CV Sciences, Inc. (OTCQB:CVSI) announced its financial results for the quarter ended September 30, 2021, with revenue falling 8% to $5.1 million for the third quarter of 2021 versus $5.6 million for the third quarter of 2020. CV Sciences said that sales were hurt by increased market competition, which was largely due to the uncertain regulatory environment for CBD.
The company had negative adjusted EBITDA for the third quarter of 2021 of $2.7 million, compared to negative adjusted EBITDA of $2.6 million in the third quarter of 2020. The company’s operating expenses of $5.3 million are higher than the income of $5.1 million, but the company managed to trim its net losses in the quarter to $40,000.
“Third quarter results met our expectations and we are very encouraged by recent legislative actions including the passage of AB 45 in California, which creates a framework for responsible CBD legalization on a much broader scale,” said Joseph Dowling, Chief Executive Officer. “We delivered third quarter revenue of $5.1 million, consistent with Q2, and continue to improve our cost structure versus a year ago as we continued to benefit from productivity initiatives. We recently launched our PlusCBD Reserve collection, a full spectrum offering that is intended to provide the benefit of hemp cannabinoids, including CBD to THC, working synergistically, for a balanced cannabinoid supplement. The new Reserve products, along with our Sleep and Calm products launched earlier this year, are evidence of our strong innovation pipeline and ability to capitalize on opportunities for future incremental revenue. With our portfolio of high-quality, proven products, and favorable regulatory momentum, we believe the Company is positioned for growth in 2022.”
Convertible Note Announced
The total cash balance was $1.7 million at the quarter-end versus $4.5 million at year-end. CV Sciences also announced that it has entered into a securities purchase agreement with an institutional investor, providing for the sale and issuance of convertible notes due 2022 in the aggregate original principal amount of $1.06 million. The company also said it may offer and sell up to an additional $4,240,000 in aggregate principal amount of notes at additional closings, resulting in potential gross proceeds for this offering and such additional offerings, of approximately $5.3 million. CV Sciences said it plans to use the net proceeds of approximately $1 million for general corporate purposes which may include, without limitation, funding of product development, sales and marketing activities, increasing the company’s working capital and investment in its products and intellectual property in order to accelerate growth.