CV Sciences, Inc.

Previous wording

We had net product sales of $3.6 million and gross profit of $1.8 million, representing a gross margin of 50.9%, in the second quarter of 2025, compared to net product sales of $4.0 million and gross profit of $1.9 million, representing a gross margin of 47.0%, in the second quarter of 2024. Our net product sales decreased in the second quarter of 2025 when compared to the second quarter 2024 mostly due to lower sales volume. The total number of units sold during the second quarter 2025 decreased by 7.0% compared to the second quarter 2024. In addition, our average sales price per unit for the second quarter 2025 decreased by 2.8% compared to the same period 2024.

Current wording

We had net product sales of $3.3 million and gross profit of $1.6 million, representing a gross margin of 48.5%, in the third quarter of 2025, compared to net product sales of $3.9 million and gross profit of $1.8 million, representing a gross margin of 46.0%, in the third quarter of 2024. Net product sales decreased in the third quarter of 2025 when compared to the third quarter 2024 driven by lower sales volume due to out-of-stock issues for some of our key products and restrictive regulation in certain states. The total number of units sold during the third quarter 2025 decreased by 15.8% compared to the third quarter 2024, partially offset by an increase of our average sales price per unit of 1.4% compared to the same period 2024. In addition, our net sales declined due to lower third-party contract manufacturing (“CMO”) revenue in the third quarter of 2025 compared to the same period in 2024.

Previous wording

38.9% of our net revenue for the second quarter 2025 was from new products launched since January 1, 2023. During this time, we launched 34 new products. 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.

Current wording

39.0% of our net revenue for the third quarter 2025 was from new products launched since January 1, 2023. During this time, we launched 38 new products. 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 the second quarter of 2025 compared to the second quarter of 2024 by $0.3 million, or 15.2%. The reduction is mostly due to the lower number of units sold in the second quarter of 2025. In addition, cost of goods sold in the second quarter of 2025 decreased as a percentage of revenue compared to the second quarter of 2024, mostly due lower freight, lower inventory losses and product mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods in the second quarter of 2025 compared to the prior year period. Our gross profit in the second quarter 2025 declined slightly by $16,000 from the second quarter of 2024. Our gross margin improved from 47.0% in the second quarter 2024 to 50.9% in the second quarter of 2025. The improvement in our gross margin is primarily due to lower freight, lower inventory losses, and product and channel mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods.

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 the third quarter of 2025 compared to the third quarter of 2024 by $0.4 million, or 19.6%. The reduction is mostly due to the lower number of units sold in the third quarter of 2025. In addition, cost of goods sold in the third quarter of 2025 decreased as a percentage of revenue compared to the second quarter of 2024, mostly due lower freight, lower inventory losses and product mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods in the third quarter of 2025 compared to the prior year period. Our gross profit in the third quarter 2025 declined by $0.2 million, or 11.2% from the third quarter of 2024. Our gross margin improved from 46.0% in the third quarter 2024 to 48.5% in the third quarter of 2025. The improvement in our gross margin is primarily due to lower freight, lower inventory losses, and product and channel mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods.

Previous wording

We had net product sales of $7.2 million and gross profit of $3.5 million, representing a gross margin of 48.5%, in the six months ended June 30, 2025, compared to net product sales of $8.0 million and gross profit of $3.7 million, representing a gross margin of 46.7%, in the six months ended June 30, 2024. Our net product sales decreased in the six months ended June 30, 2025 when compared to the six months ended June 30, 2024 mostly due to lower sales volume. The total number of units sold during the six months ended June 30, 2025 decreased by 9.5% compared to the six months ended June 30, 2024. In addition, our average sales price per unit for the six months ended June 30, 2025 decreased by 1.0% compared to the same period in 2024.

Current wording

We had net product sales of $10.5 million and gross profit of $5.1 million, representing a gross margin of 48.5%, in the nine months ended September 30, 2025, compared to net product sales of $11.8 million and gross profit of $5.5 million, representing a gross margin of 46.5%, in the nine months ended September 30, 2024. Our net product sales decreased in the nine months ended September 30, 2025 when compared to the nine months ended September 30, 2024 mostly due to lower sales volume. Our sales volume declined due to the impact of restrictive state regulations and most recently due to out-of-stock issues for some of our key products. The total number of units sold during the nine months ended September 30, 2025 decreased by 11.6% compared to the nine months ended September 30, 2024. In addition, our average sales price per unit for the nine months ended September 30, 2025 decreased by 0.2% compared to the same period in 2024.

Previous wording

37.0% of our net revenue for the six month ended June 30, 2025 was from new products launched since January 1, 2023. During this time, we launched 34 new products. 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.

Current wording

37.6% of our net revenue for the nine month ended September 30, 2025 was from new products launched since January 1, 2023. During this time, we launched 38 new products. 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 the six months ended June 30, 2025 compared to the six months ended June 30, 2024 by $0.5 million, or 12.2%. The reduction is mostly due to the lower number of units sold in the six months ended June 30, 2025. In addition, cost of goods sold in the six months ended June 30, 2025 decreased as a percentage of revenue compared to the six months ended June 30, 2024, mostly due to lower freight, cost savings and product mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods in the six months ended June 30, 2025 compared to the prior year period. Our gross profit declined to $3.5 million in the six months ended June 30, 2025 from $3.7 million in the six months ended June 30, 2024. Our gross margin improved from 46.7% in the six months ended June 30, 2024 to 48.5% in the six months ended June 30, 2025. The improvement in our gross margin is primarily due to lower freight, product and channel mix, and additional cost savings, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods.

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 the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by $0.9 million, or 14.7%. The reduction is mostly due to the lower number of units sold in the nine months ended September 30, 2025. In addition, cost of goods sold in the nine months ended September 30, 2025 decreased as a percentage of revenue compared to the nine months ended September 30, 2024, mostly due to lower freight, cost savings and product mix, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods in the nine months ended September 30, 2025 compared to the prior year period. Our gross profit declined to $5.1 million in the nine months ended September 30, 2025 from $5.5 million in the nine months ended September 30, 2024. Our gross margin improved from 46.5% in the nine months ended September 30, 2024 to 48.5% in the nine months ended September 30, 2025. The improvement in our gross margin is primarily due to lower freight, product and channel mix, and additional cost savings, partially offset by higher cost of goods sold for Elevated Softgels and Cultured Foods.

Previous wording

Research and development (“R&D”) expense for the second quarter 2025 increased compared to the same period in 2024 due to product development activity associated with the in-sourcing of our vegan softgels.

Current wording

Research and development (“R&D”) expense for the third quarter 2025 decreased slightly compared to the same period in 2024 due to lower new product development activity.

Previous wording

Selling, general and administrative (“SG&A”) expense decreased to $1.9 million in the second quarter of 2025 compared to $2.4 million in the second quarter of 2024, which was primarily a result of the following:

Current wording

Selling, general and administrative (“SG&A”) expense decreased to $1.8 million in the third quarter of 2025 compared to $2.1 million in the third quarter of 2024, which was primarily a result of the following:

Previous wording

Sales expense decreased due to lower commission, payroll, travel and other expense, partially offset by an increase in stock-based compensation expense.

Current wording

Sales expense decreased due to lower payroll, commission, travel and other expense, partially offset by an increase in stock-based compensation expense.

Previous wording

General and administrative ("G&A") expense for the second quarter of 2025 decreased from the prior year period due to lower legal fees, insurance expense and other administrative cost reductions, partially offset by an increase in stock-based compensation expense.

Current wording

General and administrative ("G&A") expense for the third quarter of 2025 decreased from the prior year period due to lower legal and professional fees, insurance expense, depreciation and other administrative cost reductions, partially offset by an increase in stock-based compensation expense. In addition, we also recognized a gain in fair-value of contingent consideration liabilities of $0.2 million during the third quarter of 2024.

Previous wording

SG&A expense decreased to $4.1 million in the six months ended June 30, 2025 compared to $4.9 million in the six months ended June 30, 2024, which was primarily a result of the following:

Current wording

SG&A expense decreased to $5.9 million in the nine months ended September 30, 2025 compared to $6.9 million in the nine months ended September 30, 2024, which was primarily a result of the following:

Previous wording

Marketing expense decreased due to lower digital advertising spend and reduced tradeshow expense, partially offset by an increase in stock-based compensation expense. Our reduced digital marketing expense declined due to lower advertising activity during the first six month of 2025.

Current wording

Marketing expense decreased due to lower digital advertising spend, partially offset by an increase in stock-based compensation expense. Our reduced digital marketing expense declined due to lower advertising activity during the first nine months of 2025.

Previous wording

G&A expense for the six months ended June 30, 2025 decreased from the prior year period due to lower legal fees, insurance expense and other administrative cost reductions, partially offset by an increase in stock-based compensation expense.

Current wording

G&A expense for the nine months ended September 30, 2025 decreased from the prior year period due to lower legal fees and professional fees, insurance expense, depreciation and other administrative cost reductions, partially offset by an increase in stock-based compensation expense. In addition, we recognized a gain in fair-value of contingent consideration liabilities of $0.2 million during the nine months ended September 30, 2024.

Previous wording

We previously recorded a contingent liability for payroll taxes associated with the RSU release to our founder. On April 15, 2025, the statute of limitations for employer and employee Medicare portion of FICA taxes expired. As a result of the expiration of the relevant statutes of limitations, the IRS does not have the rights to assess and collect the $0.5 million of employer and employee Medicare portion of FICA taxes from the Company 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 $0.5 million during the six months ended June 30, 2025. For more information, please see Note 12, Related Parties, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

We previously recorded a contingent liability for payroll taxes associated with the RSU release to our founder. On April 15, 2025, the statute of limitations for employer and employee Medicare portion of FICA taxes expired. As a result of the expiration of the relevant statutes of limitations, the IRS does not have the rights to assess and collect the $0.5 million of employer and employee Medicare portion of FICA taxes from the Company 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 $0.5 million during the nine months ended September 30, 2025. For more information, please see Note 12, Related Parties, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Interest expense, net consists of interest expense and interest income. Interest expense, net increased by approximately $0.1 million in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, and by approximately $0.3 million in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, in each case due to the amortization of debt discount and debt issuance costs for the note payable with an institutional investor.

Current wording

Interest expense, net consists of interest expense and interest income. Interest expense, net was $0.1 million in the three months ended September 30, 2025 and 2024. Interest expense increased from $0.1 million for the nine months ended September 30, 2024 to $0.3 million for the nine months ended September 30, 2025 due to the amortization of debt discount and debt issuance costs for the note payable with an institutional investor.

Previous wording

A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for the three and six months ended June 30, 2025 and 2024 is detailed below:

Current wording

A reconciliation from our net loss to Adjusted EBITDA, a non-GAAP measure, for the three and nine months ended September 30, 2025 and 2024 is detailed below:

Previous 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 10, Commitments and Contingencies, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Represents legal and other professional expenses incurred during 2024 associated with the legal dispute with founder.

Previous wording

During the six months ended June 30, 2025 and the year ended December 31, 2024, our primary sources of capital came from (i) cash generated from our operations, (ii) existing cash, and (iii) proceeds from note payable financings. As of June 30, 2025, we had approximately $0.9 million of cash and working capital of approximately $0.2 million.

Current wording

During the nine months ended September 30, 2025 and the year ended December 31, 2024, our primary sources of capital came from (i) cash generated from our operations, (ii) existing cash, and (iii) proceeds from note payable financings. As of September 30, 2025, we had approximately $0.4 million of cash and working capital of approximately $0.3 million.

Previous wording

For the six months ended June 30, 2025, the Company generated cash flows from operations of $0.2 million. However, during the year ended December 31, 2024, we generated negative cash flows from operations of $0.9 million, and we had an accumulated deficit of $87.4 million as of June 30, 2025.

Current wording

For the nine months ended September 30, 2025, the Company generated negative cash flows from operations of $0.1 million and had an accumulated deficit of $87.7 million as of September 30, 2025.

Previous wording

We believe that a combination of factors have adversely impacted our business operations for the six months ended June 30, 2025 and 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 make additional acquisitions to further diversify our product offerings.

Current wording

We believe that a combination of factors have adversely impacted our business operations for the nine months ended September 30, 2025 and 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 make additional acquisitions to further diversify our product offerings.

Previous wording

In February 2025, we received net proceeds of $1.2 million under a secured promissory note with an institutional investor - please see Note 6, Debt, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

Current wording

In October 2025, we received net proceeds of $0.3 million under a secured promissory note with an institutional investor - please see Note 14, Subsequent Events, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

Previous wording

In February 2025, we entered into a securities purchase agreement with an institutional investor (the “Investor”), pursuant to which we issued and sold to the Investor a secured promissory note in the original principal amount of $1,600,000 (the “Note”). The Note carries an original issuance discount of $400,000 and we agreed to pay $10,000 to the Investor to cover legal fees. We incurred additional legal and professional fees of $72,424. The original issuance discount was deducted from the proceeds of the Note received by us which resulted in a purchase price received by us of $1,200,000.

Current wording

In February 2025, we entered into a securities purchase agreement with an institutional investor (the “Investor”), pursuant to which we issued and sold to the Investor a secured promissory note in the original principal amount of $1,600,000 (the “Note”). The Note carries an original issuance discount of $400,000 and we paid $10,000 to the Investor to cover legal fees. We incurred additional legal and professional fees of $72,424. The original issuance discount was deducted from the proceeds of the Note received by us which resulted in a purchase price received by us of $1,200,000.

Previous wording

The Note is due and payable on August 12, 2026 and we are required to make monthly repayments to the Investor of $106,667 starting on June 12, 2025. We can pay all or any portion of the outstanding balance earlier than it is due without penalty. In the event we paid the Note in full on or before August 12, 2025, we would have received a $100,000 discount from the outstanding balance. The Note is secured by all of our assets pursuant to a security agreement and intellectual property security agreement entered into with the Investor on February 12, 2025. Our obligations under the Note are guaranteed by each of our subsidiaries. No interest will accrue on the Note unless and until an occurrence of an event of default, as defined in the Note.

Current wording

We can pay all or any portion of the outstanding balance earlier than it is due without penalty. In the event we paid the Note in full on or before August 12, 2025, we would have received a $100,000 discount from the outstanding balance. The Note is secured by all of our assets pursuant to a security agreement and intellectual property security agreement entered into with the Investor on February 12, 2025. Our obligations under the Note are guaranteed by each of our subsidiaries. No interest will accrue on the Note unless and until an occurrence of an event of default, as defined in the Note.

Previous 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 upcoming 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 June 30, 2025 was $20,256.

Current wording

In October 2025, we entered into a financing agreement with First Insurance Funding in order to fund a portion of our insurance policies for the upcoming policy year. The amount financed was $0.2 million, which incurs interest at a rate of 7.72% per annum. We are required to make monthly payments of $18,299 from November 2025 through July 2026.

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 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 June 30, 2025.

Current wording

In October 2024, we entered into a finance agreement with First Insurance Funding in order to fund a portion of our insurance policies. The amount financed is $0.2 million, which incurred interest at an annual rate of 8.42%. We were required to make monthly payments of $20,396 from November 2024 through July 2025. There was no outstanding balance as of September 30, 2025.

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 date and to provide related note disclosure in certain circumstances. Our condensed consolidated financial statements and corresponding notes have been prepared assuming the Company will continue as a going concern. We generated cash flows from operations of $0.2 million for the six months ended June 30, 2025. However, we generated negative cash flows from operations of $0.9 million for the year ended December 31, 2024 and had an accumulated deficit of $87.4 million as of June 30, 2025. 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 date and to provide related note disclosure in certain circumstances. Our condensed consolidated financial statements and corresponding notes have been prepared assuming the Company will continue as a going concern. We generated negative cash flows from operations of $0.1 million for the nine months ended September 30, 2025 and had an accumulated deficit of $87.7 million as of September 30, 2025. 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

A summary of our changes in cash flows for the three and six months ended June 30, 2025 and 2024 is provided below:

Current wording

A summary of our changes in cash flows for the three and nine months ended September 30, 2025 and 2024 is provided below:

Previous wording

Cash flows provided by operating activities was $0.2 million in the six months ended June 30, 2025, compared to cash flows used in operating activities was $0.6 million in the six months ended June 30, 2024. Our net loss of $0.4 million for the six months ended June 30, 2025, adjusted for non-cash items of $0.3 million, resulted in a net loss, adjusted for non-cash items of $0.1 million, compared to a net loss, adjusted for non-cash items, of $0.8 million in the prior year period, an improvement of $0.7 million. Our non-cash adjustments declined by $0.1 million from $0.4 million in the six months ended June 30, 2024 to $0.3 million in the six months ended June 30, 2025. Non-cash adjustments decreased as we recognized a benefit for the reversal of accrued payroll tax of $0.5 million related to the RSU's previously issued to Mona during the six months ended June 30, 2025. Recurring non-cash adjustments consists of depreciation, amortization, interest expense and stock-based compensation. Changes in working capital generated $0.2 million during the first six months of 2025 and 2024. Our net loss declined by $0.8 million, mostly due to the benefit for the reversal of accrued payroll taxes of $0.5 million. The remaining improvement in our net loss of $0.3 million is mostly due to improved operating performance and reduced SG&A expenses.

Current wording

Cash flows used in operating activities was $0.1 million in the nine months ended September 30, 2025, compared to $0.7 million in the nine months ended September 30, 2024. Our net loss of $0.8 million for the nine months ended September 30, 2025, adjusted for non-cash items of $0.7 million, resulted in a net loss, adjusted for non-cash items of $0.1 million, compared to a net loss, adjusted for non-cash items, of $1.0 million in the prior year period, an improvement of $0.9 million. Our non-cash adjustments increased by $0.1 million from $0.6 million in the nine months ended September 30, 2024 to $0.7 million in the nine months ended September 30, 2025. Non-cash adjustments increased due to higher stock-based compensation and interest expense, partially offset by the benefit for the reversal of accrued payroll tax of $0.5 million related to the RSU's previously issued to Mona during the nine months ended September 30, 2025. Recurring non-cash adjustments consists of depreciation, amortization, interest expense and stock-based compensation. Changes in working capital generated $0.3 million during the first nine months of 2024, but did not provide a material amount during the first nine months of 2025. Our net loss declined by $0.9 million, mostly due to the benefit for the reversal of accrued payroll taxes of $0.5 million and our improved operating performance and reduced SG&A expenses.

Previous wording

Cash used in investing activities was $89,000 in the six months ended June 30, 2025 related to improvements to our manufacturing facility at Elevated Softgels. We used cash in investing activities in the six months ended June 30, 2024 for the acquisition of Elevated Softgels.

Current wording

Cash used in investing activities was $0.1 million in the nine months ended September 30, 2025 related to improvements to our manufacturing facility at Elevated Softgels. We used cash in investing activities in the nine months ended September 30, 2024 for the acquisition of Elevated Softgels.

Previous wording

Net cash provided by financing activities was $0.3 million for the six months ended June 30, 2025 compared to net cash used in financing activities of $0.2 million for the six months ended June 30, 2024. Our financing activities for the six months ended June 30, 2025 consisted of proceeds from our note payable financing of $1.1 million, offset by repayments of Streeterville note of $0.6 million, repayments of our note financing of $0.1 million, and repayment of our insurance financing of $0.1 million. Our financing activities for the six months ended June 30, 2024 consisted of repayments of assumed debt for Cultured Foods of $0.1 million and our insurance financing of $0.2 million.

Current wording

Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2025 compared to $0.4 million for the nine months ended September 30, 2024. Our financing activities for the nine months ended September 30, 2025 consisted of proceeds from our note payable financing of $1.1 million, offset by repayments of Streeterville note of $0.6 million, repayments of our note financing of $0.3 million, and repayment of our insurance financing of $0.1 million. Our financing activities for the nine months ended September 30, 2024 consisted of proceeds from our Streeterville financing of $0.9 million, repayments of assumed debt for Cultured Foods of $0.1 million, repayments to Streeterville of $0.2 million and our insurance financing of $0.2 million.

Previous wording

There can be no assurance that the Company’s business and corresponding financial performance will not be adversely affected by general economic or consumer trends. In particular, global economic conditions remain constrained, and if such conditions continue, recur or worsen, this may have a material adverse effect on the Company’s business, financial condition and results of operations. Additionally, inflation has risen and Federal Reserve interest rates remain high after increases during 2023, which may also materially adversely our business and corresponding financial position and cash flows.

Current wording

There can be no assurance that the Company’s business and corresponding financial performance will not be adversely affected by general economic or consumer trends. In particular, global economic conditions remain constrained, and if such conditions continue, recur or worsen, this may have a material adverse effect on the Company’s business, financial condition and results of operations. Additionally, inflation has risen and Federal Reserve interest rates remain high, which may also materially adversely our business and corresponding financial position and cash flows.

Previous wording

There is currently a lack of a clear federal regulatory framework regarding the development, sale and use of CBD products in the United States. As a result, differing state regulations have emerged, which regulations are constantly evolving and differ significantly from state to state in many cases. Several states, including without limitation, California, Florida, Maryland, Minnesota, New York, Utah and Virginia, have recently adopted regulations that may impact our ability to sell certain of our products in these states. In September 2024, California Governor Gavin Newsom signed an emergency order into law, effectively banning the sale of hemp products intended for human use that contain detectable amounts of THC or certain other cannabinoids in California, amongst other things. The emergency order was originally in effect through March 25, 2025, and has been extended by one year. We have certain products which fall under this category that we have historically sold in California. It is currently unknown whether the duration of the emergency order will be extended, and/or whether it will be replaced with a permanent law with similar or more stringent prohibitions. This emergency order had a negative impact on our operating results for the three and six months ended June 30, 2025 and we expect that it will continue to have a negative impact on our business going forward for so long as it, or any permanent law with similar or more stringent prohibitions, remains in effect; however, it is currently impossible to quantify the expected impact on our business. There is also substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the FDA and the extent to which manufacturers of products containing cannabinoids may engage in interstate commerce. These uncertainties have had, and may continue to have, an adverse effect on our business. Additionally, restrictive state regulations could adversely impact our revenue and earnings going forward.

Current wording

There is currently a lack of a clear federal regulatory framework regarding the development, sale and use of CBD products in the United States. As a result, differing state regulations have emerged, which regulations are constantly evolving and differ significantly from state to state in many cases. Several states, including without limitation, California, Florida, Maryland, Minnesota, New York, Utah and Virginia, have recently adopted regulations that may impact our ability to sell certain of our products in these states. In September 2024, California Governor Gavin Newsom signed an emergency order into law, effectively banning the sale of hemp products intended for human use that contain detectable amounts of THC or certain other cannabinoids in California, amongst other things. The emergency order was originally in effect through March 25, 2025, and has been extended by one year. We have certain products which fall under this category that we have historically sold in California. It is currently unknown whether the duration of the emergency order will be extended, and/or whether it will be replaced with a permanent law with similar or more stringent prohibitions. This emergency order had a negative impact on our operating results for the three and nine months ended September 30, 2025 and we expect that it will continue to have a negative impact on our business going forward for so long as it, or any permanent law with similar or more stringent prohibitions, remains in effect; however, it is currently impossible to quantify the expected impact on our business. There is also substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the FDA and the extent to which manufacturers of products containing cannabinoids may engage in interstate commerce. These uncertainties have had, and may continue to have, an adverse effect on our business. Additionally, restrictive state regulations could adversely impact our revenue and earnings going forward.