8-K/A: cbdMD Corrects Stockholders Equity Error and Receives NYSE American Listing Compliance Plan Extension

cbdMD, Inc. filed an amended report to correct a previously reported stockholders deficit to a stockholders equity of $3.1 million and announced an extension to its NYSE American listing compliance plan until December 5, 2025.

Summary

• cbdMD, Inc. filed an amendment to a previous report to correct an error regarding its stockholders equity as of March 31, 2024.
• The original report incorrectly stated a stockholders deficit of $3.1 million, which has been corrected to a stockholders equity of $3.1 million.
• The company received notice from the NYSE American that its plan to regain compliance with continued listing standards has been accepted.
• The company has been granted a plan period through December 5, 2025, to meet the listing requirements.
• The company was previously notified that it did not meet the NYSE American's continued listing standards due to having less than $4 million in stockholders equity and reporting losses in three of the last four fiscal years.
• The company will be subject to quarterly reviews during the plan period to assess progress.
• Failure to regain compliance by the deadline or make sufficient progress may result in delisting proceedings.
• The company's common and preferred stock will continue to be listed on the NYSE American during the plan period.

Sentiment

Score: 4

Explanation: The sentiment is negative due to the company's non-compliance with listing standards and the risk of delisting, although the extension provides some temporary relief. The correction of the financial statement error is a positive, but the underlying financial issues remain a concern.

Positives

• The company has been granted an extension to regain compliance with NYSE American listing standards, providing additional time to improve its financial position.
• The company's stock will continue to be listed on the NYSE American during the plan period, avoiding immediate delisting.

Negatives

• The company was initially non-compliant with NYSE American listing standards due to low stockholders equity and recent losses.
• The company faces the risk of delisting if it does not regain compliance by December 5, 2025, or make sufficient progress during the plan period.

Risks

• The company may not be able to make sufficient progress to satisfy the NYSE American's requirements.
• The company could be delisted if it does not regain compliance by the deadline.
• Future events could negatively impact the company's ability to regain compliance.

Future Outlook

The company must make sufficient progress to regain compliance with NYSE American listing standards by December 5, 2025, or face potential delisting.

Management Comments

• The company can provide no assurances that it will be able to make progress with respect to its plan that NYSE American will determine to be satisfactory.
• The company can provide no assurances that it will regain compliance with Section 1003(a)(ii) of the Company Guide on or before the Deadline Date.
• The company can provide no assurances that developments and events occurring subsequent to the Companys formulation of the plan or its acceptance by the NYSE American will not adversely affect the Companys ability to make sufficient progress and/or regain compliance with Section 1003(a)(ii) of the Company Guide on or before the Deadline Date or result in the Companys failure to be in compliance with other NYSE American continued listing standards.

Industry Context

This announcement highlights the challenges faced by companies in maintaining listing compliance, particularly those with recent losses and low stockholders equity. It is not uncommon for companies to receive notices of non-compliance and be given a period to rectify the situation.

Comparison to Industry Standards

• Many companies listed on the NYSE American face similar challenges in maintaining compliance with listing standards, particularly those in volatile sectors or those experiencing financial difficulties.
• Companies like MedMen Enterprises Inc. and Sundial Growers Inc. have also faced similar issues with maintaining listing compliance, highlighting the commonality of these challenges.
• The requirement to maintain a minimum level of stockholders equity is a standard benchmark for exchanges like the NYSE American, and failure to meet this standard can lead to delisting proceedings.

Stakeholder Impact

• Shareholders face the risk of delisting if the company does not regain compliance.
• The company's employees may be impacted by the uncertainty surrounding the company's future.

Next Steps

• The company must make sufficient progress to regain compliance with NYSE American listing standards by December 5, 2025.
• The company will be subject to quarterly reviews to assess progress during the plan period.

Key Dates

Keywords

NYSE American, listing compliance, stockholders equity, delisting, financial reporting, compliance plan, cbdMD