CVSI CV Sciences Inc (QB)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2024

 

CV SCIENCES, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware	000-54677	80-0944970
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
9530 Padgett Street, Suite 107 San Diego, California		92126
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (866) 290-2157

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Conditions

The information provided below in "Item 7.01 - Regulation FD Disclosure" of this Current Report on Form 8-K is incorporated by reference into this Item 2.02.

Item 7.01 Regulation FD Disclosure

On November 14, 2024, CV Sciences, Inc. (the "Company") issued a press release regarding the Company’s financial results for its quarter ended September 30, 2024. A copy of that press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference. The press release includes non-GAAP financial measures as defined in Regulation G. The press release also includes a presentation of the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP), information reconciling the non-GAAP financial measures to the GAAP financial measures and a discussion of the reasons why the Company’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations. The non-GAAP financial measures presented therein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.

Exhibit 99.1 contains forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed in these forward-looking statements.

The information set forth under Item 7.01 of this Current Report on Form 8-K (“Current Report”), including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release of CV Sciences, Inc. dated November 14, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		CV SCIENCES, INC.
Date: November 14, 2024		By:	/s/ Joseph Dowling
			Joseph Dowling
			Chief Executive Officer

 

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CV Sciences, Inc. Reports Third Quarter 2024 Financial Results

San Diego, CA - November 14, 2024 (GLOBE NEWSWIRE) - CV Sciences, Inc. (OTCQB:CVSI) (the “Company”, “CV Sciences”, “our”, “us” or “we”), a preeminent consumer wellness company specializing in hemp extracts and other proven science-backed, natural ingredients and products, today announced its financial results for the quarter ended September 30, 2024.

Third Quarter 2024 and Recent Financial and Operating Highlights

“We are pleased with our third 2024 results. Revenues for our core business remained stable around the $4 million range during the third quarter 2024 despite a challenging environment. With our recent acquisitions and new product innovations, we believe that we are nicely positioned to grow our revenue in 2025. Our gross margins have improved throughout 2024 compared to previous years and we anticipate making further gross margin improvements in 2025,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “Our third quarter 2024 progress demonstrates our continuous commitment to innovation and cost-efficient execution as we move closer to profitability and positive cash flow. We look forward to organically grow our business and pursue additional M&A opportunities in the near future to improve our top-line revenue, profitability and shareholder value.”

Operating Results - Third Quarter 2024 Compared to Third Quarter 2023

Sales for third quarter 2024 were $3.9 million, down 5% compared to the third quarter 2023. The decline was mostly due to lower B2B sales by 9%. B2B sales were mostly impacted by the patchwork of state regulations for CBD. The total number of units sold during the third quarter 2024 decreased by 7.9% and slightly lower average sales prices per unit of 0.5%. We generated an operating loss of $0.3 million in the third quarter 2024, compared to an operating loss of $0.4 million in the third quarter 2023. The improvement is mostly due to higher gross margins and reduced operating expenses. The Company had negative adjusted EBITDA of $75,000 for the third quarter 2024 compared to $0.4 million in the third quarter of 2023.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss these results today at 10:00 am EDT/7:00 am PDT. The webcast of the conference call will be available on the Investor Relations section of the Company's website at https://ir.cvsciences.com/news-events or directly at

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https://viavid.webcasts.com/starthere.jsp?ei=1695466&tp_key=e08c31edf2. Investors interested in participating in the live call can also dial (877) 407-0784 from the U.S. or international callers can dial (201) 689-8560. A telephone replay will be available approximately three hours after the call concludes, and will be available through Thursday, November 21, 2024, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13749925.

About CV Sciences, Inc.

CV Sciences, Inc. (OTCQB:CVSI) is a consumer wellness company specializing in nutraceuticals and plant-based foods. The Company's hemp extracts and other proven, science-backed, natural ingredients and products are sold through a range of sales channels from B2B to B2C. The Company's +PlusCBD™ branded products are sold at select retail locations throughout the U.S. and are the top-selling brands of hemp extracts in the natural products market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. With a commitment to science, +PlusCBD™ product benefits in healthy people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov. +PlusCBD™ was the first hemp extract supplement brand to invest in the scientific evidence necessary to receive self-affirmed Generally Recognized as Safe (GRAS) status. The Company's Cultured FoodsTM brand provides a variety of 100% plant-based food products. Committed to crafting nutritious and flavorful alternatives, Cultured FoodsTM caters to individuals seeking vegan, gluten-free, or flexitarian options for a wholesome and satisfying culinary experience. In addition, the Company owns Elevated Softgels, a manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry. CV Sciences, Inc. has primary offices and facilities in San Diego, California, Grand Junction, Colorado, and Warsaw, Poland. The Company also operates a drug development program focused on developing and commercializing CBD-based novel therapeutics. Additional information is available from OTCMarkets.com or by visiting www.cvsciences.com.

Forward Looking Statements

This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risk and uncertainties. CV Sciences does not undertake any obligation to publicly update any forward-looking statements, except as required by applicable law. As a result, investors should not place undue reliance on such forward-looking statements.

Contact Information

ir@cvsciences.com

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CV SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Product sales, net		$	3,865			$	4,089			$	11,821			$	12,203
Cost of goods sold			2,087				2,246				6,330				6,860
Gross profit			1,778				1,843				5,491				5,343
Operating expenses:
Research and development			29				40				93				111
Selling, general and administrative			2,090				2,240				6,942				7,154
Benefit from reversal of accrued payroll taxes			—				—				—				(6,171	)
Total operating expenses			2,119				2,280				7,035				1,094
Operating income (loss)			(341	)			(437	)			(1,544	)			4,249
Other expense, net			115				10				118				275
Income (loss) before income taxes			(456	)			(447	)			(1,662	)			3,974
Income tax expense			—				—				6				3
Net income (loss)		$	(456	)		$	(447	)		$	(1,668	)		$	3,971
Weighted average common shares outstanding, basic and diluted			182,261				154,604				172,671				153,112
Net income (loss) per common share, basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.01	)		$	0.03

 

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CV SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share data)

 

		September 30, 2024				December 31, 2023
Assets
Current assets:
Cash		$	979			$	1,317
Accounts receivable, net			422				431
Inventory			5,020				5,655
Prepaid expenses and other			327				535
Total current assets			6,748				7,938
Property and equipment, net			490				379
Right of use assets			81				167
Intangibles, net			103				78
Goodwill			815				342
Other assets			154				296
Total assets		$	8,391			$	9,200
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	1,886			$	2,309
Accrued expenses			3,422				3,422
Operating lease liability - current			92				130
Debt			743				254
Total current liabilities			6,143				6,115
Operating lease liability - net of current portion			—				58
Deferred tax liability			19				19
Other liabilities			38				105
Total liabilities			6,200				6,297
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $0.0001; 10,000 shares authorized; 1 share issued as of September 30, 2024 and December 31, 2023; and no shares outstanding as of September 30, 2024 and December 31, 2023			—				—
Common stock, par value $0.0001; 790,000 shares authorized as of September 30, 2024 and December 31, 2023; 184,264 and 161,678 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively			18				16
Additional paid-in capital			88,409				87,464
Accumulated deficit			(86,255	)			(84,587	)
Accumulated other comprehensive income			19				10
Total stockholders' equity			2,191				2,903
Total liabilities and stockholders' equity		$	8,391			$	9,200

 

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CV SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

		Nine months ended September 30,
		2024				2023
OPERATING ACTIVITIES
Net income (loss)		$	(1,668	)		$	3,971
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortization			220				176
Stock-based compensation			154				185
Amortization of debt discount			117				112
Amortization of right of use assets			86				80
Gain in fair value of contingent consideration liabilities			(188	)			—
Benefit from reversal of accrued payroll tax			—				(6,171	)
Other			236				368
Change in operating assets and liabilities:
Accounts receivable, net			19				103
Inventory			689				834
Prepaid expenses and other			208				2,778
Accounts payable and accrued expenses			(570	)			(69	)
Net cash flows provided by (used in) operating activities			(697	)			2,367
INVESTING ACTIVITIES
Acquisition of business, net of cash acquired			(6	)			—
Net cash flows used in investing activities			(6	)			—
FINANCING ACTIVITIES
Proceeds from note payable			900				—
Debt issuance costs related to note payable			(5	)			—
Repayment of note payable			(325	)			(1,117	)
Repayment of unsecured debt			(203	)			(218	)
Net cash flows provided by (used in) financing activities			367				(1,335	)
Effect of exchange rate changes on cash			(2	)			—
Net increase (decrease) in cash			(338	)			1,032
Cash, beginning of period			1,317				611
Cash, end of period		$	979			$	1,643
Supplemental cash flow disclosures:
Interest paid		$	6			$	4
Income tax paid		$	6			$	—
Supplemental disclosure of non-cash transactions:
Services paid with common stock		$	92			$	100
Debt issuance cost for note payable		$	(284	)		$	—
Working capital adjustment due from seller		$	34			$	—
Fair value of assets acquired, excluding cash		$	341			$	—
Goodwill on acquisition			365				—
Common stock consideration			(700	)			—
Cash paid for acquisition		$	6			$	—

 

 

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CV SCIENCES, INC.

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

We prepare our consolidated financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures, such as net income (loss) per share and Adjusted EBITDA included in this press release are different from those otherwise presented under GAAP. We use non-GAAP measures internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplement the information provided by our GAAP measures. The non-GAAP financial measures exclude non-cash compensation expense for stock options. When evaluating the performance of our business and developing short and long-term plans, we do not consider share-based compensation charges. Although share-based compensation is necessary to attract and retain quality employees, our consideration of share-based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. Because of the varying availability of valuation methodologies and subjective assumptions, we believe that the exclusion of share-based compensation allows for more accurate comparison of our financial results to previous periods. In addition, we believe it useful to investors to understand the specific impact of the application of the fair value method of accounting for share-based compensation on our operating results.

Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation, amortization, interest, and income tax expense, less interest income, further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.

We use Adjusted EBITDA in communicating certain aspects of our results and performance, including in this press release, and believe that Adjusted EBITDA, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of Adjusted EBITDA is useful to investors in making period-to-period comparison of results because the adjustments to GAAP are not reflective of our core business performance.

A reconciliation from our GAAP net income (loss) to non-GAAP net loss for the three and nine months ended September 30, 2024 and 2023 is detailed below (in thousands, except per share data):

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Net income (loss) - GAAP		$	(456	)		$	(447	)		$	(1,668	)		$	3,971
Stock-based compensation (1)			87				32				154				185
Professional fees associated with legal dispute (2)			80				—				773				—
Benefit from reversal of accrued payroll tax (3)			—				—				—				(6,171	)
Note discount and interest expense (4)			115				—				118				112
Net loss - non-GAAP		$	(174	)		$	(415	)		$	(623	)		$	(1,903	)
Diluted EPS - GAAP		$	(0.00	)		$	(0.00	)		$	(0.01	)		$	0.03
Stock-based compensation (1)			—				—				—				—
Professional fees associated with legal dispute (2)			—				—				0.01				—
Benefit from reversal of accrued payroll tax (3)			—				—				—				(0.04	)
Note discount and interest expense (4)			—				—				—				—
Diluted EPS - non-GAAP		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.01	)
Shares used to calculate diluted EPS - GAAP and non-GAAP			182,261				154,604				172,671				153,112

 

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A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the three and nine months ended September 30, 2024 and 2023 is detailed below (in thousands):

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Net income (loss)		$	(456	)		$	(447	)		$	(1,668	)		$	3,971
Depreciation expense			93				58				223				176
Amortization expense			6				—				15				—
Interest expense (income)			115				(4	)			118				61
Income tax expense			—				—				6				3
EBITDA			(242	)			(393	)			(1,306	)			4,211
Stock-based compensation (1)			87				32				154				185
Professional fees associated with legal dispute (2)			80				—				773				—
Benefit from reversal of accrued payroll tax (3)			—				—				—				(6,171	)
Adjusted EBITDA		$	(75	)		$	(361	)		$	(379	)		$	(1,775	)

 

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v3.24.3

Document and Entity Information	Nov. 14, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 14, 2024
Entity Registrant Name	CV SCIENCES, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-54677
Entity Tax Identification Number	80-0944970
Entity Address, Address Line One	9530 Padgett Street, Suite 107
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92126
City Area Code	866
Local Phone Number	290-2157
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001510964

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