Raymond Scott Coffman - Dec 28, 2021 Form 4 Insider Report for cbdMD, Inc. (YCBD)

Role: CO-CEO, President, Director, Director, 10%+ Owner
Signature: /s/ Raymond Scott Coffman
Stock symbol: YCBD
Transactions as of: Dec 28, 2021
Transactions value $: $0
Form type: 4
Date filed: 12/30/2021, 03:06 PM
Previous filing: Aug 19, 2021
Next filing: Mar 2, 2022

Transactions Table

Type	Sym	Class	Transaction	Value $	Shares	Change %	* Price $	Shares After	Date	Ownership	Footnotes
transaction	YCBD	Common stock	Award		+306K	+1.95%		16M	Dec 28, 2021	See footnote	F1, F2

* An asterisk sign (*) next to the price indicates that the price is likely invalid.

Explanation of Responses:

Id	Content
F1	Pursuant to the terms of the Agreement and Plan of Merger (the "Merger Agreement") dated December 3, 2018 by and between the Issuer, its wholly owned subsidiaries, and Cure Based Development, LLC which closed on December 20, 2018 (the "Closing Date"), CBD Holding, LLC ("CBDH"), then the sole member of Cure Based Development, LLC, was entitled to receive (the "Earnout Rights") up to 15,250,000 additional shares of the Issuer's common stock for no additional consideration (the "Earnout Shares") as part of the merger consideration, which such Earnout Shares were to be issued upon the satisfaction of certain aggregate net revenue criteria within 60 months following the Closing Date, as measured at four intervals from the Closing Date of 12 calendar months, 24 calendar months, 42 calendar months (the "Third Marking Period"), and 59 calendar months. The issuance of the Earnout Shares was approved by the Issuer's shareholders in April 2019. On February 26, 2020 in connection with its dissolution and liquidation and pursuant to the terms of a Distribution Agreement, CBDH distributed the Earnout Rights to its members, including Coffman Family Office, LLC ("Coffman Family Office"), on a pro rata basis. On March 31, 2021 the Issuer entered into Addendum No. 1 to the Merger Agreement with the members of CBDH which amended the measurement periods within the Third Marking Period to change the determination of the aggregate net revenues within the Third Marking Period to a quarterly basis for each of the six fiscal quarters within the Third Marking Period, beginning with the quarter ended March 31, 2021, instead of following the Third Marking Period end date which was 18 months after the beginning of the third marking period. On December 28, 2021 in accordance with the terms of the Merger Agreement, as amended, the Issuer determined that the net revenue criteria for the September 30, 2021 quarter of the Third Marking Period had been achieved and the Issuer issued an aggregate of 466,713 shares of its common stock representing the September 30, 2021 quarter of the Third Marking Period Earnout Shares which were earned under the terms of the Merger Agreement, as amended. Included in this issuance was the issuance of 306,397 Earnout Shares to Coffman Family Office.
F2	Includes (i) 3,684,000 shares held of record by Edge of Business, LLC ("Edge of Business"); and (ii) 12,315,007 shares held of record by the Coffman Family Office. The Reporting Person disclaims beneficial ownership of the securities held of record by each of these entities except to the extent of his pecuniary interest therein. The Reporting Person has the sole power to vote and dispose of all of the shares of common stock held of record by Edge of Business. Coffman Management, LLC ("Coffman Management") is the Manager of the Coffman Family Office and the Reporting Person is the Manager of Coffman Management. The Reporting Person has sole power to dispose of all shares of common stock held by the Coffman Family Office and sole right to vote 9,442,819 shares of common stock held by the Coffman Family Office. The balance of 2,872,188 shares of common stock held of record by the Coffman Family Office are subject to the terms of a Voting Trust Agreement dated February 26, 2020 between the Issuer and the Coffman Family Office pursuant to which until such time as the unrestricted voting rights to these shares have vested, the voting rights to such shares are held by the independent chairman of the Audit Committee of the Issuer's board of directors who will vote such shares on any matter brought before the Issuer's shareholders in accordance with the recommendation of its board of directors. The voting rights to the 2,872,188 shares vest in equal portions on each of June 20, 2022 and December 20, 2023.

Content

Pursuant to the terms of the Agreement and Plan of Merger (the "Merger Agreement") dated December 3, 2018 by and between the Issuer, its wholly owned subsidiaries, and Cure Based Development, LLC which closed on December 20, 2018 (the "Closing Date"), CBD Holding, LLC ("CBDH"), then the sole member of Cure Based Development, LLC, was entitled to receive (the "Earnout Rights") up to 15,250,000 additional shares of the Issuer's common stock for no additional consideration (the "Earnout Shares") as part of the merger consideration, which such Earnout Shares were to be issued upon the satisfaction of certain aggregate net revenue criteria within 60 months following the Closing Date, as measured at four intervals from the Closing Date of 12 calendar months, 24 calendar months, 42 calendar months (the "Third Marking Period"), and 59 calendar months. The issuance of the Earnout Shares was approved by the Issuer's shareholders in April 2019. On February 26, 2020 in connection with its dissolution and liquidation and pursuant to the terms of a Distribution Agreement, CBDH distributed the Earnout Rights to its members, including Coffman Family Office, LLC ("Coffman Family Office"), on a pro rata basis. On March 31, 2021 the Issuer entered into Addendum No. 1 to the Merger Agreement with the members of CBDH which amended the measurement periods within the Third Marking Period to change the determination of the aggregate net revenues within the Third Marking Period to a quarterly basis for each of the six fiscal quarters within the Third Marking Period, beginning with the quarter ended March 31, 2021, instead of following the Third Marking Period end date which was 18 months after the beginning of the third marking period. On December 28, 2021 in accordance with the terms of the Merger Agreement, as amended, the Issuer determined that the net revenue criteria for the September 30, 2021 quarter of the Third Marking Period had been achieved and the Issuer issued an aggregate of 466,713 shares of its common stock representing the September 30, 2021 quarter of the Third Marking Period Earnout Shares which were earned under the terms of the Merger Agreement, as amended. Included in this issuance was the issuance of 306,397 Earnout Shares to Coffman Family Office.

Includes (i) 3,684,000 shares held of record by Edge of Business, LLC ("Edge of Business"); and (ii) 12,315,007 shares held of record by the Coffman Family Office. The Reporting Person disclaims beneficial ownership of the securities held of record by each of these entities except to the extent of his pecuniary interest therein. The Reporting Person has the sole power to vote and dispose of all of the shares of common stock held of record by Edge of Business. Coffman Management, LLC ("Coffman Management") is the Manager of the Coffman Family Office and the Reporting Person is the Manager of Coffman Management. The Reporting Person has sole power to dispose of all shares of common stock held by the Coffman Family Office and sole right to vote 9,442,819 shares of common stock held by the Coffman Family Office. The balance of 2,872,188 shares of common stock held of record by the Coffman Family Office are subject to the terms of a Voting Trust Agreement dated February 26, 2020 between the Issuer and the Coffman Family Office pursuant to which until such time as the unrestricted voting rights to these shares have vested, the voting rights to such shares are held by the independent chairman of the Audit Committee of the Issuer's board of directors who will vote such shares on any matter brought before the Issuer's shareholders in accordance with the recommendation of its board of directors. The voting rights to the 2,872,188 shares vest in equal portions on each of June 20, 2022 and December 20, 2023.