cbdMD, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
YCBD$0.42+7.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-17.
0001437749-26-004343
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001437749-26-017042
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 68 current paragraphs.
35 unchanged; 14 reworded; 18 added; 7 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
During the second quarter, the regulatory environment for hemp-derived cannabinoid products continued to evolve materially. H.R. 5371, the “Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026” (the “Act”), signed into law on November 12, 2025, remains scheduled to take effect on November 12, 2026. Section 781 of the Act narrows the federal definition of hemp by shifting to a total THC standard (inclusive of THCA) and limits hemp-derived consumable products to 0.4 mg of total THC per container. It remains unknown whether these sections will go into effect as written, or be replaced, delayed, or amended by subsequent acts of Congress.
Current report
Multiple legislative measures have been introduced in the 119th Congress that would repeal, delay, or modify Section 781 of Public Law 119-37, or that would establish a federal regulatory framework for hemp-derived cannabinoid products. These include H.R. 6209 (repeal of Section 781); H.R. 7024 and S. 3686 (the Hemp Planting Predictability Act, which would extend the effective date by two years); S. 3474 (the Cannabinoid Safety and Regulation Act); H.R. 7212 (the Hemp Enforcement, Modernization, and Protection Act); and S. 4315 (the Hemp Safety Enforcement Act, providing a state opt-out mechanism). On April 30, 2026, the U.S. House of Representatives passed the Farm, Food, and National Security Act of 2026 (H.R. 7567) by a vote of 224-200; the legislation as passed does not include provisions modifying Section 781's restrictions on finished hemp-derived cannabinoid products. The Senate Agriculture Committee is expected to consider its version of the Farm Bill in late May or early June 2026. In addition, in December 2025, the President issued Executive Order 14370 directing executive branch officials to work with Congress to update the statutory definition of finished hemp-derived cannabinoid products. None of the foregoing legislative measures have been enacted as of the date of this filing, and there can be no assurance that any such measure will be enacted or, if enacted, would modify Section 781 in a manner favorable to the Company. The Company is unable to predict the legislative outcome, the timing of any such developments, or the ultimate impact on the Company.
Current report
On April 1, 2026, the Centers for Medicare & Medicaid Services (“CMS”) activated the Substance Access Beneficiary Engagement Incentive (“BEI”), under which approved participants in the ACO REACH Model and Enhancing Oncology Model may furnish eligible hemp-derived products to Medicare beneficiaries, subject to physician oversight, at up to $500 per beneficiary per year. Eligible products must contain no more than 0.3% delta-9 THC and no more than 3 mg of total THC per serving, and inhalable products are excluded. The Company has launched a clinical healthcare channel to support this pathway and believes its clinical research, safety data, and quality systems position us well to participate, although there can be no assurance regarding the timing or scale of provider adoption. We are engaging ACOs and investing in further patient science to enhance our readiness to participate in this emerging healthcare channel and our positioning as a trusted, evidence-based supplier within the federal healthcare-access framework as provider adoption develops. The BEI is the subject of pending litigation alleging procedural and statutory deficiencies; an adverse ruling could limit or eliminate this pathway.
Current report
On April 23, 2026, the Acting Attorney General issued a final order, effective April 28, 2026, rescheduling certain narrow categories of marijuana — FDA-approved drug products and state-licensed medical marijuana — from Schedule I to Schedule III under the Controlled Substances Act. An expedited DEA administrative hearing on broader rescheduling is scheduled to conclude by July 15, 2026. The partial rescheduling does not modify the federal framework for hemp-derived cannabinoid products and does not legalize hemp-derived THC products, but the Company believes it signals a broader federal direction toward regulated access and clinical integration of cannabinoid products.
Current report
As previously disclosed, our products are regulated by the FDA. The FDA performs inspections to ensure that our facilities remain in compliance with applicable regulations for our industry. In April and May 2026, the FDA completed an inspection of our Charlotte, North Carolina manufacturing facility for dietary supplement GMP compliance. At the conclusion of the inspection, the FDA provided inspectional observations focusing primarily on documentation, recordkeeping, and quality control oversight. No product safety issues or consumer injuries were identified. The Company is in the process of timely responding to the FDA and actively taking actions to address the observations.
Current report
Our overall operating expenses increased approximately $0.6 million or 17.3% for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The acquisition of Bluebird added approximately $340,000 in labor, marketing and acquisition related legal and transaction expenses during the second quarter of fiscal 2026. Additionally, professional outside services increased as we made investments to target the Medicare program in addition to transaction costs related to the acquisition of Bluebird. Stock based compensation increased as certain grants vested during the second quarter of fiscal 2026. The increase in labor is tied to acquisition of Bluebird, some annual adjustments but also a number of projects during the quarter, notably regulatory related reworks, and offset by savings in rents, and other miscellaneous expenses.
Current report
The Company has outstanding quarterly dividend payment obligations under its Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 10% per annum, payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. The Series C Preferred Stock accrues dividends at the same rate of 10% per annum, also payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. If the Company fails to satisfy the applicable equity conditions, dividends on both series of preferred stock are payable in cash, which could adversely affect the Company’s liquidity position. As of March 31, 2026, approximately 591,207 shares of Series B Preferred Stock and 1 million shares of Series C Preferred Stock were outstanding. The aggregate quarterly dividend obligation, if paid in cash, would be approximately $70,000 based on stated values and the 10% per annum dividend rate.
Current report
Cash Flows
Current report
During the six months ended March 31, 2026 and 2025, our sources and uses of cash were as follows:
Current report
Operating Activities
Current report
During the six months ended March 31, 2026, net cash used by operating activities was $1.5 million compared to the cash flows used by operating activities of $0.5 million for the six months ended March 31, 2025. The primary components of the cash used by operating activities in the six months ended March 31, 2026 and 2025 are accounts receivable, inventory and prepaid and other operating expenses.
Current report
Investing Activities
Current report
Cash used in investing activities was $0.1 million for the six months ended March 31, 2026 and March 31, 2025, respectively, and were both related to fixed asset acquisitions.
Current report
Financing Activities
Current report
Cash provided by (used in) financing activities during the six months ended March 31, 2026 and March 31, 2025 of approximately $2.0 million and $0, respectively. The cash provided by financing activities during the six months ended March 31, 2026 is attributable to the proceeds from the issuance of preferred stock.
Current report
Adjusted EBITDA (Unaudited)
Current report
Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include: (i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect the interest expense or cash requirements necessary to service interest or principal payments on our debt; (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; (v) it does not reflect the impact of stock-based compensation upon our overall results of operations; and (vi) other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Current report
(3) Represents costs associated with the Bluebird acquisition.
Removed paragraphs (7)
Previous report
Our overall operating expenses decreased approximately $0.2 million or 5.7% for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. Accounting/legal/professional outside services and other operating expense savings were offset by an increase in marketing expense, rent and utilities related to the new warehouse lease in fiscal year 2025 and a slight increase in payroll. We are closely watching marketing expenses and working to improve spend efficiency with the goal of positively impacting (increasing) revenues. We have taken steps to reduce ongoing insurance and accounting costs which will be offset somewhat by an increase in payroll.
Previous report
On June 5, 2025 and December 31, 2024, we received notifications from the NYSE American that the Company was no longer in compliance with NYSE American continued listing standards, specifically, continued listing standards set forth in Section 1003(a)(i) and 1003(a)(ii) 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 and Section 1003(a)(ii) of the Company Guide requires a listed company to have stockholders’ equity of $4.0 million if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years then ended. As previously disclosed, all previously outstanding shares of our Series A Preferred Stock were converted to common stock on May 6, 2025 and all accrued dividends were eliminated. As part of this conversion, $6.7 million of accrued and unpaid dividends as of June 30, 2025 were converted to equity upon the Series A Preferred conversion which brought us into compliance with the NYSE American’s continued listing standards, and we maintained the continued listing standards for two fiscal quarters and complied with other provisions of Section 1003 of the Company Guide, including increased stockholders’ equity requirements of a minimum of $6.0 million, as we continued to incur annual losses from continuing operations and/or net losses for the fiscal year ended September 30, 2025. If we fail to maintain continued listing standards and the NYSE American delists our common stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities, reduced liquidity, decreased analyst coverage of our securities, and an inability for us to obtain any additional financing to fund our operations that we may need. The NYSE American formally notified the Company in a letter dated December 5, 2025, confirming that cbdMD has resolved all deficiencies related to Sections 1003(a)(i) and (ii) of the NYSE American Company Guide. We currently comply with NYSE American continued listing standards.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Adjusted EBITDA
Reworded paragraphs (14)
Previous wording
The following discussion of our financial condition and results of operations for the three months ended December 31, 2025 and the three months ended December 31, 2024 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties such as our plans, objectives, expectations and intentions.
Current wording
The following discussion of our financial condition and results of operations for the three and six months ended March 31, 2026 and the three and six months ended March 31, 2025 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties such as our plans, objectives, expectations and intentions.
Previous wording
Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements because of several factors, including those set forth under the Part I, Item 1A, Risk Factors and Business sections in our 2025 10-K, this report, and our other filings with the Securities and Exchange Commission. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report.
Current wording
Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements because of several factors, including those set forth under Part I, Item 1A, Risk Factors and Business sections in our 2025 10-K, and our other filings with the Securities and Exchange Commission. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report.
Previous wording
Our cbdMD brand of products includes an array of high-grade, premium every day and functional CBD products, including tinctures; gummies; topicals; capsules; and sleep, focus and calming aids. In addition, we have clinical based claims and industry leading strength and concentrations to drive product efficacy.
Current wording
Our cbdMD brand of products includes an array of high-grade, premium everyday and functional CBD products, including tinctures, gummies, topicals, capsules, and sleep, focus and calming aids. In addition, we have clinical based claims and industry leading strength and concentrations to drive product efficacy.
Previous wording
Bluebird Botanicals, is a line of premium full spectrum CBD Products.
Current wording
Bluebird is a line of premium full and broad spectrum hemp products.
Previous wording
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 wording
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 has increased and in the future we believe the ELOC will allow us to prudently take advantage of these situations should they occur in the future.
Previous wording
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 wording
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 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, and (iv) intellectual property including self-GRAS status on their full spectrum product. During the second quarter of fiscal 2026, the acquisition cost and integration costs created a $75,000 drag on the P&L, however, we estimate Bluebird will contribute over $500,000 in revenue per quarter at healthy contribution margins in the forthcoming quarters.
Previous wording
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 wording
While cbdMD was founded using THC-free broad spectrum formulations, a meaningful amount of our revenues is derived from products containing low-dose hemp-derived THC that complies with the original Farm Bill. The majority of the Company's revenue for the three and six months ended March 31, 2026 was 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. 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. Management continues to evaluate strategic alternatives to mitigate potential impacts, including product reformulation and channel diversification, but no assurance can be given that the Company will successfully adapt its portfolio or that alternative legislation will be enacted.
Previous wording
We continued to pursue many strategies to grow our revenues and expand the scope of our business through the first quarter of 2026 and beyond:
Current wording
We continued to pursue many strategies to grow our revenues and expand the scope of our business through the second quarter of 2026 and beyond:
Previous wording
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 wording
We had total net sales of $5.6 million and $4.7 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an increase in net sales of $0.9 million or 19% quarter over quarter and 12% sequentially. This increase is comprised of gains in both our direct to consumer and wholesale business. Direct to consumer included gains to the core business in addition to the revenue added from the acquisition of Bluebird. We anticipate Bluebird will add incremental revenue during the third quarter with the benefit of ownership for a full fiscal quarter as well as increased marketing by our in house marketing team. Our wholesale business continued to strengthen this quarter as we made progress with our Oasis brand and other cbdMD brand initiatives. We remain focused on growth and, as of this filing April’s orders remained strong. Despite the pervasive, industry-wide challenges which we are facing, we remain optimistic about our market positioning in fiscal 2026 and continue to seek to diversify revenue.
Previous wording
Our cost of sales includes costs associated with distribution, fill and labor expense, components, manufacturing overhead, third party providers, and freight for our product sales. Our cost of sales as a percentage of net sales was 40.2% and 33.5% for the three months ended December 31, 2025 and 2024, respectively. This slight increase in cost of sales is mostly attributed to (i) year over year increase in our warehouse lease cost, (ii) lower overhead absorption tied to revenue, (iii) ongoing state-level regulatory actions requiring packaging reworks, and (iv) a shift in revenue mix to more wholesale.
Current wording
Our cost of sales includes costs associated with distribution, fill and labor expense, components, manufacturing overhead, third party providers, and freight for our product sales. Our cost of sales as a percentage of net sales was 42% and 38% for the three months ended March 31, 2026 and 2025, respectively. This slight increase in cost of sales is mostly attributed to (i) a shift in our sales mix to more wholesale business which grew $0.7 million year over year, and (ii) increase in warehouse labor as we encountered several repacking projects in response to changes in state regulation.
Previous wording
The following tables provide information on our operating expenses for the three months ended December 31, 2025 and 2024:
Current wording
The following tables provide information on our operating expenses for the three and six months ended March 31, 2026 and 2025:
Previous wording
We had cash and cash equivalents on hand of approximately $3.4 million, working capital of $5.4 million and an accumulated deficit of approximately $179.8 million at December 31, 2025. At September 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $3.4 million and an accumulated deficit of approximately $179.4 million.
Current wording
We had cash and cash equivalents on hand of approximately $2.6 million, working capital of $5.4 million and an accumulated deficit of approximately $180.6 million at March 31, 2026. At September 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $3.4 million and an accumulated deficit of approximately $179.4 million.
Previous wording
cbdMD defines Adjusted EBITDA as Earnings Before Interest, Taxes, Depreciation and Amortization excluding stock based compensation and mergers and acquisitions and financing transaction expenses.
Current wording
The Company defines Adjusted EBITDA as GAAP loss from operations adjusted to exclude (i) depreciation and amortization, (ii) stock-based compensation expense, and (iii) mergers and acquisitions and financing transaction expenses. This measure differs from traditional “EBITDA” (Earnings Before Interest, Taxes, Depreciation and Amortization) because the Company’s reconciliation begins with loss from operations, which is presented before interest expense and income tax expense on the consolidated statements of operations.
Previous wording
Our management uses and relies on Adjusted EBITDA, which is a non-GAAP financial measure. We believe that management, analysts and shareholders benefit from referring to the following non-GAAP financial measure to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.
Current wording
Our management uses and relies on Adjusted EBITDA, which is a non-GAAP financial measure. We believe that management, analysts and shareholders benefit from referring to this non-GAAP financial measure to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Specifically, we believe Adjusted EBITDA is useful to investors because: (i) depreciation and amortization are non-cash charges that do not reflect our cash-based operating performance; (ii) stock-based compensation is a non-cash expense that can vary significantly based on factors such as share price volatility and is not indicative of core operating performance; and (iii) mergers and acquisitions and financing transaction expenses are non-recurring costs that are not expected to continue in the ordinary course of business. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Additionally, we continue to see changing rules and regulations at the state level, which is causing ongoing disruption and additional compliance costs. Given the pace and uncertainty of these developments, the ultimate impact on the Company's business, results of operations, and financial condition cannot be predicted with certainty.