SEATTLE, March 01, 2023 (GLOBE NEWSWIRE) -- Pervasip Corp. (OTCPK: PVSP) (“Pervasip” or the “Company”), a developer of companies and technologies in high value emerging markets, today announced the filing of its unaudited financial statements for its fiscal years ended November 30, 2022, and November 30, 2021.
Key Highlights
- Cultivation yields increased by 31% across the Company’s four independent cultivation facilities due to infrastructure upgrades and operational improvements implemented during the year.
- Wholesale sales increased in volume by 65.1% with an additional margin capture of 31.6% based on management’s margin improvement measures, while retail sales decreased due to market price pressure resulting in reduced sales volume by 7.3% and $15.8 million in overall sales for the year.
- Gross revenues were comprised of retail sales that decreased by 6.8% with 37.5% in gross margin, and wholesale sales that increased by 65.1% with materially lower margins depressing aggregate gross profit for the year.
- Gross profit for the year was $3.5 million, including the impact of one-time inventory and other adjustments. However, management expects gross profit and gross margin to increase to more than 40% of sales as new brands will shift sales volume from wholesale to retail at higher margins and further rationalize in 2023 due to ongoing margin improvement measures.
- Sales, general and administrative expenses decreased by 12.6% to $5.3 million, resulting in an operating loss of $2.9 million, and about $1.0 million in EBITDA.
- The Company closed a $1.5 million non-dilutive credit facility to enhance working capital and weather 2022's priced compressed market conditions in WA State.
“We increased yields and margins during an otherwise challenging year as the Washington market experienced a painful but necessary market correction,” said German Burtscher, Pervasip’s President and Chief Executive Officer. “Retail sales dropped materially since the Pandemic high in August of 2021, and a substantial number of producer/processors have closed their doors. It’s a testament to our team and the strength of our premier Artizen and other brands that we weathered that storm. Prices are expected to stabilize over the coming months as the market transitions to increased consolidation to enable additional efficiencies. We have been waiting for that transition and we are positioning ourselves specifically to take advantage of local acquisitions and similar growth opportunities in other states.”
Pervasip previously announced its plan to complete a spin-out and distribution of its Artizen subsidiary to Pervasip’s shareholders later this year. That transaction is intended to position Artizen to secure long-term acquisition and other growth financing on terms that are attractive and accretive to the Company’s shareholders. Pervasip will provide additional disclosure in that regard later this week.
Burtscher concluded, “Current cannabis operators trade at a forward-looking multiple of about 2 to 4 times sales. We accordingly believe that we will justify a value exceeding $50 million when we complete the spin-out, and that growth to more than five times that amount is achievable with the right financing to support our targeted growth, both in and out of Washington state.”
Pervasip Corporation
Pervasip Corp., a developer of companies and technologies in high value emerging markets, owns Artizen Corporation and its subsidiary, Zen Asset Management LLC, a diversified asset management company founded to acquire, develop, and support companies and technologies in the cannabis industry. ZAM’s existing clients operate four licensed cannabis cultivation and one processing facility in Washington. Most of the biomass produced by these independent cultivators has been sold historically under the Artizen™ brand, including all-time top selling products in flower in Washington state. Additional information on Artizen-branded products is available online at www.artizencannabis.com. Pervasip additionally owns 5% of KRTL Biotech, Inc., a developer of biotechnologies with a focus on pharmaceutical applications of cannabinol and psilocybin. Additional information on KRTL is available online at www.krtlbiotech.com. Additional information on Pervasip can be found at www.pervasip.net
Forward-Looking Statements
This news release contains statements and information that, to the extent that they are not historical fact, may constitute “forward-looking information” within the meaning of applicable securities legislation. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives, or economic performance, or the assumption underlying any of the foregoing. In some cases, forward-looking statements can be identified by terms such as may, would, could, will, likely, except, anticipate, believe, intend, plan, forecast, project, estimate, outlook, or the negative thereof or other similar expressions concerning matters that are not historical facts. Examples of such statements include, but are not limited to, statements with respect to the objectives and business plans of the Company; ability to realize benefits from its recent corporate appointments; ability to retain its key personnel; the intention to grow the Company’s business and operations; the competitive conditions of the industries in which the Company operates; and laws and any amendments thereto applicable to the Company. Forward-looking information is based on the assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. The material factors and assumptions used to develop the forward-looking information contained in this news release include, but are not limited to, key personnel and qualified employees continuing their involvement with the Company; and the Company’s ability to secure 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 forward-looking information, including, without limitation, risks relating to the future business plans of the Company; risks that the Company will not be able to retain its key personnel; risks that the Company will not be able to secure financing on reasonable terms or at all, as well as all of the other risks as described in the Company’s periodic disclosure statements. Accordingly, readers should not place undue reliance on any such forward-looking information. Further, any forward-looking information speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company’s management to predict all of such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The Company does not undertake any obligation to update any forward-looking information to reflect information or events after the date on which it is made or to reflect the occurrence of unanticipated events, except as required by law, including securities laws.
For further information, please contact:
T: 206-590-2408, Extension 102
E: info@pervasip.net
