Pervasip Announces 2nd Quarter Financial Results
SEATTLE, July 18 2022 (GLOBE NEWSWIRE) — Pervasip Corp. (OTCPK: PVSP) (“Pervasip” or the “Company”), a developer of high-value emerging markets businesses and technologies, today announced the filing of its unaudited financial statements for its 2n/a Quarter ended May 31, 2022.
The West Coast cannabis market has experienced a dramatic retraction following the pandemic and has created a challenging environment for all growers, processors and retailers. With a nearly 18% contraction in retail revenue, massive oversupply and rising costs, the industry has rushed into a perfect storm.
“Our system-wide restructuring launched in late 2021, the strength of the Artizen flower brand supported by our amazing Independent Growers, and several aggressive new initiatives have put us in a much better position than most of our competitors. The second quarter financial statements reflect the economic realities of increased spending as well as a significant investment in an aggressive market drive plan. Recognizing that economic headwinds were extremely strong and competitors were struggling, in March we decided on an aggressive strategy to seek market share and in late April reviewed the classic Artizen brand at a lower price and implemented an aggressive sales and marketing plan,” said German Burtscher, CEO and President of Pervasip. “With strong excess inventory in the first quarter, the company is using wholesale channels to generate the cash needed to pursue this strategy, albeit at extremely low margins, while enabling flow-positive operations. This is when established brands like Artizen show their strength and, with aggressive and creative responses, take advantage of their brand image to gain additional market share. market in 2017/18.”
The company is adding value-added products to its portfolio and launching a new craft brand in September. Over the past 6 months, the company has also implemented its CBD strategy in Korea, launched Artizen Wellness, a global initiative, and added new product lines that are immediately generating revenue and are expected to reach $10-12 million in revenue. annualized sales by the end of the year, with $2.5 million in annualized revenue already achieved for July 2022.
With additional new product lines coming online over the next 3-4 months and spending restructuring continuing, the company is poised for a 3rd and 4e quarter with annualized revenue reaching a conservative $21 million.
“We will also pursue additional restructuring efforts to enhance shareholder value with respect to our capital structure,” said German Burtscher. “We will report on this and provide a detailed 24-month roadmap for the business in the coming weeks.”
Second quarter 2022 financial results
With a general market contraction of 18% and after repricing the Artizen brand at a lower price range and increasing inventory wholesale volume to generate needed cash, Q2 revenue was lower than Q2 2021 Adjusted inventory added COG expenses and the company also elected to revalue some inventory which added an additional $225,000 in COG.
|Q2 21/22||Q2 20/21|
|Unadjusted EBIDTA COG||$||2,855,647||78||%||$||2,922,695||67||%|
Net loss attributable to Pervasip Corp for the period ended May 31, 2022 increased to ($433,279) from $128,915 for the period ended May 31, 2021
- Responding to difficult cannabis market conditions, the company chose an aggressive strategy to capture market share, projecting several competitors to exit the market and Artizen adding shelf space.
- Using excess inventory from rising yields, the company generates needed cash through low-cost wholesale channels
- Additionally, the company added a new product vertical through a strategic partnership for the rollout of $12 million annual vaping and concentrate verticals with the first brands launching in July 2022.
- Announced a strategic partnership with one of Canada’s best-known cannabis companies, Freedom Cannabis, and is in the process of licensing the Artizen brand for rollout in all major Canadian provinces
- Launch of Artizen Wellness, a THC-free CBD/terpene-focused wellness line that will disrupt the global wellness market
- The Company is also pursuing additional operational, financial and legal restructuring to clean up and further strengthen its balance sheet.
- A reported default on a new lease is being processed and the final arrangement will reflect new market conditions
Pervasip Corp., a developer of high-value emerging markets businesses and technologies, owns Artizen Corporation and its subsidiary, Zen Asset Management LLC, a diversified asset management firm founded to acquire, grow and support businesses and technologies in the cannabis industry. Current ZAM customers operate four licensed cannabis cultivation facilities and one processing facility in Washington. Most of the biomass produced by these independent growers has historically been sold under the Artizen™ brand, including Washington State’s all-time best-selling blooming products. Additional information about Artizen branded products is available online at www.artizencannabis.com. Pervasip also owns 5% of KRTL Biotech, Inc., a biotechnology developer focused on the pharmaceutical applications of cannabinol and psilocybin. Additional information about KRTL is available online at www.krtlbiotech.com. Additional information about Pervasip is available at www.pervasip.net.
This press release contains statements and information which, to the extent that they are not historical facts, may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information may include financial and other projections, as well as statements regarding future economic plans, objectives or performance, or assumptions underlying any of the foregoing. In some instances, forward-looking statements may be identified by terms such as may, would have, could, will be, likely, except, to anticipate, to believe, intention, to plan, provide, project, estimate, outlook, or its negative form or other similar expressions relating to matters which are not historical facts. Examples of such statements include, but are not limited to, statements regarding the Company’s objectives and business plans; ability to capitalize on recent appointments within the company; ability to retain key personnel; the intention to develop the business and operations of the Company; the competitive conditions of the industries in which the Company operates; and the laws and their amendments applicable to the Company. Forward-looking information is based on management’s assumptions, estimates, analyzes and opinions made in light of its experience and perception of trends, current conditions and anticipated developments, as well as other factors that the management believes to be relevant and reasonable in the circumstances as of the date such statements are made, but which may prove to be inaccurate. Important factors and assumptions used to develop the forward-looking information contained in this press release include, but are not limited to, key personnel and qualified employees continuing their involvement with the company; and the Company’s ability to obtain financing on reasonable terms. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the information. forward-looking, including, without limitation, risks related to the Company’s future business plans; the risks that the Company may not be able to retain its key personnel; the risks that the Company may not be able to obtain financing on reasonable terms or at all, and any other risks described in the Company’s periodic statements. Accordingly, readers should not place undue reliance on such forward-looking information. Further, any forward-looking information speaks only as of the date such statement is made. New factors appear from time to time and it is not possible for the management of the Company to foresee all of these factors and to assess in advance the impact of each of these factors on the activities of the Company or the the extent to which any factor, or combination of factors, could cause actual results to differ materially from those contained in the forward-looking information. The Company undertakes no obligation to update forward-looking information to reflect information or events after the date on which it is made or to reflect the occurrence of unforeseen events, except as required by law, including securities laws.
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