Cv Sciences Inc

Greetings and welcome to the CV Sciences 2025 Fiscal Year End and Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Brendan Hawkins. Please go ahead.

Thank you and good afternoon, everyone. With us today with prepared remarks are CV Sciences Chief Executive Officer Joseph Dowland and your GRASR Chief Financial Officer. After the prepared remarks, we'll take questions from the analyst community. I'd like to remind you that during this call, management's prepared remarks may contain forward-looking statements. These forward-looking statements are subject to risk 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 a forward-looking statement. Finally, please note that in 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 the CD Sciences press release from earlier this afternoon for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. As I mentioned, this afternoon 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 cbsciences.com. I would like to now turn the call over to CV Sciences Chief Executive Officer, Mr. Joseph Dowling. Joe?

Good afternoon, everyone. Thank you for joining our call. Earlier today, we issued a press release reporting our results for the fourth quarter and full year ended December 31, 2025. Throughout 2025, we made meaningful progress against our top priorities, improving margins, reducing our cost structure, and moving the business towards sustainable profitability. We are pleased with our fourth quarter and full-year performance, particularly given the challenging market and regulatory environment facing our industry. Despite these headwinds, we remain focused on our core objectives. scaling the business, driving continuous cost efficiency, and achieving profitability and positive cash flow. At the same time, we are advancing our transitions into a global health and wellness company, reaching several important milestones during the year. For the full year, we generated revenue of $13.8 million compared to $15.7 million for 2024. While revenue declined year over year, we believe our 2025 revenue performance reflects resilience in a difficult operating environment. Our gross margin improved significantly to 49%, up from 45.6% in 2024. Operating expenses were reduced by 17.2% to $7.7 million compared to $9.4 million in the prior year, reflecting our ongoing focus on cost discipline. Adjusted EBITDA loss narrowed to $0.3 million for 2025 compared to $0.8 million for 2024. We also generated positive adjusted EBITDA of 0.1 million for the fourth quarter of 2025, a meaningful improvement from prior periods. And we maintained our position as the number one selling hemp extract brand in the natural product retail sales channel and continue to gain market share according to SPNS, the leading provider of syndicated data and insights for the natural, organic, and specialty products industry. Our primary goal as a company is to grow profitably, and we recognize that achieving greater scale is critical to that objective. Our strategy is centered on three primary areas, product innovation, cost efficiency, and strategic M&A. Let me take a moment to walk through each of these strategic areas, starting with product innovation. We are making strong progress in diversifying and expanding our product portfolio. We recently launched our new Plus Health branded product line, a new line of cannabinoid-free supplements designed to support optimized health, performance, and vitality. The initial lineup includes clarity for cognitive support, peace for occasional stress, and reshape for metabolic health. This platform allows us to leverage our existing infrastructure while diversifying beyond cannabinoid-based products. Early feedback from consumers and retailers has been very encouraging. In the first quarter of 2026, we launched our new Plus Health Empower product, an innovative functional nutrition product that combines performance and wellness in a single convenient format with 20 grams of protein, five grams of creatine, and active probiotics. Empower supports strength, recovery, mental clarity, and gut health. We believe this product positions us well across a broad consumer base, including a growing segment of women increasingly interested in creatine for energy performance and healthy aging. Looking ahead, we plan to launch multiple non-cannabinoid products throughout 2026. These products are expected to drive organic growth, leverage our existing infrastructure, and help offset revenue pressure from regulatory challenges. We also plan to expand into select international markets through our European subsidiary, Cultured Foods. Cultured Foods remains a key component of our innovation strategy. In addition to being a manufacturer and distributor, it provides us with in-region production capabilities for European and global markets. we expect cultured foods to play an increasing role in new product launches in 2026. In our pet category, we continue to build momentum with our PlusCBD pet line. Our hip and joint health and calming care chews remain strong performers and are supported by extensive research, including validation from a landmark safety study backed by the National Animal Supplement Council. We are also continuing to expand our relationship with Chewy, strengthening our presence in the fast-growing online pet category. Turning to cost efficiency. We made substantial progress on cost efficiency in 2025. Operating expenses declined by 17.2% and we improve logistics and fulfillment efficiency, reducing shipping costs. We continue to identify additional opportunities to streamline operations. Our acquisition of elevated soft gels is a key driver of future margin expansion. By bringing certain manufacturing capabilities in-house, we can reduce costs, improve speed to market, and gain greater control over production. Combined with selective outsourcing through cultured foods, we are building a more flexible and efficient supply chain. Importantly, we are now approaching cash flow breakeven, even in a constrained revenue environment. Our third focus area is M&A, which remains an important part of our growth strategy. Over the past two years, we completed the acquisitions of cultured foods and elevated soft gels, both of which are contributing to scale, efficiency, and diversification. We continue to evaluate additional opportunities that offer strong strategic and financial alignment, and we remain actively engaged with our advisors. On the regulatory front, The regulatory environment remains complex. We continue to work closely with advocacy organizations to support the development of clear, science-based regulations. The lack of consistent federal guidance continues to create challenges, including increased costs, and has also led to uneven state regulations. The November 2025 Appropriations Act could have mixed implications for the industry. We believe it could serve as a catalyst for long overdue regulatory clarity. If unchanged, this act will require us to pivot away from certain products which we are prepared to do if needed. We are encouraged by recent federal developments supporting increased research and potential rescheduling of cannabis as well as efforts to modernize the regulatory framework for hemp-derived products. We are actively monitoring these developments and positioning the company to capitalize on emerging opportunities. A very positive regulatory development came on December 18, 2025, when President Trump signed an executive order titled increasing medical marijuana and cannabidiol research, which directed the Attorney General to take all necessary steps to complete the rulemaking process to reschedule marijuana from Schedule 1 to Schedule 3 of the CSA in the most expeditious manner permitted by federal law. The executive order also directed the administration to work with Congress to update the statutory definition of final hemp-derived cannabinoid products to allow continued access to appropriate full spectrum CBD products while restricting products that pose serious health risks. Additionally, the executive order directed the Secretary of Health and Human Services, the Commissioner of Food and Drugs, the Administrator of the Centers for Medicare and Medicaid Services, and the Director of National Institutes of Health to develop research methods and models utilizing real-world evidence to improve access to hemp-derived cannabinoid products. CMS administrator Dr. Mehmet Oz announced that the Center of Medicare and Medicaid Innovation was planning a model that would allow Medicare beneficiaries to receive hemp-derived CBD products at no charge if recommended by their physicians. with coverage of up to $500 in hemp-derived products on an annual basis, potentially beginning as early as April 26. The details of this program are beginning to be made public, and we are pursuing this opportunity aggressively. In summary, while industry challenges remain, we are positioning the company to diversify, scale, and grow profitably. We have streamlined our operations, improved cost efficiency, and built a lean organization capable of leveraging our strengths as we move forward. With that, I will turn the call over to York.