Attached files
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| EX-10.1 - FORM OF DISTRIBUTION AGREEMENT - cbdMD, Inc. | ycbd_ex10-1.htm |
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)
February 26,
2020
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cbdMD, INC.
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(Exact name of registrant as specified in its charter)
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North Carolina
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001-38299
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47-3414576
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(State or other jurisdiction of incorporation or
organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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8845 Red Oak Blvd, Charlotte, NC 28217
(Address of principal
executive offices)(Zip Code)
Registrant's
telephone number, including area code: (704) 445-3060
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________________________________
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(Former name or former address, if changed since last
report)
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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))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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common
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YCBD
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NYSE
American
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8.0%
Series A Cumulative Convertible Preferred Stock
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YCBD PR
A
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NYSE
American
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Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
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Emerging
growth company ☑
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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. ☐
Item
3.02 Unregistered
Sales of Equity Securities.
As
previously reported, on December 20, 2018 (the “Closing Date”) cbdMD,
Inc. closed that certain Agreement and Plan of Merger (the
“Merger
Agreement”) dated December 3, 2018 by and among our
company, our subsidiaries and Cure Based Development, LLC
(“Cure Based
Development”). On the
Closing Date the members of Cure Based Development and CBD
Holding LLC (“CBDH”) received contractual rights for an aggregate of
15,250,000 shares of our common stock as partial merger
consideration. The issuance of those shares was subject to
shareholder approval as required under the rules of the NYSE
American LLC. These initial shares included 8,750,000 shares of our
common stock (“Second Tranche
Shares”) to be issued to
CBDH, an entity controlled by R. Scott Coffman who was then
the CEO of Cure Based Development. Following approval of the issuance of these initial
shares at our 2019 annual shareholder meeting, the aggregate of
15,250,000 shares were issued in April 2019.
Pursuant to the
terms of the Merger Agreement, CBDH was also entitled to receive
(the “Earnout
Rights”) up to 15,250,000 additional shares of our
common stock (the “Earnout Shares”)
as part of the merger consideration
upon the satisfaction of certain aggregate net revenue criteria
within 60 months following the Closing Date, as measured at four
intervals from the Closing Date of 12 calendar months (the
“First Marking
Period”), 24 calendar
months, 42 calendar months, and 59 calendar months. The possible
issuance of the Earnout Shares was also approved by our
shareholders at our 2019 annual shareholder
meeting.
Following the
completion of the First Marking Period, and in accordance with the
terms of the Merger Agreement, we determined that the net revenues
for the First Marking Period were $33,799,787. Accordingly, CBDH
was entitled to receive 5,127,792 shares of our common stock
representing the First Marking Period Earnout Shares. On February
27, 2020 we issued the First Marking Period Earnout Shares to the
members of CBDH pursuant to the terms of the Distribution Agreement
described later in this report. The recipients were accredited
investors and the issuances were exempt from registration under the
Securities Act of 1933, as amended, in reliance on an exemption
provided by Section 4(a)(2) of that act.
Item
8.01 Other
Events.
On
February 26, 2020 in connection with the dissolution and
liquidation of CBDH, we entered into a Distribution Agreement with
CBDH and its members (the “Distribution Agreement”)
pursuant to which CBDH distributed (i) the Second Tranche Shares
which had been issued previously, (ii) the First Marking Period
Earnout Shares, and (iii) the remaining Earnout Rights to an aggregate of 10,122,208
Earnout Shares to its members. Mr. Coffman, who is now a member of our
board of directors and co-Chief Executive Officer, Martin A.
Sumichrast, Chairman of our board of directors and co-Chief
Executive Officer, and Caryn Dunayer, our president, through
entities controlled by them, are members of
CBDH.
Under
the terms of the Merger Agreement, the Second Tranche Shares were
subject to a Voting Proxy Agreement pending the vesting of
unrestricted voting rights, as well as a Leak Out Agreement. Under
the terms of the Distribution Agreement, the CBDH members entered into similar
Voting Proxy Agreements and Leak Out
Agreements.
The
foregoing terms and conditions of the Distribution Agreement is
qualified in its entirety by reference to the agreement, the form
of which is filed as Exhibit 10.1 to this report.
Item 9.01. Financial Statement and
Exhibits.
(d)
Exhibits.
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Incorporated by Reference
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Filed or
Furnished
Herewith
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No.
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Exhibit Description
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Form
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Date Filed
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Number
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Form of
Distribution Agreement dated February 26, 2020 by and among cbdMD,
Inc., CBD Holdings, LLC and the members of CBD Holdings,
LLC.
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Filed
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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.
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cbdMD,
Inc.
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Date: February 28,
2020
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By:
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/s/ Mark S.
Elliott
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Mark S.
Elliott
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Chief Financial
Officer and Chief Operating Officer
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