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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CV Sciences Inc (QB) | USOTC:CVSI | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00535 | 13.84% | 0.044 | 0.01 | 1.80 | 0.046 | 0.0373 | 0.0373 | 241,919 | 21:15:35 |
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ý
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended June 30, 2019
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☐
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from _________ to ________
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DELAWARE
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80-0944970
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
Securities registered pursuant to Section 12(b) of the Act:
|
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Title of each class
|
Trading symbol(s)
|
Name of exchange on which registered
|
Common Stock, par value $0.0001
|
CVSI
|
OTC:QB
|
|
Large accelerated filer
|
o
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Accelerated filer
|
ý
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Non-accelerated filer
|
o
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Smaller reporting company
|
ý
|
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Emerging growth company
|
o
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PAGE
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||
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June 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
15,237
|
|
|
$
|
12,684
|
|
Restricted cash
|
500
|
|
|
251
|
|
||
Accounts receivable, net
|
4,688
|
|
|
3,340
|
|
||
Inventory
|
9,107
|
|
|
7,132
|
|
||
Prepaid expenses and other
|
8,264
|
|
|
2,059
|
|
||
Total current assets
|
37,796
|
|
|
25,466
|
|
||
|
|
|
|
||||
Inventory
|
—
|
|
|
1,418
|
|
||
Property & equipment, net
|
3,228
|
|
|
2,844
|
|
||
Operating lease assets
|
3,870
|
|
|
—
|
|
||
Intangibles, net
|
3,783
|
|
|
3,801
|
|
||
Goodwill
|
2,788
|
|
|
2,788
|
|
||
Other assets
|
595
|
|
|
585
|
|
||
Total assets
|
$
|
52,060
|
|
|
$
|
36,902
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,371
|
|
|
$
|
1,245
|
|
Accrued expenses
|
9,713
|
|
|
2,673
|
|
||
Operating lease liability - current
|
651
|
|
|
—
|
|
||
Notes payable
|
69
|
|
|
474
|
|
||
Total current liabilities
|
11,804
|
|
|
4,392
|
|
||
|
|
|
|
||||
Operating lease liability
|
4,497
|
|
|
—
|
|
||
Deferred rent
|
—
|
|
|
1,329
|
|
||
Deferred tax liability
|
1,065
|
|
|
1,065
|
|
||
Other liabilities
|
406
|
|
|
—
|
|
||
Total liabilities
|
17,772
|
|
|
6,786
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
|
|
|
|
||||
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, 98,704 and 94,940 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|
10
|
|
|
9
|
|
||
Additional paid-in capital
|
67,460
|
|
|
55,134
|
|
||
Accumulated deficit
|
(33,182
|
)
|
|
(25,027
|
)
|
||
Total stockholders' equity
|
34,288
|
|
|
30,116
|
|
||
|
|
|
|
||||
Total liabilities and stockholders' equity
|
$
|
52,060
|
|
|
$
|
36,902
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Product sales, net
|
$
|
16,854
|
|
|
$
|
12,349
|
|
|
$
|
31,765
|
|
|
$
|
20,419
|
|
Cost of goods sold
|
4,903
|
|
3,289
|
|
9,255
|
|
5,797
|
||||||||
Gross Profit
|
11,951
|
|
9,060
|
|
22,510
|
|
14,622
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
1,688
|
|
|
442
|
|
|
3,030
|
|
|
596
|
|
||||
Selling, general and administrative
|
9,009
|
|
5,321
|
|
27,604
|
|
10,061
|
||||||||
|
10,697
|
|
5,763
|
|
30,634
|
|
10,657
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Operating Income (Loss)
|
1,254
|
|
|
3,297
|
|
(8,124
|
)
|
|
3,965
|
|
|||||
|
|
|
|
|
|
|
|
||||||||
Interest (income) expense, net
|
(1
|
)
|
|
71
|
|
5
|
|
120
|
|||||||
Income (loss) income taxes
|
1,255
|
|
|
3,226
|
|
(8,129
|
)
|
|
3,845
|
|
|||||
Income tax expense
|
26
|
|
|
40
|
|
|
26
|
|
|
40
|
|
||||
Net Income (Loss)
|
$
|
1,229
|
|
|
$
|
3,186
|
|
|
$
|
(8,155
|
)
|
|
$
|
3,805
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
98,633
|
|
|
90,713
|
|
|
98,557
|
|
|
90,613
|
|
||||
Diluted
|
120,929
|
|
|
112,466
|
|
|
98,557
|
|
|
106,291
|
|
||||
Net income (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.01
|
|
|
$
|
0.04
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
Diluted
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
Total
|
|||||||||||
Balance at January 1, 2019
|
94,940
|
|
|
$
|
9
|
|
|
$
|
55,134
|
|
|
$
|
(25,027
|
)
|
|
$
|
30,116
|
|
Issuance of common stock under employee benefit plan
|
3,539
|
|
|
1
|
|
|
196
|
|
|
—
|
|
|
197
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,091
|
|
|
—
|
|
|
2,091
|
|
||||
Stock-based compensation associated with employment settlement
|
—
|
|
|
—
|
|
|
7,857
|
|
|
—
|
|
|
7,857
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,384
|
)
|
|
(9,384
|
)
|
||||
Balance at March 31, 2019
|
98,479
|
|
|
10
|
|
|
65,278
|
|
|
(34,411
|
)
|
|
30,877
|
|
||||
Issuance of common stock under employee benefit plan
|
225
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,125
|
|
|
—
|
|
|
2,125
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,229
|
|
|
1,229
|
|
||||
Balance at June 30, 2019
|
98,704
|
|
|
$
|
10
|
|
|
$
|
67,460
|
|
|
$
|
(33,182
|
)
|
|
$
|
34,288
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
Total
|
|||||||||||
Balance at January 1, 2018
|
90,513
|
|
|
$
|
9
|
|
|
$
|
51,400
|
|
|
$
|
(35,028
|
)
|
|
$
|
16,381
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,036
|
|
|
—
|
|
|
1,036
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
619
|
|
|
619
|
|
||||
Balance at March 31, 2018
|
90,513
|
|
|
9
|
|
|
52,436
|
|
|
(34,409
|
)
|
|
18,036
|
|
||||
Issuance of stock for professional services
|
150
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||
Exercise of stock options
|
283
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
360
|
|
|
—
|
|
|
360
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,186
|
|
|
3,186
|
|
||||
Balance at June 30, 2018
|
90,946
|
|
|
$
|
9
|
|
|
$
|
52,966
|
|
|
$
|
(31,223
|
)
|
|
$
|
21,752
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
(8,155
|
)
|
|
$
|
3,805
|
|
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
354
|
|
|
245
|
|
||
Amortization of beneficial conversion feature of convertible debts
|
—
|
|
|
50
|
|
||
Common stock issued for professional services
|
—
|
|
|
62
|
|
||
Stock-based compensation
|
4,216
|
|
|
1,396
|
|
||
Stock-based compensation associated with employment settlement
|
7,857
|
|
|
—
|
|
||
Bad debt expense
|
32
|
|
|
2
|
|
||
Noncash lease expense
|
251
|
|
|
—
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(1,380
|
)
|
|
(1,081
|
)
|
||
Notes receivable
|
—
|
|
|
17
|
|
||
Inventory
|
(557
|
)
|
|
1,200
|
|
||
Prepaid expenses and other
|
(622
|
)
|
|
14
|
|
||
Accounts payable and accrued expenses
|
1,461
|
|
|
(463
|
)
|
||
Deferred rent
|
—
|
|
|
122
|
|
||
Net cash provided by operating activities
|
3,457
|
|
|
5,369
|
|
||
|
|
|
|
||||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of equipment
|
(475
|
)
|
|
(190
|
)
|
||
Tenant improvements to leasehold real estate
|
(29
|
)
|
|
(87
|
)
|
||
Net cash flows used in investing activities
|
(504
|
)
|
|
(277
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES
|
|
|
|
||||
Repayment of convertible debt in cash
|
—
|
|
|
(660
|
)
|
||
Repayment of unsecured debt in cash
|
(405
|
)
|
|
(99
|
)
|
||
Proceeds from exercise of stock options
|
254
|
|
|
107
|
|
||
Net cash flows used in financing activities
|
(151
|
)
|
|
(652
|
)
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
2,802
|
|
|
4,440
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
12,935
|
|
|
2,792
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
15,737
|
|
|
$
|
7,232
|
|
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
||||
Interest paid, net of interest income
|
$
|
9
|
|
|
$
|
120
|
|
Income taxes paid
|
$
|
54
|
|
|
$
|
18
|
|
Purchase of property and equipment in accounts payable and accrued expenses
|
$
|
50
|
|
|
$
|
—
|
|
1.
|
ORGANIZATION AND BUSINESS
|
•
|
Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. The Company's Level 1 assets are comprised of
$2.0 million
in money market funds which are classified as cash equivalents. The carrying value of the cash equivalents approximated the fair value as of
June 30, 2019
. The Company did not have any cash equivalents as of
December 31, 2018
. The Company does not have any liabilities that are valued using inputs identified under a Level I hierarchy as of
June 30, 2019
and
December 31, 2018
.
|
•
|
Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. The Company did not have any assets that are valued using inputs identified under a Level 2 hierarchy as of
June 30, 2019
and
December 31, 2018
.
|
•
|
Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. The Company did not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of
June 30, 2019
and
December 31, 2018
.
|
2.
|
BALANCE SHEET DETAILS
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Raw materials
|
$
|
3,833
|
|
|
$
|
4,747
|
|
Finished goods
|
5,274
|
|
|
3,803
|
|
||
|
$
|
9,107
|
|
|
$
|
8,550
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Accrued payroll expenses
(1)
|
$
|
7,651
|
|
|
$
|
1,222
|
|
Other accrued liabilities
|
2,062
|
|
|
1,451
|
|
||
|
$
|
9,713
|
|
|
$
|
2,673
|
|
(1) This includes a $5.8 million tax liability associated with a related party transaction as discussed in Note 11.
|
|
|
|
3.
|
INTANGIBLES, NET
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Useful Life
(Years)
|
||||||
Balance - June 30, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||
In-process research and development
|
$
|
3,730
|
|
|
$
|
—
|
|
|
$
|
3,730
|
|
|
—
|
Trade names
|
100
|
|
|
70
|
|
|
30
|
|
|
5
|
|||
Non-compete agreements
|
77
|
|
|
54
|
|
|
23
|
|
|
5
|
|||
|
$
|
3,907
|
|
|
$
|
124
|
|
|
$
|
3,783
|
|
|
|
Balance - December 31, 2018:
|
|
|
|
|
|
|
|
||||||
In-process research and development
|
$
|
3,730
|
|
|
$
|
—
|
|
|
$
|
3,730
|
|
|
—
|
Trade names
|
100
|
|
|
60
|
|
|
40
|
|
|
5
|
|||
Non-compete agreements
|
77
|
|
|
46
|
|
|
31
|
|
|
5
|
|||
|
$
|
3,907
|
|
|
$
|
106
|
|
|
$
|
3,801
|
|
|
|
4.
|
LEASES
|
|
June 30,
2019 |
|
Weighted average remaining lease term (in months)
|
80.06
|
|
Weighted average discount rate
|
6.5
|
%
|
Year ending December 31,
|
|
||
2019 (remaining six months)
|
$
|
475
|
|
2020
|
981
|
|
|
2021
|
928
|
|
|
2022
|
925
|
|
|
2023
|
957
|
|
|
2024
|
986
|
|
|
Thereafter
|
1,100
|
|
|
|
6,352
|
|
|
Less imputed interest
|
(1,204
|
)
|
|
Total lease liabilities
|
$
|
5,148
|
|
|
|
||
Current operating lease liabilities
|
$
|
651
|
|
Non-current operating lease liabilities
|
4,497
|
|
|
Total lease liabilities
|
$
|
5,148
|
|
|
Operating Lease Commitment
|
||
2019
|
$
|
925
|
|
2020
|
961
|
|
|
2021
|
923
|
|
|
2022
|
929
|
|
|
2023
|
957
|
|
|
Thereafter
|
2,085
|
|
|
|
$
|
6,780
|
|
5.
|
NOTES PAYABLE
|
6.
|
STOCK-BASED COMPENSATION
|
|
Number of Shares
|
|
Weighted Average
Exercise Price
|
|
Weighted Average
Remaining Contract
Term (in years)
|
|
Aggregate Intrinsic Value
|
||||||
Outstanding - December 31, 2018
|
24,775
|
|
|
$
|
0.51
|
|
|
7.5
|
|
|
$
|
94,206
|
|
Granted
|
1,805
|
|
|
4.42
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(821)
|
|
|
0.36
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(141)
|
|
|
0.82
|
|
|
—
|
|
|
—
|
|
||
Expired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Outstanding - June 30, 2019
|
25,618
|
|
|
0.79
|
|
|
6.4
|
|
|
85,035
|
|
||
|
|
|
|
|
|
|
|
||||||
Exercisable - June 30, 2019
|
22,624
|
|
|
0.53
|
|
|
6.1
|
|
|
80,242
|
|
||
Vested or expected to vest - June 30, 2019
|
25,618
|
|
|
$
|
0.79
|
|
|
6.4
|
|
|
$
|
85,035
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|||||
|
2019
|
|
2018
(1)
|
|
2019
|
|
2018
|
|
Volatility
|
110.9%
|
|
—%
|
|
113.8%
|
|
90.5%
|
|
Risk-Free Interest Rate
|
1.8%
|
|
—%
|
|
2.5%
|
|
2.6%
|
|
Expected Term (in years)
|
5.80
|
|
0.00
|
|
5.70
|
|
5.40
|
|
Dividend Rate
|
—%
|
|
—%
|
|
—%
|
|
—
|
%
|
Fair Value Per Share on Grant Date
|
$3.31
|
|
$—
|
|
$4.00
|
|
$0.30
|
|
(1) There were no option grants during the three months ended June 30, 2018.
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
RSU's outstanding - December 31, 2018
|
2,950
|
|
$
|
2.14
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(2,950
|
)
|
|
2.14
|
||
Cancellations
|
—
|
|
|
—
|
|
|
RSU's outstanding - June 30, 2019
|
—
|
|
|
$
|
—
|
|
7.
|
NET INCOME (LOSS) PER SHARE
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
1,229
|
|
|
$
|
3,186
|
|
|
$
|
(8,155
|
)
|
|
$
|
3,805
|
|
Denominator for basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for basic
|
98,633
|
|
90,713
|
|
98,557
|
|
90,613
|
||||||||
Dilutive potential common stock outstanding:
|
|
|
|
|
|
|
|
||||||||
Stock options and RSU's
|
22,296
|
|
|
19,431
|
|
—
|
|
|
13,597
|
||||||
Warrants
|
—
|
|
|
2,322
|
|
—
|
|
|
2,081
|
||||||
Weighted average common shares outstanding for diluted
|
120,929
|
|
112,466
|
|
98,557
|
|
106,291
|
||||||||
Basic net income (loss) per share
|
$
|
0.01
|
|
|
$
|
0.04
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
Diluted net income (loss) per share
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Stock options
|
—
|
|
|
600
|
|
|
18,368
|
|
|
600
|
|
Performance stock options
|
—
|
|
|
—
|
|
|
7,250
|
|
|
—
|
|
Total
|
—
|
|
|
600
|
|
|
25,618
|
|
|
600
|
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
9.
|
SEGMENT INFORMATION
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Consumer Products
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
16,854
|
|
|
$
|
12,349
|
|
|
$
|
31,765
|
|
|
$
|
20,419
|
|
Gross profit
|
11,951
|
|
|
9,060
|
|
|
22,510
|
|
|
14,622
|
|
||||
Research and development expense
|
679
|
|
|
76
|
|
|
1,378
|
|
|
193
|
|
||||
Selling, general and administrative expense
|
8,999
|
|
|
5,320
|
|
|
27,584
|
|
|
10,046
|
|
||||
Operating income (loss)
|
$
|
2,273
|
|
|
$
|
3,664
|
|
|
$
|
(6,452
|
)
|
|
$
|
4,383
|
|
|
|
|
|
|
|
|
|
||||||||
Specialty Pharmaceutical
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross profit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Research and development expense
|
1,009
|
|
|
366
|
|
|
1,652
|
|
|
403
|
|
||||
Selling, general and administrative expense
|
10
|
|
|
1
|
|
|
20
|
|
|
15
|
|
||||
Operating loss
|
$
|
(1,019
|
)
|
|
$
|
(367
|
)
|
|
$
|
(1,672
|
)
|
|
$
|
(418
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
16,854
|
|
|
$
|
12,349
|
|
|
$
|
31,765
|
|
|
$
|
20,419
|
|
Gross profit
|
11,951
|
|
|
9,060
|
|
|
22,510
|
|
|
14,622
|
|
||||
Research and development expense
|
1,688
|
|
|
442
|
|
|
3,030
|
|
|
596
|
|
||||
Selling, general and administrative expense
|
9,009
|
|
|
5,321
|
|
|
27,604
|
|
|
10,061
|
|
||||
Operating income (loss)
|
$
|
1,254
|
|
|
$
|
3,297
|
|
|
$
|
(8,124
|
)
|
|
$
|
3,965
|
|
10.
|
INCOME TAXES
|
11.
|
RELATED PARTIES
|
12.
|
SUBSEQUENT EVENT
|
|
Three months ended
June 30,
|
|
Change
|
|
Six months ended
June 30,
|
|
Change
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Product sales, net
|
$
|
16,854
|
|
|
$
|
12,349
|
|
|
$
|
4,505
|
|
|
36
|
%
|
|
$
|
31,765
|
|
|
$
|
20,419
|
|
|
$
|
11,346
|
|
|
56
|
%
|
Cost of goods sold
|
4,903
|
|
|
3,289
|
|
|
$
|
1,614
|
|
|
49
|
%
|
|
9,255
|
|
|
5,797
|
|
|
3,458
|
|
|
60
|
%
|
|||||
Gross profit
|
$
|
11,951
|
|
|
$
|
9,060
|
|
|
$
|
2,891
|
|
|
32
|
%
|
|
$
|
22,510
|
|
|
$
|
14,622
|
|
|
$
|
7,888
|
|
|
54
|
%
|
Gross margin
|
70.9
|
%
|
|
73.4
|
%
|
|
|
|
|
|
70.9
|
%
|
|
71.6
|
%
|
|
|
|
|
|
Three months ended June 30,
|
|
Change
|
|
Six months ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Research and development
|
$
|
1,688
|
|
|
$
|
442
|
|
|
$
|
1,246
|
|
|
282
|
%
|
|
$
|
3,030
|
|
|
$
|
596
|
|
|
$
|
2,434
|
|
|
408
|
%
|
Percentage of revenue
|
10
|
%
|
|
4
|
%
|
|
|
|
|
|
10
|
%
|
|
3
|
%
|
|
|
|
|
||||||||||
Selling, general and administrative
|
9,009
|
|
|
5,321
|
|
|
$
|
3,688
|
|
|
69
|
%
|
|
27,604
|
|
|
10,061
|
|
|
$
|
17,543
|
|
|
174
|
%
|
||||
Percentage of revenue
|
53
|
%
|
|
43
|
%
|
|
|
|
|
|
87
|
%
|
|
49
|
%
|
|
|
|
|
|
Three months ended June 30, 2019
|
|
Three months ended June 30, 2018
|
||||||||||||||||||||
|
Consumer Products
|
|
Specialty Pharma
|
|
Total
|
|
Consumer Products
|
|
Specialty Pharma
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Net income (loss)
|
$
|
2,248
|
|
|
$
|
(1,019
|
)
|
|
$
|
1,229
|
|
|
$
|
3,553
|
|
|
$
|
(367
|
)
|
|
$
|
3,186
|
|
Depreciation
|
168
|
|
|
—
|
|
|
168
|
|
|
117
|
|
|
—
|
|
|
117
|
|
||||||
Amortization
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||
Interest expense (income)
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
71
|
|
|
—
|
|
|
71
|
|
||||||
Income tax expense
|
26
|
|
|
—
|
|
|
26
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||
EBITDA
|
2,441
|
|
|
(1,010
|
)
|
|
1,431
|
|
|
3,781
|
|
|
(358
|
)
|
|
3,423
|
|
||||||
Stock-based compensation (1)
|
2,090
|
|
|
35
|
|
|
2,125
|
|
|
361
|
|
|
—
|
|
|
361
|
|
||||||
Common stock issued for professional services (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||||
Adjusted EBITDA
|
$
|
4,531
|
|
|
$
|
(975
|
)
|
|
$
|
3,556
|
|
|
$
|
4,204
|
|
|
$
|
(358
|
)
|
|
$
|
3,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended June 30, 2019
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||
|
Consumer Products
|
|
Specialty Pharma
|
|
Total
|
|
Consumer Products
|
|
Specialty Pharma
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Net income (loss)
|
$
|
(6,483
|
)
|
|
$
|
(1,672
|
)
|
|
$
|
(8,155
|
)
|
|
$
|
4,223
|
|
|
$
|
(418
|
)
|
|
$
|
3,805
|
|
Depreciation
|
336
|
|
|
—
|
|
|
336
|
|
|
227
|
|
|
—
|
|
|
227
|
|
||||||
Amortization
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||||
Interest expense
|
5
|
|
|
—
|
|
|
5
|
|
|
120
|
|
|
—
|
|
|
120
|
|
||||||
Income tax expense
|
26
|
|
|
—
|
|
|
26
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||||
EBITDA
|
(6,116
|
)
|
|
(1,654
|
)
|
|
(7,770
|
)
|
|
4,610
|
|
|
(400
|
)
|
|
4,210
|
|
||||||
Stock-based compensation (1)
|
4,137
|
|
|
79
|
|
|
4,216
|
|
|
1,396
|
|
|
—
|
|
|
1,396
|
|
||||||
Common stock issued for professional services (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||||
Stock-based compensation associated with employment settlement (3)
|
7,857
|
|
|
—
|
|
|
7,857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payroll expense associated with employment settlement (4)
|
934
|
|
|
—
|
|
|
934
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted EBITDA
|
$
|
6,812
|
|
|
$
|
(1,575
|
)
|
|
$
|
5,237
|
|
|
$
|
6,068
|
|
|
$
|
(400
|
)
|
|
$
|
5,668
|
|
(1)
|
Represents stock-based compensation expense related to stock options and warrants awarded to employees, consultants and non-executive directors based on the grant date fair value using the Black-Scholes valuation model.
|
(2)
|
Represents common stock issued for professional services.
|
(3)
|
Represents stock-based compensation expense related to accelerated vesting of RSU's and the modification of certain stock options associated with the settlement agreement with our former President and Chief Executive Officer.
|
(4)
|
Represents accrued payroll and related benefits associated with the retirement of our former President and Chief Executive Officer.
|
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Net cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
3,457
|
|
|
$
|
5,369
|
|
Investing activities
|
(504
|
)
|
|
(277
|
)
|
||
Financing activities
|
(151
|
)
|
|
(652
|
)
|
||
Net increase in cash and restricted cash
|
2,802
|
|
|
4,440
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
12,935
|
|
|
2,792
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
15,737
|
|
|
$
|
7,232
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|
Exhibit No.
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Description of Exhibit
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2.1 (1)
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Agreement and Plan of Merger, dated as of July 25, 2013, by and between CannaVEST Corp., a Texas corporation, and CannaVEST Corp., a Delaware corporation.
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2.1 (2)
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Agreement and Plan of Reorganization by and among CannaVEST Corp., CannaVEST Merger Sub, Inc., CANNAVEST Acquisition LLC, CanX, Inc. and the Starwood Trust, as the Shareholder Representative.
|
3.1 (1)
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Certificate of Incorporation of CannaVEST Corp., as filed on January 26, 2013.
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3.2 (1)
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Bylaws of CannaVEST Corp., dated as of January 26, 2013.
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3.3 (3)
|
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Certificate of Amendment to Certificate of Incorporation of CannaVest Corp., as filed on January 4, 2016.
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3.4 (4)
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Certificate of Incorporation of the Company, as amended.
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3.5 (5)
|
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Amendment to the Bylaws of the Company, as amended.
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3.6 (6)
|
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Bylaws of the Company, as amended.
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4.1 (7)
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CannaVEST Corp. Specimen Stock Certificate
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10.6
† (8)
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Amended and Restated 2013 Equity Incentive Plan, as amended.
|
31.1*
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|
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31.2*
|
|
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32.1*
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32.2*
|
|
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101 INS*
|
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XBRL Instance Document**
|
101 SCH*
|
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XBRL Schema Document**
|
101 CAL*
|
|
XBRL Calculation Linkbase Document**
|
101 DEF*
|
|
XBRL Definition Linkbase Document**
|
101 LAB*
|
|
XBRL Labels Linkbase Document**
|
101 PRE*
|
|
XBRL Presentation Linkbase Document**
|
(1)
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Incorporated by reference from an exhibit to our Quarterly Report on Form 10-Q filed on August 13, 2013.
|
(2)
|
Incorporated by reference from an exhibit to our Current Report on Form 8-K filed on January 4, 2016.
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(3)
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Incorporated by reference from an exhibit to our Annual Report on Form 10-K filed on April 14, 2016.
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(4)
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Incorporated by reference from an exhibit to our Quarterly Report on Form 10-Q filed on May 16, 2016.
|
(5)
|
Incorporated by reference from an exhibit to our Current Report on Form 8-K filed on March 22, 2017.
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(6)
|
Incorporated by reference from an exhibit to our Quarterly Report on Form 10-Q filed on May 9, 2017.
|
(7)
|
Incorporated by reference from an exhibit to our Current Report on Form 8-K filed on July 31, 2013.
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(8)
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Incorporated by reference from an exhibit to our Current Report on Form 8-K filed on June 17, 2019.
|
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CV SCIENCES, INC.
(Registrant)
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|
|
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By
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/s/ Joseph D. Dowling
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Joseph D. Dowling
Chief Executive Officer
(Principal Executive Officer)
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Dated August 7, 2019
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|
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By
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/s/ Joerg Grasser
|
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Joerg Grasser
Chief Financial Officer
(Principal Financial Officer)
|
|
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Dated August 7, 2019
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