Psyence Group Inc. Reports Financial Losses Driven by Research and Development Costs

NEW YORK– Psyence Group Inc. a psychedelic medicine and fungiculture company headquartered in British Columbia, recently disclosed its financial results for the fiscal year ending March 31, highlighting a surge in losses primarily attributed to increased research and development (R&D) expenditures, expansion initiatives, and clinical trials, as the company is yet to generate any revenue.

The company recorded a net loss of $6.08 million for the fiscal year, marking a notable rise from the previous year’s loss of $4.58 million. The significant losses were primarily driven by a substantial increase in research and development costs, which soared to $2.3 million compared to just $115,935 in the previous fiscal year. Psyence made key investments in a large-scale clinical trial on palliative care, amounting to $1.84 million, and the cultivation of psilocybin mushrooms, which incurred expenses of $170,940.

To bolster growth and awareness of its business and clinical trials, Psyence increased its sales and marketing spend to $253,621, up from $146,622 in the previous year, with a particular focus on fundraising efforts.

The company did manage to mitigate some expenses through cost-saving measures, slightly reducing general and administrative costs to $763,642, down from $783,159 in the previous year. Additionally, professional and consulting fees decreased from $3.41 million to $2.56 million. However, legal and audit service costs saw an increase due to a planned transaction between Psyence’s clinical trial division, Psyence Biomed, and SPAC Newcourt.

Depreciation and amortization costs rose to $92,269 in the current fiscal year, up from $52,636 in the previous year, mainly attributed to upgrades at the company’s production facility.

The production facility, located on leased land in Lesotho, incurred a total development cost of $719,099. Psyence pays a monthly rent of Lesotho Loti 3,485 for the property, and the lease agreement is set to run for nine years from June 2020.

At the end of the fiscal period, the company’s total assets were valued at $4 million, including $2.38 million in cash, $626,049 in property and equipment, and $686,913 in prepaid expenses. Notably, the latter includes $264,094 spent on upgrades at the production facility.

Despite facing financial losses, Psyence remains committed to advancing its research and development projects. The company continues to make strides in 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 worldwide.

While Psyence has not yet generated substantial revenue, its Good Psyence division managed to generate $95,954 primarily from sales of its Goodmind products in the South African market. Additionally, the company is involved in non-revenue generating initiatives, such as a palliative care clinical trial in partnership with Australia-based iNGENū.

Neil Maresky, CEO of Psyence, expressed optimism about the company’s progress, assuring investors that the company remains “firmly on track” with its business strategy. Despite the financial challenges, Psyence continues to forge ahead with its ambitious plans in the psychedelic medicine and fungiculture sector.