CV Sciences, Inc. Reports Third Quarter 2023 Financial Results

SAN DIEGO, Nov. 14, 2023

Third Quarter 2023 and Recent Financial and Operating Highlights

• Increased revenue to $4.1 million for the third quarter 2023 compared to $3.8 million for the third quarter 2022 and a sequential improvement from $4.0 million for the second quarter 2023;
• Recognized gross margin of 45.1% for the third quarter 2023 compared to 41.6% for the third quarter 2022 and a sequential improvement from 43.3% for the second quarter 2023;
• Cash balance of $1.6 million at quarter end compared to $0.6 million at the end of 2022;
• Generated cash flow from operations of $2.4 million in the first nine months of 2023 compared to cash used in operations of $2.1 million in the first nine months of 2022; cash flow from operations included employee retention credit (ERC) under the CARES Act for a total of $2.5 million;
• Further established number one position as top-selling hemp extract brand in the natural product retail sales channel, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry;
• Launched PlusCBD™ Reserve Sleep Gummies, specifically designed for better sleep;
• Launched M&A strategy that will transition the Company to continue its prominent role in the CBD category, but also leverage our strengths to pursue non-CBD nutraceuticals and other plant-based food products, both domestically and internationally;
• Executed non-binding letter of intent to acquire a plant-based food company in Europe, providing the Company with a manufacturing and distribution foothold in the EU that will allow for leverage of our key strengths and competencies; and
• Continued to evaluate select partnership opportunities, including acquisitions or other options for the Company.

"We are very pleased with our third quarter 2023 results. In a challenging environment, our revenues of $4.1 million increased both sequentially and year-over-year. Our gross margin also improved to 45.1%, again, both a sequential and year-over-year increase," stated Joseph Dowling, Chief Executive Officer of CV Sciences.  "Our third quarter progress demonstrates our continuous commitment to innovation and cost-efficient execution as we move closer to profitability and positive cash flow.  During the quarter, we launched our plan to transition to a global health and wellness company that will use M&A as a vehicle to leverage the strengths and assets of our Company.  We are thrilled to announce the first step in this plan with the signing of a non-binding letter of intent to acquire a plant-based food company in Europe, which will allow us to leverage our core competitive advantages to drive long-term growth and shareholder value."

Operating Results - Third Quarter 2023 Compared to Third Quarter 2022

Sales for third quarter 2023 were $4.1 million, an increase of 9% from $3.8 million for the third quarter 2022. The increase is primarily due to higher number of units sold during the third quarter 2023 by 6%, and increases in average sales price per unit. We generated an operating loss of $0.4 million in the third quarter of 2023, compared to an operating loss of $0.9 million in the third quarter 2022, mostly due to higher sales, improved gross margins and lower operating expenses. The Company had negative adjusted EBITDA for the third quarter of 2023 of $0.4 million, compared to negative adjusted EBITDA of $1.2 million in the third quarter of 2022.

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