Hydroponics supply company Sugarmade (OTCQB: SGMD) this morning reported that it has signed a binding Letter of Intent (“LOI”) to acquire Sky Unlimited, LLC, dba Athena United. Sky Unlimited is a supplier of cannabis cultivation materials to wholesalers and commercial cannabis cultivators. The company anticipates that this acquisition will drive earnings and shareholder value, so it is revising its guidance for full-year 2019 revenues to more than $70 million. Per the terms of the LOI, 10 million common shares of Sugarmade, which will immediately vest as a non-refundable fee, will be issued to the owners of Sky Unlimited. In return for this non-refundable compensation, Sky Unlimited agrees to a non-shop and due diligence period of no more than 180 days. At closing and upon the completion of a successful audit, Sugarmade will pay Sky Unlimited an additional 210 million common shares. At closing the company will either pay the owners a maximum value of 20% of the transaction value in cash, anticipated to be $8 million, or will allow Sky Unlimited to exercise an option to convert a portion of the cash payment or the entire cash payment into common shares at a price of $0.10 per share. More information, including details regarding incentives, will be completely outlined in the definitive agreement.
“The trend in cannabis cultivation is toward the larger commercial cultivation operations, and Sky Unlimited is in the thick of that dynamic marketplace,” Sugarmade CEO Jimmy Chan stated in the news release. “This year, Sky Unlimited and its associated operations are expected to produce in excess of $40 million in revenues with profitability and positive cash flow. This new revenue stream combined with our recently upwardly guided revenue forecast of $30 million for next year will make Sugarmade one of the largest publicly traded suppliers to the booming cannabis cultivation marketplace, with a combined revenue forecast for next year in excess of $70 million.”
To view the full press release, visit http://cnw.fm/28aLh
About Sugarmade, Inc.
Sugarmade, Inc. is a product and brand marketing company investing in products and brands with disruptive potential. Sugarmade’s brands include ZenHydro.com, CarryOutSupplies.com, and BudLife Cannabis Storage Solutions. For more information on the company’s products, please visit www.Sugarmade.com.