Please refer to CV Sciences' press release from just a few minutes ago for a full reconciliation of its non GAAP performance measures to the most comparable GAAP financial measures. [indiscernible] 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 cvsciences.com. I would like to now turn the call over to CV Sciences' Chief Executive Officer, Mr. Joseph Dowling. Joe?

Thank you, Brendan. Good afternoon, everyone. Thank you for joining our call.

This afternoon, we issued a press release reporting results for our first quarter ended March 31, 2025. We are pleased with our progress as we move closer to profitability and positive cash flow. Significant highlights during Q1 included we generated revenue of 3,600,000.0 slightly down from $3,900,000 for the fourth quarter to 2024. Our Q1 gross margin of 46% represents our continued ability to achieve a healthy gross margin. We continue to maintain our number one position in the natural product retail channel and we have also increased our market share in this important sales channel as well. During q one, we began to more fully adapt our product innovation efforts to include more non cannabinoid products to more fully diversify our product offering. We also continue to execute on our M and A strategy and are beginning to realize some of the initial benefit from our acquisition of elevated softgels especially with the in source manufacturing of many of our products previously produced by contract manufacturers.

I would like to start with a few comments on the goals execution and implementation of our M and A strategy. We have several goals with our m and a strategy. Primarily to increase our scale with greater revenue, but also to increase our cost efficiency. We are looking for opportunities to increase revenue revenue profitably with transactions that can leverage our assets including our brands, people, process, and our distribution. We are also looking at transactions that can increase our cost efficiency including assets that allow us to further in source manufacturing even though we have historically outsourced the majority of our manufacturing. We believe the timing is right for us to have more control over the manufacturing side of the supply chain. Our most recent transaction of elevated softgels provides us with an immediate opportunity to in source manufacturing of a significant number of our products. We expect to see improved cost efficiency and gross margin in the second half of twenty twenty five. Directly from the integration of elevated softgels. We are also expanding the contract manufacturing capability of the elevated facility and are investing in equipment and people to achieve this goal. Our investment in cultured foods achieved an exciting milestone during [indiscernible] with The US launch of Lunar Fox an all new line of plant based foods offering sustainable vegetarian friendly nutrition alternatives for our customers.

Lunar Fox products are a % natural gluten free, and respond to growing demand for vegan products a fast growing category driven by consumers seeking alternative healthy conscious products. Lunar Fox products are now available at select retailers and from the company's new website at lunarfoxfoods.com. Next, on product development. We are adapting our innovation and new product development in several ways. First, we will continue to develop new cannabinoid products that adapt to the changing regulatory environment but then also consider exciting new formats and formulations. A recent example is the recent launch of our new Fizz effervescent tablets launched in Q1 under our [indiscernible] This exciting new Fizz tablet format can be added to water or seltzer allowing consumers to enjoy the benefits of an uplifting fizz with a zesty lemon flavor. We are excited to have our new fizz tablet join the Aura collection which also includes our Illuminate and Serene gummy products. Alongside our legacy and new cannabinoid products, we will be emphasizing and developing new non cannabinoid products that will be positioned under our Plus Health brand.

We believe there are numerous innovative formats and formulations to develop for both human and pet consumption and are hopeful to launch several new products during the balance of 2025. We are adapting to a more diversified product offering which will include both cannabinoid and non cannabinoid products. We will continue to innovate and launch new products that are responsive to our customers and their specific needs states including for anxiety, pain, sleep, and other disorders. We will continue to develop products with strong science that support our product claims always keeping in mind the trust and loyalty of our customers. We believe that adapting our product innovation and development will not only meet consumer demand, but will also mitigate some of the regulatory challenges to the hemp industry. However, let me be clear. We remain bullish on The US hemp and CBD category. The US CBD market is still a huge market segment. According to the Bright Hill Group, the leading CBD market research firm the CBD market alone in 2024 generated 4,400,000,000.0 in sales. Brightfield estimates that the top 20 CBD companies represent approximately 20% of the total market in 2024. In addition, Brightfield estimates that approximately 1,500 DVD companies share approximately 2,000,000,000 of the total market.

Just a few years ago, Brightfield estimated that more than 3,000 CBD companies were operating in The United States. That number has been cut in half in just a few years. We believe that further market contraction represents an opportunity for CV Sciences to take market share from smaller CBD companies as the market shrinks the number of competing brands. Now, moving on other operational objectives achieved during Q1 included, Our cost efficiency efforts continue to result in a lower overall company cost structure, with efficiency gains and cash savings in numerous areas, including SG and A. Our steady and healthy gross margin of 46% in Q1 demonstrates our commitment to continuous improvement in operating a cost efficient company. On the revenue side, our goal is to increase the scale of our company through organic growth and through our m and a strategy as I previously discussed. Brand contraction continues to help us take market share in B2B channels as retailers continue to remove slow moving brands. In the natural product retail channel, we are still the number one selling brand and continue to see market share concentration of the top four brands in the 60% range. Customers are sticking with or changing to brands that they know and trust And we continue to be at the top of the list in the natural product retail channel.

Our B2C sales channel continues with steady improvement. We are seeing good results in all critical B2C KPIs including a focus on the recurring revenue from increased subscription orders. We believe that further brand contraction increased education, and consumer trust in our company and strong brand will all help grow the b to c channel. On regulatory matters, we recognize that numerous states have passed legislation that are unfavorable to the CBD category. We will continue to be involved in lobbying efforts to advocate for hemp based products including to push congress and state governments to make progress on sensible regulations. At the federal level, we would like to see rescheduling of cannabis to schedule three status and would also like to see banking reform. Both of these reforms would help the hemp industry. At the state level, we will continue to fight for a sensible and consistent framework in as many states as possible. A sensible framework will help advance our industry and would create an environment where quality companies and products are trusted politically and by consumers to produce safe and quality products in a responsible way. But we are not standing still We recognize the regulatory challenge and are adapting to this reality.

We are positioning ourselves to compete in the current environment in spite of these regulatory challenges. We are doing this in numerous ways including by streamlining our operations and increasing our cost efficiency to align the company for growth and profitability. We have made great progress in structuring a lean, cost efficient organization that is positioned to leverage our company's strengths and assets. We will continue to use our strong operating platform to utilize an M and A strategy to acquire assets that add revenue increase our scale and provide operating leverage and efficiency. We will continue to evaluate inbound and outbound M and A opportunities that support our strategic plan of achieving these goals. We are making good progress. Let me pause now and I will turn the call over to Jorg.

Thank you, Joe. During the first quarter of twenty twenty five, we made solid improvements on our cost savings initiatives. We generated EBITDA of 131,000 and an adjusted EBITDA loss of $311,000 We maintain strong gross margins of 46% and continued to reduce our operating expenses. Over the last several quarters, we have rightsized our cost structure without significant productivity losses, and we are well positioned for operating leverage as we continue to increase revenues and add additional businesses to our platform. All with the main goal of creating shareholder value. Our first quarter revenue came in at 3,600,000.0 compared to $3,900,000 in the fourth quarter of twenty twenty four and compared to 4,000,000 in the first quarter of twenty twenty four. The sequential revenue decline is mostly due to lower unit sales by 8% in the first quarter of twenty twenty five compared to the fourth quarter of 'twenty four. Our lower unit sales are mostly driven by increased state regulations, and the out of stock impact of certain of our key products. We were temporarily out of stock with certain of our products because of manufacturing delays from two of our CMOs. We have mostly worked through these challenges with our manufacturing partners at this point.

However, this further supports our strategy to further in source manufacturing of our products. Our new product development continues to be successful, and our team is doing an effective job on executing on our go to market strategy. New products introduced since the beginning of twenty twenty three represented 35% of our revenue for the first quarter twenty twenty five. Which shows the importance of new product innovation. The overall CVD market continues to be very fragmented and competitive. We don't see this changing anytime soon, but we see further brand consolidation and brand contraction which are opportunities to further increase our market share and revenue base. Our direct to consumer business continues to perform well and associated sales represented 44.8% of total revenue in the first quarter twenty twenty five. Compared to 44.2% a year earlier and 45.7% in the fourth quarter of twenty twenty four. On a sequential basis, our B2C revenue declined by 9% mostly due to seasonality around the holiday season for this channel. Gross margin for the first quarter of twenty twenty five was 46%. A nice increase from our gross margin of 43.2% in the fourth quarter of twenty twenty four and compared to 46.3% for the first quarter of twenty twenty four.

Our sequential improvement in gross margin in the first quarter of twenty twenty five compared to the fourth quarter of twenty twenty four is mostly due to additional cost savings, changes in our product mix, and margin improvement of our recent acquisitions. We are also working on further cost efficiencies, especially on insourcing some of our key products. As Joe mentioned, we made very good progress on the insourcing of our software gel and tincture SKUs during 2025. We expect that we will recognize associated costs savings in our P and L in the second half of twenty twenty five when we begin selling our in house manufactured products. SG and A expense for the first quarter of was 2,100,000.0 down from $2,400,000 a year ago. Representing a decrease of 12%. SG and A expense also decreased on a sequential basis by 7% from $2,300,000 in the fourth quarter of twenty twenty four. The decrease in SG and A expense is mostly due to lower digital marketing expense, and lower professional and legal fees. For the first quarter twenty twenty four, we generated an operating income of $11,000 compared to an operating loss of $600,000 for the first quarter and the fourth quarter of twenty twenty four.

The improvement was mostly due to the benefit of the reversal of accrued payroll taxes of $500,000 associated with the RSU release to our founder in 2019. And other cost savings initiatives. Our adjusted EBITDA loss for the first quarter was 300,000.0 improved from $400,000 in the fourth quarter of twenty twenty four. On a GAAP basis, we reported a first quarter twenty twenty five net loss of 100,000.0 compared to a net loss of $700,000 in the fourth quarter of twenty twenty four.

Now, let me turn to our balance sheet. We ended the first quarter of twenty twenty five with $800,000 of cash compared to 500,000.0 at the end of fiscal twenty twenty four. In February 2025, we entered into a financing agreement with an institutional investor and brought in $1,200,000 of additional cash to help us with our growth strategy. We also repaid our prior note payable of Streeterville and recognized the gain on early debt extinguishment of $37,500 During the first quarter twenty twenty five, we were close to our goal of generating positive operating cash and used cash from operations of 100,000.0 improved from a cash usage of 200,000.0 in the fourth quarter of twenty twenty four and 500,000.0 in the first quarter of twenty twenty four. We continue to manage our overall cash position with improved cash collections on our outstanding AR and daily management of our inventory and vendor payables. We continue to adjust our cost structure to be in line with our expected revenue with the overarching goal of generating positive operating cash on a continuous basis. We anticipate some modest cash usage in the very near future until we recognize the synergies of our acquisitions and generate positive cash flow in the second half of twenty twenty five.

Our inventory was 4,400,000.0 at the end of the first quarter of twenty twenty five, compared to $4,900,000 at year end as we continue to focus on efficient cash management and converting our raw material into cash.

Our raw materials mostly consist of hemp oil which we previously purchased, and continue to convert into finished products. We have fully consolidated the results Cultured Foods, and elevated softgels into our financials, and we anticipate realizing associated synergies of these two acquisitions in the second half of twenty twenty five. With our improved balance sheet and our reduced cost structure in place, we have the financial flexibility to continue executing our growth plan and look forward to improving trends going forward. Now, I'll turn the call back over to Joe.

Your thank you. We are working diligently to align our company to the scale of the CBD industry and we are actively adapting our business model in several ways.

First, to increase revenue, through non cannabinoid innovation that will diversify our product offering and allow for new revenue and increased distribution.

Second, as I discussed earlier, have begun the process of insourcing manufacturing of many of our products during the second half of twenty twenty five we expect to increase our gross margin through our in source manufacturing strategy, which will lead to greater cost efficiency and profitability.

And third, our M and A strategy that is focused on both large and small complementary consumer product companies that will add revenue and allow for operating synergy to increase sales and profitability. We also continue to look at opportunities to further in source manufacturing to achieve greater cost efficiency and gross margin. We believe that CV Sciences is a strong consumer product platform. And we know that we have significant room to increase our operating leverage through greater scale leading to a company that can achieve strong profitability and shareholder value. We are optimistic about the long term opportunity for our company to remain a competitive force in the health and wellness industry. We continue to make tough decisions to ensure that we are focused on adding long term shareholder value. We are an experienced dedicated group of employees, that are focused on making the best innovative products that meet the needs of our customers at value.

Now, I will turn the call back over to the operator for any calls from the analyst community.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press 1 on your telephone keypad. You may may press 2 if you like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hands before pressing the star keys. One moment please while we poll for questions. There are no questions from the analyst community at this time. Like to turn the call back over to Joseph Dowling for closing comments.

Thank you.

I would like to thank everyone for being a supporter of CV Sciences and our great products. We look forward to speaking again soon. Thank you for your time this afternoon. This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.