$

$

1,352,000

Adoption of ASU 2016-01

$

$

2,512,539

cbdMD, Inc.

SUPPLEMENTAL FINANCIAL INFORMATION

RECONCILIATION OF ADJUSTED INCOME (LOSS) FROM OPERATIONS

(Unaudited)

 

 

Three months

Three months

 

Ended

Ended

 

June 30,

2020

June 30,

2019

 

 

 

GAAP Income (Loss) from operations

(1,337,508

)

(6,466,639

)

 

 

 

Adjustments:

 

 

Inventory adjustment (1)

316,922

 

 

Non-cash inventory associated expense (2)

388,185

 

1,389,224

 

Depreciation expense

211,937

 

57,874

 

One-time irregular stock adjustment (3)

233,372

 

 

Adjusted Income (loss) from operations

(187,092

)

(5,019,541

)

 

Three months

 

Three months

 

 

Ended

 

Ended

 

 

June 30,

2020

 

June 30,

2019

 

 

 

 

 

 

GAAP web gross sales

10,636,545

 

8,005,149

 

GAAP value of gross sales

3,748,024

 

2,929,160

 

 

 

 

 

 

Adjustments:

 

 

 

 

Inventory adjustment (1)

316,922

 

130,795

 

Adjusted value of gross sales

3,431,102

 

2,798,365

 

Adjusted Gross Profit

7,205,443

67.7

%

5,206,784

65.0

%

(1)

Amount represents an adjustment after performing a bodily stock account.

(2)

Represents non-cash expense associated to choices, warrants, restricted inventory bills which have been amortized throughout the interval.

(3)

Amount represents an working expense associated to stock loss associated to regulatory modifications impacting labels and packaging.

 



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