Front your looking at it wrong-->
The key word in both statements is "option" not "will" or "could".
They have an option to exercise. That means they have a choice not to.
That means that any phrase after “They have an option to exercise” Or even just an “option” the right to buy something that: is, can, will, has, may or could make millions is based on what the company told the public company. And if they do not exercise the option, any wording after option becomes void.
Remember SGMD is relying on what budcars tells them the sales were. SGMD does not look or audit budcars financial records. They can’t even legally.
It is simply the word of budcars when they tell a public company they did $10,000,000 and the public Company post that their 30% is worth $3,000,000 even though they received no money owning less than 50%.
The fact is, it is just easier and cleaner not owning controlling interest in any company that may be lying about sales and revenue that is not and does not have to be part of the public companies responsibility.
Sell $20,000,000 in shares for cash and stay as far away from that other 40% knowing it will be a legal mess to clean up and explain to shareholders why there is no sales. Just elect to not exercise the option to buy the other 40% and continue to rely on budcars sales and data.
The best part of this is, when they are done selling $20,000,000 in company stock and say we don’t want the 40% and in fact sell back the 30% for $1, what ever happens to budcars is no longer of interest by SGMD. They just move onto another merger or buy in on another idea or company.
If SGMD can now say the company they own 30% in did $10,000,000 but if they controlled it they would have to say they made no money, how would they be able to sell shares if they did that?
Happens all the time on the OTC!
SGMD needs a valid connection to a store that posts $10,000,000 in sales (True or false) to help them sell shares, but without the legal responsibility to have to prove it and just take their word for it. Its win win win.
SGMD is off the hook on legalities, they brag they own 30% of $10,000,000 that they are not entitled to or have to prove exists and they sell $20,000,000 of stock.
In the end they elect to not exercise any options for 40%
