Pervasip to Acquire Artizen Corporation
Seattle, Washington--(Newsfile Corp. - June 3, 2021) - Pervasip Corp. (OTC Pink: PVSP) (the "Company"), a developer of companies and technologies in high value emerging markets, announced today the execution of a letter of intent ("LOI") with Artizen Asset Management LLC ("AAM") to acquire 100% of the stock of Artizen Corporation ("Artizen"), the parent of Zen Asset Management LLC ("ZAM"), a diversified asset management company that was founded to acquire, develop, and support companies and technologies in the cannabis industry.
ZAM manages four licensed cultivation facilities and one licensed processing facility in Washington state under a series of management, leasing, licensing and other long-term agreements. As one of Washington's original cannabis brands, Artizen-branded products are the all-time fourth best-selling in Washington across all product categories, and the all-time third in flower, with five of the all-time top ten selling products in flower. Eighths of Artizen's flagship Dutchberry™ flower are the all-time top selling flower product in Washington. Artizen's commitment to quality and consistency has built a substantial following, fueling more than $69 million in wholesale sales to a distribution network with more than 200 retailers, corresponding to more than $200 million in retail value since inception in 2015.
"The Artizen brand is recognized as one of the most reputable leading consumer brands in Washington state, with tremendous consumer and retailer recognition," said Paul Riss, the Company's chief executive officer. "We believe that ZAM's results in Washington are scalable with the right investment and management, and we are very excited by the potential that this acquisition brings to our shareholders."
Sales of Artizen-branded products have grown by more than 25% during the three years ended December 31, 2020, to more than $17 million in 2020. While that growth was historically driven by the continuing strong demand for Artizen-branded products, that demand significantly exceeds supplies. Additional growth is constrained by the availability of financing to invest in ZAM's infrastructure and help its customers to increase utilization, sales, and earnings.
"We expect that this transaction will allow us to resolve that challenge to dramatically improve on our existing foundation," said Timothy Foia, Artizen's founder and chairman. "Our first objective is to raise and use long-term financing on aligned, shareholder-friendly terms to build on our existing fundamentals. Critically, getting that done will allow ZAM to leverage its infrastructure with Artizen's brand and relationships to drive additional service growth, including by consolidating services offered to smaller regional brands, with an initial focus on Washington state. We are very excited by that potential, and we are looking forward to closing and building compelling shareholder value by providing safe and compliant services for licensed producers and processors in the emerging cannabis industry."
According to the LOI, the Company intends to acquire 100% of Artizen on or before July 31, 2021, in exchange for 800,000 shares of a newly-designated restricted preferred stock. No reverse-splits or other changes to the Company's existing share structure shall occur for the three years after closing, unless otherwise approved by a vote of the Company's shareholders. The Company's pre-existing subsidiaries and operations will be transferred to the Company's designee at closing.
Mr. Riss added, "The LOI calls for me to surrender my Series E, F and G preferred shares so the Company can pay for the acquisition with the new preferred shares. The current Series E shares give me voting control, while the current Series F and G shares are convertible into more than 90% of the Company's issued and outstanding voting and other stock. The new preferred shares issuable in the Artizen acquisition will correspond to 80% of the Company's outstanding equity. We are pleased that the proposed transaction brings an established business to Pervasip without issuing additional shares of common stock."
About Artizen Corporation
Artizen Corporation ("Artizen") is a diversified asset management company that was founded to acquire, develop, and support companies and technologies in the emerging cannabis industry. Artizen primarily does so in Washington state today, where it generates revenue by providing leasing, licensing, management, staffing, and supplies to cannabis production facilities. Artizen's existing clients operate five licensed cannabis cultivation and processing facilities in Washington, with about 120,000 square feet of canopy, of which only about 50,000 square feet is currently used. Most of the biomass produced by those facilities has been sold historically under the Artizen™ brand, including all-time top selling products in flower in Washington state. For more information, visit: www.artizencannabis.com.
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 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.
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