What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2025-02-13 · 253 added, 147 removed, 554 unchanged (42% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2024 AND SEPTEMBER 30, 2024

March 31, 2025 AND SEPTEMBER 30, 2024

September 30,

2 unchanged sentences

$ 1,765,234 $ 2,452,553

Accounts receivable

Accounts receivable, net

1,052,069 983,910

Inventory, net

2,662,705 2,365,187

2 unchanged sentences

Prepaid sponsorship

11,478 21,754

Prepaid expenses and other current assets

9 unchanged sentences

62,708 62,708

Intangible assets

Intangible assets, net

2,507,046 2,889,580

6 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2024 AND SEPTEMBER 30, 2024

March 31, 2025 AND SEPTEMBER 30, 2024

September 30,

12 unchanged sentences

Convertible notes, at fair value

362,021 1,171,308

Total current liabilities

13 unchanged sentences

185,194,577 184,033,012

Comprehensive other expense

( 7,777 ) ( 7,189 )

Other comprehensive income

Accumulated deficit

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE Three MONTHS ENDED December 31, 2024 and 2023

Three months Ended

FOR THE THREE AND Six MONTHS ENDED March 31, 2025 and 2024

Three Months Ended March 31,

Six Months Ended March 31,

$ 4,749,426 $ 4,816,444 $ 9,862,902 $ 10,192,075

- ( 439,926 ) - ( 440,152 )

Total Net Sales

8 unchanged sentences

Decrease of contingent liability

- 4,828 - 74,580

Decrease (increase) in fair value of convertible debt

Interest expense

( 2,583 ) ( 1,446,000 ) 87,380 ( 1,446,000 )

Income (loss) before provision for income taxes

Interest expense (income)

7,642 ( 18,399 ) 19,046 ( 18,817 )

Net Income (loss)

Loss before provision for income taxes

( 480,757 ) ( 3,010,562 ) ( 465,662 ) ( 4,007,065 )

) ( 3,010,562 ) ( 465,662 ) ( 4,007,065 )

Preferred dividends

4 unchanged sentences

Net Loss per share:

Basic and Diluted earnings per share

Basic and Diluted loss per share

( 1.90 ) ( 10.84 ) ( 3.67 ) ( 16.23 )

2 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE Three MONTHS ENDED December 31, 2024 and 2023

Three months Ended

Net Income (loss)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE AND Six MONTHS ENDED March 31, 2025 and 2024

Three Months Ended March 31,

Six Months Ended March 31,

$ ( 480,757 ) $ ( 3,010,562 ) $ ( 465,662 ) $ ( 4,007,065 )

Comprehensive Income (loss)

Comprehensive Loss

( 480,757 ) ( 3,010,562 ) ( 465,662 ) ( 4,007,065 )

Other Comprehensive income

Preferred dividends

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE Three MONTHS ENDED December 31, 2024 and 2023

Three months Ended

FOR THE Six MONTHS ENDED March 31, 2025 and 2024

Six Months Ended

Cash flows from operating activities:

4 unchanged sentences

Issuance of stock for services

Intangibles amortization

382,534 345,684

2 unchanged sentences

Increase (decrease) in fair value of convertible debt

( 87,380 ) 1,446,000

Amortization of operating lease asset

14 unchanged sentences

54,160 ( 84,497 )

Net cash flows from operating activities

Cash flows from operating activities

( 507,426 ) ( 809,948 )

2 unchanged sentences

( 179,893 ) ( 180,015 )

Net Cash flows from investing activities

Cash flows from investing activities

( 179,893 ) ( 180,015 )

Cash flows from financing activities:

Net Cash flows from financing activities

Proceeds from issuance of common stock

Cash flows from financing activities

Net increase (decrease) in cash

7 unchanged sentences

Interest expense

Non-cash financing/investing activities:

$ 19,046 $ 18,817

Non-cash financial/investing activities:

Issuance of shares for conversion of debt and accrued interest

Issuance of shares for services $ 82,250 $ -

Change in lease asset $ 1,164,652 $ -

$ 1,079,639 $ -

Issuance of shares for service

Change in lease asset related to extinguishment of HQ lease and new warehouse lease

$ ( 1,723,544 ) $ -

Preferred dividends accrued but not paid

$ 2,001,001 $ 2,001,000

See Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE three months ended December 31, 2024

FOR THE six months ended March 31, 2025

Preferred Stock

2 unchanged sentences

492,383 $ 492 5,000,000 $ 5,000

Vesting of Restricted stock

$ ( 7,189 ) $ 184,033,012 $ ( 182,067,898 ) $ 1,963,417

Issuance of Common stock

1,000 1 - - - ( 1 ) - -

Issuance of restricted stock for share based compensation

11 unchanged sentences

692,891 $ 693 5,000,000 $ 5,000 $ ( 7,777 ) $ 184,836,980 $ ( 183,053,305 ) $ 1,781,591

Issuance of Common stock

500 1 - - - ( 1 ) - -

Issuance of restricted stock for share based compensation

- - - - - 861 - 861

Change in fair value of debt related to credit risk

- - - - 7,777 - - 7,777

Issuance of Common Stock, Convertible Notes

89,964 89 - - - 356,737 - 356,826

Preferred dividend declared, not paid

- - - - - - ( 1,000,500 ) ( 1,000,500 )

- - - - - - ( 480,757 ) ( 480,757 )

Balance, March 31, 2025

783,355 $ 783 5,000,000 $ 5,000 $ - $ 185,194,577 $ ( 184,534,562 ) $ 665,798

See Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE three months ended December 31, 2023

FOR THE six months ended March 31, 2024

Preferred Stock

Comprehensive

Balance, September 30, 2023

11 unchanged sentences

370,132 $ 370 5,000,000 $ 5,000 $ - $ 183,392,147 $ ( 176,360,774 ) $ 7,036,743

Issuance of Common Stock

2,491 2 - - - 15,781 - 15,783

Issuance of options for share based compensation

- - - - - 1,080 - 1,080

Issuance of restricted stock for share based compensation

- - - - - 303 - 303

Change in fair value of debt related to credit risk

- - - - ( 6,000 ) - - ( 6,000 )

Issuance of Common stock - Keystone

8,027 8 - - - 49,992 - 50,000

Preferred dividend

- - - - - - ( 1,000,500 ) ( 1,000,500 )

- - - - - - ( 3,010,562 ) ( 3,010,562 )

Balance, March 31, 2024

380,650 $ 380 5,000,000 $ 5,000 $ ( 6,000 ) $ 183,459,303 $ ( 180,371,836 ) $ 3,086,847

See Notes to Condensed Consolidated Financial Statements

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE three months ended December 31, 2024 and 2023 (unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE three and six months ended March 31, 2025 and 2024 (unaudited)

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

10 unchanged sentences

All material intercompany transactions and balances have been eliminated in consolidation.

Reverse Stock Split

On April 17, 2025, the board effected a reverse stock split at a ratio of one -for- eight , effective as of May 6, 2025 .

Unless otherwise indicated, all share numbers in this filing, including shares of common stock and all securities convertible into, or exercisable for, shares of common stock, give effect to the reverse stock split.

Use of Estimates

10 unchanged sentences

Management’s determination of the allowance for credit losses is based on an evaluation of the receivables, past experience, current economic conditions, and other risks inherent in the receivables portfolio.

The balance for allowance for credit losses was $ 310,712 and $ 346,197 December 31, 2024 and September 30, 2024, respectively.

The balance for allowance for credit losses was $ 416,844 and $ 346,197 on March 31, 2025 and September 30, 2024 , respectively.

The following table represents a summary of the allowance for credit losses for the periods ended March 31, 2025 and September 30, 2024:

March 31, 2025 September 30, 2024

Credit loss allowance - beginning of period

$ 346,197 $ 42,180

Credit loss provision

388,693 358,339

Write offs ( 318,046 ) ( 54,322 )

Credit loss allowance - end of period $ 416,844 $ 346,197

Merchant Receivable and Reserve

3 unchanged sentences

Fees and reserves can change periodically with notice from the processors.

At December 31, 2024 and September 30, 2024, the receivable from payment processors included approximately $ 631,033 and $ 621,678 respectively, for the waiting period amount and is recorded as accounts receivable in the accompanying condensed consolidated balance sheet.

At March 31, 2025 and September 30, 2024 , the receivable from payment processors included approximately $ 694,515 and $ 621,678 respectively, for the waiting period amount and is recorded as accounts receivable in the accompanying condensed consolidated balance sheet.

Inventory is stated at the lower of cost or net realizable value with cost being determined on a weighted average basis.

2 unchanged sentences

We assess inventory quarterly for slow moving products and potential impairments and at a minimum perform a physical inventory count annually near fiscal year end.

The reserve for inventory was $ 82,036 and $ 0 for March 31, 2025 and September 31, 2024, respectively.

Property and Equipment

20 unchanged sentences

For investment other securities without a readily determinable fair value, the Company may elect to estimate its fair value at cost less impairment plus or minus changes resulting from observable price changes.

The Company elected the fair value option under ASC 825 Fair Value Measurements for it’s Convertible notes.

The Company elected the fair value option under ASC 825 Fair Value Measurements for its Convertible notes.

The convertible notes were initially recognized at fair value on the balance sheet.

All subsequent changes in fair value, excluding the impact of the change in fair value related to instrument-specific credit risk are recorded in non-operating income.

The changes in fair value related to instrument-specific credit risk is recorded through other comprehensive income (loss).

The changes in fair value related to instrument-specific credit risk is recorded through other comprehensive loss.

See Note 11 for more information related to the convertible notes.

12 unchanged sentences

Contract liabilities represent unearned revenues and are presented as deferred revenue or customer deposits on the condensed consolidated balance sheets.

Other than account receivable, the Company has no material contract assets nor contract liabilities at December 31, 2024 .

Other than account receivable, the Company has no material contract assets nor contract liabilities at March 31, 2025 .

The following tables represent a disaggregation of revenue by sales channel:

Three Months Ended December 31,

Three Months Ended March 31,

E-commerce sales

4 unchanged sentences

$ 4,749,426 100.0 % $ 4,376,518 100.0 %

Six Months Ended March 31,

E-commerce sales

$ 7,587,523 76.9 % $ 8,049,724 82.5 %

Wholesale sales

2,275,379 23.1 % 1,702,199 17.5 %

Total Net Sales

$ 9,862,902 100.0 % $ 9,751,923 100.0 %

Cost of Sales

3 unchanged sentences

The Company is a North Carolina corporation that is treated as a corporation for federal and state income tax purposes.

CBDI, Therapeutics, and Paw CBD are wholly owned subsidiaries and are disregarded entities for tax purposes and their entire share of taxable income or loss is included in the tax return of the Company and as of March 15, 2021, Therapeutics is also a wholly owned subsidiary and is a disregarded entity for tax purposes and its entire share of taxable income or loss is included in the tax return of the Company.

CBDI, Therapeutics, Proline Global, and Paw CBD are wholly owned subsidiaries and are disregarded entities for tax purposes and their entire share of taxable income or loss is included in the tax return of the Company.

The Company accounts for income taxes pursuant to the provisions of the Accounting for Income Taxes topic of ASC 740 which requires, among other things, an asset and liability approach to calculating deferred income taxes.

9 unchanged sentences

Management considers these customer receivables to represent normal business risk.

The Company did not have any customers that represented a significant amount of our sales for the three months ended December 31, 2024 .

The Company did not have any customers that represented a significant amount of our sales for the three and six months ended March 31, 2025 .

Stock-Based Compensation

12 unchanged sentences

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

The Company experienced income of $ 15,095 for the three months ended December 31, 2024 , resulting in a working capital deficit of $ 2,809,100 at December 31, 2024 .

While the Company is taking strong action, believes in the viability of its strategy and path to profitability, and in its ability to raise additional funds, there can be no assurances to that effect.

The Company experienced a loss of $ 465,662 for the six months ended March 31, 2025 , resulting in a working capital deficit of $ 3.7 million at March 31, 2025 ,which includes $ 6.7 million in accrued dividends that have subsequently converted to equity, inclusive with the conversion of the Company's series A Preferred Stock.

While the Company believes in the viability of its strategy and path to profitability, and in its ability to raise additional funds, there can be no assurances of these actions.

The Company’s working capital position may not be sufficient to support the Company’s daily operations for the twelve months subsequent to the issuance of these annual financial statements.

3 unchanged sentences

Convertible Notes

Effective February 1, 2024, the Company entered into a Securities Purchase Agreement dated January 30, 2024 ( the “Purchase Agreement”) with five institutional investors (the “Investors”) whereby the Investors advanced the Company an aggregate of $ 1,250,000 gross proceeds and the Company issued each Investor an 8 % Senior Secured Original Issue 20 % Discount Convertible Promissory Note, in the aggregate principal amount of $ 1,541,666 (the “Notes”).

Effective February 1, 2024, the Company entered into a Securities Purchase Agreement dated January 30, 2024 with five institutional investors (the “Investors”) whereby the Investors advanced the Company an aggregate of $ 1,250,000 gross proceeds and the Company issued each Investor an 8 % Senior Secured Original Issue 20 % Discount Convertible Promissory Note, in the aggregate principal amount of $ 1,541,666 (the “Notes”).

The Company is using the proceeds from the issuance of the Notes for working capital and general corporate purposes.

The table below represents the change in fair value of the convertible notes as of December 31, 2024.

The table below represents the change in fair value of the convertible notes as of March 31, 2025 .

As of the end of January 2025 the Notes were satisfied in full and no longer an obligation of the Company.

Markets for Significant Other Significant

3 unchanged sentences

Balance at September 30, 2024 - - 1,171,308

Conversion of convertible notes ( 719,324

Change in fair value of convertible notes - - ( 89,963 )

Balance at December 31, 2024 $ - $ - $ 362,021

Balance December 31, 2024 $ - $ - $ 362,021

Conversion of convertible notes ( 364,604 )

Change in fair value of convertible notes - - 2,583

Balance at March 31, 2025 $ - $ - $ -

New Accounting Standards

On December 14, 2023 the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures.

This standard went into effect for fiscal years beginning after December 31, 2024 and will go into effect for the company beginning with it's fiscal year ending September 30, 2025.

The Company is currently evaluating the impacts of this standard on the consolidated financial statements.

The Company adopted ASU 2023 - 07 , Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures Measurement.

This standard went into effect for fiscal years beginning after December 13, 2023 This standard enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures.

This standard went into effect for fiscal years beginning after December 13, 2023.

This standard enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures.

The Company is currently evaluating the impacts of this standard on the consolidated financial statements.

11 unchanged sentences

NOTE 3 - INVENTORY

Inventory at December 31, 2024 and September 30, 2024 consists of the following:

Inventory at March 31, 2025 and September 30, 2024 consists of the following:

September 30,

8 unchanged sentences

$ 2,884,334 $ 2,524,193

Abnormal amounts of idle facility expense, freight, handling costs, scrap and wasted material (spoilage) are expensed in the period they are in incurred and no material expenses related to these items occurred in the three months ended December 31, 2024 .

Abnormal amounts of idle facility expense, freight, handling costs, scrap and wasted material (spoilage) are expensed in the period they are incurred and no material expenses related to these items occurred in the three or six months ended March 31, 2025 .

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2024 and September 30, 2024 consisted of the following:

Property and equipment at March 31, 2025 and September 30, 2024 consisted of the following:

September 30,

10 unchanged sentences

$ 432,792 $ 454,268

Depreciation expense related to property and equipment was $ 106,740 and $ 110,864 for the three months ended December 31, 2024 and 2023 , respectively.

Depreciation expense related to property and equipment was $ 94,629 and $ 117,750 for the three months ended March 31, 2025 and 2024 , respectively, and was $ 201,369 and $ 228,615 for the six months ended March 31, 2025 and 2024 , respectively.

NOTE 5 – INTANGIBLE ASSETS

Intangible Assets

Intangible assets as of December 31, 2024 and September 30, 2024 consisted of the following:

Intangible assets as of March 31, 2025 and September 30, 2024 consisted of the following:

September 30,

6 unchanged sentences

Tradename related to CBD MD limited mark

368,000 368,000

Tradename related to DirectCBDOnline.com

5 unchanged sentences

$ 2,507,046 $ 2,889,580

Amortization expense related to definite lived intangible assets was $ 191,267 and $ 172,842 for the three months ended December 31, 2024 and 2023 .

Amortization expense related to definite lived intangible assets was $ 191,267 and $ 172,842 for the three months ended March 31, 2024 and 2025, respectively, and was $ 382,534 and $ 345,684 for the six months ended March 31, 2025 and 2024, respectively.

NOTE 6 – RELATED PARTY TRANSACTIONS

4 unchanged sentences

The Company reviewed ASC 480 – Distinguishing Liabilities from Equity in order to determine the appropriate accounting treatment for the preferred stock and determined that the preferred stock should be treated as equity.

There were 5,000,000 shares of 8.0 % Series A Cumulative Convertible Preferred Stock issued and outstanding at December 31, 2024 and September 30, 2024 .

The total amount of preferred dividends declared and accrued were $ 1,006,500 for the three months ended December 31, 2024 , respectively, and the total amount of preferred dividends declared and accrued were $ 1,000,501 for the three months ended December 31, 2023 .

There were 5,000,000 shares of 8.0 % Series A Cumulative Convertible Preferred Stock issued and outstanding at March 31, 2025 and September 30, 2024 .

The total amount of preferred dividends declared and accrued were $ 1,000,500 and $ 2,001,001 for both the three and six months ended March 31, 2025 , respectively, and the total amount of preferred dividends declared and accrued were $ 1,000,501 and $ 2,001,000 for the three and six months ended March 31, 2024 .

Subsequent to quarter end all preferred stock including all declared and accrued dividends was converted to common stock as further described in Note 15.

Common Stock – The Company is authorized to issue 150,000,000 shares of common stock, par value $ 0.001 per share.

There were 5,543,124 and 3,939,057 shares of common stock issued and outstanding at December 31, 2024 and September 30, 2024 , respectively.

There were 783,355 and 492,383 shares of common stock issued and outstanding at March 31, 2025 and September 30, 2024 , respectively.

Stock Options - The Company currently has awards outstanding with service conditions and graded-vesting features.

1 unchanged sentence

Preferred stock transactions:

The Company had no preferred stock transactions in the three months ended December 31, 2024 and 2023 .

The Company had no preferred stock transactions in the three and six months ended March 31, 2025 and 2024 .

Common stock transactions:

In the three months ended December 31, 2024 :

During the quarter the Company issued 1,421,067 shares of common stock for conversion of the Notes.

In the six months ended March 31, 2025 :

In March 2025, the Company issued 1,875 shares of restricted stock under the Company's 2015 equity incentive plan to a new employee that vest in 12 months.

During January of 2025, the Company issued 89,964 shares of common stock for conversions of the Notes.

During the first quarter of 2025 the Company issued 177,634 shares of common stock for conversion of the Notes.

In November 2024, the Company issued 21,875 shares of common stock to a consultant for advisory services.

In the three months ended December 31, 2023:

In the six months ended March 31, 2024:

In January 2024 , the Company issued 8,028 shares under its ELOC.

In January 2024 , the Company issued 2,478 shares as part of the final earnout related to a prior transaction.

Stock option transactions:

There were no stock options granted in the three and six months ended March 31, 2025 and 2024.

NOTE 8 – STOCK BASED COMPENSATION

The fair value of each time-based award is estimated on the date of grant using the Black-Scholes option valuation model.

Our weighted-average assumptions used in the Black-Scholes valuation model for equity awards with time-based vesting provisions granted during the year.

The following table summarizes stock option activity under both plans for the three months ended December 31, 2024 :

Our weighted-average assumptions are used in the Black-Scholes valuation model for equity awards and are calculated based on time-based vesting provisions granted during the year.

The following table summarizes stock option activity for the six months ended March 31, 2025 :

Number of shares

5 unchanged sentences

( 14 ) 82.80 - -

Outstanding at December 31, 2024

Outstanding at March 31, 2025

5,517 992.03 2.64 -

Exercisable at December 31, 2024

Exercisable at March 31, 2025

5,517 $ 992.03 2.64 $ -

As of December 31, 2024 , there was approximately $ 3,925 of total unrecognized compensation cost related to non-vested stock options which vest over a period of approximately 0.75 years.

Restricted Stock Award transactions:

The Company had 8,000 shares of previously issued restricted stock vest during the three months ended December 31, 2024.

As of March 31, 2025 , there was approximately $ 2,161 of total unrecognized compensation cost related to non-vested stock options which vest over a period of approximately 0.5 years.

NOTE 9 - WARRANTS

Transactions involving the Company equity-classified warrants for the three months ended December 31, 2024 are summarized as follows:

Transactions involving the Company equity-classified warrants for the six months ended March 31, 2025 are summarized as follows:

Number of shares

5 unchanged sentences

( 267 ) 1,024.38 - -

Outstanding at December 31, 2024

Outstanding at March 31, 2025

5,901 208.75 0.35 -

Exercisable at December 31, 2024

Exercisable at March 31, 2025

5,901 $ 208.75 - $ -

The following table summarizes outstanding common stock purchase warrants as of December 31, 2024 :

The following table summarizes outstanding common stock purchase warrants as of March 31, 2025 :

Number of shares

1 unchanged sentence

Exercisable at $1,346.40 per share

56.25 January 2025

Exercisable at $168.30 per share

429 $ 1,346.40 December 2025

6 unchanged sentences

NOTE 11 – NOTE PAYABLE

Effective February 1, 2024 ( the “Effective Date”), the Company entered into a Securities Purchase Agreement dated January 30, 2024 ( the “Purchase Agreement”) with five institutional investors (the “Investors”) whereby the Investors advanced the Company an aggregate of $ 1,250,000 gross proceeds and the Company issued each Investor an 8 % Senior Secured Original Issue 20 % Discount Convertible Promissory Note, in the aggregate principal amount of $ 1,541,666 (the “Notes”).

The Company intends to use the proceeds from the issuance of the Notes for working capital and general corporate purposes.

1 unchanged sentence

The Note is convertible into shares of common stock at any time following the date of issuance at the Investor’s option at an initial conversion price of $ 5.472 per share (the “Conversion Price”), subject to certain adjustments.

If 30 calendar days, 60 calendar days, 90 calendar days, 120 calendar days, or 180 calendar days after the effective date of a registration statement registering the shares of common stock issuable upon conversion of the Notes (the “Registration Statement”) (the “Adjustment Dates”), the Conversion Price then in effect is higher than the Market Conversion Price then in effect on the Adjustment Date, the Conversion Price shall automatically decrease to the Market Conversion Price (as defined under the Note).

If 30 calendar days, 60 calendar days, 90 calendar days, 120 calendar days, or 180 calendar days after the effective date of a registration statement registering the shares of common stock issuable upon conversion of the Notes (the “Adjustment Dates”), the Conversion Price then in effect is higher than the Market Conversion Price then in effect on the Adjustment Date, the Conversion Price shall automatically decrease to the Market Conversion Price (as defined under the Note).

The Conversion Price is subject to a $ 2.40 floor price.

As of the filing date of this report, the effective Conversion Price is $ 0.5066 .

The Company elected the fair value option under ASC 825 Fair Value Measurements for the Notes.

1 unchanged sentence

All subsequent changes in fair value, excluding the impact of the change in fair value related to instrument-specific credit risk are recorded in non-operating income.

The changes in fair value related to instrument-specific credit risk is recorded through other comprehensive income (loss).

The overall change in fair value of the Notes during the quarter ended December 31, 2024 was a decrease of $809,287.

The overall change in principal value related to the conversion of Notes to commons stock during the quarter ended December 31, 2024 was a decrease of $719,911.

As of December 31, 2024 , total fair value of the Notes is $ 362,021 of which $ 363,798 represents the total principal outstanding.

Subsequent to the period covered by this report, the remaining principal and interest of the Notes were fully converted during January 2025.

See Note 15 “Subsequent Events”.

The changes in fair value related to instrument-specific credit risk is recorded through other comprehensive loss.

During January 2025, the Company issued an aggregate of 89,964 shares of common stock upon the conversion of the Notes to satisfy the remaining balance of principal and accrued interest on the Notes.

NOTE 12 – LEASES

The Company has lease agreements for its warehouse and executive office with the lease period expiring in September 2026.

The Company has lease agreements for its warehouse and executive office the lease periods expiring in September 2026.

ASC 842 requires the recognition of leasing arrangements on the consolidated balance sheet as right-of-use assets and liabilities pertaining to the rights and obligations created by the leased assets.

The Company determines whether an arrangement is a lease at inception and classify it as finance or operating.

All of the Company’s leases are classified as operating leases.

The Company’s lease do not contain any residual value guarantees.

The Company’s lease is classified as an operating lease.

The Company’s leases does not contain any residual value guarantees.

Right-of-use lease assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term.

Since the interest rate implicit in our lease arrangements is not readily determinable, the Company determined an incremental borrowing rate for each lease based on the approximate interest rate on a collateralized basis with similar remaining terms and payments as of the lease commencement date to determine the present value of future lease payments.

Since the interest rate implicit in our lease arrangements is not readily determinable, the Company determined an incremental borrowing rate for it's lease based on the approximate interest rate on a collateralized basis with similar remaining terms and payments as of the lease commencement date to determine the present value of future lease payments.

The Company’s lease terms may include options to extend or terminate the lease.

In addition to the monthly base amounts in the lease agreements, the Company is required to pay real estate taxes, insurance and common area maintenance expenses during the lease terms.

In addition to the monthly base amounts in the lease agreement, the Company is required to pay real estate taxes, insurance and common area maintenance expenses during the lease term.

Lease costs on operating leases are recognized on a straight-line basis over the lease term and included as a selling, general and administrative expense in the condensed consolidated statements of operations.

1 unchanged sentence

Total Operating Lease Costs

$ 180,974 $ 330,969

Supplemental cash flow information related to operating leases is summarized as follows:

Cash paid for amounts included in the measurement of operating lease liabilities

As of December 31, 2024 , our operating leases had a weighted average remaining lease term of 2.56 years and a weighted average discount rate of 4.66 %.

Future minimum aggregate lease payments under operating leases as of December 31, 2024 are summarized as follows:

$ 132,624 $ 199,264

As of March 31, 2025 , our operating lease had a weighted average remaining lease term of 1.5 years and a weighted average discount rate of 4.66 %.

Future minimum aggregate lease payments under operating leases as of March 31, 2025 are summarized as follows:

For the year ended December 31,

3 unchanged sentences

NOTE 13 – LOSS PER SHARE

At December 31, 2024 , 112,831 potential shares underlying options, unvested RSUs and warrants as well as 185,223 potential shares underlying series A preferred shares were excluded from the shares used to calculate diluted loss per share as their inclusion would be anti-dilutive.

At December 31, 2023 , 93,113 potential shares underlying options, unvested RSUs and warrants as well as 185,223 convertible preferred shares, as well as total of 283,593 available shares and remaining commitment share under the Keystone agreement were excluded from the shares used to calculate diluted loss per share as their inclusion would reduce net loss per share.

At March 31, 2025 , 7,659 potential shares underlying options, unvested RSUs and warrants as well as 23,153 potential shares underlying shares of Series A Cumulative Convertible Preferred Stock were excluded from the shares used to calculate diluted loss per share as their inclusion would be anti-dilutive.

At March 31, 2024 , 11,551 potential shares underlying options, unvested RSUs and warrants as well as 23,153 shares of Series A Cumulative Convertible Preferred Stock, as well as total of 35,450 available shares and remaining commitment shares under the Keystone agreement were excluded from the shares used to calculate diluted loss per share as their inclusion would reduce net loss per share.

NOTE 14 – INCOME TAXES

3 unchanged sentences

In addition, the net indefinite lived deferred tax items were a deferred tax asset so there was not any recognition of a deferred tax liability related to indefinite lived deferred tax liabilities.

At December 31, 2024 , the Company determined the same circumstances to be true and therefore recorded a net deferred tax asset of zero.

At March 31, 2025 , the Company determined the same circumstances to be true and therefore recorded a net deferred tax asset of zero.

NOTE 15 – SUBSEQUENT EVENTS

During January 2025, the Company issued an aggregate of 719,709 shares of common stock upon the conversion of the Notes to satisfy the remaining balance of principal and accrued interest on the Notes.

Following shareholder approval at the Company's annual meeting held on April 10, 2025 for an amendment to the Company’s Series A Preferred Stock designation to amend the Company’s articles of incorporation to provide for the automatic conversion of all of the Company’s issued and outstanding shares of Series A Preferred Stock ("Preferred Stock") at a ratio of one share of Preferred Stock to 13 shares of Common stock, the Board of Directors elected to effectuate the automatic conversion (the ”Automatic Preferred Conversion”), which provides for the conversion of each share of Preferred Stock into thirteen shares of Common Stock, inclusive of all accumulated and unpaid dividends on May 6, 2025 at 4:01 p.m.

Eastern Time (the “Mandatory Exchange Date”).

Dividends on converted shares ceased to accrue on the Mandatory Exchange Date and the Preferred Stock ceased trading on the Mandatory Exchange Date.

Shareholders who held Preferred Stock electronically in book-entry form did not need to take action (the Conversion was automatic) to receive shares of Common Stock on the Mandatory Exchange Date.

Following the Mandatory Exchange Date there are no shares of Preferred Stock issued or outstanding.

In addition, following shareholder approval at the Company's annual meeting held on April 10, 2025 for the amendment to the Company's articles of incorporation to implement a reverse stock split, the Company announced one April 17, 2025 that its Board of Directors approved a ratio of one -for- eight reverse stock split of the Company's issued and outstanding shares of Common Stock.

The Company's shareholders previously approved the reverse stock split at the Company's annual meeting and granted the board the authority to determine a final reverse split ratio.

The reverse stock split was effective at 4:02 p.m.

Eastern Time on May 6, 2025 immediately following the Automatic Preferred Conversion, following the filing and effectiveness of an amendment to the Company's articles of incorporation, as amended, with the Common Stock trading on a post-split basis when the market opened on the May 7, 2025.

The Company's Common Stock continues to trade on the NYSE American under the existing trading symbol “YCBD” with a new CUSIP number 12482W 408.

Approximately 51 roundup shares were issued as part of the reverse split.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations for the three months ended December 31, 2024 and the three months ended December 31, 2023 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.

The following discussion of our financial condition and results of operations for the three and six months ended March 31, 2025 and the three and six months ended March 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.

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Our full spectrum and Delta 9 products contain a variety of cannabinoids and terpenes in addition to CBD while maintaining small amounts of THC that fall below the level of detection and are within the limits set in the 2018 Farm Act.

In addition to our core brands, we also operate cbdMD Therapeutics, LLC to capture the Company’s ongoing investments in science related to its existing and future products, including research and development activities for therapeutic applications and Proline Global that houses some of our newer brands.

In addition to our core brands, we also operate (1) cbdMD Therapeutics to capture the Company’s ongoing investments in science related to its existing and future products, including research and development activities for therapeutic applications and (2) Proline Global which houses some of our newer brands.

Our cbdMD brand of products includes an array of high-grade, premium every day and functional CBD products, including tinctures;

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Paw CBD products have undergone the National Animal Safety Council’s rigorous audit and meet their Quality Seal standard.

Our ATRx brand was developed using the power of functional mushrooms to provide consumers a complementary natural ingredient solution for immunity, focus, digestive health, cognitive and mood benefits.

cbdMD, Paw CBD and ATRx products are distributed through our e-commerce websites, third party e-commerce sites, select distributors and marketing partners as well as a variety of brick-and-mortar retailers.

Our ATRx brand was developed using the power of functional mushrooms to provide consumers a complementary natural ingredient solution for immunity, focus, digestive health, and cognitive and mood benefits.

Herbal Oasis (“Oasis”) is a premium THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection.

cbdMD, Paw CBD, Oasis, and ATRx products are distributed through our e-commerce websites, third party e-commerce sites, select distributors and marketing partners as well as a variety of brick-and-mortar retailers.

Recent Developments

Management continues to be very focused on our goal of delivering positive earnings through a combination of optimizing our product portfolio, right-sizing our cost structure and investing in marketing that will provide positive return on customer acquisition.

During fiscal 2024 we continue to make sweeping changes that have had a very positive impact to the business.

The first quarter of fiscal 2025 is the first quarter in Company’s history as a public company that revenues increased from a prior sequential quarter, the Company achieved Net Income (before the preferred dividend accrual) and the Company achieved positive EBITDA on a Non GAAP basis.

During the first fiscal quarter cbdMD took a bigger step into the beverage category and launched our line of hemp derived, ready-to-drink beverages under the Herbal Oasis (“Oasis”) line.

We see this as currently the fastest growing category in the hemp industry.

During fiscal 2024 we made sweeping changes that have had a very positive impact to the business.

The first quarter of fiscal 2025 was the first quarter in the Company’s history as a public company that revenues increased from a prior sequential quarter, the Company achieved Non GAAP Net Income (before the preferred dividend accrual) and the Company achieved positive EBITDA on a Non GAAP basis.

While we aimed to maintain our revenue levels during the second 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, regaining compliance with NYSE American continued listing standards, and preserving 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 focus from core business operations.

In parallel, we identified and addressed weaknesses within our marketing team, which led to the implementation of leadership changes late in the quarter to strengthen customer acquisition efforts and restore profitability momentum.

Additionally, our conservative cash management 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.

In the first fiscal quarter, cbdMD entered into the booming beverage market, of which Euromonitor International estimates sales of hemp-derived THC beverages more than doubled in 2024 and are projected to balloon to $4.1 billion by 2028, with the launch of our hemp-derived, ready-to-drink Oasis line — a category we believe is the fastest-growing segment in the hemp industry today.

Momentum continued in the second quarter as Oasis secured distribution through leading alcohol distributors across Alabama, Florida, Georgia, and North Carolina.

Consumer response has been positive, and in April 2025, Oasis captured multiple medals at the prestigious 2025 LA Spirits Awards, signaling strong acceptance.

We remain focused on growing the Company in a smart, profitable manner along with appropriate cost controls.

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We expanded our ATRx Labs product in GNC during 2024.

In 2025 we began developing relationships with beer and alcohol distributors for our Oasis beverage line.

In 2025, we began developing relationships with beer and alcohol distributors for our Oasis beverage line and have added several large beer distributors to support our brand.

International Expansion:

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We continue to operate and attempt to grow the Paw CBD business.

During fiscal 2024 we have launched our nootropic mushroom line under the ATRx brand.

During fiscal 2024 we launched our nootropic mushroom line under the ATRx brand.

During the first quarter of fiscal 2025 we launched a new line of hemp derived and nootropic beverages under the Oasis brand.

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While the Company continues to evaluate M&A opportunities, as of the date of this report we currently do not have any pending or potential acquisitions.

There have been opportunities, however, our current capital structure, specifically the overhang of our Series A Preferred stock, has to this point stalled prospects.

Eliminating the Series A Preferred Stock (including the cumulative dividends and other rights and preferences of the Series A Preferred Stock) has increased the volume of opportunities we are receiving from third parties.

Results of operations

The following tables provide certain selected consolidated financial information for the periods presented:

Three Months Ended December 31,

Three Months Ended March 31,

Total net sales

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Decrease on contingent liability

Net Income (loss) before taxes

Net loss before taxes

Net loss attributable to cbdMD Inc.

common shareholders

Six Months Ended March 31,

Total net sales

Cost of sales

Gross profit as a percentage of net sales

Operating expenses

Operating loss from operations

Decrease on contingent liability

Net loss before taxes

Net loss attributable to cbdMD Inc.

common shareholders

We record product sales primarily through two main delivery channels, direct to consumers via our E-commerce sales and direct to wholesalers utilizing our internal sales team.

The following table provides information on the contribution of net sales by type of sale to our total net sales.

Three Months Ended March 31,

E-commerce sales

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Total Net Sales

We had total net sales of $5.1 million and $5.4 million for the three months ended December 31, 2024 and 2023, respectively, resulting in a decrease in net sales of $0.3 million or 4.9% quarter over quarter.

This decrease is partially attributable to a decrease of $0.5 million in e-commerce sales year over year while wholesale sales increased by $0.2 million.

The decrease was primarily due to a reduction in marketing spend and ongoing market changes.

However, wholesale sales have recently seen a positive impact related to changes in our team and product portfolio year over year.

Sequentially, revenue grew by 12%.

Six Months Ended March 31, 2025

E-commerce sales

Wholesale sales

Total Net Sales

We had total net sales of $4.7 million and $4.4 million for the three months ended March 31, 2025 and 2024, respectively, resulting in an increase in net sales of $0.3 million or 9% quarter over quarter.

This increase is partially attributable to a year over year $0.36 million increase in wholesale sales as a result of an allowance provided in 2024 to a large customer.

Sequentially, revenue declined by 7%.

For the six months ended March 31, 2025, revenues were up over 1%.

Our team continues to focus on all areas of driving revenue improvement.

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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 33.5% and 33.8% for three months ended December 31, 2024 and 2023, respectively.

This slight decrease in cost of sales is mostly attributed to ongoing cost saving initiatives.

Our cost of sales as a percentage of net sales was 37.7% and 41.0% for three months ended March 31, 2025 and 2024, respectively.

This slight decrease in cost of sales is mostly attributed to the credit provided to one of our customers during 2024 and offset by an increase in warehouse rent and rent related costs that began impacting the Company at the end of November 2024.

Operating expenses

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Consolidated Operating Expenses

The following tables provide information on our operating expenses for the three months ended December 31, 2024 and 2023:

Three Months Ended December 31,

The following tables provide information on our operating expenses for the three and six months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Staff related expense

Accounting/legal expense

Professional outside services

Advertising/marketing/social media/events/tradeshows/sponsorships/affiliate commissions

Accounting/legal expense/professional outside services

Marketing/Advertising

Merchant fees

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All other expenses

Our overall operating expenses decreased by approximately $1.2 million or 26% for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023.

The year over year decrease was primarily driven by management's continued ongoing efforts to reduce our cost structure including decreases in staff related expenses, marketing expenses, and professional, accounting and legal expenses.

Six Months Ended March 31,

Staff related expense

Accounting/legal expense/professional outside services

Marketing/Advertising

Merchant fees

R&D and regulatory

Rent and utilities

Non-cash stock compensation

Intangibles Amortization

All other expenses

Our overall operating expenses decreased by approximately $0.7 million or 17% for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

For the six months ended March 31, 2025 operating expenses decreased $1.8 million.

The year over year decrease was primarily driven by management's continued ongoing efforts to reduce our cost structure including rental related decreases as our HQ office was eliminated as well as reduction in professional, accounting and legal expenses.

Our team continues to pursue cost saving initiatives, however after significant progress in 2023 and 2024, larger saving opportunities are harder to identify and implement.

We are closely watching marketing expenses and anticipate seeing some increases in future quarters with the goal of positively impacting (increasing) revenues.

Corporate overhead and allocation of management fees to our segments

Included in our consolidated operating expenses are expenses associated with our corporate overhead which are not allocated to the operating business unit, including (i) staff related expenses;

(ii) accounting and legal expenses;

(iii) professional outside services;

(iv) travel and entertainment expenses;

(vi) business insurance;

and (vii) non-cash stock compensation expense.

We are closely watching marketing expenses and working to improve spend efficiency with the goal of positively impacting (increasing) revenues.

Liquidity and Capital Resources

We had cash and cash equivalents on hand of approximately $1.8 million and a working capital deficit of $3.7 million.

Our working capital is reduced by approximately $5.7 million of accrued dividend payments as of December 31, 2024.

Our working capital is reduced by approximately $6.7 million of accrued dividend payments as of March 31, 2025.

At September 30, 2024 we had cash and cash equivalents of $2.4 million and working capital of negative $1.1 million.

Our working capital was reduced by approximately $4.7 million for accrued dividends payments as of September 30, 2024.

Excluding the accrued dividend payments, we had adjusted working capital of $2.8 million as of December 31, 2024 and $2.4 million as of September 30, 2024.

See non GAAP Adjusted EBITDA disclosure below.

As of September 30, 2024, our working capital was reduced by approximately $4.7 million for accrued dividends payments.

Excluding the accrued dividend payments, we had adjusted working capital of $3.3 million as of March 31, 2025 and $2.4 million as of September 30, 2024.

We do not have any commitments for material capital expenditures.

We have a commitment for cumulative dividends at an annual rate of 8% payable monthly in arrears for the prior month to our preferred shareholders.

We no longer have a commitment for cumulative dividends at an annual rate of 8% payable monthly in arrears to our preferred shareholders.

As of August 2023, we suspended paying the dividend in cash and are accruing this dividend on a monthly basis.

On April 10, 2025, shareholders approved the conversion of each share of Series A Preferred Stock into 13 shares of Common Stock, which was effective on May 6, 2025.

While the Company is taking strong action and believes that it can execute its strategy and path to profitability, and in its ability to raise additional funds, there can be no assurances to that effect.

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These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

On December 31, 2024, we received notification (the “Notice”) from the NYSE American NYSE American that the Company is no longer in compliance with an additional NYSE American continued listing standard.

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 $1,963,417 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 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.

As previously disclosed, the Company is committed to undertaking a transaction or transactions in the future to achieve compliance with the NYSE American’s requirements, including but not limited to seeking shareholder approval to convert its outstanding Series A Preferred Stock and accrued dividends, a liability totaling $5.7 million on December 31, 2024, into shares of Common Stock.

Under certain Series A Preferred Stock conversion proposals, the accrued dividend would move to equity and increase the Company’s stockholder equity.

However, there can be no assurance that the Company will be able to achieve compliance with the NYSE American’s continued listing standards within the required timeframe.

While the Notice has no immediate impact on the listing of the Company’s shares of common stock or Series A Preferred 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 and Series A Preferred 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 and Series A Preferred Stock;

(ii) reducing the number of investors willing to hold or acquire the Common Stock and Series A Preferred Stock, which could negatively impact the Company’s ability to raise equity financing;

As previously disclosed, following the period covered by this report, all outstanding shares of 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 future dividends as of March 31, 2025 were converted to equity upon the Series A Preferred conversion which we believe will bring us into compliance with the NYSE American’s continued listing standards within the Plan period, assuming we maintain the continued listing standards for two quarters.

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.

Our goal from a liquidity perspective is to use operating cash flows to fund day to day operations.

We continue to improve the Company’s operating performance, we have been able to stabilize our cash position over the last few quarters, and we believe we are getting closer to long-term sustainable cash flow production.

The conversion of the Notes provides the Company additional cash for working purposes during fiscal 2025.

Management continues to focus on profitability growing the Company in order to strengthen its balance sheet.

We comply with NYSE American continued listing standards.

We remain focused on improving the Company’s operating performance and continue to focus on profitability, and growing the Company in order to strengthen its balance sheet.

Adjusted EBITDA

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Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable rules of the Securities and Exchange Commission.

Adjusted EBITDA for the three months ended December 31, 2024 and December 31, 2023 is as follows:

Three months Ended December 31,

Adjusted EBITDA for the three and six months ended March 31, 2025 and March 31, 2024 is as follows:

Three Months Ended

Six Months Ended

GAAP (loss) from operations

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Mergers and Acquisitions and financing transaction expense (2)

Non-cash expense incurred as a credit (3)

Non-cash accelerated amortization of expense related to terminated IT contracts

Non-GAAP adjusted EBITDA

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

(1) 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.

(2) Represents expenses incurred in relation to M&A and financing activities during the three and six months ended March 31, 2024.

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

Critical accounting policies

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Recent accounting pronouncements

Please see Note 1 – Organization and Summary of Significant Accounting Policies appearing in the consolidated financial statements included in this report for information on accounting pronouncements.

Please see Note 1 – Organization and Summary of Significant Accounting Policies appearing in the condensed consolidated financial statements included in this report for information on accounting pronouncements.

Off balance sheet arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements