Smg Industries, Inc. · OTC:SMGI
Smg Industries — Merger or Acquisition (June 2023)
13 slides from Smg Industries's merger presentation, Jun 15, 2023
Slide 1: Debt Conversion Presentation
Debt Conversion Presentation JUNE 08, 2023
Slide 2: Legal Disclaimer: Forward-Looking Statements
Legal Disclaimer Forward - Looking Statements This presentation includes certain estimates, projections and forward - looking statements provided by SMG Industries Inc . , (the “Company”) with respect to the anticipated future performance of the Company . Such estimates, projections, and forward - l
Slide 3: Executive Summary
Executive Summary ● SMGI has entered into a non - binding letter of intent (“LOI”) to acquire a diversified transportation business (the “Target”) located in the Northeastern United States (the “Transaction”) ● If consummated, the Transaction is estimated to approximately double our annual revenue,
Slide 4: Transaction Overview
Transaction Overview ● SMGI is in the process of negotiating the Transaction, pursuant to which SMGI will acquire the Target, a leading transportati on logistics provider offering customized transportation solutions to its customers ─ Target has a strong presence in the Mid - Atlantic region and a d
Slide 5: Transaction Rationale
Transaction Rationale ● Combination of two regional leaders in a fragmented industry ─ Combining SMGI and Target should create a larger, scalable, and more diversified transportation business, set to be a regional leader in Texas, the Southwest, and the Eastern Seaboard ● Compelling benefits created
Slide 6: Transaction Rationale (cont'd)
Transaction Rationale (cont’d) ● Meaningful cross - selling revenue synergies and cost savings ─ Forecasting $2.5 million in annual cost savings from the elimination of corporate and real estate cost redundancies and savings from increased purchasing power ● Target has an experienced management team
Slide 7: Transaction Sources & Uses
Transaction Sources & Uses 7 ● We retained a leading investment bank to conduct a broad debt financing marketing process and we chose two national lenders to move forward ─ Executed Term Loan and Revolver term sheets with respected national lenders ● SMGI note holder conversion is key to financing t
Slide 8: SMGI Current Debt Summary
SMGI Current Debt Summary ● Our Board is asking each SMGI note holder to convert its notes representing our outstanding debt into our common equity ─ Our existing line of credit lender and several equipment lenders will be refinanced with the Transaction ─ Board members and management have already c
Slide 9: Pro Forma Balance Sheet
Pro Forma Balance Sheet 9 (1) Pro forma 2022 estimated Adjusted EBITDA is a non - GAAP financial measure. For a reconciliation to the most directly comparable GAAP measure, please see slide 13. (2) Equals excess Revolver capacity plus cash. Total Debt $47,950,672 Pro Forma 2022 Estimated Adjusted EB
Slide 10: Pro Forma Cap Table
Pro Forma Cap Table 10 (1) Pro forma 2022 estimated Adjusted EBITDA is a non - GAAP financial measure. For a reconciliation to the most directly comparable GAAP measure, please see slide 13. Total Shares % Ownership $ per Share SMGI Stock Oustanding 51,953,000 17% Converted SMGI Debt* 141,714,264 46
Slide 11: Pro Forma Financial and Cash Flow
Pro Forma Financial and Cash Flow 11 ● The Transaction is structured to lower leverage and improve free cash flow ● Projections indicate that the combined company should generate strong future free cash flow that leads to steady de - leveraging ● The projections exclude the impact of any future M&A
Slide 12: Request Summary
Request Summary ● We are asking applicable SMGI note holder to elect to convert its notes representing our outstanding debt into our common equity at the closing of the Transaction ─ Conversion rights and procedures will be as prescribed in the terms of the note, if convertible, or at the same price
Slide 13: Exhibit – Reconciliation Table
Exhibit – Reconciliation Table 13 In addition to certain traditional GAAP financial measures, we have presented “pro forma 2022 estimated Adjusted EBITDA” and “Ta rget’s 2022 Adjusted EBITDA,” which are non - GAAP financial measures. These non - GAAP financial measures are being used by management a