b'Update on New Cases Filed in 2020C.V. Sciences, Inc.:On August 20, 2018, activist short-seller stockholder Berry, derivatively on behalf of C.V. Sciences,Citron Research published a report that claimed the company failed to disclose to investors that the patent Inc. v. Dowling et al., Case No. 3:20-cv-1072for its chewing gum product had been rejected by the (S.D. Cal. June 11, 2020) USPTO. The companys stock price subsequently fell 63% from $9.20 to $3.40. CV Sciences, Inc. (CV Sciences) is a lifeOn April 22, 2020, plaintiff made a written demand sciences company specializing in CBD researchon the companys board of directors to investigate and the development and sale of CBD products.and take legal action, if necessary, against those The companys pharmaceutical division, which focusesresponsible for the damages the company suffered on the development of synthetically-formulatedas a result of the report. In response to the demand, cannabidiol-based medicine, began developing athe board notified plaintiff that they did not plan to CBD chewing gum product that was to be used astake any further action.a treatment for smokeless tobacco use and addiction. The company made claims that the global marketOn June 11, 2020, plaintiff brought a shareholder for smokeless tobacco addiction was estimated atderivative action against defendants for breaches over $5 billion. of fiduciary duties, waste of corporate assets, In May 2016, the company filed a patent application forunjust enrichment, and violations of Sections 10(b) the product with the U.S. Patent and Trademark Officeand 21D of the Exchange Act. Plaintiffs allegations were (USPTO), in addition to a continuing patent applicationsubstantially similar to the claims brought by plaintiffs in February 2017. in Ina v. CV Sciences, Inc. et al, No. 18-CV-01602 (D. Nev., Aug, 24, 2018), which survived a motion to In April 2017, the USPTO made a non-final rejectiondismiss. The parties in that case are currently engaging of the patent through letter correspondence andin discovery and plaintiffs recently filed a second then a final rejection decision in December 2017.amended complaint. In June 2017, the company issued a press releaseDefendants moved to dismiss the complaint in about its plan for the chewing gum product in whichAugust 2020 and the parties have completed briefing. the founder and then-CEO stated that the productDefendants also moved to stay the action until the had a favorable development roadmap. In theU.S. District Court for the District of Nevada action is companys Form 10-Q and Form 10-K filings betweenresolved. The parties are awaiting the courts decision.the second quarter of 2017 and the first quarter of 2018, the company continued to describe its chewing gum product as its lead drug candidate based onAurora Cannabis, Inc.: proprietary formulations, processes and technologyLawless v. Aurora Cannabis, Inc., Case No. that [the company] believe[s] are patent-protectable and noted that the company plan[s] to vigorously1:20-cv-13819 (D.N.J. Oct. 2, 2020)pursue patent protection. The company continued to make similar statements through August 1, 2018,Aurora Cannabis, Inc. (Aurora) produces and when the company noted in a press release that itsdistributes medical cannabis products worldwide drug development program is making steady progressfrom its headquarters in Canada. Following the 2018 in advancing [its] proprietary lead drug candidate legalization of recreational cannabis in Canada, CVSI-007which addresses the multibillion dollarAurora made a series of acquisitions tosmokeless tobacco use and addiction market.16'