Sugarmade Executes on $40 Million Definitive Agreement to Acquire Sky Unlimited, LLC Creating Hydroponic Supply Powerhouse
November 01 2018 - 8:30AM
InvestorsHub NewsWire
Sugarmade
Executes on $40 Million Definitive Agreement to Acquire Sky
Unlimited, LLC Creating Hydroponic Supply Powerhouse
Monrovia, CA --
November 01, 2018 -- InvestorsHub NewsWire -- Sugarmade, Inc.
(OTCQB:SGMD)
today announces the signing of a binding Definitive Agreement to
acquire Sky Unlimited, LLC, which through its AthenaUnited.com
operations and website offers multiple popular hydroponic brands to
several growing agricultural cultivation sectors. As a result of
this acquisition, Sugarmade is raising its revenue guidance for
calendar 2019 from $30 million to $70 million. Sugarmade expects
this acquisition to be highly accretive to common
shareholder value.
Under the terms
of the Definitive Agreement, Sugarmade will assume all operations,
brand assets, customers and liabilities of Sky Unlimited, and will
retain all employees. Sugarmade will issue the owners of Sky
Unlimited ten million non- refundable shares of Sugarmade common
stock in exchange for a non-shop period agreement, during which
final due diligence will be completed. Subject to a successful
two-year audit of the Sky Unlimited operations, Sugarmade will pay
the owners a combination of cash and common shares equal to the
audited revenues realized by Sky Unlimited during the 12-month
period preceding the close of the transaction, which is scheduled
for January of 2019. It is envisioned these payments of cash and
Company shares will total $40 million, but the actual amount will
be determined by the revenue performance of the acquired business
operations. The specific details of the Definitive Agreement will
be outlined in a subsequent filing with the U.S. Securities &
Exchange Commission over the coming days.
"This acquisition
will further boost our already very rapid growth rate and is
expected to be high accretive to common shareholder value. As a
result, we are once again raising our revenue guidance for calendar
2019," commented Sugarmade's CEO, Jimmy Chan. "Sky Unlimited and
Athena are complementary to our existing business operations
allowing us to not only increase our emphasis on brands, but also
to diversify our revenue streams to now include the larger
commercial cultivation operations."
The management
teams of both companies are seeing a rapid evolution in the
hydroponic and cultivation supply sector with the business moving
away from the home and small operator and toward the significantly
sized commercial cultivator. Sky Unlimited's operations are well
positioned against this rapidly evolving trend with most of its
revenues being derived from the wholesale market and via commercial
operations.
Mr. Chan
continued, "We are seeing a clear trend in our particular sector of
the cultivation supply business. Many of the smaller growers are
being replaced by very large grow operations that are purchasing
large amounts of products from a limited set of suppliers. Matching
this trend is Sky Unlimited as commercial accounts are now over 50%
of operations and still growing. Thus, we believe we are especially
well positioned
via
this
business
combination. Sky
Unlimited also sees strong benefits for its existing and future
customers as the increased capitalization and lowered cost of
capital will allow it to further expand its brands and to
accelerate the development of new products and technologies."
With this
acquisition and others currently being assessed by the Company,
Sugarmade's management team now believes the Company will soon be
eligible for a listing on the NASDAQ stock exchange and has thus
begun the due diligence process with its legal counsel toward a
NASDAQ listing application.
About Sugarmade,
Inc. (OTCQB:
SGMD):
Sugarmade, Inc.
is a product and brand marketing company investing in products and
brands with disruptive potential. Sugarmade's online stores
include
ZenHydro.com and
CarryOutSupplies.com. For more information on the
Company's products please visit
http://www.Sugarmade.com.
For inquiries
please call (888)-982-1628 or
info@Sugarmade.com.
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.
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