On August 24, 2018, Plaintiff's law firm issued a press release announcing the law suit. According to the press release, on August 20, 2018, Citron Research published a report on twitter alleging that CV Sciences' management misrepresented the status of one of its key patents. According to Citron Research, the Company failed to disclose a rejected patent that the Company "continue[d] to hype." As a result of the Citron report, CV Sciences stock plunged over 63% in volatile trading.
The Complaint alleges that during the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose that its Patent #15/426,617: (1) received a non-final rejection from the USPTO on April 27, 2017; (2) a final rejection from the USPTO on December 14, 2017; and (3) as a result of the foregoing, Defendants' statements about CV Sciences' business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.