Company Announcements

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

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Product sales, net

$

3,954

$

3,966

$

7,956

$

8,114

Cost of goods sold

2,094

2,248

4,243

4,614

Gross profit

1,860

1,718

3,713

3,500

Operating expenses:

Research and development

28

36

64

71

Selling, general and administrative

2,415

2,758

4,852

4,914

Benefit from reversal of accrued payroll taxes

—

—

—

(6,171)

Total operating expenses

2,443

2,794

4,916

(1,186)

Operating income (loss)

(583)

(1,076)

(1,203)

4,686

Other expense, net

1

209

3

265

Income (loss) before income taxes

(584)

(1,285)

(1,206)

4,421

Income tax expense

—

3

6

3

Net income (loss)

$

(584)

$

(1,288)

$

(1,212)

$

4,418

Weighted average common shares outstanding, basic and diluted

172,418

152,599

167,823

152,353

Net income (loss) per common share, basic and diluted

$

(0.00)

$

(0.01)

$

(0.01)

$

0.03

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

June 30,
 2024

December 31, 2023

Assets

Current assets:

Cash

$

477

$

1,317

Accounts receivable, net

639

431

Inventory

5,206

5,655

Prepaid expenses and other

410

535

Total current assets

6,732

7,938

Property and equipment, net

666

379

Right of use assets

451

167

Intangibles, net

106

78

Goodwill

729

342

Other assets

202

296

Total assets

$

8,886

$

9,200

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

2,307

$

2,309

Accrued expenses

3,461

3,422

Operating lease liability - current

234

130

Debt

29

254

Total current liabilities

6,031

6,115

Operating lease liability - net of current portion

233

58

Deferred tax liability

19

19

Other liabilities

95

105

Total liabilities

6,378

6,297

Commitments and contingencies

Stockholders' equity

Preferred stock, par value $0.0001; 10,000 shares authorized; 1 share issued as of June 30, 2024 and December 31, 2023; and no shares outstanding as of June 30, 2024 and December 31, 2023

—

—

Common stock, par value $0.0001; 790,000 shares authorized as of June 30, 2024 and December 31, 2023; 180,651 and 161,678 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

18

16

Additional paid-in capital

88,291

87,464

Accumulated deficit

(85,799)

(84,587)

Accumulated other comprehensive income (loss)

(2)

10

Total stockholders' equity

2,508

2,903

Total liabilities and stockholders' equity

$

8,886

$

9,200

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

Six months ended June 30,

2024

2023

OPERATING ACTIVITIES

Net income (loss)

$

(1,212)

$

4,418

Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:

Depreciation and amortization

139

118

Stock-based compensation

67

153

Note discount and interest expense

—

112

Non-cash lease expense, net

78

53

Benefit from reversal of accrued payroll tax

—

(6,171)

Other

158

312

Change in operating assets and liabilities:

Accounts receivable, net

(200)

148

Inventory

513

727

Prepaid expenses and other

125

2,778

Accounts payable and accrued expenses

(243)

(262)

Net cash flows provided by (used in) operating activities

(575)

2,386

INVESTING ACTIVITIES

Acquisition of business, net of cash acquired

(40)

—

Net cash flows used in investing activities

(40)

—

FINANCING ACTIVITIES

Repayment of note payable

(50)

(1,117)

Repayment of unsecured debt

(173)

(190)

Net cash flows used in financing activities

(223)

(1,307)

Effect of exchange rate changes on cash

(2)

—

Net increase (decrease) in cash

(840)

1,079

Cash, beginning of period

1,317

611

Cash, end of period

$

477

$

1,690

Supplemental cash flow disclosures:

Interest paid

$

6

$

4

Income tax paid

$

6

$

—

Supplemental disclosure of non-cash transactions:

Services paid with common stock

$

62

$

100

Fair value of assets acquired, excluding cash

$

447

$

—

Goodwill on acquisition

393

—

Common stock consideration

(700)

—

Contigent consideration

(100)

—

Cash paid for acquisition

$

40

$

—

Supplemental cash flow disclosures:

Interest paid

$

4

$

3

Income taxes paid

$

6

$

—

Supplemental disclosure of non-cash transactions:

Services paid with common stock

$

62

$

—

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Net income (loss) - GAAP

$

(584)

$

(1,288)

$

(1,212)

$

4,418

Stock-based compensation ⁽¹⁾

37

35

67

153

Professional fees associated with legal dispute ⁽²⁾

464

—

693

—

Benefit from reversal of accrued payroll tax ⁽³⁾

—

—

—

(6,171)

Note discount and interest expense ⁽⁴⁾

—

12

—

112

Net loss - non-GAAP

$

(83)

$

(1,241)

$

(452)

$

(1,488)

Diluted EPS - GAAP

$

(0.00)

$

(0.01)

$

(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)

$

(0.01)

$

(0.00)

$

(0.01)

Shares used to calculate diluted EPS - GAAP and non-GAAP

172,418

152,599

167,823

152,353

⁽¹⁾

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

⁽²⁾

Represents legal and other professional expenses incurred during 2024 associated with the legal dispute with founder.

⁽³⁾

Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019.

⁽⁴⁾

Represents amortization of OID/debt issuance costs and interest expense for convertible notes payable and notes payable.

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Net income (loss)

$

(584)

$

(1,288)

$

(1,212)

$

4,418

Depreciation expense

71

59

130

118

Amortization expense

5

—

9

—

Interest expense

1

9

3

65

Income tax expense

—

3

6

3

EBITDA

(507)

(1,217)

(1,064)

4,604

Stock-based compensation ⁽¹⁾

37

35

67

153

Professional fees associated with legal dispute ⁽²⁾

464

—

693

—

Benefit from reversal of accrued payroll tax ⁽³⁾

—

—

—

(6,171)

Adjusted EBITDA

$

(6)

$

(1,182)

$

(304)

$

(1,414)

⁽¹⁾

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

⁽²⁾

Represents legal and other professional expenses incurred during 2024 associated with the legal dispute with founder.

⁽³⁾

Represents benefit from reversal of accrued payroll tax associated with RSU release to founder in 2019.