cbdMD Delivers Continued Revenue Growth and Trend Towards Profitability in Second Fiscal Quarter
Successfully Completes Capital Structure Reset with Series A Preferred Conversion
Charlotte, North Carolina--(Newsfile Corp. - May 15, 2025) - cbdMD, Inc. (NYSE:YCBD), 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, and Herbal Oasis today announced our financial results for the second quarter of fiscal year ended September 30, 2025. The Company reported continued year-over-year improvements in both revenue and earnings while completing a transformative restructuring of its capital structure.
The Company delivered $4.8 million in revenue for the second quarter, up from $4.3 million in the prior year period. Operating loss narrowed significantly from $1.5 million to $0.48 million, reflecting disciplined expenses management and early traction from new growth initiatives.
Ronan Kennedy, CEO and CFO of cbdMD, stated: "Our second quarter results build on the positive year over year momentum from the first quarter of fiscal 2025. We continue to execute on our growth plan while maintaining a lean, scalable structure. With fresh talent on the team and gaining traction from our Herbal Oasis beverage line, we're entering the second half of the year well positioned to continue the trend."
"Our top priority this quarter was preparing for our annual shareholder meeting and shareholder proposals related to our plan to regain compliance with NYSE American Continued Listing Standards. Securing shareholder approval for the Series A Preferred conversion was a mission-critical milestone for our company and our shareholders. As previously reported, following shareholder approval, on May 7, 2025 the automatic conversion of our Series A Preferred Stock added nearly $7 million to our equity base, enabling us to exceed the $4 million minimum NYSE American continued listing standard. As part of this conversion, $6.7 million of accrued and future dividends as of March 31, 2025 were converted to equity upon the Series A Preferred conversion which we believe bring us into compliance with the NYSE American's continued listing standards. This positions cbdMD with a clean balance sheet, zero debt, and a simplified capital structure -- a strong foundation for growth and value creation," said Kennedy.
"After two years of diligent work, we've restructured both our operations and our balance sheet. Today, we have a loyal customer base, an award-winning beverage brand, a simplified cap table, and the financial flexibility to execute our vision. This is an exciting reset for cbdMD."
Highlights for the First Quarter of Fiscal 2025 and Strategic Updates
- Herbal Oasis Gains Momentum: cbdMD's hemp-derived THC beverage brand expanded distribution into Alabama, Florida, and North Carolina, tapping into one of the fastest-growing wellness categories.
- Award-Winning Product Line: All four flavors of Herbal Oasis received medals at the 2025 High Spirits Awards, presented by the L.A. Spirits Awards, affirming the brand's quality and consumer appeal.
- Series A Preferred Conversion Completed: On May 7, 2025, cbdMD executed a 1:13 conversion of its Series A Preferred Stock, eliminating $6.7 million in accrued dividend liability and adding equivalent equity value.
- Book Value Turnaround: Reported book value of equity as of March 31, 2025 was $0.67 million. On a non-GAAP pro forma basis, book value rises to approximately $7.3 million, post-conversion, satisfying NYSE American's equity listing requirements under Sections 1003(a)(i) and 1003(a)(ii). The Company is required to be in compliance with NYSE American Continued Listing Standards for 2 quarters to regain compliance with NYSE American Continued Listing Standards.
- Reverse Stock Split Executed: Concurrent with the conversion, the Company completed a 8:1 reverse stock split, resulting in approximately 8.9 million common shares outstanding as of May 15, 2025.
- Board Strengthened with Strategic Appointments: cbdMD added two new independent directors, bringing deep experience in capital markets, AI, sales, and marketing, to help guide the Company through its next growth phase.
Financial Highlights from our Second Quarter of Fiscal Year 2025:
- Net sales totaled $4.7 million in the second quarter of fiscal 2025 or an increase of 8.6% compared to $4.4 million in fiscal 2024. Year to date revenues are up from $9.7 million to $9.9 million.
- Our gross margin increased year over year from 59% to 62% during the second quarter of fiscal 2025.
- Our loss from operations was $485,000 in the second quarter of fiscal 2025 as compared to a loss of $1.6 million in the prior year comparative period.
- Net Loss before preferred dividends totaled $0.5 million in the second quarter of fiscal 2025 as compared to a loss of $3.0 million in the prior year period.
- Our non-GAAP adjusted EBITDA ("EBITDA") loss from operations in the second quarter of fiscal 2025 was approximately $197,000 compared to our EBITDA loss from operations in fiscal 2024 of approximately $678,000.
- Net loss attributable to common shareholders for the second quarter of fiscal 2025 was approximately $1.48 million or a loss of $1.90 per share as compared to a net loss for the second quarter of fiscal 2024 of approximately $4.0 million, or $10.84 per share. The improvement in fiscal 2025 was principally attributable to ongoing management's efforts on reducing losses and plan for achieving profitability.
- At March 31, 2025, we had a working capital deficit of approximately ($3.7) million and cash on hand of approximately $1.8 million as compared to a working capital deficit of approximately ($2.2) million and cash on hand of approximately $2.4 million at September 30, 2024. Excluding $6.7 million and $4.7 million of respective accrued Series A dividend payments, adjusted net working capital totaled $2.8 million and $2.4 million for the respective periods.
- We reported direct to consumer (DTC) net sales of $3.6 million or 77% of total net sales in the second quarter of fiscal 2025, as compared with $3.6 million or 83% of total net sales in the second quarter of fiscal 2024.
- We reported wholesale net sales of $1.1 million or 23% of total net sales in the second quarter of fiscal 2025, as compared to $0.75 million the second quarter of fiscal 2024.
We will host a conference call at 4:20 p.m., Eastern Time, on Thursday, May 15, 2025, to discuss our March 31, 2025, second fiscal quarter and year to date fiscal 2025 financial results and business progress.
CONFERENCE CALL DETAILS
| Thursday May 15, 2025, 4:20 p.m. Eastern Time | ||
| USA/Canada: | 844-821-3524 | |
| International: | 647-846-2919 | |
| Teleconference Replay dial in: | ||
| USA/Canada: | 855-669-9658 | |
| International: | 412-317-0088 | |
| Replay Passcode: | 7254091 | |
| Webcast/Webcast Replay link- available through May 15, 2026: https://www.gowebcasting.com/14065 | ||
About cbdMD, Inc.
cbdMD, Inc. (NYSE:YCBD) is one of the leading and most highly trusted and most recognized cannabidiol (CBD) brands with a comprehensive line of U.S. produced, THC-free1 CBD products, and an array of Farm Act compliant Delta 9 products. Our Paw CBD brand of pet products includes veterinarian-formulated products, our ATRx brand features functional mushroom products. In addition, we operate Herbal Oasis, a premium, award winning THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection. With an alcohol-free formula and wellness-forward ingredients, Oasis invites a better way to drink-one rooted in clarity, balance, and joy. To learn more about cbdMD and our comprehensive line of U.S. grown, THC-free1 CBD and Full Spectrum products as well as our other brands, please visit www.cbdmd.com, www.pawcbd.com, ATRxlabs.com, or Herbaloasis.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 certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified using words such as ''should,'' ''may,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and ''proposes.'' These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict. You are urged to carefully review and consider any cautionary statements, including but not limited to expectations on our ability to continue as a going concern, increasing our revenues, continued cost reductions, potential need for additional working capital, regaining compliance with NYSE American Continued Listing Standards, continued listing on the NYSE American, future profitability, development and sales of new products, and other disclosures, including the statements made under the heading "Risk Factors" in cbdMD, Inc.'s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 as filed with the Securities and Exchange Commission (the "SEC") on December 17, 2024, and our other filings with the SEC. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of cbdMD, Inc. and are difficult to predict. cbdMD, Inc. does not undertake any duty to update any forward-looking statements except as may be required by law. The information which appears on our websites and our social media platforms, including, but not limited to, Instagram and Facebook, is not part of this press release.
1 THC-free is defined as below the level of detection using validated scientific analytical methods.
Non-GAAP Financial Measures
This press release includes a financial measure that excludes the impact of certain items and therefore has not been calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). cbdMD, Inc. has included adjusted loss from operations because management uses this measure to assess operating performance in order to highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The adjusted operating loss has not been prepared in accordance with GAAP. This non-GAAP financial measure should not be considered as an alternative to, or more meaningful than, net loss from operations as an indicator of our operating performance. Further, this non-GAAP financial measure, as presented by cbdMD, Inc., may not be comparable to similarly titled measures reported by other companies. cbdMD, Inc. has attached to this press release a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure.
cbdMD, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2025 AND SEPTEMBER 30, 2024
| (unaudited) | ||||||
| March 31, | September 30, | |||||
| 2025 | 2024 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 1,765,234 | $ | 2,452,553 | ||
| Accounts receivable, net | 1,052,069 | 983,910 | ||||
| Inventory, net | 2,662,705 | 2,365,187 | ||||
| Inventory prepaid | 221,629 | 159,006 | ||||
| Prepaid sponsorship | 11,478 | 21,754 | ||||
| Prepaid expenses and other current assets | 479,312 | 406,674 | ||||
| Total current assets | 6,192,427 | 6,389,084 | ||||
| Other assets: | ||||||
| Property and equipment, net | 432,792 | 454,268 | ||||
| Operating lease assets | 1,042,746 | 85,817 | ||||
| Deposits for facilities | 62,708 | 62,708 | ||||
| Intangible assets, net | 2,507,046 | 2,889,580 | ||||
| Investment in other securities, non-current | 700,000 | 700,000 | ||||
| Total other assets | 4,745,292 | 4,192,373 | ||||
| Total assets | $ | 10,937,719 | $ | 10,581,457 |
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2025 AND SEPTEMBER 30, 2024
(continued)
| March 31, | September 30, | |||||
| 2025 | 2024 | |||||
| Liabilities and shareholders' equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,287,789 | $ | 1,541,108 | ||
| Accrued expenses | 609,674 | 632,674 | ||||
| Accrued dividends | 6,672,000 | 4,671,000 | ||||
| Deferred revenue | 557,353 | 503,254 | ||||
| Operating leases - current portion | 744,961 | 98,696 | ||||
| Convertible notes, at fair value | - | 1,171,308 | ||||
| Total current liabilities | 9,871,777 | 8,618,040 | ||||
| Long term liabilities: | ||||||
| Operating leases - long term portion | 400,144 | - | ||||
| Total long term liabilities | 400,144 | - | ||||
| Total liabilities | 10,271,921 | 8,618,040 | ||||
| cbdMD, Inc. shareholders' equity: | ||||||
| Preferred stock, authorized 50,000,000 shares, $0.001 | ||||||
| par value, 5,000,000 and 5,000,000 shares issued and outstanding, respectively | 5,000 | 5,000 | ||||
| Common stock, authorized 150,000,000 shares, $0.001 | ||||||
| par value, 783,355 and 492,383 shares issued and outstanding, respectively | 783 | 492 | ||||
| Additional paid in capital | 185,194,577 | 184,033,012 | ||||
| Comprehensive other expense | - | (7,189 | ) | |||
| Accumulated deficit | (184,534,562 | ) | (182,067,898 | ) | ||
| Total cbdMD, Inc. shareholders' equity | 665,798 | 1,963,417 | ||||
| Total liabilities and shareholders' equity | $ | 10,937,719 | $ | 10,581,457 |
cbdMD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2025 and 2024
(unaudited)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||
| Gross Sales | $ | 4,749,426 | $ | 4,816,444 | $ | 9,862,902 | $ | 10,192,075 | |||||
| Allowances | - | (439,926) | - | (440,152) | |||||||||
| Total Net Sales | 4,749,426 | 4,376,518 | 9,862,902 | 9,751,923 | |||||||||
| Cost of sales | 1,790,062 | 1,795,790 | 3,502,929 | 3,613,698 | |||||||||
| Gross Profit | 2,959,364 | 2,580,728 | 6,359,973 | 6,138,225 | |||||||||
| Operating expenses | 3,445,180 | 4,131,719 | 6,932,061 | 8,755,053 | |||||||||
| Loss from operations | (485,816 | ) | (1,550,991 | ) | (572,088 | ) | (2,616,828 | ) | |||||
| Decrease of contingent liability | - | 4,828 | - | 74,580 | |||||||||
| Decrease (increase) in fair value of convertible debt | (2,583 | ) | (1,446,000 | ) | 87,380 | (1,446,000 | ) | ||||||
| Interest expense (income) | 7,642 | (18,399 | ) | 19,046 | (18,817 | ) | |||||||
| Loss before provision for income taxes | (480,757 | ) | (3,010,562 | ) | (465,662 | ) | (4,007,065 | ) | |||||
| Net loss | (480,757 | ) | (3,010,562 | ) | (465,662 | ) | (4,007,065 | ) | |||||
| Preferred dividends | 1,000,500 | 1,000,500 | 2,001,001 | 2,001,000 | |||||||||
| Net Loss attributable to cbdMD, Inc. common shareholders | $ | (1,481,257 | ) | $ | (4,011,062 | ) | $ | (2,466,663 | ) | $ | (6,008,065 | ) | |
| Net Loss per share: | |||||||||||||
| Basic and diluted earnings per share | $ | (1.90 | ) | $ | (10.84 | ) | $ | (3.67 | ) | $ | (16.23 | ) | |
| Weighted average number of shares Basic and Diluted: | 778,409 | 370,132 | 672,558 | 370,125 | |||||||||
cbdMD, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2025 and 2024
(unaudited)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||
| Net Loss | $ | (480,757 | ) | $ | (3,010,562 | ) | $ | (465,662 | ) | $ | (4,007,065 | ) | |
| Comprehensive Loss | (480,757 | ) | (3,010,562 | ) | (465,662 | ) | (4,007,065 | ) | |||||
| Preferred dividends | (1,000,500 | ) | (1,000,500 | ) | (2,001,001 | ) | (2,001,000 | ) | |||||
| Comprehensive Loss attributable to cbdMD, inc. common shareholders | $ | (1,481,257 | ) | $ | (4,011,062 | ) | $ | (2,466,663 | ) | $ | (6,008,065 | ) | |
cbdMD, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2025 and 2024
(unaudited)
| March 31, | March 31, | ||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities: | |||||||
| Net Loss | $ | (465,662 | ) | $ | (4,007,065 | ) | |
| Adjustments to reconcile net loss to net | |||||||
| cash used by operating activities: | |||||||
| Stock based compensation | - | 2,852 | |||||
| Restricted stock expense | 2,868 | 992 | |||||
| Issuance of stock for services | 82,250 | - | |||||
| Amortization | 382,534 | 345,684 | |||||
| Depreciation | 201,369 | 228,615 | |||||
| Decrease in contingent liability | - | (74,580 | ) | ||||
| Increase in fair value of convertible debt | (87,380 | ) | 1,446,000 | ||||
| Amortization of operating lease asset | 330,969 | 584,574 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (67,408 | ) | 301,132 | ||||
| Deposits | - | 6,505 | |||||
| Inventory | (297,518 | ) | 878,967 | ||||
| Prepaid inventory | (62,623 | ) | (95,119 | ) | |||
| Prepaid expenses and other current assets | (62,361 | ) | (164,404 | ) | |||
| Accounts payable and accrued expenses | (277,135 | ) | 449,287 | ||||
| Operating lease liability | (241,489 | ) | (628,891 | ) | |||
| Deferred revenue / customer deposits | 54,160 | (84,497 | ) | ||||
| Cash flows from operating activities | (507,426 | ) | (809,948 | ) | |||
| Cash flows from investing activities: | |||||||
| Purchase of property and equipment | (179,893 | ) | (180,015 | ) | |||
| Cash flows from investing activities | (179,893 | ) | (180,015 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of common stock | - | 50,000 | |||||
| Note payable | - | 1,247,499 | |||||
| Cash flows from financing activities | - | 1,297,499 | |||||
| Net increase (decrease) in cash | (687,319 | ) | 307,536 | ||||
| Cash and cash equivalents, beginning of period | 2,452,553 | 1,797,860 | |||||
| Cash and cash equivalents, end of period | $ | 1,765,234 | $ | 2,105,396 | |||
| Supplemental Disclosures of Cash Flow Information: | |||||||
| 2025 | 2024 | ||||||
| Cash Payments for: | |||||||
| Interest expense | $ | 19,046 | $ | 18,817 | |||
| Non-cash financing/investing activities: | |||||||
| Issuance of shares for conversion of debt and accrued interest | $ | 1,079,639 | $ | - | |||
| Issuance of share for services | $ | 82,250 | $ | - | |||
| Change in lease asset related to extinguishment of HQ lease and new warehouse lease | $ | (1,723,544 | ) | $ | - | ||
| Preferred dividends accrued but not paid | $ | 2,001,001 | $ | 1,000,501 |
cbdMD, Inc.
SUPPLEMENTAL FINANCIAL INFORMATION
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2025 and 2024
(unaudited)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||
| GAAP loss from operations | $ | (485,816 | ) | $ | (1,550,991 | ) | $ | (572,088 | ) | $ | (2,616,828 | ) | |
| Adjustments: | |||||||||||||
| Depreciation & Amortization | 285,896 | 290,592 | 583,903 | 574,299 | |||||||||
| Employee and director stock compensation (1) | 1,934 | 11,944 | 5,016 | 28,486 | |||||||||
| Mergers and Acquisitions and financing transaction expenses (2) | - | 58,239 | - | 125,838 | |||||||||
| Non-cash expense incurred as a credit (3) | 439,926 | - | 439,926 | ||||||||||
| Non-cash accelerated amortization of expense related to terminated IT contracts | 72,101 | - | 72,101 | ||||||||||
| Non-GAAP adjusted income (loss) from operations | $ | (197,986 | ) | $ | (678,189 | ) | $ | 16,831 | $ | (1,376,178 | ) | ||
(1) Represents depreciation of property, plant and equipment and amortization of the Company's intangible assets.
(2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(3) Represents non-cash expense incurred as a credit provided to GNC to replace expired product.
Contacts:
Investors:
cbdMD, Inc.
Ronan Kennedy
Chief Financial Officer
[email protected]
(704) 445-3064
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