Attached files
| file | filename |
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| EX-99.1 - PRESS RELEASE - cbdMD, Inc. | ycbd_ex991.htm |
| EX-10.2 - EMPLOYMENT AGREEMENT - cbdMD, Inc. | ycbd_ex102.htm |
| EX-10.1 - ASSET PURCHASE AGREEMENT - cbdMD, Inc. | ycbd_ex101.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) July 22,
2021
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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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YCBDpA
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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. ☐
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Item 1.01
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Entry Into a Material Definitive Agreement.
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On July
22, 2021 (the “Closing”), cbdMD, Inc., a North Carolina
corporation (the “Company”); Twenty Two Capital, LLC, a
North Carolina limited liability company (“Twenty
Two”); Vieo Design, LLC, a Tennessee limited liability
company (“Vieo”) (Twenty Two and Vieo, collectively,
“Seller”); John J. Wiesehan III; and Bradley D. Trawick
entered into an Asset Purchase Agreement (the “Asset Purchase
Agreement”). Under the Asset Purchase Agreement, the Company
acquired from the Seller the CBD online marketplace,
DirectCBDOnline.com, related trademarks, inventory, certain other
assets, and assumed certain liabilities. The DirectCBDOnline.com
website provides CBD education and information and a selection of
the highest-quality CBD products, including, but not limited to,
oils, tinctures, salves, capsules, and gummies.
The
Company acquired the assets for the consideration of $2,000,000 and
up to 600,000 shares of the Company’s restricted common
stock. At the Closing, the $200,000 of the cash purchase price was
deposited into escrow pending possible post-Closing adjustments and
indemnity provisions. At the Closing, the Company issued Twenty Two
300,000 shares of the Company’s common stock and 100,000
shares of the Company’s Common Stock shall be issued to
Twenty Two on or before January 31, 2023, less any amounts setoff
against such shares for indemnification claims pending against or
paid by the Company under the Asset Purchase Agreement and the
remaining 200,000 shares shall be issued to Twenty Two on or before
60th day following the first year anniversary of the Closing
subject to certain earn out provisions provided under the Asset
Purchase Agreement. The shares are subject to a 180 day lock up
agreement subject to certain limited transfers which will also be
subject to the lock up. Twenty Two is an accredited or otherwise
sophisticated investor and the issuance of the shares of common
stock was exempt from registration under the Securities Act of
1933, as amended, in reliance on the exemption from registration
provided by Section 4(a)(2) of the act.
The
foregoing description of the terms and conditions of the Asset
Purchase Agreement is qualified in its entirety by references to
such agreement which is filed as Exhibit 10.1 to this
report.
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
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On July
22, 2021, pursuant to the Closing of the Asset Purchase Agreement
Mr. John J. Wiesehan III was appointed Chief Revenue Officer of the
Company. Mr. Wiesehan provided consulting services to the Company
from June 2021 through the Closing. Mr. Wiesehan, age 37, founded
Twenty Two in 2018 and has served as its chief executive officer
since its inception. From September 2012 to October 2017 he served
as vice president of sales for Ballantyne Brands LLC, a
manufacturer of ENDS (non combustible tobacco)
products. He is a
graduate of Appalachian State University. The Company and Mr.
Wiesehan entered into a two year employment agreement effective on
the Closing. Under the terms of the employment agreement, the
Company agreed to pay him an initial annual base salary of $180,000
and he is entitled to a discretionary bonus up to 40% of his base
salary at the sole determination of the Compensation Committee of
the Company’s board of directors. He will also be eligible
for a one time cash performance bonus of $160,000 payable in cash
upon the Company reporting total net sales (as defined under the
employment agreement) equal or exceeding $16,000,000 for any fiscal
quarterly period prior to September 30, 2022. In addition, he is
entitled to participate in benefit programs the Company offers its
employees and paid vacation. The employment agreement may be
terminated by the Company in the event of his death or disability,
by the Company for cause (as defined in the employment agreement),
or by either party without cause. The agreement contains customary
confidentiality, non-compete, and indemnification
provisions.
The
description of the terms of the employment agreement is qualified
in its entirety by reference to the agreement which is filed as
Exhibit 10.2 to this report.
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Item 7.01
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Regulation FD Disclosure.
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On
July 22, 2021, the Company issued a press release announcing the
completion of the DirectCBDOnline.com assets from the Seller. A
copy of this press release is furnished as Exhibit 99.1 to this
report.
Pursuant
to General Instruction B.2 of Form 8-K, the information in this
Item 7.01 of Form 8-K, including Exhibit 99.1, is being furnished
and shall not be deemed “filed” for the purposes of
Section 18 of the Securities Exchange Act of 1934 or otherwise be
subject to the liabilities of that section, nor is it incorporated
by reference into any filing of cbdMD, Inc. under the Securities
Act of 1933 or the Securities Exchange Act of 1934, whether made
before or after the date hereof, regardless of any general
incorporation language in such filing.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
Exhibits.
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Filed or
Furnished
Herewith
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Incorporated by Reference
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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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Asset
Purchase Agreement by and among Twenty Two Capital, LLC, cbdMD,
Inc., John J. Wiesehan III, Vieo Design, LLC and Bradley D.
Trawick dated July 22, 2021.
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Filed
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Employment
Agreement between the Company and John Wiesehan III dated July 22,
2021
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Filed
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Press
release dated July 22, 2021
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Furnished
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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:
July 26, 2021
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By:
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/s/ T.
Ronan Kennedy
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T.
Ronan Kennedy, Chief Financial Officer
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