cbdMD Narrows Losses, Simplifies Capital Amidst Regulatory Headwinds

TL;DR

**YCBD is a risky bet; while they've cleaned up their balance sheet, federal regulations could wipe out nearly half their revenue, making their growth strategy a high-stakes gamble.**

AI Summary

cbdMD, Inc. (YCBD) reported a significant reduction in its GAAP operating loss from $3.3 million in fiscal 2024 to $2.1 million in fiscal 2025, while essentially maintaining its revenue base. The company successfully simplified its capital structure in April 2025 by converting Series A Convertible Preferred stock and accrued dividends into approximately 91% of outstanding common stock, regaining compliance with NYSE American listing standards. cbdMD launched its new hemp-derived THC beverage brand, Oasis, which is now available in Texas, Alabama, Georgia, Florida, North Carolina, and Tennessee, and is experiencing sequential quarterly revenue growth despite being an initial P&L drag. The company also identified nearly $200,000 in corporate overhead savings for early 2026. However, federal regulatory action in November 2025 poses a significant threat, potentially impacting 40-45% of the company's revenue derived from full-spectrum SKUs.

Why It Matters

cbdMD's ability to reduce its operating loss and clean up its capital structure is a critical step towards financial stability and attracting new investment, making it more competitive in the fragmented wellness market. The successful conversion of preferred stock and regaining NYSE American compliance removes a significant overhang for investors, signaling improved governance and potential for future M&A. However, the looming federal regulatory threat to full-spectrum CBD products, which account for 40-45% of revenue, introduces substantial uncertainty for investors, employees, and customers, potentially disrupting product availability and market share against competitors like Charlotte's Web.

Risk Assessment

Risk Level: high — The company faces a high risk level due to significant regulatory uncertainty. Federal action in November 2025 poses a 'significant threat' to the industry, with approximately 40-45% of cbdMD's revenue derived from full-spectrum SKUs that may be impacted. This potential loss of nearly half its revenue base, combined with a history of losses and the need to raise additional capital, creates substantial financial instability.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to YCBD given the significant regulatory threat to 40-45% of its revenue. Monitor closely for updates on federal CBD regulations and the company's ability to pivot its product portfolio to mitigate potential losses.

Revenue Breakdown

Key Numbers

• $2.1 million — GAAP operating loss for fiscal 2025 (reduced from $3.3 million in fiscal 2024)
• $3.3 million — GAAP operating loss for fiscal 2024 (reduced to $2.1 million in fiscal 2025)
• 91% — percentage of common stock (converted from Series A Convertible Preferred and accrued dividends in April 2025)
• $200,000 — corporate overhead savings (identified for implementation in early 2026)
• 40-45% — percentage of company's revenue (derived from full-spectrum SKUs, potentially impacted by federal action in November 2025)
• $4.4 million — brand development, sponsorships and marketing spend (in fiscal year 2025)
• $4.2 million — brand development, sponsorships and marketing spend (in fiscal year 2024)
• 77% — percentage of sales from e-commerce (in fiscal 2025, down from 80% in fiscal 2024)
• 80% — percentage of sales from e-commerce (in fiscal 2024, decreased to 77% in fiscal 2025)
• 9,419,410 — shares of common stock outstanding (as of December 16, 2025)

Key Players & Entities

• cbdMD, Inc. (company) — registrant
• YCBD (company) — trading symbol
• NYSE American (regulator) — exchange where common stock is registered
• Oasis (company) — hemp-derived THC beverage brand
• Sprouts (company) — retail partner
• Door Dash (company) — customer
• GNC (company) — retail partner for ATRx Labs
• Total Wine (company) — retail partner for Oasis
• Winn-Dixie (company) — retail partner for Oasis
• Piggly Wiggly (company) — retail partner for Oasis

FAQ

Risk Factors

• Federal Regulatory Action on Full-Spectrum SKUs [high — regulatory]: Federal regulatory action in November 2025 poses a significant threat, potentially impacting 40-45% of the company's revenue derived from full-spectrum SKUs. The company's reliance on these products makes it vulnerable to changes in federal policy.
• Dependence on E-commerce Sales Channel [medium — operational]: While diversified, 77% of sales in fiscal 2025 were from e-commerce, down from 80% in fiscal 2024. A significant shift or disruption in this channel could materially impact revenue.
• Capital Structure Simplification Impact [medium — financial]: In April 2025, Series A Convertible Preferred stock and accrued dividends were converted into approximately 91% of outstanding common stock. While this simplified the capital structure and aided NYSE compliance, the dilution and ongoing financial implications need monitoring.
• New Product Launch P&L Drag [low — market]: The launch of the Oasis brand, while showing sequential growth, is an initial P&L drag. Continued investment in new product categories may impact short-term profitability.

Industry Context

The consumer wellness sector, particularly the hemp-derived cannabinoid market, is characterized by evolving consumer preferences and a dynamic regulatory landscape. Companies are increasingly focusing on functional ingredients, including CBD, THC, and nootropics, to address specific wellness needs. Competition is present across various channels, from direct-to-consumer e-commerce to traditional retail, requiring diversified distribution strategies.

Regulatory Implications

The company faces significant regulatory uncertainty, particularly concerning federal actions that could impact its full-spectrum CBD products, which constitute 40-45% of revenue. Compliance with varying state laws for hemp-derived THC products is also crucial. The company's ability to navigate these regulatory challenges will be critical for sustained growth.

What Investors Should Do

1. Monitor Federal Regulatory Developments
2. Evaluate Oasis Brand Performance
3. Assess E-commerce Channel Stability
4. Track Cost Optimization Efforts

Key Dates

• 2025-04-XX: Conversion of Series A Convertible Preferred Stock — Simplified capital structure, converting preferred stock and accrued dividends into approximately 91% of common stock, aiding NYSE American listing compliance.
• 2025-11-XX: Anticipated Federal Regulatory Action — Potential impact on 40-45% of revenue derived from full-spectrum SKUs, representing a significant risk to the business.
• 2026-01-XX: Implementation of Corporate Overhead Savings — Identified nearly $200,000 in savings, contributing to improved operating efficiency and profitability.

Glossary

Broad-spectrum CBD

A CBD extract that contains CBD and other cannabinoids and terpenes from the hemp plant, but with the THC removed. (A core product offering for cbdMD, Inc.)

Full-spectrum CBD

A CBD extract that contains CBD, other cannabinoids, terpenes, and a trace amount of THC (legally less than 0.3%). (A significant revenue driver (40-45%) but faces potential regulatory risk.)

Hemp-derived Delta-9 THC

THC derived from hemp plants, compliant with federal law if it contains less than 0.3% Delta-9 THC by dry weight. (A new product category being expanded with the Oasis brand.)

Nootropic

Substances that may improve cognitive function, including memory, creativity, or motivation. (An ingredient category utilized in the ATRX platform and Oasis brand.)

GAAP operating loss

The loss incurred from a company's core business operations as calculated under Generally Accepted Accounting Principles. (The company reduced its GAAP operating loss from $3.3 million in fiscal 2024 to $2.1 million in fiscal 2025.)

P&L drag

An expense or investment that negatively impacts a company's profit and loss statement in the short term. (The Oasis brand launch is currently a P&L drag despite showing revenue growth.)

Year-Over-Year Comparison

In fiscal 2025, cbdMD, Inc. successfully reduced its GAAP operating loss to $2.1 million from $3.3 million in fiscal 2024, while maintaining its revenue base. The company also simplified its capital structure by converting preferred stock, which aided NYSE compliance. Brand development, sponsorships, and marketing spend remained relatively stable at $4.4 million in fiscal 2025 compared to $4.2 million in fiscal 2024. E-commerce sales saw a slight decrease in percentage, from 80% in fiscal 2024 to 77% in fiscal 2025. A new significant risk has emerged regarding potential federal regulatory action impacting full-spectrum SKUs.

Key Financial Figures

• $3.3 million — o reduce our GAAP operating loss from a $3.3 million loss during fiscal 2024 to $2.1 million
• $2.1 million — $3.3 million loss during fiscal 2024 to $2.1 million during fiscal 2025. We accomplished thi
• $200,000 — In addition, we have identified nearly $200,000 in corporate overhead savings that will
• $4.4 million — rs 2025 and 2024 we spent approximately $4.4 million and $4.2 million, respectively, on bran
• $4.2 m — we spent approximately $4.4 million and $4.2 million, respectively, on brand developme

Filing Documents

• ycbd20250930_10k.htm (10-K) — 1502KB
• ex_901129.htm (EX-3.12) — 276KB
• ex_901131.htm (EX-10.20) — 284KB
• ex_901132.htm (EX-10.21) — 92KB
• ex_901133.htm (EX-10.22) — 338KB
• ex_901134.htm (EX-10.23) — 99KB
• ex_858591.htm (EX-23.1) — 3KB
• ex_858592.htm (EX-31.1) — 12KB
• ex_858593.htm (EX-31.2) — 12KB
• ex_858594.htm (EX-32.1) — 6KB
• a02.jpg (GRAPHIC) — 12KB
• c02.jpg (GRAPHIC) — 59KB
• c03.jpg (GRAPHIC) — 52KB
• ycbd_10klogo.jpg (GRAPHIC) — 5KB
• 0001437749-25-038435.txt ( ) — 9328KB
• ycbd-20250930.xsd (EX-101.SCH) — 72KB
• ycbd-20250930_cal.xml (EX-101.CAL) — 65KB
• ycbd-20250930_def.xml (EX-101.DEF) — 515KB
• ycbd-20250930_lab.xml (EX-101.LAB) — 437KB
• ycbd-20250930_pre.xml (EX-101.PRE) — 552KB
• ycbd20250930_10k_htm.xml (XML) — 999KB

Management's Discussion and Analysis of Financial Condition and Results of Operation

Management's Discussion and Analysis of Financial Condition and Results of Operation. 21 ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 26 ITEM 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. 26 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 26 ITEM 9A.

Controls and Procedures

Controls and Procedures. 26 ITEM 9B. Other Information. 27 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 27 PART III ITEM 10. Directors, Executive Officers and Corporate Governance. 28 ITEM 11.

Executive Compensation

Executive Compensation. 28 ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. 28 ITEM 13. Certain Relationships and Related Transactions, and Director Independence. 28 ITEM 14. Principal Accounting Fees and Services. 28 PART IV ITEM 15. Exhibits and Consolidated Financial Statement Schedules. 29 ITEM 16. Form 10-K Summary. 29

SIGNATURES

SIGNATURES 32 OTHER PERTINENT INFORMATION Unless the context otherwise indicates, when used in this report, the terms the "Company," "cbdMD, "we," "us, "our" and similar terms refer to cbdMD, Inc., a North Carolina corporation formerly known as Level Brands, Inc., and our subsidiaries CBD Industries LLC, a North Carolina limited liability company formerly known as cbdMD LLC, which we refer to as "CBDI", Paw CBD, Inc., a North Carolina corporation which we refer to as "Paw CBD" and cbdMD Therapeutics LLC, a North Carolina limited liability company which we refer to as "Therapeutics" and Proline Global, LLC a North Carolina limited liability company which we refer to as "Proline Global". In addition, "fiscal 2024" refers to the year ended September 30, 2024, and "fiscal 2025" refers to the year ended September 30, 2025. We maintain a corporate website at www.cbdmd.com. The information contained on our corporate website and our various social media platforms are not part of this report . 2 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "aim," "will," "would," "could," and similar expressions or phrases identify forward-looking statements. We have based these forward-looking stateme

DESCRIPTION OF BUSINESS

ITEM 1. DESCRIPTION OF BUSINESS Our Company General cbdMD, Inc. is a consumer wellness company focused on the development, manufacturing, marketing, and sale of supplement brands powered by natural compounds. The majority of our products are anchored by hemp-derived cannabinoids, including broad-spectrum and full-spectrum CBD formulations, hemp-derived Delta-9 THC products (where permitted by law), and a range of functional products designed to address key wellness needs such as sleep, recovery, mood, discomfort, mobility, cognitive function, and stress management. Our approach centers on combining scientific rigor with high manufacturing standards to produce consistent, safe, and reliable products that meet both consumer expectations and evolving regulatory requirements. We operate a multi-brand portfolio anchored by our flagship cbdMD line, which offers oils, gummies, capsules, soft-gels, topicals, functional formulations, and hemp-derived compliant Delta-9 THC products. Complementing this portfolio is Paw CBD, our dedicated pet-wellness brand, which provides tinctures, chews, and topicals for dogs and cats and reflects our long-standing emphasis on safety and quality in the animal health category. Our ATRX platform offers cutting edge, emerging and novel non-cannabinoid functional ingredients such as functional mushrooms and supports future expansion into performance-driven nutraceutical and nootropic categories utilizing synergistic ingredient combinations. Our Herbal Oasis ("Oasis") brand is a premium hemp-derived THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection. Our products are sold through a diversified distribution network that includes direct-to-consumer e-commerce platforms, online marketplaces, wholesale distribution to national and regional retailers, specialty health and pet channels, and emerging international markets. This multi-channe

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