Pervasip today announced 2nd Quarter Financials
SEATTLE, July 18, 2022 (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 2nd Quarter ended May 31, 2022.
The cannabis market on the Westcoast has seen a dramatic post pandemic retraction and created a challenging environment for all producer, processors and retailers. With an almost 18% contraction in retail revenues, massive oversupply and increasing costs, the industry has rushed head on into a perfect storm.
“Our systemwide restructuring launched end of 2021, the strength of the Artizen flower brand supported by our amazing independent cultivators, and several aggressive new initiatives have allowed us to be in a much better position than most of our competitors. Q2 financials reflect economic realities from increased expenses as well as a material investment into an aggressive market capture plan. Recognizing the economic headwinds being extremely strong, and competitors struggling, we decided in March on an aggressive strategy to go after market share and repriced in late April the classic Artizen brand at a lower shelf price and implemented an aggressive sales and marketing plan,” says German Burtscher, Pervasip’s CEO & President. “With strong surplus inventory coming out of Q1 the company is using wholesale channels to generate the cash needed to pursue this strategy, albeit at extremely low margins, yet allowing for cashflow positive operations. This is the time when established brands like Artizen show their strength and with aggressive and creative responses take advantage of their brand equity to gain additional market share. In many ways, this is reminiscent of the market contraction during 2017/18.”
The Company is adding key value products to its portfolio and is launching a new craft brand in September. During the last 6 months, the Company also executed on its Korea CBD strategy, launched Artizen Wellness, a global initiative, and added new product lines that are immediately revenue producing and are projected to reach $10 – 12 million in annualized sales by the end of the year, with $2.5 million in annualized revenues already being realized for July 2022.
With additional new product lines coming online over the next 3 – 4 months and further restructuring of expenses, the Company is poised for a positive 3rd and 4th quarter with annualized revenues reaching a conservative $21 million.
“We will also pursue additional restructuring efforts to strengthen shareholder value as it relates to our capital structure,” says German Burtscher. “We will report on those and provide a detailed 24 months company roadmap within the next few weeks.”
Second Quarter 2022 Financial Results
With an 18% general market contraction, and after repricing the Artizen brand at a lower price range and increasing wholesale volume from inventory to generate needed cash, revenue for Q2 was lower compared to Q2 2021. Adjusted inventories added COGs expenses and the Company also chose to reprice certain inventories which added another $225,000 in COGs.
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
Key Highlights
Answering tough cannabis market conditions, the Company has chosen an aggressive strategy to capture market share, projecting several competitors to exit the market and Artizen adding shelf space
Utilizing surplus inventory from increased yields, the Company is generating needed cash through low priced wholesale channels
Additionally, the Company added a new product vertical via a strategic partnership for rollout of $12 million annual vape and concentrates vertical with first brands launched in July 2022
Announced a strategic partnership with one of Canada’s most well-known cannabis companies, Freedom Cannabis, and is in the process of licensing the Artizen brand for rollout in all major Canadian provinces
Launched Artizen Wellness, a non-THC, CBD/terpene focused wellness line that will disrupt the global wellness market
The Company is also pursuing additional operational, financial and legal restructuring to further clean and strengthen its balance sheet.
A reported default on a new lease agreement is being cured and the final arrangement will be reflective of new market conditions
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
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