By Rebecca Melvin
New York, Sept. 20 – cbdMD Inc. is offering $12.5 million of 8% series A cumulative convertible preferred stock, or 1.25 million shares at $10.00 per share, according to a filing with the Securities and Exchange Commission.
The preferreds have no stated maturity and are convertible into shares of common stock at $8.00 per common share, or 1.25 shares, at any time at the option of the holder.
The notes are non-callable for four years and then provisionally callable if shares exceed $11.00, or 137.5%, of the conversion price for 20 out of 30 trading days.
The preferreds shares are also convertible upon a change of control resulting in a mandatory redemption.
Upon a change of control, the company may redeem the preferreds at a cash redemption price of $10.00 per share, plus accrued and unpaid dividends.
In the event of the company’s liquidation, holders will receive a payment equal to $10.00 per share of the series A preferreds.
The proceeds will be used for working capital.
The company has filed an application to list the preferred shares on the NYSE under the symbol YCBDP.
The Charlotte, N.C.-based company is a hemp derived, consumer cannabidiol (CBD) brand.
| Issuer: | cbdMD Inc.
|
| Securities: | Convertible preferred stock, series A
|
| Amount: | $12.5 million
|
| Greenshoe: | $1,875,000
|
| Maturity: | Perpetual
|
| Bookrunner: | ThinkEquity
|
| Distribution rate: | 8%
|
| Conversion price: | $8.00
|
| Call options: | Non-callable for four years, then provisionally callable at 137.5% price hurdle
|
| Takeover protection: | Yes
|
| Distribution: | SEC registered
|
| Stock symbol: | NYSE American: YCBD
|
| Stock price: | $4.70 at market close Sept. 19
|
| Market capitalization: | $129.73 million
|
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