16:10 ET cbdMD Reports Third Consecutive Year of Operating Improvement, Strengthens Balance Sheet, and Regains NYSE American Continued Listing Compliance

, /PRNewswire/ -- cbdMD, Inc. (NYSE American: YCBD), one of the nation's leading and most highly trusted and recognized CBD companies, and operator of the leading CBD brands cbdMD and Paw CBD, along with hemp derived THC beverage line Herbal Oasis today announced our financial results for the full fiscal year ended September 30, 2025. For fiscal year 2025, cbdMD delivered its third consecutive year of operational and financial improvement, reflecting disciplined cost management, focused execution, and continued investment in quality and science. The Company reported a loss from operations of $2.1 million, representing a $1.2 million year-over-year improvement from a $3.3 million operating loss in fiscal 2024. As a result of balance-sheet actions completed during the year, including the conversion of Series A preferred equity, net book value improved from under $2.0 million to approximately $7.2 million at year-end. The Company took further steps this week to strengthen its balance sheet and raised an additional $2.25 million in gross proceeds from the sale of Series C Convertible Preferred Stock. Management believes the current capital structure provides flexibility to support growth initiatives and opportunities ahead in 2026. "Fiscal 2025 marked an important inflection point for cbdMD as we delivered our third straight year of operating improvement while completing several foundational balance-sheet and compliance milestones," said Ronan Kennedy, CEO and CFO of cbdMD. "We believe our performance during the September quarter compared favorably with many of our public peers and reflects the early impact of strategic changes we made to our sales and marketing organization." "Our core cbdMD business continues to gain traction, and our Herbal Oasis team is seeing consistent month-over-month improvement in case sell-through across key markets as distribution expands throughout the Southeast. Importantly, we have paired this commercial momentum with a disciplined approach to capital allocation and balance-sheet management." "As federal policy discussions continue to evolve around cannabinoids and hemp-derived products, cbdMD remains focused on operating at the highest standards of safety, quality, and scientific rigor," Kennedy continued. "Since our founding, we have invested millions of dollars in GMP manufacturing, product testing, and compliance systems to ensure our products meet or exceed applicable regulatory expectations." "We are very encouraged by the White House's executive order on Thursday. We believe decriminalization will allow significant investment to further prove the benefits of cannabinoids. Since our formation, we have invested millions to ensure we provide safe, effective cannabinoid products that meet high-GMP quality standards. What makes us most excited are the statements around Medicare supporting the reimbursement of full spectrum hemp for seniors. This gives us confidence the regulators will figure out how to rework the language in Novembers' H.R. 5371 to more palatable language. There are over 60 million seniors on Medicaid who have the potential to become regular consumers to our core market. "We believe increasing regulatory clarity will encourage additional research and institutional investment across the category. With our long-standing emphasis on THC-free and broad-spectrum CBD formulations, as well as our experience responsibly operating in hemp-derived THC beverages, cbdMD is well positioned to adapt as regulatory frameworks mature." "With a stronger balance sheet, restored exchange compliance, improving operations, and a disciplined approach to growth, we believe cbdMD enters calendar 2026 in a materially stronger position," Kennedy concluded. "Our focus remains on executing responsibly, investing in science and quality, and creating long-term value for shareholders." Highlights for Fiscal 2025 and Notable Business Updates Herbal Oasis expanded into Texas through a distribution partnership with Morales Beverage Group. The brand now has established distribution in North Carolina, Florida, Alabama, Texas, Tennessee, and Minnesota, with the ability to ship directly to additional states where permitted. At the end of September 2025, cbdMD completed $1.7 million in Series B Convertible Preferred equity financing, generating $1.5 million in net proceeds to support working capital and strengthen net book value. The NYSE American formally notified the Company in a letter dated December 5, 2025, confirming that cbdMD has resolved all deficiencies related to Sections 1003(a)(i) and (ii) of the NYSE American Company Guide. On December 18, 2025 cbdMD closed a $2.25 million Series C Convertible Preferred equity financing, generating $2.2 million in net proceeds from the sale of 1,000,000 shares of Series C Convertible Preferred Stock which have rights and preferences substantially the same as the Company's outstanding Series B Preferred Stock and are initially convertible at $2.25 per share, to further enhance equity and liquidity. On December 15 2025, as amended December 18, 2025, the Company entered into a $20 million equity line of credit, providing cbdMD with a potential flexible and efficient mechanism to access capital under favorable market conditions. The ELOC is subject to an S-1 registration statement to be filed by the Company and SEC review. Financial Highlights from our Fiscal Year 2025: Net sales totaled $19.1 million in fiscal 2025 compared to $19.5 million in fiscal 2024. Our gross profit for the year was flat at 62% in fiscal 2025 compared to 62% in fiscal 2024. Our loss from operations was $2.1 million in fiscal 2025 as compared to a loss of $3.3 million in fiscal 2024. Our non-GAAP adjusted EBITDA loss from operations in fiscal 2025 was approximately $0.9 compared to our non-GAAP adjusted EBITDA from operations in fiscal 2024 of approximately $1.6. million. Net loss attributable to common shareholders for fiscal 2025 was approximately $4.3 million or $0.51 per share as compared to a net loss for fiscal 2024 of approximately $7.7 million, or $14.29 per share. The improvement in fiscal 2025 was principally attributable to ongoing management's efforts on improving profitability. At September 30, 2025, we had $2.3 million in cash on hand and working capital of approximately $3.4 million as compared to $2.4 million of cash and approximately negative $2.2 million of working capital (which includes $4.7 million of accrued Series A dividend payments) at September 30, 2024. We reported direct to consumer (DTC) net sales of $14.7 million or 77% of total net sales in fiscal 2025, a decrease of $0.9 million, or 6% from fiscal 2024. Pursuant to the disclosure requirements of the NYSE American Company Guide Section 610(b), cbdMD is reporting that its audited consolidated financial statements for the fiscal year ended September 30, 2025, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 18, 2025, contains an audit opinion from its independent registered public accounting firm that includes an explanatory paragraph related to cbdMD's ability to continue as a going concern. This announcement does not represent any change or amendment to cbdMD's financial statements or to its Annual Report on Form 10-K for the fiscal year ended September 30, 2025. We will host a conference call at 4:20 p.m., Eastern Time, on Friday, December 19, 2025, to discuss our September 30, 2025, fourth quarter and full fiscal year financial results and business progress. CONFERENCE CALL DETAILS Friday December 19, 2025, 4:20 p.m. Eastern Time USA/Canada: 888-880-3330 Webcast/Webcast Replay link- available through December 19, 2026: https://app.webinar.net/13voDmbBlxj About cbdMD, Inc. cbdMD, Inc. (NYSE American: YCBD) is one of the leading and most highly trusted and most recognized cannabidiol (CBD) brands with a comprehensive line of U.S. produced THC-free1 CBD products and an array of Farm Act compliant Delta 9 products. Our Paw CBD brand of pet products includes veterinarian-formulated products and our ATRx brand features functional mushroom products. In addition, we operate Herbal Oasis, a premium, award winning THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection. With an alcohol-free formula and wellness-forward ingredients, Oasis invites a better way to drink-one rooted in clarity, balance, and joy. To learn more about cbdMD and our comprehensive line of U.S. grown, THC-free1 CBD and Full Spectrum products as well as our other brands, please visit www.cbdmd.com, www.pawcbd.com, ATRxlabs.com, or Herbaloasis.com, follow cbdMD on Instagram and Facebook, or visit one of the thousands of retail outlets that carry cbdMD's products. Forward-Looking Statements This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified using words such as ''should,'' ''may,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and ''proposes.'' These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict. You are urged to carefully review and consider any cautionary statements, including but not limited to expectations on our ability to continue as a going concern, increasing our revenues, continued cost reductions, potential need for additional working capital, evolving regulatory and legal requirements and potential changes in federal law and federal and state oversight of CBD, continued listing on the NYSE American, future profitability, development and sales of new products, and other disclosures, including the statements made under the heading "Risk Factors" in cbdMD, Inc.'s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 as filed with the Securities and Exchange Commission (the "SEC") on December 19, 2025, and our other filings with the SEC. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of cbdMD, Inc. and are difficult to predict. cbdMD, Inc. does not undertake any duty to update any forward-looking statements except as may be required by law. The information which appears on our websites and our social media platforms, including, but not limited to, Instagram and Facebook, is not part of this press release. 1 THC-free is defined as below the level of detection using validated scientific analytical methods. Non-GAAP Financial Measures This press release includes a financial measure that excludes the impact of certain items and therefore has not been calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). cbdMD, Inc. has included adjusted loss from operations because management uses this measure to assess operating performance in order to highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The adjusted operating loss has not been prepared in accordance with GAAP. This non-GAAP financial measure should not be considered as an alternative to, or more meaningful than, net loss from operations as an indicator of our operating performance. Further, this non-GAAP financial measure, as presented by cbdMD, Inc., may not be comparable to similarly titled measures reported by other companies. cbdMD, Inc. has attached to this press release a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. cbdMD, INC. CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024 September 30, September 30, 2025 2024 Assets Cash and cash equivalents $ 2,261,242 $ 2,452,553 Accounts receivable, net 1,040,887 983,910 Inventory, net 2,732,127 2,365,187 Inventory prepaid 214,795 159,006 Prepaid sponsorship 25,231 21,754 Prepaid expenses and other current assets 277,147 406,674 Total current assets 6,551,429 6,389,084 Other assets: Property and equipment, net 277,377 454,268 Operating lease assets 703,934 85,817 Deposits for facilities 62,708 62,708 Intangible assets, net 2,124,502 2,889,580 Investment in other securities, noncurrent 700,000 700,000 Total other assets 3,868,521 4,192,373 Total assets $ 10,419,950 $ 10,581,457 CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024 (continued) September 30, September 30, 2025 2024 Liabilities and shareholders' equity Current liabilities: Accounts payable $ 1,173,642 $ 1,541,108 Accrued expenses 735,672 632,674 Accrued dividends - 4,671,000 Deferred revenue 506,289 503,254 Operating leases - current portion 778,240 98,696 Convertible notes, at fair value - 1,171,308 Total current liabilities 3,193,843 8,618,040 Long term liabilities: Operating leases - long term portion - - Total long term liabilities - - Total liabilities 3,193,843 8,618,040 cbdMD, Inc. shareholders' equity: Preferred stock, authorized 50,000,000W shares, $0.001 par value, 1,700,000 and 5,000,000 shares issued and outstanding, respectively 1,700 5,000 Common stock, authorized 150,000,000 shares, $0.001 par value, 8,917,054 and 492,383 shares issued and outstanding, respectively 8,917 492 Additional paid in capital 186,650,640 184,033,012 Comprehensive other expense - (7,189) Accumulated deficit (179,435,150) (182,067,898) Total cbdMD, Inc. shareholders' equity 7,226,107 1,963,417 Total liabilities and shareholders' equity $ 10,419,950 $ 10,581,457 cbdMD, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 2025 and 2024 September 30, September 30, 2025 2024 Gross Sales $ 19,190,678 $ 19,922,319 Allowances (210) (440,152) Total Net Sales 19,190,468 19,482,167 Cost of sales 7,222,213 7,486,626 Gross Profit 11,968,255 11,995,541 Operating expenses 14,130,845 15,310,951 Loss from operations (2,162,590) (3,315,410) Decrease of contingent liability - 74,580 Decrease (increase) in fair value of convertible debt 87,380 (429,789) Interest expense (income) 34,308 (29,507) Loss before provision for income taxes (2,040,902) (3,700,126) Net (loss) income (2,040,902) (3,700,126) Preferred dividends 2,334,501 4,004,001 Net Loss attributable to cbdMD, Inc. common shareholders $ (4,375,403) $ (7,704,127) Net Loss per share: Basic and diluted earnings per share $ (1.09) $ (14.29) Weighted average number of shares Basic and Diluted: 4,022,629 539,069 cbdMD, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE YEARS ENDED SEPTEMBER 30, 2025 and 2024 September 30, September 30, 2025 2025 Net (Loss) $ (2,040,902) $ (3,700,126) Comprehensive (Loss) income (2,040,902) (3,700,126) Other Comprehensive income (loss) $ 7,189 $ (7,189) Preferred dividends (2,334,501) (4,004,001) Comprehensive Loss attributable to cbdMD, inc. common shareholders $ (4,368,214) $ (7,711,316) cbdMD, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2025 and 2024 September 30, September 30, 2025 2024 Cash flows from operating activities: Net Loss $ (2,040,902) $ (3,700,126) Adjustments to reconcile net loss to net cash used by operating activities: Stock based compensation - 5,015 Restricted stock expense 14,121 11,885 Issuance of stock for services 86,657 - Inventory and materials impairment 365,979 921,314 Intangibles amortization 765,078 697,510 Depreciation 361,063 452,326 Credit losses 382,588 54,322 Decrease in contingent liability - (74,580) Increase in fair value of convertible debt (87,380) 429,789 Gain on termination of operating lease asset - 696,280 Amortization of operating lease asset 669,781 670,621 Changes in operating assets and liabilities: Accounts receivable (439,565) 177,858 Deposits - 76,000 Inventory (732,919) 766,472 Prepaid inventory (55,789) 23,670 Prepaid expenses and other current assets 126,051 396,311 Accounts payable and accrued expenses (261,883) (1,124,141) Operating lease liability (608,354) (1,151,326) Deferred revenue / customer deposits 3,099 318,008 Cash flows from operating activities (1,452,375) (352,792) Cash flows from investing activities: Purchase of intangible assets - (100,000) Purchase of property and equipment (184,172) (190,015) Cash flows from investing activities (184,172) (290,015) Cash flows from financing activities: Proceeds from issuance of common stock - 50,001 Note payable 1,247,499 Proceeds from issuance of preferred stock 1,445,236 - Cash flows from financing activities 1,445,236 1,297,500 Net increase (decrease) in cash (191,311) 654,693 Cash and cash equivalents, beginning of period 2,452,553 1,797,860 Cash and cash equivalents, end of period $ 2,261,242 $ 2,452,553 Supplemental Disclosures of Cash Flow Information: 2025 2024 Cash paid for interest $ - $ 74,638 Non-cash financing/investing activities: Issuance of shares for conversion of debt and accrued interest $ 1,079,639 $ 515,601 Change in lease asset related to extinguishment of HQ lease and new warehouse lease $ (1,723,544) $ - Issuance of shares for intangible asset $ - $ 40,725 Conversion accrued preferred dividends to common stock $ 7,008,151 $ - Preferred dividends accrued but not paid $ 2,334,501 $ 4,004,001 cbdMD, Inc. SUPPLEMENTAL FINANCIAL INFORMATION FOR THE YEARS ENDED SEPTEMBER 30, 2025 and 2024 (unaudited) Three Months Ended September 30, Year Ended September 30, 2025 2024 2025 2024 Revenue $ 4,720,770 $ 4,556,367 $ 19,140,468 $19,482,167 Gross profit 2,777,135 $ 2,453,803 $ 11,968,255 $11,995,541 Gross margin 58.8 % 53.9 % 62.4 % 61.6 % Operating Expenses 3,461,458 $ 2,770,356 $ 14,130,845 $15,310,951 Operating loss from operations (684,323) $ (316,553) $ (2,162,590) $ (3,315,410) Corporate overhead operating expense (1) 399,501 $ 462,068 $ 1,816,563 $ 1,978,953 Non-GAAP adjusted (loss) income from operations $ (284,822) $ 145,515 $ (346,027) $ (1,336,457) GAAP loss from operations $ (684,323) $ (316,553) $ (2,162,590) $ (3,315,410) Adjustments: Depreciation & Amortization 262,065 287,783 1,126,141 1,149,836 Employee and director stock compensation (2) 7,754 5,881 13,595 43,688 Inventory adjustment (3) 113,008 588,160 113,008 588,160 Non-cash expense incurred as a credit (4) - - - 439,926 Non-cash accelerated amortization of expense related to terminated IT contracts - - - 72,101 Termination of HQ lease - (696,280) - (696,280) Mergers and acquisitions expense - - - 125,838 Non-GAAP adjusted loss from operations $ (301,496) $ (131,009) $ (909,846) $ (1,592,141) Public Company Costs Staff related expense 70,698 119,975 310,647 288,602 Accounting/legal expense 103,532 125,874 524,352 710,188 Professional outside services 41,496 73,843 291,455 310,448 Business insurance 176,021 136,495 676,514 626,027 Non-GAAP adjusted income from operations, excluding public company costs $ 90,251 $ 325,178 $ 893,122 $ 343,124 (1) Represents corporate overhead operating expenses (2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period (3) Represents an operating expense related to inventory loss related to regulatory changes impacting labels and packaging and obsolete/expired inventory. (4) Represents non-cash expense incurred as a credit provided to GNC to replace expired product. Contacts: Investors:cbdMD, Inc.Ronan Kennedy Chief Executive Officer and Chief Financial Officer[email protected](704) 445-3064 SOURCE cbdMD, Inc.