Sugarmade Inc (SGMD)

[josbor8]

I think it has less to do with them wanting to issue preferred than it does with BizRifht owner wanting common shares. Preferred shares are preferential if you want to maintain a more powerful voting, but presuming management is coming along for the tide and will gain a large shareholder percentage, common stock is the most financially and fluid method. Preferred stocks of a penny share, to my knowledge, seems useless.

As for the dumping, it’ll happen, but it doesn’t seem wise for the selling party to do so until significant gains are made. Plus, if they hold for a year, they reduce their capital gains damn near in half once they sell off. 16% taken by taxes on millions of shares would hurt like the dickens.

All in all, I think as long as BizRight is managed right and is truly profitable, SGMD can flip the cash plus additional shares for another merger. Especially given the possibility of them moving into an area of being able to finance future deals since they’ll have significant revenue/receivables/assets moving into the future to use as collateral for a commercial line of credit or what not.

Before someone posts and says pot places can’t get loans, there’s a difference between growers and supply companies. Banks will lend to you as your products are legal and available to everyone.