cbdMD, Inc. Announces Automatic Conversion Date of Series A Preferred Stock and One for Eight Reverse Split of its Common Stock Immediately Following the Automatic Conversion
Charlotte, North Carolina--(Newsfile Corp. - April 21, 2025) - cbdMD, Inc. (NYSE American: YCBD) (NYSE American: YCBD PRA) (the "Company") one of the nation's leading and most highly trusted and recognized CBD companies, and operator of the leading CBD brands cbdMD and Paw CBD, along with its functional mushroom brand ATRx Labs, announced today that the automatic conversion (the "Conversion") of shares of its 8% Series A Cumulative Convertible Preferred Stock (the "Preferred Stock"), into the Company's Common Stock, $0.001 par value per share (the "Common Stock") will be effective at 4:01 p.m. Eastern Time on May 6, 2025 (the "Mandatory Exchange Date"). The last day of trading of the Preferred Stock is May 5, 2025 and the security will be suspended effective before the open on the Mandatory Exchange Date.
Following shareholder approval at the Company's annual meeting held on April 10, 2025 for the Conversion, the Board of Directors elected to effectuate the automatic conversion (the "Automatic Preferred Conversion"), which provides for the conversion of each share of Preferred Stock into thirteen shares of Common Stock, inclusive of all accumulated and unpaid dividends on the Mandatory Exchange Date. Dividends on converted shares will cease to accrue on the Mandatory Exchange Date and the Preferred Stock will cease trading on the Mandatory Exchange Date. Shareholders who hold Preferred Stock electronically in book-entry form will not need to take action (the Conversion will be automatic) to receive shares of Common Stock on the Mandatory Exchange Date.
In addition, the Company also announced today that its Board of Directors on April 17, 2025 approved a ratio of one-for-eight reverse stock split of the Company's issued and outstanding shares of Common Stock. The Company's shareholders previously approved the reverse stock split at the Company's annual meeting and granted the board the authority to determine a final reverse split ratio. The reverse stock split will effective after the market closes at 4:02 p.m. Eastern Time on May 6, 2025 immediately following the Automatic Preferred Conversion, following the filing and effectiveness of an amendment to the Company's articles of incorporation, as amended, with the Common Stock trading on a post-split basis when the market opens on the May 7, 2025. The Company's Common Stock will continue to trade on the NYSE American under the existing trading symbol "YCBD" with a new CUSIP number 12482W 408.
As a result of the reverse stock split, every eight pre-split shares of Common Stock outstanding (including shares issued pursuant to the Automatic Preferred Conversion) will automatically combine into one new share of Common Stock without any action on the part of holders. There will be no interim rounding between the Automatic Conversion and the reverse stock split, and the corporate actions will take place as a single event. Following the Automatic Conversion and reverse stock split the number of issued and outstanding shares of Common Stock will be consolidated from approximately 71.26 million shares to approximately 8.91 million shares. Any fractional shares resulting from the reverse stock split will be rounded up to the nearest whole share on a per shareholder basis. Proportionate adjustments will be made to (i) shares of Common Stock issuable upon exercise or conversion of all issued and outstanding options and warrants, and (ii) shares outstanding and authorized for issuance under the Company's equity incentive plans. The reverse stock split will not impact any shareholder's percentage ownership of the Company or voting power, except for the minimal effects resulting from the treatment of fractional shares. The reverse stock split will neither affect the par value of the Common Stock nor will it affect the Company's authorized stock.
"As previously stated, we are pleased with the outcome of the annual meeting. The past few months have marked a meaningful turning point for cbdMD. We had strong December results, launched our first beverage distribution deal for Oasis in March and have strengthened our marketing capabilities. Now as a result of the proposals approved at our annual meeting we have deepened our board with the additions of Mr. Porter and Mr. Roe and have improved our capital structure. We believe we are laying the groundwork for a stronger, more agile company," said Ronan Kennedy, Chief Executive Officer and Chief Financial Officer of cbdMD.
"The vote to convert the Series A Preferred and authorize the reverse stock split represents a critical final step in cleaning up historical capital structure issues. This reset positions us for strategic flexibility, including future M&A and growth opportunities, while eliminating approximately $6.7 million in accrued dividend liabilities and $4.0 million in perpetual annual obligations. We believe these actions significantly strengthen our balance sheet and clear the path for full compliance with NYSE American continued listing standards."
"After consultation with our advisors and regulators, we determined that executing the reverse split in conjunction with the preferred conversion is the most prudent path forward. This milestone is not just about compliance-it's about unlocking our ability to build value and pursue strategic opportunities from a position of strength." vStock Transfer LLC, the Company's transfer agent, will act as the exchange agent for the reverse stock split. Please contact vStock Transfer LLC for further information at (212) 828-8436. Shareholders holding their shares in book entry form or brokerage accounts need not take any action in connection with the reverse stock split.
Additional information regarding the Conversion and reverse stock split can be found in the Company's Proxy Statement filed with the Securities and Exchange Commission on February 25, 2025, which is available on the website of the Securities and Exchange Commission.
About cbdMD
cbdMD, Inc. is one of the leading and most highly trusted and most recognized cannabidiol (CBD) brands with a comprehensive line of U.S. produced, THC-free(1) CBD products, including NSF Certified for Sport® products, as well as our new Full Spectrum products. Our cbdMD brand currently includes high-grade, premium CBD products including CBD tinctures, CBD gummies, CBD topicals, CBD capsules, CBD bath bombs, CBD sleep aids and CBD drink mixes and an array of Farm Act compliant Delta 9 products. Our Paw CBD brand of pet products includes veterinarian-formulated products including tinctures, chews, topicals products in varying strengths, and our ATRx brand of natural functional mushroom support. To learn more about cbdMD and our comprehensive line of U.S. grown, THC-free1 CBD oil and Full Spectrum products as well as our other brands, please visit www.cbdmd.com, www.pawcbd.com, or ATRxlabs.com, follow cbdMD on Instagram and Facebook, or visit one of the thousands of retail outlets that carry cbdMD's products.
Forward-Looking Statements
This press release contains various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding potential growth, opportunities from our new capital structure and improved balance sheet, creating value to our shareholders and satisfying our shareholders' equity requirements for continued listing on the NYSE American. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "might," "will," "shall," "should," "could," "intends," "expects," "plans," "goals," "projects," "anticipates," "believes," "seeks," "estimates," "forecasts," "predicts," "possible," "potential," "target," or "continue" or the negative of these terms or other comparable terminology.
These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry's) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to our continued listing on the NYSE American, failure to develop and sell new products, market impact and dilutive effects on our stock price and other disclosures and other important risks and uncertainties referenced and discussed under the heading titled "Risk Factors" in the Company's filings with the Securities and Exchange Commission.
The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Contacts:
Investors: cbdMD, Inc. Ronan Kennedy Chief Executive Officer and Chief Financial Officer IR@cbdmd.com (704) 445-3064 SOURCE: cbdMD
1 THC-free is defined as below the level of detection using validated scientific analytical methods.
