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CVSI - CV Sciences Inc News Story

$0.16 0.0  0.0%

Last Trade - 02/12/21

Sector
Healthcare
Size
Micro Cap
Market Cap £13.5m
Enterprise Value £13.9m
Revenue £15.6m
Position in Universe 6623rd / 7292

CV Sciences, Inc. Reports First Quarter 2021 Financial Results

Thu 13th May, 2021 9:05pm
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SAN DIEGO, May 13, 2021 (GLOBE NEWSWIRE) -- CV Sciences, Inc. (OTCQB:CVSI)
(the “Company”, “CV Sciences”, “our”, “us” or “we”), a
preeminent supplier and manufacturer of hemp cannabidiol (CBD) products, today
announced its financial results for the quarter ended March 31, 2021.

First Quarter 2021 and Recent Operating Highlights
* Revenue of $4.8 million for first quarter of 2021, compared to $8.3 million
for the first quarter of 2020;
* Gross margin of 48.7% for first quarter of 2021, improved from 48.5% for the
first quarter of 2020;
* Improved total cash balance of $5.7 million at quarter end, compared to $4.5
million at year end;
* Total retail distribution of more than 7,300 stores as of March 31, 2021, an
increase from 5,799 stores as of March 31, 2020;
* Launched ProCBD™, a full product line of clinical strength products
supported by clinical research and available exclusively through health
practitioners;
* Launched PlusCBD(™) Calm and Sleep, two flavorful gummies that support
healthy stress responses and sleep cycles for people getting back to their
normal routines; and
* Entered into a partnership with Alkemist Labs to support the National
Institute of Standards and Technology's Cannabis Quality Assurance program.
“We continued to make progress on our strategic priorities during the first
quarter and are encouraged by recent trends, including vaccination programs
and reopening of the economy. Our digital platform investment is driving
customer engagement and improving metrics as well as resulting in sequential
B2C revenue growth. We continue to broaden store distribution in the FDM
channel, knowing that the shelf space and relationships represent an important
future revenue source. We are starting to see slight improvement in the
overall retail environment and continue to see significant potential in the
Convenience channel. We are pleased with results from new product
introductions including our immunity and pet line products, both of which
launched in 2020, targeting some of the fastest growing CBD markets. Our
January launch of ProCBD™, a line of clinical strength products targeting
health practitioners and natural, plant-based alternatives has also been well
received. Just this week, we launched PlusCBD™ Calm and Sleep, two flavorful
gummies that support healthy stress response and sleep cycles for people
getting back to their normal routines. Quality and innovation remain key
points of differentiation for CV Sciences, and we anticipate further strategic
product introductions during 2021. The recently announced partnership with
Alkemist Labs is further evidence of our leadership position in product
safety, quality and customer trustworthiness. We remain optimistic about the
potential for positive regulatory development in our industry for 2021, and
believe the Company is well positioned financially and strategically to
deliver long-term value for our shareholders," stated Joseph Dowling, Chief
Executive Officer of CV Sciences.

Operating Results - First Quarter 2021 Compared to First Quarter 2020
Sales for first quarter of 2021 were $4.8 million, a decrease of 41% from $8.3
million in the first quarter of 2020. Current quarter sales were impacted by
the ongoing COVID-19 pandemic and increased market competition, which is
largely due to the uncertain regulatory environment for CBD. First quarter
sales of 2020 were partially impacted by COVID-19. The Company's products were
sold in 7,346 retail stores nationwide as of March 31, 2021, up from 5,799
stores as of March 31, 2020.

The Company recognized an operating loss of $3.1 million in the first quarter
of 2021, compared to an operating loss of $5.3 million in the first quarter of
2020.

The Company had negative adjusted EBITDA for the first quarter of 2021 of $2.3
million, compared to negative adjusted EBITDA of $3.9 million in the first
quarter of 2020.

Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results
today at 4:30 pm EDT/1:30 pm 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
http://public.viavid.com/index.php?id=144697. 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 two hours after the call concludes, and will be
available through Thursday, May 20, 2021, by dialing (844) 512-2921 from the
U.S. or (412) 317-6671 from international locations, and entering confirmation
code 13719303.

About CV Sciences, Inc.
CV, or Curriculum Vitae, is Latin for "course of life", and science is the
pursuit of truth. CV Sciences: our name is our mission --improving quality of
life through nature and science.

CV Sciences, Inc. (OTCQB:CVSI) operates two distinct business segments: a
consumer product division focused on manufacturing, marketing and selling
plant-based dietary supplements and CBD products to a range of market sectors;
and a drug development division focused on developing and commercializing
CBD-based novel therapeutics. The Company’s PlusCBD™ products are sold at
more than 7,300 retail locations throughout the U.S. and it is the top-selling
brand of hemp-derived CBD in the natural products market, according to SPINS,
the leading provider of syndicated data and insights for the natural, organic
and specialty products industry.  CV Sciences follows all guidelines for Good
Manufacturing Practices (GMP) and the Company’s products are processed,
produced, and tested throughout the manufacturing process to confirm strict
compliance with company standards and specifications.  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 CBD supplement brand
to invest in the scientific evidence necessary to receive self-affirmed
Generally Recognized as Safe (GRAS) status. CV Sciences, Inc. has primary
offices and facilities in San Diego, California.  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.

Contact Information

Investor Contact:
ICR
Reed Anderson
646-277-1260
reed.anderson@icrinc.com

Media Contact:
ICR
Cory Ziskind
646-277-1232
cory.ziskind@icrinc.com



CV SCIENCES, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

                                                                Three months ended March 31,                              
                                                                2021                            2020                      
 Product sales, net                                             $     4,844                     $     8,270               
 Cost of goods sold                                                   2,486                           4,262               
 Gross Profit                                                         2,358                           4,008               
                                                                                                                          
 Operating expenses:                                                                                                      
 Research and development                                       186                             1,509                     
 Selling, general and administrative                                  5,285                           7,819               
                                                                      5,471                           9,328               
                                                                                                                          
 Operating Loss                                                 (3,113        )                 (5,320        )           
                                                                                                                          
 Interest (income) expense, net                                 14                              (10           )           
 Loss before income taxes                                       (3,127        )                 (5,310        )           
 Income tax benefit                                             —                               (158          )           
 Net Loss                                                       $     (3,127  )                 $     (5,152  )           
                                                                                                                          
 Weighted average common shares outstanding, basic and diluted  104,508                         99,678                    
 Net loss per common share, basic and diluted                   $     (0.03   )                 $     (0.05   )           
                                                                                                                          

CV SCIENCES, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)

                                                                                                                                                                         March 31, 2021              December 31, 2020            
 Assets                                                                                                                                                                                                                           
 Current assets:                                                                                                                                                                                                                  
 Cash and cash equivalents                                                                                                                                               $     5,165                 $      4,024                 
 Restricted cash                                                                                                                                                         501                         501                          
 Accounts receivable, net                                                                                                                                                949                         1,126                        
 Inventory                                                                                                                                                               9,008                       8,840                        
 Prepaid expenses and other                                                                                                                                              1,902                       2,372                        
 Total current assets                                                                                                                                                    17,525                      16,863                       
                                                                                                                                                                                                                                  
 Property & equipment, net                                                                                                                                               2,688                       2,877                        
 Operating lease assets                                                                                                                                                  2,912                       3,057                        
 Intangibles, net                                                                                                                                                        3,730                       3,730                        
 Goodwill                                                                                                                                                                2,788                       2,788                        
 Other assets                                                                                                                                                            1,035                       1,310                        
 Total assets                                                                                                                                                            $     30,678                $      30,625                
                                                                                                                                                                                                                                  
 Liabilities and stockholders' equity                                                                                                                                                                                             
 Current liabilities:                                                                                                                                                                                                             
 Accounts payable                                                                                                                                                        $     1,083                 $      1,677                 
 Accrued expenses                                                                                                                                                        10,243                      9,805                        
 Current portion of operating lease liability                                                                                                                            670                         680                          
 Current portion of long-term debt                                                                                                                                       2,907                       2,174                        
 Total current liabilities                                                                                                                                               14,903                      14,336                       
                                                                                                                                                                                                                                  
 Debt                                                                                                                                                                    363                         1,453                        
 Operating lease liability                                                                                                                                               3,291                       3,467                        
 Deferred tax liability                                                                                                                                                  157                         157                          
 Total liabilities                                                                                                                                                       18,714                      19,413                       
                                                                                                                                                                                                                                  
 Commitments and contingencies                                                                                                                                                                                                    
                                                                                                                                                                                                                                  
 Stockholders' equity                                                                                                                                                                                                             
 Preferred stock, par value $0.0001; 10,000 shares authorized; no shares issued and outstanding                                                                          —                           —                            
 Common stock, par value $0.0001; 190,000 shares authorized, 106,791 and 100,664 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively  11                          10                           
 Additional paid-in capital                                                                                                                                              79,001                      75,123                       
 Accumulated deficit                                                                                                                                                     (67,048       )             (63,921        )             
 Total stockholders' equity                                                                                                                                              11,964                      11,212                       
                                                                                                                                                                                                                                  
 Total liabilities and stockholders' equity                                                                                                                              $     30,678                $      30,625                
                                                                                                                                                                                                                                  

CV SCIENCES, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

                                                                                    Three months ended March 31,                              
                                                                                    2021                            2020                      
 OPERATING ACTIVITIES                                                                                                                         
 Net loss                                                                           $     (3,127  )                 $     (5,152  )           
 Adjustments to reconcile net loss to net cash flows used in operating activities:                                                            
 Depreciation and amortization                                                      204                             185                       
 Stock-based compensation                                                           657                             1,258                     
 Deferred taxes                                                                     —                               (158          )           
 Non-cash lease expense                                                             145                             287                       
 Other                                                                              124                             144                       
 Change in operating assets and liabilities:                                                                                                  
 Accounts receivable                                                                133                             570                       
 Inventory                                                                          (168          )                 970                       
 Prepaid expenses and other                                                         692                             1,479                     
 Accounts payable and accrued expenses                                              (349          )                 (1,274        )           
 Net cash used in operating activities                                              (1,689        )                 (1,691        )           
                                                                                                                                              
 INVESTING ACTIVITIES                                                                                                                         
 Purchase of property and equipment                                                 (35           )                 (480          )           
 Net cash flows used in investing activities                                        (35           )                 (480          )           
                                                                                                                                              
 FINANCING ACTIVITIES                                                                                                                         
 Repayment of unsecured debt                                                        (357          )                 —                         
 Proceeds from issuance of common stock                                             3,222                           —                         
 Proceeds from exercise of stock options                                            —                               161                       
 Net cash flows provided by financing activities                                    2,865                           161                       
                                                                                                                                              
 Net increase (decrease) in cash, cash equivalents and restricted cash              1,141                           (2,010        )           
 Cash, cash equivalents and restricted cash, beginning of period                    4,525                           9,608                     
 Cash, cash equivalents and restricted cash, end of period                          $     5,666                     $     7,598               
                                                                                                                                              
 Supplemental cash flow disclosures:                                                                                                          
 Interest paid                                                                      $     —                         $     —                   
 Income taxes paid                                                                  —                               18                        
 Supplemental disclosure of non-cash transactions:                                                                                            
 Purchase of property and equipment in accounts payable and accrued expenses        $     7                         $     76                  
                                                                                                                                              

CV SCIENCES, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)

We prepare our condensed financial statements in accordance with generally
accepted accounting principles for the United States (GAAP). The non-GAAP
financial measures such as net income and 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 expense, amortization expense, and interest expense, minus income
tax benefit and 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 loss to non-GAAP net loss for the three
months ended March 31, 2021 and 2020 is detailed below (in thousands, except
per share data):

                                                           Three months ended March 31,                              
                                                           2021                            2020                      
 Net loss - GAAP                                           $     (3,127  )                 $     (5,152  )           
 Stock-based compensation (1)                              657                             1,258                     
 Net loss - non-GAAP                                       $     (2,470  )                 $     (3,894  )           
                                                                                                                     
 Diluted EPS - GAAP                                        $     (0.03   )                 $     (0.05   )           
 Stock-based compensation (1)                              0.01                            0.01                      
 Diluted EPS - non-GAAP                                    $     (0.02   )                 $     (0.04   )           
                                                                                                                     
 Shares used to calculate diluted EPS - GAAP and non-GAAP  104,508                         99,678                    

_____________

 (1)  Represents stock-based compensation expense related to stock options awarded to employees, consultants and non-executive directors based on the grant date fair value using the Black-Scholes valuation model.  

A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for
the three months ended March 31, 2021 and 2020 is detailed below (in
thousands):

                               Three months ended March 31, 2021                                                            Three months ended March 31, 2020                                                           
                               Consumer Products                 Specialty Pharma                 Total                     Consumer Products                 Specialty Pharma                  Total                   
 Net loss                      $      (3,054  )                  $      (73    )                  $     (3,127  )           $      (3,939  )                  $      (1,213  )                  $     (5,152  )         
 Depreciation                  204                               —                                204                       176                               —                                 176                     
 Amortization                  —                                 —                                —                         —                                 9                                 9                       
 Interest expense (income)     14                                —                                14                        (10            )                  —                                 (10           )         
 Income tax benefit            —                                 —                                —                         (158           )                  —                                 (158          )         
 EBITDA                        (2,836         )                  (73           )                  (2,909        )           (3,931         )                  (1,204         )                  (5,135        )         
 Stock-based compensation (1)  656                               1                                657                       1,258                             —                                 1,258                   
 Adjusted EBITDA               $      (2,180  )                  $      (72    )                  $     (2,252  )           $      (2,673  )                  $      (1,204  )                  $     (3,877  )         

______________

 (1)  Represents stock-based compensation expense related to stock options awarded to employees, consultants and non-executive directors based on the grant date fair value using the Black-Scholes valuation model.  

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