HENDERSON, Nev. , Oct. 15, 2021 /PRNewswire/ -- EVIO, Inc. (OTC: EVIO) is pleased to provide this update to shareholders. This update includes a summary of the financial results for fiscal year 2020, notification of a withdrawal of LOI, discussion of the turnaround efforts to date, and announcement of new initiatives.
On September 23, 2021 the company released its financial results for its fiscal year 2020.
EVIO, Inc. gross margin improved to $148,927 in 2020 from ($936,040) in 2019 while revenues decreased 5% to $3.6 million from $3.8 million. Improved margins are primarily due consolidation of labs to locations in Oregon, California, and Canada. Revenue increased in Oregon but was offset by reduction in licensing revenue, loss of revenue due to COVID shutdowns and cost of relocation of the Berkeley laboratory.
The company had 23% lower cost of testing services and 30% reduction in selling, general and administrative costs year over year. Lower cost of testing services is due to the increased scale at fewer labs. SG&A expense reduction is largely due to lower corporate overhead by maintaining fewer locations, reducing the size of its executive team, and shifting to outsourced finance and accounting staff.
"Although revenue was down slightly in 2020, lab consolidation and reduced overhead put the remaining operating labs into a stronger financial position", said Lori Glauser, CEO. "EVIO's goal for 2021 has been to continue to reduce costs, improve its debt position, and evaluate new business opportunities to diversify its portfolio".
Continued cost reductions include reduction of the executive team to just a CEO and CSO with outsourced financial and accounting staff; transition the executive team from its office in Henderson, NV to remote work, and restructuring of compensation plans for certain sales and administrative personnel.
Since the end of 2020, the company has retired substantial liabilities, including $1.8 million in debt and lease liabilities from the Massachusetts, Medford, and Humboldt locations.
Convertible note holders are also reducing debt by converting their shares. Approximately, $1.8 million of the outstanding $3.6 million in convertible notes have been settled.
Withdrawal of LOI with Leading Edge Pharms
On July 12, 2021, the Company announced it had engaged in a LOI with Leading Edge Pharms, Inc. ("LEP"), a formulator of topical CBD products, to merge the two companies together.
Upon further review, both companies have mutually agreed to terminate the LOI and withdraw from the process of a potential merger. The rationale behind the withdrawal is regulatory and market uncertainty as it pertains to the combined company's ability to both produce and test CBD products. "While Leading Edge Pharms has a robust suite of CBD products and proprietary formulations, such an acquisition could result in a conflict of interest for EVIO, as the company would both test and sell products. That presents a possible conflict with both regulators, and our labs growing base of clients that produce similar products".
New Lab Initiatives
Recently, Health Canada has allowed accessing psychedelics as controlled substances for special cases, exempted persons, and clinical trials. In September, 2021, Keystone Labs submitted its application for a Controlled Substance License. This license would allow Keystone to perform safety testing of psychedelic substances including psilocybin, MDMA, and ketamine used for certain new applications including clinical trials.
Also in November, 2020, voters passed Oregon Ballot Measure 109, making Oregon the first state to both decriminalize psilocybin and also legalize it for therapeutic use. The program will be administered by the Oregon Health Authority, which plans to take applications in 2023 EVIO Labs Portland intends to be prepared to assist emerging producers and manufacturers in both testing, compliance consulting, and research & development.
EVIO Labs Portland also recently expanded its testing services to test to include novel cannabinoids including THC-O. This further expands the already robust list of cannabinoids tested that includes THCV, CBDV, and Delta 8 THC.
About EVIO, Inc.
EVIO, Inc. is a provider of analytical testing services for cannabis, hemp, and CBD products. EVIO maintains full-service, licensed and accredited laboratory operations in California, Oregon, and Canada. EVIO also provides clients with quality analytical R&D and consulting services to help them produce the best, compliant products. For more information, visit www.eviolabs.com.
Safe Harbor Statement
Any statements in this press release that are not statements of historical fact may be considered forward-looking statements pertaining to anticipated or projected plans, performance, and developments, as well as other statements relating to future operations and results. Words such as "may," "will," "expect," "believe," "anticipate," "estimate," "intends," "goal," "objective," "seek," "attempt," or variations of these or similar words, identify forward-looking statements. These forward-looking statements by their nature are estimates of future results only, and involve substantial risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, the Company's ability to complete product testing and launch product commercially, the acceptance of product in the marketplace, the uncertainty of the laws and regulations relating to cannabis, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed from time to time in Company reports available at www.sec.gov or www.eviolabs.com.
For Further Information, contact:
Lori Glauser, CEO
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SOURCE EVIO, Inc