Exhibit 99.1


CV Sciences, Inc. Reports Third Quarter 2019 Financial Results
Increased Retail Distribution by Over 800 Stores

San Diego, CA - November 5, 2019 (GLOBE NEWSWIRE) - CV Sciences, Inc. (OTCQB:CVSI) (the “Company”, “CV Sciences”, “our”, “us” or “we”), a preeminent supplier and manufacturer of hemp cannabidiol (CBD) products, today announced its financial results for the quarter ended September 30, 2019.

Third Quarter 2019 and Recent Financial and Operating Highlights
•
Revenue of $12.6 million for the third quarter of 2019;
•
Total retail distribution increased to more than 5,400 stores as of September 30, 2019, an 18% increase from June 30, 2019;
•
Broadened retail presence in the food, drug and mass channel (FDM) and in active discussions for further expansion of the PlusCBD™ Oil brand;
•
Announced expanded distribution partnership with The Kroger Co. by an additional 400 locations to a total of 1,350 stores;
•
Announced distribution partnership with Harris Teeter for 150 locations;
•
Announced distribution partnership with The Vitamin Shoppe for 383 locations during the third quarter of 2019, which has grown to 515 locations;
•
Expanded e-commerce sales to 21.6% of total net revenue;
•
Gross margin of 66.9% for the third quarter of 2019;
•
Maintained total cash balance of $14.2 million at quarter end;
•
Announced expansion of additional production and warehouse space;
•
Appointment of three new independent board members; and
•
Launched seven new body care hemp products.

“We continued to execute our expansion efforts, growing our retail distribution by 18% during the third quarter. We added new national retail partners in both the food, drug and mass (FDM) and natural products channels and we continue to see strong retailer interest across all channels. We broadened our product offerings, with the launch of a new body care line, further




expanding our presence in hemp-derived CBD topicals, while allowing us to capitalize on the growing interest of national retailers,” stated Joseph Dowling, Chief Executive Officer of CV Sciences. “We generated $12.6 million of third quarter revenue, representing a modest decline compared to the prior year, reflecting the uncertain regulatory environment for CBD resulting in state by state ambiguities that are impacting retailer activities, as well as the short-term impact of new competition in the natural product channel. We expect both of these near-term challenges to abate as the regulatory environment develops, providing more structured guidance on the CBD market and establishing quality standards that benefit all consumers and expand availability. We are encouraged by the recent USDA establishment of the U.S. domestic hemp production program, and look for additional regulation to be established, particularly by the FDA. There is a significant opportunity to expand the market across all channels of distribution by broadening product availability beyond topicals, currently the only products adopted in many national retail chains. Further regulatory clarity will expand availability of ingestibles, which account for many of our top selling products.”
“We believe that we are at an important period in the hemp-derived CBD market. Consumer demand is strong and growing, and there is growing interest from all parties in establishing the regulatory lanes that will drive the market forward. CV Sciences is uniquely positioned as an experienced market leader, with industry-leading quality standards, a broad offering and distribution footprint, and a commitment to science and regulatory compliance as well as our corporate governance. We remain highly confident in our long-term growth opportunity and will continue to focus on building an industry-leading portfolio of products, broadening retail distribution and supporting the growth of the hemp-derived CBD market,” Dowling continued.


Operating Results - Third Quarter 2019 Compared to Third Quarter 2018
Sales for the third quarter of 2019 were $12.6 million, a decrease of 7% from $13.6 million in the third quarter of 2018. Third quarter sales were impacted by increased market competition in the natural product category, and the continued impacts on retail customers as a result of the uncertain regulatory environment for CBD. The Company's retail store count increased to 5,435 stores nationwide as of September 30, 2019, up from 4,591 stores as of June 30, 2019.

The Company recognized an operating loss of $1.8 million in the third quarter of 2019, compared to an operating income of $3.5 million in the third quarter of the prior year. The decline in operating income is primarily related to reduced sales and additional investment in sales, marketing and R&D activities.

As reported under U.S. generally accepted accounting principles (GAAP), our third quarter 2019 net loss was $1.8 million, compared to our GAAP net income of $3.3 million in the same period in 2018. Net loss in the third quarter of 2019 was




impacted by increased R&D, additional management resources and marketing activities to leverage future growth. Diluted net loss per share was $0.02 for the third quarter of 2019 compared to a diluted net income per share of $0.03 for the same period in 2018.

Non-GAAP net loss for the third quarter of 2019 was $1.1 million, or $0.01 per diluted share based on weighted average shares outstanding of 98.7 million. This compares to non-GAAP net income of $3.8 million or $0.03 per diluted share based on weighted average shares outstanding of 115.9 million for the same period in 2018.

Adjusted EBITDA for the third quarter of 2019 was a loss of $0.9 million, compared to income of $4.1 million in the third quarter of 2018.

Business Outlook
For fiscal year 2019, the Company expects revenue to be in the range of $55 million to $57 million.

Conference Call and Webcast
The Company will host a conference call and webcast to discuss these results today at 4:30 pm EST/1:30 pm PST. The webcast of the conference call will be available on the Investor Relations section of the Company's web site at https://ir.cvsciences.com/news-events and at http://public.viavid.com/index.php?id=136763. 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 two hours after the call concludes, and will be available through Tuesday, November 12, 2019, by dialing (844) 512-2921 from the U.S. or (412) 317-6671 from international locations, and entering confirmation code 13695960.

About CV Sciences, Inc.
CV Sciences, Inc. (CVSI) operates two distinct business segments: a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors; and a drug development division focused on developing and commercializing CBD-based novel therapeutics utilizing CBD. The Company’s PlusCBD™ Oil products are sold at more than 5,500 retail locations throughout the U.S. and it is the top-selling brand of hemp-derived CBD on the market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. CV Sciences’ state-of-the-art facility follows all guidelines for Good Manufacturing Practices (GMP) and the Company’s full spectrum hemp extracts are processed, produced, and tested throughout the manufacturing process to confirm the cannabinoid content meets strict company standards. With a commitment to science, PlusCBD™ Oil’s benefits in healthy




people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov. PlusCBD™ Oil was the first hemp CBD supplement brand to invest in the scientific evidence necessary to receive self-affirmed Generally Recognized as Safe (GRAS) status. CV Sciences, Inc. has primary offices and facilities in San Diego, California. 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.

Contact Information
Investor Contact:
ICR
Scott Van Winkle
617-956-6736
scott.vanwinkle@icrinc.com

Media Contact:
ICR
Cory Ziskind
646-277-1232
cory.ziskind@icrinc.com







CV SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Product sales, net
$
12,603

 
$
13,601

 
$
44,368

 
$
34,020

Cost of goods sold
4,175
 
3,655
 
13,430
 
9,453
Gross Profit
8,428
 
9,946
 
30,938
 
24,567
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Research and development
1,544

 
530

 
4,574

 
1,125

Selling, general and administrative
8,657
 
5,890
 
36,261
 
15,952
 
10,201
 
6,420
 
40,835
 
17,077
 
 
 
 
 
 
 
 
Operating Income (Loss)
(1,773
)
 
3,526

 
(9,897
)
 
7,490

 
 
 
 
 
 
 
 
Interest expense (income)
(7
)
 
31
 
(2
)
 
150
Income (loss) before income taxes
(1,766
)
 
3,495

 
(9,895
)
 
7,340

Income tax expense
3

 
200

 
29

 
240

Net Income (Loss)
$
(1,769
)
 
$
3,295

 
$
(9,924
)
 
$
7,100

 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
 
 
 
 
 
 
Basic
98,733

 
91,639

 
97,524

 
90,959

Diluted
98,733

 
115,889

 
97,524

 
110,601

Net income (loss) per common share
 
 
 
 
 
 
 
Basic
$
(0.02
)
 
$
0.04

 
$
(0.10
)
 
$
0.08

Diluted
$
(0.02
)
 
$
0.03

 
$
(0.10
)
 
$
0.06










CV SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)

 
September 30,
2019
 
December 31,
2018
Assets
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
13,738

 
$
12,684

Restricted cash
500

 
251

Accounts receivable, net
3,542

 
3,340

Inventory
10,025

 
7,132

Prepaid expenses and other
8,469

 
2,059

Total current assets
36,274

 
25,466

 
 
 
 
Inventory
—

 
1,418

Property & equipment, net
3,454

 
2,844

Operating lease assets
9,021

 
—

Intangibles, net
3,774

 
3,801

Goodwill
2,788

 
2,788

Other assets
1,227

 
585

Total assets
$
56,538

 
$
36,902

 
 
 
 
Liabilities and stockholders' equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
1,110

 
$
1,245

Accrued expenses
10,366

 
2,673

Operating lease liability - current
669

 
—

Notes payable, net
—

 
474

Total current liabilities
12,145

 
4,392

 
 
 
 
Operating lease liability
9,787

 
—

Deferred rent
—

 
1,329

Deferred tax liability
1,065

 
1,065

Other liabilities
298

 
—

Total liabilities
23,295

 
6,786

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
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, 98,767 and 94,940 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
10

 
9

Additional paid-in capital
68,184

 
55,134

Accumulated deficit
(34,951
)
 
(25,027
)
Total stockholders' equity
33,243

 
30,116

 
 
 
 
Total liabilities and stockholders' equity
$
56,538

 
$
36,902











CV SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(in thousands)
 
Nine months ended September 30,
 
2019
 
2018
OPERATING ACTIVITIES
 
 
 
Net income (loss)
$
(9,924
)
 
$
7,100

Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
 
 
 
Depreciation and amortization
533

 
376

Amortization of beneficial conversion feature of convertible debts
—

 
50

Common stock issued for professional services
—

 
295

Stock-based compensation
4,915

 
1,634

Stock-based compensation associated with employment settlement
7,857

 
—

Bad debt expense
38

 
47

Noncash lease expense
497

 
—

Change in operating assets and liabilities:
 
 
 
Accounts receivable
(240
)
 
(1,030
)
Inventory
(1,475
)
 
1,959

Prepaid expenses and other current assets
(659
)
 
(1,036
)
Accounts payable and accrued expenses
857

 
364

Deferred rent
—

 
167

Net cash provided by operating activities
2,399

 
9,926

 
 
 
 
INVESTING ACTIVITIES
 
 
 
Purchase of equipment
(872
)
 
(331
)
Tenant improvements to leasehold real estate
(29
)
 
(94
)
Net cash flows used in investing activities
(901
)
 
(425
)
 
 
 
 
FINANCING ACTIVITIES
 
 
 
Repayment of convertible debt in cash
—

 
(660
)
Repayment of unsecured debt in cash
(474
)
 
(966
)
Proceeds from exercise of stock options
279

 
343

Net cash flows used in financing activities
(195
)
 
(1,283
)
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
1,303

 
8,218

Cash, cash equivalents and restricted cash, beginning of period
12,935

 
2,792

Cash, cash equivalents and restricted cash, end of period
$
14,238

 
$
11,010

 
 
 
 
Supplemental cash flow disclosures:
 
 
 
Interest paid, net of interest income
$
9

 
$
150

Income taxes paid
$
70

 
$
70

Purchase of property and equipment in accounts payable and accrued expenses
$
21

 
$
—

Operating ROU lease assets obtained in exchange for operating lease liabilities
$
5,405

 
$
—











CV SCIENCES, INC.
NON-GAAP FINANCIAL MEASURES

We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures such as net income and 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 and other non-recurring items. 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 expense, amortization expense, interest and income tax expense (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 income (loss) for the three and nine months ended September 30, 2019 and 2018 is detailed below:
 
Three months ended September 30,
 
Nine months ended
September 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands, except per share data)
Net income (loss) - GAAP
$
(1,769
)
 
$
3,295

 
$
(9,924
)
 
$
7,100

Stock-based compensation (1)
699

 
238

 
4,915

 
1,634

Common stock issued for professional services (2)
—

 
233

 
—

 
295

Stock-based compensation associated with employment settlement (3)
—

 
—

 
7,857

 
—

Payroll expense associated with employment settlement (4)
—

 
—

 
934

 
—

Net income (loss) - non-GAAP
$
(1,070
)
 
$
3,766

 
$
3,782

 
$
9,029

 
 
 
 
 
 
 
 
Diluted EPS - GAAP
$
(0.02
)
 
$
0.03

 
$
(0.10
)
 
$
0.06

Stock-based compensation (1)
0.01

 
—

 
0.04

 
0.02

Common stock issued for professional services (2)
—

 
—

 
—

 
—

Stock-based compensation associated with employment settlement (3)
—

 
—

 
0.08

 
—

Payroll expense associated with employment settlement (4)
—

 
—

 
0.01

 
—

Diluted EPS - non-GAAP
$
(0.01
)
 
$
0.03

 
$
0.03

 
$
0.08

 
 
 
 
 
 
 
 
Shares used to calculate diluted EPS - GAAP
98,733

 
115,889

 
97,524

 
110,601

Shares used to calculate diluted EPS - non-GAAP
98,733

 
115,889

 
117,318

 
110,601

_____________
(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.




A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the three months ended September 30, 2019 and 2018 is detailed below:
 
Three months ended September 30, 2019
 
Three months ended September 30, 2018
 
Consumer Products
 
Specialty Pharma
 
Total
 
Consumer Products
 
Specialty Pharma
 
Total
 
(in thousands)
Net income (loss)
$
(651
)
 
$
(1,118
)
 
$
(1,769
)
 
$
3,674

 
$
(379
)
 
$
3,295

Depreciation
170

 
—

 
170

 
122

 
—

 
122

Amortization
—

 
9

 
9

 
—

 
9

 
9

Interest expense (income)
(7
)
 
—

 
(7
)
 
31

 
—

 
31

Income tax expense
3

 
—

 
3

 
200

 
—

 
200

EBITDA
(485
)
 
(1,109
)
 
(1,594
)
 
4,027

 
(370
)
 
3,657

Stock-based compensation (1)
657

 
42

 
699

 
238

 
—

 
238

Common stock issued for professional services (2)
—

 
—

 
—

 
233

 
—

 
233

Adjusted EBITDA
$
172

 
$
(1,067
)
 
$
(895
)
 
$
4,498

 
$
(370
)
 
$
4,128

A reconciliation from our net income (loss) to Adjusted EBITDA, a non-GAAP measure, for the nine months ended September 30, 2019 and 2018 is detailed below:
 
Nine months ended September 30, 2019
 
Nine months ended September 30, 2018
 
Consumer Products
 
Specialty Pharma
 
Total
 
Consumer Products
 
Specialty Pharma
 
Total
 
(in thousands)
Net income (loss)
$
(7,134
)
 
$
(2,790
)
 
$
(9,924
)
 
$
7,898

 
$
(798
)
 
$
7,100

Depreciation
506

 
—

 
506

 
349

 
—

 
349

Amortization
—

 
27

 
27

 
—

 
27

 
27

Interest expense (income)
(2
)
 
—

 
(2
)
 
150

 
—

 
150

Income tax expense
29

 
—

 
29

 
240

 
—

 
240

EBITDA
(6,601
)
 
(2,763
)
 
(9,364
)
 
8,637

 
(771
)
 
7,866

Stock-based compensation (1)
4,794

 
121

 
4,915

 
1,634

 
—

 
1,634

Common stock issued for professional services (2)
—

 
—

 
—

 
295

 
—

 
295

Stock-based compensation associated with employment settlement (3)
7,857

 
—

 
7,857

 
—

 
—

 
—

Payroll expense associated with employment settlement (4)
934

 
—

 
934

 
—

 
—

 
—

Adjusted EBITDA
$
6,984

 
$
(2,642
)
 
$
4,342

 
$
10,566

 
$
(771
)
 
$
9,795

_________________
(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.