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10-Q REPORTS ARE UNAUDITED HOW FREAKING LONG HAVE YOU BEEN TRADING
https://en.wikipedia.org/wiki/Form_10-Q
dude you're way off. look at the list of companies that uplisted this year alone and try to find me any press leading up to it.
serious investors (like myself) that have an understanding of the balance sheet can see plain as day that this is a company with strong, consistent revenue growth within a market that is rapidly growing, and in which they already boast a stronghold with leading sales, head and shoulders above lesser companies.
if anyone believes the garbage you consistently post without any facts or merit, they are the ones who deserve to lose their investment.
you speak of additional cash as if the volume of lawsuits is somehow burdensome.
i'm explaining that they're fighting ONE lawsuit multiple times. if they have a lawyer on the payroll, it's taken care of.
when they're filing identical lawsuit, shuffling papers becomes a matter of switching out dates and names while the core arguments remain the same.
so when you can't argue against all my points showing why this patent stuff is overblown, you turn to claiming (rather outlandishly) that the revenues are somehow faked?
you've yet to provide absolutely ANY insight into the lawsuit other than "it's legit and the company is also faking revenues"
your arguments, like the lawsuit, do not hold water.
dude. each lawsuit is IDENTICAL. they are all based on the citron tweet. there is essentially one lawsuit to fend off, multiple times over.
read my post where it took me just a few hours to disprove and argue against this lawsuit.
explain to me why this goes beyond in-house counsel.
"this is being priced into the stock price IMO" -- this is exactly right and it's truly infuriating how senseless this is.
no they don't. the company has a lawyer on the payroll for this exact reason.
the company has other lawsuits that have been pending for years. look how much they cost the company.
your post is the exact sentiment that's the dominating theme on this board and the stock altogether.
you're susceptible to the misinformation campaign that's assaulted this ticker for the last several weeks.
EXACTLY WHY THE LAWSUITS ARE D.O.A.
i'm a savvy investor who's capable of doing due diligence and understanding the law.
i'm also capable of reading a lawsuit and the things alleged in said lawsuit.
the volume of lawsuits doesn't at all speak to the legitimacy of the lawsuits.
each and every lawsuit hangs on the "report" by citron -- which is nothing more than a couple sentences. hardly a "report"
read my post. i'll say again here:
"there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the 'total mix' of information made available."
as the story here has always been about revenue growth, with the patent quietly in the background, i believe the company can easily prove that the reasonable investor would NOT have viewed the omitted fact as "SIGNIFICANTLY" altering the "TOTAL MIX" of information made available.
the company didn't dish out false or misleading information. the company always maintained that the patent was pending, and disclosed quite clearly in each quarterly statement that the revenues and growth were attributed to the consumer products side.
a "reasonable investor" could therefore conclude that the patent was not material to the company's continued success.
prove to me how the patent was a significant enough part of the stock's rapid ascension to warrant disclosing the status of the patent as a material event.
this is what the plaintiffs have to prove.
and their only proof is the fact that the stock crashed AFTER a tweet from a known short seller and market manipulator.
this is a weak argument.
i read the lawsuit. i read the law and the precedents for the law. i explained all of this in my post.
and all you've got is "CVSI did make the patent a material event during the pumping process"
good luck explaining this to a judge.
it absolutely is, when the entire case hangs on the supposition that the company touted the patent as material to the company's success.
the company did not. the fact that it's mentioned once highlights this.
further, the patent isn't material to the company's success. the fact that the recent surge in revenues DOESN'T COME FROM ANYTHING DEALING WITH THE PATENT highlights this as well.
you clearly didn't read my extensive post wherein i discuss all the reasons why the status of the patent wasn't a material event as it pertains to the company's recent gains in stock price and the "overall mix" of information -- which has clearly been heavily skewed toward revenues.
in fact, the patent was hardly ever discussed in the public discourse until citron tweeted about it.
read my post on the lawsuit and explain to me how i'm wrong.
here's my big DD post on the lawsuit:
hi folks. i just read the entire lawsuit. i'm going to lay out what i find to be weak arguments/interesting points throughout, and then i'm going to share excerpts from a paper about what constitutes materiality as it pertains to IP, as that is at the heart of this entire lawsuit -- the plaintiff alleges that the patent's "final rejection" status was material enough to warrant disclosing to the public. i will then explain why this is not the case.
raw notes from the lawsuit:
-it points out that CVSI mentions the patent pending IP in quarterly and annual reports, as early as last year. the patent gets ONE (1) mention in the latest quarterly report. one mention. the quarterly report also clearly states that the majority of revenues come from the consumer products side, and even mentions the R&D costs for the pharma side being negligible as it hasn't made much of any progress yet.
-nowhere in the quarterly reports or press releases does the company assert that the patent is crucial to the success of the business, which it is not.
-there's even a damn spelling error in this lawsuit (par. 6 "if its patent" instead of "of its patent")
-paragraph 6 italicizes "final" to drive home this point. the need to emphasize this is to sway in favor of their skewed interpretation of the law in this case.
-the company did not tout the patent. they touted the drug and the potential market for it. this is not illegal or misleading. the language they use clearly expresses the fact that nothing is set in stone, and merely highlights the market potential were their drug to progress in FDA trials. the language CVSI uses in its press releases is consistent in it's underscoring the potential, without making any kind of pie-in-the-sky guarantees. SAFE HARBOR EXISTS FOR THIS REASON.
-arguably the biggest flawed point in the lawsuit is when they assert that the fact that the stock crashed on the Citron tweet is somehow proof that that's what was driving the share price higher. A cursory search of Citron shows that he crashes stocks. Further, if the patent were the cause of the stock's ascent, then it would have gone up when this drug was discussed in 2017. the stock did not react. in fact, it can easily be proven that the stock was reacting instead to news about record quarterly revenues, for three quarters straight. *(this will be important later)*
-paragraph 26, they quote Mona as saying the company has a "favorable development roadmap" for the drug, only days after the patent was issued a final rejection notice. that was june of last year. again, the stock didn't care. proof that the patent was not holding much weight with shareholders. EVEN STILL, Mona's comments are accurate, as they had been in talks with the FDA about what needs to happen to accelerate the process with an IND to get trials started. Also, they had received notes from the patent examiner, which can be considered part of the roadmap to making it happen. it is also incredibly important to remember what the patent examiner told me, which is that a DRUG CAN BEGIN TRIALS BEFORE A PATENT IS ISSUED, and that TRIALS CAN HELP SUPPORT A PENDING PATENT'S CASE.
-the lawsuit HEAVILY relies on the Citron "report" -- this is the most flawed part of the entire lawsuit. first off, the language "report" denotes that there was something concrete behind it. there was nothing more than a single tweet. this is not a report. the lawsuit asserts that Citron's "report" "unearthed" this patent revelation and that once the market was privy to this information, the sell-off therefore proves that not only was the share price heavily dependent upon this patent, but that it's rejection status was ominously hidden from investors. this is absolutely false.
-"patent pending" language is used by companies for many reasons. Patent pending means that you are working toward getting your idea patented. It is important because the pending status can deter other companies from trying to copy your invention. Most companies will not invest the time or money to develop a product that could receive a patent in the near future. it is important to remember this, as CVSI is able to begin FDA trials with a patent still pending.
-companies put out products with "PATENT PENDING" language all the time for crying out loud!!!
-overall: this case reads like a naive idiot who doesn't understand how stocks work and what does and doesn't constitute legitimate fraud.
THE MAIN POINT OF THE LAWSUIT, AND WHAT THE PLAINTIFF'S LAWYERS MUST PROVE, IS WHETHER THE STATUS OF THE PATENT WAS MATERIAL INFORMATION THAT NEEDED TO BE DISCLOSED, SO THAT A "REASONABLE INVESTOR" WOULD HAVE CHANGED HIS MIND UPON LEARNING OF THE PATENT'S REJECTED STATUS.
So let's talk about materiality as it pertains to IP.
i pulled pertinent facts from this paper: www.ipmall.info/sites/default/files/hosted_resources/IDEA/1.Thomas02.pdf
-Misrepresenting a patent pending status could in fact put you at legal risk, especially if your patent is denied.
-there is no legal requirement to include the serial number on any materials. the only legal requirement is that you can only use "patent pending" as long as the application is still in process. (which CVSI's is).
-The most widely-adopted test for materiality of an omitted fact was set forth by the Supreme Court in TSC Indus., Inc. v. Northway, Inc. The Supreme Court in TSC Industries held that "there must
be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the 'total mix' of information made available."
^ THIS IS WHAT THEY HAVE TO PROVE. and the crux of their case hurriedly relies on Citron being the impetus. as his tweet's "exposure to this fact" and the stock's subsequent tumble is the *only* proof they assert that it was in fact material to the performance of the stock. they do not ever point out the stock's RISE being attributed to discussion of the patent. Citron is their ONLY "proof" that the patent had weight. No. Citron pointed out a mundane detail and did the overhyping, so as to mislead the common investor who doesn't know any better, and momentum day traders who had clearly piled into the stock without any prior knowledge of the company's revenues and functions.
-"Materiality is a mixed question of law and fact, ordinarily determined by the fact finder. However, if the "alleged misrepresentations or omissions are so obviously unimportant to an investor that reasonable minds [could] not differ on the question of materiality . . . the allegations [are] inactionable as a matter of law." ---- in CVSI's case, it is plain to see from the language in press releases and quarterly + annual reports that the vast majority of emphasis for the stock's performance was based on QUARTERLY SALES REVENUES, with only a minor mention of the patent-pending biotech.
plain and simple, a "reasonable investor" would have clearly seen that the status of a patent which as of yet had no material significance on the stock's revenues -- which were what was otherwise driving the rapid increase of the stock's price -- and deemed them unimportant.
go back to the language of the law: "there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the 'total mix' of information made available."
in CVSI's case, the "total mix of information made available" can easily and clearly be proven to be heavily skewed in favor of the growing revenues, with the patent being nothing more than an afterthought. the fact that the patent only gets a one-sentence mention in quarterly and annual reports only serves to underscore this fact.
now, for those concerned that perhaps CVSI was negligent, there's more to it:
"The Supreme Court, in both Basic and TSC Industries, has been careful not to set too low a standard for materiality. Too low a standard could lead to "an overabundance of information" being supplied to investors, "especially concerning corporate developments of 'dubious significance.'" The rationale of the Supreme Court for assuring that their standard was not too low was their concern that a minimal standard could lead to corporate management simply burying investors in "an avalanche of trivial information." A minimal standard would also force attorneys to disclose every trivial bit of information to investors out of fear of incurring potential liability for failing to disclose those minutiae. This result would hardly be conducive to informed decision making, which is a key goal behind the securities laws."
Further reading and you'll see that materiality is of importance when the company's sole source of revenue and/or revenue potential is contingent upon a patent -- which is NOT THE CASE with CVSI.
my favorite excerpt:
"Therefore, the materiality standard may vary depending upon the patent's prominence in a corporation's expected earnings. The status of a patent application, critically entwined with the company’s financial viability should be disclosed if a reasonable investor would believe that such information would significantly alter the "total mix" of information available to him when trading stocks.46 In general, a corporation should disclose to its shareholders the status of any given patent application. If a patent application is undergoing prosecution, however, it may be prudent for a corporation not to mention facts regarding that patent application at all until a final allowance or rejection on the merits has been received, so long as that patent application is not entwined with the success of the corporation" -- one look at the company's revenues and where they come from is all you need to realize the patent application is not entwined with the success of CVSI.
dude. people on this board were talking about the patent's status long before citron "unearthed" it.
i know nothing about them!
None of that has anything to do with nasdaq rules.
Show us proof that any of this is true.
It is becoming too mentally exhausting to write out these responses to people about this stuff.
i would argue that the court of public opinion has been heavily skewed in the wrong direction by bad actors like citron and i-glow.
and instead of kowtowing to them and letting it slide, i'm doing my part to better inform people about what is and isn't real and materially affecting the stock and it's businesses.
"how far they are from a single patent of substance." -- you're absolutely correct. and guess what? that entire side of the business hardly burns any cash, and isn't even a part of the valuation of the company. the story here is revenue growth and always has been. the biotech side was always a dark horse -- an added bonus.
yes. and i discussed it with the examiner. he informed me that this is normal language, and he was in contact with the lawyers and gave them information to help them reframe their language.
this is a process.
if the appeals board rejects the patent, then we'll all know it, because it'll appear on the USPTO site.
and then the company would have a duty to inform shareholders.
until then, PATENT PENDING MEANS PATENT PENDING.
PATENT
PENDING =
NOT ISSUED OR ABANDONED
did CVSI inform shareholders that the patent was pending? yes? okay.
is it still pending? yes? okay.
where did they break the law?
again, these lawsuits have no merit whatsoever.
they still haven't even found a lead plaintiff.
vandalay, i've address the final rejection language multiple times, and even capped it off with the patent examiner who was on CVSI's patent.
his own words -- final rejection doesn't mean "final rejection" in the conventional sense. it is part of the process.
he also said that out of the 2,000 patents he's issued, only 1 was issued without any rejections.
the rejections are part of the process.
companies submit.
they are rejected. the USPTO provides notes.
they appeal, they re-submit.
they are rejected. the USPTO provides notes.
they appeal and re-submit.
it is part of the process of getting a patent.
again, it falls under the legal language of "patent pending". if it were materially detrimental, the company would have an obligation to inform shareholders.
there is as of yet nothing materially detrimental in this process that is so far out of the ordinary so as to necessitate informing the investing public as to the status of the patent in question.
jesus christ.
i would think you'd be smarter than this, but anyway, here goes:
anyone can FILE a lawsuit for anything.
i can file a lawsuit against you for being an idiot. that doesn't give the lawsuit any merit.
if you look at all of these lawsuits, the crux of them lies in the citron tweet. they're lazily ambulance chasing based on a damn tweet from citron that has repeatedly been shot down by the due diligence on this board. these law firms don't have a case. period.
why?
1) because they cannot prove that CV sciences pumped this patent as being the crucial piece to making hundreds of millions of dollars.
2) because CV sciences disclosed in filings that the patent was pending.
3) legally speaking, patent pending means a patent has not been abandoned nor issued.
4) CV science's patent was neither abandoned nor issued.
5) CV science's patent is therefore still pending. in fact, it is pending a hearing from the USPTO appeal board.
6) in declaring in filings that the patent is and was pending, CV sciences committed to their fiduciary duty to keep shareholders updated.
7) if a shareholder so chose, they'd freely be able to check the status of the patent, as many have. there are many many many back-and-forth communications between the company and the USPTO. none of which was PR'ed. because it wasn't necessary. it's all part of the process of getting a patent.
CBD removed from anti-doping agency list:
https://www.nbcsandiego.com/news/local/Can-CBD-Improve-Your-Fitness-492449781.html
Whoa, I thought they were pumping the patent and the tech? But here you say there’s nothing out there! Are you getting caught up?
CSVI has literally always imported the raw hemp. This is known.
Show me where CVSI pumped the patent.
Solid post man. Yeah the mention of Naz in that dr. Maroon post indicates to me they’re still going through the process.
What I like most about your post is where CVSI would rank in market cap.
Lastly, I learned today that if they’re denied, nasdaq requires that they issue a PR within three days. And if he company doesn’t, naz will.
Still waiting for a response!
ok, so i just called the nasdaq help line on the first page of the PDF on uplisting requirements.
yes, the closing price must be above $4 for 90 consecutive days BEFORE APPLYING.
CVSI obviously doesn't meet that criteria and has already applied.
therefore, they're applying under the following exception to the rule, with a closing bid above $3 -- without the need for closing above it for any consecutive period.
** To qualify under the closing price alternative, a company must have: (i) average annual revenues of $6 million for three years, or (ii) net tangible assets of $5 million, or (iii) net tangible assets of $2 million and a 3 year operating history, in addition to satisfying the other financial and liquidity requirements listed above.
CVSI satisfies the alternative requirements.
in addition to these, however, there are other requirements like having an independent board.
on august 8th, by appointing the doctor to the board of directors, CVSI satisfied this requirement, and even called it out in the PR.
to me, that's a likely indicator that they're working with/in contact with Nasdaq to meet the requirements to list.
they haven't filed a lawsuit because it's difficult to prove malicious intent with nothing more than a tweet taking selective facts and painting them in a certain light.
further, Andrew Left never outright claimed fraud. he ASKED A QUESTION, which was enough to inject fear into the market.
lastly, i've posted enough DD to prove was citron posted wasn't accurate.
you have yet to respond to any of it.
i've replied to you a dozen times and you refuse to acknowledge my posts
how does this work? are they gonna IPO these spin-off shares? i don't get it.
dude everything you just said is what i've been pounding the table on and it's been so upsetting because the more it's talked about the more it's still in people's minds. it's crazy how many inexperienced traders there are out there who think these lawsuits are a real thing to be worried about.
second, what you said about traders not knowing what they're trading -- THAT'S WHAT CITRON TOOK ADVANTAGE OF WHEN HE SAID THE BULL CASE WAS ABOUT A PATENT.
i think what's most concerning is the fact that there are this many lawfirms out there who are incapable of doing even basic due diligence.
legally speaking, "patent pending" means a patent has not yet been issued, nor has it been abandoned -- which are the two outcomes when applying for a patent.
CVSI's patent has neither been issued nor has it been abandoned.
therefore, it is pending, as they've disclosed on more than one occasion.
those who claim they had a responsibility to report on the "rejection notice" don't understand how the process works.
if you look at the timeline on the USPTO site, there are MULTIPLE events, including the rejection -- all of which are equally ordinary and just part of the process. the company is not expected to issue a press release for each small milestone in the patent process.
further, the company did not publicly state that this patent was a money maker, or in any way material to the company's success.
these lawsuits are comically lacking merit.
wondering why nobody has pinned my post about the conversation i had with the patent examiner?
you're not responding to any of my posts and it's very telling.
here's the timeline:
Date Transaction Description
06-20-2018 Email Notification
06-20-2018 Docketing Notice Mailed to Appellant
06-18-2018 Assignment of Appeal Number
06-15-2018 Appeal Awaiting BPAI Docketing
06-11-2018 Appeal ready for BPAI review
06-11-2018 Request for Oral Hearing
06-11-2018 Reply Brief Filed
05-15-2018 Electronic Review
05-15-2018 Email Notification
05-12-2018 Exam. Ans. Review Complete
05-15-2018 Mail Examiner's Answer
05-09-2018 Examiner's Answer to Appeal Brief
02-28-2018 Date Forwarded to Examiner
02-15-2018 track 1 OFF
02-15-2018 Appeal Brief Filed
02-28-2018 Appeal Brief Review Complete
02-02-2018 Email Notification
02-02-2018 Mail Appeals conf. Proceed to BPAI
01-29-2018 Pre-Appeals Conference Decision - Proceed to BPAI
01-23-2018 Request for Pre-Appeal Conference Filed
01-23-2017 Notice of Appeal Filed
11-15-2017 Electronic Information Disclosure Statement
12-20-2017 Electronic Review
12-20-2017 Email Notification
12-20-2017 Mail Final Rejection (PTOL - 326)
12-14-2017 Final Rejection
so it looks like december 14th was the rejection date. since then they've gone through the totally run-of-the-ordinary process of appealing.