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The Daily Buzz: What’s Hot on the OTC This Week (SGMD, KPAY, CRLBF)

Sugarmade Inc (OTCMKTS:SGMD) momentum in recent action is indisputable and appears to spring from the company’s announcement earlier this week of the finalization of terms between itself and BZRTH Inc. for a definitive agreement whereby Sugarmade will acquire BZRTH Inc., a leading ecommerce supplier to the rapidly expanding hydroponic agricultural space.

According to the release, “the Parties expect the acquisition to be finalized and closed by October 31, 2019. The acquisition will position Sugarmade to book all revenues from both entities, creating a combined entity that, based on most-recent financial estimates, stands to produce $37 million in annual sales and positive cash flow and EBITDA, resulting in Sugarmade becoming one of the largest publicly traded companies in this fast growing sector.”

Sugarmade Inc (OTCMKTS:SGMD) bills itself as a company that engages in the supply of hydroponic and cultivation products, and products to quick service restaurants. It supplies hydroponic and indoor/outdoor cultivation products to the agricultural market sectors, including the legal cannabis cultivation, processing, and distribution sectors.

The company also produces and wholesales custom printed and generic supplies, such as double poly paper cups for cold beverage; and disposable, clear, and plastic cold cups, and paper coffee cups, yogurt cups, ice cream cups, cup lids, cup sleeves, edible packaging, food containers, soup containers, plastic spoons, and other related products.

Sugarmade, Inc. was founded in 2009 and is headquartered in Monrovia, California.

According to company materials, “Sugarmade, Inc. (OTCQB: SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. The Company is becoming a leading supplier to the growing hemp industry and is benefitting from the growth of the hydroponic marketplace. The Company is in the process of acquiring several leading hydroponic and agricultural supply companies that are currently producing in excess of $70 million in annual revenues. The Company also operates Carryoutsupplies.com, a leader provider to the quick service restaurant industry.”

“After months of negotiations, we now have robust terms set into place that represent enormous value for Sugarmade shareholders,” commented Jimmy Chan, CEO of Sugarmade. “This acquisition, in itself, will dramatically augment the Company’s top and bottom line numbers and massively expand our overall presence in the booming hydroponics and hemp ecommerce space. Further, it also represents the central piece of our overarching roll-up strategy to position Sugarmade as the dominant pick-and-shovel entity on the hydroponics side catering to producers in the explosive market for hemp and hemp-related crops in North America.”

And the stock has been acting well over recent days, up something like 86% in that time. Shares of the stock have powered higher over the past month, rallying roughly 45% in that time on strong overall action.

Sugarmade Inc (OTCMKTS:SGMD) managed to rope in revenues totaling $1.2M in overall sales during the company’s most recently reported quarterly financial data.

 

Kinerjapay Corp (OTCMKTS:KPAY) shares caught fire in Wednesday’s action clearly in direct response to news that the company just announced it has successfully concluded negotiations with its local bank, China Construction Bank Indonesia (CCBI), which will provide the Company with a $25 million, non-recourse credit facility. Obviously, access to capital as a funding runway is one of the most important variables for assessing potential in a micro-cap, so this news is justifiably important to the market.

According to the release, “This credit facility will be accessed by the Company utilizing the Gabriel Capital Ltd. HSBC bank guarantee, the draft of which has already been approved by the Bank’s Credit Committee. Gabriel is a privately-owned, Indonesian family controlled entity, based in Singapore. The final HSBC bank guarantee for $25 million is expected to be received in KinerjaPay’s account with CCBI within the week. Upon delivery of the collateral, KinerjaPay will draw down the guaranteed net proceeds of $22.5 million in three monthly tranches of $7.5 million commencing within 48 hours of receipt of the final bank guarantee. Upon each draw, KPAY will issue Gabriel a proportionate number of shares of Series F and G Preferred Stock under Gabriel’s executed Reg S Subscription Agreements, based upon the net subscription proceeds. Gabriel intends to continue delivering such guarantees until the full $200 million is received under these Subscription Agreements.”

Kinerjapay Corp (OTCMKTS:KPAY) trumpets itself as a company that operates an e-commerce platform in Indonesia. The company’s platform, KinerjaPay IP, an e-wallet service for bill transfers and online shopping; and allows top-up phone credit for users. KinerjaPay Corp. was founded in 2010 and is based in Medan, Indonesia.

KinerjaPay enables consumers to “Pay, Play and Buy” through its secure web portal and mobile applications. Based in Indonesia, the Company provides an easy and convenient payment solution while shopping online at its marketplace platform. With its current omni-channel platform, users can perform various payment services such as credit card bill payment, utility, phone bill, healthcare insurance and direct transfer to anyone at their convenience.

KinerjaPay is also planning to launch other eCommerce verticals such as travel market, delivery services, and online gaming in the near future. The Company’s services are available through its mobile applications and on its website at www.kinerjapay.com.

The Company’s Chairman and CEO, Mr. Edwin Ng commented, “We are extremely pleased to have completed the negotiation process with the local Bank for the non-recourse credit facility.  We are also very fortunate to be supported by Gabriel Capital Ltd.’s equity investment in KPAY’s Preferred Stock, shares of which shall be issued upon receipt of the final HSBC bank guarantee.  We have put in place an equity financing structure to enable KPAY to be at the forefront of Indonesian growth in key business and financial sectors.”  Mr. Agoeng Noegroho, the Chief Investment Officer of the Singapore-based Gabriel Capital Ltd. stated “We view our $200 million investment commitment, of which this first tranche of $25 million will close upon the delivery of our collateral, as evidence of our belief in Indonesia’s growth and KPAY’s ability to invest in exciting US technologies suitable for integration into the rapidly growing South East Asia economy.”

If you’re long this stock, then you’re liking how the stock has responded to the announcement. KPAY shares have been moving higher over the past week overall, pushing about 93% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 64% in that time on strong overall action.

Kinerjapay Corp (OTCMKTS:KPAY) generated sales of $167K, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 76% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($273K against $7.3M, respectively).

 

Cresco Labs Inc (OTCMKTS:CRLBF) continues to fight for a change in tone after having decisively carved out a possible major low earlier this month in the $5/share area. To put some more flesh on the bone, the company just announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired with respect to the proposed acquisition of Origin House by Cresco Labs.

According to the release, the expiration of the waiting period under the HSR Act satisfies one of the remaining conditions to completing the Transaction. With the waiting period passed, the parties are now working towards closing the Transaction on terms that will be mutually agreeable to both parties.

CRESCO LABS ORD (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand.

In addition, it operators a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.

The company was formerly known as Cresco Labs, LLC and changed its name to Cresco Labs Inc. in November 2018. Cresco Labs Inc. is headquartered in Chicago, Illinois.

If you’re long this stock, then you’re liking how the stock has responded to the announcement. Shares of the stock have powered higher over the past month, rallying roughly 8% in that time on strong overall action.

“We look forward to working through the remaining steps required to close the Transaction” said Charlie Bachtell, CEO and Co-founder of Cresco Labs, Marc Lustig, Chairman and CEO of Origin House, added “the expiration of the HSR Act waiting period is a significant milestone for this transaction and for the entire cannabis industry.”

Cresco Labs Inc (OTCMKTS:CRLBF) generated sales of $40M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 42.9% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($89.8M against $41.2M).

Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email ([email protected]) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).

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