CV Sciences Inc (CVSI)

[Det_Robert_Thorne]

Yes, my2kidsdad, they have enough inventory for 2016

Yes, the 10-K says that they have enough hempstuff in inventory and don't need to purchase more in 2016, though their contracts with the farmers will go through 2018:

The Company sources its raw materials from well-established and well-recognized hemp growers in Europe. We have arrangements with some of these growers to have exclusive rights to their supply. The Company has two supply arrangements in place with European farmers to supply raw material in future years. The first arrangement contemplates growth and processing of 2,600 kilograms of product and the second contract provides up to 1 million kilograms of raw product to the Company. There is approximately $260,000 remaining to be paid under this second contract related to the 2015 crop. We have contractual rights for the growth and processing of hemp oil for delivery through October 2018 under both of these contracts. We anticipate the cost under both contracts will remain consistent with current year prices. We do not intend to purchase any inventory under these supply agreements from the 2016 crop.

Regarding the $12.2M net loss, on page 7 of the filing, they do show a calculation of non-GAAP EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) that indicates that without the Stock-based compensation and bad debt expenses and the one-time income from the litigation settlement, the net loss would have been $2.3M. Still not great, but much better.

Interest expenses should drop in 2016, so if they can boost revenues by a few million and make some expense cuts, they should show a profit.

A couple of things to watch, however: They're talking about doing some pharmaceutical stuff with CanX in 2016, including development of synthetic CBD, so if certain milestones are hit, shares will be awarded. Also if they move forward on an FDA-related development project, they will have to raise $1.5M.