# EDGAR Filing Document

**Accession Number:** 0001644903
**File Stem:** 0001437749-26-017042
**Filing Date:** 2026-5
**Character Count:** 138161
**Document Hash:** 788a0e39c02a7f202569dc0c044f7205
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-26-017042.hdr.sgml**: 20260514

**ACCESSION NUMBER**: 0001437749-26-017042

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 78

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260514

**DATE AS OF CHANGE**: 20260514

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** cbdMD, Inc.
- **CENTRAL INDEX KEY:** 0001644903
- **STANDARD INDUSTRIAL CLASSIFICATION:** PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 473414576
- **STATE OF INCORPORATION:** NC
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38299
- **FILM NUMBER:** 26978787

**BUSINESS ADDRESS:**
- **STREET 1:** 8845 RED OAK BOULEVARD
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28217
- **BUSINESS PHONE:** 704-445-3060

**MAIL ADDRESS:**
- **STREET 1:** 8845 RED OAK BOULEVARD
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28217

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Level Brands, Inc.
- **DATE OF NAME CHANGE:** 20170202

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LEVEL BEAUTY GROUP, INC.
- **DATE OF NAME CHANGE:** 20150611

?xml version='1.0' encoding='ASCII'? ycbd20260331_10q.htm

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

---

| | |
|:---|:---|
| **☒**  | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | For the quarterly period ended **<u>March 31, 2026</u>** |

---

or

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| | |
|:---|:---|
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|  | For the transition period from __________________ to _______________ |

---

Commission file number **001-38299**

![ycbd_10qimg5.jpg](ycbd_10qimg5.jpg)

---

| |
|:---|
| **cbdMD, INC.** |
| (Exact Name of Registrant as Specified in its Charter) |

---

---

| | |
|:---|:---|
| **North Carolina** | **47-3414576** |
| State or Other Jurisdiction of Incorporation or Organization | I.R.S. Employer Identification No. |

---

---

| | |
|:---|:---|
| **2101 Westinghouse Blvd., Suite A, Charlotte, NC** | **28273** |
| Address of Principal Executive Offices | Zip Code |

---

**<u>704-445-3060</u>**

Registrant's Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| common | YCBD | NYSE American |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒&nbsp;&nbsp;&nbsp;&nbsp; No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.

See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated Filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

10,497,919 shares of common stock are issued and outstanding as of May 13, 2026.

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**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| | | **Page No** |
| [**<u>PART I-FINANCIAL INFORMATION</u>**](#parti) | [**<u>PART I-FINANCIAL INFORMATION</u>**](#parti) | [**<u>PART I-FINANCIAL INFORMATION</u>**](#parti) |
| [<u>ITEM 1.</u>](#parti) | [<u>Condensed Consolidated Financial Statements.</u>](#parti) | [5](#parti) |
| [<u>ITEM 2.</u>](#mda) | [<u>Management</u><u>'</u><u>s Discussion and Analysis of Financial Condition and Results of Operations.</u>](#mda) | [24](#mda) |
| [<u>ITEM 3.</u>](#qqdmr) | [<u>Quantitative and Qualitative Disclosures About Market Risk.</u>](#qqdmr) | [32](#qqdmr) |
| [<u>ITEM 4.</u>](#cp) | [<u>Controls and Procedures.</u>](#cp) | [32](#cp) |
| [**<u>PART II - OTHER INFORMATION</u>**](#partii) | [**<u>PART II - OTHER INFORMATION</u>**](#partii) | [**<u>PART II - OTHER INFORMATION</u>**](#partii) |
| [<u>ITEM 1.</u>](#legal) | [<u>Legal Proceedings.</u>](#legal) | [33](#legal) |
| [<u>ITEM 1A.</u>](#risks) | [<u>Risk Factors.</u>](#risks) | [33](#risks) |
| [<u>ITEM 2.</u>](#equitysales) | [<u>Unregistered Sales of Equity Securities and Use of Proceeds.</u>](#equitysales) | [33](#equitysales) |
| [<u>ITEM 3.</u>](#defaults) | [<u>Defaults Upon Senior Securities.</u>](#defaults) | [33](#defaults) |
| [<u>ITEM 4.</u>](#msd) | [<u>Mine Safety Disclosures.</u>](#msd) | [33](#msd) |
| [<u>ITEM 5.</u>](#oi) | [<u>Other Information.</u>](#oi) | [34](#oi) |
| [<u>ITEM 6.</u>](#exhibits) | [<u>Exhibits.</u>](#exhibits) | [34](#exhibits) |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

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**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," Proline Global, LLC, a North Carolina limited liability company which we refer to as "Proline," cbdMD Therapeutics LLC, a North Carolina limited liability company which we refer to as "Therapeutics," and BB Botanicals, a North Carolina limited liability company which we refer to as "Bluebird." In addition, "fiscal 2025" refers to the fiscal year ended September 30, 2025, "fiscal 2026" refers to the fiscal year ending September 30, 2026, "first quarter of 2025" refers to the three months ended December 31, 2024 and "first quarter of 2026" refers to the three months ended December 31, 2025, "second quarter of 2025" refers to the three months ended March 31, 2025, "second quarter of 2026" refers to the three months ended March 31, 2026, "third quarter of 2025" refers to the three months ended June 30, 2025, and "third quarter of 2026" refers to the three months ended June 30, 2026.

We maintain a corporate website at www.cbdmd.com. The information contained on our corporate website and our various social media platforms is not part of this report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

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**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION**

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, but are not limited to, statements regarding our liquidity, capital resources and financial condition, path to profitability, ability to raise additional funds, impact of the implementation of the Act (defined below) on the Company's results of operations and business, effect and advantages resulting from the equity line of credit (the "ELOC"), expectations from the acquisition of Bluebird Botanicals ("Bluebird"), innovation and product portfolio improvements, expectations from the President's Medicare reimbursement program, diversification of revenue and reduction in costs. Forward-looking statements are statements that are not historical facts and may include projections and estimates concerning the timing and success of specific products and services, our future production, revenues, income and capital spending and financing needs. These statements are generally identified by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or the negative of such terms and similar expressions.

We intend that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include but are not limited to the risks described below.

Material risks associated with our overall business, including:

● our history of losses, potential liquidity concerns, need to raise additional capital and our ability to continue as a going concern;

● our current capitalization limits our ability to make strategic or accretive acquisitions or attract new investors;

● our reliance on key digital marketing channels and our ability to effectively market to customers;

● our ability to acquire new customers at a profitable rate;

● our ability to bring new and compelling dietary ingredients to market;

● our reliance on third party raw material suppliers and manufacturers;

● potential impact of tariffs;

● our reliance on key management personnel and our ability to attract and retain qualified employees;

● our ability to execute our business strategy, including expanding distribution channels, cultivating additional brands, and pursuing strategic acquisitions;

● our ability to maintain and grow relationships with distributors and retail partners and expand into new distribution channels;

● our expectations regarding participation in the President's Medicare reimbursement program and similar government programs;

● our ability to successfully integrate acquired businesses, including the Bluebird acquisition, and realize anticipated synergies and benefits therefrom; and

● our reliance on third party compliance with our supplier verification program and testing protocols.

Material risks associated with regulatory environment for dietary ingredients, including but not limited to CBD, including:

● federal laws and regulatory compliance, as well as FDA, FTC, DEA or USDA interpretation of existing regulations, pending federal executive orders, and law changes, including the Continuing Appropriations Act of 2026 (H.R. 5371) (the "Act");

● state and local laws pertaining to regulated hemp products or dietary ingredients (such as industrial hemp), beverages and their derivatives;

● costs to us for compliance with laws and regulations and the risks of increased litigation;

● acceptance of dietary ingredients, such as CBD or hemp-derived THC products; and

● our ability to successfully adapt our product portfolio in response to changes in laws and regulations, including the potential impact of the Act.

Material risks associated with the ownership of our securities, including:

● the risks for failing to maintain compliance with the continued listing standards of the NYSE American;

● the designations, rights and preferences of our Series B Convertible Preferred Stock (the "Series B Preferred Stock") and Series C Convertible Preferred Stock (the "Series C Preferred Stock");

● the risks for the potential dilution from the conversion of our Series B and C Convertible Preferred Stock and the potential adjustment of conversion rights of such securities;

● our ability to access the ELOC with C/M Master Fund, LP, the conditions to drawing thereunder, and the impact of future sales of common stock on existing stockholders; and

● the risk of potential dilution from our ELOC.

Readers should carefully review this report in its entirety, including the risks described in Part II, Item 1A of this report and in Part I, Item 1A of our 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 (the "2025 10-K"), as amended on January 20, 2026, as well as our other filings with the SEC. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statements are made. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in circumstances or any other reason after the date of this Quarterly Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

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**PART 1** – **FINANCIAL INFORMATION**

**ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.**

**cbdMD, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**March 31, 2026 AND SEPTEMBER 30, 2025**

---

| | | |
|:---|:---|:---|
|  | **(Unaudited)** | |
|  | ***March 31,*** | ***September 30,*** |
|  | ***2026*** | ***2025*** |
| **Assets** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $2638243 | $2261242 |
| Accounts receivable, net | 1573101 | 1040887 |
| Inventory | 3321045 | 2732127 |
| Inventory prepaid | 331694 | 214795 |
| Prepaid expenses and other current assets | 520110 | 302378 |
| **Total current assets** | 8384193 | 6551429 |
| Other assets: |  |  |
| Property and equipment, net | 361119 | 277377 |
| Operating lease assets | 361558 | 703934 |
| Deposits for facilities | 62708 | 62708 |
| Intangible assets | 2193271 | 2124502 |
| Goodwill | 190000 |  |
| Investment in other securities, noncurrent | 700000 | 700000 |
| **Total other assets** | 3868656 | 3868521 |
| **Total assets** | $**12252849** | $**10419950** |

---

See Notes to Condensed Consolidated Financial Statements<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

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**cbdMD, INC.**

---

| |
|:---|
| **CONDENSED CONSOLIDATED BALANCE SHEETS** |
| **March 31, 2026 AND SEPTEMBER 30, 2025** |
| **(continued**) |

---

---

| | | |
|:---|:---|:---|
|  | **(Unaudited)** |  |
|  | ***March 31,*** | ***September 30,*** |
|  | ***2026*** | ***2025*** |
| **Liabilities and shareholders' equity** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $1393402 | $1173642 |
| Accrued expenses | 626722 | 735672 |
| Accrued dividends | 78805 |  |
| Deferred revenue | 454039 | 506289 |
| Operating leases – current portion | 407811 | 778240 |
| Note payable | 7321 |  |
| **Total current liabilities** | **2968100** | **3193843** |
| **Total liabilities** | **2968100** | **3193843** |
| Commitments and Contingencies (Note 10) |  |  |
| cbdMD, Inc. shareholders' equity: |  |  |
| Preferred stock, authorized 50,000,000 shares, $0.001 |  |  |
| par value, 1,591,210 and 1,700,000 shares issued and outstanding, respectively | 1591 | 1700 |
| Common stock, authorized 150,000,000 shares, $0.001 |  |  |
| par value, 10,495,561 and 8,917,054 shares issued and outstanding, respectively | 10496 | 8917 |
| Additional paid in capital | 189909199 | 186650640 |
| Accumulated deficit | (180636537) | (179435150) |
| **Total cbdMD, Inc. shareholders' equity** | **9284749** | **7226107** |
| **Total liabilities and shareholders' equity** | $**12252849** | $**10419950** |

---

See Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

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| |
|:---|
| **cbdMD, INC.** |
| **CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** |
| **FOR THE Six MONTHS ENDED March 31, 2026 and 2025** |
| **(Unaudited)** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended March 31,*** | ***Three Months Ended March 31,*** | ***Six Months Ended March 31,*** | ***Six Months Ended March 31,*** |
|  | ***2026*** | ***2025*** | ***2026*** | ***2025*** |
| Gross Sales | $5640059 | $4749426 | $10656964 | $9862902 |
| **Total Net Sales** | 5640059 | 4749426 | 10656964 | 9862902 |
| Cost of sales | 2383137 | 1790062 | 4398751 | 3502929 |
| **Gross Profit** | 3256922 | 2959364 | 6258213 | 6359973 |
| Operating expenses | 4057706 | 3445180 | 7345287 | 6932061 |
| **Loss from operations** | (800784) | (485816) | (1087074) | (572088) |
| Decrease (increase) in fair value of convertible debt |  | (2583) |  | 87380 |
| Interest income | 2806 | 7642 | 5963 | 19046 |
| **Loss before provision for income taxes** | (797978) | (480757) | (1081111) | (465662) |
| Net Loss | (797978) | (480757) | (1081111) | (465662) |
| **Preferred dividends** | 78805 | 1000500 | 120276 | 2001001 |
| **Net Loss attributable to cbdMD, Inc. common shareholders** | $(876783) | $(1481257) | $(1201387) | $(2466663) |
| **Net Loss per share:** |  |  |  |  |
| Basic and Diluted earnings per share | $(0.08) | $(1.90) | $(0.12) | $(3.67) |
| Weighted average number of shares Basic and Diluted: | 10443617 | 778410 | 9715873 | 672558 |

---

See Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

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| |
|:---|
| **cbdMD, INC.** |
| **CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** |
| **FOR THE** **Six MONTHS ENDED March 31, 2026 and 2025** |
| **(Unaudited)** |

---

---

| | | |
|:---|:---|:---|
|  | ***Six Months Ended*** | ***Six Months Ended*** |
|  | ***March 31,*** | ***March 31,*** |
|  | ***2026*** | ***2025*** |
| **Cash flows from operating activities:** |  |  |
| Net Loss | $(1081111) | $(465662) |
| **Adjustments to reconcile net loss to net cash used by operating activities:** |  |  |
| Restricted stock expense | 296950 | 2868 |
| &nbsp;&nbsp;&nbsp; Issuance of stock for services |  | 82250 |
| Intangibles amortization | 398126 | 382534 |
| Depreciation | 98866 | 201369 |
| &nbsp;&nbsp;&nbsp; Decrease in fair value of convertible debt |  | (87380) |
| Amortization of operating lease asset | 342376 | 330969 |
| **Changes in operating assets and liabilities:** |  |  |
| Accounts receivable | (511168) | (67408) |
| Inventory | (325720) | (297518) |
| Prepaid inventory | (116899) | (62623) |
| Prepaid expenses and other current assets | (110764) | (62361) |
| Accounts payable and accrued expenses | (121059) | (277135) |
| Operating lease liability | (370428) | (241489) |
| Deferred revenue / customer deposits | (34133) | 54160 |
| **Cash flows from operating activities** | (1534964) | (507426) |
| **Cash flows from investing activities:** |  |  |
| Purchase of property and equipment | (170550) | (179893) |
| Purchase of Bluebird | 56427 |  |
| **Cash flows from investing activities** | (114123) | (179893) |
| **Cash flows from financing activities:** |  |  |
| Proceeds from issuance of preferred stock | 2026088 |  |
| **Cash flows from financing activities** | 2026088 |  |
| Net increase (decrease) in cash | 377001 | (687319) |
| Cash and cash equivalents, beginning of period | 2261242 | 2452553 |
| Cash and cash equivalents, end of period | $2638243 | $1765234 |

---

**Supplemental Disclosures of Cash Flow Information:**&nbsp;&nbsp;&nbsp;&nbsp;

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| | | |
|:---|:---|:---|
|  | ***2026*** | ***2025*** |
| Cash Payments for: |  |  |
| Interest expense | $- | $19046 |
| Non-cash financial/investing activities: |  |  |
| Issuance of shares for conversion of debt and accrued interest | $- | $1079639 |
| All stock purchase of Bluebird | $936992 | $- |
| Issuance of shares for service | $- | $82250 |
| Preferred dividends accrued but not paid | $78805 | $2001001 |

---

See Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8

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| |
|:---|
| **cbdMD, INC.** |
| **CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY** |
| **FOR THE six months ended March 31, 2026** |
| **(Unaudited)** |

---

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | ***Additional*** |  |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Preferred Stock*** | ***Preferred Stock*** | ***Paid in*** | ***Accumulated*** |  |
|  | ***Shares*** | ***Amount*** | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Total*** |
| **Balance, September 30, 2025** | **8917054** | $**8917** | **1700000** | $**1700** | $**186650640** | $**(179435150)** | $**7226107** |
| Issuance of Common stock | 4716 | 5 |  |  | 296945 |  | 296950 |
| ELOC commitment shares | 40000 | 40 |  |  | (40) |  |  |
| Series C Preferred Stock issuance |  |  | 1000000 | 1000 | 2025087 |  | 2026087 |
| Series B Preferred Stock conversion | 1108790 | 1109 | (1108790) | (1109) |  |  |  |
| Bluebird Asset Acquisition | 425000 | 425 |  |  | 936567 |  | 936992 |
| Preferred dividend declared, not paid | *-* |  | *-* |  |  | (120276) | (120276) |
| Net Income | *-* |  | *-* |  |  | (1081111) | (1081111) |
| **Balance, March 31, 2026** | **10495561** | $**10496** | **1591210** | $**1591** | $**189909199** | $**(180636537)** | $**9284749** |

---

See Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9

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| |
|:---|
| **cbdMD, INC.** |
| **CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY** |
| **FOR THE six months ended March 31, 2025** |
| **(Unaudited)** |

---

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | ***Other*** | ***Additional*** |  |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Preferred Stock*** | ***Preferred Stock*** | ***Comprehensive*** | ***Paid in*** | ***Accumulated*** |  |
|  | ***Shares*** | ***Amount*** | ***Shares*** | ***Amount*** | ***Income*** | ***Capital*** | ***Deficit*** | ***Total*** |
| **Balance, September 30, 2024** | **492383** | $**492** | **5000000** | $**5000** | $**(7189)** | $**184033012** | $**(182067898)** | $**1963417** |
| Issuance of Common Stock | 1500 | 2 |  |  |  | (2) |  |  |
| Issuance of restricted stock for share based compensation | *-* |  | *-* |  |  | 2868 |  | 2868 |
| Change in fair value of debt related to credit risk | *-* |  | *-* |  | 7189 |  |  | 7189 |
| Conversion of Convertible Notes | 267597 | 267 |  |  |  | 1076470 |  | 1076737 |
| Issuance of Common Stock, GSS Agreement | 21875 | 22 |  |  |  | 82228 |  | 82250 |
| Preferred dividend | *-* |  | *-* |  |  |  | (2001001) | (2001001) |
| Net Loss | *-* |  | *-* |  |  |  | (465662) | (465662) |
| **Balance, March 31, 2025** | **783355** | $**783** | **5000000** | $**5000** | $**-** | $**185194577** | $**(184534562)** | $**665798** |

---

See Notes to Condensed Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10

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**cbdMD, INC.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (unaudited)

**NOTE *1*** – **ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

cbdMD, Inc. ("cbdMD," "we," "us," "our," or the "Company") is a corporation organized under the laws of the State of North Carolina, formed on *March 17, 2015* as Level Beauty Group, Inc. In *November 2016,* we changed the name of the Company to Level Brands, Inc., and on *May 1, 2019* we changed the name of our Company to cbdMD, Inc. We operate from offices located in Charlotte, North Carolina. Our fiscal year end is established as *September 30.*

There have been *no* material changes in the Company's significant accounting policies from those previously disclosed in the Annual Report as of and for the fiscal year ended *September 30, 2025* as filed on Form *10*-K, as amended (the *"2025 10*-K").

The accompanying unaudited interim condensed consolidated financial statements of cbdMD have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the *2025 10*-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of consolidated financial position and the consolidated results of operations for the interim periods presented have been reflected herein.

**Principles of Consolidation**

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: CBDI, Paw CBD, Proline, Therapeutics and Bluebird. All material intercompany transactions and balances have been eliminated in consolidation.

**Reverse Stock Split**

On *April 17, 2025,* the Board of Directors 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 (the "Reverse Stock Split").

**Use of Estimates**

The Company's condensed consolidated financial statements have been prepared in accordance with US GAAP and requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant estimates made in the accompanying condensed consolidated financial statements include, but are *not* limited to, allowances for credit losses, inventory valuation reserves, expected sales returns and allowances, certain assumptions related to the valuation of investments and other securities, acquired intangibles and long-lived assets, the recoverability of intangible and long-lived assets, and income taxes, including deferred tax valuation allowances and reserves for estimated tax liabilities. Actual results could differ from these estimates. The Company continues to monitor macroeconomic conditions to remain flexible and to optimize and evolve its business as appropriate.

**Cash and Cash Equivalents**

For financial statements purposes, the Company considers all highly liquid investments with a maturity of less than *three* months when purchased to be cash equivalents.

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**Accounts Receivable**

Accounts receivables are stated at cost less an allowance for credit losses, if applicable. Credit is extended to customers after an evaluation of the customer's financial condition, and generally collateral is *not* required as a condition of credit extension. 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 $633,308 and $599,521 on *March 31, 2026* and *September 30, 2025,* respectively.

The following table represents a summary of the allowance for credit losses for the periods ended *March 31, 2026* and *September 30, 2025:*

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **September 30,** <br> **2025** |
| Credit loss allowance - beginning of period | $599521 | $346197 |
| Credit loss provision | 96384 | 635912 |
| Write offs | (62597) | (382588) |
| Credit loss allowance - end of period | $633308 | $599521 |

---

**Merchant Receivable and Reserve**

The Company primarily sells its products through the internet and has an arrangement to process customer payments with *third*-party payment processors and negotiate the fee based on the market. The arrangement with the payment processors requires that the Company pay a fee between 2.5% and 4.0% of the transaction amounts processed. Pursuant to this agreement, there can be a waiting period between *2* to *5* days prior to reimbursement to the Company, as well as a calculated reserve which some payment processors hold back. Fees and reserves can change periodically with notice from the processors. At *March 31, 2026* and *September 30, 2025*, the receivable from payment processors included approximately $820,935 and $786,449, respectively, for the waiting period amount and is recorded as accounts receivable in the accompanying condensed consolidated balance sheet.

**Inventory**

Inventory is stated at the lower of cost or net realizable value with cost being determined on a weighted average basis. The cost of inventory includes product cost, freight-in, and production fill and labor. Write-offs of potentially slow moving or damaged inventory are recorded based on management's analysis of inventory levels, forecasted future sales volume and pricing and through specific identification of obsolete or damaged products. 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 $131,882 and $48,738 as of *March 31, 2026* and *September 30, 2025*, respectively.

**Property and Equipment**

Property and equipment items are stated at cost, less accumulated depreciation. Expenditures on routine maintenance and repairs are charged to operations as incurred. Depreciation is charged to expense over the estimated useful lives of the assets using the straight-line method. Generally, the useful lives are five years for manufacturing equipment and automobiles and three years for software, computer, and furniture and equipment. The useful life for leasehold improvements is over the term of the lease, or the remaining economic life of the asset, whichever is shorter. The cost and accumulated depreciation of property are eliminated from the accounts upon disposal, and any resulting gain or loss is included in the consolidated statements of operations for the applicable period. Long-lived assets held and used by the Company are reviewed for impairment whenever changes in circumstance indicate the carrying value of an asset *may not* be recoverable.

**Fair Value Accounting**

The Company utilizes relevant accounting standards for fair value, which include the definition of fair value, the framework for measuring fair value, and disclosures about fair value measurements. Fair value is a market-based measurement, *not* an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels *1* and *2* of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level *3* of the hierarchy).

Level *1* inputs utilize quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level *2* inputs are inputs other than quoted prices included in Level *1* that are directly or indirectly observable for the asset or liability. Level *2* inputs *may* include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability. Level *3* inputs are unobservable inputs for the asset or liability, which are based on an entity's own assumptions, as there is little, if any, observable market activity. In instances where the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

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When the Company records an investment in marketable securities the carrying value is assigned at fair value. Any changes in fair value for marketable securities during a given period will be recorded as an unrealized gain or loss in the consolidated statement of operations. For investment in 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 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 (loss). The changes in fair value related to instrument-specific credit risk are recorded through other comprehensive loss. See Note *11* for more information related to the convertible notes.

**Intangible Assets**

Trademarks, tradenames, and technology relief from royalty are amortized over an estimated useful life of *5*-*10* years. The Company performs impairment tests whenever events or changes in circumstances indicate that the asset group's carrying value *may not* be recoverable.

**Goodwill**

Goodwill is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value *may not* be recoverable.

**Revenue Recognition**

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the *five*-step model including: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

*Performance Obligations*

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

Other than accounts receivable, the Company has no material contract assets at *March 31, 2026*.

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

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended March 31,*** | ***Three Months Ended March 31,*** | ***Three Months Ended March 31,*** | ***Three Months Ended March 31,*** |
|  | ***2026*** | ***% of total*** | ***2025*** | ***% of total*** |
| E-commerce sales | $3796219 | 67.3% | $3634793 | 76.5% |
| Wholesale sales | $1843840 | 32.7% | $1114633 | 23.5% |
| **Total Net Sales** | $5640059 | 100.0% | $4749426 | 100.0% |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Six Months Ended March 31,*** | ***Six Months Ended March 31,*** | ***Six Months Ended March 31,*** | ***Six Months Ended March 31,*** |
|  | ***2026*** | ***% of total*** | ***2025*** | ***% of total*** |
| E-commerce sales | $7398085 | 69.4% | $7587523 | 76.9% |
| Wholesale sales | $3258879 | 30.6% | $2275379 | 23.1% |
| **Total Net Sales** | $10656964 | 100.0% | $9862902 | 100.0% |

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**Cost of Sales**

The Company's cost of sales includes costs associated with distribution, fill and labor expense, components, manufacturing overhead, *third*-party providers, and outbound freight for the Company's products sales. For the Company's product sales, cost of sales also includes the cost of refurbishing products returned by customers that will be offered for resale, if any, and the cost of inventory write-downs associated with adjustments of held inventories to their net realizable value. These expenses are reflected in the Company's consolidated statements of operations when the product is sold and net sales revenues are recognized or, in the case of inventory write-downs, when circumstances indicate that the carrying value of inventories is in excess of their net realizable value.

**Income Taxes**

The Company is a North Carolina corporation that is treated as a corporation for federal and state income tax purposes. CBDI, Therapeutics, Proline Global, Paw CBD and Bluebird 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 utilizing the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company uses the inside basis approach to determine deferred tax assets and liabilities associated with its investment in a consolidated pass-through entity. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than *not* that the net deferred asset will *not* be realized.

**Concentrations**

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, and securities.

The Company places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation ("FDIC") covers *$250,000* for substantially all depository accounts. The Company from time to time *may* have amounts on deposit in excess of the insured limits.

Concentration of credit risk with respect to receivables is principally limited to trade receivables with corporate customers that meet specific credit policies. 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* and *six* months

ended *March 31, 2026*.

**Stock-Based Compensation**

Stock-based compensation cost is measured at the grant date fair value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that **may* be settled by the issuance of those equity instruments.

The Company uses the Black-Scholes model for measuring the fair value of options and warrants. The fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. The Company recognizes forfeitures when they occur.

**Loss Per Share**

The Company computes basic loss per share by dividing net loss and net loss attributable to common shareholders, after deducting preferred stock dividends, by the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

**Liquidity and Going Concern Considerations**

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company experienced a loss of $797,978 and $1,081,111 for the *three* and *six* months ended *March 31, 2026*, respectively, and an accumulated deficit of approximately $180.6 million at *March 31, 2026.*

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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* assurance that these actions will be successful. The Company's ability to continue as a going concern is dependent upon its ability to improve profitability and its ability to acquire additional funding on commercially reasonable terms, if required. These and other factors raise substantial doubt about the Company's ability to continue as a going concern for *twelve* months after the date that the accompanying condensed consolidated financial statements are issued. These condensed consolidated financial statements and notes 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 from the Company's inability to continue as a going concern.

**Convertible Notes**

Effective *February 1, 2024,* the Company entered into a Securities Purchase Agreement dated *January 30, 2024* with *five* institutional investors (the "Investors") pursuant to which the Investors advanced the Company an aggregate of $1,250,000 in gross proceeds and the Company issued to the Investors 8% Senior Secured Original Issue 20% Discount Convertible Promissory Notes, in the aggregate principal amount of $1,541,666 (the "Notes"). The Company used the proceeds from the issuance of the Notes for working capital and general corporate purposes. During the fiscal year ended *September 30, 2025,* the Notes were converted and satisfied in full and are *no* longer an obligation of the Company.

**New Accounting Standards**

In *November 2023,* the FASB issued guidance that updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance on an annual and interim basis. The Company adopted this guidance for its annual period ending *September 30, 2025.* While the adoption of this standard did *not* have a material impact on the Company's Consolidated Financial Statements, the new guidance resulted in increased disclosures on reportable segments in Note *15* of the Notes to the Consolidated Financial Statements.

In *November 2024,* the FASB issued guidance that requires disaggregation of specific expense categories in disclosures within the footnotes to the financial statements on an annual and interim basis. The Company is required to adopt this guidance for its annual period ending *September 30, 2028* and all interim periods thereafter on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.

In *December 2023,* the FASB issued guidance that enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The Company is required to adopt this guidance for its annual period ending *September 30, 2026,* which will result in increased disclosures in the Notes to its Consolidated Financial Statements.

**NOTE *2*** – **MARKETABLE SECURITIES AND INVESTMENT OTHER SECURITIES**

The Company has, from time to time, entered into contracts where a portion of the consideration provided by the counterparty in exchange for the Company's products or services was common stock, options or warrants (an equity position). In these situations, upon invoicing the customer for the stock or other instruments, the Company recorded the receivable as accounts receivable other, and used the value of the stock or other instrument upon invoicing to determine the value. In determining fair value of marketable securities and investment other securities, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value. The Company determines the fair value of marketable securities and investment other securities based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the fair value hierarchy distinguishes between observable and unobservable inputs.

On *April 7, 2022,* CBD Industries, LLC entered into an asset sale agreement to sell substantially all its manufacturing assets to a subsidiary of Steady State, LLC ("Steady State"). The equipment sale was initially valued at approximately $1.8 million for accounting purposes, with the sale price consisting of products to be provided to the Company under the manufacturing and supply agreement and $1.4 million of which the Company invested into Steady State in the form of an equity investment consistent with the terms of Steady State's completed Series C financing. In *September 2023,* the Company impaired this investment by $700,000. The Company has classified this investment as Level *3* for fair value measurement purposes as there are *no* observable inputs and has included it in non-current assets on the accompanying condensed consolidated balance sheets as the Company plans to hold this investment.

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**NOTE *3* - INVENTORY**

Inventory consists of the following as of *March 31, 2026* and *September 30, 2025:*

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| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***September 30,*** |
|  | ***2026*** | ***2025*** |
| Finished Goods | $1846280 | $1577309 |
| Inventory Components | 1606647 | 1203556 |
| Inventory Reserve | (131882) | (48738) |
| Inventory prepaid | 331694 | 214795 |
| Total Inventory | $3652739 | $2946922 |

---

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, 2026*.

**NOTE *4*** – **PROPERTY AND EQUIPMENT**

Property and equipment consisted of the following as of:

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***September 30,*** |
|  | ***2026*** | ***2025*** |
| Computers, furniture and equipment | $1933176 | $1758805 |
| Manufacturing equipment | 296791 | 288554 |
| Leasehold improvements | 495581 | 495581 |
|  | 2725548 | 2542940 |
| Less accumulated depreciation | (2364429) | (2265563) |
| Property and equipment, net | $361119 | $277377 |

---

Depreciation expense related to property and equipment was $44,706 and $94,629 for the *three* months ended *March 31, 2026* and *2025,* respectively, $98,866 and $201,369 for the *six* months ended *March 31, 2026* and *2025*, respectively.

**NOTE *5*** – **INTANGIBLE ASSETS**

**<u>Intangible Assets</u>**

Intangible assets consisted of the following as of:

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***September 30,*** |
|  | ***2026*** | ***2025*** |
| Trademark related to cbdMD | $21585000 | $21585000 |
| Trademark for HempMD | 50000 | 50000 |
| Technology Relief from Royalty related to DirectCBDOnline.com | 667844 | 667844 |
| Tradename related to CBD MD limited mark | 368000 | 368000 |
| Tradename related to DirectCBDOnline.com | 749567 | 749567 |
| Customer relationships related to Bluebird | 363895 |  |
| Intellectual property related to Bluebird | 103000 |  |
| Accumulated impairment of intangible assets | (17504000) | (17504000) |
| Amortization of definite lived intangible assets | (4190035) | (3791909) |
| Total | $2193271 | $2124502 |

---

Amortization expense related to definite lived intangible assets was $398,126 and $382,534 for the *six* months ended *March 31, 2026* and *2025*, respectively.

**NOTE *6*** – **RELATED PARTY TRANSACTIONS**

*None.*

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**NOTE *7*** – **SHAREHOLDERS**' **EQUITY**

<u>Preferred Stock Conversion and Reverse Stock Split</u>

In *October 2019,* the Company designated 5,000,000 of its 50,000,000 authorized shares of preferred stock as 8.0% Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"). Series A Preferred Stock ranked senior to common stock for liquidation or dividend and holders were entitled to receive cumulative cash dividends at an annual rate of *8.0%* payable monthly in arrears for the prior month.

Among other matters, during the Company's annual meeting held on *April 10, 2025,* the shareholders of the Company approved:

i. an amendment the Certificate of Designation of the Company's Series A Preferred Stock to include an automatic conversion provision whereby each outstanding share of Series A Preferred Stock, together with accrued and unpaid dividends, would automatically convert into thirteen shares of common stock, at an effective date determined by of the Board of Directors (the "Automatic Preferred Conversion"); and

ii. an amendment to the Company's Articles of Incorporation to authorize the Board of Directors to effect a reverse stock split of the then outstanding shares of Common stock at a specific ratio, ranging from *one*-for-three to *one*-for-ten, to be determined by the Board of Directors at a date and time to be determined by the Board of Directors. 

The Board of Directors elected to effectuate the Automatic Preferred Conversion on *May 6, 2025* at *4:01* p.m. Eastern Time (the "Mandatory Exchange Date"). On the Mandatory Exchange Date, all Series A Preferred Stock, together with accrued and unpaid dividends, was converted in to 65,000,000 shares (pre-split) of common stock, dividends on converted shares ceased to accrue, and the Series A Preferred Stock ceased trading.

The Board of Directors elected to implement a *one*-for-*eight* (1:8) reverse stock split of the Company's common stock (the "Reverse Stock Split") on *May 6, 2025,* effective at *4:02* p.m. Eastern Time, immediately following and therefore inclusive of shares of common stock issued in connection with the Automatic Preferred Conversion. Following the Reverse Stock Split, holders of fractional shares received, in lieu of a fractional share, the number of shares rounded up to the next whole number ("Round Up Shares"). 89 Round Up Shares were issued as a result of the Reverse Stock Split.

<u>Asset Purchase</u>

On *January 12, 2026,* the Company and Gaia Botanicals, LLC, a Colorado limited liability company d/b/a Bluebird Botanicals ("Bluebird") and Bluebird's wholly owned subsidiaries entered into an Asset Purchase Agreement (the "Asset Purchase Agreement"). Under the Asset Purchase Agreement, the Company acquired substantially all of Bluebird's assets, including Bluebird's brand name, website, related trademarks, inventory, and certain other assets, and assumed certain liabilities. This strategic acquisition brings together *two* mission-aligned brands and broadens the Company's customer base. The purchase consideration consisted of (i) 425,000 shares of the Company's restricted common stock issued at closing and (ii) an earnout amount of up to 525,000 shares of the Company's restricted common stock, subject to earnout share calculations and right of setoff as set forth in the Asset Purchase Agreement. The earnout shares shall be issued to Bluebird on or before the *60th* day following the *first* anniversary of the closing date. The shares issued at closing and the earnout shares are subject to a *180*-day lock-up agreement with certain limited transfer exceptions and dribble-out provisions.

<u>Preferred stock transactions</u>

On *September 29, 2025,* the Company filed a Certificate of Amendment to the Certificate of Incorporation (the "Series B Certificate of Designation") designating 1,700,000 shares of the Company's authorized preferred stock as Series B Convertible Preferred Stock, par value $0.001 per share and stated value of $1.00 per share. Each share of the Series B Preferred Stock is initially convertible into common stock at an initial conversion price of $1.00, subject to anti-dilution adjustments and price protection provisions, which *may* be triggered upon the issuance of common stock options or convertible securities at a price below the then-applicable conversion price, and Alternate Conversion rights (as defined in the Series B Certificate of Designation) resulting from a Triggering Event (as defined in the Series B Certificate of Designation). The Series B Preferred Stock accrues dividends at a rate of 10% per annum which are payable quarterly in shares of common stock, subject to the satisfaction of all Equity Conditions (as defined in the Series B Certificate of Designation), or in cash. If the Company fails to satisfy an Equity Condition, dividends shall be paid in cash. However, if North Carolina law prohibits the payment of dividends in cash, then the Stated Value (as defined in the Series B Certificate of Designation) shall be increased by the amount of such unpaid dividends. The Series B Preferred Stock is further subject to repricing adjustments upon the effectiveness of a registration statement wherein the conversion price shall equal the lower of (a) the original conversion price or (b) the closing price of the common stock on the effective date of such registration statement. Additionally, the Series B Preferred Stock is subject to future financing exchange options upon any issuance by the Company, or subsidiaries, of any security with terms more favorable than those set forth in the Series B Certificate Designation.

With respect to dividends, distributions, liquidation, dissolution and winding up of the Company, the Series B Preferred Stock ranks pari passu with the Series C Convertible Preferred Stock and senior to all other shares of the Company's capital stock unless otherwise consented to by the holders of the Series B Preferred Stock. The holders of Series B Preferred Stock have *no* voting power and *no* right to vote, except as required by the North Carolina Business Corporations Act or with respect to matters affecting the preferences, rights, privileges or powers relating to the Series B Preferred Stock. In addition, the Series B Preferred Stock is subject to a beneficial ownership limitation which prohibits any holder from beneficially owning more than 4.99% of the shares of the Company's common stock outstanding immediately following such conversion. The Series B Certificate of Designation contains various restrictive covenants and protective provisions, including restrictions on the Company's ability to incur additional indebtedness, redeem capital stock, pay cash dividends, dispose of assets outside of the ordinary course of business or make certain issuances of securities. The complete rights, preferences and limitations of the Series B Preferred Stock are set forth in the Series B Certificate of Designation which is filed as Exhibit *3.1* to the Company's Form *8*-K Current Report filed on *October 6, 2025.*

On *December 19, 2025,* the Company filed a Certificate of Amendment to the Certificate of Incorporation (the "Series C Certificate of Designation") designating 1,000,000 shares of the Company's authorized preferred stock as Series C Convertible Preferred Stock, par value $0.001 per share and stated value of $2.25 per share. Each share of the Series C Preferred Stock is initially convertible into common stock at a conversion price of $1.13, subject to anti-dilution adjustments and price protection provisions, which *may* be triggered upon the issuance of common stock options or convertible securities at a price below the then-applicable conversion price, and Alternate Conversion rights (as defined in the Series C Certificate of Designation) resulting from a Triggering Event (as defined in the Series C Certificate of Designation). The Series C Preferred Stock accrues dividends at a rate of 10% per annum which are payable quarterly in shares of common stock, subject to the satisfaction of all Equity Conditions (as defined in the Series C Certificate of Designation), or in cash. If the Company fails to satisfy an Equity Condition, dividends shall be paid in cash. However, if North Carolina law prohibits the payment of dividends in cash, then the Stated Value (as defined in the Series C Certificate of Designation) shall be increased by the amount of such dividends unpaid dividends. Further, the conversion price of the common stock is subject to adjustment on the effective date of the initial registration statement registering the shares of common stock issuable upon conversion of the Series C Preferred Stock, equal to the lower of the (a) original conversion price or (b) the closing sale price of the common stock on the date prior to the effective date of such registration statement subject to a floor price of $0.65 per share, and repricing adjustments upon the effectiveness of any subsequent registration statement wherein the conversion price shall equal the lower of the (a) original conversion price or (b) the closing price of the common stock on the effective date of such registration statement.

With respect to dividends, distributions, liquidation, dissolution and winding up of the Company, the Series C Preferred Stock ranks pari passu with the Series B Preferred Stock and is senior to all other shares of the Company's capital stock unless otherwise consented to by the holders of the Series C Preferred Stock. The holders of Series C Preferred Stock have *no* voting power and *no* right to vote, except as required by the North Carolina Business Corporations Act or with respect to matters affecting the preferences, rights, privileges or powers relating to the Series C Preferred Stock. In addition, the Series C Preferred Stock is subject to a beneficial ownership limitation which prohibits any holder from beneficially owning more than 4.99% of the shares of the Company's common stock outstanding immediately following such conversion. The Series C Certificate of Designation contains various restrictive covenants and protective provisions, including restrictions on the Company's ability to incur additional indebtedness, redeem capital stock, pay cash dividends, dispose of assets outside of the ordinary course of business or make certain issuances of securities. The complete rights, preferences and limitations of the Series C Preferred Stock are set forth in the Series C Certificate of Designation which is filed as Exhibit *3.12* to the Company's Form *10*-K Annual Report for the year ended *September 30, 2025* filed on *December 19, 2025.*

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<u>Securities Purchase Agreement</u>

On *December 15, 2025,* the Company entered into a Securities Purchase Agreement (the "ELOC Agreement") with C/M Capital Master Fund, LP, an accredited investor (the "ELOC Purchaser"). Pursuant to the ELOC Agreement, the Company agreed to sell, and the ELOC Purchaser agreed to purchase, up to $20,000,000 (the "Available Amount") of the Company's common stock (the "Purchase Shares"), subject to a sale limit of 19.99% of the outstanding shares of the Company's common stock as of the date of the ELOC Agreement in accordance with the rules of the NYSE American. The transactions contemplated by the ELOC Agreement are subject to the Company registering the ELOC Purchaser's resale of the Purchase Shares on a registration statement to be filed with the SEC. Concurrent with the execution of the ELOC Agreement, the Company entered into a registration rights agreement with the ELOC Purchaser. Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement on Form S-*1* with the SEC covering the resale of the shares of common stock sold under the ELOC, on or before the *30th* calendar day following the date of the Registration Rights Agreement and to use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC at the earliest practicable date, subject to limited exceptions described therein. The registration rights granted under the Registration Rights Agreement are subject to certain conditions and limitations and are subject to customary indemnification and contribution provisions. In connection with entering into the ELOC Agreement, the Company agreed to immediately issue to the ELOC Purchaser 40,000 shares of common stock as commitment shares and thereafter an amount of shares equal to 0.5% of the Available Amount, which shall be issued in a pro rata fashion simultaneously with the delivery of any and all Purchase Shares purchased under the ELOC Agreement. The Company does *not* have a right to commence any sales of common stock to the ELOC Purchaser under the ELOC Agreement until the time when all of the conditions to the Company's right to commence sales of Purchase Shares to the ELOC Purchaser set forth in the ELOC Agreement have been satisfied, including that a registration statement covering the resale of the Purchase Shares is declared effective by the SEC and the final form of prospectus contained therein is filed with the SEC (the "Commencement Date"). At any time from and after the Commencement Date, on any business day on which the previous business day's closing sale price of common stock was equal to or greater than $0.50 (the "Purchase Date"), the Company *may* direct the ELOC Purchaser to purchase a specified number of shares of common stock (a "Fixed Purchase") *not* to exceed on any single business day the lesser of (i) $500,000 of shares of common stock or (ii) $20,000,000 in the aggregate of Fixed Purchases (as defined in the ELOC Agreement), at a purchase price equal to the lesser of 95% of (A) the lowest sale price of the common stock on the trading day immediately prior to such applicable Purchase Date or (B) the daily volume weighted average price of the common stock for the *five* trading days immediately preceding the applicable Purchase Date for such Fixed Purchase.

In addition, at any time from and after the Commencement Date, on any business day on which the previous business day's closing sale price of the common stock is equal to or greater than $0.50 and such business day is also the Purchase Date for a Fixed Purchase of an amount of shares of common stock *not* less than the applicable Fixed Purchase Share Limit (as defined in the ELOC Agreement) (the "VWAP Purchase Date"), the Company *may* also direct the ELOC Purchaser to purchase an additional number of shares of common stock (a "VWAP Purchase") at a purchase price equal to the lesser of 95% of (i) the closing price of a share of common stock on the trading day immediately prior to such applicable Purchase Date and (ii) the lowest sale price on the VWAP Purchase date. If the Company makes certain issuances of its securities within a specified period of time after a Purchase Date and such securities are issued at prices (the "New Issuance Price") less than the prices to be paid by the ELOC Purchaser in such Fixed Purchase or VWAP Purchase, the purchase price for such applicable Fixed Purchase or VWAP Purchase would be reduced to the New Issuance Price, subject to the terms and conditions set forth in the ELOC Agreement. Under the ELOC Agreement, in *no* event *may* the aggregate amount of Purchase Shares submitted in any single or combination of VWAP Purchase notices on a particular date require a payment from the ELOC Purchaser to us that exceeds $10,000,000, unless such limitation is waived by the ELOC Purchaser.

<u>Common Stock Transactions</u>

During the *six* months ended *March 31, 2026,* the Company (i) issued 425,000 shares to Gaia Botanicals, LLC as part of the acquisition of Bluebird Botanicals; (ii) granted 455,000 shares of RSUs to an executive that vested upon shareholder approval of the *2025* equity incentive plan (these shares fully vested on *March 30, 2026* and the full value of the shares was recognized in the *second* quarter of fiscal *2026,* but the shares have not been legally issued as of *March 31, 2016), (*iii) issued 1,108,790 shares during late *December 2025* in connection with the conversion of the Series B Preferred Stock and (iv) 40,000 shares of common stock (commitment shares) in connection with the closing of the ELOC.

During the *six* months ended *March 31, 2025,* the Company (i) issued 1,875 shares of restricted stock under the Company's *2015* equity incentive plan to a new employee that vest in *12* months, (ii) issued 89,964 shares of common stock for conversions of the Notes during *January 2025; (*iii) issued 177,633 shares of common stock for conversion of the Notes and (iv) 21,875 shares of common stock to a consultant for advisory services.

**NOTE *8*** – **STOCK BASED COMPENSATION**

The following table summarizes stock option activity for the *six* months ended *March 31, 2026*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Number of shares*** | ***Weighted-average exercise price*** | ***Weighted-average remaining contractual term (in years)*** | ***Aggregate intrinsic value (in thousands)*** |
| Outstanding at September 30, 2025 | 5517 | $991.70 | 3.14 | $*-* |
| Granted |  |  | *-* | *-* |
| Exercised |  |  | *-* | *-* |
| Forfeited | (1394) | 1344.21 | *-* | *-* |
| Outstanding at March 31, 2026 | 4123 | 731.26 | 2.32 | *-* |
| Exercisable at March 31, 2026 | 4123 | $731.26 | 2.32 | $*-* |

---

As of *March 31, 2026*, there was no remaining unrecognized stock compensation costs as all stock options were vested.

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**NOTE *9* - WARRANTS**

Transactions involving the Company equity-classified warrants for the *six* months ended *March 31, 2026* are summarized as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Number of shares*** | ***Weighted-average exercise price*** | ***Weighted-average remaining contractual term (in years)*** | ***Aggregate intrinsic value (in thousands)*** |
| Outstanding at September 30, 2025 | 5901 | $244.06 | 3.42 | $*-* |
| Granted |  |  | *-* | *-* |
| Exercised |  |  | *-* | *-* |
| Forfeited | (429) | 1346.40 | *-* | *-* |
| Outstanding at March 31, 2026 | 5472 | 119.56 | 1.95 | *-* |
| Exercisable at March 31, 2026 | 5472 | $119.56 | *-* | $*-* |

---

The following table summarizes outstanding common stock purchase warrants as of *March 31, 2026*:

---

| | | | |
|:---|:---|:---|:---|
|  | ***Number of shares*** | ***Weighted-average exercise price*** | ***Expiration*** |
| Exercisable at $1,350.00 per share | 409 | 1350.00 | *June 2026* |
| Exercisable at $20.16 per share | 5063 | 20.16 | *April 2028* |
|  | 5472 | $119.56 |  |

---

**NOTE *10*** – **COMMITMENTS AND CONTINGENCIES**

From time to time, the Company is involved in legal proceedings and subject to various claims that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company is *not* currently a party to any legal proceedings the outcome of which, if determined adversely, would individually or in the aggregate have a material adverse effect on the Company's Consolidated Financial Statements.

During *2025,* the Company continued to expand distribution of its hemp-derived beverage products. The Company has entered into agreements with various distributors providing for the distribution of certain of our hemp-derived beverage products, subject to certain terms and conditions, which *may* vary depending on the form of the agreement. Such agreements remain in effect for their then-current term as long as the Company's products are being distributed but are subject to specified termination rights held by each party. Additionally, the Company is entitled to terminate certain distribution agreements at any time without cause upon payment of a termination fee, which *may* be material depending on the agreement and the sell through of the product set.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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**NOTE *11*** – **NOTE PAYABLE**

Effective *February 1, 2024,* the Company entered into a Securities Purchase Agreement dated *January 30, 2024,* with *five* institutional investors whereby the Investors advanced the Company an aggregate of $1.25 million in gross proceeds and the Company issued to the Investors 8% Senior Secured Original Issue 20% Discount Convertible Promissory Notes, in the aggregate principal amount of $1.54 million (the "Notes").

Each Note bore interest of 8% per annum and was to mature on *July 30, 2025.* Further, the notes were convertible, at the option of the holder, into shares of common stock at a conversion price which was adjusted for certain down-round provisions, as defined in the Securities Purchase Agreement. At issuance, the Company elected the fair value option to account for the Notes. The Notes were initially recognized at a fair value of $2.7 million. Excluding the impact of the change in fair value related to instrument-specific credit risk, which was recorded in other comprehensive income, subsequent changes in fair value were recorded in non-operating income at each reporting period.

During fiscal *2025,* the Company issued an aggregate of 267,597 shares of common stock to satisfy all remaining outstanding obligations of the Notes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

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**NOTE *12*** – **LEASES**

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 its 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 agreement, the Company is required to pay real estate taxes, insurance and common area maintenance expenses during the lease term and are treated as period expenses during the time incurred.

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.

Components of operating lease costs are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | ***Three Months*** | ***Six Months*** |
|  | ***Ended*** | ***Ended*** |
|  | ***March 31,*** | ***March 31,*** |
|  | ***2026*** | ***2026*** |
| Total Operating Lease Costs | $180974 | $361947 |

---

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

---

| | | |
|:---|:---|:---|
|  | ***Three Months*** | ***Six Months*** |
|  | ***Ended*** | ***Ended*** |
|  | ***March 31,*** | ***March 31,*** |
|  | ***2026*** | ***2026*** |
| Cash paid for amounts included in the measurement of operating lease liabilities | $197600 | $392600 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

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As of *March 31, 2026*, our operating lease had a weighted average remaining lease term of 0.50 years and a weighted average discount rate of 4.66%.

Future minimum aggregate lease payments under operating leases as of *March 31, 2026* are summarized as follows:

---

| | |
|:---|:---|
| **For the year ended September 30,** |  |
| 2026 | $413267 |
| Total future lease payments | 413267 |
| Less interest | (5456) |
| Total lease liabilities | $407811 |

---

**NOTE *13*** – **LOSS PER SHARE**

At *March 31, 2026*, 490,850 potential shares underlying options, unvested RSUs and warrants as well as 1.6 million shares issuable upon conversion of our Series B and C Preferred stock 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 convertible preferred shares, were excluded from the shares used to calculate diluted loss per share as their inclusion would reduce net loss per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

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**NOTE *14*** – **INCOME TAXES**

The Company has a valuation allowance against the net deferred tax assets, with the exception of the deferred tax liabilities that result from indefinite-life intangibles ("naked credits"). The Company has determined that using the general methodology for calculating income taxes during an interim period for the quarters ending *December 31, 2019, March 31, 2020,* and *June 30, 2020,* provided for a wide range of potential annual effective rates. At *September 30, 2025,* the Company recorded a net deferred tax asset of zero as the cumulative net deferred tax asset had a full valuation on it and there was *not* enough positive evidence that would warrant recognizing the benefit of the net deferred tax asset. 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 *March 31, 2026*, the Company determined the same circumstances to be true and therefore recorded a net deferred tax asset of zero.

**NOTE *15*** – **SEGMENT INFORMATION**

The Company operates as a single reportable segment. Our chief operating decision maker (CODM) is the Chief Executive Officer, who reviews financial information on a consolidated basis for purposes of assessing performance and allocating resources. Accordingly, all of the Company's operations are considered a single operating segment under the criteria of ASC *280,* Segment Reporting.

Because we have a single reportable segment, the segment information presented herein is consistent with the condensed consolidated financial statements. The required segment information for revenue, profit or loss, assets, and specified expenses (such as depreciation and amortization) can be found on the face of the condensed consolidated income statement and condensed consolidated balance sheet.

**NOTE *16* - BUSINESS COMBINATION**

On *January 12, 2026,* the Company, Bluebird and Bluebird's wholly owned subsidiaries entered into the Asset Purchase Agreement. Under the Asset Purchase Agreement, the Company acquired substantially all of Bluebird's assets, including Bluebird's brand name, website, related trademarks, inventory, and certain other assets, and assumed certain liabilities. This strategic acquisition brings together *two* mission-aligned brands and broadens the Company's customer base. The purchase consideration consisted of (i) 425,000 shares of the Company's restricted common stock issued at closing and (ii) an earnout amount of up to 525,000 shares of the Company's restricted common stock, subject to earnout share calculations and right of setoff as set forth in the Asset Purchase Agreement. The earnout shares shall be issued to Bluebird on or before the *60th* day following the *first* anniversary of the closing date. The shares issued at closing and the earnout shares are subject to a *180*-day lock-up agreement with certain limited transfer exceptions and dribble-out provisions.

The Acquisition was accounted for as an business combination in accordance with U.S. GAAP. In connection with the Acquisition, the Company engaged an independent *third*-party valuation firm to assist management in determining the estimated fair values of the assets acquired. The valuation was performed using accepted valuation methodologies and management estimates and assumptions. The following table summarizes the allocation of the purchase consideration to the assets acquired based on their estimated fair values as of the acquisition date:

---

| | |
|:---|:---|
| **Bluebird Assets Acquired:** | *Fair Value* |
| Net working capital | 268039 |
| Property and Equipment | 12058 |
| Customer relationships | 363895 |
| Intellectual property | 103000 |
| Assembled workforce goodwill | 88000 |
| Residual goodwill | 102000 |
| Total purchase consideration | $936992 |

---

The identifiable intangible assets acquired consisted primarily of customer relationships and intellectual property. Customer relationship intangible assets represent the estimated fair value attributable to existing customer relationships acquired in the transaction. Intellectual property represents proprietary technology, know-how, trademarks, and related intangible assets acquired as part of the Acquisition.

The above purchase price allocation is preliminary and subject to change during the measurement period (which *may* extend to up to *12* months from the acquisition date) as the Company finalizes its accounting for this transaction.

The excess purchase consideration allocated to goodwill primarily represents the value attributable to the assembled workforce, expected synergies, future growth opportunities, and other intangible benefits that do *not* qualify for separate recognition. Of the total goodwill recognized, approximately $88,000 was attributable to the assembled workforce and approximately $102,000 represented residual goodwill.

The acquired customer relationships and intellectual property are finite-lived intangible assets and are amortized on a straight-line basis over their estimated useful lives of 5 years. Property and equipment acquired in the Acquisition is depreciated over its estimated remaining useful life.

Goodwill is *not* amortized and is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value *may not* be recoverable. Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts *may not* be recoverable.

**NOTE *17*** – **SUBSEQUENT EVENTS**

On *April 22, 2026,* the Company paid accrued dividends of $14,780 and $64,375 related to the Series B and Series C Preferred Stock, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *23*

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**ITEM 2. 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 and six months ended March 31, 2026 and the three and six months ended March 31, 2025 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.

Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements because of several factors, including those set forth under Part I, Item 1A, Risk Factors and Business sections in our 2025 10-K, and our other filings with the Securities and Exchange Commission. We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report.

![ycbd_10qimg1.jpg](ycbd_10qimg1.jpg)

**Our Company**

***<u>Genera</u>***<u>***l***</u>

We own and operate the nationally recognized CBD (cannabidiol) brands cbdMD, Paw CBD, and Bluebird Botanicals, as well as functional mushroom brand ATRx Labs, and Herbal Oasis, our line of THC beverages. We believe that we are an industry leader producing and distributing hemp derived solutions including broad spectrum CBD products and full spectrum CBD products. Our mission is to enhance our customer's overall quality of life while bringing powerful natural plant education, awareness and accessibility of high quality and effective products to all. We source hemp-derived cannabinoids, which are extracted from non-GMO hemp grown on farms in the United States. Our innovative broad spectrum formula utilizes one of the purest hemp extracts, containing CBD, CBG and CBN, while eliminating the presence of tetrahydrocannabinol (THC). Non-THC is defined as below the level of detection using validated scientific analytical methods. 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 to capture the Company's ongoing investments in science related to its existing and future products, including research and development activities for therapeutic applications.

Our cbdMD brand of products includes an array of high-grade, premium everyday and functional CBD products, including tinctures, gummies, topicals, capsules, and sleep, focus and calming aids. In addition, we have clinical based claims and industry leading strength and concentrations to drive product efficacy.

![cbdmd_productlineupsmallest.jpg](cbdmd_productlineupsmallest.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24

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Our Paw CBD brand of products includes veterinarian-formulated products including tinctures, chews, topicals products in varying strengths and formulas. Paw CBD products have undergone the National Animal Safety Council's rigorous audit and meet their Quality Seal standard.

![fullproductlineuppaw2.jpg](fullproductlineuppaw2.jpg)

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.

![mushroomsmaller.jpg](mushroomsmaller.jpg)

Herbal Oasis ("Oasis") 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.

![oasissmallest.jpg](oasissmallest.jpg)

Bluebird is a line of premium full and broad spectrum hemp products.

![bblittle.jpg](bblittle.jpg)

cbdMD, Paw CBD, Oasis, Bluebird 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25

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*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.

Toward the end of the first quarter of 2026, the Company raised additional cash to bolster its balance sheet with the Series C Preferred Stock and structured an ELOC. Over the last few months, we have seen several instances where the stock price and volume has increased and in the future we believe the ELOC will allow us to prudently take advantage of these situations should they occur in the future.

The Company has continued to pursue several potential acquisitions since the conversion of the Series A Preferred Stock in 2025. In January 2026, the Company acquired the Bluebird brand. The Company believes Bluebird provides (i) a large existing customer base that we believe is underserved with their existing product portfolio (ii) a brand name not defined by CBD, allowing for natural expansion into other natural products, (iii) significant SG&A synergies, and (iv) intellectual property including self-GRAS status on their full spectrum product. During the second quarter of fiscal 2026, the acquisition cost and integration costs created a $75,000 drag on the P&L, however, we estimate Bluebird will contribute over $500,000 in revenue per quarter at healthy contribution margins in the forthcoming quarters.

During the second quarter, the regulatory environment for hemp-derived cannabinoid products continued to evolve materially. H.R. 5371, the "Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026" (the "Act"), signed into law on November 12, 2025, remains scheduled to take effect on November 12, 2026. Section 781 of the Act narrows the federal definition of hemp by shifting to a total THC standard (inclusive of THCA) and limits hemp-derived consumable products to 0.4 mg of total THC per container. It remains unknown whether these sections will go into effect as written, or be replaced, delayed, or amended by subsequent acts of Congress.

While cbdMD was founded using THC-free broad spectrum formulations, a meaningful amount of our revenues is derived from products containing low-dose hemp-derived THC that complies with the original Farm Bill. The majority of the Company's revenue for the three and six months ended March 31, 2026 was derived from products that would comply with the Act's THC limitations; however, a meaningful amount of revenue could be impacted should no changes in legislation occur. The Act, if implemented as currently written, will in all likelihood have a material adverse impact on the Company's business, results of operations, and financial condition. Management continues to evaluate strategic alternatives to mitigate potential impacts, including product reformulation and channel diversification, but no assurance can be given that the Company will successfully adapt its portfolio or that alternative legislation will be enacted.

Multiple legislative measures have been introduced in the 119th Congress that would repeal, delay, or modify Section 781 of Public Law 119-37, or that would establish a federal regulatory framework for hemp-derived cannabinoid products. These include H.R. 6209 (repeal of Section 781); H.R. 7024 and S. 3686 (the Hemp Planting Predictability Act, which would extend the effective date by two years); S. 3474 (the Cannabinoid Safety and Regulation Act); H.R. 7212 (the Hemp Enforcement, Modernization, and Protection Act); and S. 4315 (the Hemp Safety Enforcement Act, providing a state opt-out mechanism). On April 30, 2026, the U.S. House of Representatives passed the Farm, Food, and National Security Act of 2026 (H.R. 7567) by a vote of 224-200; the legislation as passed does not include provisions modifying Section 781's restrictions on finished hemp-derived cannabinoid products. The Senate Agriculture Committee is expected to consider its version of the Farm Bill in late May or early June 2026. In addition, in December 2025, the President issued Executive Order 14370 directing executive branch officials to work with Congress to update the statutory definition of finished hemp-derived cannabinoid products. None of the foregoing legislative measures have been enacted as of the date of this filing, and there can be no assurance that any such measure will be enacted or, if enacted, would modify Section 781 in a manner favorable to the Company. The Company is unable to predict the legislative outcome, the timing of any such developments, or the ultimate impact on the Company.

On April 1, 2026, the Centers for Medicare & Medicaid Services ("CMS") activated the Substance Access Beneficiary Engagement Incentive ("BEI"), under which approved participants in the ACO REACH Model and Enhancing Oncology Model may furnish eligible hemp-derived products to Medicare beneficiaries, subject to physician oversight, at up to $500 per beneficiary per year. Eligible products must contain no more than 0.3% delta-9 THC and no more than 3 mg of total THC per serving, and inhalable products are excluded. The Company has launched a clinical healthcare channel to support this pathway and believes its clinical research, safety data, and quality systems position us well to participate, although there can be no assurance regarding the timing or scale of provider adoption. We are engaging ACOs and investing in further patient science to enhance our readiness to participate in this emerging healthcare channel and our positioning as a trusted, evidence-based supplier within the federal healthcare-access framework as provider adoption develops. The BEI is the subject of pending litigation alleging procedural and statutory deficiencies; an adverse ruling could limit or eliminate this pathway.

On April 23, 2026, the Acting Attorney General issued a final order, effective April 28, 2026, rescheduling certain narrow categories of marijuana — FDA-approved drug products and state-licensed medical marijuana — from Schedule I to Schedule III under the Controlled Substances Act. An expedited DEA administrative hearing on broader rescheduling is scheduled to conclude by July 15, 2026. The partial rescheduling does not modify the federal framework for hemp-derived cannabinoid products and does not legalize hemp-derived THC products, but the Company believes it signals a broader federal direction toward regulated access and clinical integration of cannabinoid products.

As previously disclosed, our products are regulated by the FDA. The FDA performs inspections to ensure that our facilities remain in compliance with applicable regulations for our industry. In April and May 2026, the FDA completed an inspection of our Charlotte, North Carolina manufacturing facility for dietary supplement GMP compliance. At the conclusion of the inspection, the FDA provided inspectional observations focusing primarily on documentation, recordkeeping, and quality control oversight. No product safety issues or consumer injuries were identified. The Company is in the process of timely responding to the FDA and actively taking actions to address the observations.

Additionally, we continue to see changing rules and regulations at the state level, which is causing ongoing disruption and additional compliance costs. Given the pace and uncertainty of these developments, the ultimate impact on the Company's business, results of operations, and financial condition cannot be predicted with certainty.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 26

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**Growth Strategies**

We continued to pursue many strategies to grow our revenues and expand the scope of our business through the second quarter of 2026 and beyond:

● <u>*Product Innovation:*</u> Our goal is to provide our customers superior functional based products with greater efficacy claims and absorption. We constantly assess and evaluate our product portfolio, and devote resources to ongoing research and development processes with the goal of improving our product offerings. During 2025, we launched reformulations on several sleep products to enhance their effectiveness and improve taste and expanded into the ready-to-drink beverage product sector under our new Oasis brand. During the first half of 2026, we expanded Oasis's portfolio to include additional flavors and strengths. Since the acquisition of Bluebird, we have introduced a number of new SKUs to their customer base. We have a pipeline of cannabinoid and non-cannabinoid products and formulation upgrades that are in the queue for ongoing innovation and product portfolio improvement.

● <u>*Expand our revenue channels:*</u> We continued to pursue relationships with traditional retail accounts and distributors and believe our top brand awareness and effective marketing position us as a preferred CBD partner for key traditional retail accounts as this channel has continued to normalize. In 2025, we developed relationships with beer and alcohol distributors for our Oasis beverage, with current focus in the southeast. Additionally, we are working to participate in the plan outlined by the President's Medicare reimbursement program launched April 1, 2026.

● <u>*International Expansion:*</u> We continue to explore sales in markets outside of the United States. We generally partner with local wholesalers and local legal counsel who can help navigate the laws and regulatory requirements within their jurisdiction. We continue to pursue key wholesale accounts in a number of international markets.

● *<u>Cultivate Additional Brands:</u>* We continue to operate and attempt to grow the Paw CBD business. 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 which we continued to expand distribution of Oasis during the second quarter of fiscal 2026. We believe there are ongoing opportunities with these brands to focus on education, cross-selling and customer retention.

● *<u>Acquisitions:</u>* We evaluate acquisitions (M&A) where we believe (i) there is an accretive customer base that can lower our cost of customer acquisitions through either a complementary direct to consumer base or wholesale channels, or (ii) the target has a profitable business or easily attainable cost synergies that can quickly help contribute and accelerate profitability of our Company. During January 2026, we acquired the Bluebird brand. We continue to evaluate additional opportunities within our industry as well as complementary industries that can further propel our business forward.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 27

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**Results of operations**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** | **Change** |
| Total net sales | $5640059 | $4749426 | $890633 |
| Cost of sales | 2383137 | 1790062 | 593075 |
| Gross profit as a percentage of net sales | 57.7% | 62.3% | -4.6% |
| Operating expenses | 4057706 | 3445180 | 612526 |
| Operating loss from operations | (800784) | (485816) | (314968) |
| Net loss before taxes | (797978) | (480757) | (317221) |
| Net loss attributable to cbdMD Inc. common shareholders | $(876783) | $(1481257) | $604474 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended March 31,** | **Six Months Ended March 31,** | **Six Months Ended March 31,** |
|  | **2026** | **2025** | **Change** |
| Total net sales | $10656964 | $9862902 | $794062 |
| Cost of sales | 4398751 | 3502929 | 895822 |
| Gross profit as a percentage of net sales | 58.7% | 64.5% | -5.8% |
| Operating expenses | 7345287 | 6932061 | 413226 |
| Operating loss from operations | (1087074) | (572088) | (514986) |
| Net loss before taxes | (1081111) | (465662) | (615449) |
| Net loss attributable to cbdMD Inc. common shareholders | $(1201387) | $(2466663) | $1265276 |

---

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,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **% of total** | **2025** | **% of total** |
| E-commerce sales | $3796219 | 67.3% | $3634793 | 76.5% |
| Wholesale sales | $1843840 | 32.7% | $1114633 | 23.5% |
| Total Net Sales | $5640059 |  | $4749426 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended March 31,** | **Six Months Ended March 31,** | **Six Months Ended March 31,** | **Six Months Ended March 31,** |
|  | **2026** | **% of total** | **2025** | **% of total** |
| E-commerce sales | $7398085 | 69.4% | $7587523 | 76.9% |
| Wholesale sales | 3258879 | 30.6% | 2275379 | 23.1% |
| Total Net Sales | $10656964 |  | $9862902 |  |

---

**Net Sales**

We had total net sales of $5.6 million and $4.7 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an increase in net sales of $0.9 million or 19% quarter over quarter and 12% sequentially. This increase is comprised of gains in both our direct to consumer and wholesale business. Direct to consumer included gains to the core business in addition to the revenue added from the acquisition of Bluebird. We anticipate Bluebird will add incremental revenue during the third quarter with the benefit of ownership for a full fiscal quarter as well as increased marketing by our in house marketing team. Our wholesale business continued to strengthen this quarter as we made progress with our Oasis brand and other cbdMD brand initiatives. We remain focused on growth and, as of this filing April's orders remained strong. Despite the pervasive, industry-wide challenges which we are facing, we remain optimistic about our market positioning in fiscal 2026 and continue to seek to diversify revenue.

**Cost of sales**

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 42% and 38% for the three months ended March 31, 2026 and 2025, respectively. This slight increase in cost of sales is mostly attributed to (i) a shift in our sales mix to more wholesale business which grew $0.7 million year over year, and (ii) increase in warehouse labor as we encountered several repacking projects in response to changes in state regulation.

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**Operating expenses**

Our principal operating expenses include staff-related expenses, advertising (which includes expenses related to industry distribution and trade shows), sponsorships, affiliate commissions, merchant fees, technology, travel, rent, professional service fees, and business insurance expenses.

*Consolidated Operating Expenses*

The following tables provide information on our operating expenses for the three and six months ended March 31, 2026 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** | **Change** |
| Staff related expense | $1510938 | $1247439 | $263499 |
| Professional outside services | 340680 | 287002 | 53678 |
| Marketing | 1237125 | 1124246 | 112778 |
| Merchant fees | 156967 | 135499 | 21468 |
| R&D and regulatory | 2899 | 6323 | (3424) |
| Rent and utilities | 210441 | 224264 | (13823) |
| Non-cash stock compensation | 296872 | 1934 | 294938 |
| Intangibles Amortization | 206844 | 191267 | 15577 |
| Depreciation | 44706 | 94629 | (49923) |
| All other expenses | 50234 | 132577 | (82344) |
| Totals | $4057706 | $3445180 | $612526 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended March 31,** | **Six Months Ended March 31,** | **Six Months Ended March 31,** |
|  | **2026** | **2025** | **Change** |
| Staff related expense | $2774008 | $2489318 | $284690 |
| Professional outside services | 582901 | 632413 | (49512) |
| Marketing | 2372897 | 2125487 | 247309 |
| Merchant fees | 299343 | 284138 | 15205 |
| R&D and regulatory | 3706 | 9269 | (5563) |
| Rent and utilities | 390558 | 363509 | 27049 |
| Non-cash stock compensation | 301804 | 5016 | 296788 |
| Intangibles Amortization | 398126 | 382534 | 15592 |
| Depreciation | 98866 | 201369 | (102503) |
| All other expenses | 123007 | 439007 | (315928) |
| Totals | $7345287 | $6932061 | $413226 |

---

Our overall operating expenses increased approximately $0.6 million or 17.3% for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The acquisition of Bluebird added approximately $340,000 in labor, marketing and acquisition related legal and transaction expenses during the second quarter of fiscal 2026. Additionally, professional outside services increased as we made investments to target the Medicare program in addition to transaction costs related to the acquisition of Bluebird. Stock based compensation increased as certain grants vested during the second quarter of fiscal 2026. The increase in labor is tied to acquisition of Bluebird, some annual adjustments but also a number of projects during the quarter, notably regulatory related reworks, and offset by savings in rents, and other miscellaneous expenses.

**Liquidity and Capital Resources**

We had cash and cash equivalents on hand of approximately $2.6 million, working capital of $5.4 million and an accumulated deficit of approximately $180.6 million at March 31, 2026. At September 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $3.4 million and an accumulated deficit of approximately $179.4 million.

The Company has outstanding quarterly dividend payment obligations under its Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 10% per annum, payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. The Series C Preferred Stock accrues dividends at the same rate of 10% per annum, also payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. If the Company fails to satisfy the applicable equity conditions, dividends on both series of preferred stock are payable in cash, which could adversely affect the Company's liquidity position. As of March 31, 2026, approximately 591,207 shares of Series B Preferred Stock and 1 million shares of Series C Preferred Stock were outstanding. The aggregate quarterly dividend obligation, if paid in cash, would be approximately $70,000 based on stated values and the 10% per annum dividend rate.

While the Company is taking strong action and believes that it can execute its strategy and path to profitability, including the Bluebird acquisition, and believes in its ability to raise additional funds, there can be no assurances to that effect. The Company's ability to continue as a going concern is dependent upon its ability to improve profitability and cash flow and the ability to acquire additional funding. These and other factors raise substantial doubt about the Company's ability to continue as a going concern within twelve months after the date that these financial statements are issued. 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.

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**<u>Cash Flows</u>**

During the six months ended March 31, 2026 and 2025, our sources and uses of cash were as follows:

*Operating Activities*

During the six months ended March 31, 2026, net cash used by operating activities was $1.5 million compared to the cash flows used by operating activities of $0.5 million for the six months ended March 31, 2025. The primary components of the cash used by operating activities in the six months ended March 31, 2026 and 2025 are accounts receivable, inventory and prepaid and other operating expenses.

*Investing Activities*

Cash used in investing activities was $0.1 million for the six months ended March 31, 2026 and March 31, 2025, respectively, and were both related to fixed asset acquisitions.

*Financing Activities*

Cash provided by (used in) financing activities during the six months ended March 31, 2026 and March 31, 2025 of approximately $2.0 million and $0, respectively. The cash provided by financing activities during the six months ended March 31, 2026 is attributable to the proceeds from the issuance of preferred stock.

We do not have any commitments for material capital expenditures.

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

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**Adjusted EBITDA (Unaudited)**

To supplement the Company's unaudited interim consolidated financial statements presented in accordance with US GAAP, the Company uses certain non-GAAP measures of financial performance. Non-GAAP financial measures are not prepared in accordance with, or as an alternative to US GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance that either excludes or includes amounts, or is subject to adjustment that have such an effect, that are not normally excluded or included in the most directly comparable financial measure that is calculated and presented in accordance with US GAAP. Adjusted EBITDA as presented below is a non-GAAP measure.

The Company defines Adjusted EBITDA as GAAP loss from operations adjusted to exclude (i) depreciation and amortization, (ii) stock-based compensation expense, and (iii) mergers and acquisitions and financing transaction expenses. This measure differs from traditional "EBITDA" (Earnings Before Interest, Taxes, Depreciation and Amortization) because the Company's reconciliation begins with loss from operations, which is presented before interest expense and income tax expense on the consolidated statements of operations.

Our management uses and relies on Adjusted EBITDA, which is a non-GAAP financial measure. We believe that management, analysts and shareholders benefit from referring to this non-GAAP financial measure to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Specifically, we believe Adjusted EBITDA is useful to investors because: (i) depreciation and amortization are non-cash charges that do not reflect our cash-based operating performance; (ii) stock-based compensation is a non-cash expense that can vary significantly based on factors such as share price volatility and is not indicative of core operating performance; and (iii) mergers and acquisitions and financing transaction expenses are non-recurring costs that are not expected to continue in the ordinary course of business. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

We have included a reconciliation of our non-GAAP financial measure to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between cbdMD and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. 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 has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include: (i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect the interest expense or cash requirements necessary to service interest or principal payments on our debt; (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; (v) it does not reflect the impact of stock-based compensation upon our overall results of operations; and (vi) other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
|  | **2026** | **2025** | **2026** | **2025** |
| **(Unaudited)** |  |  |  |  |
| **GAAP (loss) from operations** | $**(800784)** | $**(485816)** | $**(1087074)** | $**(572088)** |
| Adjustments: |  |  |  |  |
| Depreciation & Amortization (1) | 251550 | 285896 | 496992 | 583903 |
| Employee and director stock compensation (2) | 296872 | 1934 | 301804 | 5016 |
| Mergers and Acquisitions and financing transaction expense (3) | 31671 |  | 31671 |  |
| **Non-GAAP adjusted EBITDA** | $**(220691)** | $**(197986**) | $**(256607)** | $**16831** |

---

---

| |
|:---|
| (1) Represents depreciation of property, plant and equipment and amortization of the Company's intangible assets. |
| (2) Represents non-cash expense related to options, warrants, restricted stock expenses that have been amortized during the period. |
| (3) Represents costs associated with the Bluebird acquisition. |

---

**Critical accounting policies**

The preparation of financial statements and related disclosures in conformity with US GAAP and our discussion and analysis of our financial condition and operating results require our management to make judgments, assumptions and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Note 1, "Organization and Summary of Significant Accounting Policies," of the Notes to our condensed consolidated financial statements appearing elsewhere in this report describes the significant accounting policies and methods used in the preparation of our condensed consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

Please see Part II, Item 7 – Critical Accounting Policies appearing in our 2025 10-K for the critical accounting policies we believe involve the more significant judgments and estimates used in the preparation of our consolidated financial statements and are the most critical to aid you in fully understanding and evaluating our reported financial results. Management considers these policies critical because they are both important to the portrayal of our financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters.

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**Recent 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**

As of the date of this report, we have no undisclosed off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Not applicable for a smaller reporting company.

**ITEM 4. CONTROLS AND PROCEDURES**

Evaluation of Disclosure Controls and Procedures. We maintain "disclosure controls and procedures" as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluation as of the end of the period covered by this report, our principal executive officer and principal accounting officer have concluded that our disclosure controls and procedures were effective to ensure that the information relating to our company, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our principal executive officer and principal accounting officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS.**

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. As of the date of this Quarterly Report, the Company is not a party to any pending legal proceedings that it believes would, individually or in the aggregate, have a material adverse effect on its business, financial condition, or results of operations. For additional information regarding commitments and contingencies, see Note 10 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

**ITEM 1A. RISK FACTORS.**

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the 2025 10-K. Investors should carefully consider the risks described in the 2025 10-K, together with all of the other information included in this Quarterly Report, including our financial statements and the related notes and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, before deciding whether to invest in our securities. See also "Liquidity and Capital Resources" above for additional discussion of factors that may affect our results of operations and financial condition.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

There were no unregistered sales of the Company's equity securities during the three months ended March 31, 2026, that were not previously disclosed in a Current Report on Form 8-K.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable to our Company's operations.

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**ITEM *5.* OTHER INFORMATION.**

The Auditor Firm ID for our external auditors, Cherry Bekaert LLP, is *677.*

During the fiscal quarter ended *March 31, 2026,* no officers (as defined in Rule *16a*-*1*(f)) or directors adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-*1* trading arrangement" (as defined in Item *408* of Regulation S-K).

**ITEM 6. EXHIBITS.**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Filed or Furnished** |
| **No.** | **Exhibit Description** | **Form** | **Date Filed** | **Number** | **Herewith** |
| [<u>2.1</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495418013530/levb_ex2-1.htm) | [<u>Merger Agreement dated December 3, 2018 by and among Level Brands, Inc.,</u> <u>AcqCo, LLC, cbdMD LLC and Cure Based Development, LLC</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495418013530/levb_ex2-1.htm) | 8-K | 12/3/18 | 2.1 |  |
| [<u>2.2</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-1.htm) | [<u>Articles of Merger dated December 20, 2018 as filed with the Secretary of State of</u> <u>Nevada merging AcqCo, LLC with and into Cure Based Development, LLC</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-1.htm) | 10-Q | 2/14/19 | 2.2 |  |
| [<u>2.3</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-2.htm) | [<u>Articles of Merger dated December 20, 2018 as filed with the Secretary of State of</u> <u>North Carolina merging AcqCo, LLC with and into Cure Based Development, LLC</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-2.htm) | 10-Q | 2/14/19 | 2.3 |  |
| [<u>2.4</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-3.htm) | [<u>Articles of Merger dated December 20, 2018 as filed with the Secretary of State of</u> <u>Nevada merging Cure Based Development, LLC with an into cbdMD LLC</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-3.htm) | 10-Q | 2/14/19 | 2.4 |  |
| [<u>2.5</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-4.htm) | [<u>Articles of Merger dated December 20, 2018 as filed with the Secretary of State of</u> <u>North Carolina merging Cure Based Development, LLC with an into cbdMD LLC</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419001576/level_ex2-4.htm) | 10-Q | 2/14/19 | 2.5 |  |
| [<u>2.6</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495421003778/ycbd_ex10-1.htm) | [<u>Addendum No. 1 to Agreement and Plan of Merger dated March 31, 2021</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495421003778/ycbd_ex10-1.htm) | 8-K | 4/1/21 | 10.1 |  |
| [<u>3.1</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex21.htm) | [<u>Articles of Incorporation</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex21.htm) | 1-A | 9/18/17 | 2.1 |  |
| [<u>3.2</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex22.htm) | [<u>Articles of Amendment to the Articles of Incorporation –</u> <u>filed April 22, 2015</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex22.htm) | 1-A | 9/18/17 | 2.2 |  |
| [<u>3.3</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex23.htm) | [<u>Articles of Amendment to the Articles of Incorporation –</u> <u>filed June 22, 2015</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex23.htm) | 1-A | 9/18/17 | 2.3 |  |
| [<u>3.4</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex24.htm) | [<u>Articles of Amendment to the Articles of Incorporation –</u> <u>filed November 17, 2016</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex24.htm) | 1-A | 9/18/17 | 2.4 |  |
| [<u>3.5</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex25.htm) | [<u>Articles of Amendment to the Articles of Incorporation –</u> <u>filed December 5, 2016</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex25.htm) | 1-A | 9/18/17 | 2.5 |  |
| [<u>3.6</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419004936/levb_ex37.htm) | [<u>Articles of Amendment to Articles of Incorporation</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419004936/levb_ex37.htm) | 8-K | 4/29/19 | 3.7 |  |
| [<u>3.7</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419011679/ycbd_31f.htm) | [<u>Articles of Amendment to the Articles of Incorporation including the Certificate of</u> <u>Designations, Rights and Preferences of the 8.0% Series A Cumulative Convertible</u> <u>Preferred Stock</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495419011679/ycbd_31f.htm) | 8-A | 10/11/19 | 3.1(f) |  |
| [3.8](http://www.sec.gov/Archives/edgar/data/1644903/000143774923011231/ex_507592.htm) | [Articles of Amendment of Articles of Incorporation, as amended, of cbdMD, Inc. effective April 24, 2023 - reverse stock split](http://www.sec.gov/Archives/edgar/data/1644903/000143774923011231/ex_507592.htm) | 8-K | 4/27/23 | 3.1 |  |
| [3.9](http://www.sec.gov/Archives/edgar/data/1644903/000143774925015119/ycbd20250506_8k.htm) | [Articles of Amendment Automatic Conversion of Preferred Stock effective May 6, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925015119/ycbd20250506_8k.htm) | 8-K | 5/7/25 | 3.1 |  |
| [3.10](http://www.sec.gov/Archives/edgar/data/1644903/000143774925015119/ycbd20250506_8k.htm) | [Articles of Amendment to the Articles of Incorporation 8 to 1 reverse split effective May 6, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925015119/ycbd20250506_8k.htm) | 8-K | 5/7/25 | 3.2 |  |
| [3.11](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866201.htm) | [Certificate of Designation of Series B Convertible Preferred Stock filed September 29, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866201.htm) | 8-K | 10/6/25 | 3.1 |  |
| [3.12](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901129.htm) | [Certificate of Designation of Series C Convertible Preferred Stock filed December 19, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901129.htm) | 10-K | 12/19/25 | 3.12 |  |
| [3.<u>1</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex26.htm)3 | [<u>Bylaws, As amended</u>](http://www.sec.gov/Archives/edgar/data/1644903/000165495417008542/level_ex26.htm) | 1-A | 9/18/17 | 2.6 |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 34

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| [10.1](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866173.htm) | [Form of Preferred Stock Purchase Agreement between cbdMD, Inc. and the Selling Shareholders+](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866173.htm) | 8-K | 10/6/25 | 10.1 |  |
| [10.2](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866174.htm) | [Form of Registration Rights Agreement between cbdMD, Inc. and the Selling Shareholders](http://www.sec.gov/Archives/edgar/data/1644903/000143774925030537/ex_866174.htm) | 8-K | 10/6/25 | 10.2 |  |
| [10.3](http://www.sec.gov/Archives/edgar/data/1644903/000143774925036497/ex_893882.htm) | [Executive Employment Agreement dated November 28, 2025 by and between cbdMD, Inc. and T. Ronan Kennedy++](http://www.sec.gov/Archives/edgar/data/1644903/000143774925036497/ex_893882.htm) | 8-K | 11/28/25 | 10.1 |  |
| [10.4](http://www.sec.gov/Archives/edgar/data/1644903/000143774925036497/ex_893883.htm) | [2025 Equity Compensation Plan++](http://www.sec.gov/Archives/edgar/data/1644903/000143774925036497/ex_893883.htm) | 8-K | 11/28/25 | 10.2 |  |
| [10.5](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901132.htm) | [Registration Rights Agreement by and between cbdMD, Inc. and C/M Capital Master Fund, LP, dated December 15, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901132.htm) | 10-K | 12/19/25 | 10.21 |  |
| [10.6](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901133.htm) | [Form of Series C Preferred Stock Securities Purchase Agreement dated December 19, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901133.htm) | 10-K | 12/19/25 | 10.22 |  |
| [10.7](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901134.htm) | [Form of Registration Rights Agreement dated December 19, 2025](http://www.sec.gov/Archives/edgar/data/1644903/000143774925038435/ex_901134.htm) | 10-K | 12/19/25 | 10.23 |  |
| [10.8](http://www.sec.gov/Archives/edgar/data/1644903/000143774926000144/ex_903946.htm) | [Securities Purchase Agreement by and between cbdMD, Inc. and C/M Capital Master Fund, LP, dated December 15, 2025, as amended](http://www.sec.gov/Archives/edgar/data/1644903/000143774926000144/ex_903946.htm) | S-1 | 1/5/26 | 10.2 |  |
| [10.9](http://www.sec.gov/Archives/edgar/data/1644903/000143774926001219/ex_907169.htm) | [Asset Purchase Agreement by and among cbdMD, Inc., Gaia Botanicals, LLC d/b/a Bluebird Botanicals, CBD CliniLabs LLC and Precision Botanical LLC company dated January 12, 2026+](http://www.sec.gov/Archives/edgar/data/1644903/000143774926001219/ex_907169.htm) | 8-K | 1/14/26 | 10.1 |  |
| [10.10](http://www.sec.gov/Archives/edgar/data/1644903/000143774926001219/ex_907184.htm) | [Lockup Agreement Gaia Botanicals, LLC and cbdMD, Inc., dated January 12, 2026](http://www.sec.gov/Archives/edgar/data/1644903/000143774926001219/ex_907184.htm) | 8-K | 1/14/26 | 10.2 |  |
| [10.11](ex_924281.htm) | [Letter Agreement between cbdMD, Inc. and Series C Preferred Shareholders dated February 10, 2026](ex_924281.htm) | 10-Q | 2/17/2026 | 10.11 |  |
| [<u>31.1</u>](ex_924282.htm) | [<u>Certification of Principal Executive Officer and Principal Financial Officer (Section 302)</u>](ex_924282.htm) |  |  |  | Filed |
| [<u>32.1</u>](ex_924283.htm) | [<u>Certification of Principal Executive Officer and Principal Financial Officer (Section 906)</u>](ex_924283.htm) |  |  |  | Furnished\* |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |  |  |  | Filed |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  | Filed |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  | Filed |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  | Filed |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  | Filed |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  | Filed |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101) |  |  |  | Filed |

---

+ Certain exhibits, appendices and/or schedules have been omitted in accordance with Item 601 of Regulation S-K. The Company hereby agrees to furnish to the staff of the Securities and Exchange Commission upon request any omitted information.

++ Management contract of compensatory plan or arrangement.

\* This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our stockholders who make a written request to our Corporate Secretary at cbdMD, Inc. 2101 Westinghouse Blvd, Suite A, Charlotte, NC 28273.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 35

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by a duly authorized officer of the registrant and by the principal financial or chief accounting officer of the registrant.

---

| | | |
|:---|:---|:---|
|  | **cbdMD, INC.** | **cbdMD, INC.** |
| May 14, 2026 | By: | */s/ T. Ronan Kennedy* |
|  |  | T. Ronan Kennedy<br> Chief Executive Officer (Principal Executive Officer)<br> and Chief Financial Officer (Principal Financial Officer) |
| May 14, 2026 | By: | */s/ Brad Whitford* |
|  |  | Brad Whitford, Chief Accounting Officer |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36

## Exhibit 31.1

**EXHIBIT 31.1**

**Rule 13a-14(a)/15d-14(a) Certification**

I, T. Ronan Kennedy, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form 10-Q for the period ended March 31, 2026 of cbdMD, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Dated: May 14, 2026 | */s/ T. Ronan Kennedy* |
|  | T. Ronan Kennedy, |
|  | Chief Executive Officer (Principal Executive Officer) and<br> Chief Financial Officer (Principal Financial Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**Section 1350 Certification**

In connection with the Quarterly Report of cbdMD, Inc. (the "Company") on Form 10-Q for the period ended March 31, 2026 as filed with the Securities and Exchange Commission (the "Report"), I, T. Ronan Kennedy, do hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes- Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

---

| | |
|:---|:---|
| May 14, 2026 | */s/ T. Ronan Kennedy* |
|  | T. Ronan Kennedy, |
|  | Chief Executive Officer (Principal Executive Officer) |
| May 14, 2026 | */s/ T. Ronan Kennedy* |
|  | T. Ronan Kennedy, |
|  | Chief Financial Officer (Principal Financial Officer) |

---

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.