cbdMD Reduces Year over Year Net Loss from Operations by $3.0 Million

cbdMD leads with Strategic Improvements and is Building Momentum with ATRx Line

Charlotte, North Carolina–(Newsfile Corp. – February 13, 2024) – cbdMD, Inc. (NYSE American: YCBD) (NYSE American: YCBD-PA), one of the nation’s leading and most highly trusted and recognized CBD companies, and operator of the leading CBD brands – its flagship brand cbdMD, its animal health brand Paw CBD, today announced our financial results for our first quarter of fiscal 2024 ending December 31, 2023.

For the first quarter of Fiscal 2024, we continued to make strong year over year progress on our turnaround. Year over year we improved our operating loss from $4.1 for the first quarter of fiscal 2023 to $1.1 million for the first quarter of fiscal 2024.

“We continued to make strong year over year improvements to our operating income during the first quarter. During the quarter we focused on addressing some larger strategic goals which culminated with the launch of our hempMD brand and functional mushroom brand, ATRx Labs. This diversification allows us to access markets and channels more challenging to CBD while still attracting consumers focused on utilizing natural product to improve their daily lives. While still early, the positive reception, including the Wholefoods Magazine 2024 Natural Choice nominations, and growing commitments around our ATRx Line are promising indicators of our strategic direction,” says Ronan Kennedy, cbdMD’s Interim CEO & CFO.

The Company recently closed on new financing, supported by several existing shareholders that will help provide additional working capital and to fund expansion of our ATRx Labs line and further bolster our balance sheet.

The Company also continues to focus on marketing and sales efforts, highlighted by the recent appointment of a new Vice President of Wholesale. This move is part of a broader strategy to ensure the organization has the right resources and optimizes vendor relationships to pave the way for revenue growth and improved profitability.

cbdMD remains steadfast in its commitment to delivering exceptional value to its customers and shareholders alike, as it continues to navigate through its strategic initiatives and explore new avenues for growth and profitability.

Financial Highlights from our First Quarter of Fiscal 2024:

  • Net sales totaled $5.4 million for the December 31, 2024 quarter or a decrease of 12% compared to $6.1 million for the prior year comparative fiscal quarter.
  • We reported direct to consumer (DTC) net sales of $4.4 million or 82.3% of total net sales in the first quarter of fiscal 2024, a decrease from $4.9 million, or 10% from first quarter of fiscal 2023.
  • Our gross profit for the quarter totaled 66% in compared to 59% in the first quarter of fiscal 2023.
  • Our loss from operations was $1.1 million during the first quarter of fiscal 2024 as compared to a loss of $4.1 million in first quarter of fiscal 2023.
  • Our non-GAAP adjusted loss from operations during the first quarter of fiscal 2024 was approximately $0.69 million as compared to our non-GAAP adjusted loss from operations during the first quarter of fiscal 2023 of approximately $2.65 million, despite the decrease in overall revenue.
  • Net loss attributable to common shareholders for first quarter of 2024 was approximately $1.97 million, or $0.67 per share, as compared to a net loss for the first fiscal quarter of 2023 of approximately $4.96 million, or $3.70 per share. The improvement in the first fiscal quarter of 2024 was principally attributable to a $3 million reduction in operating expenses.
  • At December 31, 2023, we had working capital of approximately $1.4 million and cash on hand of approximately $1.5 million as compared to working capital of approximately $3.4 million and cash on hand of approximately $1.8 million at September 30, 2023.

Highlights for the First Quarter of 2024 and Notable Business Updates

  • The Company launched into Sprouts Markets in December of 2023 and looks to further expand during 2024.
  • The Company launched its ATRx Labs and HempMD brands onto Amazon USA during the quarter and is looking to accelerate revenue through this channel during 2024. The Company has received orders for several ATRx Labs functional mushroom products from a national retailer which it anticipates shipping in the coming months.
  • The Company recently announced raising gross proceeds of $1.25 million through a series of senior secured discounted convertible notes.
  • In an effort to clean up the Company’s capital structure, the Company has included a new proposal in its proxy statement for its annual meeting to amend its certificate of incorporation to convert each share of its Series A Convertible Preferred Stock and accrued dividends into 6 shares of common stock.

We will host a conference call at 4:20 p.m., Eastern Time, on Tuesday, February 13, 2024, to discuss our December 31, 2023, first quarter of fiscal 2024 financial results and business progress.


Tuesday February 13, 2024, 4:20 p.m. Eastern Time
USA/Canada: 800-319-4610
International: 604-638-5340
Teleconference Replay dial in:
USA/Canada: 855-669-9658
International: 412-317-0088
Replay Passcode: 0714
Webcast/Webcast Replay link- available through February 13, 2025: https://www.gowebcasting.com/13171


About cbdMD, Inc.

cbdMD, Inc. 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, including NSF Certified for Sport® products, as well as our new Full Spectrum products. Our cbdMD brand currently includes high-grade, premium CBD products including CBD tinctures, CBD gummies, CBD topicals, CBD capsules, CBD bath bombs, CBD sleep aids and CBD drink mixes and an array of Farm Act compliant Delta 9 products. Our Paw CBD brand of pet products includes veterinarian-formulated products including tinctures, chews, topicals products in varying strengths, and our ATRx brand of natural functional mushroom support. To learn more about cbdMD and our comprehensive line of U.S. grown, THC-free1 CBD oil and Full Spectrum products as well as our other brands, please visit www.cbdmd.com, www.pawcbd.com, or ATRxlabs.com, follow cbdMD on Instagram and Facebook, or visit one of the thousands of retail outlets that carry cbdMD’s products.

No Offer or Solicitation

This press release is for informational purposes only and shall not constitute a solicitation of a proxy, consent or authorization with respect to the amendment proposal. This communication may be deemed to be solicitation material in respect of the proposed amendment to cbdMD, Inc.’s Series A preferred stock designation included as a proposal in the Company’s preliminary proxy statement for its 2024 annual meeting. In connection with the proposed amendment, the Company had filed with the SEC a preliminary proxy statement and will mail to shareholders a definitive proxy statement in connection with the solicitation of proxies for its annual meeting, and the Company may file other documents with the SEC regarding the proposed amendment. The Company’s shareholders are urged to read the definitive proxy statement and other relevant materials when they become available, in their entirety, because they will contain important information about the Company and the proposed amendment.

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, cost reductions, potential need for additional working capital, 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, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on December 22, 2023, as amended on January 29, 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.
DECEMBER 31, 2023 AND SEPTEMBER 30, 2023
December 31, September 30,
2023 2023
Cash and cash equivalents $ 1,504,844 $ 1,797,860
Accounts receivable 1,102,180 1,216,090
Inventory 3,554,395 4,052,972
Inventory prepaid 188,250 182,675
Prepaid sponsorship 29,473 70,061
Prepaid expenses and other current assets 986,821 750,383
Total current assets 7,365,963 8,070,041
Other assets:    
Property and equipment, net 790,349 716,579
Operating lease assets 3,060,405 3,350,865
Deposits for facilities 132,203 138,708
Intangible assets, net 3,046,248 3,219,090
Investment in other securities, noncurrent 700,000 700,000
Total other assets 7,729,205 8,125,242
Total assets $ 15,095,168 $ 16,195,283
DECEMBER 31, 2023 AND SEPTEMBER 30, 2023
December 31, September 30,
2023 2023
Liabilities and shareholders’ equity    
Current liabilities:    
Accounts payable $ 1,566,633 $ 1,906,319
Accrued expenses 3,102,468 1,484,441
Operating leases – current portion 1,302,663 1,277,089
Note payable 2,492
Total current liabilities 5,971,764 4,670,341
Long term liabilities:    
Long term liabilities 9
Operating leases – long term portion 2,066,050 2,403,286
Contingent liability 20,611 90,363
Total long term liabilities 2,086,661 2,493,658
Total liabilities 8,058,425 7,163,999
cbdMD, Inc. shareholders’ equity:    
Preferred stock, authorized 50,000,000 shares, $0.001    
par value, 5,000,000 and 500,000 shares issued and outstanding, respectively 5,000 5,000
Common stock, authorized 150,000,000 shares, $0.001    
par value, 2,961,056 and 2,960,573 shares issued and outstanding, respectively 2,961 2,961
Additional paid in capital 183,389,556 183,387,095
Accumulated deficit (176,360,774 ) (174,363,772 )
Total cbdMD, Inc. shareholders’ equity 7,036,743 9,031,284
Total liabilities and shareholders’ equity $ 15,095,168 $ 16,195,283


  cbdMD, INC.
  December 31, December 31,
  2023 2022
  Gross Sales $ 5,375,630 $ 6,240,526
  Allowances (225 ) (155,308 )
  Total Net Sales 5,375,405 6,085,218
  Cost of sales 1,817,907 2,517,452
  Gross Profit 3,557,498 3,567,766
  Operating expenses 4,623,333 7,613,947
  Loss from operations (1,065,835 ) (4,046,181 )
  Decrease of contingent liability 69,752 61,000
  Interest expense (income) (418 ) 29,119
  Loss before provision for income taxes (996,501 ) (3,956,062 )
  Benefit for income taxes
  Net Loss (996,501 ) (3,956,062 )
  Preferred dividends 1,000,501 1,000,502
  Net Loss available to cbdMD, Inc. common shareholders $ (1,997,002 ) $ (4,956,564 )
  Net Loss per share:    
  Basic and diluted earnings per share (0.67 ) (3.70 )
  Weighted average number of shares Basic and Diluted: 2,960,945 1,341,277


  cbdMD, INC.
  December 31, December 31,
  2023 2022
  Net Loss Income $ (996,501 ) $ (3,956,062 )
  Comprehensive Loss (996,501 ) (3,956,062 )
  Preferred dividends (1,000,501 ) (1,000,502 )
  Comprehensive Loss attributable to cbdMD, inc. common shareholders $ (1,997,002 ) $ (4,956,564 )


  cbdMD, INC.
  FOR THE THREE ENDED DECEMBER 31, 2023 and 2022
  December 31, December 31,
  2023 2022
  Cash flows from operating activities:
  Net Loss $ (996,501 ) $ (3,956,062 )
  Adjustments to reconcile net (income) loss to net    
  cash used by operating activities:    
  Stock based compensation 1,772 79,446
  Restricted stock expense 689 43,449
  Write off of prepaid assets due to termination of contractual obligation 884,892
  Marketing stock amortization
  Inventory and materials impairment
  Intangibles amortization 172,842 277,354
  Depreciation 110,864 100,112
  Impairment of Goodwill and other intangible assets
  Gain on sale of fixed assets
  Decrease in contingent liability (69,752 ) (61,000 )
  Realized and unrealized loss of Marketable and other securities
  Termination benefit
  Extinguishment of Paycheck Protection Program Loan
  Amortization of operating lease asset 290,459 276,636
  Changes in operating assets and liabilities:    
  Accounts receivable 67,169 549,111
  Deposits 6,505 105,898
  Inventory 498,577 (434,695 )
  Prepaid inventory (5,575 ) 340,799
  Prepaid expenses and other current assets (195,850 ) (226,670 )
  Accounts payable and accrued expenses 142,292 39,204
  Operating lease liability (311,661 ) (287,547 )
  Deferred revenue / customer deposits 182,290 203,341
  Collection on discontinued operations accounts receivable 1,375
  Cash used by operating activities (105,880 ) (2,064,357 )
  Cash flows from investing activities:    
  Proceeds from sale of other investment securities
  Purchase of property and equipment (184,635 ) (177,370 )
  Cash used by investing activities (184,635 ) (177,370 )
  Cash flows from financing activities:    
  Proceeds from issuance of common stock
  Note payable (2,501 ) (125,341 )
  Preferred dividend distribution (1,000,502 )
  Cash used by financing activities (2,501 ) (1,125,843 )
  Net decrease in cash (293,016 ) (3,367,570 )
  Cash and cash equivalents, beginning of period 1,797,860 26,411,424
  Cash and cash equivalents, end of period $ 1,504,844 $ 23,043,854
  Supplemental Disclosures of Cash Flow Information:    
  2023 2022
  Cash Payments for:    
  Interest expense $ 11,614 $ 2,638
  Non-cash financial activities:    
  Preferred dividends accrued but not paid $ 1,000,501 $


  cbdMD, Inc.
  Three Months Three Months
  Ended Ended
  December 31, December 31,
  2023 2022
  GAAP loss from operations $ (1,065,835 ) $ (4,046,181 )
  Depreciation & Amortization 283,706 377,466
  Employee and director stock compensation (1) 16,542 137,144
  Other non-cash stock compensation for services (2) 884,893
  Mergers and Acquistions and financing transaction expenses (3) 67,599
  Non-GAAP adjusted loss from operations $ (697,988 ) $ (2,646,678 )


(1) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period.
(3) Represents expenses incurred in relation to M&A and financing activities during the quarter ended December 31, 2023.


cbdMD, Inc.
Ronan Kennedy
Chief Financial Officer
(704) 445-3064

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