Pervasip Corp (PVSP)

[Sooah]

$PVSP MASSIVE NEWS EXPLAINED ---> READ and LEARN

WHITE PLAINS, NY -- May 15, 2015 -- InvestorsHub NewsWire -- Pervasip Corp. (USOTC: PVSP) (“Pervasip” or the “Company”) announced today an agreement with Flux Carbon Corporation (“FCC”) in which FCC agrees to absorb the impact of common stock issued by the Company to its secured debt holders who choose to convert their debt into shares of common stock.

Paul Riss, the Company’s chief executive officer, said “We continue to work with our shareholders to create value and reduce our debt burden, and we are pleased to say that the remaining convertible secured debt will convert into shares of common stock, without impacting the total number of outstanding shares. FCC is our largest shareholder and currently owns 1,000,000,000 shares of common stock of Pervasip. We expect that FCC's agreement to do so will be sufficient to offset the dilutive impact as we satisfy our remaining secured debt.”

Part 1: FCC agrees to absorb the impact of common stock issued:

Issuance of equity (stock) for settlement of convertible debt comes with accretion expenses which hit the income statement (administrative expenses). The impact referred to in the PR is the negative impact debt conversions have on the bottom line of the Company for issuing 10s of millions of shares on variable convertible notes. This is why we call them toxic notes because the impact to the income statement is indeed toxic.

The agreement with FCC indeed absorbs the impact of common stock issued because a fixed conversion at 0,002 per share adds close to $140K in shareholder equity while simultaneously reducing debt in the same amount. The reason for this is that issuance of shares at 0,002 per share puts the majority of the $140K into what we call additional paid in capital at the balance sheet level, folks. The deal with FCC occurs only at the balance sheet level in a positive way.

Part 2: Stock issued on remaining convertible debt to be issued without impacting the O/S:

This is exciting and a HINT to some more developments coming possibly with FCC and/or other noteholders. Debt conversions usually always impact O/S because CD agreements involve conversion of debt into common stock of an issuer hence the result is an increase in O/S.

When PVSP states that stock will be issued on remaining CD without impacting the O/S, it is hinting that a party or two will cancel their common stock holdings in exchange for Preferred stock or other settlements.

Since FCC owns 1 billion shares, it is highly likely that they will turn in part or all of their commons which would reduce the O/S of commons by up to 1 Billion shares, folks.

Additionally, other lenders could also agree to take preferred stock instead of common stock.

The impact here refers to "negative" impact of increasing the O/S and not necessarily "no change" to O/S.

Expect O/S reduction by up to 1 Billion to come to $PVSP shortly.

Have a good weekend, all.