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Nice little reminder - At the close of business on the Record Date, the Common Stock and Preferred Stock were held by approximately 32 and one individual participants in securities positions listings of our capital stock, respectively. Shares cannot be voted at the Meeting unless the holder thereof is present or represented by proxy.
Blazing start. $564 - 10 trades- 1 1/2 into the day.
$1700 in trades today so far. Down 7 percent.
Short week, anyway a point worth mentioning. CVSI has a negative book value. I made a mention about liabilities exceeding assets in a earlier post.
The meaning below is standard boilerplate as seen below.
A negative book value means that a company's liabilities are greater than its assets. This indicates a company is possibly insolvent.
If book value is negative, where a company's liabilities exceed its assets, this is known as a balance sheet insolvency.
The book value per share is basically this total divided by the number of shares outstanding in the company. Negative book value per share means that if you were to buy all the shares, combine them into one big pile, and sell them at market price, you would get less than you paid for them.
To go along with that from the start of the year.
Debt 1.53 million.
Cash flow negative 1.89 million
Levered Free Cash Flow -951 k
Cash 600 million.
Just numbers worth knowing I would think, have a good weekend.
That’s a nice little joint venture there.
No time to wait “The JV plans to engage with the FDA to file an Investigational New Drug ("IND") application and commence Phase I clinical development in 2023”
This person is big time “Orrin Devinsky, M.D., Ph.D., renowned neurologist and researcher and AJNA's Chief Medical Advisor, will lead the JV's clinical and regulatory strategy. Dr. Devinsky is an early stakeholder in AJNA and is the Director of New York University (NYU) Langone's Comprehensive Epilepsy Center and a Professor of Neurology, Neurosurgery, and Psychiatry at NYU Grossman School of Medicine. He was a principal investigator for the development of the cannabis-based FDA approved drug, Epidiolex®. Epidolex was approved in 2018 for the treatment of seizure disorders, Dravet and Lennox-Gastaut syndromes, which are rare and severe forms of pediatric epilepsy”.
Good stuff, good stuff indeed.
Well you can't argue with the price, but I feel this sector is still trying to find itself. Good luck!
Seems like you got it the way you want then, sounds good.
Wolf, it's not that they don't have products to sell, it’s their inability to sell them.
Over 10k in trades and up 3 percent. For this one that's a good day.
It’s got a shot at $5000 in trades today, just another $700 in sells and we’ll have it. More sells than buys today.
Was that a 32,000 shares sell that just went by . . . huh.
CHICAGO and VANCOUVER, British Columbia, March 29, 2023 (GLOBE NEWSWIRE) -- Green Thumb Industries Inc. (Green Thumb) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE Dispensaries, today announced it will release first quarter 2023 financial results after the market closes on Wednesday, May 3, 2023.
4 hours into the day $2000 in total trades, It's on fire!
Already up to $1300 in trades today. Good start.
CVSI does NOT have to report RISK FACTORS
Not required for “smaller reporting companies” as defined in Item 10(f)(1) of Regulation S-K.
No, I didn’t forget, I’m a long way’s away from done here. But to your corporate welfare, that will be included with the net operating loss carryforwards, when I get that far. Need to break down the fundamentals and valuation before then, ROA ROE ROI, book, P/B etc. Still have to cover loans, debt, legal, no worries I’ll get to it.
Updated numbers. Need to add the dilution in 2022. Roughly 40,000,000 shares in dilution
Figures taken from the 10K’s
112,482 shares issued and outstanding as of December 31, 2021.
152,104 shares issued and outstanding as of December 31, 2022
Part IV The numbers. Rough numbers used at this point.
Sales were 16 million in 2022. Down from 20 million in 2021.
Cost of goods sold was 10 million, down from 11 million.
Gross profit was 5 million down from 8 million.
SG&A was 12 million 74 percent of sales!
Adjusted EBITDA NEG 6 million.
600k cash at end of year, down from 1.4 million at start of year.
Total assets were 12 million.
Total liabilities however were 13 million.
Accumulated deficit was neg 87 million.
Net loss attributable to common stockholders for 2022 was neg 9 million.
Loss per share 0.07 cents. “Note the stock is only 4 cents at time of this post.
A few notes here and all IMO. For every 1 dollar in sales, it cost them 1.56 to do it.
The cash burn rate doesn’t leave a lot of room, they only have {600k cash} when it’s gone, it generally leads to somebody not getting paid, suppliers, workers, etc. Again, the burn rate is higher than 600K
With an Accumulated deficit of neg 87 million, you will have a hard time getting a loan, at least at a decent rate, or for a decent amount, as it would be viewed as a high risk by the lender and since your liabilities are higher than your assets it would be viewed as a problem as well. All IMO
However, I am interested on what they will do, or try and do to escape this position. It also will be interesting when the 1st qt {just closed} numbers come out.
Part IV The numbers. Rough numbers used at this point.
Sales were 16 million in 2022. Down from 20 million in 2021.
Cost of goods sold was 10 million, down from 11 million.
Gross profit was 5 million down from 8 million.
SG&A was 12 million 74 percent of sales!
Adjusted EBITDA NEG 6 million.
600k cash at end of year, down from 1.4 million at start of year.
Total assets were 12 million.
Total liabilities however were 13 million.
Accumulated deficit was neg 87 million.
Net loss attributable to common stockholders for 2022 was neg 9 million.
Loss per share 0.07 cents. “Note the stock is only 4 cents at time of this post.
A few notes here and all IMO. For every 1 dollar in sales it cost them 1.56 to do it.
The cash burn rate doesn’t leave a lot of room, they only have {600k cash} when it’s gone, it generally leads to somebody not getting paid, suppliers, workers, etc. Again, the burn rate is higher than 600K
With an Accumulated deficit of neg 87 million, you will have a hard time getting a loan, at least at a decent rate, or for a decent amount, as it would be viewed as a high risk by the lender and since your liabilities are higher than your assets it would be viewed as a problem as well. All IMO
However I am interested on what they will do, or try and do to escape this position. It also will be interesting when the 1st qt {just closed} numbers come out.
Too EVERYONE. I have a question. I will not challenge any answer.
The simple question is. Why would a person buy this stock?
Well, I won't know what he got in 2022 until it's filed and that will not be till May?
We have 2021 at this point :During fiscal year 2021, Mr. Dowling's total compensation was $1,206,814, which included his salary for fiscal year 2021 of $320,523, a repayment of $80,000 deferred compensation from 2020, the issuance of 1,500,000 stock options, and a $18,000 auto allowance. Mr. Dowling's target for his performance bonus was 50% of his annual salary
I'll table this until that filing comes out.
Too EVERYONE. I have a question. I will not challenge any answer.
The simple question is. Why would a person buy this stock?
Wage -FYI -And does this seem like a lot :
During fiscal year 2021, Mr. Dowling's total compensation was $1,206,814
During fiscal year 2021, Mr. Grasser's total compensation was $645,690
The 2022 numbers will not be out for a couple more months. However last May they did vote to give themselves a raise {off memory only, I think it was something like 200k more, but will need to firm that up when the statement comes out.
But are we getting our monies worth?
All numbers from the SEC filing.
Part III Liquidity and Capital Resources. As of December 31, 2022, we had approximately $0.6 million of cash and negative working capital of approximately $2.2 million. During the year ended December 31, 2022, we used cash in operating activities of approximately $1.9 million.
Management implemented, and continues to make and implement, strategic cost reductions, including reductions in employee headcount, vendor spending, and the delaying of certain expenses related to our drug development activities.
Our new facility consists of approximately 6,000 square feet of leased office and warehouse space located in San Diego, with a total lease obligation of $0.4 million. During the year ended December 31, 2022, we started outsourcing the majority of our manufacturing, warehousing and fulfillment functions. To the extent that we feel it is necessary and in the best interest of the Company and our shareholders, we may also take further actions that alter our operations in order to ensure the success of our business.
We expect to receive $2.5 million of tax credits under the relief provisions. However, as discussed in further detail below, pursuant to the Streeterville Note, within three trading days of receipt by the Company of any employee retention credit funds owed to the Company under the CARES Act, such amounts must be paid to Streeterville pursuant to the terms of the Streeterville Note.
In November 2022, 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 incurs interest at an annual rate of 6.32%. We are required to make monthly payments of $27,900 from November 2022 through July 2023. The outstanding balance as of December 31, 2022 was $0.2 million.
On March 25, 2022, we sold and issued additional Notes in the aggregate principal amount of $1.06 million (the "Second Tranche"). The Notes issued in the Second Tranche also had an OID of 6%, resulting in gross proceeds of the Company of $1.0 million. The Notes issued in the Second Tranche were scheduled to mature on September 25, 2022.
The Notes did not bear interest except upon the occurrence of an event of default. After the occurrence of an event of default, the Notes accrued interest at the rate of 15% per annum.
In April 2022, the volume weighted average price ("VWAP") of the Company's common stock was below $0.10 for more than 5 days, which constituted a price default in accordance with the Notes. As a result, from the date of such default and for so long as such default remained uncured, the Notes that remained outstanding accrued interest at a rate of 15% per annum. Following such default, the holder also added a 15% per annum default premium to the outstanding balance in accordance with the Notes.
On August 18, 2022, we entered into the Cancellation Agreement and Mutual General Release (the “Cancellation Agreement”) with the holder of the Notes issued in March, pursuant to which we paid the investor a total sum of $675,000 in full satisfaction and repayment of the Notes issued in March. Upon execution of the Cancellation Agreement, the March Notes, including the Company’s obligations thereunder, were canceled and terminated.
The Notes were senior to other indebtedness of the Company. There was no outstanding balance on any of the Notes as of December 31, 2022.
On March 30, 2022, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor, pursuant to which we agreed to issue and sell 700 shares of our Series A Convertible Preferred Stock (the "Preferred Stock"), which had limited voting rights, including "supervoting" rights equal to 170,000 votes per share of preferred stock on certain stockholder proposals, and warrants to purchase an aggregate of 10,000,000 shares of Company common stock. Shares of the Preferred Stock had a stated value of $1,000 per share and were convertible at any time into an aggregate of 10,000,000 shares of common stock at a conversion price of $0.07 per share. We received aggregate gross proceeds of $0.7 million before deducting placement agent’s fees and other offering expenses in connection with this offering. In April 2022, the investor converted all of the 700 outstanding shares of Preferred Stock into an aggregate of 10,000,000 shares of our common stock. We recognized a beneficial conversion charge of $0.9 million during the year ended December 31, 2022, which represents the in-the-money value of the conversion rate as of the date of the conversion.
Streeterville Note
In August 2022, we entered into a note purchase agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which we issued and sold to Streeterville a secured promissory note ("Streeterville Note") in the original principal amount of $2.0 million. The Streeterville Note carries an original issuance discount of $400,000. We incurred additional debt issuance costs of $23,000. As a result, we received aggregate net proceeds of approximately $1.6 million in connection with the sale and issuance of the Streeterville Note. We are required to make weekly repayments to Streeterville on the Streeterville Note in the following amounts: (a) $40,000 for the first eight weeks; and (b) $56,000 thereafter until the Streeterville Note is paid in full. The unpaid amount of the Streeterville Note, any interest, fees, charges and late fees accrued shall be due and payable in full nine months from August 19, 2022 (the “Maturity Date”); provided, however, that within three trading days of the Company's receipt of any employee retention credit funds owed under the CARES Act, such amounts are required to be paid to Streeterville; provided, further, that if at least $1.0 million in CARES Act proceeds are not remitted to Streeterville within ninety days of August 19, 2022, the outstanding balance under the Streeterville Note will be increased by five percent (5%). The Company did not receive the CARES Act proceeds within ninety days of August 19, 2022; as a result, the outstanding balance of the Streeterville Note was increased by five percent (5%). The Streeterville Note is secured by all of the Company’s assets. The outstanding balance of the Streeterville Note as of December 31, 2022 was $1.0 million.
Tax Liability
During the first quarter of 2019, we issued 2,950,000 Restricted Stock Units ("RSU's") to our founder, former President and Chief Executive Officer, Michael Mona Jr. ("Mona Jr."). The vesting of the RSU's is treated as a taxable compensation and thus subject to income tax withholdings. No amounts were withheld (either in cash or the equivalent of shares of common stock from the vesting of the RSU's) or included in our payroll tax filing at the time of vesting. During the year ended December 31, 2020, we reported the taxable compensation associated with the RSU release to the taxing authorities and included the amount in Mona Jr's W-2 for 2019. Although the primary tax liability is the responsibility of Mona Jr., we are secondarily liable and thus have recorded the liability on our balance sheet as of December 31, 2021 and December 31, 2022. The liability may be relieved once the tax amount is paid by Mona Jr. and the Company has received the required taxing authority documentation from Mona Jr. As of December 31, 2022, Mona Jr. has not provided us with proof that he filed and paid his taxes for 2019. Refer to Note 12. Related Parties and Note 13. Commitments and Contingencies to our financial statements included in Part IV in this Annual Report on Form 10-K for additional information.
Going Concern
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 and to provide related note disclosure in certain circumstances. Our financial statements and corresponding notes have been prepared assuming the Company will continue as a going concern. For the year ended December 31, 2022, the Company generated negative cash flows from operations of $1.9 million and had an accumulated deficit of $87.7 million. 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.
The Company's financial operating results and accumulated deficit, besides other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company will continue to pursue the actions outlined above, as well as work towards increasing revenue and operating cash flows to meet its future liquidity requirements. However, there can be no assurance that the Company will be successful in any capital-raising efforts that it may undertake, and the failure of the Company to raise additional capital could adversely affect its future operations and viability.
10K PartII Results of Operations.
Without comment.
We had product sales of $16.2 million and gross profit of $5.6 million, representing a gross margin of 34.2% in 2022 compared to product sales of $20.0 million and gross profit of $8.6 million, representing a gross margin of 43.0% in 2021. Our net product sales decreased by $3.8 million or 19% in 2022 when compared to 2021. The decline is primarily due to lower retail sales in our retail channel, mostly resulting from reduced sales to independent natural product retailers and FDM accounts. The total number of units sold during the year ended December 31, 2022 decreased by 22% compared to the year ended December 31, 2021, partially offset by higher sales prices of 3% in the second half of 2022. Our revenue in 2022 was negatively impacted by supply chain challenges with certain contract manufacturers. In addition, 36% of our net revenue for the year ended December 31, 2022 was from new products launched since May 2021.
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. Cost of goods sold in 2022 increased as a percentage of revenue compared to 2021, mostly due to higher product costs, partially offset by warehouse and production cost savings. The gross profit decrease of $3.1 million or 36% to $5.6 million in 2022 was mostly driven by the decline in product sales. Gross margins decreased from 43.0% in 2021 to 34.2% in 2022. The decrease is primarily due to higher overhead cost and associated volume deleverage and increased production cost.
General and administrative ("G&A") expense decreased by $10.0 million compared to 2021, of which $3.8 million was due to lower impairment charges in 2022 compared to 2021. In 2022, we recorded an intangible asset impairment charge of $1.2 million compared to a goodwill and intangible asset impairment charge of $5.0 million in 2021. In addition, G&A expense in 2022 decreased as a result of the recognition of the employee retention credit of $2.5 million, offset by the impact of the lease modification of $0.7 million in 2021. The remaining decrease of $4.4 million is a result of our ongoing efforts to reduce our overall cost structure. We were able to reduce our expenses for rent, legal, professional services, insurance, payroll, depreciation and stock-based compensation.
Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Annual Report, including our financial statements, to aid in their analysis and understanding of our performance and in making comparisons.
A few notes from the 10K Part I
Notes are giving without comment.
There are currently no drugs approved by the U.S. Food and Drug Administration (“FDA”) for treatment of smokeless tobacco use and addiction. We expect to continue our development efforts as we seek approval from the FDA to commercialize the world's first and only FDA-approved treatment for smokeless tobacco addiction. If we choose to build a commercial infrastructure to support marketing in the United States, such commercial infrastructure could include a sales organization, internal sales support, an internal marketing group and distribution support. However, we anticipate that building such a commercial infrastructure will require significant investment.
Our new facility consists of approximately 6,000 square feet of leased office and warehouse space located in San Diego with a total lease obligation of $0.4 million. During the year ended December 31, 2022, we started outsourcing the majority of our manufacturing, warehousing and fulfillment functions
The FDA has consistently taken the position that CBD is prohibited from use as an ingredient in food and dietary supplements. This stems from its interpretation of the exclusionary clauses in the FDCA because CBD has been approved as a prescription drug and is the subject of substantial clinical investigations as a drug, which have been made public. The exclusionary clauses under the FDCA provide that a substance that has been approved or has been subject to substantial clinical investigations as a drug may not be used in a food or dietary supplement, unless the substance was first marketed in a food or dietary supplement prior to the initiation of substantial clinical investigations of the substance as a drug. The exclusionary clause does not apply to cosmetics. Cosmetics containing CBD could be viewed as drug products by the FDA if disease claims are made, or if the FDA determines the use of CBD in the product has a structure or function effect on the body (i.e., a drug effect). The FDA has also issued warning letters to dietary supplement manufacturers objecting to the designation of CBD infused products as dietary supplements on the basis that CBD was not a permissible dietary supplement ingredient.
Competition. The CBD-based consumer product industry is highly competitive and fragmented with numerous companies, consisting of publicly- and privately-owned companies, such as Charlotte's Web Holdings Inc., cbdMD, Inc., Medterra CBD, Inc., and many others. There are also large, well-funded companies that have indicated their intention to compete in the hemp-based product category in the U.S. We routinely evaluate internal and external opportunities to optimize value for shareholders through new product development or by asset acquisitions or sales and believe we are well-positioned to capitalize in the growing CBD product category. There are several companies developing cannabinoid therapeutics for a range of medical indications. The cannabinoid therapeutic area currently includes formulated extracts of the Cannabis plant and synthetic formulations. These formulations include CBD or THC, or a combination of CBD and THC as the active pharmaceutical ingredient. Certain companies such as GW Pharmaceuticals plc have focused on plant-based CBD formulations, while other companies such as Zynerba Pharmaceuticals, Inc. and Insys Therapeutics, Inc. have focused on synthetic CBD formulations.
Raw Materials and Product Manufacturing. We have invested significant capital to develop and maintain relationships with growers on a global scale to ensure access to raw materials to support anticipated revenue growth. We have historically sourced our raw materials from well-established and well-recognized hemp growers in Europe. In addition, we have developed relationships with hemp growers in the United States and purchase raw materials domestically as well. We have maintained access to these growers for their raw material supply and continue to explore and develop other relationships to ensure that we can meet the expected demand for hemp-based consumer products well into the future.
Yes, Albert Einstein had extraordinary vision, thought and application to the physics of the universe.
However, that did not turn into the riches he deserved. Albert Einstein enjoyed a relatively modest net worth during his lifetime compared to his level of fame and importance to mankind. He was actually quite poor throughout his career. In death, he is perennially one of the highest-paid dead celebrities. Einstein's estate was worth $65,000 at the time of his death.
LOL, regarding Stuart Tomc, all I can do is play you a song.
$3800 in trades today with a hour to go. Again dead in the water, heck the traders can't even work with this one.
Well, that is the goal, $5 million per qt. “ On the revenue side, our immediate goal is to get the company back to a $5 million plus per quarter”
They will most likely still be losing money, and they only have 600k to play with.
I don’t think those 44 work in the building, the building is smaller than a size of a standard city lot. Well I guess that be depending on which city. Still very small. But I don’t know how the workers are displaced with in the company. I was more interested in the 27 they got rid of. A long with the cost savings.
Took a quick glance at the 10K, it’s about as bad as a person would think but there is some items that do need, I need, to research as I get into it.
I do think the company will be around for a while, but I don’t think they will be making any money, at this point it’s a paycheck company. It will provide that.
Some people think they got a good deal, others look and say they got chumped. However it’s always a good time to make smart decisions, and never a good time to make foolish ones.
Let the buyer beware.
I see the truly risk based are all the way up to 0.049, whew, good luck!
You know that $920,000 for Deemed dividend for beneficial conversion of Series A Convertible Preferred Stock would have been nice for the shareholders to avoid, right?
Well sure what is the worth then?
Question, when they state in the 10K “Net loss attributable to common stockholders 9.134 million , that does mean after the went thru the 16 million on sales , they went thru another 9,134 million . So from start to finish, does that mean for every dollar they sell it costs them 1.56 to do it?
So Thomas, have you read that SEC filing?
Yes Thomas, and when would you expect {which year} they will have a product to sell. Also how much does it cost to go thru phase 1 2 3? and how much time between each phase, I think I know, just want you to confirm.
I would think many, many would try that solution first.
"And, by varying the NICOTINE-GUM-to-GUMMIE RATIO, I can adjust the dosage to my PERSONAL REQUIREMENTS"
common sense
Nonsense, in there current state that's exactly what they are, and at this stage there is no way you could even assign a value. No way of knowing if they get past 1 2 3 phases.
Hey motorcity, hope all is going well.
It’s been my opinion for some time that the management team is failing. Nothing from the CC changes that.
There going to go to a smaller footprint. I’m sure you know about the building from 30k to 6k square. The dropped 27 in head count. Going to shoot for 5 million a qt. Here maybe it’s best to have you read the CC, as my view maybe different than yours.
Haven’t done the SEC filing, it can wait for now. But my view is not a positive one. They did admit indirectly that that the business plan was wrong, and there going to readjust. The best I can say is they will keep those paychecks they get coming for a while.
Anyway here you go:
CV Sciences, Inc. (CVSI) 2022 Q4 2022 Earnings Call Transcript
Mar. 29, 2023 1:32 PM CV Sciences, Inc. (CVSI)
(OTCQB:CVSI) Q4 2022 Earnings Call Transcript March 29, 2023 10:00 AM ET
Company Participants
Joseph Dowling - CEO, Secretary and Director
Joerg Grasser - CFO
Conference Call Participants
Operator
Greetings. And welcome to the CV Sciences’ Fourth Quarter and Year End 2022 Conference call. [Operator Instructions] This conference is being recorded. I’d now like to turn the call over to CV Sciences for an introduction. Please go ahead.
Unidentified Company Representative
Thank you, and good morning, everyone. With us today with prepared remarks are CV Sciences' Chief Executive Officer, Joseph Dowling; and Joseph Dowling, Chief Financial Officer. After the prepared remarks, we will take questions from the analyst community.
I would like to remind you that during this call, management's prepared remarks may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by CV Sciences at this time. When used in this call, the words anticipate, could, estimate, intend, expect, believe, potential, will, should, project and similar expressions as they relate to CV Sciences are as such forward-looking statements.
Finally, please note that on today's call, management will refer to non-GAAP financial measures in which CV Sciences excludes certain expenses from its GAAP financial results. Please refer to CV Sciences' press release from earlier today for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures.
This morning, the company issued a press release announcing its financial results. Participants on this call who may not have already done so may wish to look at the press release as the company provides a summary of the results on this call. The press release may be found at www.cvsciences.com.
I would like to now turn the call over to CV Sciences' Chief Executive Officer, Mr. Joseph Dowling. Joe?
Joseph Dowling
Good morning, everyone. Thank you for joining our call. This morning we issued a press release reporting results for our fourth quarter and for the full year ended December 31, 2022. Before I turn the call over to Joerg to comment on our Q4 and full year financial results, I will provide an overview on our accomplishments during 2022, the continuing challenges we face, and the steps we have taken and continue to take to remain a competitive force in our industry. Our industry has faced serious challenges since early 2020, and those challenges, including brand saturation and continued inaction by FDA and Congress, persisted in 2022. Despite the challenging environment, we have made significant progress to position the Company to achieve profitability and free cash flow in the near term.
Over the last several quarters, we have discussed the challenging external environment on our industry and company. Our proactive steps during 2022 to address these challenges were significant and included continued realignment to make sure we have the right personnel, the right partners. And the resources to optimize our operational effectiveness. Two, personnel realignment during 2022 continued, our headcount at the end of 2022 was 44, down 27 positions from the end of 2021. Three, we have evaluated every vendor relationship, including contract manufacturers, packaging suppliers, ingredient suppliers, every professional service provider, including legal, accounting and other consultants to ensure that we have the right partners and are receiving optimal value. We have optimized our facility costs. During 2022, we moved from a 30,000 plus square foot facility to a facility that is approximately 6000 square feet. This move alone resulted in annual savings of approximately $1 million with zero decline in productivity. The timing of this move was ideal and coincided with a hybrid work model resulting from the pandemic that includes both remote and online work schedules.
We completed the outsource of our warehouse fulfillment operations with an established 3PL operator that has enabled our warehousing and fulfillment to become more cost efficient while at the same time improving shipping times and customer service to both B2B and B2C customers in all geographic regions. The original business model of CV Sciences was to solely be a distributor of hemp biomass, primarily CBD Oil. We exited that business several years ago, but are still working through CBD Oil inventory. Up until 2022, we processed nearly 100% of our CBD Oil needs. In 2022, we fully exited the oil processing phase of the supply chain and are now working with manufacturing partners at a much lower cost to process our CBD Oil inventory and needs and at the same high value of quality our customers expect.
All of these initiatives fully embrace our long standing commitment to an asset light business model that can take advantage of an industry that is maturing, becoming more professional and trustworthy. We are now starting to realize the positive impact of these cost efficiency measures. Joerg will discuss the specifics of this positive financial impact during his comments. On the revenue side, our immediate goal is to get the company back to a $5 million plus per quarter revenue run rate and higher. We know this revenue goal is in near term sight. We are overcoming the supply chain issues we experienced during 2022. We are starting to see brand contraction in B2B as retailers are working through old inventory and removing slow moving brands. In the natural product retail channel, we are the number one selling brand and we continue to see market share concentration of the top three brands in the 50% range. Customers are sticking with brands that they know and trust and we are at the top of the list in the natural channel. Our B2C sales channel continues to improve. Our B2C infrastructure is built for scale and can support nearly unlimited traffic and activity. We continuously improve our merchandising and marketing investment to optimize our B2C return on investment.
We are seeing results in all critical B2C KPIs, including new visitors, increased subscription orders and revenue and AOV. Brand contraction, increased education and consumer trust will all help grow the B2C channel and we are prepared to grow the channel and take market share as the category evolves. We know from our long commitment to the B2B channel how important product quality, safety and customer trust is to growing the category. Customers can often learn about or even try our products from a B2B retailer and then transition to a B2C customer over time. This is one reason why both B2B and B2C channels are important and work synergistically.
Product development will continue to be important for our growth strategy. 36% of our fiscal year 2022 revenue was from new products launched since May of 2021. Consumers are not only looking for high quality products like our PlusCBD products, but they increasingly want multi active ingredient products that carry a structure function claim that can be trusted. We are proactively addressing this trend and during 2022 launch several new products under our Wellness Line, including our Sleep, Calm and Relief products and our Over the Counter Topical Line. Also during 2022, we launched our innovative Reserve Line to extremely favorable customer reviews and demand. We will continue to innovate and launch new products that are responsive to our customers and their specific need states, including for anxiety, pain and sleep disorders. We believe that strong science supports our product claims and will win the trust and loyalty of our existing and new customers.
On regulatory matters, we remain optimistic but know that patience will be required. We have seen progress at the state level and remain optimistic regarding further progress. While inaction by FDA in Congress is frustrating, we continue to be actively involved at the federal level in pushing Congress to make progress on a hemp and cannabis regulatory framework. Incremental legislative progress creates a reality that hemp and cannabis are constructively legal at the federal level already. This helps advance our industry and create an environment where quality companies and products can be trusted to grow the category responsibly.
I also want to comment on our drug development program in treatment of smokeless tobacco use and addiction. We recently issued a press release announcing that the company received its formal certificate of grant from the Japan Patent Office for its patent application 721-?6697 for our drug development asset. The patent covers methods of treating smokeless tobacco addiction by administering pharmaceutical formulations containing CBD and nicotine. CV Sciences has also filed corresponding patent applications that provide similar patent protection in additional key commercial markets, with patents already granted in the United States, Canada, Australia, Germany. Great Britain, France, Spain, Netherlands and Italy. We believe this program and asset have significant value and while we have paused development of this program internally, we are seeking collaboration partners on this program.
The challenges in our industry continue, but we are positioning ourselves to compete in the current environment. During 2022, we continue to streamline our operations, increase our cost efficiency and realign the company for growth and profitability. We have made great progress in structuring a very lean, cost efficient organization that is now repositioned to leverage our company's strengths, which includes our employees, the quality of our products, the trust in our brand and the strength of our distribution. We will be able to achieve profitability and cash flow positive at a much lower revenue number than many of our competitors because of the tough decisions that we have made and our much lower business model cost.
Let me pause now and I will turn the call over to Joerg.
Joerg Grasser
Thank you, Joe, and also good morning to everyone. As Joe indicated, we are starting to see the positive financial impact of our cost efficiency measures across all functional areas of the company. We have significantly reduced our cost structure without significant productivity losses and we are well positioned for operating leverage as we increase revenues. An example of our increased operating leverage occurred during the fourth quarter of 2022 where we generated positive cash flow from operations of $0.2 million, which was the first time that we generated operating cash since Q2 of 2019.
Let me dig into the detail for the quarter and yearend, our fourth quarter revenue was $3.9 million, compared to $5 million in the fourth quarter of 2021 and up from $3.8 million in the third quarter of 2022. The year-over-year decline is mostly due to lower sales volume in our B2B channel. The sequential increase was from additional ecommerce sales in Q4. Our Q4 sales continued to be negatively impacted by supply chain challenges, with the result that we were not able to fill all of our orders. The year-over-year volume decline was partially offset by higher sales prices per unit. The overall market continues to be fragmented and very competitive, which we believe is largely due to the lack of a clear regulatory framework. Our direct-to-consumer business performed really well, and associated sales represented 46.2% of total revenue in the fourth quarter, compared to 38.8% a year earlier and 43.8% in the third quarter of 2022.
Online sales continue to become a larger part of our overall business. Our online revenue increased by 9% on a sequential basis, mostly related to higher volume due to increased traffic. We made solid improve our main digital KPIs. We were able to continue to increase our visits to our website on a sequential basis despite lower digital marketing spend. Our conversion rate was negatively impacted by being out of stock for certain products and higher sales prices. We also made good improvements during the quarter with our subscriptions and loyalty programs. Gross margin for the fourth quarter of 2022 was 40.4%, compared to 41.6% in the third quarter of 2022 and 32.4% in the fourth quarter of 2021. The improvement in gross margin compared to prior year is mostly due to reduced shipping and fulfillment costs, as well as higher average sales prices, partially offset by lower volume. We continue to work on further cost efficiencies in order to improve our gross margins. During the fourth quarter, we added a second distribution center on the East Coast for our B2B fulfillment to reach more of our customers with next day delivery and reduced shipping cost.
SG&A expense for the fourth quarter was $3.6 million, significantly down from $10.1 million a year ago and up from $2.4 million sequentially. SG&A expense included a non-cash impairment charge of $1.2 million for 2022 and $5 million for 2021. Excluding impairment charges, our SG&A expense bill decreased significantly on a year-over-year basis by 52% and remained flat sequentially. These improvements are the direct results of our ongoing efforts to reduce our overall cost structure. We have taken out cost from all areas of our business and continue to do so in order to generate positive cash flows.
For the fourth quarter 2022, we generated an operating loss of $2.1 million, compared to an operating loss of $8.8 million a year ago. Our adjusted EBITDA loss for the fourth quarter was $0.7 million, compared to $1.2 million in the third quarter of 2022 and $2.6 million in the fourth quarter of 2021. The improved operating performance and adjusted EBITDA loss as a result of our asset light business model, which allowed us to implement cost savings throughout the organization to minimize our cash outflow. On a GAAP basis, we reported a fourth quarter 2022 net loss attributable to common stockholders of $2.3 million, or $0.02 per share, compared to a net loss of $8.9 million, or $0.08 per share, in the fourth quarter of 2021.
Now let me turn to our balance sheet. We continue to manage our cash position very carefully and ended the fourth quarter of 2022 with $0.6 million compared to $1.1 million at the end of the third quarter of 2022 and $1.4 million at the end of fiscal ’21. Cash used in operations during the year ended 2022 was $1.9 million, a significant improvement from the prior year of $7.5 million. As we stated earlier, we generated positive cash from operations for the quarter of $0.2 million compared to negative cash used in operations for the fourth quarter of 2021 of $1.2 million and $0.5 million in the third quarter of 2022. Subsequent to year end, we received ESE funds of $1.1 million from the IRA. We anticipate that we will receive an additional approximately $1.3 million in 2023. During all of 2022, we have more aggressively managed our overall cash position with improved cash collections on our outstanding AR and daily management of our inventory and vendor payables. We continue to work on reducing our cash usage in 2023, but anticipate that we will be dependent in the near future on additional capital to fund our growth initiatives. We continue to adjust our cost structure to be in line with our expected revenue with the overarching goal to generate positive operating cash on a continuous basis. We anticipate some modest cash usage in the first half of 2023.
Our inventory was $6.6 million at the end of the year, compared to $8.6 million at prior year end as we continue to focus on efficient cash management and convert our raw material into cash. Also, during 2022, we extinguished our convertible note, which strengthened our balance sheet and helps us with our long-term strategic initiatives. Entering 2023, with our improved balance sheet and our reduced cost structure in place, we have the financial flexibility to continue executing our plan and look forward to improving trends as the year unfolds.
Now, I will turn the call back over to Joe.
Joseph Dowling
Joerg, thank you. As Jorge and I have discussed this morning, we have realigned our company to the scale of the industry to achieve profitability and cash flow positive in the near term. We know that investors are looking for leaders like CV Sciences to achieve positive financial fundamentals such as profitability and free cash flow to demonstrate the viability of our industry. Also, we are poised to do that. We also continue to participate in the contraction and consolidation of both the cannabis and hemp industries, which we continue to do with our advisors in evaluating both inbound and outbound M&A opportunities. Also beyond the current opportunities we have domestically, we believe CBD is a global market and we are actively pursuing international prospects that will allow us to leverage our brand and high quality products, our infrastructure and the trust in our company.
We are optimistic about the long term opportunity for our company and industry. We have made difficult decisions to ensure that we are scaled properly, operating efficiently, and are focused on adding long-term shareholder value. Our customers and retail partners love our products and they trust who we are. We continue to be a company of determined employees that produce safe and high quality products that meet the needs of our customers at value.”