CV Sciences Inc (CVSI)

[Det_Robert_Thorne]

Maybe $1 - $1.25 before the 2015 10-K filed

It's really complicated, but I think that $1 - $1.25 is possible before the 10-K is filed in a few weeks.

I've been really negative on CANV in the past for two reasons:

1) Competition in the CBD-from-hemp market

2) The way they were financing the company with cheap restricted shares and convertible notes.

The competition issue could be a problem as more states legalize marijuana and CBD can be extracted from high-CBD strains of marijuana like Charlotte's Web. As for that, time will tell.

CANV's bigger issue since 2013 has been the way the company got the cash to pay the huge contracts for European hemp that it would discuss in its 10-K filings.

I think that CANV thought that it could handle increased competition other from CBD-from-hemp suppliers by grabbing as big a supply of hemp as possible, along with its relationship with Medical Marijuana, Inc, which would market the products.

Unfortunately for CANV, Medical Marijuana, Inc has a history of screwing up, and so by August, 2014, CANV had cancelled the distribution agreement with that company.

This left CANV in a hole, with large payments still due on the hemp contracts and a market that wasn't going to support the sale of more restricted shares as it did in the ealy part of 2014.

And so they issued convertible notes, which enabled them to pay the remaining hemp contracts, but left the company in a situation where starting late last Fall, the notes began to convert, and since the converters always are able to convert at a significantly lower price than the closing price, it didn't matter to the converters how low the price went.

That conversion appears now to have ended because CANV was able to get a non-converting note to repay the holders of the convertible notes.

That tells me that the new noteholder has some confidence that CANV can repay the note, which could mean that the company is finally profitable on an operating basis.

In the first 9 months of 2015, CANV saw revenues of $9.3M, but lost $5.6M. I think that the reason for the large loss was legal expenses from its now ended battles with Medical Marijuana, Inc, along with very large expenses for shares and options distributed as executive compensation.

I think that the company kept issuing shares to the execs because the price kept falling and their prior options and grants were either worthless or down in value. These costs are more "paper" expenses than anything else, and might now be over, so I think that CANV could turn a profit in 4Q/15 and 1Q/16.

So for now, I think that the price could work back up to the $1 or so we saw before the conversion began, and then when the 10-K is filed, we'll learn how many shares the note conversion cost.

If CANV had a profitable 4Q/15 and the OS is less than 65M (meaning an increase of 30M shares from dilution), then $1 - $1.25 could hold.

Told you it was complicated.