cbdMD, Inc.

Current report

Bluebird Botanicals, is a line of premium full spectrum CBD Products.

Current report

During the first quarter, legislation continued to be a key factor impacting the industry. On November 12, 2025, President Trump signed into law H.R. 5371, the “Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026” (the “Act”), which makes continuing appropriations and extensions for fiscal year 2026, and which also limits any THC content to 0.4mg per container for hemp-derived consumable products nationally effective November 12, 2026. It is unknown to the Company whether or not the sections of the Act that impact the hemp industry will ultimately go into effect on November 12, 2026, or if those sections will be replaced, impacted or amended by subsequent acts of Congress. While cbdMD was founded using THC-free broad spectrum formulations, a significant amount of our revenues are derived from products that contain low-dose hemp-derived THC that complies with the original Farm Bill. The Act, if implemented as currently written, will in all likelihood have a material adverse impact on the Company’s business, results of operations, and financial condition. The majority of the Company’s revenue for the three months ended December 31, 2025 were derived from products that would comply with the Act's THC limitations, however a meaningful amount of revenue could be impacted should no changes in legislation occur. Management is actively monitoring this legislation and evaluating strategic alternatives to mitigate potential impacts, but there can be no assurance that the Company will be able to successfully adapt its product portfolio or that alternative legislation will be enacted. During December 2025, Senator Wyden introduced the Cannabinoid Safety and Regulation Act (“CSRA”) which has received strong support from industry and a number of legislators, and would mitigate damaging impact for the Act, should this be ultimately signed into law. On January 22, 2026, the Hemp Enforcement, Modernization, and Protection (“HEMP”) Act was filed in Congress lead by bi-partisan support. As of the date of this filing, there are no assurance that the CSRA or HEMP will be enacted. Additionally, we continue to see changing rules and regulation at the state level which is causing some disruption and additional costs.

Current report

Toward the end of the first quarter of 2026, the Company raised additional cash to bolster its balance sheet with the Series C Preferred Stock and structured an ELOC. Over the last few months, we have seen several instances where the stock price and volume spiked and the equity line of credit (“ELOC”) will allow us to prudently take advantage of these situations should they occur in the future.

Current report

The Company has continued to pursue several potential acquisitions since the conversion of the Series A Preferred Stock in 2025. In January 2026, the Company acquired the Bluebird Botanicals brand. The Company believes Bluebird provides (i) a large existing customer base that we believe is underserved with their existing product portfolio (ii) a brand name not defined by CBD, allowing for natural expansion into other natural products, (iii) significant SG&A synergies, (iv) intellectual property including self-GRAS status on their full spectrum product and (v) an estimated $500,000 in revenue per quarter with opportunities to grow. We believe this revenue, once fully integrated, can provide a step function in our growth and have a meaningful impact on non-GAAP EBITDA and Net Income

Current report

We had total net sales of $5.0 million and $5.1 million for the three months ended December 31, 2025 and 2024, respectively, resulting in a decrease in net sales of $0.1 million or 1.9% quarter over quarter. This decrease is primarily due to slightly lower direct-to-consumer business over the prior year and holiday promotions that generated less revenue this year. Our wholesale business strengthened this quarter as we made progress with our Oasis brand and other cbdMD brand initiatives. Our team remains focused on driving revenue improvement across the business, and, as of the date of this filing, both December and January 2026 generated the highest respective December and January monthly revenue levels since 2022, excluding the contribution from the Bluebird Botanicals acquisition. We also anticipate the Bluebird acquisition to add more that $0.5 million in revenue per quarter once fully integrated. Despite the pervasive, industry wide challenges which we too are facing, we remain optimistic about our market positioning in fiscal 2026 and continue to seek to diversify revenue.

Current report

Effective September 30, 2025, the Company entered into Securities Purchase Agreements dated September 29, 2025 with four institutional investors whereby the Investors were issued an aggregate of 1,700,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) for aggregate gross proceeds of $1.7 million. Additionally, on September 29, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation, (the “Series B Certificate of Designation”) designating 1,700,000 shares of the Company’s authorized preferred stock as Series B Convertible Preferred Stock, par value $0.001 per share and stated value of $1.00 per share. Each share of the Series B Preferred Stock is initially convertible into common stock at a conversion price of $1.00 per share, subject to anti-dilution adjustments and price protection provisions, which may be triggered upon the issuance of common stock, options or convertible securities at a price below the then-applicable conversion price, and Alternate Conversion rights (as defined in the Series B Certificate of Designation) resulting from a Triggering Event (as defined in the Series B Certificate of Designation). The Series B Preferred Stock accrues dividends at a rate of 10% per annum which are payable quarterly in shares of common stock, subject to the satisfaction of all Equity Conditions (as defined in the Series B Certificate of Designation), or in cash. If the Company fails to satisfy an Equity Condition, dividends shall be paid in cash. However, if North Carolina law prohibits the payment of dividends in cash, then the Stated Value (as defined in the Series B Certificate of Designation) shall be increased by the amount of such unpaid dividends. The Series B Preferred Stock is further subject to repricing adjustments upon the effectiveness of a registration statement wherein the conversion price shall equal the lower of (a) the original conversion price or (b) the closing price of the common stock on the effective date of such registration statement. Additionally, the Series B Preferred Stock is subject to future financing exchange options upon any issuance by the Company, or subsidiaries, of any security with terms more favorable than those set forth in the Series B Certificate of Designation.

Current report

With respect to dividends, distributions, liquidation, dissolution and winding up of the Company, the Series B Preferred Stock ranks pari passu with the Series C Convertible Preferred Stock and is senior to all other shares of the Company’s capital stock unless otherwise consented to by the holders of the Series B Preferred Stock. The holders of Series B Preferred Stock have no voting power and no right to vote, except as required by the North Carolina Business Corporations Act or with respect to matters affecting the preferences, rights, privileges or powers relating to the Series B Preferred Stock. In addition, the Series B Preferred Stock is subject to a beneficial ownership limitation which prohibits any holder from beneficially owning more than 4.99% of the shares of the Company’s common stock outstanding immediately following such conversion. The Series B Certificate of Designation contains various restrictive covenants and protective provisions, including restrictions on the Company’s ability to incur additional indebtedness, redeem capital stock, pay cash dividends, dispose of assets outside of the ordinary course of business or make certain issuances of securities. The complete rights, preferences and limitations of the Series B Preferred Stock are set forth in the Series B Certificate of Designation which is filed as Exhibit 3.1 to the Company’s Form 8-K Current Report filed on October 6, 2025. As of February 12, 2026, there are 591,207 shares of Series B Preferred Stock outstanding.

Current report

Effective December 18, 2025, the Company entered into Securities Purchase Agreements dated December 18, 2025 with two institutional investors whereby the investors were issued an aggregate of 1,000,000 shares of Series C Convertible Preferred Stock (“Series C Preferred Stock”) for aggregate gross proceeds of $2.25 million. Additionally, on December 19, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation, (the “Series C Certificate of Designation”) designating 1,000,000 shares of the Company’s authorized preferred stock as Series C Convertible Preferred Stock, par value $0.001 per share and stated value of $2.25 per share. Each share of the Series C Preferred Stock is initially convertible into common stock at an initial conversion price of $2.25 per share, and pursuant to the Series C Certificate of Designation, as amended by a Letter Agreement dated February 10, 2026, is adjusted to $1.13 per share upon the effectiveness of a registration statement covering the conversion shares, and further subject to anti-dilution adjustments, which may be triggered upon the issuance of common stock, options or convertible securities at a price below the then-applicable conversion price, and Alternate Conversion rights (as defined in the Series C Certificate of Designation) resulting from a Triggering Event (as defined in the Series C Certificate of Designation). The Series C Preferred Stock accrues dividends at a rate of 10% per annum which are payable quarterly in shares of common stock, subject to the satisfaction of all Equity Conditions (as defined in the Series C Certificate of Designation), or in cash. If the Company fails to satisfy an Equity Condition, dividends shall be paid in cash. However, if North Carolina law prohibits the payment of dividends in cash, then the Stated Value (as defined in the Series C Certificate of Designation) shall be increased by the dividends as reasonably determined by the Company and the holders of the Series C Preferred Stock. Additionally, the Series C Preferred Stock is subject to future financing exchange options upon any issuance by the Company, or subsidiaries, of any security with terms more favorable than those set forth in the Series C Certificate of Designation.

Current report

With respect to dividends, distributions, liquidation, dissolution and winding up of the Company, the Series C Preferred Stock ranks pari passu with the Series B Convertible Preferred Stock and is senior to all other shares of the Company’s capital stock unless otherwise consented to by the holders of the Series C Preferred Stock. The holders of Series C Preferred Stock have no voting power and no right to vote, except as required by the North Carolina Business Corporations Act or with respect to matters affecting the preferences, rights, privileges or powers of the Series C Preferred Stock. In addition, the Series C Preferred Stock is subject to a beneficial ownership limitation which prohibits any holder from beneficially owning more than 4.99% of the shares of the Company’s common stock outstanding immediately following such conversion. The Series C Certificate of Designation contains various restrictive covenants and protective provisions, including restrictions on the Company’s ability to incur additional indebtedness, redeem capital stock, pay cash dividends, dispose of assets outside of the ordinary course of business or make certain issuances of securities. The complete rights, preferences and limitations of the Series C Preferred Stock are set forth in the Series C Certificate of Designation which is filed as Exhibit 3.12 to the Company’s Form 10-K Annual Report for the year ended September 30, 2025 filed on December 19, 2025. The Company and the holders of the Series C Preferred Stock entered into a Letter Agreement date February 10, 2026 amending the Series C Certificate of Designation to (i) provide for a fixed conversion price of $1.13 per share, and (ii) eliminate price reset mechanisms that would otherwise apply in the event of the filing of any additional registration statement covering conversion shares. The Letter Agreement did not remove the price protection for non-exempt issuances at prices below $1.13 or Alternate Conversions. As of February 17, 2026, there are 1,000,000 shares of Series C Preferred Stock outstanding.

Current report

(1) Represents depreciation of property, plant and equipment and amortization of the Company's intangible assets.

Previous report

While we aimed to maintain our revenue levels during the third fiscal quarter, we experienced a decline driven by several identifiable factors. Our top priority for the quarter was securing shareholder approval to amend our articles of incorporation and convert the Series A Preferred stock. This strategic move was essential to improving stockholders’ equity, and our plan to regain compliance with NYSE American continued listing standards and preserve our Common Stock listing on the NYSE American. We were successful in obtaining shareholder approval to convert our Series A Preferred Stock; however, the process required significant management attention and temporarily diverted executive management focus from core business operations.

Previous report

In parallel, we identified and addressed weaknesses within our marketing team, which led to the implementation of leadership changes late in the second quarter to strengthen customer acquisition efforts and restore profitability momentum. During the third quarter we rebuilt our marketing team and agency base. During the third quarter we reconstructed our marketing and creative systems and processes along with our customer acquisition funnels and performed significant channel testing. This resulted in a growing new customer base in July and key metrics of our direct to consumer business trending in the right direction. Our conservative cash management in the second quarter led to inventory levels dropping below optimal thresholds. Coupled with delays in product testing, this resulted in intermittent stock shortages across several SKUs. To correct this, we have since increased inventory investments to ensure better product availability and to support revenue recovery moving forward.

Previous report

During this fiscal year, we have faced a notable uptick in both state and federal regulatory activity that, if enacted, would limit consumer choice and significantly impact market access. Legislative actions in states like Georgia and Florida introduced new labeling requirements, which led to delays in product availability and required us to allocate additional resources toward packaging updates to remain compliant. At the federal and state levels, proposals such as HB 1 in Texas, HB 328 in North Carolina, and changes to the definition of hemp in the federal appropriations bill sought to fundamentally alter the definition of sellable hemp-derived products. If passed, these measures could have materially affected both our future revenue and the broader industry's viability.

Previous report

While many of these proposals were ultimately defeated or delayed, the trend is clear: there is a growing and coordinated effort to restrict the hemp and cannabinoid wellness category. In response, management has had to dedicate increased time and capital this quarter to regulatory engagement—including updating packaging, mobilizing grassroots customer advocacy, lobbying efforts across multiple state capitals, and working closely with national trade organizations. We expect this regulatory pressure to persist, requiring continued strategic investment to protect market access and consumer choice. Increased regulation may also negatively affect our smaller competitors and potential reduce competition.

Previous report

In the first fiscal quarter, cbdMD entered the rapidly expanding hemp-derived beverage market with the launch of Oasis, our ready-to-drink THC-infused seltzer. According to Euromonitor International, sales of hemp-derived THC beverages more than doubled in 2024 and are projected to grow to $4.1 billion by 2028—making this one of the fastest-growing segments in the hemp industry. Early consumer response to Oasis has been highly encouraging. In April 2025, the brand earned multiple medals at the prestigious LA Spirits Awards, a strong indicator of product acceptance and brand potential.

Previous report

To support market momentum, we expanded our sales team mid-third quarter, initiated discussions with major retail chains, and ramped up in-person brand activation efforts. By the end of the third quarter, we have secured distribution for Oasis across Alabama, Georgia, North Carolina, parts of South Carolina, and the Florida Panhandle. Sell-through has continued to accelerate in the fourth quarter. Most recently, we signed new distribution agreements in Tennessee, Minnesota, with other distributors in the pipleeine, and we anticipate revenue from these market launches to begin contributing in the remainder of the fourth quarter.

Previous report

We had total net sales of $4.6 million and $5.2 million for the three months ended June 30, 2025 and 2024, respectively, resulting in a decrease in net sales of $0.6 million or 12% quarter over quarter. This decrease is primarily due to declining performance of our direct-to-consumer business as well as regulatory uncertainty which impacted many of our wholesale accounts during recent months. For the nine months ended June 30, 2025, revenues were down 3%, which is driven by the decrease in revenue in the third quarter, which offset the previously reported 1% increase year over year through March 31, 2025. Our team continues to focus on all areas of driving revenue improvement, and during the third quarter made significant changes to our marketing team and strategy to combat recent trends; although through June 30, 2025 we did not see the benefits of these changes. We are seeing signs of success from our marketing changes and strategy commencing in July and through the fourth quarter, as we have secured distribution agreements for Oasis in multiple states. Despite the pervasive, industry wide challenges which we too are facing, we remain optimistic about our market positioning in fiscal 2025.

Previous report

On December 31, 2024, we received notification (the “Notice”) from the NYSE American that the Company is no longer in compliance with an additional NYSE American continued listing standard. Specifically, the letter states that the Company is not in compliance with the continued listing standard set forth in Section 1003(a)(i) of the NYSE American Company Guide (the “Company Guide”). Section 1003(a)(i) requires a listed company to have stockholders’ equity of $2.0 million or more if the listed company has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years then ended. The Company reported stockholders equity of $1.9 million as of September 30, 2024, and losses from continuing operations and/or net losses in four of its five most recent fiscal years then ended. The Notice further provided that the Company remains subject to the conditions set forth in the NYSE American’s initial non compliance notification dated June 5, 2024 and its compliance plan that was accepted by the NYSE American on August 20, 2024 for noncompliance under Section 1003(a)(ii) of the Company Guide due to stockholders’ equity under $4.0 million which addressed how the Company intends to regain compliance with the continued listing standards by December 5, 2025 (the “Plan”). If the Company is not in compliance with the continued listing standards by December 5, 2025 or if the Company does not make progress consistent with the Plan during the Plan period, the Company will be subject to delisting procedures as set forth in the Company Guide.

Previous report

While the Notice has no immediate impact on the listing of the Company’s shares of common stock which will continue to be listed and traded on the NYSE American during this period, subject to the Company’s compliance with the other listing requirements of the NYSE American, if the Common Stock ultimately were to be delisted for any reason, it could negatively impact the Company by (i) reducing the liquidity and market price of the Company’s Common Stock; (ii) reducing the number of investors willing to hold or acquire the Common Stock, which could negatively impact the Company’s ability to raise equity financing; and (iii) limiting the Company’s ability to use a registration statement to offer and sell freely tradable securities, thereby preventing the Company from accessing the public capital markets.

Previous report

(2) Represents expenses incurred in relation to M&A and financing activities during the three and nine months ended June 30, 2024.

Previous report

(3) Represents non-cash expense incurred as a credit provided to GNC to replace expired product.