Item 1.01. Entry into a Material Definitive Agreement.
On April 30, 2023, cbdMD, Inc., a North Carolina corporation (the "Company"),
entered into an underwriting agreement (the "Underwriting Agreement") with Maxim
Group LLC as representative of the underwriters named therein (the
"Underwriter") relating to the issuance and sale of 1,350,000 shares of the
Company's common stock, par value $0.001 per share (the "Offering"). The price
to the public in the Offering was $2.10 per share, before underwriting discounts
and commissions. Under the terms of the Underwriting Agreement, the Company
granted the Underwriter an option, exercisable for 45 days, to purchase up to an
additional 202,500 shares of common stock. The net proceeds to the Company from
the Offering were approximately $2.5 million, after deducting underwriting
discounts and commissions and estimated Offering expenses payable by the
Company, and does not take into account the exercise by the Underwriter of its
option to purchase additional shares of common stock. The Company intends to use
the net proceeds from the Offering for general working capital and selective
mergers and acquisitions. The Offering closed on May 3, 2023.
The Offering was made pursuant to the Company's shelf registration statement on
Form S-3 (File No. 333-264143) which became effective on April 21, 2022, as
supplemented by a preliminary and final prospectus supplement thereunder, filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act of 1933 (the "Securities Act").
The Underwriting Agreement contains customary representations, warranties and
agreements by the Company, customary conditions to closing, indemnification
obligations of the Company and the Underwriter, including for liabilities under
the Securities Act, other obligations of the parties and termination provisions.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current
Report on Form 8-K and is incorporated herein by reference. The foregoing
description of the terms of the Underwriting Agreement is qualified in its
entirety by such exhibit.
The Company also issued the Underwriter a warrant (the "Representative's
Warrant") to purchase up to 40,500 shares of its common stock exercisable at
$2.52 per share, and reimbursed the Underwriter up to $65,000 for its out of
pocket expenses, which included fees of counsel to the Underwriter, subject to
compliance with FINRA Rule 5110(f)(2)(D). The Representative's Warrant and the
shares of common stock underlying the Representative's Warrant were offered
pursuant to the exemptions from registration provided in Section 4(a)(2) under
the Securities Act and Regulation D promulgated thereunder, and were not offered
pursuant to the Company's prospectus supplement and accompanying prospectus. The
form of Representative's Warrant is filed as Exhibit 4.1 to this Current Report
on Form 8-K and is incorporated herein by reference. The foregoing description
of the terms of the Representative's Warrant is qualified in its entirety by
such exhibit.
The legal opinion, including the related consent, of Nason, Yeager, Gerson,
Harris & Fumero, P.A. relating to the legality of the issuance and sale of the
shares of the Company's common stock in the Offering is filed as Exhibit 5.1 to
this Current Report.
The Company and its officers, directors and affiliates have entered into lock-up
agreements with the Underwriter pursuant to which they have agreed not to sell,
transfer, assign or otherwise dispose of the shares of the Company's securities
beneficially owned by them, subject to certain exclusions as set forth therein,
for a period ending 75 days, for the Company, and 90 days for the Company's
officers, directors and affiliates, from the closing date of the Offering. One
of our executive officers and an employee purchased up to $20,000 of shares of
the Company's common stock in the Offering at the public Offering price. The
Underwriter received the same underwriting discount on the shares purchased by
these individuals as they did on the shares sold to the public in this offering.
This Current Report contains forward-looking statements that involve risk and
uncertainties, such as statements related to the anticipated closing of the
Offering and the amount of net proceeds expected from the Offering. The risks
and uncertainties involved include the Company's ability to satisfy certain
conditions to closing on a timely basis or at all, as well as other risks
detailed from time to time in the Company's Securities and Exchange Commission
filings.
Item 8.01. Other Events.
On April 28, 2023, the Company issued a press release announcing that it had
commenced the Offering, and on April 30, 2023, the Company issued a press
release announcing that it had priced the Offering. On May 3, 2023, the Company
issued a press release announcing that it had closed the Offering Copies of
these press releases are attached as Exhibits 99.1, 99.2 and 99.3 hereto,
respectively, and are incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
1.1 Underwriting Agreement, dated as of April 30, 2023, between
cbdMD, Inc and Maxim Group LLC.
4.1 Form of Representative's Warrant
5.1 Opinion of Nason, Yeager, Gerson, Harris & Fumero, P.A.
23.1 Consent of Nason, Yeager, Gerson, Harris & Fumero, P.A. (contained
in Exhibit 5.1).
99.1 Press Release of cbdMD, Inc., dated April 28, 2023
99.2 Press Release of cbdMD, Inc., dated April 30, 2023
99.3 Press Release of cbdMD, Inc., dated May 3, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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