CV Sciences Inc(OTCMKTS:CVSI) has been on the move after a recent retest of the $3 support. The stock has gained its footing some since the Citron Research debacle and commands a strong investor base who is confident that CVSI is on the cusp of a significant recovery from current levels.
CVSI collapsed in the last week of August after noted short-seller, Andrew Left) released a tweet alleging that CV Sciences’ management misrepresented the status of one of its key patents. According to Citron Research, the Company failed to disclose a rejected patent that the Company “continue[d] to hype.” Since then a number of class action lawsuits have been filed by law firms accusing the Company of failing to disclose that the U.S. Patent and Trademark Office rejected the patent for CVSI-007, the Company’s lead drug candidate for the treatment of smokeless tobacco addiction. There has been some discussion on whether Citron neglected to clarify that the patent is currently under appeal, and not absolutely rejected as his tweet would have you believe.
CV Sciences Inc(OTCMKTS: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 (PlusCBD Oil(TM)) to a range of market sectors. The largest segment is the consumer products business segment, which is in charge of manufacturing and selling the company’s CBD brand PlusCBD™ CV Sciences, Inc. has primary offices and facilities in San Diego, California and Las Vegas, Nevada.
A big party of CVSI success is PlusCBD Oil™, the #1 brand of hemp-derived CBD products in the natural channel according to SPINS scan data, has achieved immense success since the launch of its brand of dietary supplements in 2014. This brand is currently being sold in approximately 1300 health food stores and continues to grow its shelf presence in various retail outlets across the country.
the huge success of PlusCBD Oil™ has resulted in massive sales for CVSI: on August 1, CVSI announced Second Quarter 2018 Financial Results. The Company announced record sales of $12,349,000 an increase of 203% compared to Q2 2017. CVSI also increased retail store count to 1,968 natural and organic health food stores as of June 30, 2018, representing an 11.1% sequential increase over the Company’s retail store count for the first quarter of 2018. PlusCBD™ product line is now positioned for mainstream acceptance and expanded distribution as the health and wellness markets continue to embrace CBD commercialization and standardization.
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In July the Company said it has submitted its application to list the Company’s common stock in the U.S. on the Nasdaq Capital Market. Acceptance for listing the Company’s shares is subject to approval based on several factors including satisfaction of minimum listing requirements for the Nasdaq Capital Market. The Company intends to satisfy all of the applicable listing requirements, however, there is no assurance that its application will be approved. During the Nasdaq review process, the Company’s common stock will continue to trade in the U.S. on the OTC under its current symbol, CVSI.
The Company stated in an 8k dated August 28 “CV Sciences, Inc. has been informed of a class action lawsuit filed against the Company that alleges violations of federal securities laws. The Company disputes the allegations in the complaint and will vigorously defend this lawsuit. Both the Citron report and the newly filed lawsuit allege, in pertinent part, that the Company violated securities laws by failing to disclose that it had received notice from the United States Patent and Trademark Office (USPTO) that its pending patent application, U.S. Patent Application No. 15/426,617 (the ‘617 Application), had been “finally rejected” by the USPTO. The complaint draws the conclusion that this notice from the USPTO terminated the Company’s patent application, and that the Company’s efforts to obtain patent protection for the inventions disclosed in the ‘617 Application have therefore failed.
Last week CVSI announced 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.
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Currently trading at a $305 million market valuation CVSI has $6 million in the treasury, manageable debt and significant fast growing revenues reporting $12,348,695 in sales for the 3 months ended June 30, 2018 up from $4,081,832 for the same period last year. This represents over 200% growth in revenues year over year. CVSI PlusCBD Oil™ has achieved nationwide success since the launch of its brand of dietary supplements in 2014. CVSI was one of the hottest stocks on the OTCBB and one of the most volatile hitting $9.20 new highs when Citron Research tweeted that “CVSI misrepresentation by management. The total bull case is based on REJECTED patents the company has never disclosed and continues to hype. Securities Fraud? Another IRTH special.” This caused the stock to collapse in hours to as low as $3.40 a share. The short position here cites CEO Michael J. Mona history of questionable conduct including an SEC enforcement action and a fraud judgment against him as well as the fact that Citreon Research has been sued 5 times and never lost once. The longs point to all of the huge positives reported here: another huge revenue increase expected next quarter, higher net income, no debt, NASDAQ up listing as well as a number of new states that are legalizing MJ. We will be updating on CVSI when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with CVSI.
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Disclosure: we hold no position in CVSI either long or short and we have not been compensated for this article.