Sugarmade Issues Shareholder Letter
on Expansion and the Road Ahead
NEW YORK, NY -- June 26, 2020 -- InvestorsHub NewsWire
-- Sugarmade,
Inc. (OTCQB:SGMD)
("Sugarmade", "SGMD", or the "Company") issues
the following letter on behalf of the CEO:
Dear Valued Shareholder,
Allow me to begin by expressing our
most sincere
gratitude to
our committed shareholders for
your loyalty and patience as we gear up for continued expansion at
Sugarmade.
As we have discussed in our recent corporate communications, our
BudCars business is experiencing tremendous growth while
maintaining very strong gross margins, with both topline sales and
gross profits steadily increasing at better than 10% on a
sequential week-over-week basis for multiple consecutive
months.
We are well ahead of our targets in terms of performance. All of
this naturally points to the need for expansion given the clear
strong ROI on
display.
We are already preparing to open a Los Angeles BudCars hub next
month. But we believe strongly that the opportunity in front of us
is much larger than simply opening another hub in
a
new
regional market. We have completed considerable analysis, the
results of which point to strong returns from capital investment in
both verticalizing BudCars operations and expanding to multiple new
regions.
This path is supported by both end-demand data and our market
positioning, and by data on the current California market from a
licensing and real estate standpoint given the wave of distressed
assets on the market right now, which will likely offer us a window
within which to expand at extremely cost-effective levels in the
second half of 2020.
To accomplish this, we have organized a Reg-A+
funding
round targeting $6 million in capital financing. We have not yet
established the precise pricing for this funding round, but we are
committed to working with a top-tier investment banking
partner. We
have initially allowed a pricing scale with a price well above our
current market pricing for SGMD shares. This is not due to any
plans for a near-term reverse split. Instead, it reflects the rapid
growth and strong financial performance we are currently
experiencing and anticipate as we move into the second half of the
year.
These funds will be used to expand
our BudCars
delivery
service, initially
establishing three
additional
locations
within the
following 12
months and a
further eight
potential
locations
across
the California market within
the
coming 24
months.
In addition, as discussed above, we are seeking to further
vertically integrate our supply chain by establishing our own
cannabis cultivation and product manufacturing operations. Our
analysis suggests we can expand our gross margins on a per unit
basis significantly by establishing strong in-house farm-to-door
verticalization. It will reduce cost of goods sold and fast-track
in-house branded product development and marketing given our direct
access to our own customer base.
The current market in California is prime for purchase
right
now as
both
cannabis-related licenses
and real estate assets
are
on
the market at distressed levels, with many firms operating on final
capital resources
or weakened balance sheets. The upshot is a lot of high-quality
non-operating assets on the market just waiting to be scooped up
and put back into action.
Finally, we have been working diligently with the excellent team at
Tiger Global Management to increase our presence on social and
digital media. We believe a great deal in our vision and feel it is
in our shareholders' best interests to tell our story to the world
as we see powerful performance and results.
To that end, we have been putting our message out to our current
and prospective shareholders and to the public at large with
complete transparency, and we will continue to spread the word on
Sugarmade's vision and progress.
As always, thank you for your support and commitment. We will
continue to update you every
step of the way.
Best Regards,
Jimmy Chan, CEO
About
Sugarmade, Inc.
Sugarmade, Inc. (OTCQB:
SGMD) is a product and branding marketing company investing in
operations and technologies with disruptive potential. Our Brand
portfolio includes CarryOutsupplies.com, SugarRush™
and Budcars.com. For more information please reference
www.Sugarmade.com.
FORWARD-LOOKING STATEMENTS: This release contains "forward-looking
statements" within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements also may be included in other publicly
available documents issued by the Company and in oral statements
made by our officers and representatives from time to time. These
forward-looking statements are intended to provide management's
current expectations or plans for our future operating and
financial performance, based on assumptions currently believed to
be valid. They can be identified by the use of words such as
"anticipate," "intend," "plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy," "future," "likely,"
"may," "should," "would," "could," "will" and other words of
similar meaning in connection with a discussion of future operating
or financial performance. Examples of forward looking statements
include, among others, statements relating to future sales,
earnings, cash flows, results of operations, uses of cash and other
measures of financial performance.
Because forward-looking statements relate to the future, they are
subject to inherent risks, uncertainties and other factors that may
cause the Company's actual results and financial condition to
differ materially from those expressed or implied in the
forward-looking statements. Such risks, uncertainties and other
factors include, among others. such as, but not limited to economic
conditions, changes in the laws or regulations, demand for products
and services of the company, the effects of competition and other
factors that could cause actual results to differ materially from
those projected or represented in the forward looking
statements.
Any forward-looking information provided in this release should be
considered with these factors in mind. We assume no obligation to
update any forward-looking statements contained in this
report.
Corporate
Contact:
Jimmy Chan
+1-(888)-982-1628
info@Sugarmade.com
Public
Relations:
Tiger Global
Management
info@TigerGMP.com
www.TigerGMP.com