CV Sciences Inc (CVSI)

[ap17]

CV SCIENCES, INC. ANNOUNCES PROPOSED SETTLEMENT OF SHAREHOLDER LITIGATION
September 27, 2022
SAN DIEGO, Sept. 27, 2022 /PRNewswire/ -- CV Sciences, Inc. (OTCQB: CVSI) (the "Company", "CV Sciences", "our", "us" or "we"), a preeminent consumer wellness company specializing in hemp extracts and other proven science-backed, natural ingredients and products, announced today that CV Sciences has received preliminary approval of the proposed settlement of six shareholder derivative lawsuits pending in Nevada and California. These lawsuits alleged breach of fiduciary duty and other claims against current and former board members arising out of a tweet issued by Citron Research on August 20, 2018, suggesting that the Company misled investors by failing to disclose certain facts related to its efforts to secure patent protection for its product CVSI-007 from the United States Patent and Trademark Office ("USPTO"), which facts plaintiffs alleged made it less likely that the Company would obtain patent protection. Defendants at all times denied any wrongdoing. On May 19, 2020, the USPTO issued a patent pertaining to CVSI-007.

CV Sciences, Inc. Announces Proposed Settlement of Shareholder Litigation

The settlement agreement was executed by on July 28, 2022. On September 21, 2022, the District Court of Clark County, Nevada granted a motion for preliminary approval of the settlement agreement. On November 14, 2022, at 1:30 p.m., the District Court of Clark County, Nevada will hold a hearing to determine whether to grant final approval of the settlement agreement. The proposed settlement, if approved by the court, will resolve all claims asserted the defendants in these shareholder actions without any admission, concession or finding of any fault, liability or wrongdoing by the Company or any defendant. CV Sciences and the individual defendants continue to deny any wrongdoing. The proposed settlement contemplates the implementation by the Company of certain corporate reforms and payment of $275,000 in attorneys' fees to plaintiffs. The Company currently anticipates that all settlement payments will be paid through insurance, although no assurance can be provided.

Additional details regarding the proposed settlement are included in that Current Report on Form 8-K filed by CV Sciences with the Securities and Exchange Commission ("SEC") on September 27, 2022. The Stipulation and Agreement of Settlement and Notice of Proposed Settlement ("Notice") are available at https://ir.cvsciences.com/governance-docs. A copy of the Notice is attached.