CV Sciences (CVSI) to Acquire Extract Labs

CV Sciences, Inc. (OTCQB: CVSI) (the "Company", "CV Sciences", "our", "us" or "we"), a preeminent consumer wellness company specializing in hemp extracts and other proven science-backed, natural ingredients and products, today announced that it has entered into a definitive agreement (the "Purchase Agreement") to acquire Extract Labs, Inc. ("Extract Labs"), a leading manufacturer and distributor of premium cannabinoid products including gummies, topicals and tinctures. Extract Labs branded products are sold through a range of sales channels from B2B to B2C. Extract Labs has operational flexibility allowing low to large minimum order quantity ("MOQ") production runs, allowing for efficient use of capital and the ability to increase speed to market for new product development. Extract Labs is GMP-certified and FDA-registered. The acquisition is expected to create the opportunity to increase our sales to current and new clients. In addition, we intend to in-source production of certain of our key products.

"We are thrilled that Extract Labs and its employees are joining CV Sciences as another milestone in our transition to a thriving health and wellness company. The acquisition synergies are expected to increase our revenue and customer base, allow us to leverage our key assets, optimize operations and processes, and drive long-term growth and shareholder value. Extract Labs is a stand-alone profitable business and our plan is to increase its existing revenue base and further leverage its existing capacity," said Joseph Dowling, Chief Executive Officer of CV Sciences. "In addition, we are planning to in-source the manufacturing of select +PlusCBD™ branded products providing an opportunity for meaningful cost savings. Extract Labs manufacturing capability will provide us with greater control over our supply chain and accelerate our new product development cycle."

The total consideration for the acquisition of Extract Labs payable at closing, consists of (i) a cash payment of $400,000 (the "Closing Payment"), less the amount of certain holdbacks and adjustments, and (ii) the issuance of shares of CV Sciences' common stock valued at $1,000,000 based on the sixty day volume weighted average price ("VWAP") of CV Sciences' common stock.

In addition to the consideration payable at closing, and as further consideration for the acquisition, the Extract Labs sellers will be eligible to receive up to $600,000 of additional shares of CV Sciences' common stock if Extract Labs satisfies certain revenue targets during the two 12-month periods following the closing date. Such shares will be issued based on the thirty day VWAP of CV Sciences' common stock as of the end of each such 12-month period and will be calculated as follows:

• If Extract Labs' Net Revenue is at least $4,600,000 in the relevant calculation period, then the Extract Labs Earnout Amount for such period will be $300,000.
• If Extract Labs' Net Revenue is at least $4,300,000 but less than $4,600,000 in the relevant calculation period, then the Extract Labs Earnout Amount for such period will be $200,000.
• If Extract Labs' Net Revenue is at least $4,000,000 but less than $4,300,000 in the relevant calculation period, then the Extract Labs Earnout Amount for such period will be $100,000.
• If Extract Labs' Net Revenue is at least $3,500,000 but less than $4,000,000 in the relevant calculation period, then the Extract Labs Earnout Amount for such period will be $50,000.
• If Extract Labs' Net Revenue is less than $3,500,000 in the relevant calculation period, then the Extract Labs Earnout Amount for such period will be $0.

The acquisition is expected to close during the first quarter of 2025. Closing of the transaction is subject to customary conditions precedent. On November 21, 2024, CV Sciences, Inc. filed a Current Report on Form 8-K which includes a description of the material terms of the transaction. Investors are encouraged to read such filing in its entirety.

You May Also Be Interested In

• Phillips 66, Marathon Merger Talks Collapsed - Semafor
• Vivos Therapeutics posts 35% revenue gain but widens net loss
• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August