Cbdmd Stock Earnings Reports

Key points for investors:

- Capital structure reset and NYSE compliance: The company completed a Series A preferred conversion and a reverse stock split, converting ~$6.7M of accrued preferred dividends into common stock, eliminating legacy preferred obligations (including ~$4M in annual dividends and >$50M in preferred waterfall payouts), and simplifying the cap table to ~8.9M common shares outstanding. Management says this leaves the company debt-free, with no warrant overhang, a pro forma non-GAAP adjusted book value >$7M, and positioned to regain NYSE American compliance by year-end.

- Financial performance and improvement: Q2 FY2025 net sales were $4.7M (up 8.6% YoY). E-commerce (DTC) generated $3.6M (77% of sales) and wholesale $1.1M (up 22% YoY). Gross margin remained strong at 62%. GAAP net loss was ~$480K for the quarter (operating loss ~$485K). Non-GAAP adjusted EBITDA loss improved to $197K (versus $680K loss prior-year), driven by SG&A reductions and other cost controls. Cash was ~$1.7M at March 31, 2025; working capital was negative ~$3.7M but adjusted positive ~$2.8M when excluding accrued preferred dividends.

- Cost discipline and near-term targets: Management reduced SG&A (payroll, professional fees, elimination of HQ lease), is focused on returning to positive income and EBITDA in H2 FY2025, and says modeled liquidity remains sufficient through fiscal 2026 under current assumptions.

- Growth priorities and product pipeline: Management is focused on (1) improving DTC customer acquisition/retention (leadership changes made), (2) expanding wholesale (wholesale up ~13% on a trailing 12-month basis per management), and (3) scaling Herbal Oasis THC seltzer (award wins, new distributor agreements in AL/FL/NC, rollout paused briefly by state-level legislation but resuming). Management highlights strong category tailwinds for THC seltzers and is tracking regulation in 23+ states.

- Strategic optionality: With a cleaned-up cap table and improved listing outlook, management is re-opening strategic conversations including disciplined M&A (both inside and outside cannabinoid space) where clear synergies and accretion exist.

- Risks and caveats: Q2 marketing underperformance weighed on DTC results; regulatory uncertainty remains relevant for the THC seltzer rollout; shelf availability and broader capital markets flexibility depend on completing the next audit and timing of the shelf reactivation.