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"We are pleased with our fiscal year 2024 results. Revenues for our core business remained stable around the $4 million range per quarter throughout 2024 despite a challenging market and regulatory 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 fiscal 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 organic growth with further new product development and will continue to pursue additional M&A opportunities in the near future to improve our top-line revenue, profitability and shareholder value."

Operating Results - Full Year 2024 Compared to Full Year 2023

Sales for fiscal 2024 were $15.7 million, a decrease of 1.9% from $16.0 million in 2023. The decline is primarily due to lower B2B sales of $0.4 million because of lower unit sales. B2B sales were mostly impacted by the patchwork of state regulations for CBD. B2C sales increased in fiscal 2024 by $0.1 million or 1.6% because of higher volume, despite lower digital marketing advertisement. The total number of units sold during fiscal 2024 decreased by 9.2%, partially offset by increases in average sales prices of 5.7%. In addition, 28% of our net revenue for the year ended December 31, 2024 was from new products launched since January 1, 2023. During this time period, we launched 24 new products.

We generated an operating loss of $2.2 million in fiscal 2024, compared to an operating income of $3.4 million in 2023, mostly due to the reversal of accrued payroll taxes of $6.2 million in 2023, improved gross margins and reduced operating expenses. The Company had negative adjusted EBITDA of $0.8 million for fiscal 2024, an improvement of 66.7% compared to negative adjusted EBITDA of $2.3 million in 2023.

Fourth Quarter 2024 Results

During the fourth quarter of 2024, sales increased 2.2% to $3.9 million compared to $3.8 million in the same prior year period. The increase in sales is mostly due to additional revenue from Cultured Foods and Elevated Softgels, partially offset by lower number of units sold during the fourth quarter 2024. Fourth quarter sales also increased sequentially compared to the third quarter 2024. We generated an operating loss of $0.6 million in the fourth quarter of 2024, compared to an operating loss of $0.9 million in the fourth quarter of 2023, mostly due to the intangible asset impairment charge in 2023. The Company had negative adjusted EBITDA for the fourth quarter of 2024 of $0.4 million, compared to negative adjusted EBITDA of $0.5 million in the fourth 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 https://viavid.webcasts.com/starthere.jsp?ei=1710928&tp_key=ccf1cdb9ed. 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, April 3, 2025, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13752212.

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 hemp-extract brand 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 also produces cannabinoid-free supplements under its +PlusHLTH™ brand, with targeted formulations to optimize health, improve performance, and increase vitality. Our Cultured Foods™ brand provides a variety of 100% plant-based food products that are distributed primarily in the EU and other select markets. Cultured Foods™ 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 leading 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. 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.

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, and interest expense, less income tax benefit, 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 years ended December 31, 2024 and 2023 is detailed below (in thousands, except per share data):

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 intangible asset impairment charge for 2023.

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

A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the years ended December 31, 2024 and 2023 is detailed below (in thousands):

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 intangible asset impairment charge during 2023.

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

SOURCE: CV Sciences, Inc.

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