HENDERSON, Nev.--(BUSINESS WIRE)--Second paragraph, fourth sentence of release should read: Meanwhile, gross margins improved from -32% to -1% (instead of Meanwhile, gross margins improved from 32% to -1%).
The corrected release reads:
EVIO INC. PROVIDES CORPORATE UPDATE AND STATUS OF FINANCIALS, OPERATIONS AND GUIDANCE ON COMPANY OUTLOOK
EVIO Inc. (the “Company” or “EVIO”) (OTC:EVIO) provides an update on recent financial results, highlights current operations, and provides guidance on future growth.
In EVIO’s last shareholder update, the Company stated that it was shifting attention from aggressive market expansion to focus on profitability and optimizing current operations. This focal shift has been very successful, as recent filings demonstrate the company’s commitment to corporate initiatives. Revenue for the third quarter, ending in June 2019, increased by 84%, compared to the same period in 2018. Meanwhile, gross margins improved from -32% to -1%. To achieve these figures the company has increased sales across all of EVIO’s operating labs, developed and invested in the company’s strong team members, and optimized staffing levels. The company’s labs continue to meet client demand for accurate, consistent results, while also providing a fast turnaround time.
The Company’s plan for 2020 honors its prior commitments, making operational improvements to achieve a path towards profitability and to prepare the company for expansion into additional targeted markets as cannabis legalization continues its rapid progression across North America.
EVIO serves the entire state of Oregon from two locations: EVIO Labs Portland, the company-owned flagship location located in Tigard, and EVIO Labs Medford, located in the heart of Southern Oregon’s burgeoning outdoor cannabis and hemp farms. Both labs have seen considerable growth in recent months, particularly since both labs have achieved all needed accreditations. These include the addition of pesticide testing in Portland, and residual solvent testing in Medford. Both labs have attained ISO 17025 accreditation, which is now required by hemp producers and processors in many states outside of Oregon.
These accreditations make each lab a “one stop shop” for customers. Both labs now offer same-day potency testing and three-day full compliance testing services for a premium fee. The labs have also increased the amount of hemp testing they perform, as many clients have switched from small-scale cannabis production to large-scale hemp and CBD production; such clients continue to rely on EVIO for all their testing needs.
Since completing its audits with the California Bureau of Cannabis Control, the Berkeley Lab has been steadily increasing its testing throughput and has set a goal to provide services that exceed 10% of the state’s regulated cannabis market by the end of 2020. To achieve this goal, the Company plans to double its current instrumentation at the facility. Berkeley has also been designated as EVIO’s primary lab location for hemp and CBD product testing. The lab offers a broad range of testing services, including heavy metals testing and testing for E. coli and salmonella, which is of interest to hemp growers nationwide. EVIO Berkeley also works with multiple municipalities to assist with hemp sampling efforts within California.
In Canada, the Company’s subsidiary, Keystone Labs, has also experienced an increase in testing demand, following the much-anticipated legalization of cannabis edibles, concentrates, and topicals on October 17th, 2019. The uptick in demand for testing—to ensure the first generation of legal consumer packaged goods and products meet quality and safety measures—will be a positive catalyst for EVIO’s revenues and profitability. Analysts predict the edibles market is expected to add approximately $50 million to Canada’s testing market. Keystone Labs was recently recognized as the Top Testing Lab in the 2019 Canadian Cannabis Awards and stands poised to meet growing market demand.
Subject to the approval of the Massachusetts Cannabis Control Commission (“CCC”), the Company plans to form a partnership with Green Analytics MA. Pursuant to the proposed agreement and upon approval from the CCC, Green Analytics will acquire 49% of Viridis Analytics LLC, be responsible for its day-to-day operations, and will operate as Steep Hill MA. Green Analytics already operates several successful laboratories along the eastern seaboard, including in Pennsylvania and Maryland. EVIO’s partnership with Green Analytics helps ensure that the lab in Massachusetts will be a successful operation. The partnership will also help accelerate EVIO’s ability to resume testing in the state.
Since launching nationally targeted CBD and Hemp product marketing initiatives on the heels of the 2018 Farm Bill approval, the launch of our website www.hemptesting.com, and the explosion of the availability of CBD products, the Company has driven new revenue growth by testing hemp flower and a myriad of hemp and CBD manufactured products from around the US. The Company has created the Hemp and CBD Safety Panel test, focused on providing manufacturers and distributors a comprehensive suite of tests that gives clients the utmost confidence in the purity and potency of their products. The company anticipates both hemp and CBD trends to continue, further expanding EVIO’s market position.
The USDA recently issued interim rules that require producers of hemp to register; these interim rules also require that hemp be sampled and tested by DEA-certified laboratories. EVIO is well positioned to be a major national provider of hemp testing and has begun the process of attaining the needed certifications to achieve this designation. The Company anticipates there will be additional guidance from the FDA and the DEA on hemp testing requirements and guidelines, and will ensure that its multiple labs will meet federal standards.
Expanded Testing Capabilities
In response to the recent outbreak of lung injuries associated with e-cigarettes or vaping (EVALI), the Company recently added tocopheryl acetate (vitamin E acetate) testing to its catalog of tests. The Company has also expanded its capability for providing higher sensitivity potency tests to offer a “THC Free” designation for CBD products. Further, the Company is developing methods to identify additional compounds that are potentially harmful to consumers as well as accommodate the varied requests of customers and regulatory bodies who wish to ensure that products meet the highest safety standards.
The company’s transition to a new auditor and the completion of the implementation of new enterprise financial systems has allowed the company to catch up on its financial reports. The company is currently completing its 2019 Annual Report and anticipates that the report will be filed in January 2020, within the extension period. Upon filing the annual report, EVIO intends to take necessary actions to resume trading on the upgraded OTCQB trading platform.
“Our focus on profitability and operational efficiency during the past six months is paying off,” comments CEO William Waldrop. “We are currently limited only by our capacity to serve an ever-increasing demand. With our financials now current, we will return focus to fundraising and investor awareness activities.”
Cannabis reform remains the most positive catalyst for EVIO. “We are at the precipice of what could be a watershed moment for EVIO and the US cannabis industry,” concludes Mr. Waldrop. “It is becoming increasingly likely that marijuana banking reform and even de-scheduling may occur in the next couple of years, leaving regulation to individual states and agencies like the USDA and FDA. When that happens, demand for our testing will increase considerably while costly regulatory hurdles will be cleared.”
About EVIO Inc.
EVIO Labs is the leading provider of cannabis, hemp, and CBD testing. EVIO maintains licensed and accredited cannabis, CBD, and hemp full-service testing laboratory operations, and provides clients with quality analytical, R&D, and consulting services to produce the best, compliant products. EVIO provides quality assurance to consumers that the potency listed on the label matches what is in the package, and that the product is free of harmful contaminants.
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 filed with the Securities and Exchange Commission, available at www.sec.gov or www.eviolabs.com.