Level Brands Signs Merger Agreement to Acquire Cannabidiol Consumer Products Brand cbdMD

Level Brands, Inc. announced that it has signed a definitive merger agreement to acquire Cure Based Development, LLC the owner, operator and manufacturer of nationally recognized consumer cannabidiol (CBD) brand cbdMD, in a two-step merger for merger consideration of 15,525,000 shares of Level Brand’s common stock, with an earnout potential of up to an additional 15,525,000 shares if net revenue targets aggregating $300 million are met within 60 months of the closing date.

The closing of the merger is subject to a number of customary conditions precedent as well as both the passage of the Agricultural and Nutrition Act of 2018, which is commonly referred to as the 2018 Farm Bill, or such other titled Federal legislation, which, when approved by the President of the United States, contains a permanent declassification of cannabidiol (CBD) as a controlled substance under Federal law.

Formed in August 2017, Cure Based Development began reporting revenues in 2018 and for the eight months ended August 31, 2018 reported revenue of $3.2 million and in October 2018 had monthly sales exceeding $1.0 million. Cure Based Development’s current product offerings include gummies, tinctures, topical, bath bombs, oils, and pet products. Its products are available online at www.cbdMD.com or 700 stores in 40 states. Cure Based Development currently employs over 50 people in its corporate, manufacturing and distribution sites based in Charlotte, NC.

“With the passage of the 2018 Farm Bill, CBD will no longer be listed as a Schedule 1 controlled substance which we believe will open the access to national retailers for CBD consumer products. We believe that the next three to five years will produce a few leading CBD brands, and our goal is to be the leader in the space,” said Martin A. Sumichrast, Chairman and CEO of Level Brands.

Following the expected closing, the operations of Cure Based Development will continue under our cbdMD LLC wholly-owned subsidiary. In addition, Mr. Scott Coffman, the CEO of Cure Based Development, and Ms. Caryn Dunayer, its President, will continue in similar positions with our cbdMD LLC subsidiary. Following the closing, Mr. Coffman will also join Level Brands’ Board of Directors. Mr. Coffman founded Ecig Company Blu in 2009 and built it into one the leadings ECIG brands in the world before selling it to Lorillard Tobacco in 2012. In the event we complete the merger our combined company will be required to satisfy the NYSE American initial listing standards for the continued listing of Level Brand’s common stock following the closing.

On December 4, 2018 Level Brands filed a Current Report on Form 8-K which includes a description of the material terms of the pending transaction as well as the merger agreement and other transactional documents. Investors are encouraged to read such filing in its entirety. Investors are also cautioned not to place undue reliance on the execution of the merger agreement as the material conditions precedent to closing are not within the control of Level Brands and, accordingly, the transaction may not be consummated.

About Level Brands, Inc. (www.LevelBrands.com)

Level Brands is an innovative marketing and licensing company that provides bold, unconventional, and socially responsible branding for leading businesses. The focus of LEVB is licensing and corporate brand management for consumer products, including art, beauty, fashion, the beverage space, health and wellness, and entertainment. License brand marketing is at the core of the Level Brands businesses: kathy ireland® Health & Wellness, Ireland Men One and Encore Endeavor One (EE1).