Here's a bad news/good news mind blower..:)
Recall the original BizRight MMA valued shares at .086 ..and appears 200m shares, certainly 1.5m were issued to Tan/Huang Dec3,2018 @.087 per May2019 10%+ beneficial owner filing..
And recall earlier i mentioned the (Dietrich?) *NUGS "Backstop Clause" which is designed to cover sellers. "Upon the expiration of the SEC required Rule 144 Holding Period (the “144
Clear Date”) and up until the 60th day after the “144 Clear Date” (the “60-Day Period”), NUGS
will offer additional shares in addition to original restricted shares issued to the PURE
Shareholders, if the price falls below $0.50 at the time the shares are sold during the 60-Day Period
and at the request of the PURE Shareholders. NUGS shall issue to the PURE Shareholders
additional shares (the “Back Stop Shares”) so that the total value of the shares originally issued,
plus the newly issued Back Stop shares, shall equal $700,000. The additional shares will be duly
issued, effectively and on the 61st day.
These Backstop shares shall be issued on a restricted basis, subject to the restrictions outlined in
Section 1.3."
*Now, do i know if a SGMD backstop clause exists? No way Biz owners not going to cover their ass in case the stock price drops..instead of "sister" company NUGS, insert SGMD above and instead of .50, insert .086..We can't replace the $700k NUGS purchase price because Jimmy hasn't disclosed final price terms..
Basically, it suggests that Biz owners can start unloading any one year restricted shares come circa Jan1, and any sold during those 60 days that sell below .086, will be replensished with additional restricted shares on the 61st day to make up any loss difference from any earlier shares issued..Should note that i have no idea if 50m or 200m include a one year restriction..could phase over two years.
Now, for example purpose only, if i was Tan/Huang, i'd consider selling all my shares during Jan1-March1, or certainly use that possibility as leverage against Jimmy....Take today's price of .012..and frankly, don't care if i tank the price because the Backstop clause will take care of any losses..Assuming .012 example on Jan1, why would i want to hold 200m shares @.012 when i can sell them for $2.4m..I know, we dont know what the Jan1 price will be, but work with me to get an idea of similar scenarios..:) So, Tan/Huang sell their 200m Dec3,2018 shares for $2.4m over the 60 day window...That's right at $15m loss that SGMD needs to amend starting the 61st day..just happens to be 1.25B iou shares! Ouch..That maxes the A/S ..And i'm assuming that somewhere agreement/SEC rule language exists that SGMD is required to maintain shares in reserve to accomodate this scenario..
Anyway, the bad news, as the share price stands now, is i don't see how SGMD can complete any more of the mentioned acquisitions this year beyond BZRTH.. and the good news is, SGMD doesn't force those acquisitions during the price weakness and moves on..I think SGMD is really only committed to filling the 138m share K&J agreement, the remaining $20m funding gig is optional..???.Reducing dilution at these prices imo a good thing..
July26 Jimmy mentioned BZRTH acquisition growth options.. "We are analyzing several of these options in order to select the path for greatest shareholder maximization." For me, i take it Jimmy sending clue that persuing all the aquisitions under present conditions is not the path to maximize shareholder value..I think we start getting more Hempistry news in short term..glta..:)
AI
