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Operator: Good afternoon. Welcome, ladies and gentlemen, to cbdMD Inc.’s December 31, 2025, First Fiscal Quarter of 2026 Earnings Call and Update. This afternoon, the company issued a press release that provided an overview of its first quarter results, which followed the filing of its quarterly report on Form 10-Q. Today’s conference call is being recorded and will be available online along with our earnings press release covering our financial results and non-GAAP presentation at cbdmd.com in accordance with cbdMD’s retention policies. [Operator Instructions] I would now like to turn the conference over to Mr. Brad Whitford, the company’s Chief Accounting Officer. Welcome, Brad.

Bradley Whitford: Thank you, Jim, and thank you all for joining cbdMD’s December 31, 2025, First Quarter of Fiscal 2026 Earnings Call and Update. On the call today, we also have Ronan Kennedy, our Chief Executive Officer and Chief Financial Officer. We’d like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. cbdMD cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, including risks described in the company’s annual report on Form 10-K — excuse me, 10-Q for the first quarter ended December 31, 2025, and our other filings with the SEC.

All of which can be reviewed on the company’s website at www.cbdmd.com or on the SEC’s website at www.sec.gov. Any forward-looking statements made on this conference call speak only as of today’s date, Tuesday, February 17, 2026, and cbdMD does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today’s date, except as may be required by federal securities laws. With that, I’d like to turn the call over to Ronan.

T. Kennedy: Good afternoon, everyone, and thank you for joining us. The first quarter of fiscal 2026 represents another important step forward in stabilizing and rebuilding cbdMD. While we continue to operate in a challenging regulatory environment, we are encouraged by the underlying trends we are seeing across the business. Most notably, we now have 3 quarters of sequential revenue growth, generating just over $5 million in revenue, representing a 12% increase from the fourth quarter of fiscal 2025. Importantly, both December 2025 and January 26 generated the highest monthly revenue levels in the respective months since 2022, which we believe is a clear indicator that our core business is trending in the right direction. Over the past several years, we’ve executed a deliberate reset focused on reducing fixed costs, simplifying operations, strengthening the balance sheet and repositioning the platform for durable regulated growth.

This quarter reflects continued progress against that strategy. From a channel perspective, direct-to-consumer remained our largest channel, representing approximately 72% of total revenue, while our wholesale business represented 28% of revenue and showing a year-over-year growth of 17% versus the prior quarter. That wholesale growth is important. It reflects improved execution in our core cbdMD brand as well as ongoing progress with our beverage brand Oasis. Regulatory challenges impacted both categories during the quarter, creating some packaging and appliance-related confusion amongst customers tied to proposed and newly enacted regulations. Despite that backdrop, we were encouraged by the wholesale momentum. Across our core CBD and Paw CBD brands, we remain focused on high velocity SKUs, disciplined acquisition funnels and margin protection.

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While revenue remains below historical peaks, the trend direction has improved meaningfully, and we believe recent monthly performance supports that conclusion. Historically, our capital structure limited our ability to pursue accretive M&A. Since converting our Series A preferred in May and regaining full NYSE American continued listing compliance, we’ve been able to reengage meaningfully on strategic opportunities. As a result, in mid-January, we completed the acquisition of the assets of Bluebird Botanicals, a respected and long-standing brand in the CBD category. This transaction is strategically important for several reasons. It adds incremental revenue and a loyal customer base, allowing us to build a broader wellness portfolio beyond just CBD.

It brings valuable intellectual property, including grass status for full spectrum CBD to balance out our safety and clinical data on our THC-free broad-spectrum CBD. And it strengthens our regulatory and scientific position. Our focus in the second quarter is on integration, consolidating supply chain, marketing and other operational areas while extracting both cost and revenue synergies. We structured the acquisition with limited upfront equity and performance-based earn-out to mitigate risk, and we believe Bluebird provides a step function increase in revenue at attractive contribution margins. We continue to evaluate additional opportunities that are accretive, defensible and align with our regulatory strategy. Another key area of progress this quarter was our balance sheet.

As a result of the efforts throughout fiscal 2025, we received notice from the NYC in early December confirming we regained compliance with continued listing requirements that our temporary status have been removed. In December, we completed an approximate $2.25 million in Series C preferred financing, strengthening our liquidity and working capital. As of December 31, 2025, we ended the quarter with approximately $3.4 million in cash and $5.4 million in working capital, both meaningfully higher than at fiscal end. In addition to the Series C financing, we structured a $20 million equity line of credit, which provides greater flexibility to strengthen the balance sheet opportunistically under favorable market conditions while minimizing costs and dilution.

During the latter half of the calendar year 2025, we saw our stock price and volume react very favorably to some news announcements, and we’re unable to fully capitalize on these. We believe the ELOC will allow us to prudently capitalize on these potential positive stock movements going forward. We continue to manage cash carefully with a focus on preserving flexibility while supporting initiatives that can drive sustainable, improving operating results. The regulatory environment remains active and at times uncertain. As we noted previously, the restrictive hemp language, including H.R. 5371 legislation enacted in November could have industry-wide impact if left unchanged. That said, we are encouraged by recent bipartisan efforts to revisit restrictive hemp legislation, such as the HEMP Act introduced in January.

We support the HEMP Act as it would enact more reasonable per serving limits and ensuring stronger consumer protections, clarity and enforcement consistency. We continue to engage constructively with industry organizations, policymakers, including time on [ Capitol Hill ] to help educate on sensible regulation. We continue to pursue efforts and incur costs associated with participating with the CBD programs referenced in the December 17 executive orders regarding CBD usage for Medicare ahead of the April pilot program. We believe increasingly regulatory clarity will favor well-capitalized compliance-focused operators. CBD has invested for years in cGMP manufacturing, rigorous safety and quality standards and proven effective formulations, and we view this as a competitive advantage as the category matures.

I’ll now turn the call back over to Brad to discuss financials.

Bradley Whitford: Thanks, Ronan. Turning to the financials for the first quarter of fiscal 2026. Net sales totaled $5 million compared to $5.1 million in the prior year period and increased 12% sequentially from the first quarter of — from the fourth quarter of fiscal 2025. Gross margin totaled 60% for the quarter, down from 66% over prior year. This is mostly attributable to the increase in our warehouse expense during the year and a shift in revenue mix to more wholesale, reflecting product mix and continued pricing discipline. Loss from operations was approximately $286,000 compared to a loss of $86,000 in the prior year period. Net loss attributable to common shareholders was approximately $325,000 or $0.04 per share compared to a net loss of approximately $1 million or $1.73 per share in the prior year quarter, a substantial improvement on a per share basis.

This improvement was primarily driven by the elimination of our Series A preferred dividend during fiscal 2025 and the resulting conversion of the Series A into common stock. Adjusted non-GAAP EBITDA loss for the quarter totaled just $36,000. We are laser-focused on generating positive EBITDA. The first fiscal quarter tends to require more working capital than other quarters. Cash used in operating activities was approximately $812,000, reflecting our minimal EBITDA loss along with ongoing $200,000 investment in inventory, a $225,000 increase in prepaids, which include annual insurance and ERP contracts and an approximate $300,000 reduction in some of our payables. Excluding the acquisition of Bluebird, we do not anticipate the same working capital build in the next quarter.

Cash and cash equivalents increased by approximately $1.1 million to $3.3 million during the quarter, driven by the Series C preferred equity financing. Overall, we believe the quarter reflects continued stabilization, improved liquidity and meaningful progress toward positive income while maintaining discipline around costs. With that, I’ll turn the call back to Ronan.

T. Kennedy: Thanks, Brad. Looking ahead, our priorities are clear: continue driving sequential revenue improvement in the core business, successfully integrating Bluebird and unlocking synergies, maintaining cost discipline and margin focus and navigating the regulatory landscape responsibly. Importantly, we believe we have a meaningful long-term runway supported by a strong cash position relative to our current EBITDA profile, even before considering the incremental benefits from the Bluebird acquisition. This balance sheet strength provides flexibility to execute our strategy deliberately rather than reactively. While challenges remain, we believe the foundation we built over the past several years is beginning to show through in the numbers.

We are encouraged by recent monthly trends and believe we are entering the remainder of fiscal 2026 on firmer footing. I want to thank our employees, partners and shareholders for their continued support. And with that, I’m now happy to take some questions. If there are no further questions, thank you for attending the call, and we look forward to our update after our annual meeting. Thank you.

Operator: Gentlemen, I do apologize. This is your operator, Jim. I was addressing you as well as the group, with my mute on. Ladies and gentlemen, I apologize.

Operator: [Operator Instructions] We’ll hear first from Thomas McGovern at Maxim Group.

Thomas McGovern: Yes. So congratulations on the acquisition of Bluebird Botanicals. It sounds like we’re still entering a large integration phase. But maybe just if you can give us a little bit more insight on that, kind of what you’re expecting with that? Will there be opportunities to bring people on board from Bluebird into kind of the broader company? Or are you guys looking at potential SKU rationalization for — if there’s any overlapping products? Anything like that would be helpful for our understanding.

T. Kennedy: Sure, Thomas. Look, they have a small team that we’ve been able to bring over several of those people. But really, I think what attracted us was access to a new customer base and the ability to look at sort of our supply chain, our SKU base and SKU mix and be able to sort of find opportunities and where we think there’s some gaps in their portfolio as well as some — leveraging some of our sort of expertise on building some acquisition funnel. So we see opportunity for sort of growth, not only sort of improving some of the marketing activities, but also servicing some of the needs of customers through bringing some of our SKUs under the Bluebird label where it aligns with their customer.

Thomas McGovern: Understood. And do you plan on integrating their e-commerce capabilities with your own or kind of keeping them separate as like the brand identity that you guys have called out in the past is fairly strong with those companies. Are you planning on kind of marketing them as 2 separate label — separate companies? Or will there be some integration in the future?

T. Kennedy: Yes. Look, at this time, we intend to maintain them as separate brands. The customer is a slightly different customer. And I think given the size of the business, I believe there’s opportunity to continue to grow and build on that customer base, which is slightly different than the cbdMD customer base.

Thomas McGovern: Understood. And last question for me, and then I’ll hop out of the queue here. But we’ve been continuing to see updates on the Herbal Oasis line of seltzers. Just curious, I know you haven’t necessarily provided exact numbers in the past, but what percent of sales is this making up? Do you guys have any kind of idea of when this might start contributing materially to the top line? Is it already contributing materially? Just kind of any insight on that line of the business would be very helpful as well.

T. Kennedy: Yes. Thomas, I don’t think we’ve published any specific data. It’s still — the D2C still fits under sort of — and wholesale still fit within their respective sort of categories. It is starting to contribute, but it’s still small relative to the overall size of the core CBD brand. We expect that throughout this year to continue to improve. And as we see those gains, we’ll reassess sort of what we’re willing to disclose.

Operator: [Operator Instructions] Well, Mr. Kennedy and Mr. Whitford, gentlemen, we have no further signals from our audience. I’m happy to turn it back to you for any additional or closing remarks that you have.

T. Kennedy: Great. Well, thank you, everyone, again for your support and your time today, and we look forward to our update after our — as part of our annual meeting.

Operator: This does conclude today’s teleconference, and we thank you all for your participation. You may now disconnect your lines. Have a great day.

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