cbdMD, Inc. (YCBD) Earnings Call Transcript & Summary

Greetings. Welcome to the cbdMD Inc. 2022 Annual Meeting of Shareholders Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Martin A. Sumichrast, Chairman of the Board and Co-Chief Executive Officer of cbdMD. Marty, please go ahead.

It is now 1:00 p.m. Eastern Time on March 11, 2022. Will the meeting please come to order? I'm Marty Sumichrast, Chairman of the Board and Co-CEO of cbdMD. Along with my fellow directors and executive officers of cbdMD, I would like to welcome you to our 2022 Annual Meeting of Shareholders. We appreciate your attendance, your interest and, most importantly, your support of cbdMD. This annual meeting of shareholders is held pursuant to the bylaws of cbdMD and Notice of Annual Meeting of Shareholders. You are participating in the meeting virtually. We are pleased to, again, hold our annual meeting virtually as we aim to increase access and participation. On the left-hand side of the registration page for the virtual annual meeting, you will see links to the Notice of Annual Meeting of Shareholders and the proxy statement for 2022 Annual Meeting as previously filed with the SEC on January 27, 2022, an agenda and the meeting conduct standards and procedures. Registered shareholders may submit questions at any time during this meeting in the space provided on the left-hand side once you have completed the registration page and entered the meeting. During the formal portion of the annual meeting, questions from shareholders should pertain to the proposals being considered at that particular time. If you are a registered shareholder of cbdMD and you would like to view the list of shareholders on the record date for this meeting, please submit your request after you've entered the meeting. We will take care of the formal business at annual meeting first and then we'll adjourn the formal portion of the annual meeting, but we'll stay online in order to answer any additional questions that may have been posted. After dealing with a few procedural matters, we will take up the items to be acted upon. If a technical disruption occurs that prevents us from continuing the meeting and polls have been open but the meeting is not adjourned, the polls will be closed immediately. Votes received prior to the time the polls are closed will be counted. The meeting will not be reconvened, and the results will be announced publicly. I will act as Chairman of the meeting, and Brian Pearlman will serve as the secretary of the meeting and take the minutes. I would like to introduce the officers and directors of cbdMD, who are in attendance today. Joining me are Scott Coffman, Co-CEO and a member of cbdMD's Board; Bakari Sellers, Billy Raines, Peter Ghiloni and Scott Stephen, members of the Board; and Ronan Kennedy, cbdMD's Chief Financial Officer and Chief Operating Officer. In addition, the Board of Directors has previously appointed Ronan Kennedy to serve as the inspector of the election for this meeting. I request that he file his oath of office with the secretary of the meeting for inclusion in the minutes of the meeting. Will the secretary please report on the proof of mailing of the Notice of Annual Meeting of Shareholders?

I have an affidavit of mailing from Issuer Direct Proxy Services certifying as to the giving of notice of this meeting and the sending to shareholders of record as of January 18, 2022, the notice of Internet availability of proxy material, which Issuer Direct Proxy Services commenced distributing to shareholders on or about January 28, 2022.

The notice of meeting and the affidavit of meeting will be filed with the minutes of this meeting. The secretary has a list of holders of record of common stock at cbdMD at the close of business on January 18, 2022, the record date for this annual meeting. This list of shareholders has been open for examination of the company's executive offices for any purpose relevant to this meeting during ordinary business hours, beginning 2 days after the giving of notice of the 2022 Annual Meeting of Shareholders. This list is available for inspection during this meeting by any registered shareholder. If you wish to inspect this list, please post a request in the questions portion of the registration page. The Secretary will please file a copy of the list of shareholders with the records of cbdMD for this Annual Meeting of Shareholders. Ronan, will you please present your report of attendance at this meeting, so we can determine whether a quorum is present?

Mr. Chairman, on January 18, 2022, the record date for this annual meeting, there were outstanding and entitled to vote a total of 58,546,720 shares of common stock. There are at least 33 1/3% of such shares of common stock represented by proxy, thus constituting a quorum for this Annual Meeting of Shareholders.

Thank you, Ronan. On the basis of the report of the secretary and the inspector of election, I find that proper notice has been given and that the quorum is present. Accordingly, this Annual Meeting of Shareholders has been properly convened. The polls for voting on all matters are open. All cbdMD common shareholders entitled to vote at this meeting have the ability to do so online. If you are a shareholder entitled to vote and you have not yet voted, or if you want to change your previously cast vote, please do so via the Vote My Shares link on the registration page. Please remember that if you have already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we will close the polls, and the inspector of election will provide his preliminary report. We'll now move to a review of the proposals as set forth in the notice of annual meeting and accompanying proxy statement. The first proposal to come before the meeting is the election of directors. At this meeting, we'll be electing 7 directors for a term expiring at the 2023 Annual Meeting of Shareholders. The nominees are Marty Sumichrast; Scott Coffman, Bakari Sellers, William Raines, Peter Ghiloni and Scott Stephen. Information concerning their principal occupation, skills and qualifications and other matters which may be of interest are contained in the proxy statement for the 2022 Annual Meeting as previously filed with the SEC, a link to which is on the registration page. No other nominations were received prior to the deadline established in our 2022 proxy statement. Therefore, no additional nominations may be made at this meeting, and I declare the nominations to be closed. Are there any questions or comments on the first proposal? Seeing none, we'll move on to the second proposal. The next matter to come before the meeting is the ratification of the appointment of Cherry Bekaert LLP as the company's independent registered public accounting firm. The Board of Directors recommends the ratification of the appointment of Cherry Bekaert LLP to serve as cbdMD's independent registered public accounting firm and to audit its financial statements for the fiscal year ending September 30, 2022. Are there any questions or comments on this proposal? Seeing none, I'll move to the next proposal. The polls are about to close. So if you have not yet voted, please do so. [Voting]

Since everyone has had the opportunity to vote, the polls are now closed. The inspector of election has delivered his preliminary report, and he will now announce the preliminary results.

Mr. Chairman, based on the inspector of election's preliminary report, each of the nominees for director received more than 83% of the votes cast in favor of his election and has been elected as director of cbdMD to hold office until 2023 Annual Meeting of the Shareholders or until his successor has been duly elected and qualified. The ratification of the appointment of Cherry Bekaert LLP as cbdMD's independent registered public accounting firm received more than 99% of the votes in favor, and the appointment has been ratified.

We will file the final report of the inspector of election with the records of this meeting. We expect to report the results of the voting on Form 8-K to be filed with the SEC within 4 business days of this meeting. A link to the Form 8-K will also be posted on cbdMD's corporate website under the Investors tab. That concludes the business for the meeting. The meeting is now adjourned. On behalf of my Co-CEO, Scott Coffman, and the other executive officers, members of our Board and all of our employees, I would like to thank all of you for your continued interest and support you've shown in cbdMD. We will provide a business update as part of our earnings call for fiscal quarter March 31, 2022, which we will hold in mid-May. We will announce a specific date and time as we get closer to that date. I now invite you to ask any questions you may have regarding cbdMD and its business. Please follow the instructions provided on the left-hand side of the screen to submit questions.

Ladies and gentlemen...

I apologize, Nadia. We don't have any questions, so we can go ahead and close it out. It looks like we've lost Marty's line. Just one moment, please. We still don't have any questions, so we can go ahead and conclude. Thank you all for attending. You may now disconnect.

This concludes today's call. You may disconnect at this time. Thank you for your attendance.