SEATTLE, Jan. 17, 2023 (GLOBE NEWSWIRE) -- Pervasip Corp. (OTCPK: PVSP) (“Pervasip” and the “Company”) today announced that it will spin-off 100% of its wholly-owned subsidiary, Artizen Corporation (“Artizen”), as a separate public company, with an anticipated record date between July 1, 2023, and September 30, 2023. As a result of the spin-off, all Pervasip shareholders of record as of the designated record date shall receive shares in the newly public Artizen in proportion to their ownership in Pervasip. Artizen conducts 100% of Pervasip’s cannabis business segment operations through its Zen Asset Management LLC subsidiary ("Zen”).
Positioning for Expansion
“Spinning out Artizen will allow us to properly capitalize the business to take advantage of multiple expansion opportunities to build on our existing foundation,” said German Burtscher, Chairman and Chief Executive Officer of Pervasip and Artizen.
Pervasip previously announced its identification of a series of exciting expansion opportunities, including potential acquisitions involving licensed wholesale and retail operations that would offer Artizen the potential to establish itself as a vertically integrated multi-state operator (“MSO”).
While the local Washington market presents compelling opportunities for the acquisition and roll-up of wholesale flower, concentrate, and other related production assets by Zen’s independent cultivators, the regulatory environment in Washington prevents vertical integration into retail assets. That limitation is a significant constraint on growth since Zen’s independent cultivators cannot acquire dispensary assets to internalize retail revenues that are typically about three times wholesale receipts. Stated differently, Artizen could be generating about three times its current revenues, or about $46 to $52 million, if Zen’s existing footprint was in another state. Thus, diversification has been and remains a key strategic focus – both within Washington by expanding Zen’s offerings and exploiting compliant acquisition opportunities, and in valuable emerging cannabis markets by replicating Artizen’s proven formula for success in new U.S. and Canadian geographies.
Burtscher added, “Timing is important. The valuations and fates of MSOs and other participants in the cannabis industry have vacillated in several waves since state legalization commenced. We believe that increased legalization is inevitable in time, both at the federal level and in the form of improved regulatory environments in Washington. Preparing ourselves for that day is an important aspect of our long-term plans, including by expanding our brands and building on our footprint in valuable new geographies, and accessing long term equity capital to do so with shareholder friendly structures. Critically, the Artizen capital structure after the spin-out is completed has been specifically designed to allow us to raise equity financing on terms that vastly exceed anything that we can accomplish with Pervasip’s current capital structure.”
Improved Capital Structure
Pervasip currently has about 5,000,000,000 shares of common stock issued and outstanding, corresponding to about 15% of Pervasip’s fully diluted issued and outstanding common stock. Pervasip additionally has 850,000 shares of Series K convertible preferred stock issued and outstanding, corresponding to 85% of Pervasip’s fully diluted issued and outstanding common stock, as well as various other convertible securities.
Holders of Pervasip’s issued and outstanding common shares as of the record date will receive an aggregate of 15,000,000 shares of Artizen common stock, corresponding to 15% of Artizen’s fully diluted issued and outstanding common shares upon completion of the transaction (in addition to retaining their shares in Pervasip). Likewise, holders of Pervasip’s Series K and other convertible securities will receive an aggregate of 85,000,000 shares of Artizen common stock, the vast majority of which will be subject to lock-up restrictions prohibiting sales prior to Artizen’s realization of material growth and other performance objectives. Artizen will have 100,000,000 common shares outstanding on a fully diluted basis upon completion of the transaction, with no convertible debt or other securities.
The Company is working with its auditors to complete the required financial audits, including one for Pervasip on a consolidated basis and another for Artizen on a consolidated basis (without Pervasip). Once complete, a Form 10 Registration Statement will be filed with the SEC for Artizen to initiate the spin-off process. Additional information regarding the status and timing of the transaction and the various required regulatory and other approvals will be provided as it becomes available. Pervasip has commenced evaluation of potential targets for acquisition upon completion of the Artizen spin-off.
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.
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 attain SEC approval, risk 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 Ext 102
E: info@pervasip.net
