cbdMD, Inc. 10-Q

ITEM 5. OTHER INFORMATION.   On August 9, 2022, T. Ronan Kennedy, our Chief Financial Officer and Chief Operating Officer, was appointed interim principal executive officer.   Effective August 9, 2022, Dr. Sybil Swift, a key employee of the Company, was appointed to serve on the board of directors, filling a vacancy on the board, in accordance with the bylaws of the Company.  Dr. Swift has served as the Company’s Vice President for Scientific & Regulatory Affairs and the co-chair of cbdMD Therapeutics, LLC, since March of 2021. She initially joined the Company as a Regulatory Consultant in Jan 2021. Prior to joining the Company, from Jan 2020 to Dec 2020, Dr. Swift was the Senior Vice President for Scientific & Regulatory Affairs at the Natural Products Association. Dr. Swift served in multiple roles during her 5 years within the U.S. Food and Drug Administration's Office of Dietary Supplement Programs; the last role was the Associate Director for Research and Strategy. As Associate Director, Dr. Swift directed the office’s research portfolio and was responsible for ensuring alignment between its science, research, compliance, enforcement, and policy initiatives. Dr. Swift was also the co-chair of the Botanical Safety Consortium, a collaboration between scientists from government agencies, academia and industry. Dr. Swift earned her Ph.D. in Nutrition has and M.S. in Kinesiology at Texas A&M University. She is currently a member of the American Society for Nutrition, the Global Retailer & Manufacturer Alliance (GRMA), the Natural Products Association (NPA) ComPLI Committee, the Council for Federal Cannabis Regulation's (CFCR) SRAC. Dr. Swift is not considered an “independent director” within the meaning of Section 803 of the NYSE American Company Guide. As an employee director, she will not be appointed to any committee of our board of directors.  She shall receive a restricted stock grant of 5,000 shares of our common stock and five options to purchase 30,000 shares of our common stock, exercisable at $0.568 per share.  The restricted stock grant and options vest on the date of issuance.   In keeping with the Company’s stated commitment to increase diversity on the board which it believes supports the Company’s core values and is an essential measure of sound governance and critical to a well-functioning board, the board of directors recognizes that Dr. Swift is a minority.   As previously reported, on December 20, 2018 we closed that certain Merger Agreement, as amended, by and among our company, our subsidiaries and Cure Based Development, LLC (“Cure Based Development”). Pursuant to the terms of the Merger Agreement, as partial merger consideration CBD Holding, LLC (“CBDH”), the then sole member of Cure Based Development, was entitled to receive (the “Earnout Rights”) up to 15,250,000 additional shares of our common stock (the “ Earnout Shares ”) upon the satisfaction of certain aggregate net revenue criteria within 60 months (marking periods) following the Closing Date. The possible issuance of the Earnout Shares was approved by our shareholders in April 2019. In February 2020 CBDH distributed the Earnout Rights to its members which included affiliates of Martin A. Sumichrast (our former officer and director) and R. Scott Coffman (a current member of our board of directors and former officer).  Following the completion of the June 30, 2022 quarter within the third marking period, and in accordance with the terms of the Merger Agreement, as amended, we determined that the net revenues for the June 30, 2022 quarter within the third marking period were $8,592,892 and on August 9, 2022 we issued the members an aggregate of 409,505 shares of our common stock. The recipients were accredited investors and the issuances were exempt from registration under the Securities Act of 1933, as amended, in reliance on an exemption provided by Section 4(a)(2) of that act.       37 Table of Contents   ITEM 6. EXHIBITS.               Incorporated by Reference   Filed or Furnished No.   Exhibit Description   Form   Date Filed   Number   Herewith 2.1   Merger Agreement dated December 3, 2018 by and among Level Brands, Inc.,   AcqCo, LLC, cbdMD LLC and Cure Based Development, LLC   8-K   12/3/18   2.1                           2.2   Articles of Merger dated December 20, 2018 as filed with the Secretary of State of   Nevada merging AcqCo, LLC with and into Cure Based Development, LLC   10-Q   2/14/19   2.2                           2.3   Articles of Merger dated December 20, 2018 as filed with the Secretary of State of   North Carolina merging AcqCo, LLC with and into Cure Based Development, LLC   10-Q   2/14/19   2.3                           2.4   Articles of Merger dated December 20, 2018 as filed with the Secretary of State of   Nevada merging Cure Based Development, LLC with an into cbdMD LLC   10-Q   2/14/19   2.4                           2.5   Articles of Merger dated December 20, 2018 as filed with the Secretary of State of   North Carolina merging Cure Based Development, LLC with an into cbdMD LLC   10-Q   2/14/19   2.5                           2.6   Addendum No. 1 to Agreement and Plan of Merger dated March 31, 2021   8-K   4/1/21   10.1                           3.1   Articles of Incorporation   1-A   9/18/17   2.1                           3.2   Articles of Amendment to the Articles of Incorporation –  filed April 22, 2015   1-A   9/18/17   2.2                           3.3   Articles of Amendment to the Articles of Incorporation –  filed June 22, 2015   1-A   9/18/17   2.3                           3.4   Articles of Amendment to the Articles of Incorporation –  filed November 17, 2016   1-A   9/18/17   2.4                           3.5   Articles of Amendment to the Articles of Incorporation –  filed December 5, 2016   1-A   9/18/17   2.5                           3.6   Articles of Amendment to Articles of Incorporation   8-K   4/29/19   3.7                           3.7   Articles of Amendment to the Articles of Incorporation including the Certificate of   Designations, Rights and Preferences of the 8.0% Series A Cumulative Convertible   Preferred Stock   8-A   10/11/19   3.1(f)                           3.8   Bylaws, As amended   1-A   9/18/17   2.6                           10.21   Equipment Purchase Agreement dated April 7, 2022 +   10-Q   5/13/22   10.21                           10.22   Membership Interest Transfer Agreement effective June 22, 2022               Filed                       31.1   Certification of Principal Executive Officer (Section 302)               Filed                       31.2   Certification of Principal Financial Officer (Section 302)               Filed                       32.1   Certification of Principal Executive Officer and Principal Financial Officer (Section   906)               Filed   101.INS   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document Filed 101.SCH   Inline XBRL Taxonomy Extension Schema Document Filed 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document Filed 101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document Filed 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed 104   Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101) Filed   + Exhibits and/or schedules have been omitted.  The Company hereby agrees to furnish to the staff of the Securities and Exchange Commission upon request any omitted information.   38 Table of Contents   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 thereunto duly authorized.     cbdMD, INC.                         August 11, 2022 By: /s/ T. Ronan Kennedy       T. Ronan Kennedy, interim Principal Executive Officer                   August 11, 2022 By: /s/ T. Ronan Kennedy       T. Ronan Kennedy, Chief Financial Officer,       principal financial and accounting officer             39