Item 7.01 Regulation FD Disclosure
Sugarmade Inc., a Delaware corporation
(the “Company”) makes the following disclosures pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934,
generally referred to as Regulation FD Disclosure.
On May 4, 2020, the Company informs
its shareholders and other interested parties relative to new purchase orders received for consumable sanitary supplies and non-medical
grade protective gear. Sugarmade, via its CarryOutSupplies.com operation, has begun to receive a substantial number of large purchase
orders from both private and public institutions and businesses and in many cases, has begun to deliver products to the ordering
customers.
As of the close of business on May 1,
2020, these purchase orders totaled in excess of ten million US dollars ($10,000,000). Considering the Company’s revenue
of $4,367,644 and $4,439,324 for the recently completed fiscal years ending June 30, 2019, and June 30, 2018, respectively, the
Company believes the receipt of these purchase orders is potentially a material event and thus, puts forth these disclosures pursuant
to Regulation FD.
Executives at the Company have identified
numerous sources to supply the products with several factories having available capacity to meet a substantial portion, if not
all, of these orders. These supply sources include factories in both Vietnam and Southern China. In many cases, executives
at Sugarmade have long standing relationship with these factories and the principal operators. While the Company will work toward
delivering on as many of these purchase orders as is possible, airfreight transportation resources between Asia and Los Angeles,
and relative to other routes, is at a premium with demand generally exceeding supply. As a result of the current transportation
constraints, the Company may be limited in its ability to fully deliver on orders being received.
There are numerous others risks to fulfilling
the orders received. These include, but are not limited to availability of financing, ability for contracted factory operations
to produce the products, access to adequate logistical resource, customs clearance, ability for the ordering party to pay and risks
related to transportation of finished goods to end customers.
The Company advises all interested
parties to reference its disclosure of Forward-Looking Statements, included herein, and our other disclosures and risk factors
outlined in our periodic filings with the U.S. Securities & Exchange Commission, including Form 10-K for our most recently
ending fiscal year ending on June 30, 2019.
FORWARD-LOOKING STATEMENTS: This filing contains "forward-looking
statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements also may be included in other publicly available documents issued by the Company and in oral statements
made by our officers and representatives from time to time. These forward-looking statements are intended to provide management's
current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be
valid. They can be identified by the use of words such as "anticipate," "intend," "plan," "goal,"
"seek," "believe," "project," "estimate," "expect," "strategy," "future,"
"likely," "may," "should," "would," "could," "will" and other words
of similar meaning in connection with a discussion of future operating or financial performance. Examples of forward-looking statements
include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other
measures of financial performance. At this time there are no assurances the Company’s acquisition efforts will be successful.