Psyence Group Inc. (OTCQB: PSYGF) reported rising financial losses for the fiscal year ending March 31, with significant investment in business expansion and clinical trials and no revenue just yet.
The psychedelic medicine and fungiculture firm, headquartered in British Columbia, posted a net loss of C$6.08 million for the fiscal year, marking a significant increase from the previous year’s loss of C$4.58 million.
The losses primarily resulted from a surge in research and development costs, which rose to C$2.3 million, up from just C$115,935 last fiscal year. Key investments included a large-scale clinical trial on palliative care, which cost C$1.84 million, and the cultivation of psilocybin mushrooms, which cost C$170,940.
Psyence also ramped up its sales and marketing spend to C$253,621, compared with C$146,622 last year, focusing on fundraising and increasing awareness of its business and clinical trials.
The company managed to reduce its general and administrative costs slightly to C$763,642, down from C$783,159 the previous year, through cost-saving measures. Professional and consulting fees also saw a reduction from C$3.41 million last year to C$2.56 million this year, even as legal and audit service costs increased due to a planned transaction between Psyence’s clinical trial division, Psyence Biomed, and SPAC Newcourt.
Depreciation and amortization costs rose to C$92,269 this year, up from C$52,636 last year, mainly due to upgrades at the company’s production facility.
The production facility, situated on rented land in Lesotho, cost the company C$719,099 to develop. Psyence pays a monthly rent of Lesotho Loti 3,485 for the property, with the lease running for nine years from June 2020.
The company’s total assets were valued at C$4 million at the end of the period. That includes C$2.38 million in cash, C$626,049 in property and equipment, and C$686,913 in prepaid expenses. The latter includes C$264,094 spent on upgrades at the facility.
Psyence continues to progress with its research and development projects, despite the financial losses, making strides in both its therapeutic division, focusing on the research and development of registered psilocybin drugs, and its production facility, which cultivates ISO 22000:2018 BSI certified mushrooms for research centers and universities globally.
The company’s Good Psyence division generated C$95,954 revenue primarily from sales of its Goodmind products in the South African market, while the company continues to engage in nonrevenue generating projects such as a palliative care clinical trial, in partnership with Australia-based iNGENū.
Earlier this month, Neil Maresky, CEO of Psyence, signaled to investors that management has remained optimistic about the company’s progress, stating that the company is “firmly on track” in regards to the company’s business strategy.