cbdMD resolves lease obligations, anticipates gain

CHARLOTTE, NC – cbdMD (NYSE:YCBD), Inc. (NYSE American:YCBD), a North Carolina-based company specializing in perfumes, cosmetics, and other toilet preparations, has announced the settlement of its lease obligations for its former executive offices. On Thursday, the company made a final payment of $255,000 to its landlord, effectively fulfilling all outstanding payments and amounts due under the previous lease agreement.

The payment concludes a series of financial arrangements between cbdMD and its landlord, which began with a License Agreement and a Lease Forbearance Agreement in March 2024. These agreements were established to terminate the lease of the company's former executive offices.

With this settlement, cbdMD expects to realize an approximate gain of $550,000, which is anticipated to counterbalance a related non-cash expense of approximately $230,000. This non-cash expense was incurred due to the elimination of the right of use asset and the corresponding liability following the termination of the original lease.

The company has confirmed that with the completion of this payment, there are no further obligations—financial or otherwise—owed to the landlord under any of the agreements previously reported on Form 8-K to the Securities and Exchange Commission.

This financial move by cbdMD is seen as a positive step in resolving past due rent, interest, and penalties. The gain from this settlement is expected to improve the company's financial position by offsetting the aforementioned non-cash expense.

cbdMD's Chief Executive Officer and Chief Financial Officer, T. Ronan Kennedy, signed off on the report, ensuring compliance with the requirements of the Securities Exchange Act of 1934. The information disclosed is based on the company's most recent filing with the SEC.

In other recent news, cbdMD reported its Q3 results, noting a 15% decrease in total net sales to $5.1 million year-over-year. Despite the sales decline, cbdMD emphasized improvements in gross margins, reductions in selling, general and administrative expenses, and operational efficiencies.

The direct-to-consumer segment saw incremental gains, attributed to a revamped sales strategy and the hiring of new sales personnel.

These are recent developments for the company, which also reported a loss from operations of approximately $400,000 but generated about $200,000 in cash during the quarter.

cbdMD is working on optimizing its customer acquisition funnel and plans to increase marketing spend. The company is also awaiting UK FSA approval for its submission on higher daily CBD levels than proposed.

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