CV Sciences, Inc. (OTCQB: CVSI) operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors.
CV Sciences’ Pharmaceutical Division is developing synthetically‐formulated cannabidiol‐based medicine, pursuing the approval of the U.S. Food and Drug Administration (FDA) for drugs with specific indications utilizing cannabidiol as the active pharmaceutical ingredient. CV Sciences has achieved promising preclinical results in the development of cannabinoid medicines for treatment of a range of medical conditions.
CV Sciences’ Consumer Products Division delivers botanical‐based cannabidiol products that enhance quality of life. Currently distributed nationally in health food stores, health care provider’s offices and online, each consumer products brand is backed by a formal safety review, growing body of case reports, and physician’s recommendations.
CV Sciences is in development of CBD-based potential FDA approved drugs. In December 2015, CV Sciences acquired CanX Inc., a pre-clinical drug development company focused on significant unmet medical needs. The initial drug candidate (CVSI-007) is a chewing gum containing nicotine and synthetic CBD to support cessation of smokeless tobacco use and addiction. The product is in the pre-clinical stage.
Recent Events
September 05, 2018. CV Sciences announced that its industry dominating brand of finished products, PlusCBD Oil™ will be exhibiting at Natural Products Expo East on September 12-15, in Baltimore, Maryland. Produced by New Hope Network, Natural Products Expo East is the leading trade show in the natural, organic and healthy products industry, attracting over 28,000 industry professionals and over 1,500 exhibits to the Baltimore Convention Center.
August 22, 2018. CV Sciences announced that it has fully repaid the promissory note payable to Wiltshire, LLC in cash, thus avoiding any remaining interest payments due on the Note. The Company issued the Promissory Note on November 9, 2017 in the principal amount of $850,000, with an original due date of May 9, 2019. By prepaying this debt, the Company avoids further payments associated with this Promissory Note and they are now completely free of debt other than ordinary course payables.
Recent Highlights
Over the last year, the Company has achieved numerous milestones and market-leading fundamentals. Some notable items include:
Record-breaking Q2 2018 financial results including revenues of $12.3 million, net income of $3.2 million and adjusted EBITDA of $3.8 million.
Record-breaking first half 2018 financial results including revenues of $20.4 million, net income of $3.8 million and adjusted EBITDA of $5.6 million.
Recent repayment of remaining debt obligations resulting in a much stronger, debt-free balance sheet.
Market-leading retail distribution of our PlusCBD Oil™ brand to 1,968 stores as of June 30, 2018.
Accelerated investment to increase their operating scale to take advantage of a fast-growing market, expected to reach $1.6 billion by 2021.
Strong trade leadership role to advocate passage of the 2018 Farm Bill to further solidify industry legal framework.
Actively prosecuting their U.S. Patent Application No. 15/426,617 (the ‘617 Application) with plans to file and prosecute several more applications related to the ‘617 Application. Also, they have commenced foreign patent prosecution for the ‘617 Application based on the global strategy to commercialize their drug candidate CVSI-007.
Ranking among the leading financial performers in the sector especially when measured against comparable public companies including Tilray Inc., Cronos Group Inc. and Canopy Growth Corporation.
Submitting up-listing application with NASDAQ Capital Market, which would allow the Company to broaden their investor pool and provide greater access to capital markets.
Products
PlusCBD Oil is the top-selling brand of hemp-derived CBD oil for consumers in the natural products industry with a track record of excellence.
The company offers a wide variety of CBD oil softgels, drops, capsules sprays and balms.
About
CV Sciences, Inc. is a life science company that operates through two segments, specialty pharmaceuticals and consumer products. The Company focuses on developing and commercializing proprietary prescription drugs utilizing synthetic cannabidiol (CBD) as the active pharmaceutical ingredient and is engaged in the development, manufacturing, marketing and sale of consumer products containing plant-based CBD, which is refined into its own proprietary branded products. CV Sciences initial drug candidate (CVSI-007) is a chewing gum that combines CBD and nicotine, which the Company believes has the potential to effectively treat smokeless tobacco use and addiction. The market for cessation of smokeless tobacco use and addiction is estimated at $2 billion, growing to over $4 billion in the next 5-6 years.
Financial review
Second Quarter 2018 Financial Highlights
Record Sales of $12,349,000, an increase of 203% compared to Q2 2017
Record Gross Profit of $9,060,000, an increase of 219% compared to Q2 2017
Record GAAP Net Income of $3,186,000, an improvement of $4,178,000 compared to Q2 2017
Record Adjusted EBITDA $3,806,000, an improvement of $4,087,000 compared to Q2 2017
First Six Months 2018 Financial Highlights
Record Sales of $20,419,000, an increase of 160% compared to the first six months of 2017
Record Gross Profit of $14,622,000, an increase of 177% compared to the first six months of 2017
GAAP Net Income of $3,805,000, an improvement of $8,582,000 compared to the first six months of 2017
Record Adjusted EBITDA of $5,628,000, an improvement of $6,099,000 compared to the first six months of 2017
Cash Flow from Operations of $5,369,000, with a cash balance increase of $3,344,000 during Q2 2018
Stock influences and risk factors
Further legislation legalizing the use of cannabis/hemp products could act as a catalyst for CVSI shares.
Conversely, any restrictions imposed on the use of cannabis/hemp products, through legislation could impact the company negatively.
There is much competition in the cannabis/hemp product sector and the company revenues may suffer from better products sold by competitors.
Stock chart
On Wednesday, September 5, 2018, CVSI shares were trading at $4.19 on traded volume of 2.1 million shares. The current RSI (14) is 49.26
At $4.19, CVSI shares are trading above their 50 DMA and 200 DMA of $3.32 and $1.35 respectively.
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