CV Sciences Inc (CVSI)

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he complaint relates to our acquisition of the assets of PhytoSphere Systems, LLC in January 2013. The key asset purchased in the transaction was the seller’s European inventory supply chain, which is the asset critical in launching our successful consumer products division. In its complaint, the SEC does not question the legality of the transaction nor does the SEC criticize our operations. Further, the SEC does not suggest that any officer or director sold shares of stock in connection with this transaction, or at any other time. The SEC simply takes issue with how the Company reported the transaction in its quarterly reports to the SEC during the first three quarters of 2013. More specifically, with the benefit of hindsight, the SEC takes issue with the negotiated acquisition price and the timing of our valuation to determine asset reporting value.
The Company stands behind the PhytoSphere transaction and its financial reporting during 2013. We have retained Paul Hastings as our litigation counsel and intend to vigorously defend this matter.