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)
January 9,
2020
cbdMD, INC.
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(Exact Name of Registrant as Specified in 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)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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8845 Red Oak Boulevard, Charlotte, NC 28217
(Address of Principal Executive Offices)(Zip Code)
Registrant's
telephone number, including area code: (704) 445-3060
not applicable
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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))
Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933 (17
CFR §230.405) or Rule 12b-2 of the Securities Exchange
Act of 1934 (17 CFR §240.12b-2).
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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. ☐
Securities
registered pursuant to Section 12(b) of the Act:
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
stock
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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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Item1.01
Entry
into a Material Definitive Agreement.
On January 9, 2020, cbdMD, Inc. (“cbdMD” or the
“Company”) entered into an underwriting agreement (the
“Underwriting Agreement”) with ThinkEquity, a
division of Fordham Financial Management, Inc. as representative of
the underwriters (the
“Representative”), pursuant to which the Company agreed
to sell to the underwriters in a firm commitment underwritten
public offering (the “Offering”) an aggregate of
16,000,000 shares of common stock, par value $0.001 per share (the
“Common Stock”), at an Offering price of $1.00 per
share. The Company granted the underwriters a 45-day option to
purchase up to an additional 2,400,000 shares of Common Stock to
cover over-allotments, if any. ThinkEquity, a division of Fordham
Financial Management, Inc., is acting as sole book-running manager
for the Offering and The Benchmark Company, LLC is acting as
co-manager for the Offering.
Eight of our executive officers and directors have indicated an
interest in purchasing up to an aggregate of 455,000 shares of our
Common Stock in the Offering at the public Offering price. However,
because indications of interest are not binding agreements or
commitments to purchase, the underwriters may determine to sell
more, less or no shares in this Offering to these executive
officers and directors or these executive officers and directors
may determine to purchase more, less, or no shares in this
Offering.
The net proceeds to the Company from the Offering are expected to
be approximately $14.6 million before the over-allotment option,
after deducting underwriting discounts and commissions and
estimated expenses payable by the Company. The transactions
contemplated by the Underwriting Agreement are expected to close on
January 14, 2020, subject to customary closing
conditions.
The Offering was registered pursuant to the Company’s
effective shelf registration statement on Form S-3 (File No.
333-228773) (the “Registration Statement”) and the
related base prospectus included in the Registration Statement, as
supplemented by the prospectus supplement dated January 8, 2020
(the “Preliminary Prospectus Supplement”) and the final
prospectus supplement dated January 9, 2020 (the “Final
Prospectus Supplement” and collectively with the Preliminary
Prospectus Supplement, the “Prospectus Supplement”)).
The legal opinion and consent of Pearlman Law Group LLP addressing
the validity of the Common Stock is filed as Exhibit 5.1 hereto and
is incorporated into the Registration Statement, and the legal
opinion and consent of Gavigan Law, PLLC related to certain matters
under North Carolina law is filed as Exhibit 5.2 hereto and is
incorporated by reference into the Registration
Statement.
The Underwriting Agreement contains customary representations,
warranties and agreements by the Company, customary conditions to
closing, indemnification obligations of the Company and the
underwriters, including for liabilities under the Securities Act of
1933, as amended, other obligations of the parties and termination
provisions.
The underwriters will receive discounts and commissions of 7.5% of
the gross cash proceeds received by the Company from the sale of
the shares of Common Stock in the Offering. We will issue the
Representative a warrant to purchase 480,000 shares of Common Stock
(3% of the shares of Common Stock sold in the Offering) exercisable
at $1.25 per share, and reimburse it for its out of pocket
expenses, which includes fees of counsel to the Representative, up
to 1/2 of 1% of the gross proceeds to be received by us in the
Offering, subject to compliance with FINRA Rule 5110(f)(2)(D). The
Company estimates the total expenses of this Offering, which will
be payable by us, excluding the underwriters’ discounts and
commissions, will be approximately $230,000. The Company
intends to use the net proceeds for
general working capital purposes.
The Company’s executive officers, directors and 5% or greater
shareholders have entered into 45 day Lock-Up Agreements with the
Representative pursuant to which they have agreed not to sell,
transfer, assign or otherwise dispose of the shares of the
Company’s Common Stock owned by them, subject to certain
exclusions as set forth therein.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to
this Current Report on Form 8-K and is incorporated into this Item
1.01 by reference. The Underwriting Agreement has been included to
provide investors and security holders with information regarding
its terms. It is not intended to provide any other factual
information about the Company. The representations, warranties and
covenants contained in the Underwriting Agreement were made only
for purposes of such agreement and as of specific dates, were
solely for the benefit of the parties to such agreement, and may be
subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures exchanged
between the parties in connection with the execution of the
Underwriting Agreement. The representations and warranties may have
been made for the purposes of allocating contractual risk between
the parties to the agreement instead of establishing these matters
as facts, and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to
investors. The foregoing description of the terms of the
Underwriting Agreement does not purport to be complete and is
qualified in its entirety by reference to the Underwriting
Agreement. Investors should review that document as well as the
Registration Statement and Prospectus Supplement for a complete
understanding of the terms and conditions associated with the
Offering.
This Current Report contains forward-looking statements that
involve risk and uncertainties, such as statements related to the
amount of net proceeds expected from the Offering. The risks and
uncertainties involved include various risks detailed in the
Company’s SEC filings from time to time.
On January 9, 2020, the Company issued a press release announcing
pricing of the Offering of Common Stock. A copy of this press
release is furnished hereto as Exhibit 99.1 and is incorporated
herein by reference.
Item
9.01
Financial
Statements 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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Underwriting
Agreement dated January 9, 2020 by and between cdbMD, Inc. and
ThinkEquity, a Division of Fordman Financial Management,
Inc.
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Filed
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Form of
Representative’s Warrant
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Filed
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Opinion
of Pearlman Law Group LLP
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Filed
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Opinion
of Gavigan Law, PLLC
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Filed
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Form of
Lock-Up Agreement
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Filed
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Consent
of Pearlman Law Group LLP (included in Exhibit 5.1)
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Filed
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Consent
of Gavigan Law, PLLC (included in Exhibit 5.2)
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Filed
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Press
release dated January 9, 2020
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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:
January 10, 2020
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By:
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/s/
Mark S. Elliott
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Mark S.
Elliott, Chief Financial Officer and Chief Operating
Officer
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