CV Sciences, Inc.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0000950170-24-038736
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0000950170-25-046180
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 108 current paragraphs.
35 unchanged; 48 reworded; 24 added; 24 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
In May 2024, we acquired all outstanding membership interests of Elevated Softgels, LLC, a Delaware limited liability company. Elevated Softgels is a leading manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry, based in Colorado.
Current report
Sales expense increased by $0.1 million, or 3.3%, due to higher payroll and employee benefits, partially offset by lower stock-based compensation, commission and other sales related expenses. Payroll and related benefits increased as we reallocated certain of our employees from marketing to sales.
Current report
General and administrative (“G&A”) expense increased by $0.2 million, or 6.6%, The increase is mostly due to additional legal and professional fees during the year ended December 31, 2024. The current year included professional fees of $0.8 million associated with the legal dispute with the Company's founder. For more information on the Company's legal proceedings, please refer to Note 13, Commitments and Contingencies, to our consolidated financial statements included in Part IV in this Annual Report. In addition, stock-based compensation and other G&A expenses increased slightly, partially offset by reduced insurance expense and intangible asset impairment charge of $0.3 million in 2023.
Current report
Elevated Softgels Acquisition
Current report
Softgels’ Net Revenue (as defined in the Softgels Purchase Agreement) generated during the 12-month period following the closing date and will be calculated as follows:
Current report
If the Elevated Softgels’ Net Revenue is at least $700,000, then the Softgels Earnout Amount will be $200,000.
Current report
If the Elevated Softgels’ Net Revenue is at least $650,000 but less than $700,000, then the Softgels Earnout Amount will be $125,000.
Current report
If the Elevated Softgels’ Net Revenue is at least $600,000 but less than $650,000, then the Softgels Earnout Amount will be $50,000.
Current report
If the Elevated Softgels’ Net Revenue is at least $550,000 but less than $600,000, then the Softgels Earnout Amount will be $25,000.
Current report
July 2024 Streeterville Note
Current report
On July 3, 2024, we entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), pursuant to which we issued and sold to Streeterville a Secured Promissory Note in the original principal amount of $1,188,500 (the “Note”). The Note carried an original issuance discount of $283,500 and we agreed to pay $5,000 to Streeterville to cover legal fees, each of which were deducted from the proceeds of the Note received by us, which resulted in a purchase price received by us of $900,000 (the “Purchase Price”).
Current report
The unpaid amount of the Note, any interest, fees, charges and late fees accrued was due and payable in twelve months from July 3, 2024 (the “Maturity Date”). We were required to make weekly repayments to Streeterville of $22,856. We were permitted able to pay all or any portion of the outstanding balance earlier than it is due without penalty. In the event we would have repaid the Note in full on or before December 31, 2024, we would have received a $75,000 discount from the outstanding balance. The Note was secured by all of our assets pursuant to a Security Agreement entered into with Streeterville on July 3, 2024. No interest was to accrue on the Note unless and until an occurrence of an Event of Default.
Current report
Subsequent to December 31, 2024, the Company repaid the entire amount due under the Note and all obligations thereunder were cancelled and terminated. For more information, please see Note 8, Debt, to our consolidated financial statements included in Part IV in this Annual Report.
Current report
2025 Secured Promissory Note
Current report
In February 2025, the Company entered into a securities purchase agreement with an institutional investor (the “Investor”), pursuant to which the Company issued and sold to the Investor a secured promissory note in the original principal amount of $1,600,000 (the "2025 Note"). The 2025 Note carries an original issuance discount of $400,000 and the Company agreed to pay $10,000 to the Investor to cover legal fees. The original issuance discount was deducted from the proceeds of the 2025 Note received by the Company which resulted in a purchase price received by the Company of $1,200,000.
Current report
The 2025 Note is due and payable on August 12, 2026 and the Company is required to make monthly repayments to the Investor of $106,667 starting on June 12, 2025. The Company can pay all or any portion of the outstanding balance earlier than it is due without penalty. In the event the Company repays the 2025 Note in full on or before August 12, 2025, the Company will receive a $100,000 discount from the outstanding balance. The 2025 Note is secured by all of the Company's assets and the assets of its subsidiaries pursuant to a security agreement and intellectual property security agreement entered into with the Investor on February 12, 2025. The Company's obligation under the 2025 Note are guaranteed by each of the Company's subsidiaries. No interest will accrue on the 2025 Note unless and until an occurrence of an event of default, as defined in the 2025 Note.
Current report
Several states have adopted new regulations that will impact the Company's ability to sell certain products as currently formulated or packaged in these states. Many of these states have also implemented new THC/CBD limits, age verification, testing, labeling and packaging requirements. The Company continues to assess the business and financial impact of the new regulations, including steps that can be taken to address the new product formulation and labeling requirements, as well as costs and potential revenue impacts and anticipated timing for such impacts to the Company in these states.
Current report
In October 2024, we entered into a new lease agreement for our manufacturing facility in Poland. The facility is approximately 2,400 square feet and located outside of Warsaw, Poland. The lease term is for two years and expires on September 30, 2026. Our monthly base rent was $1,963 through December 31, 2024 and increased to $2,208 for the period from January 1, 2025 to September 30, 2026.
Current report
On May 13, 2024, we entered into the Softgels Purchase Agreement. For more information, please see the discussion above under - Liquidity and Capital Resources -Elevated Softgels Acquisition.
Current report
Subsequent to December 31, 2024, we entered into a new lease agreement for our Elevated Softgels business. For more information, please see Note 17, Subsequent Events, to our consolidated financial statements included in Part IV in this Annual Report.
Current report
Goodwill and Intangible Assets – We evaluate the carrying value of goodwill and intangible assets annually during the fourth quarter in accordance with Accounting Standards Codification (“ASC”) Topic 350, Intangibles Goodwill and Other, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.
Current report
Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may more likely than not be less than carrying amount, or if significant adverse changes in our future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, we can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, we then evaluate goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The quantitative assessment for goodwill requires us to estimate the fair value of our reporting units using either an income or market approach or a combination thereof.
Current report
Management makes critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets. Our cash flow projections look several years into the future and include assumptions on variables such as future sales and operating margin growth rates, economic conditions, probability of success, market competition, inflation and discount rates.
Current report
During the fourth quarter of 2024 and 2023, we performed our annual goodwill impairment test and determined, after performing a qualitative test of our reporting unit, that it is more likely than not that the fair value of the exceeded its carrying amount. As a result of our goodwill impairment test, we did not record a goodwill impairment charge for the years ended December 31, 2024 and 2023.
Removed paragraphs (24)
Previous report
Sales expense decreased by $0.7 million, or 18.8%, due to lower payroll, stock-based compensation and other sales related expenses. Payroll decreased as a result of lower sales employee headcount. The decline is partially offset by higher commission expense, as a result of increased B2B sales.
Previous report
General and administrative ("G&A") expense decreased by $0.2 million, or 3.9%. In 2022, we recognized the benefit of the employee retention credit of $2.5 million. In addition, we recognized an intangible asset impairment charge of $0.3 million and $1.2 million in 2023 and 2022, respectively. Excluding the impact of these transactions, G&A expenses decreased by $1.7 million, or 32.9%, as a result of our ongoing efforts to reduce our overall cost structure. We were able to reduce our expenses for payroll, stock-based compensation, professional services, insurance, depreciation and other expense, partially offset by increases in legal expense.
Previous report
Represents gain on extinguishment of our convertible note during the year ended December 31, 2022. For more information, please see Note 8, Convertible Note, to our consolidated financial statements included in Part IV in this Annual Report.
Previous report
Represents benefits related to the employee retention credit. For more information, please see Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included in Part IV in this Annual Report.
Previous report
For the year ended December 31, 2023, we generated cash flows from operations of $2.3 million, which included government receipts of $2.7 million. Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 and the subsequent extension of the CARES Act, we were eligible for a refundable employee retention tax credit subject to certain criteria. We determined that we qualify for the tax credit under the CARES Act. In 2022, we claimed employee retention tax credits, which were recognized as a reduction to general and administrative expenses of $2.5 million during the year ended December 31, 2022. The amount was included in prepaid expenses and other in our consolidated balance sheet as of December 31, 2022.
Previous report
Cultured Foods Acquisition
Previous report
The Company shall release the Holdback Amount, less any amounts owed to the Company by the Member pursuant to the Purchase Agreement, including without limitation as a result of the post-closing adjustments discussed above, to the Member one year from the Closing Date.
Previous report
If Cultured Foods net revenue is at least $500,000, then the Earnout Amount will be $110,000.
Previous report
If Cultured Foods net revenue is at least $450,000 but less than $500,000, then the Earnout Amount will be $75,000.
Previous report
If Cultured Foods net revenue is at least $400,000 but less than $450,000, then the Earnout Amount will be $50,000.
Previous report
If Cultured Foods net revenue is at least $300,000 but less than $400,000, then the Earnout Amount will be $20,000.
Previous report
CARES Act
Previous report
The CARES Act provided an employee retention credit, which is a refundable tax credit against certain employment taxes of up to a maximum of $5,000 for each employee in 2020 and $7,000 per employee per quarter from January to September 2021. We determined that we qualify for the tax credit under the CARES Act and filed our amended tax returns in March and August 2022. During the year ended December 31, 2023, we received $2.7 million of tax credit payments, including interest, under the relief provisions. As discussed in further detail below, pursuant to the Streeterville Note, within three trading days of receipt by the Company of any employee retention credit funds owed to the Company under the CARES Act, such amounts were to be paid to Streeterville pursuant to the terms of the Streeterville Note.
Previous report
March 2022 Purchase Agreement
Previous report
On March 30, 2022, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor, pursuant to which we agreed to issue and sell 700 shares of our Series A Convertible Preferred Stock (the "Preferred Stock"), which had limited voting rights, including "supervoting" rights equal to 170,000 votes per share of preferred stock on certain stockholder proposals, and warrants to purchase an aggregate of 10,000,000 shares of Company common stock. Shares of the Preferred Stock had a stated value of $1,000 per share and were convertible at any time into an aggregate of 10,000,000 shares of common stock at a conversion price of $0.07 per share. We received aggregate gross proceeds of $0.7 million before deducting placement agent’s fees and other offering expenses in connection with this offering. In April 2022, the investor converted all of the 700 outstanding shares of Preferred Stock into an aggregate of 10,000,000 shares of our common stock. We recognized a beneficial conversion charge of $0.9 million during the year ended December 31, 2022, which represents the in-the-money value of the conversion rate as of the date of the conversion.
Previous report
The warrants issued pursuant to the Purchase Agreement have an exercise price of $0.10 per share, became exercisable on June 6, 2022 (the "Initial Exercise Date"), and will expire three years from the Initial Exercise Date.
Previous report
Streeterville Note
Previous report
In August 2022, we entered into a note purchase agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which we issued and sold to Streeterville a secured promissory note ("Streeterville Note") in the original principal amount of $2.0 million. The Streeterville Note carries an original issuance discount of $400,000. We incurred additional debt issuance costs of $23,000. As a result, we received aggregate net proceeds of approximately $1.6 million in connection with the sale and issuance of the Streeterville Note. We are required to make weekly repayments to Streeterville on the Streeterville Note in the following amounts: (a) $40,000 for the first eight weeks; and (b) $56,000 thereafter until the Streeterville Note is paid in full. The unpaid amount of the Streeterville Note, any interest, fees, charges and late fees accrued shall be due and payable in full nine months from August 19, 2022 (the “Maturity Date”); provided, however, that within three trading days of the Company's receipt of any employee retention credit funds owed under the CARES Act, such amounts are required to be paid to Streeterville; provided, further, that if at least $1.0 million in CARES Act proceeds are not remitted to Streeterville within ninety days of August 19, 2022, the outstanding balance under the Streeterville Note will be increased by five percent (5%). The Company did not receive the CARES Act proceeds within ninety days of August 19, 2022; as a result, the outstanding balance of the Streeterville Note was increased by five percent (5%). The Streeterville Note was secured by all of the Company’s assets. The Streeterville Note was repaid in full in April 2023, and there was no outstanding balance as of December 31, 2023.
Previous report
On December 7, 2023, we entered into a purchase agreement to acquire all outstanding equity interests in Cultured Foods. In accordance with the purchase agreement, we shall make an additional cash payment to the prior member of Cultured Foods in the form of an earn-out (the “Earnout Amount”), which shall be based on Cultured Foods revenues generated in fiscal 2024 and will be calculated as follows:
Previous report
If Cultured Foods net revenue is at least $500,000, then the Earnout Amount will be $110,000.
Previous report
If Cultured Foods net revenue is at least $450,000 but less than $500,000, then the Earnout Amount will be $75,000.
Previous report
If Cultured Foods net revenue is at least $400,000 but less than $450,000, then the Earnout Amount will be $50,000.
Previous report
If Cultured Foods net revenue is at least $300,000 but less than $400,000, then the Earnout Amount will be $20,000.
Previous report
If Cultured Foods net revenue (as defined in the Purchase Agreement) is less than $300,000, then the Earnout Amount will be $0.
Reworded paragraphs (48)
Previous wording
The following discussion of our financial condition and results of operations for the years ended December 31, 2023 and 2022 should be read in conjunction with our financial statements and the notes to those statements that are included elsewhere in this Annual Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of various factors, many of which are out of our control. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Current wording
The following discussion of our consolidated financial condition and results of operations for the years ended December 31, 2024 and 2023 should be read in conjunction with our consolidated financial statements and the notes to those statements that are included elsewhere in this Annual Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of various factors, many of which are out of our control. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Previous wording
We are a consumer wellness company specializing in hemp extracts and other proven, science-backed, natural ingredients and products, which are sold through a range of sales channels from B2B to B2C.
Current wording
We are a consumer wellness company specializing in nutraceuticals and plant-based foods. Our hemp extracts and other proven, science-backed, natural ingredients and products are sold through a range of sales channels from B2B to B2C.
Previous wording
Our+PlusCBD™ branded products are sold at select retail locations throughout the U.S. and are the top-selling brands of hemp extracts in the natural products market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. We follow all guidelines for GMP and our products are processed, produced, and tested throughout the manufacturing process to confirm strict compliance with company and regulatory standards and specifications. With a commitment to science,+PlusCBD™ product benefits in healthy people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov.+PlusCBD™ was the first hemp extract supplement brand to invest in the scientific evidence necessary to receive self-affirmed GRAS status.
Current wording
Our+PlusCBD™ branded products are sold at select retail locations throughout the U.S. and are the top-selling brands of hemp extracts in the natural products market, according to SPINS, the leading provider of syndicated data and insights for the natural, organic and specialty products industry. With a commitment to science,+PlusCBD™ product benefits in healthy people are supported by human clinical research data, in addition to three published clinical case studies available on PubMed.gov.+PlusCBD™ was the first hemp extract supplement brand to invest in the scientific evidence necessary to receive self-affirmed GRAS status.
Previous wording
In addition, on December 7, 2023, we entered into a Membership Interest Purchase Agreement, pursuant to which we purchased all of the outstanding equity interests in Cultured Foods Sp. z.o.o., resulting in Cultured Foods becoming a wholly owned subsidiary of the Company. Cultured Foods is a leading European manufacturer and distributor of plant-based, protein products.
Current wording
On December 7, 2023, we entered into a Membership Interest Purchase Agreement, pursuant to which we purchased all of the outstanding equity interests in Cultured Foods Sp. z.o.o., resulting in Cultured Foods becoming a wholly owned subsidiary of the Company. Cultured Foods is a leading European manufacturer and distributor of plant-based protein products. In January 2025, we launched Lunar Fox™, a brand that is focused on distribution of plant-based products in the U.S. market. Our Cultured Foods™and Lunar Fox™brands provide a variety of 100% plant-based food products. Committed to crafting nutritious and flavorful alternatives, Cultured Foods™and Lunar Fox™cater to individuals seeking vegan, gluten-free, or flexitarian options for a nutritious and satisfying culinary experience.
Previous wording
Over the last several years, we have built an efficient and cost effective consumer products platform and we continue to evaluate inbound or outbound merger, sale, acquisition or other opportunities for the Company.
Current wording
In August 2024, we engaged Maxim Group, LLC as a non-exclusive financial advisor and investment banker to provide strategic financial advisory and investment banking services. Working with Maxim, the Company intends to continue building an efficient and cost effective consumer products platform. We intend to continue to evaluate inbound and outbound merger, sale, acquisition or other opportunities for the Company.
Previous wording
We also have a drug development program focused on developing and commercializing CBD-based novel therapeutics.
Current wording
We also have a dormant drug development program focused on developing and commercializing CBD-based novel therapeutics, which may be pursued further, subject to available capital.
Previous wording
Our primary offices and facilities are located in San Diego, California and Warsaw, Poland.
Current wording
Our primary offices and facilities are located in San Diego, California; Grand Junction, Colorado; and Warsaw, Poland.
Previous wording
We had product sales of $16.0 million and gross profit of $7.1 million, representing a gross margin of 44.3%, in 2023 compared to product sales of $16.2 million and gross profit of $5.6 million, representing a gross margin of 34.2%, in 2022. Our net product sales decreased by $0.2 million, or 1.2%, in 2023 when compared to 2022. The decline is primarily due to lower B2C sales in 2023. The total number of units sold during the year ended December 31, 2023 decreased by 6.7% compared to the year ended December 31, 2022, partially offset by higher sales prices of 5.8%. In addition, 33% of our net revenue for the year ended December 31, 2023 was from new products launched since January 1, 2022. During this time period, we launched 28 new products.
Current wording
We had product sales of $15.7 million and gross profit of $7.2 million, representing a gross margin of 45.6%, in 2024 compared to product sales of $16.0 million and gross profit of $7.1 million, representing a gross margin of 44.3%, in 2023. Our net product sales decreased by $0.3 million, or 1.9%, in 2024 when compared to 2023. The decline is primarily due to lower B2B sales in 2024. The total number of units sold during the year ended December 31, 2024 decreased by 9.2% compared to the year ended December 31, 2023, partially offset by higher sales prices of 5.7%. In addition, 28% of our net revenue for the year ended December 31, 2024 was from new products launched since January 1, 2023. During this time period, we launched 24 new products. B2C sales increased in 2024 compared to 2023, despite lower digital marketing advertisement. The overall market continues to be fragmented and highly competitive, which we believe is largely due to the lack of a clear regulatory framework and a patchwork of state regulation.
Previous wording
Cost of goods sold consists primarily of raw materials, packaging, manufacturing overhead (including payroll, employee benefits, stock-based compensation, facilities, depreciation, supplies and quality assurance costs), merchant card fees and shipping. We were able to reduce our cost of goods sold in 2023 compared to 2022 by $1.7 million or 16.3%. The reduction is partially due to the lower number of units sold in 2023. In addition, cost of goods sold in 2023 decreased as a percentage of revenue compared to 2022, mostly due to lower shipping and fulfillment cost, lower payroll and other production cost savings. Our gross profit improved by $1.5 million, or 27.7%, to $7.1 million in 2023 and gross margins improved from 34.2% in 2022 to 44.3% in 2023. The improvement in our gross margin is primarily due to our continued cost savings of lower shipping and fulfillment cost, lower payroll and other production costs.
Current wording
Cost of goods sold consists primarily of raw materials, packaging, manufacturing overhead (including payroll, employee benefits, stock-based compensation, facilities, depreciation, supplies and quality assurance costs), merchant card fees and shipping. We were able to reduce our cost of goods sold in 2024 compared to 2023 by $0.4 million or 4.3%. The reduction is partially due to the lower number of units sold in 2024. In addition, cost of goods sold in 2024 decreased as a percentage of revenue compared to 2023, mostly due to lower shipping and fulfillment cost, lower payroll, lower inventory losses and other production cost savings. Our gross profit improved by $0.1 million, or 1.2%, to $7.2 million in 2024 and gross margins improved from 44.3% in 2023 to 45.6% in 2024. The improvement in our gross margin is primarily due to reduced discounts, product and channel mix, lower shipping and fulfillment cost, lower payroll, lower inventory losses and other production cost savings.
Previous wording
Research and development (“R&D”) expense decreased to $0.2 million in 2023 compared to $0.3 million in 2022. The decrease is mostly related to reduced new product development activities for our consumer products.
Current wording
Research and development (“R&D”) expense decreased to $0.1 million in 2024 compared to $0.2 million in 2023. The decrease is mostly related to reduced new product development activities for our consumer products.
Previous wording
Selling, general and administrative (“SG&A”) expenses decreased by $2.3 million, or 19.4%, to $9.7 million in 2023, from $12.1 million in 2022. Additionally, SG&A expense as percentage of product sales, net decreased from 74.6% in 2022 to 60.9% in 2023.
Current wording
Selling, general and administrative (“SG&A”) expenses decreased by $0.5 million, or 5.2%, to $9.2 million in 2024, from $9.7 million in 2023. Additionally, SG&A expense as percentage of product sales, net decreased from 60.9% in 2023 to 58.8% in 2024.
Previous wording
Marketing expense decreased by $1.5 million, or 33.6%, due to lower payroll, stock-based compensation, outside services and reduced digital marketing activities. Payroll decreased as a result of lower marketing employee headcount.
Current wording
Marketing expense decreased by $0.9 million, or 29.0%, due to reduced digital marketing activities as well as lower payroll, employee benefits, stock-based compensation, and outside services. Payroll decreased as we reallocated certain employees to sales.
Previous wording
We previously recorded a contingent liability for payroll taxes associated with the RSU release to our founder in 2019 of $6.7 million. On April 15, 2023, the statute of limitations for federal payroll tax withholding expired. In addition, the statute of limitations for the state tax withholding expired during the year ended December 31, 2023. As a result of the expiration of the relevant statutes of limitations, the Company believes that neither the IRS nor the State of California have the rights to assess and collect the $6.2 million of income taxes from CV Sciences and we have made a change in accounting estimate and no longer expect to incur a loss with respect to this matter. As a result, we derecognized the contingent liability of $6.2 million during the year ended December 31, 2023. For more information, please see Note 13, Related Parties, to our consolidated financial statements included in Part IV in this Annual Report.
Current wording
We previously recorded a contingent liability for payroll taxes associated with the RSU release to our founder in 2019 of $6.7 million. On April 15, 2023, the statute of limitations for federal payroll tax withholding expired. In addition, the statute of limitations for the state tax withholding expired during the year ended December 31, 2023. As a result of the expiration of the relevant statutes of limitations, the Company believes that neither the IRS nor the State of California have the rights to assess and collect the $6.2 million of income taxes from CV Sciences and we made a change in accounting estimate and no longer expect to incur a loss with respect to this matter. As a result, we derecognized the contingent liability of $6.2 million during the year ended December 31, 2023. For more information, please see Note 12, Related Parties, to our consolidated financial statements included in Part IV in this Annual Report.
Previous wording
Other expense, net consists of interest expense, interest income and fair value adjustments to our financial instruments. Other expense decreased by $1.2 million compared to the year ended December 31, 2022. The decrease is mostly related to lower interest expense for the accretion of the original issuance discount and debt issuance cost for our convertible notes, which were extinguished during 2022. The decrease is partially offset by increases to other operating expenses of $0.2 million.
Current wording
Other expense, net consists of interest expense, interest income and fair value adjustments to our financial instruments. Other expense decreased by $0.1 million compared to the year ended December 31, 2023. Other expenses, net included fair value increases for our financial instruments of $0.2 million during 2023 and interest expense for the amortization of the original issuance discount for the new Streeterville note payable of $0.2 million in 2024.
Previous wording
We use Adjusted EBITDA internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent generally accepted accounting principles ("GAAP") measures or that supplement the information provided by our GAAP measures. Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation and amortization expense, and interest expense, minus income tax benefit), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it helps to provide insights in trends in our business in addition to GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.
Current wording
measures or that supplement the information provided by our GAAP measures. Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation and amortization expense, and interest expense, minus income tax benefit), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it helps to provide insights in trends in our business in addition to GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.
Previous wording
Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Annual Report, including our financial statements, to aid in their analysis and understanding of our performance and in making comparisons.
Current wording
Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Annual Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.
Previous wording
On November 5, 2021, Mona Jr. filed a complaint against the Company seeking to recover federal and state taxes which the taxing authorities assessed against him associated with the RSU release. For more information, please see Note 14. Commitments and Contingencies, to our consolidated financial statements included in Part IV in this Annual Report.
Current wording
Represents legal and other professional expenses incurred during 2024 associated with the legal dispute with founder. For more information on the Company's legal proceedings, please see Note 13, Commitments and Contingencies, to our consolidated financial statements included in Part IV in this Annual Report.
Previous wording
Represents intangible asset impairment charge. For more information, please see Note 6, Goodwill and Intangible Assets, to our consolidated financial statements included in Part IV in this Annual Report.
Current wording
Represents intangible asset impairment charge during 2023. For more information, please see Note 6, Goodwill and Intangible Assets, to our consolidated financial statements included in Part IV in this Annual Report.
Previous wording
Represents benefits for reversal of accrued payroll tax associated with the RSU release to founder in 2019. For more information, please see Note 13, Related Party, to our consolidated financial statements included in Part IV in this Annual Report.
Current wording
Represents benefit for reversal of accrued payroll tax associated with the RSU release to founder in 2019. For more information, please see Note 12, Related Party, to our consolidated financial statements included in Part IV in this Annual Report.
Previous wording
During the year ended December 31, 2023, our primary sources of capital came from (i) cash generated from our operations, (ii) existing cash, (iii) funds received from the IRS related to employee retention credits, and (iv) proceeds from third-party financings completed in 2022, including the sale of shares of our preferred stock and promissory notes, to certain investors. As of December 31, 2023, we had approximately $1.3 million of cash and working capital of approximately $1.8 million.
Current wording
During the year ended December 31, 2024, our primary sources of capital came from (i) cash generated from our operations, (ii) existing cash, (iii) proceeds from note payable financings, and (iv) funds received from the IRS related to employee retention credits during the year ended December 31, 2023. As of December 31, 2024, we had approximately $0.5 million of cash and working capital of approximately $0.1 million.
Previous wording
Excluding the funds for employee retention tax credits, we generated negative cash flows from operations of $0.5 million for the year ended December 31, 2023 and had an accumulated deficit of $84.6 million. Management anticipates that we will be dependent, for the near future, on additional investment capital to fund operations, growth initiatives, and will continue to make and implement strategic cost reductions, including reductions in employee headcount, vendor spending, and delaying expenses related to its drug development activities. We intend to position ourselves so that we will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit.
Current wording
For the year ended December 31, 2024, we generated negative cash flows from operations of $0.9 million, and we had an accumulated deficit of $87.0 million as of December 31, 2024. Excluding the funds for employee retention tax credits, we generated negative cash flows from operations of $0.5 million for the year ended December 31, 2023. In February 2025, the Company entered into a securities purchase agreement with an institutional investor (the “Investor”), pursuant to which the Company issued and sold to the Investor a secured promissory note and received net proceeds of $1,200,000 - please see Note 17, Subsequent Events, to our consolidated financial statements included in Part IV in this Annual Report for more information. Management anticipates that we will be dependent, for the near future, on additional investment capital to fund operations, growth initiatives, and will continue to make and implement strategic cost reductions, including reductions in employee headcount, vendor spending, and delaying expenses related to its drug development activities. We intend to position ourselves so that we will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit.
Previous wording
We believe that a combination of factors have adversely impacted our business operations for the year ended December 31, 2023. Due to a low barrier entry market with a lack of a clear regulatory framework, we face intense competition from both licensed and illicit market operators that may also sell herbal supplements and hemp-based CBD consumer products. Because we operate in a market that is rapidly evolving and expanding globally, our customers may choose to obtain CBD products from our competitors, and our success depends on our ability to attract and retain our customers from purchasing CBD products elsewhere. To remain competitive, we intend to continue to innovate new products, build brand awareness, and make significant investments in our business strategy by introducing new products into the markets in which we operate, adopt quality assurance protocols and procedures, build our market presence, and undertake further research and development.
Current wording
We believe that a combination of factors have adversely impacted our business operations for the year ended December 31, 2024. Due to a low barrier entry market with a lack of a clear regulatory framework, we face intense competition from both licensed and illicit market operators that may also sell herbal supplements and hemp-based CBD consumer products. Because we operate in a market that is rapidly evolving and expanding globally, our customers may choose to obtain CBD products from our competitors, and our success depends on our ability to attract and retain our customers from purchasing CBD products elsewhere. To remain competitive, we intend to continue to innovate new products, build brand awareness, and make significant investments in our business strategy by introducing new products into the markets in which we operate, adopt quality assurance protocols and procedures, build our market presence, and undertake further research and development. In addition, we intend to evaluate and pursue additional acquisitions to further diversify our product offerings.
Previous wording
Management implemented, and continues to make and implement, strategic cost reductions, including reductions in employee headcount, vendor spending, and the delaying of certain expenses related to our drug development activities. During the year ended December 31, 2022, we started outsourcing the majority of our manufacturing, warehousing and fulfillment functions. To the extent that we feel it is necessary and in the best interest of the Company and our shareholders, we may also take further actions that alter our operations in order to ensure the success of our business.
Current wording
Management implemented, and continues to make and implement, strategic cost reductions, including reductions in employee headcount, vendor spending, and the delaying of certain expenses related to our drug development activities. To the extent that we feel it is necessary and in the best interest of the Company and our shareholders, we may also take further actions that alter our operations in order to ensure the success of our business.
Previous wording
On December 7, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), by and among the Company, Cultured Foods, Brian Carl McWhorter (the “Member”) and Barbara McWhorter, pursuant to which the Company purchased all of the outstanding equity interests in Cultured Foods, resulting in Cultured Foods becoming a wholly owned subsidiary of the Company (the “Acquisition”). Cultured Foods is a leading European manufacturer and distributor of plant-based, protein products. The Acquisition closed on December 7, 2023 (the “Closing Date”).
Current wording
On May 8, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Softgels Purchase Agreement”), by and among the Company, Elevated Softgels, LLC, a Delaware limited liability company (“Elevated Softgels”), Clayton J. Montgomery (the “Softgels Member”), Chris Fagan, Andrew Kester, and Timothy McGreer, pursuant to which the Company purchased all of the outstanding equity interests in Elevated Softgels, resulting in Elevated Softgels becoming a wholly owned subsidiary of the Company (the “Softgels Acquisition”). Elevated Softgels is a leading manufacturer of softgels. The Elevated Softgels Acquisition closed on May 13, 2024.
Previous wording
In consideration for the Acquisition, at closing, the Company (i) made a cash payment of $175,000 to the Member, less a $17,500 holdback (the “Holdback Amount”) and certain other adjustments provided for in the Purchase Agreement (the “Closing Payment”), and (ii) issued an aggregate of 7,074,270 restricted shares of Company common stock to the Member, valued at $250,000 based on the three day volume weighted average price of the Company’s common stock on the three trading days prior to closing (the “Closing Shares,” and together with the Closing Payment, the “Closing Consideration”). The Closing Payment is subject to adjustment, upward or downward, based on post-closing adjustments to the net working capital of Cultured Foods within 120 days of closing, as reflected in the Final Working Capital Statement (as defined in the Purchase Agreement). Additionally, within 90 days following the final determination of the Final Working Capital Statement (the “Receivables Date”), the Company shall be entitled to recover from the Member an amount equal to the unpaid balance, as of the Receivables Date, of all accounts receivable which were included in as assets in the Final Working Capital Statement.
Current wording
In consideration for the Softgels Acquisition, at closing, the Company (i) made a cash payment of $100,000 to the Softgels Member, less certain transaction expenses and certain other adjustments provided for in the Softgels Purchase Agreement (the “Softgels Closing Payment”), (ii) issued an aggregate of 15,854,185 restricted shares of Company common stock to the Softgels Member valued at $637,000, and (iii) issued an aggregate of 1,567,996 restricted shares of Company common stock to the selling broker of Elevated Softgels valued at $63,000. The Company common stock was valued based on the thirty-day volume weighted average price of the Company’s common stock on the thirty trading days prior to the date of the Softgels Purchase Agreement (the “Softgels Closing Shares,” and together with the Softgels Closing Payment, the “Softgels Closing Consideration”). The Softgels Closing Payment is subject to adjustment, upward or downward, based on post-closing adjustments to the net working capital of Elevated Softgels within 120 days of closing, as reflected in the Final Working Capital Statement (as defined in the Softgels Purchase Agreement). Additionally, within 90 days following the final determination of the Final Working Capital Statement (the “Softgels Receivables Date”), the Company shall be entitled to recover from the Softgels Member an amount equal to the unpaid balance, as of the Softgels Receivables Date, of all accounts receivable which were included in as assets in the Final Working Capital Statement. The closing working capital has been settled and the Company received a payment of $30,000 from the Softgels Member.
Previous wording
In addition to the Closing Consideration, and as further consideration for the Acquisition, the Company shall make an additional cash payment to the Member in the form of an earn-out (the “Earnout Amount”), which shall be based on Company revenues generated in fiscal 2024 and will be calculated as follows:
Current wording
In addition to the Softgels Closing Consideration, the Company has agreed to issue additional consideration for the Softgels Acquisition, in the form of an earn-out (the “Softgels Earnout Amount”), which shall be based on Elevated
Previous wording
If Cultured Foods net revenue (as defined in the Purchase Agreement) is less than $300,000, then the Earnout Amount will be $0.
Current wording
If the Elevated Softgels’ Net Revenue is less than $550,000, then the Softgels Earnout Amount will be $0.
Previous wording
The Earnout Payment shall be paid within 10 business days after the final determination of Cultured Foods net revenue for fiscal 2024, as determined in accordance with the Purchase Agreement.
Current wording
The Softgels Earnout Payment shall be paid within 10 business days after the final determination of the Company’s Net Revenue for the 12-month period following the closing date, as determined in accordance with the Softgels Purchase Agreement. 50% of the Softgels Earnout Amount shall be paid in cash and 50% of the Softgels Earnout Amount shall be in the form of restricted common stock of the Company, with the number of shares determined based upon the thirty-day volume weighted average price of the Company's common stock as of the 12-month anniversary of the closing date. Net revenues of Elevated Softgels are currently expected to be insufficient to trigger any earn-out payments.
Previous wording
Pursuant to the Purchase Agreement, the Member agreed that he will not, on any single trading day sell, transfer or otherwise dispose of any Company common stock, including the Closing Shares, in an aggregate amount exceeding the greater of (i) 15% of the of the Company’s common stock sold in the aggregate based on the greater of the current or proceeding trading day, and (ii) $3,000 in gross value; provided, however, that in the event that the Company enters into a leak-out agreement with any third party on terms more favorable than the foregoing, the Member shall be afforded the same more favorable terms offered to such third party.
Current wording
Pursuant to the Softgels Purchase Agreement, the recipients of the Company's common stock agreed that they will not, on any single trading day sell, transfer or otherwise dispose of any Company common stock, including the Softgels Closing Shares, in an aggregate amount exceeding the greater of (i) 15% of the of the Company’s common stock sold in the aggregate based on the greater of the current or proceeding trading day, and (ii) $3,000 in gross value; provided, however, that in the event that the Company enters into a leak-out agreement with any third party on terms more favorable than the foregoing, the Softgels Member shall be afforded the same more favorable terms offered to such third party.
Previous wording
Additionally, for a period of one year following the Closing Date, the Member and Ms. McWhorter, including their affiliates, shall be prohibited from engaging in certain competitive and/or solicitation activities within the United States and the European Union, as more particularly set forth in the Purchase Agreement.
Current wording
Additionally, for a period of one year following the closing date, Mr. Montgomery and Mr. Fagan shall be prohibited from engaging in certain competitive and/or solicitation activities within the United States, as more particularly set forth in the Softgels Purchase Agreement.
Previous wording
In November 2023, we entered into a finance agreement with First Insurance Funding in order to fund a portion of our insurance policies. The amount financed is $0.3 million, which incurs interest at an annual rate of 8.42%. We are required to make monthly payments of $29,781 from November 2023 through July 2024. The outstanding balance as of December 31, 2023 was $0.2 million.
Current wording
In October 2024, we entered into a new finance agreement with First Insurance Funding in order to fund a portion of our insurance policies for the current policy year. The amount financed is $0.2 million, which incurs interest at an annual rate of 8.42%. We are required to make monthly payments of $20,396 from November 2024 through July 2025. The outstanding balance as of December 31, 2024 was $0.1 million.
Previous wording
In November 2022, we entered into a finance agreement with First Insurance Funding in order to fund a portion of our insurance policies. The amount financed was $0.2 million, which incurred interest at an annual rate of 6.32%. We were required to make monthly payments of $27,900 from November 2022 through July 2023. There was no outstanding balance as of December 31, 2023.
Current wording
In November 2023, we entered into a finance agreement with First Insurance Funding in order to fund a portion of our insurance policies. The amount financed was $0.3 million, which incurred interest at an annual rate of 8.42%. We were required to make monthly payments of $29,781 from November 2023 through July 2024. There was no outstanding balance as of December 31, 2024.
Previous wording
The Company previously recorded accrued payroll taxes associated with the RSU release to Mona Jr. in 2019. On April 15, 2023, the statute of limitations for federal payroll tax withholding expired. In addition, the statute of limitations for the state tax withholding expired during the year ended December 31, 2023. As a result of the expiration of the relevant statutes of limitations, the Company believes that neither the IRS nor the State of California have the rights to assess and collect the $6.2 million of income taxes from CV Sciences and we have made a change in accounting estimate and no longer expect to incur a loss with respect to this matter. As a result, we derecognized the accrued payroll taxes of $6.2 million during the year ended December 31, 2023. For more information, please see Note 13, Related Parties, to our consolidated financial statements included in Part IV in this Annual Report.
Current wording
The Company previously recorded accrued payroll taxes associated with the RSU release to Michael Mona Jr. (“Mona”) in 2019. On April 15, 2023, the statute of limitations for federal payroll tax withholding expired. In addition, the statute of limitations for the state tax withholding expired during the year ended December 31, 2023. As a result of the expiration of the relevant statutes of limitations, the Company believes that neither the IRS nor the State of California have the rights to assess and collect the $6.2 million of income taxes from CV Sciences and we have made a change in accounting estimate and no longer expect to incur a loss with respect to this matter. As a result, we derecognized the accrued payroll taxes of $6.2 million during the year ended December 31, 2023. For more information, please see Note 12, Related Parties, to our consolidated financial statements included in Part IV in this Annual Report.
Previous wording
U.S. GAAP requires management to assess a company's ability to continue as a going concern within one year from the financial statement issuance and to provide related note disclosure in certain circumstances. Our consolidated financial statements and corresponding notes have been prepared assuming the Company will continue as a going concern. Excluding the received ERC funds, the Company generated negative cash flows from operations of $0.5 million for the year ended December 31, 2023 and had an accumulated deficit of $84.6 million. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund our operations and growth initiatives. The Company intends to position itself so that it will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit in order to continue its operations. However, there can be no assurances that additional working capital will be available to us on favorable terms, or at all, which would be likely to have a material adverse effect on the Company's ability to continue its operations.
Current wording
U.S. GAAP requires management to assess a company's ability to continue as a going concern within one year from the financial statement issuance and to provide related note disclosure in certain circumstances. Our consolidated financial statements and corresponding notes have been prepared assuming the Company will continue as a going concern. For the year ended December 31, 2024, we generated negative cash flows from operations of $0.9 million, and we had an accumulated deficit of $87.0 million as of December 31, 2024. Excluding the funds for employee retention tax credits, we generated negative cash flows from operations of $0.5 million for the year ended December 31, 2023. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund our operations and growth initiatives. The Company intends to position itself so that it will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit in order to continue its operations. However, there can be no assurances that additional working capital will be available to us on favorable terms, or at all, which would be likely to have a material adverse effect on the Company's ability to continue its operations.
Previous wording
The Company's financial operating results and accumulated deficit, besides other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company will continue to pursue the actions outlined above, as well as work towards increasing revenue and operating cash flows to meet its future liquidity requirements. However, there can be no assurance that the Company will be successful in any capital-raising efforts that it may undertake, and the failure of the Company to raise additional capital could adversely affect its future operations and viability.
Current wording
The Company's financial operating results and accumulated deficit, besides other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company will continue to work towards increasing revenue and operating cash flows to meet its future liquidity requirements. However, there can be no assurance that the Company will be successful in generating positive cash flows from operations or any capital-raising efforts that it may undertake, and the failure of the Company to generate positive cash flows or raise additional capital could adversely affect its future operations and viability.
Previous wording
Net cash provided by (used in) operating activities includes net income (loss) adjusted for non-cash items such as depreciation, bad debt expense, stock-based compensation, employee retention credit benefit, benefit of reversal of payroll tax liability and interest expense related to our promissory notes. Operating assets and liabilities primarily include balances related to funding of inventory purchases and customer accounts receivable. Operating assets and liabilities that arise from the funding of inventory purchases and customer accounts receivable can fluctuate significantly from day to day and period to period depending on the timing of inventory purchases and customer payment behavior.
Current wording
Net cash provided by (used in) operating activities includes net income (loss) adjusted for non-cash items such as depreciation, amortization, bad debt expense, stock-based compensation, benefit of reversal of payroll tax liability and amortization of debt discount related to our promissory notes. Operating assets and liabilities primarily include balances related to funding of inventory purchases and customer accounts receivable. Operating assets and liabilities that arise from the funding of inventory purchases and customer accounts receivable can fluctuate significantly from day to day and period to period depending on the timing of inventory purchases and customer payment behavior.
Previous wording
Cash provided by operating activities was $2.3 million in the year ended December 31, 2023, compared to cash used in operating activities of $1.9 million in the year ended December 31, 2022. The improvement in our cash flow from operating activities by $4.2 million was mostly due to our improved operating performance and the receipt of the ERC funds. Our net income for the year ended December 31, 2023, adjusted for non-cash items, was a net loss of $1.7 million, compared to a net loss, adjusted for non-cash items, of $5.4 million in the prior year, an improvement of $3.7 million. Changes in working capital generated $4.0 million during the year of 2023, compared to $3.6 million during the prior year, an improvement of $0.4 million. Our changes in working capital improved primarily due to the fact that we received the ERC funds of $2.5 million from the IRS during 2023, partially offset by the collection of a large outstanding receivable with one retailer during 2022. Our net income improved by $11.3 million from a net loss of $8.2 million in 2022 to a net income of $3.1 million in 2023, mostly due to our improved operating performance and the benefit for the reversal of accrued payroll taxes. Non-cash adjustments increased by $6.2 million, as we recognized a benefit for the reversal of accrued payroll tax of $6.2 million related to the RSUs previously issued to Mona Jr. Recurring non-cash adjustments consists of depreciation, interest expense and stock-based compensation.
Current wording
Cash used by operating activities was $0.9 million in the year ended December 31, 2024, compared to cash provided by operating activities of $2.3 million in the year ended December 31, 2023. The year over year decrease in our cash flow from operating activities by $3.2 million was mostly due to the receipt of Employee Retention Credit (“ERC”) funds of $2.5 million in the prior year and the fact that we did not receive similar funds in 2024. Our net loss for the year ended December 31, 2024, adjusted for non-cash items, resulted in a net loss of $1.3 million, compared to a net loss, adjusted for non-cash items, of $1.7 million in the prior year, an improvement of $0.4 million. Changes in working capital generated $0.5 million during the year of 2024, compared to $4.0 million during the prior year, a decrease of $3.5 million. Our changes in working capital decreased primarily due to the receipt of ERC funds during 2023. Our net income (loss) declined by $5.5 million from a net income of $3.1 million in 2023 to a net loss of $2.4 million in 2024, mostly due to the benefit for the reversal of accrued payroll taxes of $6.2 million in 2023 and our improved operating performance. Non-cash adjustments decreased by $5.9 million, as we recognized a benefit for the reversal of accrued payroll tax of $6.2 million related to the RSUs previously issued to Mona. Recurring non-cash adjustments consists of depreciation, amortization, interest expense and stock-based compensation.
Previous wording
Cash used in investing activities of $0.2 million in the year ended December 31, 2023 related to our acquisition of Cultured Foods in December 2023. We did not use any cash in investing activities in 2022.
Current wording
Cash used in investing activities was $28,000 in the year ended December 31, 2024 related to our acquisition of Elevated Softgels of $10,000 in May 2024 and the purchase of additional manufacturing equipment for Elevated Softgels of $18,000. Cash used in investing activities of $0.2 million in the year ended December 31, 2023 related to our acquisition of Cultured Foods in December 2023.
Previous wording
Net cash used in financing activities was $1.4 million for 2023, compared to cash provided by financing activities of $1.1 million for 2022. Our financing activities for 2023 consisted of repayments of our insurance financing of $0.3 million and note payable of $1.1 million. Our financing activities for 2022 consisted of net proceeds from issuance of preferred stock of $0.6 million, convertible notes of $1.0 million, and note payable of $1.6 million, partially offset by repayments of the insurance financing of $0.3 million, convertible notes of $0.7 million, and a note payable of $1.0 million.
Current wording
Net cash provided by financing activities was $32,000 for 2024 compared to cash used in financing activities of $1.4 million for 2023. Our financing activities for 2024 consisted of proceeds from our note payable financing with Streeterville of $0.9 million, offset by repayments of our insurance financing of $0.2 million, the Streeterville note payable of $0.5 million and the notes payable that we assumed in connection with the Cultured Foods acquisition of $0.1 million. Our financing activities for 2023 consisted of repayments of the Streeterville note payable of $1.1 million and our insurance financing of $0.3 million.
Previous wording
We have not been affected materially by inflation during the periods presented. However, recent trends towards rising inflation may adversely impact our business and corresponding financial position and cash flow.
Current wording
We have not been affected materially by inflation during the periods presented. However, rising inflation may adversely impact our business and corresponding financial position and cash flow.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We use Adjusted EBITDA internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent generally accepted accounting principles (“GAAP”)
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Earnout Payment shall be paid within 10 business days after the final determination of Cultured Foods’ net revenue for fiscal 2024.