CV Sciences, Inc. (OTCQB:CVSI), a prominent consumer wellness company focusing on hemp extracts and other science-backed natural ingredients, has completed the acquisition of Elevated Softgels, LLC. This acquisition, valued at up to $1,000,000, involves a cash payment of $100,000 at closing, 17,422,181 shares of CV Sciences’ common stock valued at $700,000, and a potential earn-out of up to $200,000 based on performance thresholds.

Enhancing Production Capabilities and Flexibility

Elevated Softgels is a leading manufacturer of encapsulated softgels and tinctures, known for its GMP-certified and FDA-registered operations. The company’s ability to handle low to large minimum order quantity (MOQ) production runs enhances operational flexibility, optimizing capital use and speeding up new product development.

Strategic Synergies and Operational Integration

The acquisition allows CV Sciences to leverage Elevated Softgels’ capabilities, aiming to in-source production of key products and enhance sales to both existing and new clients. Joseph Dowling, Chief Executive Officer of CV Sciences, highlighted the strategic synergies expected from this acquisition, stating, “The acquisition synergies should allow us to leverage our key assets including our relationships with other hemp and supplement companies to drive long-term growth and shareholder value.”

Financial Impact and Growth Prospects

Elevated Softgels is expected to be immediately accretive, contributing to CV Sciences’ scaling economics. The in-sourcing of manufacturing for select +PlusCBD™ branded products is projected to yield significant cost savings. In 2023, sales of softgels and tinctures represented approximately 50% of CV Sciences’ total business, underscoring the strategic importance of this acquisition.

Long-Term Growth and Market Positioning

The acquisition marks a significant milestone in CV Sciences’ transition towards becoming a global health and wellness company. By integrating Elevated Softgels’ production capabilities, CV Sciences aims to enhance its market position, offering flexible and cost-efficient services to clients and strengthening its internal production processes.

Financial and Operational Terms

The acquisition’s financial terms include:

– A cash payment of $100,000 at closing.

– Issuance of 17,422,181 shares of CV Sciences’ common stock valued at $700,000.

– A potential earn-out payment of up to $200,000, contingent on meeting specific performance metrics within a year post-closing.

Regulatory and Compliance Information

CV Sciences has filed a Current Report on Form 8-K with the Securities and Exchange Commission, detailing the material terms of the transaction. Investors and stakeholders are encouraged to review the filing for comprehensive information on the acquisition.

The acquisition of Elevated Softgels by CV Sciences is poised to drive significant operational and financial benefits, bolstering the company’s production capabilities and market presence. With the integration of Elevated Softgels, CV Sciences is strategically positioned for long-term growth and enhanced shareholder value.

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