CV Sciences, Inc. has acquired Elevated Softgels, LLC, a manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry.
Elevated Softgels has operational flexibility with low to large minimum order quantity (MOQ) production runs, allowing for efficient use of capital and the ability to increase speed to market for new product development. Elevated Softgels is GMP-certified and FDA-registered.
The acquisition was structured as an equity purchase, where CV Sciences will operate Elevated Softgels as its wholly-owned subsidiary.
"We are thrilled that Elevated Softgels and its employees are joining CV Sciences as another milestone in our transition to a global health and wellness company,” said CV Sciences CEO Joseph Dowling. “The acquisition synergies should allow us to leverage our key assets including our relationships with other hemp and supplement companies to drive long-term growth and shareholder value. Elevated Softgels is a stand-alone profitable business. Our immediate plan is to increase the existing business of Elevated Softgels to further leverage its existing capacity. In addition, we are planning to in-source the manufacturing of select +PlusCBD branded products, providing an opportunity for meaningful cost savings. During 2023, sales of softgels and tinctures combined represented approximately 50% of our total business. The ability of Elevated Softgels to provide low-MOQ production runs, allows us to provide flexibility, and cost-efficient service to our clients and to our internal production needs."
The total consideration for the acquisition of Elevated Softgels is up to $1 million, consisting of a cash payment made at the closing of $100,000, the delivery at the closing of 17,422,181 shares of CV Sciences' common stock, having a value of $700,000 as priced at the 30 day volume weighted average price of CV Sciences' common stock, and the potential payment of cash and stock up to $200,000 in the form of an earn-out if the business of Elevated Softgels meets certain performance thresholds during the 12-month period following the closing. The closing payment was subject to adjustment based on certain working capital calculations.
