HOUSTON, TX - (NewMediaWire) - June 15, 2023 - SMG Industries Inc. (“SMG” or the "Company") (OTCQB: SMGI), a growth-oriented transportation services company focused on the domestic infrastructure logistics market, is excited to announce that it has entered into a non-binding letter of intent to acquire a diversified transportation business located in the Northeastern United States. The potential transaction, if consummated, is estimated to approximately double SMGI's annual revenue, increase adjusted EBITDA^[1], bring about operational diversification, strengthen the Company's balance sheet, and add valuable expertise to its leadership team. The target company specializes in full truck load, dry bulk, liquids, intermodal, LTL, heavy haul, drayage and transload, as well as an “asset lite” brokerage business. The proposed acquisition is expected to be completed this summer and contribute to SMGI's revenue diversification and expansion efforts.

Based on audited pro forma 2022 combined revenues of $153 million and pro forma Adjusted EBITDA¹ of $18.2 million (which includes $2.5 million in cost synergies), this acquisition would create a larger regional transportation and logistics player across multiple markets in the United States. This strategic move also is expected to provide SMGI and the target company with enhanced cross-selling opportunities and improved penetration into new end markets, as well as strengthen the Company’s balance sheet post-closing.

Commenting on the proposed acquisition, Mr. Matt Flemming, Chairman of SMGI, stated, "The acquisition of the target company by SMGI would create an attractive and diversified platform. I expect the combined entity to establish itself as a larger, scalable, and more diversified transportation business, becoming a regional leader in Texas, the Southwest, and the Eastern Seaboard, in addition to improving customer relationships and reducing cyclicality and customer concentration. SMGI's due diligence review of the target acquisition has already commenced, and upon satisfactory completion, we intend to proceed towards executing a definitive acquisition agreement and closing the transaction as soon as all closing conditions are met by all parties involved."

Strategic Deal Highlights:

The proposed acquisition is expected to yield several strategic and financial benefits, positioning the combined entity for further growth:

●      SMGI and the target company would benefit from significant cross-selling opportunities, with the transaction providing a broader service mix to meet the needs of key customers.

●      By integrating the target company's expertise in dry bulk and non-hazardous liquid freight shipping, the combined business would be able to scale and expand its service offerings.

●      There is limited customer overlap and no significant customer concentration, as both SMGI and the target company bring unique customer relationships to the table.

●      Anticipated cross-selling revenue synergies and cost savings, with projected annual cost savings of $2.5 million resulting from the elimination of corporate and real estate cost redundancies.

●      The target company has an experienced management team committed to the success of the combined entity after closing.

●      SMGI's public company structure would serve as an acquisition platform, providing access to liquidity for ongoing operations and future M&A transactions. Post-closing, SMGI intends to up-list to a national listing exchange to enhance access to the public capital markets and create a more attractive capital structure.

The letter of intent described above is non-binding, and as such, there can be no assurance that the Company will enter into a definitive acquisition agreement or that the proposed acquisition will be consummated.

For additional information regarding the proposed acquisition, please refer to the Company’s Current Report on Form 8-K filed on June 8, 2023.

Forward-Looking Statements

This press release contains certain "forward-looking statements" with respect to our financial condition, business strategies, growth opportunities, acquisitions, listing plans and objectives of management, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.

Forward-looking statements, including, without limitation, those relating to our future business prospects, listing plans, financial condition and acquisitions, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, among others, the risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

About SMG Industries Inc.:  SMG Industries is a growth-oriented transportation services company focused on the domestic infrastructure logistics market.  Through several of the Company’s wholly-owned subsidiaries branded as the “5J Transportation Group,” it offers specialized heavy haul, super heavy haul, flatbed, brokerage, and drilling rig mobilization services. 5J’s engineered permitted jobs can support up to 500-thousand-pound loads including infrastructure cargo associated with bridge beams, wind energy, power generation components, compressors, refinery and construction equipment.  SMG Industries is headquartered in Houston, Texas and has facilities in Floresville, Hempstead, Henderson, Houston, Odessa, Palestine, Victoria, Texas and Fort Mill, South Carolina. Read more at www.5J-Group.com and www.SMGIndustries.com

Source:  SMG Industries Inc. +1-713-955-3497

Contact:

Stan Abiassi – Market Street Capital, Inc.

stan@marketstreetcp.com

713-338-9415

Non-GAAP Financial Measures

In addition to certain traditional GAAP financial measures, we have presented in this press release “pro forma 2022 estimated Adjusted EBITDA” and “Target’s 2022 Adjusted EBITDA,” which are non-GAAP financial measures. These non-GAAP financial measures are being used by management and the Company’s board of directors to evaluate the anticipated benefits of the proposed acquisition of the target company. The non-GAAP financial measures should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP, and an analysis of non-GAAP financial measures should be used in conjunction with results presented in accordance with GAAP.

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