PVSP news: Pervasip Acquires Artizen Corporation
Press Release | 09/09/2021
Seattle, Washington--(Newsfile Corp. - September 9, 2021) - Pervasip Corp. (OTC Pink: PVSP) (the "Company"), a developer of companies and technologies in high value emerging markets, announced its acquisition of 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."
ZAM's sales from management, leasing, licensing and other recurring sales has grown to over $14 million as of December 31, 2020. At the same time, 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 sales 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."
Acquisition Terms
According to the final agreements, the Company agreed to acquire 100% of Artizen with an effective date of September 1, 2021, in exchange for 850,000 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.
Mr. Riss added, "The agreements called 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 Series E shares gave me voting control, while the 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 85% of the Company's outstanding equity. We are pleased that the acquisition 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
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