| Page No |
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| PART I-FINANCIAL INFORMATION |
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| ITEM 1. | Condensed Consolidated Financial Statements. | 5 |
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| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 26 |
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| ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk. | 34 |
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| ITEM 4. | Controls and Procedures. | 34 |
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| PART II - OTHER INFORMATION |
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| ITEM 1. | Legal Proceedings. | 35 |
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| ITEM 1A. | Risk Factors. | 35 |
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| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 35 |
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| ITEM 3. | Defaults Upon Senior Securities. | 35 |
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| ITEM 4. | Mine Safety Disclosures. | 35 |
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| ITEM 5. | Other Information. | 36 |
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| ITEM 6. | Exhibits. | 36 |
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OTHER PERTINENT INFORMATION
Unless the context otherwise indicates, when used in this report, the terms the “Company,” “cbdMD, “we,” “us, “our” and similar terms refer to cbdMD, Inc., a North Carolina corporation formerly known as Level Brands, Inc., and our subsidiaries CBD Industries LLC, a North Carolina limited liability company formerly known as cbdMD LLC, which we refer to as “CBDI”, Paw CBD, Inc., a North Carolina corporation which we refer to as “Paw CBD”, Proline Global, LLC, a North Carolina limited liability company which we refer to as "Proline", and cbdMD Therapeutics LLC, a North Carolina limited liability company which we refer to as “Therapeutics”. In addition, “fiscal 2023” refers to the year ended September 30, 2023, “fiscal 2024” refers to the fiscal year ending September 30, 2024, “first quarter of 2023” refers to the three months ended December 31, 2022, “first quarter of 2024” refers to the three months ended December 31, 2023, "second quarter of 2023" refers to the three months ended March 31, 2023, "second quarter of 2024" refers to the three months ended March 31, 2024, "third quarter of 2023" refers to the three months ended June 30, 2023, and "third quarter of 2024" refers to the three months ended June 30, 2024.
We maintain a corporate website at www.cbdmd.com. The information contained on our corporate website and our various social media platforms are not part of this report**.**
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:
| ● | material risks associated with our overall business, including: |
| ● | our history of losses, potential liquidity concerns, and our ability to continue as a going concern; |
| ● | our reliance to market to key digital channels; |
| ● | our ability to acquire new customers at a profitable rate; |
| ● | our reliance on third party raw material suppliers and manufacturers; and |
| ● | our reliance on third party compliance with our supplier verification program and testing protocols |
| ● | material risks associated with regulatory environment for CBD, including: |
| ● | federal laws as well as FDA or DEA interpretation of existing regulation; |
| ● | state laws pertaining to industrial hemp and their derivatives; |
| ● | costs to us for compliance with laws and the risks of increased litigation; and |
| ● | possible changes in the use of CBD. |
| ● | material risks associated with the ownership of our securities, including; |
| ● | the risks for failing to comply with the continued listing standards of the NYSE American and reliance on the NYSE American to accept our Plan for continued listing; |
| ● | availability of sufficient liquidity; |
| ● | the designations, rights and preferences of our 8% Series A Cumulative Convertible Preferred Stock; |
| ● | our inability to pay dividends on our Series A Convertible Preferred Stock; |
| ● | ability to repay the Notes; and |
| ● | dilution upon the issuance of shares of common stock underlying outstanding Notes, warrants, options and the Series A Convertible Preferred Stock. |
Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward- looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, including the risks described in Part II, Item 1A. Risk Factors appearing later in this report, Part I, Item 1A. - Risk Factors appearing in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on December 12, 2023 and as amended on January 29, 2024 (the “2023 10-K”), as well as our other filings with the SEC. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
